Document:

Exhibit 10.3

 

EXECUTION VERSION

 

GUARANTEE AND COLLATERAL AGREEMENT

 

dated as of

 

April 27, 2015

 

among

 

ELECTRONIC CIGARETTES INTERNATIONAL GROUP,
LTD.,

 

THE GUARANTORS PARTY HERETO

 

and

 

CALM WATERS PARTNERSHIP

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

 

 

	 	Page
	 	 
	Section 1 . Definitions	1
	Section 2 . Guarantees by Guarantors	8
	Section 3 . Grant of Transaction Liens	11
	Section 4 . General Representations and Warranties	13
	Section 5 . Further Assurances; General Covenants	16
	Section 6 . Intellectual Property	17
	Section 7 . Investment Property	18
	Section 8 . Deposit Accounts	21
	Section 9 . Commercial Tort Claims	21
	Section 10 . Transfer of Record Ownership	22
	Section 11 . Right to Vote Securities; Right to Proceeds of Insurance	22
	Section 12 . Certain Cash Distributions	23
	Section 13 . Remedies upon Event of Default	23
	Section 14 . Application of Proceeds	24
	Section 15 . Fees and Expenses; Indemnification	25
	Section 16 . Authority to Administer Collateral	26
	Section 17 . Limitation on Duty in Respect of Collateral	27
	Section 18 . Termination of Transaction Liens; Release of Collateral	28
	Section 19 . Additional Guarantors and Grantors	28
	Section 20 . Notices	28
	Section 21 . No Implied Waivers; Remedies Not Exclusive	28
	Section 22 . Successors and Assigns	29
	Section 23 . Amendments and Waivers	29
	Section 24 . Choice of Law	29
	Section 25 . Waiver of Jury Trial	29
	Section 26 . Severability	29
	Section 27 . Intercreditor Agreement	30

 

    	 

    	 

    

 

	SCHEDULES:	 
	 	 
	Schedule 1	Equity Interests in Subsidiaries and Affiliates Owned by Original Grantors
	 	 
	Schedule 2	Other Investment Property Owned by Original Grantors 
	 	 
	Schedule 3	Material Commercial Tort Claims
	 	 
	EXHIBITS:	 
	 	 
	Exhibit A	Security Agreement Supplement
	 	 
	Exhibit B	Notice of Grant of Security Interest in Copyrights
	 	 
	Exhibit C	Notice of Grant of Security Interest in Patents
	 	 
	Exhibit D	Notice of Grant of Security Interest in Trademarks
	 	 
	Exhibit E	Information Certificate
	 	 
	Exhibit F	Issuer Control Agreement

 

    	ii

    	 

    

 

GUARANTEE AND COLLATERAL AGREEMENT

 

GUARANTEE AND COLLATERAL AGREEMENT (this
“Agreement”), dated as of April 27, 2015, among ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD., as the Borrower,
the GUARANTORS party hereto and CALM WATERS PARTNERSHIP, as the Secured Party.

 

WHEREAS, the Borrower is entering into the
Credit Agreement described in Section 1 hereof, pursuant to which the Borrower intends to borrow funds for the purposes set forth
therein;

 

WHEREAS, (i) the Borrower is willing to
secure its obligations under the Credit Agreement and (ii) the Borrower is willing to cause certain of its Subsidiaries to guarantee
the foregoing obligations of the Borrower and to secure their guarantee thereof by granting Liens on their assets to the Secured
Party as provided in the Security Documents;

 

WHEREAS, the Secured Party is not willing
to make loans under the Credit Agreement unless (i) the foregoing obligations of the Borrower and the Guarantors are secured and
guaranteed as described above and (ii) each guarantee thereof is secured by Liens on assets of the Borrower and the relevant Guarantor
as provided in the Security Documents; and

 

WHEREAS, upon any foreclosure or other enforcement
of the Security Documents, the net proceeds of the relevant Collateral are to be received by or paid over to the Secured Party
and applied as provided herein;

 

NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

Section
1. Definitions.

 

(a)          Terms
Defined in Credit Agreement. Terms defined in the Credit Agreement and not otherwise defined in subsection (b) or (c) of this
Section have, as used herein, the respective meanings provided for therein. The rules of construction specified in Section 1.02
of the Credit Agreement also apply to this Agreement.

 

(b)          Terms
Defined in UCC. As used herein, each of the following terms has the meaning specified in the UCC:

 

	Term	 	UCC
	 	 	 
	Account	 	9-102
	Authenticate	 	9-102

 

    	 

    	 

    

 

	Term	 	UCC
	Certificated Security	 	8-102
	Chattel Paper	 	9-102
	Commercial Tort Claim	 	9-102
	Commodity Account	 	9-102
	Commodity Customer	 	9-102
	Debtor	 	9-102
	Deposit Account	 	9-102
	Document	 	9-102
	Entitlement Holder	 	8-102
	Equipment	 	9-102
	Financial Asset	 	8-102 & 103
	General Intangibles	 	9-102
	Instrument	 	9-102
	Inventory	 	9-102
	Investment Property	 	9-102
	Letter-of-Credit Right	 	9-102
	Money	 	1-201
	Record	 	9-102
	Securities Account	 	8-501
	Securities Intermediary	 	8-102
	Security	 	8-102 & 103
	Security Entitlement	 	8-102
	Supporting Obligations	 	9-102
	Uncertificated Security	 	8-102

 

(c)          Additional
Definitions. The following additional terms, as used herein, have the following meanings:

 

“Agreement” has the meaning
specified in the preamble hereto.

 

“Capital Stock” means
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.

 

“Cash Distributions”
means dividends, interest and other distributions and payments (including proceeds of liquidation, sale or other disposition) made
or received in cash upon or with respect to any Collateral.

 

“Collateral” means all
property, whether now owned or hereafter acquired, on which a Lien is granted or purports to be granted to the Secured Party pursuant
to the Security Documents. When used with respect to a specific Grantor, the term “Collateral” means all its property
on which such a Lien is granted or purports to be granted.

 

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“Collateral Accounts”
means the Controlled Deposit Accounts and the Controlled Securities Accounts.

 

“Contingent Obligation”
means, at any time, any Obligation (or portion thereof) that is contingent in nature at such time, including any Obligation that
is an obligation to provide collateral to secure the foregoing type of obligation.

 

“Control” has the meaning
specified in UCC Section 8-106, 9-104, 9-105, 9-106 or 9-107, as may be applicable to the relevant Collateral.

 

“Controlled Deposit Account”
means a Deposit Account that is subject to a Deposit Account Control Agreement.

 

“Controlled Securities Account”
means a Securities Account that (i) is maintained in the name of a Grantor at an office of a Securities Intermediary located in
the United States and (ii) together with all Financial Assets credited thereto and all related Security Entitlements, is subject
to a Securities Account Control Agreement among such Grantor, the Secured Party and such Securities Intermediary.

 

“Copyright License” means
any agreement now or hereafter in existence granting to any Grantor, or pursuant to which any Grantor grants to any other Person,
any right to use, copy, reproduce, distribute, prepare derivative works, display or publish any records or other materials on which
a Copyright is in existence or may come into existence (excluding any Exclusive Copyright License).

 

“Copyrights” means all
the following: (i) all copyrights under the laws of the United States or any other country (whether or not the underlying works
of authorship have been published), all registrations and recordings thereof, all copyrightable works of authorship (whether or
not published), and all applications for copyrights under the laws of the United States or any other country, including registrations,
recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, including those described in Schedule 1 to any Notice
of Grant of Security Interest in Copyrights, (ii) all renewals of any of the foregoing, (iii) all claims for, and rights to sue
for, past or future infringements of any of the foregoing, and (iv) all income, royalties, damages and payments now or hereafter
due or payable with respect to any of the foregoing, including damages and payments for past or future infringements thereof.

 

“Credit Agreement” means
the Credit Agreement, dated as of the date hereof, between the Borrower and the Secured Party.

 

“Deposit Account Control Agreement”
means a control agreement reasonably satisfactory to the Secured Party executed by the relevant Grantor, each institution maintaining
a Deposit Account for such Grantor, and the Secured Party.

 

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“Depositary Bank” means
a bank at which a Controlled Deposit Account is maintained.

 

“Equity Interest” means,
with respect to any Person, (a) the Capital Stock of such Person and (b) any Security Entitlement in respect of any Capital Stock
of such Person.

 

“Excluded Assets” has
the meaning specified in Section 3.

 

“Exclusive Copyright License”
means any material agreement now or hereafter in existence granting to any Grantor an exclusive right to use, copy, reproduce,
distribute, prepare derivative works, display or publish any materials on which a United States Copyright is in existence or may
come into existence.

 

“Exempt Account” means
any Deposit Account or Securities Account maintained by Grantors that is (x) exclusively used for payroll, payroll taxes or employee
benefits, (y) a zero balance disbursement account, or (z) an account containing not more than $250,000 at any one time, provided,
however, that amounts on deposit in all such accounts under this clause (z) do not exceed $500,000 at any time.

 

“Grantors” means the
Borrower and the Guarantors.

 

“Guarantors” means each
Subsidiary listed on the signature pages hereof under the caption “Guarantors” and each Subsidiary that shall, at any
time after the date hereof, become a “Guarantor” pursuant to Section 19.

 

“Information Certificate”
means, with respect to any Grantor, a certificate substantially in the form of Exhibit E (with any changes that the Secured Party
and the Borrower shall have approved), completed and supplemented with the schedules contemplated thereby to the satisfaction of
the Secured Party, and signed by an officer of such Grantor.

 

“Intellectual Property”
means all intellectual property and similar proprietary property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential
or proprietary technical and business information, know-how, show-how or other data or information, software and databases and
all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any of the foregoing.

 

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“Intellectual Property Filing”
means (i) with respect to any Patent or Trademark, the filing of the applicable Notice of Grant of Security Interest in Patents
or Notice of Grant of Security Interest in Trademarks with the United States Patent and Trademark Office, together with an appropriately
completed recordation form, and (ii) with respect to any Copyright or Exclusive Copyright License, the filing of the applicable
Notice of Grant of Security Interest in Copyrights with the United States Copyright Office, together with an appropriately completed
recordation form.

 

“Intellectual Property Notice”
means a Notice of Grant of Security Interest in Copyrights, a Notice of Grant of Security Interest in Patents or a Notice of Grant
of Security Interest in Trademarks.

 

“Issuer Control Agreement”
means an Issuer Control Agreement substantially in the form of Exhibit F (with any changes that the Secured Party and the Borrower
shall have approved).

 

“License” means any Patent
License, Trademark License, Copyright License, Exclusive Copyright License or other license or sublicense agreement relating to
Intellectual Property to which any Grantor is a party.

 

“Material Commercial Tort Claim”
means a Commercial Tort Claim involving a claim for more than $250,000.

 

“Non-Contingent Obligation”
means at any time any Obligation (or portion thereof) that is not a Contingent Obligation at such time.

 

“Notice of Grant of Security Interest
in Copyrights” means a Notice of Grant of Security Interest in Copyrights, substantially in the form of Exhibit B (with
any changes that the Secured Party and the Borrower shall have approved), executed and delivered by a Grantor in favor of the Secured
Party.

 

“Notice of Grant of Security Interest
in Patents” means a Notice of Grant of Security Interest in Patents, substantially in the form of Exhibit C (with any
changes that the Secured Party and the Borrower shall have approved), executed and delivered by a Grantor in favor of the Secured
Party.

 

“Notice of Grant of Security Interest
in Trademarks” means a Notice of Grant of Security Interest in Trademarks, substantially in the form of Exhibit D (with
any changes that the Secured Party and the Borrower shall have approved), executed and delivered by a Grantor in favor of the Secured
Party.

 

“Obligor” means the obligor
with respect to any Obligation.

 

“Original Grantor” means
any Grantor that grants a Lien on any of its assets hereunder on the Closing Date.

 

    	5

    	 

    

 

“own” refers to the possession
of sufficient rights in property to grant a security interest therein as contemplated by UCC Section 9-203, and “acquire”
refers to the acquisition of any such rights.

 

“Patent License” means
any agreement now or hereafter in existence granting to any Grantor, or pursuant to which any Grantor grants to any other Person,
any right with respect to any Patent or any invention now or hereafter in existence, whether patentable or not, whether a patent
or application for patent is in existence on such invention or not, and whether a patent or application for patent on such invention
may come into existence or not.

 

“Patents” means (i) all
letters patent and design letters patent of the United States or any other country and all applications for letters patent or design
letters patent of the United States or any other country, including applications in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof,
including those described in Schedule 1 to any Notice of Grant of Security Interest in Patents, (ii) all reissues, divisions, continuations,
continuations in part, revisions and extensions of any of the foregoing, (iii) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (iv) all income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past or future infringements thereof.

 

“Permitted Liens” means
the Liens described in Section 6.02 of the Credit Agreement.

 

“Pledged”, when used
in conjunction with any type of asset, means at any time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, “Pledged Equity Interest” means an Equity Interest that is included
in the Collateral at such time.

 

“Proceeds” means all
“proceeds” (as defined in Section 9-102 of the UCC) and including, in any event, all proceeds of, and all other profits,
products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other
disposition of, or other realization upon, any Collateral, including all claims of the relevant Grantor against third parties for
loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance
in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral.

