Document:

Exhibit
10.25

 

CERTAIN
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (1) NOT MATERIAL AND (2) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT
(this “Agreement”) is entered into this 10th day of June, 2022 (the “Effective Date”),
by and between BIDI VAPOR, LLC, a Florida limited liability company (“Licensor”), KAIVAL BRANDS INTERNATIONAL,
LLC, a Delaware limited liability company (“Licensee”), and KAIVAL BRANDS INNOVATIONS GROUP, INC.,
a Delaware corporation (“KBIG”), solely for purposes of Sections 4(i) and 4(j) only. Licensor
and Licensee are, at times, each individually referred to in this Agreement as a “Party”, and collectively as
the “Parties”.

 

RECITALS

 

A.        Licensor, and
Licensee’s sole member, KBIG have been parties to that certain Second Amended and Restated Exclusive Distribution Agreement
dated April, 2021, pursuant to which KBIG was appointed as Licensor’s exclusive worldwide distributor of all electronic and
non-electronic nicotine delivery systems and related components (the “Second A/R Distribution Agreement”).

 

B.        On the Effective
Date, Licensee and PM (as defined below) are entering into the PM License (as defined below).

 

C.        In order to
enter into the PM License, Licensee requires: (1) a license of certain intellectual property rights from Licensor; and (2) a contribution
of certain of KBIG’s distribution rights with respect to certain products manufactured by Licensor.

 

D.        In furtherance
thereof, Licensor has agreed to enter into this Agreement on the further condition that, concurrently herewith, Licensee take the
following actions in further consideration of the license and other obligations undertaken by Licensor under this Agreement: (1)
cause KBIG to enter into that certain Third Amended and Restated Exclusive Distribution Agreement (the “Third A/R Distribution
Agreement”) with Licensor; and (2) enter (and cause KBIG to enter) into that certain Limited Liability Company Agreement
of Licensee dated June 10, 2022.

 

AGREEMENT

 

NOW, THEREFORE,
in consideration of the foregoing recitals, and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, Licensor and Licensee hereby agree as follows:

 

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1.         Definitions.
Capitalized terms that are used, but not defined, in this Agreement shall have the meanings given to those terms in the PM License.
As used in this Agreement, the following terms shall have the following meanings assigned to them:

 

      (a)        “Bidi
IP” means all of the Materials and IPR set forth on Schedule 2 of the PM Agreement.

 

(b)       “Bidi
Manager” means Nirajkumar K. Patel, and such person’s successors from time to time who are designated by Licensor
as set forth in the Licensee Operating Agreement.

 

(c)       “Confidential
Information” means: (i) all confidential information, documentation, designs, drawings and data, of whatever nature,
disclosed, whether orally or in writing, by one Party to the other, or obtained by one Party from the other, whether before or
after the date of commencement of the Agreement, relating to or connected with the Licensed IP or the business, affairs, clients/customers,
prospective clients/customers, operations, processes, strategies, plans, IPR, developments or Know-How of a Party and/or its Affiliates,
together with any information derived by a Party from, and any data underlying such information, and any other information designated
by a party as being confidential (whether or not it is marked as “confidential”) or which ought to reasonably be considered
to be confidential; (ii) the terms of the PM License; and (iii) all “Confidential Information” (as defined in the PM
License) of PM that is disclosed to Licensee and provided to Licensor in connection with Licensor’s performance of its covenants
and agreements hereunder.

 

(d)       “Kaival
Manager” means Eric Mosser, and such person’s successors from time to time who are designated by Licensee as set
forth in the Licensee Operating Agreement.

 

(e)       “KBI
Failure” has the meaning set forth in the Side Letter.

 

(f)         “Licensed
IP” means the Technology, Documentation, Bidi IP, and all Developed IPR assigned to Licensor pursuant to Section 3(a).

 

(g)       “Licensee
Operating Agreement” means that certain Limited Liability Company Agreement of Licensee dated June 10, 2022.

 

(h)       “Manager”
means the Bidi Manager or the Kaival Manager, as the context requires. “Managers” means both the Bidi Manager
and the Kaival Manager, collectively.

 

(i)        “PM”
means Philip Morris Products S.A. and its successors and permitted assigns.

 

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(j)        “PM License” means that certain Deed of Licensing Agreement by and between Licensee and PM with respect to
the manufacturing, promotion, sale, and distribution of certain current and future products in various international
markets.

 

(k)       “Scope”
means the performance of Licensee’s duties and obligations under the PM License, including, without limitation, the grant
of sub-licenses by Licensee to PM and its successors and permitted assigns under the PM License.

 

(l)        “Side
Letter” means the Deed of Letter dated on or around the date hereof by and between Licensor, KBIG, and PM.

 

(m)      “Transactions”
means the commercial transactions contemplated by the PM License, generally being the manufacture, marketing, and sale of Products
and New Property in the Markets.

 

2.         Grant
of License.

 

(a)        Licensor hereby
grants to Licensee an irrevocable license to use the Licensed IP during the Term and the Sell-Out Period to the extent (but only
to the extent) of the Scope, and for no other purpose, which license: (i) is exclusive to Licensee in relation to the Markets for
the Scope; (ii) includes the right of Licensee to grant sub-licenses to PM under the PM License for the express purposes set forth
in the PM Agreement, but for no other purpose; (iii) includes the right of Licensee to grant to PM the right to grant sub-sub-licenses
in the manner set forth in the PM License, but for no other purpose; and (iv) includes the KBI Branding to the extent (but only
to the extent) necessary to permit Licensee to perform its obligations to PM as set forth in clause 10.3 of the PM License (the
“License”).

 

(b)       Notwithstanding
anything to the contrary set forth in this Agreement, except as expressly set forth in Section 2(a), Licensor conveys no
right, title, or interest of any kind in and to the Licensed IP or any other IPR (including, without limitation, [***]), all of
which are reserved by Licensor in all respects. For clarity, except as otherwise set forth in Section 2(c), the License
shall continue with respect to each Extension Period and any Sell-Out Period as set forth in the PM License.

 

(c)       Notwithstanding
the provisions of Section 2(a) to the contrary, the License shall not expand in scope or duration as a result of the direct
action of Licensee unless that action was taken by Licensee at the direction of both Managers as presently required by the Licensee
Operating Agreement.

 

(d)       At Licensor’s
written direction and sole expense, all IPR registered in the Markets by Licensee or PM shall be registered in the name of Licensor.

 

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(e)       Notwithstanding
anything to the contrary set forth in this Agreement, Licensor shall not be in breach of this Agreement by virtue of a direct license
of any Licensed IP to PM (a “Direct License”) pursuant to the Side Letter, or by virtue of Licensor’s
performance of its any of its other obligations thereunder. To the extent Licensor is required to grant a Direct License to PM
pursuant to the Side Letter, the scope of the License shall be amended to exclude the Licensed IP to the extent, and for the duration,
of that Direct License

 

3.         Assignment
of Rights.

 

(a)        Licensee acknowledges
and agrees that Licensor shall own, and Licensee hereby assigns and, upon future creation, automatically assigns, to Licensor,
all right, title, and interest in and to any IPR that is assigned to, accrues to, or is otherwise acquired by Licensee under the
PM License and/or in connection with the transactions contemplated thereby, or that is otherwise based thereon or results therefrom,
including, without limitation, all IPR arising out of or in connection with the data verification and related data and results
referenced in clause 9.7 of the PM License, and all [***] (collectively, “Developed IPR”). Licensee acknowledges
and agrees that all Developed IPR will be and shall become the sole and exclusive property of Licensor, subject only to the License,
the terms and conditions of the PM License, and the terms and conditions of the Third A/R Distribution Agreement, as applicable.
Licensee covenants and agrees to refrain from taking any actions inconsistent with the provisions of this Section 3(a),
and to use commercially reasonable efforts to avail itself of any of its rights with respect to Developed IPR under the PM License
for the purpose of securing the full extent of the right, title, and interest for which it is entitled thereunder. At Licensor’s
written request and sole expense, Licensee agrees to perform any acts reasonably requested by Licensor to transfer, perfect, and
defend Licensor’s ownership of Developed IPR, including, without limitation, executing all documents and instruments (including
additional written assignments to Licensor), whether for filing an application or registration for protection of the Developed
IPR (an “Application”) or otherwise under any form of intellectual property laws whether in the United States
or elsewhere in the world, or providing any other assistance reasonably required for the orderly prosecution of Applications. Licensee
acknowledges and agrees that Licensee’s covenants, agreements, and assignments contained in this Section 3(a) are
given to Licensor in partial consideration of the License, without which covenants, agreements, and assignments Licensor would
not grant the License.

 

(b)       If, at any
time, Licensee receives any license of [***] in the manner contemplated by the PM License, Licensee hereby grants to Licensor an
irrevocable sub-license of all right, title, and interest of Licensee in and to that [***] for the duration of such license, for
the purpose of Licensor fulfilling its obligations to Licensee under this Agreement. Licensor shall not have any obligations with
respect to any Improvements or similar activities that rely on any [***], except to the extent that Licensor is granted a valid
sub-license by Licensee with respect to such [***].

 

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4.         Payments
and Reimbursements.

 

(a)        It is the
express intention of Licensor and Licensee that: (a) the total net royalties and similar amounts payable to Licensee under the
PM License shall be apportioned equally among Licensor and Licensee in a manner such that each Party shall ultimately receive fifty
percent (50%) thereof; and (b) payments by PM in respect of a reimbursement to an individual or entity, or in satisfaction of any
losses or damages incurred by an individual or entity, shall be paid to, and be the property of, that individual or entity.

 

(b)       Without limiting
the generality of Section 4(a), Licensee shall pay to Licensor fifty percent (50%) of the following amount (the “Adjusted
Royalty Payment”):

 

(i)        The
total amount of all royalties, the Guaranteed Royalty, and similar amounts actually paid by PM under the PM License, after reduction
of any [***] by PM as set forth in the PM License (collectively, the “Royalty Payments”); plus

 

(ii)       All
[***] and other credits and reimbursements payable to Licensee under the PM License, other than [***] and any other credits or
reimbursements paid by PM that pertain specifically to [***] in furtherance of the Transactions, which amounts shall be paid directly
to Licensor (to the fullest extent permitted by the PM License) or Licensee, as applicable; minus

 

(iii)      Any
amounts allocated to the “Cash Reserve” in the manner permitted by Section 4.2 of the Licensee Operating Agreement,
if any; minus

 

(iv)      All
out-of-pocket costs and expenses mandated by the PM License that are actually incurred by Licensee or Licensor, including, without
limitation, in satisfaction of all indemnity and defense obligations thereunder; minus

 

(v)       All
amounts paid by Licensee to Licensor and KBIG (each, a “Guaranty Party”) in connection with that certain Deed
dated on or about the Effective Date by and between PM, Licensor, and KBIG (the “Guaranty”), and/or the Side
Letter, at any such time as one Guaranty Party’s total aggregate payments and monetary obligations incurred under the Guaranty
and Side Letter exceed the total aggregate payments and monetary obligations incurred by the other Guaranty Party thereunder; and
minus

 

(vi)      All
reimbursement and contribution payments actually made by Licensee to Licensor pursuant to Section 5(c)(i).

