Document:

LOAN
AGREEMENT

 

THIS
LOAN AGREEMENT (“Agreement”) is made as of September 6, 2018 by and among VPR Brands, L.P., a limited partnership
duly organized and validly existing under the laws of Delaware (the “Borrower”), and Healthier Choices
Management Corp., a corporation duly organized and validly existing under the laws of Delaware, formerly known as Vapor Corp.
(“Lender”).

 

RECITALS:

 

WHEREAS,
Lender has agreed to make a loan to Borrower in the aggregate principal amount of Five Hundred Thousand and no/100 Dollars ($500,000.00)
(the “Loan”);

 

WHEREAS,
to evidence the loan the Borrower will execute and deliver to the Lender that certain Secured Promissory Note in favor of the
Lender in the amount of the Loan, dated on or about the date hereof (the “Note”);

 

WHEREAS,
as further security for the repayment of the Note, the Lender requires that the Borrower to execute and deliver that certain First
Amendment to Security Agreement, dated on or about the date hereof (as may be amended or supplemented from time to time, the “Amendment”),
under which the Borrower pledges to the Lender, and grant the Lender a first lien and security interest in certain assets of the
Borrower; and

 

NOW,
THEREFORE, in consideration of the making of the Loan and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties, the parties hereto agree as follows:

 

Article
1

DEFINITIONS

 

1.1       Definitions.
For the purposes of this Agreement and any amendments or supplements, the following terms shall have the following meanings:

 

(a)       “Agreement”
shall have the meaning set forth in the preamble and shall include any amendments or supplements.

 

(b)       “Borrower”
shall have the meaning set forth in the preamble.

 

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

 

(d)       “Indebtedness”
shall mean all loans, including this Loan, together with all other obligations, debts and liabilities of Borrower to Lender, as
well as all claims by Lender against Borrower, whether now or hereafter existing, voluntary or involuntary, due or not due, absolute
or contingent, liquidated or unliquidated; whether Borrower may be liable individually or jointly with others; whether Borrower
may obligated as guarantor, surety or otherwise; whether recovery upon such indebtedness may be or hereafter may become barred
by any statute of limitations and whether such indebtedness may be or hereafter may become unenforceable.

 

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(e)       “Lender”
shall have the meaning set forth in the preamble, and shall include Lender’s successors and assigns.

 

(f)       “Loan”
shall have the meaning set forth in the recitals.

 

(g)       “Loan
Documents” shall mean this Agreement, the Security Agreement, the Note and such other documents as Lender may require to
evidence and secure the Loan, as each may from time to time may be amended or supplemented, and each of which shall be satisfactory
to Lender in form and substance:

 

(h)       “Maturity
Date” shall mean August ____, 2021.

 

(i)       “Note”
shall have the meaning given in the recitals, which Note evidences Borrower’s obligation to repay the Loan with interest,
and each amendment, modification, extension or renewal thereof.

 

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

 

(k)       “Security
Agreement” shall mean that certain Security Agreement, dated as of July 29, 2016, between the Borrower and the Lender, as
amended by the Amendment.

 

Article
2

THE LOAN AND COLLATERAL

 

2.1       Loan.
Subject to the conditions and terms of this Agreement, Lender agrees to make the Loan to the Borrower in the principal amount
of Five Hundred Thousand and no/100 Dollars ($500,000.00). Borrower agrees to borrow the amount of the Loan from Lender in accordance
with this Agreement. The Loan shall be evidenced by the Note and payment will be secured by the Security Agreement. The Loan shall
be made in a single advance upon the closing of the Loan, subject to satisfaction of the conditions precedent set forth herein.

 

(a)       Maturity.
The outstanding balance of the Loan, plus accrued and unpaid interest shall be due and payable on the Maturity Date.

 

(b)       Interest
Rate and Calculation. The principal balance of the Loan shall be amortized over a period of three (3) years. Interest shall
accrue and be payable on the outstanding principal balance at an annual rate of seven percent (7%) (the “Interest Rate”).
Interest shall be fully cumulative and shall accrue on a daily basis, based on a 365-day year, and compound monthly on the last
day of each month beginning on the last day of the first full month after the Original Issue Date .