 

“Recordable Intellectual Property”
means (i) any Patent issued or applied for issuance with the United States Patent and Trademark Office, (ii) any Trademark registered
or applied for registration with the United States Patent and Trademark Office, (iii) any Copyright registered or applied for registration
with the United States Copyright Office, and (iv) any Exclusive Copyright License.

 

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“Related Parties” means
with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.

 

“Release Conditions”
means the conditions for releasing all the Secured Guarantees and terminating all the Transaction Liens, which are specified in
Section 8.18 of the Credit Agreement.

 

“Secured Agreement”,
when used with respect to any Obligation secured hereby, refers collectively to each instrument, agreement or other document that
sets forth obligations of the Borrower, obligations of any Subsidiary and/or rights of the holder with respect to such Obligation.

 

“Secured Guarantee” means,
with respect to each Guarantor, its guarantee of the Obligations under Section 2 hereof or Section 1 of a Security Agreement Supplement.

 

“Secured Party” has the
meaning specified in the preamble hereto.

 

“Security Account Control Agreement”
means a control agreement reasonably satisfactory to the Secured Party executed by the relevant Grantor, each institution maintaining
a Securities Account for such Grantor, and the Secured Party.

 

“Security Agreement Supplement”
means a Security Agreement Supplement, substantially in the form of Exhibit A, signed and delivered to the Secured Party for the
purpose of adding a Subsidiary as a party hereto pursuant to Section 19 and/or adding additional property to the Collateral.

 

“Security Documents”
means this Agreement, the Security Agreement Supplements, the Deposit Account Control Agreements, the Issuer Control Agreements,
the Securities Account Control Agreements, the Intellectual Property Notices and all other supplemental or additional security
agreements, control agreements or similar instruments now or hereafter securing (or given with the intent to secure) any Obligations.

 

“Trademark License” means
any agreement now or hereafter in existence granting to any Grantor, or pursuant to which any Grantor grants to any other Person,
any right to use any Trademark.

 

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“Trademarks” means: (i)
all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of the foregoing have appeared or appear, package and other designs,
and all other source or business identifiers, and all general intangibles of like nature, and the rights in any of the foregoing
which arise under applicable law, (ii) the goodwill of the business symbolized thereby or associated with each of them, (iii) all
registrations and applications in connection therewith, including registrations and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political
subdivision thereof, including those described in Schedule 1 to any Notice of Grant of Security Interest in Trademarks, (iv) all
renewals of any of the foregoing, (v) all claims for, and rights to sue for, past or future infringements of any of the foregoing
and (vi) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including
damages and payments for past or future infringements thereof.

 

“Transaction Liens” means
the Liens granted by the Grantors under the Security Documents.

 

“UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any Transaction Lien on any Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such
other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or
priority.

 

Section
2. Guarantees by Guarantors.

 

(a)          Secured
Guarantees. Each Guarantor unconditionally guarantees the full and punctual payment of each Obligation (other than the Obligations
of such Guarantor) when due (whether at stated maturity, upon acceleration or otherwise), which guarantees shall constitute a continuing
guarantee of payment and not of collection. If the Borrower or any other Obligor fails to pay any Obligation punctually when due,
each other Guarantor agrees that it will forthwith on demand pay the amount not so paid at the place and in the manner specified
in the relevant Secured Agreement.

 

(b)          Secured
Guarantees Unconditional. The obligations of each Guarantor under its Secured Guarantee shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

 

(i)          any
extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Borrower, any other Guarantor
or Obligor or any other Person under any Secured Agreement, by operation of law or otherwise;

 

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(ii)         the
genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or
any Secured Agreement, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound;

 

(iii)        any
release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of the Borrower, any other
Guarantor or Obligor or any other Person under any Secured Agreement;

 

(iv)         any
change in the corporate existence, structure or ownership of the Borrower, any other Guarantor or Obligor or any other Person or
any of their respective subsidiaries, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower,
any other Guarantor or Obligor or any other Person or any of their assets or any resulting release or discharge of any obligation
of the Borrower, any other Guarantor or Obligor or any other Person under any Secured Agreement;

 

(v)          the
existence of any claim, set-off or other right that such Guarantor may have at any time against the Borrower, any other Guarantor
or Obligor, the Secured Party or any other Person, whether in connection with the Loan Documents or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

 

(vi)         any
invalidity or unenforceability relating to or against the Borrower, any other Guarantor or Obligor or any other Person for any
reason of any Secured Agreement, or any provision of any applicable law, rule or regulation purporting to prohibit the payment
of any Obligation by the Borrower, any other Guarantor or Obligor or any other Person; or

 

(vii)        any
other act or omission to act or delay of any kind by the Borrower, any other Guarantor or Obligor, any other party to any Secured
Agreement, the Secured Party or any other Person, or any other circumstance whatsoever that might, but for the provisions of this
clause (vii), constitute a legal or equitable discharge of or defense of a surety or guarantor to any obligation of any Guarantor
hereunder.

 

(c)          Release
of Secured Guarantees. (i) All Secured Guarantees will be released when all Release Conditions are satisfied. If at any time
any payment of an Obligation is rescinded or must be otherwise restored or returned upon the insolvency or receivership of the
Borrower, any other Obligor or otherwise, the Secured Guarantees shall be reinstated with respect thereto as though such payment
had been due but not made at such time.

 

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(ii)         In
addition, if any Guarantor shall cease to be a Subsidiary of the Borrower as permitted by Section 8.18(b) of the Credit Agreement,
the Secured Party, at the request of the Borrower, shall release such Guarantor from its Secured Guaranty and its other Obligations
under the Loan Documents;

 

(iii)        Upon
any termination of a Secured Guaranty, the Secured Party will, in accordance with Section 8.18(d) of the Credit Agreement, execute
and deliver to the Borrower such documents as it shall reasonably request to evidence the termination thereof.

 

(d)          Waiver
by Guarantors. Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower, any other Guarantor
or Obligor or any other Person. Each Guarantor expressly waives all rights that it may have now or in the future under any statute,
at common law, in equity or otherwise, to compel the Secured Party to marshal assets or to proceed against any Obligor, other Person
or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Guarantor.
Each Guarantor waives all defenses available to a surety, guarantor or accommodation co-obligor other than payment in full of all
Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of any Obligations as long as
it is a Guarantor.

 

(e)          Subrogation.
A Guarantor that makes a payment with respect to an Obligation hereunder shall be subrogated to the rights of the payee against
the Borrower or the applicable Obligor with respect to such payment; provided that no Guarantor shall enforce any payment
by way of subrogation against the Borrower or the applicable Obligor, or by reason of contribution against any other guarantor
of such Obligation, until all the Release Conditions have been satisfied.

 

(f)          Stay
of Acceleration. If acceleration of the time for payment of any Obligation by the Borrower or the applicable Obligor is stayed
by reason of the insolvency or receivership of the Borrower or the applicable Obligor or otherwise, all Obligations otherwise subject
to acceleration under the terms of any Secured Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by the Secured Party.

 

(g)          Right
of Set-Off. In addition to any rights and remedies of the Secured Party provided by law, the Secured Party shall have the right,
upon any amount becoming due and payable by any Guarantor hereunder (whether at the stated maturity, by acceleration or otherwise)
to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured at any time held or owing by the Secured Party or for the credit or the account of
such Guarantor. The Secured Party agrees to promptly notify such Guarantor after any such setoff and application made by the Secured
Party; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

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(h)          Continuing
Guarantee. Each Secured Guarantee is a continuing guarantee, shall be binding on the relevant Guarantor and its successors
and assigns, and shall be enforceable by the Secured Party. If all or part of the Secured Party’s interest in any Obligation
is assigned or otherwise transferred, the transferor’s rights under each Secured Guarantee, to the extent applicable to the
obligation so transferred, shall automatically be transferred with such obligation.

 

(i)          Limitation
on Obligations of Guarantor. The obligations of each Guarantor under its Secured Guarantee shall be limited to an aggregate
amount equal to the largest amount that would not render such Secured Guarantee subject to avoidance under Section 548 of the Bankruptcy
Code or any comparable provisions of applicable law.

 

(j)          Right
of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other
Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall
be subject to the terms and conditions of Section 2(e) . The provisions of this Section 2(j) shall in no respect limit the obligations
and liabilities of any Guarantor to the Secured Party, and each Guarantor shall remain liable to the Secured Party for the full
amount guaranteed by such Guarantor hereunder.

 

Section
3. Grant of Transaction Liens. (a) The Borrower, in order to secure all Obligations, and each Guarantor party hereto,
in order to secure all Obligations, including its Obligations under its Secured Guarantee, grants to the Secured Party a continuing
security interest in all the following property of such Borrower or such Guarantor, as the case may be, whether now owned or existing
or hereafter acquired or arising and regardless of where located:

 

(i)          all
Accounts;

 

(ii)         all
Chattel Paper;

 

(iii)        all
Money and Deposit Accounts;

 

(iv)         all
Documents;

 

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(v)          all
Equipment;

 

(vi)         all
General Intangibles (including (x) any Equity Interests in other Persons that do not constitute Investment Property and (y) any
Intellectual Property);

 

(vii)        all
Instruments;

 

(viii)      all
Inventory;

 

(ix)         all
Investment Property;

 

(x)          the
Commercial Tort Claims described in Schedule 3;

 

(xi)         all
Letter-of-Credit Rights;

 

(xii)        all
books and records (including customer lists, credit files, computer programs, printouts and other computer materials and records)
of such Grantor pertaining to any of its Collateral;

 

(xiii)      all
Proceeds of the Collateral described in the foregoing clauses (i) through (xii);

 

provided that the following property is excluded from
the foregoing security interests (it being understood that such grant will be applicable at such time as any such property or assets
ceases to constitute Excluded Assets): (A) motor vehicles the perfection of a security interest in which is excluded from the Uniform
Commercial Code in the relevant jurisdiction, (B) any lease, license or other agreement to the extent that a grant of a security
interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any
other party thereto (other than the Borrower or Grantor) after giving effect to the applicable anti-assignment provisions of the
UCC, (C) any properties and assets with respect to which the Secured Party determines in its good faith judgment that the costs
or other consequences of granting or perfecting a security interest therein are excessive in view of the benefits to be obtained
by the Secured Party, (D) any United States intent-to-use Trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use Trademark
applications under applicable federal law, (E) any real property (which shall, notwithstanding anything herein to the contrary,
be subject to the requirements of Section 4.01 and 5.12(a) of the Credit Agreement), (F) any letter of credit rights to the extent
any Grantor is required by applicable law to apply the proceeds of a drawing of such letter of credit for a specified purpose,
(G) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such
licenses, franchises, charters or authorizations are prohibited or restricted thereby after giving effect to the applicable anti-assignment
provisions of the Uniform Commercial Code, and (H) any property to the extent that the grant of a security interest therein is
prohibited by any applicable law or regulation, requires a consent not obtained of any Governmental Authority pursuant to any applicable
law or regulation, or is prohibited by, or would constitute a breach or default under or would result in the termination, invalidation
or abandonment of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing
or giving rise to such property or, in the case of any Investment Property, any applicable shareholder or similar agreement (the
foregoing, collectively, the “Excluded Assets”), provided that the foregoing limitation in clause (H)
shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any asset
or right to the extent that Sections 9-406 and 9-408 of the Uniform Commercial Code as in effect on the date hereof would permit
(and excuse any default or violation resulting therefrom) the creation of a security interest in such asset or right notwithstanding
such law or regulation or the provision of such contract, license, agreement, instrument or other document or shareholder or similar
agreement prohibiting the creation of a security interest therein or shall render such provision unenforceable. Each Grantor shall
upon request of the Secured Party use commercially reasonable efforts to obtain any such required consent that is reasonably obtainable.

 

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(b)          With
respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein
includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any
Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

 

(c)          The
Transaction Liens are granted as security only and shall not subject the Secured Party to, or transfer or in any way affect or
modify, any obligation or liability of any Grantor with respect to any of the Collateral or any transaction in connection therewith.

 

Section
4. General Representations and Warranties. Each Grantor represents and warrants that:

 

(a)          Such
Grantor (a) is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction
of its organization or formation, (b) has the requisite power and authority to own and operate its properties, to lease the properties
it operates as lessee and to conduct the business in which it is currently engaged as it is currently conducted, (c) is duly qualified
as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification except to the extent that the failure to so qualify could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all applicable laws, rules and
regulations, except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.

 

    	13

    	 

    

 

(b)          With
respect to each Original Grantor, Schedule 1 lists all Equity Interests in Subsidiaries and Affiliates of such Grantor owned by
such Grantor as of the Closing Date. Such Grantor holds all such Equity Interests directly (i.e., not through a Subsidiary,
a Securities Intermediary or any other Person).

 

(c)          With
respect to each Original Grantor, Schedule 2 lists, as of the Closing Date, (i) all Securities owned by such Grantor (except for
Securities evidencing Equity Interests in Subsidiaries and Affiliates of such Grantor) and (ii) all Securities Accounts (other
than any one or more Securities Accounts comprising Financial Assets of less than $250,000 in the aggregate) to which Financial
Assets are credited in respect of which such Grantor owns Security Entitlements.

 

(d)          As
of the Closing Date, such Grantor owns no Commodity Account in respect of which such Grantor is the Commodity Customer.