 

(c)        In further
consideration of the License and the representations, warranties, covenants, and other agreements of Licensor in this Agreement,
Licensee shall pay to Licensor an Adjusted Royalty Payment within ten (10) days after the end of any calendar month in which Licensee
received a Royalty Payment from PM.

 

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(d)       The Parties
acknowledge and agree: (i) the PM License Agreement contains provisions regarding [***] for modifications, improvements, or other
changes to the Products at the request of PM; (ii) Licensor, utilizing commercially reasonable efforts, shall be responsible for
fulfilling all of [***] and shall invoice Licensee for all costs and expenses arising out of or relating to [***], which invoices
shall be promptly submitted by Licensee to PM for payment; and (iii) all cash received by Licensee from PM for the invoiced [***]
shall be remitted to Licensor from Licensee within ten (10) business days after receipt. If [***] are incurred by Licensor with
Licensee’s acknowledgment or approval, but ultimately not reimbursed by PM for any reason, the amount of all subsequent Adjusted
Royalty Payments shall be modified to the extent necessary to achieve the intention expressed in Section 4(a)(i) and ensure
that the Parties equally share the burden of such [***].

 

(e)        In the event
that any repayment by Licensee to PM is mandated by clauses [***] or [***] of the PM License, Licensor shall repay to Licensee,
and Licensee shall cause KBIG to contribute to Licensee, all amounts necessary to ensure that the intention of Section 4(a)
is achieved.

 

(f)         In the event
that an adjustment pursuant to this Section 4 (other than Section 4(d)) would result in a negative amount payable
to Licensor in connection with a Royalty Payment, Licensor shall not be required to pay any amount to Licensee, but rather the
remaining adjustment shall be included in the allocation of the next succeeding Adjusted Royalty Payments as necessary to achieve
the intention of Section 4(a).

 

(g)       All payments
made by Licensee to Licensor pursuant to this Agreement shall be made pursuant to wire instructions delivered in writing by Licensor
to Licensee.

 

(h)       If Licensee
receives any payment from PM in satisfaction of PM’s obligation to indemnify Licensor or any of Licensor’s officers,
directors, employees, or agents, Licensee shall promptly remit the full amount of such payment to such indemnified person.

 

(i)         If either
Licensor or KBIG (the “Excess Contributor”) is required to make any payment to PM or its affiliated companies,
or otherwise incurs any monetary obligation in connection with its obligations under, the Guaranty and/or the Side Letter that
together with all other such payments and monetary obligations exceeds the total amount of all such payments and obligations of
the other person (the “Deficit Contributor”) under the Guaranty and Side Letter (each, an “Excess Payment”),
then Licensee, first, or the Deficit Contributor, second to the extent that Licensee is unable or unwilling, shall make a payment
to the Excess Contributor within thirty (30) days after such Excess Payment by the Excess Contributor to the extent necessary to
ensure that the total amounts paid by Licensor and KBIG pursuant to the Guaranty and Side Letter on a collective basis are equal,
but subject in all cases to adjustment as necessary to achieve the intention of Section 4(a).

 

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(j)        The Parties
and KBIG acknowledge and agree: (i) the Side Letter provides that Licensor and/or KBIG may be required to perform certain of KBI’s
contractual obligations set forth in the PM License Agreement (collectively, the “Contractual Obligations”)
if a KBI Failure occurs as more fully set forth in the Side Letter; (ii) the Side Letter provides that Licensor and/or KBIG shall
perform the Contractual Obligations on the same terms as set forth in the PM License; and (c) to compute and share the Adjusted
Royalty Payment as necessary to achieve the intention of Section 4(a) if PM pays any portion of the royalty due under the
PM License to KBIG and/or Licensor after a KBI Failure. This Section 4(j) shall survive the termination of the Agreement
for so long as the Contractual Obligations are being performed.

 

5.         Representations,
Warranties, and Covenants.

 

(a)       Mutual
Representations and Warranties. Each Party represents and warrants to the other Party that each of the following is true
and correct on the Effective Date: (i) such Party has the full right, power, and authority to execute and deliver this Agreement
to the other Party and to perform all of such Party’s obligations set forth in this Agreement; (ii) this Agreement constitutes
a valid and legally binding obligation of such Party; and (iii) none of the execution of this Agreement, the grant of the License,
or any of the other transactions contemplated by this Agreement will constitute a violation of or default under, or conflict with,
any law, judgment, decree, statute, or regulation of any governmental authority applicable to such Party or any contract, commitment,
agreement, or restriction of any kind to which such Party is, or by which any of such Party’s assets are, bound, and will
not, violate any contract, agreement, or understanding (whether oral or written) of any kind applicable to such Party.

 

(b)       Representations
and Warranties By Licensor. Licensor hereby represents and warrants to Licensee that each of the following is true and
correct on the Effective Date for the purpose of supporting Licensee’s representations and warranties to PM in clause 28.1
of the PM License:

 

(i)        Licensor
is the legal and beneficial owner of the Licensed IP and KBI Branding.

 

(ii)       Licensor
has the unconditional and irrevocable right, power, and authority to grant the License set forth in this Agreement, subject to
the terms and conditions of the Side Letter.

 

(iii)      Neither
the grant of the License by Licensor, nor Licensor’s performance of any of its obligations set forth in this Agreement does,
or, to its knowledge will: (A) violate any applicable law; (B) require the consent, approval, or authorization of any governmental
or regulatory authority or other third party; or (C) require the payment of any consideration to any third party.

 

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(iv)      Other
than the Third A/R Distribution Agreement and the Side Letter, Licensor has not granted any licenses or any other right, waiver,
covenant not to assert or sue, option or other beneficial right under or in connection with the Licensed IP or the KBI Branding
in relation to any Market.

 

(v)       To
Licensor’s knowledge, no information, fact, condition, circumstance, or prior art exists that would negatively affect the
validity, enforceability, term, or Scope of the Licensed IP or the KBI Branding.

 

(vi)      There
is no pending, or to its knowledge threatened litigation or reissue application, re-examination, post-grant, inter partes or
covered business method patent review, interference, derivation, opposition, claim of invalidity or other claim or proceeding:
(i) alleging the unpatentability, invalidity, misuse, unregisterability, unenforceability, or non-infringement or, or error in
any Licensed IP or KBI Branding; (ii) challenging Licensor’ ownership of, or right to practice, or license the Licensed IP
or KBI Branding; or (iii) alleging that the sale of any product that uses or embodies the Licensed IP does or would infringe, misappropriate,
or otherwise violate any patent, trade secret, or other intellectual property of any third party.

 

(c)       Licensor
Covenants.

 

(i)        Licensor
covenants and agrees to take all actions (or, as applicable, refrain from taking such actions) within its control that are necessary
in order to enable Licensee to satisfy its obligations to PM under PM License to the extent that it is commercially impractical
for Licensee and/or KBIG to satisfy those obligations themselves. Notwithstanding the foregoing provision of this Section 5(c)(i)
to the contrary, if Licensor’s performance of any obligation pursuant to this covenant requires substantial additional time
or capital commitments outside of Licensor’s ordinary course of business (including, but not limited to, additional staffing,
and materials and equipment), Licensor may reasonably condition its performance of such obligation on Licensee’s agreement
to reimburse Licensor for fifty percent (50.0%) of the cost of such additional commitments as an operating expense from the income
of Licensee (and not as part of Adjusted Royalty Payments), which if approved by Licensee (such approval not to be unreasonably
withheld, conditioned, or delayed), shall be timely paid pursuant to the terms of such agreement (and, in any event, within thirty
(30) days after Licensee receives reasonable documentation evidencing such operating expenses).

 

(ii)       Licensor
shall promptly notify the Licensee in writing of: (A) any infringement claim or challenge to the Licensed IP or the KBI Branding
of which Licensor becomes aware; or (B) any claim or lawsuit of which Licensor becomes aware that would affect or reasonably affect
the Licensed IP or the KBI Branding.

 

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(iii)      Notwithstanding
anything to the contrary set forth in this Agreement, nothing in this Agreement shall require Licensor to disclose [***] or any
material information relating thereto in any manner, except in the manner required by clause 3.3 of the PM License.

 

(iv)      Licensor
shall not be obligated under Sections 5(c)(i) during any period of time when Licensee is in material breach of its obligations
set forth in Section 4 or that Section 5(c)(i) after receipt of written notice from Licensor and fifteen (15) days’
opportunity to cure.

 

(v)       Licensor
covenants and agrees to take all actions necessary to facilitate [***] for use permitted by the PM License, either to PM or to
PM’s designated manufacturers, in the manner required by clause 3.5 of the PM License; provided, however, that
in no event shall Licensor be required to [***] except where otherwise required by Section 5(c)(iii).

 

(vi)      Licensor
covenants and agrees that it will not knowingly take any action (unless otherwise required by this Section 5(c)) that would
cause any of the representations and warranties set forth in Section 5(a) to become untrue in any material respect as if
they were made at the time of such action, to the extent such action causes, or is reasonably likely to cause, any material liability,
loss, or damage of or to Licensee in respect of the PM License.

 

(d)       Licensee’s
Covenants.

 

(i)        Licensee
covenants and agrees to: (A) not amend, restate, or otherwise modify any term or provision of the Licensee Operating Agreement,
Licensee’s certificate of formation, or PM License, unless the same is approved by the Bidi Manager; (B) waive any material
right of Licensee, or material obligation of PM, under the PM License or any other agreement between Licensee and PM relating thereto,
in each case without the prior consent of the Bidi Manager (such consent not to be unreasonably withheld, conditioned, or delayed);
(C) not remove the Bidi Manager as a limited liability company manager of Licensee, increase the number of limited liability managers
of Licensee above two (2), or pursue or permit KBIG to pursue any claim against Bidi Manager for breach of a express or implied
duty (fiduciary or otherwise) in its role as a limited liability company manager of Licensee; and (D) not refuse or unreasonably
condition or frustrate the Bidi Manager’s exercise of any right of the Bidi Manager under the Licensee Operating Agreement.

 

(ii)       Licensee
further covenants and agrees that, as promptly as practicable following a request by Licensor, to provide copies of all documentation
and information provided, or otherwise made available, to Licensee under the PM License or otherwise developed by Licensee and
PM in connection therewith (including, without limitation, the Registration Strategy, PMI Product Standards, and information regarding
Market Applicable Law), or request and obtain copies of such documentation and information that Licensee has the right to obtain,
in each case to the extent necessary to facilitate the performance of Licensor’s covenant pursuant to Section 5(c)(i).