 

(c)       Time
and Amount of Payments. Borrower shall pay monthly payments of principal and interest on the Loan in the following manner.

 

1)       Beginning
on September ____, 2018, and on the Monday of each week for the following one hundred fifty-five (155) weeks ending on August
____, 2021; and

 

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2)       On
or before the Maturity Date, Borrower shall pay one (1) final payment consisting of the balance of unpaid principal and interest
remaining, and such fees as may be owed to Lender.

 

(d)       Prepayment.
Borrower may at any time, pre-pay the principal of the Loan, in whole or in part, with such pre-payment to be credited first to
any outstanding accrued interest or fees owed to Lender, and second to a reduction in the principal of the Loan.

 

2.2       Collateral.
As security for the repayment of the Indebtedness, agrees to execute the Amendment.

 

2.3       Use
of Funds. The funds advanced under this Agreement may be used only for [___________________________________] .

 

Article
3

REPRESENTATIONS AND WARRANTIES

 

3.1       Other
Obligations. Borrower represents and warrants to Lender, as of the date hereof, that Borrower is not in default on any obligation
for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation.

 

3.2       Representations
and Warranties under the Security Agreement. All representations and warranties under the Security Agreement are hereby incorporated
by reference. Borrower hereby represents and warrants that all each and every representation and warranty given under the Security
Agreement is true and accurate as of the date hereof, and will continue to be true and accurate as long as any Indebtedness is
owed to the Lender under any Loan Document.

 

Article
4

COVENANTS OF BORROWER

 

4.1       Covenants
under the Security Agreement. All covenants, whether affirmative or negative, under the Security Agreement are hereby incorporated
by reference. Borrower covenants, that so long as Lender remains committed to extend credit to Borrower pursuant to this Agreement,
or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Lender under any of the Loan Documents
remain outstanding, and until payment in full of all Indebtedness of Borrower in connection with the Loan, or unless Lender otherwise
consents in writing, Borrower comply with each and every covenant given under the Security Agreement.

 

4.2       Release.
In partial consideration for the Lender agreeing to make the Loan, each of Borrower, Frija and their respective affiliates specifically
releases, waives, and forever discharges the Lender, its successors in interest, its past, present and future assigns, officers,
directors, subsidiaries, affiliates and insurers, from any and all past claims, demands, actions, liabilities and causes of actions,
of every kind and character, whether asserted or unasserted, whether known or unknown, suspected or unsuspected, in law or in
equity, for or by reason of any matter, cause or thing whatsoever, arising out of the claims related to a breach by the Lender
of Section 10(H) of that certain Asset Purchase Agreement (the “APA”) dated as of July 29, 2016 by and among the Borrower,
Kevin Frija and the Lender, including any claims related to the Lender’s Exclusive Distribution Agreement, dated August
13, 2018, with MJ Holdings Inc . In addition, the parties acknowledge and agree that the Section 10(H) of the APA shall be
terminated and shall be of no further effect.

 

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Article
5

EVENTS OF DEFAULT

 

5.1       Events
of Default. Each of the following events shall constitute an “Event of Default” under this Agreement:

 

(a)       If
Borrower shall be in default in making payments of principal, interest or other amounts due under this Agreement or under the
Note.

 

(b)       A
default in the payment or performance of any of the Security Agreement.

 

(c)       If
at any time any representation or warranty made by Borrower in any Loan Document, or any other document provided by Borrower to
Lender shall prove to be incorrect, false or misleading in any material respect when furnished or made.

 

(d)       If
Borrower shall fail to duly perform or observe any of the covenants, conditions or terms contained in any Loan Document.

 

(e)       The
Borrower fails to pay when due any of its indebtedness, or any interest or premium thereon when due (whether by scheduled maturity,
acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement
or instrument relating to such indebtedness.

 

(f)       Any
action is filed that results, or may ultimately result, in the bankruptcy, insolvency or reorganization of the Borrower, or the
Borrower’s dissolution, liquidation or ceasing to exist.