 

(e)          All
Pledged Equity Interests owned by such Grantor are owned by it free and clear of any Lien other than Permitted Liens. All shares
of capital stock included in such Pledged Equity Interests (including shares of capital stock in respect of which such Grantor
owns a Security Entitlement) have been duly authorized and validly issued and are fully paid and non-assessable. None of such Pledged
Equity Interests is subject to any option to purchase or similar right of any Person.

 

(f)          Such
Grantor has good and marketable title to all its Collateral (subject to exceptions that are, in the aggregate, not material), free
and clear of any Lien other than Permitted Liens.

 

(g)          Such
Grantor has not performed any acts that are reasonably likely to prevent the Secured Party from enforcing any of the provisions
of the Security Documents or that would limit the Secured Party in any such enforcement. No financing statement, security agreement,
mortgage or similar or equivalent document or instrument covering all or part of the Collateral owned by such Grantor is on file
or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral,
except financing statements, mortgages or other similar or equivalent documents with respect to Permitted Liens. After the Closing
Date, no Collateral owned by such Grantor will be in the possession or under the Control of any other Person having a claim thereto
or security interest therein, other than a Permitted Lien.

 

(h)          The
Transaction Liens on all Collateral owned by such Grantor (i) have been validly created, (ii) will attach to each item of such
Collateral on the Closing Date (or, if such Grantor first obtains rights thereto on a later date, on such later date) and (iii)
when so attached, will secure all the Obligations, including the Obligations under its Secured Guarantee, as the case may be.

 

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(i)           Such
Grantor has delivered an Information Certificate to the Secured Party. With respect to each Original Grantor, information set forth
therein is correct and complete, in all material respects, as of the Closing Date.

 

(j)          When
UCC financing statements describing the Collateral as “all assets” or “all personal property now existing or
hereinafter acquired” or other words to that effect have been filed in the offices specified in such Information Certificate,
the Transaction Liens will constitute perfected security interests in the Collateral owned by such Grantor to the extent that a
security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein except
Permitted Liens. When, in addition to the filing of such UCC financing statements, the applicable Intellectual Property Filings
have been made with respect to such Grantor’s Recordable Intellectual Property (including any future filings required pursuant
to Sections 5(a) and 6(a)), the Transaction Liens will constitute perfected security interests in all right, title and interest
of such Grantor in its Recordable Intellectual Property to the extent that security interests therein may be perfected by such
filings, prior to all Liens and rights of others therein except Permitted Liens. Except for (x) the filing of such UCC financing
statements, (y) such Intellectual Property Filings, and (z) additional Intellectual Property Filings that may be necessary to perfect
the Transaction Liens with respect to such Grantor’s Patents, Trademarks and Copyrights that do not constitute Recordable
Intellectual Property, no registration, recordation or filing with any governmental body, agency or official is required in connection
with the execution or delivery of the Security Documents or is necessary for the validity or enforceability thereof or for the
perfection (other than in respect of deposit accounts) or due recordation of the Transaction Liens or for the enforcement of the
Transaction Liens. Notwithstanding anything herein to the contrary, no Grantor shall take any action to perfect any security interest
in any part of the Collateral under the laws of any jurisdiction outside of the United States of America.

 

(k)          Such
Grantor has taken, and will continue to take, all actions necessary under the UCC to perfect its interest in any Accounts or Chattel
Paper purchased or otherwise acquired by it, as against its assignors and creditors of its assignors, except with respect to actions
not required to taken until a specified period after the Closing Date.

 

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Section
5. Further Assurances; General Covenants. Each Grantor covenants as follows:

 

(a)          Such
Grantor will, from time to time, at the Borrower’s expense, execute, deliver, file and record any reasonable statement, assignment,
instrument, document, agreement or other paper and take any other action (including any Intellectual Property Filing but solely
with respect to Recordable Intellectual Property) that from time to time may be necessary, or that the Secured Party may reasonably
request, in order to:

 

(i)          create,
preserve, perfect, confirm or validate the Transaction Liens on such Grantor’s Collateral;

 

(ii)         in
the case of (a) Pledged Deposit Accounts (other than Exempt Accounts), Pledged Investment Property or Pledged Securities Accounts
(other than Exempt Accounts) and (b) upon the occurrence and during the continuance of an Event of Default, Pledged Letter-of-Credit
Rights, cause the Secured Party to have Control thereof (subject to exclusions expressly set forth therein and in the Credit Agreement);

 

(iii)        enable
the Secured Party to obtain the full benefits of the Security Documents; or

 

(iv)         enable
the Secured Party to exercise and enforce any of its rights, powers and remedies with respect to any of such Grantor’s Collateral.

 

Such Grantor authorizes the Secured Party
to execute and file such financing statements or continuation statements in such jurisdictions with such descriptions of collateral
(including “all assets” or “all personal property now existing or hereinafter acquired” or other words
to that effect) and other information set forth therein as the Secured Party may deem necessary or desirable for the purposes set
forth in the preceding sentence. Each Grantor also ratifies its authorization for the Secured Party to file in any such jurisdiction
any initial financing statements or amendments thereto if filed prior to the date hereof. The Secured Party is further authorized
to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office) such documents
as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interests
granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Secured
Party as secured party. The Borrower will pay the costs of, or reasonably incidental to, any Intellectual Property Filings and
any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto.

 

(b)          Such
Grantor shall furnish to the Secured Party 20 Business Days (or such shorter period as the Secured Party may agree) prior written
notice of any change (1) in its name, (2) in its jurisdiction of organization or formation, (3) in its identity or corporate structure
or (4) in its federal taxpayer identification number. Such Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order
for the Secured Party to continue at all times following such change to have a valid, legal and perfected security interest in
all the Collateral under the Loan Documents.

 

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(c)          If
any of its Collateral is in the possession or control of a warehouseman, bailee or agent at any time, when an Event of Default
shall have occurred and be continuing, such Grantor will, upon the request of the Secured Party: (i) notify such warehouseman,
bailee or agent of the relevant Transaction Liens, (ii) instruct such warehouseman, bailee or agent to hold all such Collateral
for the Secured Party’s account subject to the Secured Party’s instructions (which shall permit such Collateral to
be removed by such Grantor in the ordinary course of business until the Secured Party notifies such warehouseman, bailee or agent
that an Event of Default has occurred and is continuing), (iii) cause such warehouseman, bailee or agent to Authenticate a Record
acknowledging that it holds possession of such Collateral for the Secured Party’s benefit and (iv) make such Authenticated
Record available to the Secured Party.

 

(d)          Such
Grantor will promptly upon request, provide to the Secured Party all information and evidence concerning such Grantor’s Collateral
that the Secured Party may reasonably request from time to time to enable it to enforce the provisions of the Security Documents.

 

(e)          Except
as permitted under the Credit Agreement, each Grantor shall defend its title to Collateral and the Secured Party’s Liens
therein against all Persons, claims and demands, except Permitted Liens.

 

Section
6. Intellectual Property. Each Grantor covenants as follows:

 

(a)          On
the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first Security Agreement Supplement
(in the case of any other Grantor), such Grantor will sign and deliver to the Secured Party Intellectual Property Notices with
respect to all Recordable Intellectual Property then owned by it. Within 45 calendar days after the last day of each fiscal quarter
thereafter, it will sign and deliver to the Secured Party an appropriate Intellectual Property Notice covering any Recordable Intellectual
Property owned by it on the last day of such fiscal quarter that is not covered by any previous Intellectual Property Notices so
signed and delivered by it. In each case, it will, within 45 calendar days after the last day of each such fiscal quarter, make
all Intellectual Property Filings necessary to record the Transaction Liens on such Recordable Intellectual Property.

 

    	17

    	 

    

 

(b)          Such
Grantor will notify the Secured Party within 45 days after the last day of the fiscal quarter in which it learns that any application
or registration relating to any Intellectual Property owned by it may become abandoned, or of any adverse, final and non-appealable
determination (including any final, non-appealable adverse determination in the United States Copyright Office, the United States
Patent and Trademark Office or any court) regarding such Grantor’s ownership of such Intellectual Property, its right to
register or patent the same, or its right to keep and maintain the same, in each case of the foregoing, except to the extent that
the loss of such Intellectual Property would not reasonably be expected to have a Material Adverse Effect. If any of such Grantor’s
rights to any Intellectual Property are materially infringed or misappropriated by a third party and such infringement or misappropriation
would be reasonably expected to have a Material Adverse Effect, such Grantor will notify the Secured Party within 45 calendar days
after it learns thereof and will, unless such Grantor shall reasonably determine that such action would be of negligible value,
economic or otherwise, promptly take such actions as such Grantor shall reasonably deem appropriate under the circumstances to
protect such Intellectual Property.

 

(c)          Upon
the occurrence and during the continuance of an Event of Default, each Grantor shall, upon the request of the Secured Party therefor,
use its commercially reasonable efforts to obtain all requisite consents or approvals by the licensor of each Exclusive Copyright
License and each material Copyright License, Patent License and Trademark License under which such Grantor is the licensee to effect
the assignment of all such Grantor’s right, title and interest thereunder to the Secured Party or its designee.

 

Section
7. Investment Property. Each Grantor represents, warrants and covenants as follows:

 

(a)          Certificated
Securities. On the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first Security
Agreement Supplement (in the case of any other Grantor), such Grantor will deliver to the Secured Party as Collateral hereunder
all certificates representing Pledged Certificated Securities then owned by such Grantor. Thereafter, whenever such Grantor acquires
any other certificate representing a Pledged Certificated Security, such Grantor will promptly (and in any event within 10 Business
Days) deliver such certificate to the Secured Party as Collateral hereunder.

 

(b)          Uncertificated
Securities. On the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first Security
Agreement Supplement (in the case of any other Grantor), such Grantor will enter into (and cause the relevant issuer to enter into)
an Issuer Control Agreement in respect of each Pledged Uncertificated Security then owned by such Grantor and deliver such Issuer
Control Agreement to the Secured Party (which shall enter into the same). Thereafter, whenever such Grantor acquires any other
Pledged Uncertificated Security, such Grantor will promptly (and in any event within 10 Business Days) enter into (and cause the
relevant issuer to enter into) an Issuer Control Agreement in respect of such Pledged Uncertificated Security and deliver such
Issuer Control Agreement to the Secured Party (which shall enter into the same).

 

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(c)          Security
Entitlements. On the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first
Security Agreement Supplement (in the case of any other Grantor), such Grantor will, with respect to each Security Entitlement
then owned by it, enter into (and cause the relevant Securities Intermediary to enter into) a Securities Account Control Agreement
in respect of such Security Entitlement and the Securities Account to which the underlying Financial Asset is credited and will
deliver such Securities Account Control Agreement to the Secured Party (which shall enter into the same); provided that
the Grantors have the right not to comply with this section with respect to Exempt Accounts (and Financial Assets credited thereto
and related Security Entitlements). Thereafter, whenever such Grantor acquires any other Security Entitlement with respect to Financial
Assets (other than a Financial Asset credited to an account that would be an Exempt Account immediately after such Financial Asset
is so credited), promptly (and in any event within 10 Business Days) cause the underlying Financial Asset to be credited to a Controlled
Securities Account.

 

(d)          Perfection
as to Certificated Securities. When such Grantor delivers the certificate representing any Pledged Certificated Security owned
by it to the Secured Party and complies with Section 7(h) in connection with such delivery, (i) the Transaction Lien on such Pledged
Certificated Security will be perfected, subject to no prior Liens or rights of others (other than Permitted Liens), (ii) the Secured
Party will have Control of such Pledged Certificated Security and (iii) assuming the Secured Party does not have notice of any
adverse claim to such perfected Certificated Security (it being understood and agreed that as of the Closing Date, the Secured
Party does not have notice of any adverse claim to such Pledged Certificated Security), the Secured Party will be a protected purchaser
(within the meaning of UCC Section 8-303) thereof.

 

(e)          Perfection
as to Uncertificated Securities. When such Grantor, the Secured Party and the issuer of any Pledged Uncertificated Security
owned by such Grantor enter into an Issuer Control Agreement with respect thereto, (i) the Transaction Lien on such Pledged Uncertificated
Security will be perfected, subject to no prior Liens or rights of others (other than Permitted Liens), (ii) the Secured Party
will have Control of such Pledged Uncertificated Security and (iii) assuming the Secured Party does not have notice of any adverse
claim to such Pledged Uncertificated Security (it being understood and agreed that as of the Closing Date, the Secured Party does
not have notice of any adverse claim to such Pledged Uncertificated Security), the Secured Party will be a protected purchaser
(within the meaning of UCC Section 8-303) thereof.

 

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(f)          Perfection
as to Security Entitlements. So long as the Financial Asset underlying any Security Entitlement owned by such Grantor is credited
to a Controlled Securities Account, (i) the Transaction Lien on such Security Entitlement will be perfected, subject to no prior
Liens or rights of others (except Liens and rights of the relevant Securities Intermediary that are Permitted Liens), (ii) the
Secured Party will have Control of such Security Entitlement and (iii) assuming the Secured Party acquires its Security Entitlement
with respect thereto without notice of any adverse claim thereto (it being understood and agreed that as of the Closing Date, the
Secured Party does not have notice of any adverse claim to such Security Entitlement), no action based on an adverse claim to such
Security Entitlement or such Financial Asset, whether framed in conversion, replevin, constructive trust, equitable lien or other
theory, may be asserted against the Secured Party.