 

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(iii)      Licensee
further covenants and agrees to actively, diligently, and timely enforce all provisions of the PM License that are reasonably necessary
to protect the Licensed IP and Licensor’s right, title, and interest thereto. Licensee and Licensor shall not unreasonably
refuse to equally share the cost and expense of Licensee’s activities in this regard, in which case any proceeds, damage
awards, income, royalties, or other payments resulting therefrom shall constitute a Royalty Payment. Otherwise, if Licensee cannot
or will not participate in such sharing of cost and expense, Licensee shall, at Licensor’s election, perform such activities
at Licensor’s sole cost and expense, with any proceeds, damage awards, income, royalties, or other payments resulting therefrom
that are received by Licensee to be promptly paid directly to Licensor for Licensor’s sole benefit (and shall not constitute
a Royalty Payment or any other payment subject to Section 4 in any respect). Licensee shall further actively, timely, and
diligently pursue all rights of indemnification and defense owed by PM under the PM License to Licensor, or to Licensee in respect
of the Licensed IP. Notwithstanding anything to the contrary set forth in this Agreement, in no event shall Licensee approve or
authorize any settlement that materially affects Licensor without Licensor’s consent.

 

(iv)      Licensee
further covenants and agrees to reasonably coordinate with Licensor with respect to all of Licensee’s material activities
regarding Improvements and/or new versions of the Products involving PM.

 

(v)       Licensee
further covenants and agrees to not unreasonably refuse, condition, or delay its consent to any action requested by Licensor to
protect and defend the Licensed IP and implement the [***].

 

(vi)      Licensee
covenants and agrees to take all actions necessary to assist Licensor with performing all of Licensor’s covenants, obligations,
and duties under the Side Letter, except where those covenants, obligations, and duties arise as a result of Licensor’s breach
of this Agreement or any other agreement between Licensor and Licensee.

 

(e)       Mutual
Covenants.

 

(i)
      The Parties acknowledge and agree: (i) Licensee is required to acquire and maintain a Ten Million Dollar ($10,000,000.00)
public liability insurance policy, employer’s liability policy, and professional indemnity insurance policy as set
forth in the PM License Agreement (the “Insurance Policies”); and (ii) the cost for acquiring and
maintaining the Insurance Policies shall be paid in equal shares by the Parties, with Licensor reimbursing Licensee for fifty
percent (50%) of the Insurance Policies premiums within ten (10) days after being provided written notice of the Insurance
Policies premium and a copy of the invoice therefor. Licensee agrees to use commercially reasonable efforts to add Licensor
and KBIG as additional insureds to the Insurance Policies, to the extent it does not result in a material increase to the
amount of the premium to do so.

 

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(ii)       If
Licensee incurs any liability or obligation to PM under the PM License that requires Licensee to pay any amount to PM or its Affiliates,
and Licensee’s “Cash Reserve” does not contain enough cash to fund such payment (a “Shortfall”),
then Licensor shall pay fifty percent (50.0%) of that Shortfall to Licensee, and Licensee shall cause KBIG to contribute fifty
percent (50.0%) of that Shortfall to Licensee, which Licensee shall promptly use to make the required payment. As necessary, the
pro-rata amount of the payment required of Licensor, or the contribution required of KBIG, shall be adjusted to the extent necessary
to achieve the intention expressed in Section 4(a)(i).

 

(f)        Indemnification.

 

(i)
       Each Party agreed to indemnify, defend, and hold the other Party, its Affiliates, and its and their respective officers,
directors, employees, agents, and representatives harmless of and from all claims, demands, causes of action, judgments,
fines, and direct damages, costs, expenses, charges, and fees to the extent arising out of or relating to any inaccuracy in
or breach of a representation, warranty, or covenant of that Party set forth in this Agreement.

 

(ii)       For
all third-party claims, demands, complaints, actions, suits, proceedings, and other matters that give rise, or might give rise,
to a right of indemnification under Section 5(e) (each, a “Claim”), the indemnifying party shall be entitled
to timely assume the defense of the Claim on behalf of the indemnified party upon the indemnifying party’s receipt of written
notice of the Claim. As a condition of the indemnifying party’s assumption of the Claim, the Claim shall be fully tendered
to the indemnifying party for defense and settlement. Failure or delay by the indemnified party to give prompt notice of any Claim
shall not release, waive, or otherwise affect the indemnifying party’s obligations with respect to the Claim, except to the
extent of any loss or prejudice to the indemnifying party resulting from such failure or delay. The indemnified party shall be
entitled to participate in (but not to control) the defense of a Claim, with the indemnified party’s own counsel and at its
own expense. If the indemnifying party does not assume the defense of a Claim, the indemnified party may defend against the Claim
in such manner as the indemnified party may deem appropriate, including, but not limited to, settling such Claim on such terms
as the indemnified party may deem appropriate after giving reasonably advance prior notice thereof to the indemnifying party, and
the indemnified party shall be entitled to prompt indemnification from the indemnifying party for all of the expenses incurred
in connection with the indemnified party’s defense and resolution of the Claim, but only if that Claim gives rise to a right
of indemnification against the indemnifying party under this Agreement. The indemnified party shall provide all assistance reasonably
requested by the indemnifying party in connection with the defense of a Claim.

 

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(iii)      Pass-through
Indemnification. To the extent that Licensee is defended, indemnified and/or held harmless by PM for any reason under the PM
License, such rights to be defended, indemnified and held harmless shall be passed through to Licensor to the extent permissible
under applicable law.

 

6.         Confidentiality.

 

(a)       Subject to
Sections 6(b) and 6(c), each Party undertakes to the other Party: (i) to keep all Confidential Information strictly
confidential; (ii) not to disclose the Confidential Information in whole or in part to any third party except when required under
the PM License; and (iii) to use the Confidential Information solely in order to comply with its obligations under this Agreement
or the PM License, as applicable, or to receive the benefit of this Agreement or that PM License (the “Purpose”),
and not otherwise for its own benefit or the benefit of any third party.

 

(b)       Each
Party may disclose the other Party’s Confidential Information:

 

(i)        To
its Affiliates and its and their respective its employees, officers, contractors, subcontractors, representatives and advisers
(“Representatives”) who need to know such information for the Purpose. Each Party shall ensure that Representative
to whom a disclosure is made is subject to equivalent obligations of confidentiality as those that bind the party under this Section
6(b) and each Party shall be liable for the acts and omissions of each such Representative that lead to a breach of that party’s
obligations under this Section 6(b); and

 

(ii)       As
may be required by law, a court of competent jurisdiction, a Governmental Authority or a recognized securities exchange provided
that: (A) the Party to which the Confidential Information relates has been notified by the party intending to disclose it of the
intended disclosure prior to the disclosure taking place (where permitted); and (B) the Party intending to disclose the Confidential
Information has provided (where permitted) such assistance as has been reasonably requested by the Party to which the Confidential
Information relates in order to restrict the scope of the intended disclosure to the maximum effect.

 

(iii)      As
is reasonably necessary and permitted under the PM License: (A) in order to comply with, or take the benefit of, clause 3 of the
PM License; (B) to apply for, obtain and maintain Regulatory Approvals and make related filings in relation to the Products in
any Markets; and (C) to apply for, prosecute and maintain any IPR.

 

    	12

    	 

    

 

(c)        The obligations
of confidentiality under this Agreement shall not apply (or shall cease to apply as the case may be) to any Confidential Information
which: (i) becomes public knowledge other than as a result of a breach of this Section 6; (ii) was or is lawfully obtained
by the receiving Party without any obligation of confidentiality from a third party who was or is entitled to disclose it; or (iii)
was independently created by the receiving Party without the use of, or reference to, any of the disclosing party’s Confidential
Information.

 

(d)       Each Party
acknowledges and agrees that damages alone would not be an adequate remedy for any breach of this Section 6, and that any
violation by a Party of this Section 6 may cause irreparable injury to the disclosing Party that is not adequately compensable
by money damages and for which the disclosing Party may not have an adequate remedy available at law. On that basis, each Party
agrees that a disclosing Party is entitled to seek injunctive or other equitable relief to prevent or curtail any such threatened
or actual violation without posting a bond or security and without prejudice to any other rights available to the disclosing Party.

 

7.
        Other Provisions.

 

(a)        Incorporation
By Reference. The recitals set forth above are all true and correct and are incorporated into this Agreement by this reference.

 

(b)
      Notice. Unless otherwise agreed to by the Parties, all notices shall be deemed effective when received and
made in writing by either: (i) certified mail, return receipt requested; (ii) nationally recognized overnight courier; or
(iii) electronic mail with proof of delivery, addressed to the Party to be notified at the following address or to such other
address as such Party shall specify by like notice hereunder:

 

If to
Licensor:

 

Bidi Vapor,
LLC

401 N.
Wickham Road

Melbourne,
FL 32835

Attention:
Bidi Vapor – Corporate

E-Mail:
admin@bidivapor.com

 

With
a copy to, which copy does not serve as notice:

 

Nelson
Mullins Riley & Scarborough LLP

390 N.
Orange Ave.

Suite 1400

Orlando,
FL 32801

Attention:
Matt Armstrong

E-Mail:
matt.armstrong@nelsonmullins.com

 

    	13

    	 

    

 

If to
Licensee:

 

Kaival
Brands International, LLC

401 N.
Wickham Road

Melbourne,
FL 32835

Attention:
KAVL-Corporate

E-Mail:
admin@kaivalbrands.com

 

With
a copy to, which copy does not serve as notice:

 

Baker &
Hostetler LLP

200 S.
Orange Ave., Suite 2300

Orlando,
FL 32801

Attention:
Keith Durkin

E-Mail:
kdurkin@bakerlaw.com

 

Either Party, by written notice to the
other pursuant to this section, may change its address or designees for receiving such notices

 

(c)        Severability.
If any of the provisions of this Agreement shall contravene the laws of any country, it is agreed that such invalidity or illegality
shall not invalidate this Agreement, but instead this Agreement shall be construed as if it did not contain the provision(s) claimed
or held to be invalid or illegal in the particular jurisdiction concerned, insofar as such construction does not materially affect
the substance of this Agreement, and the rights and obligations of the Parties shall be construed and enforced accordingly. In
the event, however, that such claimed invalidity or illegality shall substantially alter the relationship between the Parties,
materially affecting adversely the interest of either Party in such jurisdiction, then the Parties shall negotiate an alternative
provision not conflicting with such laws so as to maintain, to the degree reasonably possible, the business and economic benefits
and liabilities as initially set forth herein. If such invalidity or illegality is such that it is not possible to reasonably restore
the business and economic benefits and liabilities of the Parties, then the Party whose interests are adversely affected shall
have the right to terminate only that portion of this Agreement that is materially impacted by such invalidity or illegality.

 

(d)       Binding
Effect. The terms of this Agreement shall be binding upon the direct or indirect successors or assigns of the Parties.