 

5.2       Remedies.
If any Event of Default shall occur, except where otherwise provided in the Loan Documents, all commitments and obligations of
Lender under this Agreement or the Loan Documents or any other agreement shall immediately be suspended or terminated (including
any obligation to make advances for which Lender shall not be obligated to make upon the happening of any Event of Default regardless
of whether or not any required notice was given) at Lender’s option, and Lender may, at its option, declare the entire Indebtedness
owed to Lender immediately due and payable and may institute foreclosure proceedings against any Collateral given as security
for the Loan, all without notice of any kind to Borrower. However, except that in the case of an Event of Default relating to
or resulting in (i) bankruptcy, insolvency or reorganization of the Borrower, and/or (ii) the Borrower’s dissolution, liquidation
or ceasing to exist, such acceleration shall be automatic and not optional. Following an Event of Default, Lender shall have all
remedies available under any Loan Document and at law or in equity, and all such remedies shall be cumulative and not exclusive.

 

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Article
6

MISCELLANEOUS

 

6.1       No
Waiver. No delay, failure or discontinuance of Lender in exercising any right, power or remedy under any of the Loan Documents
will affect or operate as a waiver of such right, power or remedy; nor will any single or partial exercise of any such right,
power or remedy preclude, waive or otherwise affect any other or further exercise of those rights, powers or remedies or the exercise
of any other right, power or remedy. Any waiver, permit, consent or approval of any kind by Lender of any breach of or default
under any of the Loan Documents must be in writing and is effective only to the extent set forth in the writing.

 

6.2       Notices.
Any notices and other communications permitted or required by the provisions of this Agreement (except for telephonic notices
expressly permitted) shall be in writing and shall be deemed to have been properly given or served by depositing the same with
a reputable overnight delivery service capable of expedient and reliable international delivery, and addressed as hereinafter
provided. Each such notice shall be effective upon being deposited or delivered as aforesaid. The time period within which a response
to any such notice must be given, however, shall commence to run from the date of receipt of the notice by the addressee thereof.
Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall
be deemed to be receipt of the notice sent. Each party shall give to the other party hereto at least ten (10) day notice of such
address change.

 

Each
notice to Lender shall be addressed as follows:

 

Healthier
Choices Management Corp.

3800
North 28th Way

Hollywood,
FL 33020

Attn:
Jeffrey Holman, CEO

Telephone:
(888) 482-7671

Facsimile:
(888) 882-7095

Email:
jholman@vpco.com

 

With
a copy to:

 

Cozen
O’Connor

Attn:
Martin T. Schrier

Southeast
Financial Center

200
South Biscayne Blvd.

Suite
3000

Miami,
FL 33131

 

Each
notice to Borrower shall be addressed as follows:

 

VPR
Brands, LP

3001
Griffin Road

Fort
Lauderdale, FL 33312

Attn:
Kevin Frija, CEO

Telephone:
(954) 715-7001 

Facsimile:

Email:
kevin.frija@vprbrands.com

 

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With
a copy to:

 

Legal & Compliance LLC

Attn:
Laura Anthony, Esq.

330
Clematis Street, Suite 217

West
Palm Beach, FL 33401

Email:
LAnthonv@LegalAndCompliance.com

Legal & Compliance LLC

 

6.3       Costs,
Expenses and Attorneys’ Fees. Each agrees to pay its own costs and expenses, including reasonable attorneys’ fees
(to include outside counsel fees) expended or incurred by Lender in connection with: (a) the negotiation, preparation, continued
administration or enforcement of this Agreement and the other Loan Documents, and (b) the prosecution or defense of any action
in any way related to any of the Loan Documents.

 

6.4       Successors;
Assignment. This Agreement is binding upon and inures to the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; except that Borrower may not assign or transfer its interest under this Agreement without
Lender’s prior written consent. Lender reserves the right to sell, assign, transfer, negotiate or grant participations in
all or any part of, or any interest in, Lender’s rights and benefits under each of the Loan Documents. In connection therewith,
Lender may disclose all documents and information that Lender now has or may later acquire relating to any credit subject to the
Loan Documents, Borrower or its business, or any collateral required under the Loan Documents.

 

6.5       Entire
Agreement; Amendment. The Loan Documents constitute the entire agreement between Borrower and Lender, and supersede all prior
negotiations, communications, discussions and correspondence concerning the subject matter contained in the Loan Documents. This
Agreement may be amended or modified only in a writing signed by each party.