 

(g)          Agreement
as to Applicable Jurisdiction. In respect of all Security Entitlements owned by such Grantor, and all Pledged Securities Accounts
to which the related Financial Assets are credited, the related Securities Account Control Agreement will provide that the Securities
Intermediary’s jurisdiction (determined as provided in UCC Section 8-110(e)) will at all times be located in the United States.

 

(h)          Delivery
of Pledged Certificates. All certificates representing Pledged Certificated Securities, when delivered to the Secured Party,
will be in suitable form for transfer by delivery, or accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, all in form and substance reasonably satisfactory to the Secured Party.

 

(i)           Communications.
Upon the reasonable request of the Secured Party, each Grantor will promptly give to the Secured Party copies of any notices and
other communications received by it with respect to (i) Pledged Securities registered in the name of such Grantor or its nominee
and (ii) Pledged Security Entitlements as to which such Grantor is the Entitlement Holder; provided that, with respect to
any such notice or other communication that could reasonably be expected to adversely affect the security interest of the Secured
Party in such Pledged Securities or Pledged Securities Entitlements granted hereunder or the perfection thereof, the Secured Party
shall be deemed to have made such request on the last day of each fiscal quarter of the Borrower.

 

(j)           Certification
of Limited Liability Company and Partnership Interests. Any limited liability company and any partnership controlled by any
Grantor shall either (a) not include in its operative documents any provision that any Equity Interests in such limited liability
company or such partnership be a “security” as defined under Article 8 of the Uniform Commercial Code, or (b) certificate
any Equity Interests in any such limited liability company or such partnership. To the extent an interest in any limited liability
company or partnership controlled by any Grantor and pledged hereunder is certificated or becomes certificated, each such certificate
shall be delivered to the Secured Party pursuant to Section 7(a) and such Grantor shall fulfill all other requirements under Section
7 applicable in respect thereof.

 

    	20

    	 

    

 

Section
8. Deposit Accounts. Each Grantor represents, warrants and covenants as follows:

 

(a)          All
cash owned by such Grantor shall be deposited, upon or promptly after receipt thereof, in one or more Controlled Deposit Accounts
or an account that would be an Exempt Account immediately after such deposit.

 

(b)          In
respect of each Controlled Deposit Account, the related Deposit Account Control Agreement will provide that the Depositary Bank’s
jurisdiction (determined as provided in UCC Section 9-304) will at all times be a jurisdiction in which Article 9 of the Uniform
Commercial Code is in effect.

 

(c)          So
long as the Secured Party has Control of a Controlled Deposit Account, the Transaction Lien on such Controlled Deposit Account
will be perfected, subject to no prior Liens or rights of others (except (x) the Depositary Bank’s right to deduct its normal
operating charges and any uncollected funds previously credited thereto, and (y) Permitted Liens).

 

Section
9. Commercial Tort Claims. Each Grantor represents, warrants and covenants as follows:

 

(a)          In
the case of an Original Grantor, Schedule 3 accurately describes, with the specificity required to satisfy Official Comment 5 to
UCC Section 9-108, each Material Commercial Tort Claim with respect to which such Original Grantor is the claimant as of the Closing
Date. In the case of any other Grantor, Schedule 3 to its first Security Agreement Supplement will accurately describe, with the
specificity required to satisfy said Official Comment 5, each Material Commercial Tort Claim with respect to which such Grantor
is the claimant as of the date on which it signs and delivers such Security Agreement Supplement.

 

(b)          If
any Grantor acquires a Material Commercial Tort Claim after the Closing Date (in the case of an Original Grantor) or the date on
which it signs and delivers its first Security Agreement Supplement (in the case of any other Grantor), such Grantor will promptly
(and in any event within 10 Business Days) sign and deliver to the Secured Party a Security Agreement Supplement granting a security
interest in such Commercial Tort Claim (which shall be described therein with the specificity required to satisfy said Official
Comment 5) to the Secured Party.

 

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Section
10. Transfer of Record Ownership. At any time when an Event of Default shall have occurred and be continuing, the
Secured Party may (and to the extent that action by it is required, the relevant Grantor, if directed to do so by the Secured Party,
will as promptly as practicable) cause each of the Pledged Securities (or any portion thereof specified in such direction) to be
transferred of record into the name of the Secured Party or its nominee. Each Grantor will take any and all actions reasonably
requested by the Secured Party to facilitate compliance with this Section. If the provisions of this Section are implemented, Section
7(b) shall not thereafter apply to any Pledged Security that is registered in the name of the Secured Party or its nominee. The
Secured Party will promptly give to the relevant Grantor copies of any notices and other communications received by the Secured
Party with respect to Pledged Securities registered in the name of the Secured Party or its nominee.

 

Section
11. Right to Vote Securities; Right to Proceeds of Insurance. (a) Unless an Event of Default shall have occurred
and be continuing, each Grantor shall have the right, from time to time, to vote and to give consents, ratifications and waivers
with respect to any Pledged Security owned by it and the Financial Asset underlying any Pledged Security Entitlement owned by it,
and the Secured Party will, upon receiving a written request from such Grantor, deliver to such Grantor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers in respect of any such Pledged Security that is registered
in the name of the Secured Party or its nominee or any such Pledged Security Entitlement as to which the Secured Party or its nominee
is the Entitlement Holder, in each case as shall be specified in such request and be in form and substance satisfactory to the
Secured Party.

 

(b)          If
an Event of Default shall have occurred and be continuing, the Secured Party shall have the exclusive right to the extent permitted
by law to vote, to give consents, ratifications and waivers and to take any other action with respect to the Pledged Investment
Property, the other Pledged Equity Interests and the Financial Assets underlying the Pledged Security Entitlements, with the same
force and effect as if the Secured Party were the absolute and sole owner thereof, and each Grantor shall take all such action
as the Secured Party may reasonably request from time to time to give effect to such right.

 

(c)          Upon
the receipt by Secured Party of a request from a Grantor that the Secured Party (i) turn over the proceeds of any policy of insurance
of such Grantor on which the Secured Party is named as a loss payee or (ii) provide written instructions to the related insurer
directing the insurer to pay the proceeds thereof directly to such Grantor or its designee, Secured Party shall promptly (and in
any event within two Business Days) turn over such proceeds or provide such written instructions in accordance with the request
of such Grantor, unless and to the extent (x) such proceeds are required to be applied to the repayment of the Obligations under
the Credit Agreement at such time or (y) an Event of Default shall have occurred and be continuing.

 

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Section
12. Certain Cash Distributions. Cash Distributions with respect to assets held in a Collateral Account shall be deposited
and held therein, or withdrawn therefrom, as provided herein and in the Credit Agreement. Funds held in any Collateral Account
may, until withdrawn, be invested and reinvested in such Permitted Investments as the relevant Grantor shall request from time
to time; provided that if an Event of Default shall have occurred and be continuing, the Secured Party may select such Permitted
Investments.

 

Section
13. Remedies upon Event of Default. (a) If an Event of Default shall have occurred and be continuing, the Secured
Party may exercise (or cause its sub-agents to exercise) any or all of the remedies available to it (or to such sub-agents) under
the Loan Documents.

 

(b)          Without
limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, the Secured Party may exercise
all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised)
with respect to any Collateral and, in addition, the Secured Party may, without being required to give any notice, except as herein
provided or as may be required by mandatory provisions of law, sell or otherwise dispose of the Collateral or any part thereof
in one or more parcels at public or private sale, at any exchange, broker’s board or at any of the Secured Party’s
offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such
other terms as the Secured Party may deem commercially reasonable, irrespective of the impact of any such sales on the market price
of the Collateral. To the maximum extent permitted by applicable law, the Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled to use and apply all of any part of the Obligations as a credit on account of
the purchase price of any Collateral payable at such sale. Upon any sale of Collateral by the Secured Party (including pursuant
to a power of sale granted by statute or under a judicial proceeding), the receipt of the Secured Party or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase money paid to the Secured Party or such officer or
be answerable in any way for the misapplication thereof. Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights
of redemption, stay or appraisal that it now has or may at any time in the future have under any rule of law or statute now existing
or hereafter enacted. The Secured Party shall not be obliged to make any sale of Collateral regardless of notice of sale having
been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. To the maximum
extent permitted by law, each Grantor hereby waives any claim against the Secured Party arising because the price at which any
Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale, even
if the Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree. The Secured
Party may disclaim any warranty, as to title or as to any other matter, in connection with such sale or other disposition, and
its doing so shall not be considered adversely to affect the commercial reasonableness of such sale or other disposition.

 

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(c)          If
the Secured Party sells any of the Collateral upon credit, the Grantors will be credited only with payment actually made by the
purchaser, received by the Secured Party and applied in accordance with Section 14 hereof. In the event the purchaser fails to
pay for the Collateral, the Secured Party may resell the same, subject to the same rights and duties set forth herein.

 

(d)          Notice
of any such sale or other disposition shall be given as required by applicable law, rule or regulation. Each Grantor hereby agrees
that 10 days’ written notice of any proposed sale or other disposition of Collateral by the Secured Party shall be reasonable.

 

(e)          For
the purpose of enabling the Secured Party to exercise rights and remedies under this Agreement at such time as the Secured Party
shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Secured Party a license (exercisable
without payment of royalty or other compensation to the Grantors and subject to any prior rights granted by such Grantor to third
parties), to use, license or sublicense any of the Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and including in such license access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs (solely to the extent permitted by the relevant licenses therefor) used for the compilation
or printout thereof; provided, however, that any trademarks or service marks licensed pursuant to the foregoing may be used
only in connection with goods and services of similar type and similar or greater quality than those theretofore sold by such Grantor
under such trademark or service mark. The use of such license by the Secured Party may be exercised only upon the occurrence and
during the continuation of an Event of Default; provided, however, that any license or sublicense entered into by
the Secured Party in accordance herewith shall be binding upon each Grantor notwithstanding any subsequent cure of an Event of
Default.

 

Section
14. Application of Proceeds. If an Event of Default shall have occurred and be continuing, the Secured Party may
apply (a) any cash held in the Collateral Accounts and (b) the proceeds of any sale or other disposition of all or any part of
the Collateral to the Obligations, which application shall be made by the Secured Party in the following order:

 

    	24

    	 

    

 

First, to payment of that
portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest, but including
all reasonable fees, disbursements and other charges of counsel under Section 8.05 of the Credit Agreement and amounts payable
under Sections 2.03, 2.09 and 2.11 of the Credit Agreement) payable to the Secured Party;

 

Second, to payment of that
portion of the Obligations constituting accrued and unpaid interest on, and unpaid principal of, the Term Loan;

 

Third, to the payment of
all other Obligations of the Loan Parties that are due and payable to the Secured Party on such date; and

 

Last, the balance, if any,
after all of the Obligations have been paid in full, to the Borrower or as otherwise required by applicable law, rule or regulation.

 

Section
15. Fees and Expenses; Indemnification. (a) All expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all
other payments required to be made by Secured Party to any Person to realize upon any Collateral, shall be borne and paid by the
Grantors.  The Borrower will forthwith upon demand pay to the Secured Party:

 

(i)          the
amount of any taxes that the Secured Party may have been required to pay by reason of the Transaction Liens or to free any Collateral
from any other Lien thereon;

 

(ii)         the
amount of any reasonable and documented out-of-pocket costs and expenses incurred in connection with the development, preparation,
execution and administration of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents
and any other documents prepared in connection herewith or therewith, and the consummation and administration of the Transactions,
including, without limitation, the fees, charges and disbursements of counsel to the Secured Party, including, if applicable, special
or local counsel in each applicable jurisdiction, as appropriate; and

 

(iii)        the
amount required to pay or reimburse the Secured Party for all its reasonable costs and expenses incurred in connection with the
enforcement of any rights under this Agreement, the other Loan Documents and any such other documents, including, without limitation,
the fees, charges and disbursements of counsel to the Secured Party, including, if applicable, special or local counsel in each
applicable jurisdiction, as appropriate.

 

    	25

    	 

    

 

Any such amount not paid to the Secured Party on demand will
bear interest for each day thereafter until paid at the rate provided for in Section 2.05 of the Credit Agreement.

 

(b)          If
any transfer tax, documentary stamp tax or other tax is payable in connection with any transfer or other transaction provided for
in the Security Documents, the Borrower will pay such tax and provide any required tax stamps to the Secured Party or as otherwise
required by law.

 

(c)          The
Borrower shall indemnify the Secured Party its affiliates and the respective directors, officers, agents and employees of the foregoing
(each an “Indemnitee”) in accordance with Section 8.05 of the Credit Agreement.