 

(e)       Entire
Agreement; Amendments. This Agreement and the Licensee Operating Agreement collectively set forth the entire understanding
of the Parties relating to the subject matter hereof and cancels and supersedes all other agreements or understandings leading
up to the execution of this Agreement. No amendment or modification of this Agreement shall be valid or binding upon the Parties
unless made in writing and signed on behalf of the Parties by their respective duly authorized representatives. Notwithstanding
the foregoing provisions of this Section 7(e) to the contrary, references herein to the terms and definitions contained
in the PM License shall be afforded the meaning set forth in the PM License with respect to interpretation of such terms, and,
only to the extent necessary, interpretation of this Agreement may be performed with reference to the PM License. In the event
of a conflict between the PM License and this Agreement, this Agreement shall control.

 

    	14

    	 

    

 

(f)
       Assignment. This Agreement, and the rights and licenses provided herein, may not be assigned by either
Party without the prior written consent of the other Party.

 

(g)       Waiver.
No act, delay or omission by any Party shall be deemed a waiver of any right, power, or remedy of such party unless such waiver
is in writing, and then only to the extent set forth therein. All remedies, either under this Agreement or by law or otherwise
afforded to a party, shall be cumulative and not alternative. No waiver of any provision, right or remedy under this Agreement
on any one occasion shall constitute a waiver of any other provision, right or remedy on said occasion or the same or any other
provision, right or remedy on any other occasion.

 

(h)       Bankruptcy.
All rights and licenses granted under or pursuant to this Agreement by Licensor to Licensee are, and shall otherwise be deemed
to be, for the purpose of Section 365(n) of the United States Bankruptcy Code, as amended (the “Bankruptcy Code”),
licenses of rights to “intellectual property” as defined under Section 101 (35A) of the Bankruptcy Code. The parties
hereto agree that Licensee, as licensee of such rights under this Agreement, shall retain and may fully exercise all of their rights
and elections under the Bankruptcy Code. The Parties further agree that, if a Bankruptcy Code case is commenced by or against Licensor
and this Agreement is rejected as provided in the Bankruptcy Code, then Licensor (in any capacity, including debtor-in-possession)
and its successors and assigns (including, without limitation, a Bankruptcy Code trustee) shall take such steps as are necessary
to permit Licensee to exercise all of its rights under this Agreement. All rights, powers and remedies of Licensee provided under
this Section 7(h) are in addition to and not in substitution for any and all other rights, powers, and remedies now or hereafter
existing at law or in equity (including, without limitation, the Bankruptcy Code) in the event of any such commencement of a bankruptcy
proceeding by or against Licensor. Licensee, in addition to the rights, powers and remedies expressly provided herein, shall be
entitled to exercise all other such rights and powers and resort to all other such remedies as may now or hereafter exist at law
or in equity (including the Bankruptcy Code) in such event. Licensor acknowledges that the payments described in Section 4
represent at least equivalent value for the rights granted under this Agreement.

 

(i)        Governing
Law; Venue; Jury Waiver. This Agreement shall be governed by the laws of the State of Florida, without giving effect to
the principles of conflicts of law of such state and shall be binding upon the Parties hereto in the United States and worldwide.
Any claims or legal actions by one Party against the other arising under this Agreement or concerning any rights under this Agreement
shall be commenced and maintained in any state or federal court located in Orange County, Florida. Both Parties hereby submit to
the jurisdiction and venue of any such court. THE PARTIES FURTHER AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO WAIVE ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTERCLAIM, OR ACTION ARISING FROM THE TERMS OF THIS AGREEMENT.

 

    	15

    	 

    

 

(i)        If
any dispute arises between or among the Parties in connection with this Agreement, the Parties shall first proceed in good faith
to submit the matter to mediation before instituting any legal proceeding in a state or federal court. Costs related to mediation
shall be mutually shared by the Parties. Unless otherwise agreed in mediation, the Parties retain their rights to proceed to litigation.
In no event shall this Section 7(i)(i) apply with respect to any action by a Party for injunctive or other similar equitable
relief with respect to a breach of this Agreement by a Party.

 

(j)         No Strict
Construction. This Agreement shall not be construed more strongly against either Party regardless of which Party is more
responsible for its preparation.

 

(k)
      No Partnership or Joint Venture. Nothing in this Agreement, and no course of dealing between the Parties,
shall be construed to create or imply an employment or agency relationship or a partnership or joint venture relationship
between the Parties or between one Party and the other Party’s employees or agents. Neither Licensor nor Licensee has
the authority to bind the other, to incur any liability, or otherwise act on behalf of the other. Each Party shall be solely
responsible for payment of its employees’ salaries (including withholding of income taxes and social security),
workers’ compensation, and all other employment benefits (subject only to the reimbursements contemplated by Section
4).

 

(l)        Headings.
All titles used in this Agreement herein are for the convenience of reference only and shall not affect the construction of this
Agreement.

 

(m)      Counterparts;
Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an
original, but all of which together will constitute one and the same instrument, without necessity of production of the others.
Delivery of executed signature pages hereof by facsimile, DocuSign, or electronic mail transmission shall constitute effective
and binding execution and delivery thereof.

 

[Remainder of Page Intentionally Blank.
Signature Page Follows.]

 

    	16

    	 

    

 

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be duly executed by their duly authorized representatives as of the Effective Date.

 

	 	LICENSOR:
	 	 
	 	BIDI VAPOR, LLC, a Florida limited liability
	 	company
	 	 
	 	By:	/s/ Nirajkumar Patel
	 	 	Nirajkumar Patel, as its Manager

 

	 	LICENSEE:
	 	 
	 	KAIVAL BRANDS INTERNATIONAL, LLC, a
	 	Delaware limited liability company
	 	 
	 	By:	Nirajumar Patel
	 	 	Nirajkumar Patel, as a Manager
	 	 
	 	By: 	/s/ Eric Mosser
	 	 	Eric Mosser, as a Manager

 

	 	KAIVAL BRANDS INNOVATIONS GROUP,
	 	INC., a Delaware corporation
	 	 
	 	By:	/s/ Eric Mosser
	 	 	Eric Mosser, Chief Operating Officer

 

Kaival Brands Innovations
Group, Inc., a Delaware corporation is signing this Agreement solely with respect to Sections 4(i) and 4(j)

 

[End of Agreement.]

 

17EXHIBIT 10.26

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED
WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (1) NOT MATERIAL AND (2) WOULD
LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.

 

	 	DATED
2022	 
	 	 	 
	 	PHILIP
MORRIS PRODUCTS S.A.	(1)
	 	 	 
	 	and	 
	 	 	 
	 	KAIVAL
BRANDS INTERNATIONAL, LLC	(2)

 

	 	 

DEED
OF LICENSING AGREEMENT

 

    	 

 

    

     

    

 

Contents

 

	1   Interpretation	3
	2   Term	15
	3   Grant
OF Licence	15
	4   Exclusivity	16
	5   know-how
and technical assistance	18
	6   compliance
with standards and laws	19
	7   development
services	19
	8   KBI
initiated product development	20
	9   testing	20
	10   PRODUCT
BRANDING AND PACKAGING	21
	11   initial
MARKETS AND expansion	21
	12   regulatory
approvals	22
	13   marketing
and sales	22
	14   Key
performance indicators	23
	15   cessation
of sales	24
	16   Royalty
payments	24
	17   defects	27
	18   PRODUCT
INDEMNITIES	28
	19   new
PROPERTY	30
	20   registration
and maintenance of intellectual property	30
	21   development
of intellectual property	32
	22   ENFORCEMENT
OF INTELLECTUAL PROPERTY	33
	23   INFRINGEMENT
CLAIMS BY THIRD PARTIES	35
	24   liability	37
	25   Parent
company guarantee, ip side letter and IP WAIVER LETTER	38
	26   insurance	38
	27   corporate
REPRESENTATIONS and WARRANTIES	38
	28   KBI
REPRESENTATIONS and WARRANTIES	39
	29   termination	40
	30   consequences
of termination	41
	31   CONFIDENTIALITY	42
	32   Child/Forced
labour	43
	33   Anti-Bribery
and Corruption and Anti-Money Laundering	43
	34   FORCE
MAJEURE EVENT	45
	35   Notices	45
	36   Further
assurance	46
	37   Assignment
and other dealings	46
	38   Waiver	47
	39   Entire
agreement	47
	40   Variation	47
	41   Severance	47
	42   Third
party rights	47
	43   No
partnership or agency	48
	44   COSTS	48
	45   Counterparts	48
	46   Language	48
	47   Governing
law	48
	48   dispute
resolution	48
	49   arbitration	49
	50   Interim
relief	49

 

    i

     

    

 

THIS DEED is dated

 

Parties

 

		(1)	PHILIP MORRIS PRODUCTS S.A., a corporation incorporated under the laws of Switzerland (registered
no. CH-105-950.151), with offices at Quai Jeanrenaud 3, 2000 Neuchatel, Switzerland (“PMI”).

 

		(2)	KAIVAL BRANDS INTERNATIONAL, LLC, a corporation incorporated under the laws of Delaware, USA with
(registered no. 6670323), whose registered office is at 401 N. Wickham Road, Suite 130, Melbourne, Florida 32935 (“KBI”).

 

Background

 

		(A)	PMI has been a pioneer in the development and commercialization of science-based smoke-free reduced-risk
products and has developed a sizeable intellectual property portfolio relating to such technologies and has substantial expertise in selling
such products;

 

		(B)	PMI is interested in exploring the manufacture and sale of smoke-free products that may ultimately be
used to replace cigarettes;

 

		(C)	Bidi has developed a range of smoke-free products such as the “BIDI Stick” for sale in the
United States of America and has licensed all of the intellectual property rights relating thereto to KBI, an Affiliate of Bidi, on an
exclusive basis as necessary to enable KBI to license those rights on an exclusive basis to PMI pursuant to the terms of this agreement;

 

		(D)	PMI wishes to manufacture, promote, sell and distribute such products on an exclusive basis in various
markets outside the United States of America;

 

		(E)	KBI has agreed to grant, and PMI has agreed to take, a license of certain intellectual property rights
relating to such products on an exclusive basis on the terms set out in this agreement.

 

Agreed
Terms

 

		1	Interpretation

 

The following definitions and rules of
interpretation apply in this agreement.

 

		1.1	Definitions:

 

	“Acceptance
    Criteria”	means
    the criteria against which the Design Specification or Consumable will be assessed during EVT, DVT or PVT. 
	 	 
	“Affiliate”	means,
    in relation to a party, any person that from time to time directly or indirectly Controls, is Controlled by, or is under common Control
    with, that party and, in the case of KBI, includes Bidi, and any person that from time to time directly or indirectly Controls, is
    Controlled by, or is under common Control with, Bidi (but in all cases, excluding the other party and any person who is an Affiliate
    of the other party at the Effective Date);
	 	 
	“Anti-Bribery
    and Corruption Laws”	means,
    to the extent applicable: the Foreign Corrupt Practices Act 1977 of the United States of America, as amended (“FCPA”),
    any rules and regulations thereunder; the Bribery Act 2010 of England and Wales, any rules and regulations thereunder, any similar
    laws or regulations in any other jurisdiction; and any other national and international laws enacted to implement the OECD Convention
    on Combating Bribery of Foreign Public Officials in International Business Transactions, as each may be amended.