 

6.6       No
Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties hereto
and their respective permitted successors and assigns, and no other person or entity may be a third party beneficiary of, or have
any direct or indirect cause of action or claim in connection with any of the Loan Documents to which it is not a party.

 

6.7       Time.
Time is of the essence for each and every provision of this Agreement and each of the other Loan Documents.

 

6.8       Severability.
If any provision of this Agreement is prohibited by or invalid under applicable law, the provision will be ineffective only to
the extent of the prohibition or invalidity without invalidating the remainder of the provision or any remaining provisions of
this Agreement.

 

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6.9       Counterparts.
This Agreement may be executed in any number of counterparts, each of which when executed and delivered is deemed to be an original,
and all of which when taken together constitute one and the same Agreement.

 

6.10       Consent
to Jurisdiction. The Borrower submits and consents to personal jurisdiction of the Courts of the State of Florida and Courts
of the United States of America sitting in such State for the enforcement of this instrument and waives any and all personal rights
under the laws of any other jurisdiction to object to jurisdiction in the State of Florida. Nothing contained herein shall prevent
Lender from bringing any action or exercising any rights against any security given to Lender, or against the Borrower personally,
or against any property of the Borrower, within any other state or country. Commencement of any such action or proceeding in any
other state or country shall not constitute a waiver of consent to jurisdiction or of the submission made by the Borrower to personal
jurisdiction within the State of Florida. Notwithstanding the place of execution of this Agreement, the parties to this Agreement
have contracted for Florida law to govern this Agreement and it is agreed that this Agreement is made pursuant to and shall be
construed and governed by the laws of the State of Florida without regard to principles of conflicts of laws .

 

[Remainder
of page intentionally left blank]

 

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

 

	 	BORROWER:
	 	 
	 	VPR Brands, L.P.
	 	 	 
	 	By:	/s/ Kevin
    Frija
	 	Name:	Kevin
Frija
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	LENDER:
	 	 
	 	HEALTHIER CHOICES MANAGEMENT CORP.
	 	 	 
	 	By:	/s/ Jeffrey
    Holman
	 	Name:	Jeffrey
    Holman
	 	Title:	Chief
    Executive Officer

 

    	 	8	 

    	 	 	 

    

 

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

 

$582,260.00

 

Amended
and Restated Secured Promissory Note

 

Due
September 6___ 2021

 

This
Amended and Restated Secured Promissory Note (this “Note”) is issued this 6th day of September, 2018,
by VPR Brands, L.P., a Delaware limited partnership (the “Borrower” or the “Company”),
to Healthier Choices Management Corp., a Delaware corporation (“Vapor” or the “Holder”),
pursuant to that certain Loan Agreement, of even date herewith, between the parties (the “Purchase Agreement”).
This Note amends and restates the existing secured promissory note issued by the Company to the Holder on July 29, 2016.

 

FOR
VALUE RECEIVED, the Borrower hereby promises to pay to the Holder or his, her or its successors and assigns the principal sum
of FIVE HUNDRED EIGHTY-TWO THOUSAND and TWO HUNDRED SIXTY DOLLARS ($582,260.00) on or before September 5, 2021 (the “Maturity
Date”) and to pay interest on the principal sum outstanding from time to time in arrears at the rate of seven percent
(7%) per annum (“Interest Rate”) (which rate shall be reset at each anniversary of the Closing), accruing from the
Original Issue Date until the Maturity Date. Interest shall accrue monthly (pro-rated on a daily basis for any period longer or
shorter than a month) from the Original Issue Date and shall be payable in cash. Interest shall be fully cumulative and shall
accrue on a daily basis, based on a 365-day year, and compound monthly on the last day of each month beginning on the last day
of the first full month after the Original Issue Date, until paid. The payment schedule hereunder shall be as follows: (i) Borrower
shall make 155 weekly payments of $4,140.55, with such payments commencing September _14___, 2018, with subsequent installments
(each, payment date a “Payment Date”) payable on the Monday of each week for the following one hundred fifty-five
(155) weeks ending on September _14___, 2021 and (ii) in the 156th week, a balloon payment for all remaining accrued
interest and principal. Borrower will make the weekly payments via direct electronic payment using Automated Clearing House (“ACH”)
transfers. Interest payable in cash hereunder shall be paid on or before each Payment Date in US Dollars to the Holder. Any payment
received hereunder will first be applied against accrued and unpaid interest.