 

Section
16. Authority to Administer Collateral. Each Grantor irrevocably appoints the Secured Party (and all Persons designated
by the Secured Party) as its true and lawful attorney (and agent in fact), with full power of substitution, in its name or in the
name of such Grantor, the Secured Party or otherwise, for the sole use and benefit of the Secured Party, but at the Borrower’s
sole cost and expense, to the extent permitted by law and without notice, to exercise, at any time and from time to time, all or
any of the following powers with respect to all or any of such Grantor’s Collateral:

 

(i)          endorse
a Grantor’s name on any proceeds of Collateral (including proceeds of insurance) that come into the Secured Party’s
possession or control; or

 

(ii)         during
the continuance of any Event of Default:

 

(A)         notify
any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts by legal proceedings or otherwise,
and generally exercise any rights and remedies with respect to Accounts;

 

(B)         demand,
sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,

 

(C)         settle,
adjust, modify, compromise, compound, discharge, release, prosecute or defend any Accounts or other Collateral or any action or
proceeding with respect thereto,

 

(D)         collect,
liquidate and receive balances in Pledged Deposit Accounts or Pledged Securities Accounts, and take control, in any manner, of
proceeds of Collateral;

 

    	26

    	 

    

 

(E)         prepare,
file and sign a Grantor’s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice,
assignment or satisfaction of Lien or similar document;

 

(F)         receive,
open and dispose of mail addressed to a Grantor, and notify postal authorities to deliver any such mail to an address designated
by the Secured Party;

 

(G)         endorse
any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory or
other Collateral;

 

(H)         use
a Grantor’s stationery and sign its name to verifications of Accounts and notices to Account Debtors;

 

(I)         use
information contained in any data processing, electronic or information systems relating to Collateral;

 

(J)         make
and adjust claims under insurance policies;

 

(K)         take
any action as may be necessary or appropriate to obtain payment under any letter of credit, banker’s acceptance or other
instrument for which a Grantor is a beneficiary;

 

(L)         sell,
lease, license or otherwise dispose of the same or the proceeds or avails thereof, as fully and effectually as if the Secured Party
were the absolute owner thereof,

 

(M)         extend
the time of payment of any or all thereof and to make any allowance or other adjustment with reference thereto; and

 

(N)         take
all other actions as the Secured Party deems appropriate to fulfill any Grantor’s obligations under the Loan Documents.

 

Section
17. Limitation on Duty in Respect of Collateral. Beyond the exercise of reasonable care in the custody and preservation
thereof, the Secured Party will have no duty as to any Collateral in its possession or control or in the possession or control
of any sub-agent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Secured Party will be deemed to have exercised reasonable care in the custody and preservation of the Collateral
in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property,
and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by
reason of any act or omission of any sub-agent or bailee selected by the Secured Party in good faith, except to the extent that
such liability arises from the Secured Party’s gross negligence or willful misconduct.

 

    	27

    	 

    

 

Section
18. Termination of Transaction Liens; Release of Collateral. (a) The Transaction Liens granted by each Guarantor
shall terminate when its Secured Guarantee is released pursuant to Section 2(c).

 

(b)          The
Transaction Liens granted by the Borrower shall terminate when all the Release Conditions are satisfied.

 

(c)          Notwithstanding
the foregoing, the Transaction Liens with respect to property of the Borrower or any Guarantor securing the Obligations will be
automatically released, in whole or in part, to the extent permitted in Section 8.18(c) of the Credit Agreement.

 

(d)          Upon
any termination of a Transaction Lien or release of Collateral, the Secured Party will, subject to the terms of Section 8.18(d)
of the Credit Agreement, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence
the termination of such Transaction Lien or the release of such Collateral, as the case may be, and will duly assign and transfer
to such Grantor any such Collateral that may be in the possession of the Secured Party and has not theretofore been sold or otherwise
applied or released pursuant to this Agreement.

 

Section
19. Additional Guarantors and Grantors. Any Subsidiary may and to the extent required by Section 5.11(b) of the Credit
Agreement, shall become a party hereto by signing and delivering to the Secured Party a Security Agreement Supplement, whereupon
such Subsidiary shall become a “Guarantor” and a “Grantor” as defined herein.

 

Section
20. Notices. Each notice, request or other communication given to any party hereunder shall be given in accordance
with Section 8.01 of the Credit Agreement, and in the case of any such notice, request or other communication to a Grantor other
than the Borrower, shall be given to it in care of the Borrower.

 

Section
21. No Implied Waivers; Remedies Not Exclusive. No failure to exercise and no delay in exercising, on the part of
any party hereto, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. Without limiting the generality of the foregoing, the making
of the Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Secured Party may
have had notice or knowledge of such Default or Event of Default at the time. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

    	28

    	 

    

 

Section
22. Successors and Assigns. This Agreement is for the benefit of the Secured Party. If all or any part of the Secured
Party’s interest in any Obligation is assigned or otherwise transferred, the transferor’s rights hereunder, to the
extent applicable to the obligation so transferred, shall be automatically transferred with such obligation. This Agreement shall
be binding on the Grantors and their respective successors and assigns.

 

Section
23. Amendments and Waivers. Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated
except pursuant to an agreement or agreements in writing entered into by the Secured Party. No such waiver, amendment or modification
shall be binding upon any Grantor, except with its written consent.

 

Section
24. Choice of Law. This Agreement and any claims, controversy, dispute or cause of action (whether in contract or
tort or otherwise) based upon, arising out of or relating to this Agreement and the Transactions shall be construed in accordance
with and governed by the law of the State of New York, without giving effect to any conflict of law principles that result in the
application of laws of another jurisdiction.

 

Section
25. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY SECURITY
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section
26. Severability. Any provision of any Security Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

 

    	29

    	 

    

 

Section
27. Intercreditor Agreement. Notwithstanding anything herein to the contrary, the Liens and security interests granted
to the Secured Party pursuant to this Agreement and the exercise of any right or remedy by the Secured Party hereunder, in each
case, with respect to the Collateral are subject to the limitations and provisions of the Intercreditor Agreement dated as of the
date hereof by and among the Secured Party and the additional lenders signatories thereto (the “Intercreditor Agreement”).
In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement with respect to the
Collateral, the terms of the Intercreditor Agreement shall govern and control; provided that the Intercreditor Agreement
shall not be construed, by its terms, to modify any security interest granted pursuant to Section 3 hereof.

 

[SIGNATURES FOLLOW]

 

    	30

    	 

    

 

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

 

	 	ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD.
	 	 
	 	By:	 
	 	 	Name:	Philip Anderson
	 	 	Title:	Chief Financial Officer

 

Guarantors:

 

	 	VICTORY ELECTRONIC CIGARETTES, INC.
	 	 
	 	By:	 
	 	 	Name:	Philip Anderson
	 	 	Title:	President

 

	 	VAPESTICK HOLDINGS LIMITED
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	 	VCIG LLC
	 	 
	 	By:	 
	 	 	Name:       Philip Anderson
	 	 	Title:         Manager

 

	 	FIN BRANDING GROUP, LLC
	 	 
	 	By:	 
	 	 	Name:        Philip Anderson
	 	 	Title:          Manager

 

[SIGNATURE PAGE TO GUARANTEE AND COLLATERAL
AGREEMENT]

 

    	 

    	 

    

 

	 	HARDWIRE INTERACTIVE ACQUISITION COMPANY
	 	 
	 	By:	 
	 	 	Name:        Philip Anderson
	 	 	Title:          President

 

	 	MUST HAVE LIMITED
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	 	E-CIGS UK HOLDING COMPANY LIMITED
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

Secured Party:

 

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

 

[SIGNATURE PAGE TO GUARANTEE AND COLLATERAL
AGREEMENT]

 

    	 

    	 

    

 

SCHEDULE 1

 

EQUITY INTERESTS IN SUBSIDIARIES AND
AFFILIATES

OWNED BY ORIGINAL GRANTORS

(as of the Closing Date)

 

	Issuer	 	Jurisdiction
 of
 Organization	 	Owner of
 Equity Interest	 	Percentage
 Owned	 
	Victory Electronic Cigarettes, Inc.	 	Nevada	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	Vapestick Holdings Limited	 	United Kingdom	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	VCIG LLC	 	Delaware	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	FIN Branding Group, LLC	 	Illinois	 	VCIG LLC	 	 	100	%
	Hardwire Interactive Acquisition Company	 	Delaware	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	Must Have Limited	 	United Kingdom	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	E-Cigs UK Holding Company Limited	 	United Kingdom	 	Electronic Cigarettes International Group, Inc.	 	 	100	%

 

    	S-1-1

    	 

    

 

SCHEDULE 2

 

INVESTMENT PROPERTY

(other than Equity Interests in Subsidiaries
and Affiliates)

OWNED BY ORIGINAL GRANTORS

(as of the Closing Date)

 

PART 1 — Securities

 

NONE

 

PART 2 — Securities Accounts

 

The Original Grantors own Security Entitlements with respect
to Financial Assets credited to the following Securities Accounts:

 

NONE

 

    	S-2-1

    	 

    

 

SCHEDULE 3

 

MATERIAL COMMERCIAL TORT CLAIMS

 

Describe each existing Material Commercial Tort Claim with the
specificity required to satisfy Official Comment 5 to UCC Section 9-108.

 

NONE

 

    	S-3-1

    	 

    

 

EXHIBIT A

to Security Agreement

 

SECURITY AGREEMENT SUPPLEMENT

 

SECURITY AGREEMENT SUPPLEMENT dated as of
_______, ____, between [NAME OF GRANTOR] (the “Grantor”) and CALM WATERS PARTNERSHIP, as the Secured Party.

 

WHEREAS, Electronic Cigarettes International
Group, Ltd. (the “Borrower”), the other Guarantors party thereto and Calm Waters Partnership, as the Secured
Party, are parties to a Guarantee and Collateral Agreement dated as of April 27, 2015 (as heretofore amended and/or supplemented,
the “Security Agreement”) under which the Borrower secures all Obligations (as defined therein) and the Guarantors
guarantee the Obligations and secure their respective guarantees thereof;

 

WHEREAS, [name of Grantor] desires to become
[is] a party to the Security Agreement as a Guarantor and Grantor thereunder; and

 

WHEREAS, terms defined in the Security Agreement
(or whose definitions are incorporated by reference in Section 1 of the Security Agreement) and not otherwise defined herein have,
as used herein, the respective meanings provided for therein;

 

NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

1.          Secured
Guarantee.1 The Grantor unconditionally guarantees the full and punctual payment of each Obligation when due (whether
at stated maturity, upon acceleration or otherwise). The Grantor acknowledges that, by signing this Security Agreement Supplement
and delivering it to the Secured Party, the Grantor becomes a “Guarantor” and “Grantor” for all purposes
of the Security Agreement and that its obligations under the foregoing Secured Guarantee are subject to all the provisions of the
Security Agreement (including those set forth in Section 2 thereof) applicable to the obligations of a Guarantor thereunder.

 

 

 

1 Delete this Section if the
Grantor is a Guarantor that is already a party to the Security Agreement.

 

    	A-1

    	 

    

 

 

2.          Grant
of Transaction Liens. (a) In order to secure Obligations, including the Obligations under the Secured Guarantee, as applicable,
the Grantor grants to the Secured Party for the benefit of the Secured Parties a continuing security interest in all the following
property of the Grantor, whether now owned or existing or hereafter acquired or arising and regardless of where located (the “New
Collateral”):

 

[describe property being added to the Collateral]2

 

(b)          With
respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein
includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any
Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

 

(c)          The
foregoing Transaction Liens are granted as security only and shall not subject the Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of the Grantor with respect to any of the New Collateral or any transaction in connection
therewith.

 

3.          Delivery
of Collateral. Concurrently with delivering this Security Agreement Supplement to the Secured Party, the Grantor is complying
with the provisions of Section 7 of the Security Agreement with respect to Investment Property, in each case if and to the extent
included in the New Collateral at such time.

 

4.          Party
to Security Agreement. Upon delivering this Security Agreement Supplement to the Secured Party, the Grantor will become a party
to the Security Agreement and will thereafter have all the rights and obligations of a Guarantor and a Grantor thereunder and be
bound by all the provisions thereof as fully as if the Grantor were one of the original parties thereto.

 

 

 

2 If the Grantor is not already
a party to the Security Agreement, clauses (i) through (xiii) of, and the proviso to, Section 3(a) of the Security Agreement may
be appropriate.

 

    	A-2

    	 

    

 

5.          Representations
and Warranties. (a) The Grantor (i) is duly organized or formed, as the case may be, validly existing and in good standing
under the laws of the jurisdiction of its organization or formation, (ii) has the requisite power and authority to own and operate
its properties, to lease the properties it operates as lessee and to conduct the business in which it is currently engaged as it
is currently conducted, (iii) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of properties or the conduct of its business requires such qualification except to the
extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and
(iv) is in compliance with all applicable laws, rules or regulations except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)          The
Grantor has delivered an Information Certificate to the Secured Party. The information set forth therein is correct and complete
as of the date hereof.

 

(c)          The
execution and delivery of this Security Agreement Supplement by the Grantor and the performance by it of its obligations under
the Security Agreement as supplemented hereby are within its corporate or other powers, have been duly authorized by all necessary
corporate or other action, require no action by or in respect of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision of applicable law or regulation or of its organizational documents,
or of any agreement, judgment, injunction, order, decree or other instrument binding upon it or result in the creation or imposition
of any Lien (except a Transaction Lien) on any of its assets.

 

(d)          The
Security Agreement as supplemented hereby constitutes a valid and binding agreement of the Grantor, enforceable in accordance with
its terms, except as limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’
rights generally and (ii) general principles of equity.

 

(e)          Each
of the representations and warranties set forth in Sections 4 through 10 of the Security Agreement is true as applied to the Grantor
and the New Collateral. For purposes of the foregoing sentence, references in said Sections to a “Grantor” shall be
deemed to refer to the Grantor, references to “Schedules” to the Security Agreement shall be deemed to refer to the
corresponding Schedules to this Security Agreement Supplement, references to “Collateral” shall be deemed to refer
to the New Collateral, and references to the “Closing Date” shall be deemed to refer to the date on which the Grantor
signs and delivers this Security Agreement Supplement.