 

    3

     

    

 

	“Applicable
    Law”	means
    all applicable laws, statutes, regulations, directives, decisions, rulings, decrees, government policies, enactments or instruments
    (including national, regional, local or municipal laws, regulations or by-laws of any kind whatsoever including where made by any
    Governmental Authority), and mandatory requirements, standards and codes which may from time to time be in force. 
	 	 
	“[***]”	[***]
	 	 
	“Base
    Price”	[***]
	 	 
	“Bidi”
    	means
    Bidi Vapor, LLC incorporated and registered in the State of Florida, US with registration # L19000072294 and having its registered
    address at 200 S. Orange Ave., Suite 2300, Orlando, FL 32801.
	 	 
	“Business
    Day”	means
    a day other than a Saturday, Sunday or public holiday in Switzerland, when banks in Switzerland are open for business.
	 	 
	“Change
    of Control”	means
                                           the occurrence of any of the following events:

     

    (a)       a
    change of Control of KBI or Bidi or any Holding Company of KBI or Bidi (as defined in section 1159 of the Companies Act 2006);

     

    (b)       the
    merger or consolidation of KBI or Bidi or any Holding Company of KBI or Bidi, other than a merger or consolidation in which: (i)
    the shareholders of that entity immediately prior to the consolidation or merger owns, directly or indirectly, at least a majority
    of the shares in the capital of the continuing or surviving corporation immediately after such consolidation or merger; or (ii) the
    board of directors of that entity immediately prior to the merger or consolidation would, immediately after the merger or consolidation,
    constitute a majority of the board of directors of the continuing or surviving corporation, which liquidation, merger, or consolidation
    has been approved by the shareholders of that entity; or

     

    (c)       the
    sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the assets of KBI or Bidi
    or any Holding Company of KBI or Bidi.

	 	 
	“Claim”	means
    an assertion, or an actual or threatened claim, action, suit, or proceedings (whether civil, criminal, administrative, arbitral,
    investigative, or otherwise), including border enforcement actions, whether or not such actions involve law enforcement.

 

    4

     

    

 

	“COGS”	means
    the cost of goods sold as defined under the US Generally Accepted Accounting Principles.
	 	 
	“[***]”	[***]
	 	 
	“[***]”	[***]
	 	 
	“Commencement
    Date”	means
    13 May 2022.
	 	 
	“Competing
    Product”	means
    a product that competes with, and is the same as or similar to, any of the Products made and sold by PMI pursuant to this agreement,
    [***]
	 	 
	“Confidential
    Information”	means
    all confidential information, documentation, designs, drawings and data, of whatever nature, disclosed, whether orally or in writing,
    by one party to the other, or obtained by one party from the other, whether before or after the date of commencement of this agreement,
    relating to or connected with the Licensed Rights or the business, affairs, clients/customers, prospective clients/customers, operations,
    processes, strategies, plans, IPR, developments or Know-How of a party and/or its Affiliates, together with any information derived
    by a party from, and any data underlying such information, and any other information designated by a party as being confidential
    (whether or not it is marked as “confidential”) or which ought to reasonably be considered to be confidential. The terms
    of this agreement shall be Confidential Information.
	 	 
	“Control”	has
    the meaning given in section 1124 of the Corporation Tax Act 2010, and “Controls” and “Controlled”
    shall be construed accordingly.
	 	 
	“Consumable”	has
    the meaning given in clause 7.1(a).
	 	 
	“Defect”	means
                                           any Product (including the KBI Packaging but excluding any Product Branding, text or other
                                           content on such KBI Packaging) that fails to:

     

    (a)       be
    of high quality;

     

    (b)       function
    properly and reliably for its intended purpose;

     

    (c)       comply
    with its Functional Specifications;

     

    (d)       comply
    with the Applicable Law, including any applicable environmental, health, employment and safety laws and regulations and Regulatory
    Approvals in the Market in which it is intended for sale; and

     

    (e)       comply
    with the PMI Product Standards

     

    and
    “Defective” shall be construed accordingly.

 

    5

     

    

 

	“Design
    Defect”	means
    a Defect arising from the Design Specification which is not a Manufacturing Defect or Excluded Defect.
	 	 
	“Design
    Specification”	means
    the detailed specification setting out the process, materials and other requirements necessary for the manufacture, assembly and
    production of a Product or any KBI Packaging. 
	 	 
	“Development
    Services”	[***]
	 	 
	“Disclosed”	means
    disclosed by KBI prior to the Effective Date in writing in the data room [***] and in such manner and in such detail as to enable
    a reasonable licensee to identify and make a reasonably informed assessment of the nature and scope of the matter concerned.
	 	 
	“Distribution
    Agreement”	means
    the Third Amended and Restated Exclusive Distribution Agreement between Kaival and Bidi dated 10 June 2022.
	 	 
	“Documentation”	means
    any and all Materials (and IPR therein) from time to time: (a) relating to the Exploitation of the Products or KBI Packaging; and/or
    (b) subsisting in the Product Regulatory Data or the Specifications. 
	 	 
	“DVT”	means
    so-called “design validation testing” which includes testing to deliver objective verification that the component parts
    of the device have, and the device as a whole has, been designed and specified to deliver their/its intended functions correctly
    for a user and meet the Functional Specification and other requirements in this agreement. 
	“E-Cigarette”	means
    a disposable electronic delivery product that produces an aerosol for human inhalation.
	 	 
	“Effective
    Date”	means
    the date of this agreement.
	 	 
	“E-Liquid”	means
    the finished and produced ‘e-liquid’, being the liquid that forms a nicotine-containing aerosol when heated.
	 	 
	“E-Liquid
    Defect”	means
    a Defect arising from the KBI E-Liquid.
	 	 
	“[***]”	[***].
	 	 
	“Encumbrance”	means
    any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, option, assignment by way of security, security interest,
    restriction, right of first refusal, right of pre-emption, third party right or interest, covenant not to sue or enforce, or other
    encumbrance or security interest of any kind, or another type of agreement or arrangement having similar effect including anything
    analogous to any of the foregoing under the laws of any jurisdiction, or an agreement or commitment to create any of the foregoing.
	 	 
	“EVT”	means
    so-called “engineering validation testing” which includes testing first engineering prototypes to ensure that
    the unit performs to the Functional Specification and other requirements in this agreement. 

 

    6

     

    

 

	“Excluded
    Defect”	has the meaning set out in clause 17.2(b).

                                                                                 

	“Excluded
    Products”	[***]
	 	 
	“Expansion
    Criteria”	means
the non-binding criteria for PMI’s plans for expansion into further Markets, as set out in Schedule 5. 

	 	 
	“Expansion
    Business Plan”	means
    a plan provided by PMI to KBI under clause 11.3 or 11.4 as updated by PMI from time to time.
	 	 
	“Exploit”	means
    to make, use, stock, keep, import, export, apply for Regulatory Approvals, Promote, sell and/or distribute, and “Exploitation”
    shall be construed accordingly.
	 	 
	“Extension
    Period”	means
    a period of five (5) years.
	 	 
	“First
    Sale”	means
    the sale of a unit of a Product by PMI or an Affiliate of PMI in a Market to (a) a Third Party distributor or reseller; or (b) a
    final consumer where PMI or the Affiliate of PMI sells the Product through its own channels directly to final consumers.
	 	 
	“Force
    Majeure Event”	1.2means
    any event beyond the relevant party’s reasonable anticipation and control including fire, flood, storm and other acts of God,
    epidemic and pandemic, trade union disputes, riot, war or hostilities between any nations (or preparations for the same), imposition
    of Sanctions or embargo, terrorism or rebellion provided that, in each case where possible for such party to take reasonable and
    proportionate measures to avoid such event arising, such measures were taken.
	 	 
	“Freedom
    to Operate”	means,
    with respect to the Products, that such Products and their design, manufacturing, use and sale (excluding the Product Branding) do
    not infringe, misuse, or misappropriate the IPR of any Third Party.
	 	 
	“Functional
    Specification”	means
    the detailed specification describing the functionality, performance, features and characteristics of the Products to which KBI develops
    the Design Specification, as agreed by the parties in writing (including in or pursuant to a Work Order) or, with respect to the
    period before the Effective Date only, as specified by PMI.
	 	 
	“Government
    Official”	means:
    (a) an employee, officer, or representative of, or any person otherwise acting in an official capacity for, or on behalf of, a Governmental
    Authority; (b) a legislative, administrative, or judicial official, regardless of whether elected or appointed; (c) an officer of
    or individual who holds a position in a political party; (d) a candidate for political office; or (e) an officer or employee of a
    supra-national organization (e.g., World Bank, United Nations, International Monetary Fund, Organization for Economic Co-operation
    and Development).

 

    7

     

    

 

	“Governmental
    Authority”	means
    any supra-national, national, federal, state, provincial, municipal, or local government (including any sub-division, court, administrative
    agency, commission, or other authority thereof) or private body exercising any regulatory, taxing, customs, importing, or quasi-governmental
    authority, including but not limited to state-owned or state-controlled entities or enterprises, in each case having jurisdiction
    or authority.
	 	 
	“Guarantors”	mean
    Kaival and Bidi.
	 	 
	“Handover
    Confirmation”	means
    a written confirmation from both parties that the Design Specification or Consumable has passed the pre-manufacturing testing and
    verification required under this agreement. 
	 	 
	“Improvement”	means
    any improvement, enhancement or modification.
	 	 
	“Initial
    Period”	means
    the period commencing as of the Commencement Date and ending five (5) years from the Effective Date.
	 	 
	“Insolvency
    Event”	means
                                           if any of the following occur:

     

    (a)       KBI
    suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay
    its debts or is deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 (IA 1986) as if the words
    “it is proved to the satisfaction of the court” did not appear in sections 123(1)(e) or 123(2) of the IA 1986;

     

    (b)       KBI
    commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for
    or enters into any compromise or arrangement with any of its creditors;

     

    (c)       KBI
    applies to court for, or obtains, a moratorium under Part A1 of the Insolvency Act 1986;

     

    (d)       a
    petition is filed, a notice is given, a resolution is passed, or an order is made, for or on connection with the winding up of KBI;

     

    (e)       an
    application is made to court, or an order is made, for the appointment of an administrator or a notice of intention to appoint an
    administrator is given or an administrator is appointed over KBI;

     

    (f)       the
    holder of a qualifying floating charge over the assets of KBI has become entitled to appoint or has appointed an administrative receiver;

     

    (g)       a
    person becomes entitled to appoint a receiver over all or any of the assets of KBI or a receiver is appointed over all or any of
    the assets of KBI;

     

    (h)       a
    creditor or encumbrancer of KBI attaches or takes possession of, or a distress, execution, sequestration or other such process is
    levied or enforced on or sued against, the whole or any part of its assets and such attachment or process is not discharged within
    seven (7) days;

     

    (i)       any
    event occurs, or proceeding is taken, with respect to KBI in any jurisdiction to which it is subject that has an effect equivalent
    or similar to any of the events mentioned in (a) to (h) above; or

     

    (j)       KBI
    ceases, or threatens to cease, to carry on all or substantially the whole of its business other than in connection with an internal
    group reorganisation.