 

    	 	 	 

     

    

 

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

 

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

 

Section
2. Covenants.

 

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

 

(1)
Financial Reports. Notices and Other Information.

 

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

 

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

 

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

 

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

 

    	 	3	 

     

    

 

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

 

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

 

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

 

    	 	4	 

     

    

 

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

 

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

 

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

 

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

 

    	 	5	 

     

    

 

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

 

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

 

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

 

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

 

    	 	6	 

     

    

 

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

 

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

 

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

 

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

 

    	 	7	 

     

    

 

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

 

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

 

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

 

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

 

Section
3. Events of Default and Cross-Default

 

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

 

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

 

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

 

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

 

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

 

    	 	8	 

     

    

 

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

 

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

 

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

 

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

 

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

 

    	 	9	 

     

    

 

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

 

Section
4. Security Agreement. This Note is secured by a Security Agreement of July 29, 2016, as amended (the “Security
Agreement”) between the Borrower and the Holder. The Holder understands and acknowledges that the
Borrower intends to issue either simultaneously with this Note or at a subsequent time to the Original Issue Dates additional
secured indebtedness to Borrower secured by the Collateral (as defined in the Security Agreement) as more fully described on Exhibit
A and consents to such additional secured indebtedness.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	10	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	11	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	12	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	13	 

     

    

 

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

 

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

 

    	 	14	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	15	 

     

    

 

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

 

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

 

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

 

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

 

    	 	16	 

     

    

 

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

 

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

 

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

 

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

 

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

 

    	 	17	 

     

    

 

	If
    to the Borrower, to:	VPR
    Brands, LP
	 	3001
    Griffin Road
	 	Dania
    Beach, FL 33312
	 	Attn:
    Kevin Frija, CEO
	 	Telephone:
    (954) 715-7001
	 	Facsimile:
	 	Email:
    kevin.frija@vprbrands.com
	 	 
	With
    a copy to:	Legal
    & Compliance LLC
	 	 
	 	Attn:
    Laura Anthony, Esq.
	 	330
    Clematis Street, Suite 217
	 	West
    Palm Beach, FL 33401
	 	Email:
    LAnthonv@LegalAndCompliance.com
	 	Legal
    & Compliance LLC
	 	 
	If
    to the Holder:	Healthier
    Choices Management Corp.
	 	3800
    North 28th Way
	 	Hollywood,
    FL 33020
	 	Attn:
    Jeffrey Holman, CEO
	 	Telephone:
    (888) 482-7671
	 	Facsimile:
    (888) 882-7095
	 	Email:
    jholman@vpco.com
	 	 
	With
    a copy to:	Cozen
    O’Connor
	 	Attn:
    Martin T. Schrier
	 	Southeast
    Financial Center
	 	200
    South Biscayne Blvd.
	 	Suite
    3000
	 	Miami,
    FL 33131

 

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

 

[The
Remainder of this Page Intentionally Left Blank.]

 

    	 	 	 

     

    

 

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

 

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

 

    	 	 	 

     

    

 

EXHTBTT
“A”

 

EXISTING
INDEBTEDNESS OF BORROWER

WHICH
RANKS PARI PASSU TO THE NOTE

None

 

    	 	 	 

     

    

 

EXHIBIT
“B”

 

PERMITTED
PAYMENTS TO HOLDERS OF EXISTING INDEBTEDNESS

 

	1)	TRADE
                                         ACCOUNT PAYABLES

 

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

 

	2)	ACCRUED
                                         LIABILITIES

 

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

 

    	 	 	 

     

    

 

EXHIBIT
“C”

 

OTHER
EXISTING INDEBTEDNESS

 

None

 

    	 	 	 

     

    

 

SCHEDULES

 

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

 

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

 

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

 

None

 

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

 

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

 

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

 

None

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