 

    	A-3

    	 

    

 

6.          Governing
Law. This Security Agreement Supplement and any claims, controversy, dispute or cause of action (whether in contract or tort
or otherwise) based upon, arising out of or relating to this Security Agreement Supplement and the Transactions shall be construed
in accordance with and governed by the law of the State of New York, without giving effect to any conflict of law principles that
result in the application of laws of another jurisdiction.

 

[The remainder of this page has been intentionally
left blank.]

 

    	A-4

    	 

    

 

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

 

	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	CALM WATERS PARTNERSHIP
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

    	A-5

    	 

    

 

Schedule 1

to Security Agreement

Supplement

 

EQUITY INTERESTS IN SUBSIDIARIES AND
AFFILIATES

OWNED BY GRANTOR

 

	
        Issuer
	
	
        Jurisdiction

        of

        Organization
	
	
        Percentage

        Owned
	
	
        Number
        of

        Shares or Units

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	A-6

    	 

    

 

Schedule 2

to Security Agreement

Supplement

 

INVESTMENT PROPERTY

(other than Equity Interests in Subsidiaries and Affiliates)

OWNED BY GRANTOR

 

PART 1 — Securities

 

	
        Issuer
	
	
        Jurisdiction

        of

        Organization
	
	
        Amount
        

Owned
	
	
        Type
        of 

Security

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

PART 2 — Securities Accounts

 

The Grantor owns Security Entitlements with respect to Financial
Assets credited to the following Securities Accounts:

 

	
        Securities
        Intermediary
	
 	
        Account
        Number

	 	 	 
	 	 	 
	 	 	 

 

    	A-7

    	 

    

 

EXHIBIT B

to Security Agreement

 

NOTICE OF GRANT OF SECURITY INTEREST
IN COPYRIGHTS

 

(Copyrights, Copyright Registrations,
and Copyright Licenses)

 

[DATE]

 

WHEREAS, [name of Grantor], a _____________
[corporation]3 (herein referred to as the “Grantor”) owns, or in the case of licenses is a party
to, the Copyright Collateral (as defined below);

 

WHEREAS, Electronic Cigarettes International
Group, Ltd. (the “Borrower”) and Calm Waters Partnership (the “Lender”) are parties to a
Credit Agreement dated as of April 27, 2015 (as amended from time to time, the “Credit Agreement”); and

 

WHEREAS, pursuant to (i) a Guarantee and
Collateral Agreement dated as of April 27, 2015 (as amended and/or supplemented from time to time, the “Security Agreement”)
among the Borrower, the Guarantors party thereto and Calm Waters Partnership, as the Secured Party (in such capacity, together
with its successors in such capacity, the “Grantee”), and (ii) certain other Security Documents (including this
Notice of Grant of Security Interest in Copyrights), the Grantor has secured certain of its Obligations (the “Secured
Obligations”) and guaranteed certain obligations of the Borrowers and the other Guarantors, as applicable, and secured
such guarantee (the “Grantor’s Secured Guarantee”) by granting to the Grantee a continuing security interest
in personal property of the Grantor, including all right, title and interest of the Grantor in, to and under the Copyright Collateral
(as defined below);

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby grants to the Grantee, to secure its Secured Obligations,
including its Obligations under the Grantor’s Secured Guarantee, a continuing security interest in all of Grantor’s
right, title and interest in, to and under the following (all of the following items or types of property being herein collectively
referred to as the “Copyright Collateral”), whether now owned or existing or hereafter acquired or arising:

 

 

 

3 Modify if entity is not a corporation.

 

    	B-1

    	 

    

 

(i)          each
Copyright (as defined in the Security Agreement) owned by the Grantor, including, without limitation, each Copyright registration
or application therefor referred to in Schedule 1 hereto;

 

(ii)         each
Exclusive Copyright License (as defined in the Security Agreement) to which the Grantor is a party, including, without limitation,
each Exclusive Copyright License referred to in Schedule 1 hereto; and

 

(iii)        all
proceeds of, revenues from, and accounts and general intangibles arising out of, the foregoing, including, without limitation,
all proceeds of and revenues from any claim by the Grantor against third parties for past, present or future infringement of any
Copyright owned by the Grantor (including, without limitation, any Copyright identified in Schedule 1), and all rights and benefits
of the Grantor under any Exclusive Copyright License (including, without limitation, any Exclusive Copyright License identified
in Schedule 1).

 

The foregoing security interest is granted
in conjunction with the security interests granted by the Grantor to the Grantee pursuant to the Security Agreement, and is expressly
subject to the terms and conditions thereof. The Grantor acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if fully set forth herein and which shall override the
terms hereof in the event of a conflict.

 

This Notice of Grant of Security Interest
in Copyrights has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein
with the United States Copyright Office (and any successor office).

 

This Notice of Grant of Security Interest
in Copyrights may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one
original.

 

[The remainder of this page has been intentionally
left blank.]

 

    	B-2

    	 

    

 

IN WITNESS WHEREOF, the Grantor has caused
this Notice of Grant of Security Interest in Copyrights to be duly executed by its officer thereunto duly authorized as of the
date first written above.

 

	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	Acknowledged:	 
	 	 
	CALM WATERS PARTNERSHIP	 
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	B-3

    	 

    

 

Schedule 1

to Copyright

Security Agreement

 

[NAME OF GRANTOR]

 

U.S. COPYRIGHT REGISTRATIONS

 

	
        Registration
        No.
	
	
        Title

	 	 	 
	 	 	 
	 	 	 

 

EXCLUSIVE COPYRIGHT LICENSES

 

	Name, Date and

Parties to

Agreement	Title(s) of

Works of

Authorship 	Copyright

Registration

No(s).	Copyright

Owner(s)
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

    	B-4

    	 

    

 

EXHIBIT C

to Security Agreement

 

NOTICE OF GRANT OF SECURITY INTEREST
IN PATENTS

 

(Patents, Patent Applications and Patent
Licenses)

 

[DATE]

 

WHEREAS, [name of Grantor], a _____________
[corporation]4 (herein referred to as the “Grantor”) owns, or in the case of licenses is a party
to, the Patent Collateral (as defined below);

 

WHEREAS, Electronic Cigarettes International
Group, Ltd. (the “Borrower”) and Calm Waters Partnership (the “Lender”), are parties to a
Credit Agreement dated as of April 27, 2015 (as amended from time to time, the “Credit Agreement”); and

 

WHEREAS, pursuant to (i) a Guarantee and
Collateral Agreement dated as of April 27, 2015 (as amended and/or supplemented from time to time, the “Security Agreement”)
among the Borrower, the Guarantors party thereto and Calm Waters Partnership, as the Secured Party (in such capacity, together
with its successors in such capacity, the “Grantee”), and (ii) certain other Security Documents (including this
Notice of Grant of Security Interest in Patents), the Grantor has secured certain of its Obligations (the “Secured Obligations”)
and guaranteed certain obligations of the Borrowers and the other Guarantors, as applicable and secured such guarantee (the “Grantor’s
Secured Guarantee”) by granting to the Grantee a continuing security interest in personal property of the Grantor, including
all right, title and interest of the Grantor in, to and under the Patent Collateral (as defined below);

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby grants to the Grantee, to secure its Secured Obligations,
including its Obligations under the Grantor’s Secured Guarantee, a continuing security interest in all of the Grantor’s
right, title and interest in, to and under the following (all of the following items or types of property being herein collectively
referred to as the “Patent Collateral”), whether now owned or existing or hereafter acquired or arising:

 

 

 

4 Modify if entity is not a corporation.

 

    	C-1

    	 

    

 

(i)          each
Patent (as defined in the Security Agreement) owned by the Grantor, including, without limitation, each Patent referred to in Schedule
1 hereto; and

 

(ii)         all
proceeds of and revenues from the foregoing, including, without limitation, all proceeds of and revenues from any claim by the
Grantor against third parties for past, present or future infringement of any Patent owned by the Grantor (including, without limitation,
any Patent identified in Schedule 1 hereto).

 

The foregoing security interest is granted
in conjunction with the security interests granted by the Grantor to the Grantee pursuant to the Security Agreement, and is expressly
subject to the terms and conditions thereof. The Grantor acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully set forth herein and which shall override the terms
hereof in the event of a conflict.

 

This Notice of Grant of Security Interest
in Patents has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with
the United States Patent and Trademark Office (and any successor office).

 

This Notice of Grant of Security Interest
in Patents may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one
original.

 

[The remainder of this page has been intentionally
left blank.]

 

    	C-2

    	 

    

 

IN WITNESS WHEREOF, the Grantor has caused
this Notice of Grant of Security Interest in Patents to be duly executed by its officer thereunto duly authorized as of the date
first written above.

 

	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	Acknowledged:	 
	 	 
	CALM WATERS PARTNERSHIP	 
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	C-3

    	 

    

 

Schedule 1

to Patent

Security Agreement

 

[NAME OF GRANTOR]

 

U.S. PATENTS AND DESIGN PATENTS

 

	
        Patent
        No.
	
	
        Issue
        Date
	
	
        Country
	
	
        Title

		 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

U.S. PATENT APPLICATIONS

 

	
        Serial No.
	
	
        Country
	
	
        Application

        Date
	
	
        Title

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	C-4

    	 

    

 

EXHIBIT D

to Security Agreement

 

NOTICE OF GRANT OF SECURITY INTEREST
IN TRADEMARKS 

 

(Trademarks, Trademark Registrations,
Trademark

Applications and Trademark Licenses)

 

[DATE]

 

WHEREAS, [name of Grantor], a _____________
[corporation]5 (herein referred to as the “Grantor”) owns, or in the case of licenses is a party
to, the Trademark Collateral (as defined below);

 

WHEREAS, Electronic Cigarettes International
Group Ltd. (the “Borrower”) and Calm Waters Partnership (the “Lender”) are parties to a Credit
Agreement dated as of April 27, 2015 (as amended from time to time, the “Credit Agreement”); and

 

WHEREAS, pursuant to (i) a Guarantee and
Collateral Agreement dated as of April 27, 2015 (as amended and/or supplemented from time to time, the “Security Agreement”)
among the Borrower, the Guarantors party thereto and Calm Waters Partnership, as the Secured Party (in such capacity, together
with its successors in such capacity, the “Grantee”), and (ii) certain other Security Documents (including this
Notice of Grant of Security Interest in Trademarks), the Grantor has secured certain of its Obligations (the “Secured
Obligations”) and guaranteed certain obligations of the Borrowers and the other Guarantors, as applicable, and secured
such guarantee (the “Grantor’s Secured Guarantee”) by granting to the Grantee a continuing security interest
in personal property of the Grantor, including all right, title and interest of the Grantor in, to and under the Trademark Collateral
(as defined below);

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby grants to the Grantee, to secure its Secured Obligations,
including its Obligations under the Grantor’s Secured Guarantee, a continuing security interest in all of the Grantor’s
right, title and interest in, to and under the following (all of the following items or types of property being herein collectively
referred to as the “Trademark Collateral”), whether now owned or existing or hereafter acquired or arising:

 

 

 

5 Modify if entity is not a corporation.

 

    	D-1

    	 

    

 

(i)          each
Trademark (as defined in the Security Agreement) owned by the Grantor, including, without limitation, each Trademark registration
and application referred to in Schedule 1 hereto, and all of the goodwill of the business connected with the use of, or symbolized
by, each Trademark; and

 

(ii)         all
proceeds of and revenues from the foregoing, including, without limitation, all proceeds of and revenues from any claim by the
Grantor against third parties for past, present or future unfair competition with, or violation of intellectual property rights
in connection with or injury to, or infringement or dilution of, any Trademark owned by the Grantor (including, without limitation,
any Trademark identified in Schedule 1 hereto); provided that no security interest shall be granted in any United States
intent-to-use Trademark applications to the extent that, and solely during the period in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use Trademark applications under applicable federal law.

 

The foregoing security interest is granted
in conjunction with the security interests granted by the Grantor to the Grantee pursuant to the Security Agreement, and is expressly
subject to the terms and conditions thereof. The Grantor acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if fully set forth herein and which shall override the
terms hereof in the event of a conflict.

 

This Notice of Grant of Security Interest
in Trademarks has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein
with the United States Patent and Trademark Office (and any successor office).

 

This Notice of Grant of Security Interest
in Trademarks may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one
original.

 

    	D-2

    	 

    

 

IN WITNESS WHEREOF, the Grantor has caused
this Notice of Grant of Security Interest in Trademarks to be duly executed by its officer thereunto duly authorized as of the
date first written above.

 

	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	Acknowledged:	 
	 	 
	CALM WATERS PARTNERSHIP	 
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	D-3

    	 

    

 

Schedule 1

to Trademark

Security Agreement

 

[NAME OF GRANTOR]

 

U.S. TRADEMARK REGISTRATIONS

 

	
        TRADEMARK
	
	
        REG.
        NO.
	
	
        REG.
        DATE

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

U.S. TRADEMARK APPLICATIONS

 

	
        TRADEMARK
	
	
        APP.
        NO.
	
	
        APP.
        DATE

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

    	D-4

    	 

    

 

EXHIBIT E

to Security Agreement

 

INFORMATION CERTIFICATE

 

See attached.