 

    8

     

    

 

	“Intellectual
    Property Rights” or “IPR”	means
    patents, rights to inventions, copyright and related rights, rights in software, trade secrets, proprietary formulae, trade marks,
    business names and domain names, rights in get-up, goodwill and the right to sue for passing off, rights in designs, utility models,
    database rights, rights to use, and protect the confidentiality of, confidential information (including Know-How) and all other intellectual
    property rights, in each case whether registered or unregistered and including all applications and rights to apply for and be granted,
    renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection
    which subsist or will subsist now or in the future in any part of the world.
	 	 
	“IP
    Side Letter”	means
    the deed of letter between PMI and Bidi set out in Schedule 9.
	 	 
	“IP
    Waiver Letter”	means
    the letter between the parties set out in Schedule 10.
	 	 
	“Joint
    Improvements”	means
    any Improvement to the Technology, Documentation or Licensed IPR related to the Products, or to the Products or their method of manufacture
    that is developed by the parties and/or their respective Affiliates jointly. 
	 	 
	“Joint
    Improvement IPR”	has
    the meaning set out in clause 21.1.
	 	 
	“Kaival”	means
    Kaival Brands Innovations Group, Inc. with registered address at 401 N. Wickham Road, Suite 130, Melbourne, Florida 32935.
	 	 
	“KBI
    Branding”	means
    the trade marks, names and branding set out in Schedule 3 which are licensed to KBI by Bidi.

 

    9

     

    

 

	“KBI
    E-Liquid”	means
    the E-Liquid developed by or on behalf of KBI and/or any of its Affiliates and used in or with a Product.
	 	 
	“KBI
    E-Liquid Composition”	[***]
	 	 
	“KBI
    IP”	means
    the Materials (and IPR therein) and IPR listed in Schedule 2.
	 	 
	“KBI
    Markets”	means
    the US and any other territory that is outside the Markets.
	 	 
	“KBI
    Packaging”	means
    the external polystyrene packaging, inner box and cardboard sleeve used to package the Products (excluding any KBI Branding on such
    packaging, box or sleeve).
	 	 
	“Know-How”	means
    any secret or covert knowledge or information, including trade and other secrets, knowledge, ideas, inventions, concepts, discoveries
    and know-how.
	 	 
	“KPIs”	means
    the key performance indicators set out in, or determined by PMI from time to time in in accordance with, Schedule 5.
	 	 
	“Launch”	means
    the first sale of a Product in a Market to (a) a Third Party distributor or reseller, or (b) a final consumer where PMI or an Affiliate
    of PMI sells the Product through its own channels directly to final consumers, as applicable. “Launching” and
    “Launched” shall be construed accordingly.
	 	 
	“Licensed
    IPR”	means
    all IPR comprised in or relating to the Technology, Documentation and KBI IP that is licensed to PMI under clause 3.1 including any
    Joint Improvement IPR and IPR in Improvements that become a part of the Licensed Rights pursuant to clause 21.
	 	 
	“Licensed
    Rights”	has
    the meaning set out in clause 3.1.
	 	 
	“Manufacturing
    Defect”	has
    the meaning set out in clause 17.2(a).
	 	 
	“Market
    Applicable Law”	has
    the meaning set out in clause 6.1(a).
	 	 
	“Markets”	means
    the countries and markets set out in Schedule 1.
	 	 
	“Market
    Specific Terms”	means
    the terms and conditions that relate to and apply to a particular Market as set out in Schedule 6, as amended by the parties pursuant
    to clause 4.2 or 40. 
	 	 
	“Materials”
    	means:
    (a) regardless of whether IPR actually inhere in any such items, all processes, methodologies, technologies, algorithms, techniques,
    designs, reports, works of authorship, video recordings, audio recordings, photographs, software (in both source code and object
    code form and including all related data), mask works, models, formulae, programmer interfaces, specifications, operating instructions,
    drawings, compositions, processes, research and development results, technology, technical data, drawings, data and commercial, technical,
    manufacturing and production activities, notes, manuals, documentation, training materials, job aids and materials; (b) all Know-How;
    and (c) all translations, adaptations, derivations, and combinations of any of the foregoing. 

 

    10

     

    

 

	“Minimum
    KPIs”	means
    the key performance indicators identified as such and set out in, or determined in accordance with, Schedule 5.
	 	 
	“Negative
    Factor”	means
    any matter, fact or circumstance outside of PMI’s control including any breach by or act or omission of KBI, any material adverse
    change (including negative reputational development affecting KBI, its Affiliates or its or their products outside the Markets),
    any material adverse change in laws or regulations, any change in exchange rates or commodity prices, or any Force Majeure Event,
    but excluding any change in conditions generally affecting the industry, changes in financial markets or general economic conditions
    other than those specified in the foregoing part of this definition.
	 	 
	“New
    Property”	means
    a Nicotine E-Cigarette product that is outside the product categories set out in the definition of the term “Products”
    (including any system of a “pod mod” or “pod product” for nicotine E-Liquid or nicotine salts that involve
    a vaping product making use of a pre-filled or refillable “pod” or pod cartridge containing a vaporizer system, intended
    to be used with a separate external battery, that is currently being or may be developed by Bidi or its Affiliates) excluding in
    all cases Nicotine E-Cigarettes to the extent they are Excluded Products.
	 	 
	“Nicotine
    E-Cigarette”	means
    an electronic delivery product that produces a nicotine-containing aerosol for human inhalation.
	 	 
	“[***]”	[***].
	 	 
	“[***]”	[***].
	 	 
	“Parent
    Company Guarantee”	means
    the deed of guarantee between PMI and the Guarantors set out in Schedule 8.
	 	 
	“PMI
    Background IP”	means
    any IPR from time to time owned by, or licensed from a Third Party by, PMI and/or any of PMI’s Affiliates. 
	 	 
	“PMI
    Branding”	means
    the trade marks, names and branding used on the Products that are owned by PMI or licensed by PMI from a Third Party. 
	 	 
	“PMI
    Product Standards”	means
    PMI’s standards on product quality, safety, and chemistry that PMI applies to its own products, that are provided by PMI to
    KBI on or prior to the date of this agreement, and as may be amended by PMI in its sole discretion from time to time on notice to
    KBI, the first version of which is set out in Schedule 4.
	 	 
	“Product
    Branding”	has
    the meaning set out in clause 10.1.

 

    11

     

    

 

	“Product
    Packaging”	has
    the meaning set out in clause 10.1.
	 	 
	“Product
    Regulatory Data”	means
    with respect to each Product all testing, pre-clinical and clinical trial data, including data from all experiments, information,
    results, testing designs and protocols, information useful for, contained in, or submitted in, any application for any product licence,
    registration, regulatory approval or similar before any Governmental Authority, all government certifications and findings, and related
    materials, data from any safety databases, adverse event reporting or other consumer testing or user database;
	 	 
	“Products”	means
    disposable Nicotine E-Cigarettes containing an E-Liquid developed by, for, or on behalf of KBI and/or any of its Affiliates, commonly
    referred to as ‘disposable e-cigarettes’, (including disposable Nicotine E-Cigarettes that are currently commercialized
    by or on behalf of KBI and/or any of its Affiliates as of the date of this agreement) and any evolution, or new, enhanced, updated
    or substituted versions, of such products, and any accessories intended for use with any such products, excluding in all cases any
    such Nicotine E-Cigarettes that are only Excluded Products.
	 	 
	“Promote”	means
    to market, advertise and promote, and “Promotion” shall be construed accordingly.
	 	 
	“PVT”	means
    so-called “production validation testing” which includes verifying that the Design Specification will deliver Products
    that conform to the Functional Specification and other requirements of this agreement at mass production yields and at mass production
    rates. 
	 	 
	“Quarter”	means
    each period of three (3) months commencing on 1 January, 1 April, 1 July and 1 October respectively, and “Quarterly”
    shall be construed accordingly.
	 	 
	“Recall”	means
    any action to withdraw, recall, collect, recover or return a Product from, or prevent further Promotion, release or distribution
    of a Product in or to, any part of the supply chain or any end-user, or have a third party take those actions, at the request of
    any Governmental Authority or as a voluntary corrective or preventive action of PMI, an Affiliate of PMI or any of its or their distributors.
    This includes any action by a Governmental Authority to seize, detain or destroy a Product.
	 	 
	“Recommended
    Sales Price”	means
    the recommended price for the sale of the relevant Product to a final consumer in the relevant Market as suggested by PMI or an Affiliate
    of PMI. 
	 	 
	“Regulatory
    Approvals”	means
    regulatory, legal and antitrust approvals, permission, licence, dispensation, waiver or consent (including product registration)
    required to import, export, Promote, sell and/or distribute a Product in a Market.

 

    12

     

    

 

	“Relevant
    Affiliates”	means,
    with respect to a party, any Affiliates of such party that are engaged in activities related to the performance of this agreement
    (including by owning the Licensed IPR).
	 	 
	“Relevant
    Defect”	has
    the meaning given in clause 17.1.
	 	 
	“[***]”	[***].
	 	 
	“Representatives”	has
    the meaning given in clause 31.2.
	 	 
	“Royalties”	means
    the royalties payable by PMI to KBI with respect to the First Sale of Products in the Markets calculated in accordance with clause
    16.1.
	 	 
	“Royalty
    Statement”	(a)has
    the meaning given in clause 16.10.
	 	 
	“Sanctioned
    Party”	(a)means
    any person (i) that is the subject of any Sanctions including by inclusion on the list of specially designated nationals maintained
    by the US Department of Treasury’s Office of Foreign Assets Control or other applicable restricted parties list maintained
    by the US, the United Nations Security Council, Switzerland, the European Union, or any member state thereof, or Her Majesty’s
    Treasury; or (ii) located or organized within, or doing business or operating from a country or territory that is the subject of
    comprehensive Sanctions at the relevant time.
	 	 
	“Sanctions”	means
    any all applicable sanctions laws including U.S. laws (including those administered or enforced by the U.S. Department of Treasury’s
    Office of Foreign Assets Control, the U.S. Department of State or the U.S. Department of Commerce) or any sanctions imposed by the
    United Nations Security Council, Switzerland, the European Union, or Her Majesty’s Treasury that have a material adverse impact
    on the operation of this agreement or any aspect of its operation.
	 	 