 

    	E-5

    	 

    

 

EXHIBIT F

to Security Agreement

 

ISSUER CONTROL AGREEMENT

 

ISSUER CONTROL AGREEMENT dated as of ______,
_____ among _____________ (the “Grantor”), CALM WATERS PARTNERSHIP, as Secured Party under the Guarantee and
Collateral Agreement, dated as of April 27, 2015, among the Grantor, the Secured Party and the other parties thereto (as amended,
restated, supplemented or otherwise modified from time to time, the “Security Agreement”) and _________ (the
“Issuer”). All references herein to the “UCC” refer to the Uniform Commercial Code as in
effect from time to time in [Issuer’s jurisdiction of incorporation].

 

WITNESSETH:

 

WHEREAS, the Grantor is the registered holder
of [specify Pledged Uncertificated Securities issued by the Issuer] issued by the Issuer (the “Securities”);

 

WHEREAS, pursuant to the Security Agreement,
the Grantor has granted to the Secured Party a continuing security interest (the “Transaction Lien”) in all
right, title and interest of the Grantor in, to and under the Securities, whether now existing or hereafter arising; and

 

WHEREAS, the parties hereto are entering
into this Agreement in order to perfect the Transaction Lien on the Securities;

 

NOW, THEREFORE, the parties hereto agree
as follows:

 

Section 1. Nature of Securities. The
Issuer confirms that (i) the Securities are “uncertificated securities” (as defined in Section 8-102 of the UCC) and
(ii) the Grantor is registered on the books of the Issuer as the registered holder of the Securities.

 

Section 2. Instructions. The Issuer
agrees to comply with any “instruction” (as defined in Section 8-102 of the UCC) originated by the Secured Party and
relating to the Securities without further consent by the Grantor or any other person. The Grantor consents to the foregoing agreement
by the Issuer.

 

Section 3. Conflicting Orders or Instructions.
Notwithstanding anything to the contrary contained herein, if at any time the Issuer shall receive conflicting orders or instructions
from the Grantor and the Secured Party, the Issuer shall follow the orders or instructions of the Secured Party, not the Grantor.

 

Section 4. Waiver of Lien; Waiver of
Set-off. The Issuer waives any security interest, lien or right of set-off that it may now have or hereafter acquire in or
with respect to the Securities. The Issuer’s obligations in respect of the Securities will not be subject to deduction, set-off
or any other right in favor of any person other than the Secured Party.

 

    	F-1

    	 

    

 

Section 5. Choice of Law. This Agreement
shall be governed by the laws of [Issuer’s jurisdiction of incorporation].

 

Section 6. Conflict with Other Agreements.
There is no agreement (except this Agreement) between the Issuer and the Grantor with respect to the Securities [except for
[identify any other existing agreements] (the “Existing Other Agreements”)]. In the event of any conflict between
this Agreement (or any portion hereof) and any other agreement [(including any Existing Other Agreement)] between the Issuer and
the Grantor with respect to the Securities, whether now existing or hereafter entered into, the terms of this Agreement shall prevail.

 

Section 7. Amendments. No amendment
or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing
and is signed by all the parties hereto.

 

Section 8. Notice of Adverse Claims.
Except for the claims and interests of the Secured Party and the Grantor in the Securities, the Issuer does not know of any
claim to, or interest in, the Securities. If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, attachment, execution or similar process) against the Securities, the Issuer will promptly notify the Secured Party and
the Grantor thereof.

 

Section 9. Maintenance of
Securities. In addition to, and not in lieu of, the obligation of the Issuer to honor instructions as agreed in Section 2 hereof,
the Issuer agrees as follows:

 

(i)          Grantor
Instructions; Notice of Exclusive Control. So long as the Issuer has not received a Notice of Exclusive Control (as defined
below), the Issuer may comply with instructions of the Grantor or any duly authorized agent of the Grantor in respect of the Securities.
After the Issuer receives a written notice from the Secured Party that it is exercising exclusive control over the Securities (a
“Notice of Exclusive Control”), the Issuer will cease complying with instructions of the Grantor or any of its
agents.2

 

(ii)         Non-Cash
Dividends and Distributions. The Issuer shall deliver to the Secured Party all non-cash dividends, interest and other non-cash
distributions paid or made upon or with respect to the Securities.

 

(iii)        Voting
Rights. Until the Issuer receives a Notice of Exclusive Control, the Grantor shall be entitled to direct the Issuer with respect
to voting the Securities.

 

(iv)         Statements
and Confirmations. The Issuer will promptly send copies of all statements and other correspondence concerning the Securities
simultaneously to each of the Grantor and the Secured Party at their respective addresses specified in Section 12 hereof.

 

 

 

2 Delete subsection (i) if the Grantor
will not be permitted to sell the Securities.

 

    	F-2

    	 

    

 

(v)          Tax
Reporting. All items of income, gain, expense and loss recognized in respect of the Securities shall be reported to the Internal
Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Grantor.

 

Section 10. Representations,
Warranties and Covenants of the Issuer. The Issuer makes the following representations, warranties and covenants:

 

(i)          This
Agreement is a valid and binding agreement of the Issuer enforceable in accordance with its terms.

 

(ii)         The
Issuer has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other person
relating to the Securities pursuant to which it has agreed, or will agree, to comply with instructions (as defined in Section 8-102
of the UCC) of such person. The Issuer has not entered into any other agreement with the Grantor or the Secured Party to limit
or condition the obligation of the Issuer to comply with instructions as agreed in Section 2 hereof.

 

Section 11. Successors. This Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

 

Section 12. Notices. Each notice,
request or other communication given to any party hereunder shall be in writing (which term includes facsimile or other electronic
transmission) and shall be effective (i) when delivered to such party at its address specified below, (ii) when sent to such party
by facsimile or other electronic transmission, addressed to it at its facsimile number or electronic address specified below, and
such party sends back an electronic confirmation of receipt or (iii) ten days after being sent to such party by certified or registered
United States mail, addressed to it at its address specified below, with first class or airmail postage prepaid:

 

Grantor:

 

Secured Party:

 

Issuer:

 

Any party may change its address, facsimile number and/or e-mail
address for purposes of this Section by giving notice of such change to the other parties in the manner specified above.

 

    	F-3

    	 

    

 

Section 13. Termination. The rights
and powers granted herein to the Secured Party (i) have been granted in order to perfect the Transaction Lien, (ii) are powers
coupled with an interest and (iii) will not be affected by any bankruptcy of the Grantor or any lapse of time. The obligations
of the Issuer to the Secured Party hereunder shall continue in effect until the security interest of the Secured Party in the Securities
has been terminated pursuant to the terms of the Security Agreement and the Secured Party has notified the Issuer of such termination
by delivering to the Issuer a Notice of Termination. The Secured Party agrees to provide a Notice of Termination in substantially
the form of Annex B hereto to the Issuer, with a copy to the Grantor, upon the request of the Grantor on or after the termination
of the Secured Party’s security interest in the Securities pursuant to the terms of the Security Agreement.

 

Section 14. Counterparts. This Agreement
may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto
may execute this Agreement by signing and delivering one or more counterparts.

 

(remainder of page intentionally
blank; signature pages follow)

 

    	F-4

    	 

    

 

	 	[NAME OF GRANTOR]
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	CALM WATERS PARTNERSHIP
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	[NAME OF ISSUER]
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

    	F-5

    	 

    

 

Exhibit A

 

[Letterhead of Secured Party]

 

[Date]

 

[Name and Address of Issuer]

 

Attention: ________________________

 

Re: Notice of Exclusive Control

 

Ladies and Gentlemen:

 

As referenced in the Issuer Control Agreement
dated as of ______, ____ among [name of Grantor], CALM WATERS PARTNERSHIP and you (a copy of which is attached), we notify you
that we will hereafter exercise exclusive control over [specify Pledged Uncertificated Securities] registered in the name of [name
of Grantor] (the “Securities”). You are instructed not to accept any directions or instructions with respect
to the Securities from any person other than the undersigned unless otherwise ordered by a court of competent jurisdiction.

 

You are instructed to deliver a copy of
this notice by facsimile transmission to [name of Grantor].

 

Very truly yours,

 

	 	CALM WATERS PARTNERSHIP,

as Secured Party
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

cc: [name of Grantor]

 

    	F-6

    	 

    

 

ANNEX A

TO ISSUER ACCOUNT CONTROL AGREEMENT

 

[Letterhead of the Secured Party]

 

[Date]

 

[Name and Address of Issuer]

 

Attention:

 

Re: Notice of Termination of
Issuer Control Agreement

 

This letter serves
as notice to the Issuer in accordance with Section 13 of the Issuer Control Agreement dated as of [●], [●] (the “Agreement”)
among [name of Grantor], you and CALM WATERS PARTNERSHIP (a copy of which is attached) (capitalized terms used but not defined
herein shall have the meaning assigned thereto in the Agreement) that the Secured Party is hereby permanently releasing its control
over the Securities and releases the Issuer from any further obligation to comply with instructions originated by the Secured Party
with respect to the Securities. The Agreement is terminated and you have no further obligations to the Secured Party pursuant to
the Agreement. Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with
respect to the Securities from [name of Grantor]. This notice terminates any obligations you may have to the undersigned with respect
to the Securities, however nothing contained in this notice shall alter any obligations which you may otherwise owe to [name of
Grantor] pursuant to any other agreement.

 

	 	Very truly yours,
	 	 
	 	CALM WATERS PARTNERSHIP 
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

    	F-7Exhibit
10.4

 

EXECUTION
VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of April 27, 2015, between Electronic Cigarettes International
Group, Ltd., a Nevada corporation (the “Company”), and each of the lenders signatory hereto (each such shareholder,
a “Holder”  and, collectively, the “Holders”).

 

RECITALS:

 

WHEREAS, the Company
has entered into a Credit Agreement, dated April 27, 2015 (the “Lead Lender Credit Agreement”), by and between
the Company and Calm Waters Partnership, a Wisconsin general partnership (the “Lead Lender”), pursuant to which
the Lead Lender will provide the Company with a term loan upon the terms and conditions set forth in the Lead Lender Credit Agreement;

 

WHEREAS, the Company
has also entered into a Credit Agreement, dated April 27, 2015 (the “Additional Lender Credit Agreement”  and
together with the Lead Lender Credit Agreement, the “Credit Agreements”), by and among the Company and various
additional lenders party thereto (the “Additional Lenders”  and together with the Lead Lender, the
“Lenders”), pursuant to which the Additional Lenders will provide the Company with a term loan upon the terms
and conditions set forth in the Additional Lender Credit Agreement;

 

WHEREAS, in connection
with the Credit Agreements the Company has agreed, upon the terms and subject to the conditions of the Credit Agreements, to issue
to each Lender the Warrants (as defined in the Credit Agreements) which will be exercisable to purchase Warrant Shares (as defined
in the Credit Agreements) in accordance with the terms of the Warrants; and

 

WHEREAS, in order to
induce the Lenders to consummate the transactions contemplated by the Credit Agreements, the Company has agreed to provide the
Lenders with certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations thereunder, or any similar successor statute, and applicable state securities laws.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Lender hereby agree as follows::

 

		1.	Definitions.

 

Capitalized terms used
and not otherwise defined herein that are defined in the Credit Agreements shall have the meanings given such terms in the Credit
Agreements. As used in this Agreement, the following terms shall have the following meanings:

 

“Advice”  shall
have the meaning set forth in Section 6(c).

 

“Credit
Agreement”  shall have the meaning set forth in the recitals.

 

    	1

    	 

    

 

“Effectiveness
Date”  means, with respect to the Initial Registration Statement required to be filed hereunder, the 90th
calendar day following the Filing Date, and with respect to any additional Registration Statements which may be required pursuant
to Section 2(c) or Section 3(c), the 90th calendar day following the date on which an additional Registration Statement
is required to be filed hereunder; provided, however, that in the event the Company is notified by the Commission
that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments,
the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company
is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on
a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

 

“Effectiveness
Period”  shall have the meaning set forth in Section 2(a).

 

“Event”  shall
have the meaning set forth in Section 2(d).

 

“Event
Date”  shall have the meaning set forth in Section 2(d).

 

“Filing
Date”  means, with respect to the Initial Registration Statement required hereunder, the 45th calendar day
following the date the Lead Lender requests the Company to file the Initial Registration Statement, and, with respect to any additional
Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the
Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

 

“Holder”  or
“Holders”  means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified
Party”  shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party”  shall have the meaning set forth in Section 5(c).

 

“Initial
Registration Statement”  means the initial Registration Statement filed pursuant to this Agreement.

 

“Lead
Lender”  shall have the meaning set forth in the recitals.

 

“Losses”  shall
have the meaning set forth in Section 5(a).

 

“Plan
of Distribution”  shall have the meaning set forth in Section 2(a).

 

“Prospectus”  means
the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.

 

    	2

    	 

    

 

“Registrable
Securities”  means, as of any date of determination, (a) all Warrant Shares then issued and issuable upon exercise
of the Warrants and (b) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease
to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another. Registration
Statement hereunder with respect thereto for so long as (a) a Registration Statement with respect to the sale of such Registrable
Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed
of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously
sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions
and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed,
delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable
upon exercise of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate
of the Company, and all Warrants are exercised by “cashless exercise”  as provided in the Warrants), as reasonably
determined by the Company, upon the advice of counsel to the Company.

 

“Registration
Statement”  means any registration statement required to be filed hereunder pursuant to Section 2(a) and any
additional registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments
and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

“Rule
415”  means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended
or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

 

“Rule
424”  means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended
or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

 

“Selling
Stockholder Questionnaire”  shall have the meaning set forth in Section 3(a).