	“Sell-Out
    Period”	has
    the meaning set out in clause 30.1.
	 	 
	“[***]”	[***].
	 	 
	“Specifications”	means
    the Design Specifications and Functional Specifications for Products to be sold in Markets under this agreement.
	 	 
	“Tax”	means
    taxes and/or duties on or targeting a specific component, e.g. nicotine, or product (whether fixed, based on quantity, weight, strength
    or similar, administered on an ad valorem basis or otherwise), excluding VAT.
	 	 
	“Technology”	means
    any and all Materials (and IPR therein) from time to time: (a) subsisting in or related to the Products or KBI Packaging, excluding
    the KBI Branding and the PMI Branding; or (b) enabling or required for the best use, practice, performance or exploitation of such
    Materials (and IPR).

 

    13

     

    

 

	“Term”	means
    the duration of this agreement.
	 	 
	“Third
    Party”	means
    any person that is not a party to this agreement or an Affiliate of such a party.
	 	 
	“US”	means
    United States of America.
	 	 
	“USD”	means
    United States Dollars.
	 	 
	“VAT”	means
    tax on sales, revenue or turnover including value added tax or any equivalent tax chargeable in anywhere in the world.
	 	 
	“Vendor
    Disclosure Agreement”	means
    the PMI non-disclosure agreement relating to sensitive materials that are provided to PMI which governs the usage and disclosure
    of such materials. 
	 	 
	“VEEV”	means
    the E-Cigarette sold under the name “VEEV”. 
	 	 

	 	1.3  	In this agreement, save where
the context requires otherwise:

 

	 	(a)	references to clauses and Schedules
are to the clauses and Schedules of this agreement and references to paragraphs are to paragraphs of the relevant Schedule;

 

	 	(b)	clause, Schedule and paragraph
headings shall not affect the interpretation of this agreement. The Schedules form part of this agreement and shall have effect as if
set out in full in the body of this agreement. Any reference to this agreement includes the Schedules;

 

	 	(c)	a person includes a
natural person, corporate or unincorporated body (whether or not having separate legal personality) and a reference to a company
shall include any company, corporation or other body corporate, wherever and however incorporated or established;

 

	 	(d)	unless the context otherwise
requires, words in the singular shall include the plural and in the plural shall include the singular and a reference to one gender shall
include a reference to the other gender;

 

	 	(e)	a reference to this agreement
or to any other agreement or document referred to in this agreement is a reference to this agreement or such other agreement or document
as varied or novated (in each case, other than in breach of the provisions of this agreement) from time to time;

 

	 	(f)	a reference to a statute or
statutory provision shall include all subordinate legislation made from time to time under that statute or statutory provision and is
a reference to it as amended, extended or re-enacted from time to time;

 

	 	(g)	any undertaking by or obligation
on a party to do any act or thing, or not to do any act or thing, includes an undertaking to procure the doing of that act or thing,
or the not doing of that act or thing, by a party’s Affiliates;

 

	 	(h)	any undertaking by or obligation
on a party not to do any act or thing includes an undertaking not to encourage, solicit, cause, permit or assist the doing of that act
or thing;

 

    14

     

    

 

	 	(i)	any reference to KBI’s
knowledge or similar shall be deemed to include the knowledge or similar of KBI’s Affiliates and Niraj Patel;

 

	 	(j)	a reference to writing
or written includes email but not fax; and

 

	 	(k)	any words following the terms
including, include, in particular, for example or any similar expression shall be construed as illustrative
and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.

 

	 	1.4	This agreement shall be binding
on, and enure to the benefit of, the parties to this agreement and their respective personal representatives, successors and permitted
assigns, and references to any party shall include that party’s personal representatives, successors and permitted assigns.

 

	 	2	Term

 

	 	2.1	This agreement shall be deemed
to have commenced on the Commencement Date and, unless terminated earlier in accordance with clause 29, shall remain in force until the
end of the Initial Period.

 

	 	2.2	The parties acknowledge that
PMI has manufactured a limited quantity of Products prior to the Effective Date pursuant to a letter agreement between PMI, KBI, Bidi
and Kaival dated 13 May 2022. The parties agree that, notwithstanding the manufacture of such Products prior to the Effective Date, the
terms and conditions of this agreement shall apply to such Products and their Exploitation.

 

	 	2.3	Upon expiry of the Initial
Period this agreement shall automatically renew for an Extension Period unless PMI has failed to meet the Minimum KPIs, in which case
it shall terminate automatically without notice at the end of the Initial Period.

 

	 	2.4	At least nine (9) months before
the end of an Extension Period, the parties will meet to discuss and decide whether or not to renew the agreement for a further Extension
Period, such decision to be made at least three (3) months before expiry of the then-current Extension Period.

 

	 	2.5	If the parties agree in writing
to renew this agreement for a further Extension Period then this agreement shall, unless terminated earlier in accordance with clause
29, remain in force until the end of such Extension Period when it shall terminate automatically without notice.

 

	 	2.6	If the parties do not agree
to renew this agreement for a further Extension Period then this agreement shall terminate automatically without notice at the end of
the then-current Extension Period.

 

	 	3	Grant OF Licence

 

	 	3.1	KBI hereby grants to PMI an
irrevocable licence to use the Technology, Documentation and KBI IP during the Term and the Sell-Out Period to:

 

		(a)	manufacture
                                            the Products (excluding the KBI E-Liquid) and KBI Packaging, and apply the Product Branding
                                            to the Products and KBI Packaging, anywhere in the world;

 

		(b)	to
                                            export and import the Products and KBI Packaging into and from the Markets;

 

	 	(c)	use, stock, keep, Promote,
sell and distribute the Products and KBI Packaging in the Markets, and apply for Regulatory Approvals for the Products in the Markets,

 

    15

     

    

 

on
the terms of this agreement (the “Licensed Rights”); and

 

	 	(d)	sub-license such Licensed Rights
to PMI’s Affiliates, [***] and/or any other Third Party through multiple tiers, provided that:

 

	 	(i)	all sub-licences granted under
this clause 3.1(d) shall be in writing and shall terminate automatically on termination or expiry of PMI’s corresponding right
under this agreement; and

 

	 	(ii)	PMI shall monitor the performance
of any sub-licensee and shall be primarily liable to KBI for any sub-licensee’s breach of terms of this agreement regarding use
of the Licensed Rights.

 

	 	3.2	Nothing in clauses 3, 5 and
6 of this agreement shall oblige KBI to disclose Documentation, Specifications, Know-How, Materials or Technology to PMI or its Affiliates
unless such Documentation, Specifications, Know-How, Materials or Technology is relevant or related to, or required for, the exercise
or performance of PMI’s or its Affiliates’ rights or obligations under this agreement (including PMI’s, its Affiliates
or its sub-licensee’s enjoyment of the Licensed Rights).

 

	 	3.3	[***].

 

		3.4	KBI
                                            shall disclose the KBI E-Liquid Composition to PMI in accordance with the Vendor Disclosure
                                            Agreement to the extent necessary for legal, regulatory or toxicology compliance purposes.

 

	 	3.5	KBI confirms that with effect
from the Effective Date and throughout the Term and Sell-Out Period, it shall supply [***]. If PMI and/or an Affiliate of PMI appoints
any other Third Party to manufacture the Products, [***] ordered by PMI and/or such Affiliate from the relevant Third Party.

 

	 	3.6	[***]:

 

	 	(a)	[***]; or

 

	 	(b)	[***].

 

	 	4	Exclusivity

 

	 	4.1	Subject to the Market Specific
Terms, the licence granted by KBI under clause 3.1 shall be exclusive in relation to the Markets and KBI shall not, and shall procure
that its Affiliates shall not, directly or indirectly (including as principal or partner, alone or jointly with, through or as manager,
adviser, consultant or agent or in any other capacity whatsoever):

 

	 	(a)	subject to clause 4.3, Promote,
exploit, use, sell or distribute any of the Licensed Rights or Products in the Markets, grant any third party the right to do so, or
actively enable, assist, encourage or facilitate any third party to do so (including by waiving or settling any claim or agreeing not
to sue in respect of any rights in the Licensed Rights or the Products);

 

	 	(b)	subject to clause 4.3, Promote,
exploit, use, sell or distribute in the Markets any Competing Product, or actively enable, assist, encourage, or facilitate any third
party to do so (including by licensing any Materials or KBI Branding, or by directly or indirectly supplying or permitting the manufacture
of any KBI E-Liquid, for use in connection with any such Competing Product, or waiving or settling any claim or agreeing not to sue in
respect of any rights in any such Competing Product), other than New Property in respect of which KBI is unrestricted pursuant to clause
19.7 and Excluded Products; or

 

    16

     

    

 

	 	(c)	apply for, or hold any Regulatory Approval for any Product within any of the Markets or make any notifications to any Governmental Authority or Government Official with respect to any Products (whether in anticipation of a Launch or otherwise) within any of the Markets.

 

	 	4.2	The parties acknowledge and
agree that it may be necessary to vary the scope of restrictions under this agreement that apply to KBI and/or its Affiliates in relation
to one or more Markets for the purposes of compliance with competition law. If either party notifies the other that it wishes to vary
such restrictions, the other party shall consider such request and if it accepts such variation, the parties shall record such variation
by way of an amendment to Schedule 6. No variation shall be effective unless signed in writing by both parties.

 

	 	4.3	The restrictions in clauses
4.1(a) and 4.1(b) and the obligation in clause 4.4:

 

	 	(a)	with respect to sales, shall
only restrict active sales with respect to the Markets that are within the European Economic Area and not, for the avoidance of doubt,
restrict passive sales into such Markets;

 

	 	(b)	with respect to Promotion, shall only restrict active Promotion
by KBI and/or its Affiliates; and

 

	 	(c)	shall not restrict KBI or its
Affiliates from manufacturing and storing Products or Competing Products within the Markets and exporting such Products and Competing
Products from the Markets into the KBI Markets, provided that: (i) such Products and Competing Products are actually exported outside
the Markets and (ii) KBI complies with clauses 4.1(a) and 4.1(b) with respect to the Promotion, sale and distribution of such Products
and Competing Products and with clauses 4.6, 4.8, 4.9 and 4.10.

 

	 	4.4	If KBI or any of its Affiliates
or any of their distributors sells or distributes any of the Products in any Market as at the Effective Date, KBI shall cease to sell
or distribute, or procure the cessation of sale or distribution of, such Products in such Market as soon as reasonably practicable and
in any event within two (2) months of the Effective Date and clause 4.1(a) shall not apply to the sale and distribution of such Products
in such Market for such period.

 

	 	4.5	KBI shall, and shall procure
that its Affiliates shall, act in good faith with respect to the exclusivity granted to PMI and shall not authorize, engage in, or otherwise
implement, directly or indirectly, any practice so as to circumvent, avoid, or otherwise not deliver the intended benefit of the exclusivity
provisions set out in this clause 4.