 

“SEC
Guidance”  means (i) any publicly-available written or oral guidance of the Commission staff, or any comments,
requirements or requests of the Commission staff and (ii) the Securities Act.

 

“Securities
Act”  shall have the meaning set forth in the recitals.

 

    	3

    	 

    

 

		2.	Registration.

 

(a)          On
or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale
of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-1 (or such other
appropriate form in accordance herewith) and shall contain (unless otherwise directed by at least 85% in interest of the Holders)
substantially the “Plan of Distribution”  attached hereto as Annex A. Subject to the terms of this
Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including, without
limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the filing thereof,
but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement (i) have
been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule
144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule
144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable
to the Transfer Agent and the affected Holders (the “Effectiveness Period”). The Company shall telephonically
request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately
notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the
Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such
Registration Statement. The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration
Statement, file a final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holder within one (1)
Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under
Section 2(d).

 

(b)          Notwithstanding
the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities
cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement,
the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments
to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted
to be registered by the Commission, on Form S-1 or such other form available to register for resale the Registrable Securities
as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on Form S-1 or other appropriate form,
and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however,
that prior to filing such amendment, the Company shall be obligated to use its commercially reasonable efforts to advocate with
the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without
limitation, Compliance and Disclosure Interpretation 612.09.

 

(c)          Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission
or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular
Registration Statement as a secondary offering (and notwithstanding that the Company used its commercially reasonable efforts to
advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed
in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration
Statement will be reduced as follows:

 

    	4

    	 

    

 

		a.	First, the Company shall reduce or eliminate any securities
to be included on such Registration Statement by any Person other than a Holder; and

 

		b.	Second, the Company shall reduce Registrable Securities
represented by Warrant Shares issued or issuable under the Warrants held by the Holders (applied, in the case that some Warrant
Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by
such Holders).

 

In the event
of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations
as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the
foregoing, the Company will use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more registration statements on Form S-1 or such other
form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration
Statement, as amended.

 

(d)          If:
(i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the
Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request
for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities
Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that such Registration Statement will not be “reviewed”  or will not be subject to further review,
or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise
respond in writing to comments made by the Commission in respect of such Registration Statement within ten (10) business days after
the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement
to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared
effective by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of
a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable
Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein
to resell such Registrable Securities, for more than ten (10) consecutive Trading Days or more than an aggregate of thirty (30)
Trading Days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred
to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of
clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such
ten (10) calendar day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or thirty (30) Trading
Day period, as applicable, is exceeded being referred to as “Event Date”), then, in addition to any other rights the
Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event
Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 0.5% multiplied by
the aggregate principal amount of the Term Loan made to the Company by such Holder. If the Company fails to pay any partial liquidated
damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate
of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from
the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial
liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure
of an Event.  Notwithstanding the foregoing, no partial liquidated damages shall be paid to a Holder to the extent the
Company has previously paid to such Holder an aggregate of partial liquidated damages in excess of three percent (3%) of the aggregate
principal amount of the Term Loan made to the Company by such Holder.

 

    	5

    	 

    

 

		3.	Registration Procedures.

 

In connection with
the Company’s registration obligations hereunder, the Company shall:

 

(a)          Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than two (2) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated
or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review
of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation
within the meaning of the Securities Act. Without limiting the foregoing, on the date each Registration Statement is declared effective
by the Commission and on the date each post-effective amendment thereto is declared effective by the Commission, the Holders shall
have received (a) to the extent such Registration Statement is for an underwritten public offering, a negative assurance letter
dated as of such dates from counsel to the Company, to the effect that such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the independent public accountants for the Company, and with representatives
of the underwriters and counsel for the underwriters at which the contents of the Registration Statement, any post-effective amendment
thereto and the Prospectus and related matters were discussed and, although such counsel need not pass upon or assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the Registration Statement, any post-effective amendment
thereto or the Prospectus and need not make any independent check or verification thereof, on the basis of the foregoing, no facts
have come to the attention of such counsel which have led such counsel to believe that (i) the Registration Statement or any post-effective
amendment, at each time it became effective, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, as of its date
and, as amended or supplemented, if applicable, as of the date on which the Registration Statement or any post-effective amendment
was declared effective by the Commission, contained or contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial
data included in or excluded from the Registration Statement and (b) a letter dated as of such dates, in form and substance satisfactory
to the Holders, from the Company’s independent registered public accounting firm, provided such independent registered accounting
firm is able to deliver such letter in accordance with the requirements of AU-C § 920, containing statements and information
of the type ordinarily included in accountants’ “comfort letters”  to underwriters with respect to
the financial statements and certain financial information contained in each Registration Statement, each post-effective amendment
thereto and the Prospectus; provided that each such letter delivered shall use a “cut-off date”  not
earlier than the date that is five days prior to the date of the letter.  Notwithstanding the above, the Company shall
not be obligated to provide the Holders advance copies of any universal shelf registration statement registering securities in
addition to those required hereunder, or any Prospectus prepared thereto. The Company shall not file a Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall
reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Trading
Days after the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have
been so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company
a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”)
on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following
the date on which such Holder receives draft materials in accordance with this Section.

 

    	6

    	 

    

 

(b)          (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements
in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to
be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the
Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to
the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided
that, the Company shall excise any information contained therein which would constitute material non-public information regarding
the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during
the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders
thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

    	7

    	 

    

 

(c)          If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.

 

(d)          Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Trading Day following the day (i) (A) when a Prospectus or any Prospectus
supplement or post- effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the
Company whether there will be a “review”  of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when
the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission
or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of
the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible
for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence
or existence of any pending corporate development with respect to the Company that the Company believes may be material and that,
in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided, however, in no event shall any such notice contain any information which would constitute material,
non-public information regarding the Company or any of its Subsidiaries.  

 

    	8

    	 

    

 

(e)          Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

 

(f)          Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

(g)          Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

 

(h)          The
Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting
a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the Company
shall pay the filing fee required by such filing within two (2) Business Days of request therefor.

 

(i)          Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not
be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such
jurisdiction.

 

(j)          If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Credit Agreement, of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holder may request.

 

    	9

    	 

    

 

(k)          Upon
the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into
account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders
in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise
its right under this Section 3(k) to suspend the availability of a Registration Statement and Prospectus, subject to the payment
of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need
not be consecutive days) in any 12-month period.

 

		(l)	Comply with all applicable rules and regulations of the
Commission.

 

(m)          The
Company shall use its best efforts to maintain eligibility for use of Form S-1 (or any successor form thereto) for the registration
of the resale of Registrable Securities.

 

(n)          The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive
control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration
of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise
occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

 

    	10

    	 

    

 

		4.	Registration Expenses.

 

All fees
and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether
or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses
of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission,
(B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (C)
in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable
Securities) and (D) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that
may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant
to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale,
(ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance,
if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all
of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder
or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

 

		5.	Indemnification.

 

(a)          Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact
contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in
any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of
its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such
Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for
this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of
the Advice contemplated in Section 6(c), but only if and to the extent that following the receipt of the Advice the misstatement
or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which
the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf
of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with
Section 6(g).

 

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(b)          Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless each other Holder and the Company, its
directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon;
(x) such Holder’s failure to comply with any applicable prospectus delivery requirements of the Securities Act through no
fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement,
any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the
extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing
by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent,
but only to the extent, that such information relates to such Holder’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto
or (iii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the
extent, related to the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to
the receipt by such Holder of the Advice contemplated in Section 6(c), but only if and to the extent that following the receipt
of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability
of any selling Holder under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

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(c)          Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that
it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate
counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

 

Subject to
the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

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(d)          Contribution.
If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement
or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms.

 

The parties
hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute
pursuant to this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

 

The indemnity
and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.

 

		6.	Miscellaneous.

 

(a)          Remedies.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company
and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

 

    	14

    	 

    

 

(b)          Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

(c)          Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees
and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities
hereunder shall be subject to the provisions of Section 2(d).

 

(d)          Piggy-Back
Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection
with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written
notice of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Holder shall
so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities
such Holder requests to be registered, subject to any applicable underwriter cutbacks or limits as a result of the application
of Rule 415; provided, however, that the Company shall not be required to register any Registrable Securities pursuant
to this Section 6(d) that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information
requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective Registration
Statement.

 

(e)          Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed
by the Company and the Holders of 50% or more of the then outstanding Registrable Securities (for purposes of clarification, this
includes any Registrable Securities issuable upon exercise or conversion of any Security). If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then
the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder
shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the
rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only
by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however,
that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of
the first sentence of this Section 6(e). No consideration shall be offered or paid to any Person to amend or consent to a waiver
or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this
Agreement.

 

    	15

    	 

    

 

(f)          Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Credit Agreement.

 

(g)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may
assign their respective rights hereunder in part or in whole to any person to whom the Warrant or Warrant Shares are transferred.

 

(h)          No
Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof. No Person has any registration rights with respect to any of the Company’s securities that will effective or that
may be exercised prior to the date that the registration rights granted hereunder have been satisfied in full.

 

(i)           Execution
and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf’ format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf signature page were an original thereof.

 

(j)           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Credit Agreement.

 

(k)          Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

    	16

    	 

    

 

(l)           Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(m)         Headings.
The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit
or affect any of the provisions hereof.

 

(n)          Independent
Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association,
a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert
or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters,
and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not asset any such
claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as
an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company
contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that
each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders
collectively and not between and among Holders.

 

**********************

(Signature Pages Follow)

 

    	17

    	 

    

 

IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.

 

	 	ELECTRONIC CIGARETTES 
	 	INTERNATIONAL GROUP, LTD.
	 	 	 
	 	By: 	 
	 	Name:	 
	 	Title:	 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

    	 

    	 

    

 

Name of Holder:

 

	Signature of Authorized Signatory of Holder:	 	 
	 	 	 
	Name of Authorized Signatory:	 	 
	 	 	 
	Title of Authorized Signatory:	 	 	 
	 	 	 	 	 

    	

    	 

    

 

Annex A

 

Plan of Distribution

 

Each Selling Stockholder
(the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the OTC Bulletin Board or any other stock exchange,
market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified
number of such securities at a stipulated price per security;

 

		·	through the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise;

 

		·	a combination of any such methods of sale; or

 

		·	any other method permitted pursuant to applicable law.

 

The Selling Stockholders
may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.

 

Broker-dealers engaged
by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.

 

In connection with
the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).

 

    	ANNEX A - PAGE 1

    	 

    

 

The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”  within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.

 

The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

 

Because Selling Stockholders
may be deemed to be “underwriters”  within the meaning of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this
prospectus. The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with
the proposed sale of the resale securities by the Selling Stockholders.

 

We agreed to keep this
prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of
similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or
any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

 

Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and
sales of securities of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

    	ANNEX A - PAGE 2

    	 

    

 

Annex B 

 

ELECTRONIC CIGARETTES INTERNATIONAL GROUP,
LTD.

 

Selling Stockholder Notice and Questionnaire

 

The undersigned beneficial
owner of common stock (the “Registrable Securities”) of ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD. (the
“Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission
(the “Commission”) a registration statement (the “Registration Statement”) for the registration
and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”)
to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement,

 

Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial
owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement.

 

    	ANNEX B
                                                                                                                                                                                               - PAGE 1

    	 

    

 

The undersigned
hereby provides the following information to the Company and represents and warrants that such information is accurate;

 

QUESTIONNAIRE

 

		1.	Name.

 

		(a)	Full Legal Name of Selling Stockholder

 

 

 

		(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities
are held:

 

 

 

		(c)	Full Legal Name of Natural Control Person (which means
a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this
Questionnaire):

 

 

 

		2.	Address for Notices to Selling Stockholder:

 

	 
	 
	 
	 
	 
	 
	Telephone:	 
	 
	Fax:	 	 
	 
	Contact Person:	 

 

		3.	Broker-Dealer Status:

 

		(a)	Are you a broker-dealer?

 

	Yes  ̈ 	 	No  ̈

 

		(b)	If “yes”  to Section 3(a), did you
receive your Registrable Securities as compensation for investment banking services to the Company?

 

	Yes  ̈ 	 	No  ̈

 

Note: If “no”  to
Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

    	ANNEX B
                                                                                                                                                                                               - PAGE 2

    	 

    

 

		(c)	Are you an affiliate of a broker-dealer?

 

	Yes  ̈ 	 	No  ̈

 

		(d)	If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities
in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

 

	Yes  ̈ 	 	No  ̈

 

Note: If “no”  to
Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

		4.	Beneficial Ownership of Securities of the Company Owned
by the Selling Stockholder.

 

Except as
set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other
than the securities issuable pursuant to the Credit Agreement.

 

		(a)	Type and Amount of other securities beneficially owned by the Selling Stockholder:

 

	 
	 

 

    	ANNEX B
                                                                                                                                                                                               - PAGE 3

    	 

    

		5.	Relationships with the Company:

 

Except as
set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of
5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the past three years.

 

State any exceptions
here:

 

	 
	 

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion
of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus and any amendments or supplements thereto.

 

IN WITNESS WHEREOF
the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person
or by its duly authorized agent.

 

	Date:	 	 	 	Beneficial Owner:	 
	 	 	 	 	 
	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 

 

PLEASE FAX A COPY
(OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

    	ANNEX B
                                                                                                                                                                                               - PAGE 4

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