 

	 	4.6	KBI shall take reasonable steps
to ensure that any Products that it or any of its Affiliates sell in a KBI Market are not re-sold outside the KBI Market. The parties
shall invoke protective mechanisms permitted at law to limit ‘grey market’ goods entering the Markets by taking steps to
limit exhaustion of rights principles.

 

	 	4.7	PMI shall take reasonable steps
to the extent reasonably available to PMI as licensee of the Licensed IPR to ensure that any Products and New Property that it or any
of its sub-licensees and Affiliates sell in the Markets are not re-sold outside the Markets and shall use reasonable efforts to invoke
protective mechanisms permitted at law to limit ‘grey market’ goods entering the US by taking steps to limit exhaustion
of rights principles.

 

	 	4.8	KBI shall not, and shall procure
that its Affiliates shall not, sell any Product in the KBI Markets to any person or entity whom it knows or ought reasonably to know
is engaged in any illegal trade, nor sell any Product to any customers of KBI or KBI’s Affiliates in quantities in excess of what
KBI or KBI’s Affiliates reasonably believe to be the legitimate demand from that customer for or in the KBI Markets.

 

    17

     

    

 

	 	4.9	If KBI receives from PMI a
request to terminate the direct or indirect supply of the Products in the KBI Markets to a customer of KBI or one of its Affiliates because
of involvement in the illegal trade of ‘e-cigarettes’, cigarettes, or other tobacco or tobacco-related products, KBI will
consider such request and any supporting documentation provided by PMI in good faith and act accordingly, recognising the right and interest
of PMI to take steps to ensure that its Products do not find their way directly or indirectly into illegal channels.

 

	 	4.10	KBI shall implement and maintain
“know-your-customer” policies and procedures for customers to whom it will sell the Products. KBI agrees to provide PMI with
information sufficient for PMI to evaluate the adequacy of these policies and procedures, if so requested by PMI, and at least twice
annually, conduct an annual volume check to confirm adherence to such policies and procedures.

 

	 	4.11	PMI shall not, and shall procure
that its Affiliates and sub-licensees shall not, sell any Product in the Markets to any person or entity whom it knows or ought reasonably
to know is engaged in any illegal trade, nor sell any Product to any of its customers in quantities in excess of what it reasonably believes
to be the legitimate demand from that customer for or in the Markets.

 

	 	4.12	If PMI receives from KBI a
request to terminate the direct or indirect supply of the Products in the Markets to a customer of PMI or one of its Affiliates or sub-licensees
because of involvement in the illegal trade of ‘e-cigarettes’, cigarettes, or other tobacco or tobacco-related products,
PMI will consider such request in good faith and act accordingly, recognising the right and interest of KBI to take steps to ensure that
Products do not find their way directly or indirectly into illegal channels.

 

	 	4.13	PMI shall implement and maintain
“know-your-customer” policies and procedures for customers to whom it will sell the Products. PMI agrees to provide KBI with
information sufficient for KBI to evaluate the adequacy of, and compliance with, these policies and procedures, if so requested by KBI.

 

	 	4.14	Each party acknowledges that
it has obtained advice on the provisions of this clause 4 and consider that the restrictions contained in this clause 4 are reasonable
for the protection of their respective, legitimate business interests.

 

	 	4.15	Each party acknowledges and
agrees that damages alone would not be an adequate remedy for any breach of this clause 4.

 

	 	5	know-how and technical assistance

 

	 	5.1	On the Effective Date KBI shall
make available to PMI all Documentation in existence as at the Effective Date, subject to clauses 3.2 and 3.3.

 

		5.2	Throughout
                                            the Term and Sell-Out Period KBI shall, subject to clauses 3.2 and 3.3, make available to
                                            PMI:

 

	 	(a)	any modified, updated or new
version of the Documentation and any new Documentation promptly after their creation; and

 

	 	(b)	such reasonable additional
information and assistance (including Know-How and technical assistance) as may be requested by PMI from time to time in relation to
and for the exercise of the Licensed Rights in accordance with this agreement,

 

promptly
upon request.

 

    18

     

    

 

	 	5.3	KBI warrants, represents and
undertakes on an ongoing basis that the Documentation (including the Specifications). [***] and any other Know-How supplied to PMI and/or
any Governmental Authority pursuant to this agreement is accurate, up to date, complete, and relevant to and adequate for the Exploitation
of the Products.

 

	 	5.4	KBI shall make available to
PMI the services of its staff on reasonable notice and as reasonably necessary to advise PMI on the use of the Documentation for the
exercise of the Licensed Rights under this agreement for such period as requested by PMI, free of charge but PMI shall be responsible
for assessing the advice given and for its implementation.

 

	 	5.5	Throughout the Term and Sell-Out
Period, KBI shall promptly update the Documentation to reflect any Improvements to the Products or KBI Packaging.

 

	 	6	compliance with standards and
laws

 

	 	6.1	PMI shall notify KBI as soon
as reasonably practicable of:

 

	 	(a)	the Applicable Law in a Market
in which a Product is to be (or has been) Launched (“Market Applicable Law”);

 

	 	(b)	all forthcoming or anticipated
changes to the PMI Product Standards; and

 

		(c)	all
                                            forthcoming or anticipated changes to Market Applicable Law of which PMI becomes aware.

 

	 	6.2	KBI shall ensure that the Specifications
and the Products, when made in accordance with their Specifications, will comply with the Market Applicable Law.

 

	 	6.3	KBI shall use all reasonable
endeavours to ensure that the Specifications and the Products, when made in accordance with the Specifications, will comply with the
PMI Product Standards.

 

	 	7	development services

 

	 	7.1	PMI may from time to time request
that KBI:

 

	 	(a)	makes changes and/or Improvements
to the Design Specifications for the Products; or

 

	 	(b)	develops [***] or for any other
reason at PMI’s sole discretion.

 

	 	7.2	As soon as reasonably practicable
and within [***] of KBI receiving PMI’s written request for any Development Services, KBI shall, acting reasonably and in good
faith, provide to PMI [***] setting out, without limitation:

 

	 	(a)	a breakdown of the Development
Services that are required;

 

	 	(b)	a breakdown of the [***] and
the payment schedule for the same; and

 

	 	(c)	an estimated time frame for
completion of the Development Services.

 

	 	7.3	Upon receipt of [***] PMI shall
either confirm its acceptance of [***] or inform KBI that it rejects the [***]. If PMI rejects [***] the parties shall act in good faith
and use reasonable endeavours to agree the terms of the [***] of PMI’s rejection. Any dispute as to the agreement of the [***]
shall be resolved by either party [***] clause 48 [***]. If KBI has not received confirmation of acceptance, or proposed changes
to, [***] will be deemed rejected.

 

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	 	7.4	Once a [***] has been agreed
in writing by both parties, such [***] shall become [***] and KBI shall provide the Development Services specified in such [***] in accordance
with that [***] and the terms of this agreement including clause 28.1(l).

 

	 	7.5	KBI shall invoice PMI for the
[***] specified in the [***], and PMI shall pay such [***] of receipt of a valid invoice for such sums. Such [***] shall be [***] payable
by PMI to KBI under this agreement in accordance with clause 16.

 

	 	8	KBI initiated product development

 

	 	8.1	Save as required under clauses
6 and 7 of this agreement and as permitted under clauses 8.3 and 21.3, neither KBI nor any of its Affiliates shall make any alteration
or Improvement to any Design Specification to a Product for any Market (including to the Technology or Documentation therefor) without
PMI’s prior written consent.

 

	 	8.2	The parties shall from time
to time discuss potential Improvements to, and new versions of, then-current Products for use in the Markets [***].

 

	 	8.3	KBI may, at its own initiative,
cost and expense, and independently of PMI, develop and suggest an Improvement to, or new versions of, a then-current Product for use
in the Markets (“KBI Product Improvement”). KBI shall promptly notify PMI providing all necessary details thereof.
Provided that KBI successfully develops the Design Specifications for such KBI Product Improvements, [***]. Nothing in this clause 8.3:

 

	 	(a)	[***] restrict PMI’s
right to choose and change the Product Branding and Product Packaging in accordance with clause 10;

 

		(b)	shall
                                            operate to assign any IPR in and to such KBI Product Improvement to PMI.

 

	 	8.4	KBI may, at its own initiative,
cost and expense, and independently of PMI, develop and suggest improvements to the design of any Product or part thereof aimed at maintaining
or exceeding performance versus consumer expectations and decreasing the COGS of that Product. Subject to PMI’s acceptance and
implementation of such improvement following receipt of the Design Specification and signature of a [***] therefor, [***].

 

	 	8.5	If any Improvement to the design
of any Product for the Markets would result in a Product that uses any technology or invention whose use or Exploitation would infringe
any patent, design or utility model owned by PMI and/or an Affiliate of PMI, then the parties shall negotiate a mutually satisfactory
agreement [***].

 

	 	9	testing

 

	 	9.1	KBI shall carry out reasonable
testing in relation to any changes it makes to the Design Specifications or any [***] to ensure such changes do not result in any defect,
reduction in performance or functionality.

 

	 	9.2	Without limiting clause 9.1,
with respect to any Development Services undertaken pursuant to this agreement, KBI shall [***].

 

	 	9.3	The parties shall work together
in good faith and using reasonable endeavours to agree the [***] by the relevant date set out in the Work Order.

 

	 	9.4	If the Design Specification
or Consumable fails to pass the testing to be performed by KBI under this clause 9 [***], KBI shall notify PMI and [***]. This clause
9.4 shall apply to [***].

 

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	 	9.5	Throughout the Term and Sell-Out
Period, KBI shall promptly provide to PMI the results of the testing [***] carried out by or on behalf of KBI [***], [***]. PMI may conduct
[***].

 

	 	9.6	Once PMI has [***] under clause
9.5, PMI shall notify KBI and [***].

 

	 	9.7	[***].

 

	 	9.8	If prior to Launch of a Product
in a Market, PMI becomes aware that a Design Specification or a Product, when made in accordance with its Design Specification, does
not comply with Market Applicable Law [***].

 

		10	PRODUCT
                                            BRANDING AND PACKAGING

 

	 	10.1	Subject to clause 10.3, PMI
shall have absolute discretion for Products to be sold in Markets under this agreement, in relation to:

 

	 	(a)	the names, trade marks, logos,
branding, graphics and other content used on or in connection with the Products and their Promotion and distribution (“Product
Branding”); and

 

	 	(b)	the packaging, packaging materials,
labels, package inserts, manuals, instructions and retail displays for, and other marketing and packaging materials relating to the Products
(“Product Packaging”) including the design and composition of such Product Packaging and the Product Branding on and
relating to such Product Packaging.

 

	 	10.2	PMI shall be solely responsible
for, and KBI shall not have any liability for, any Product Branding, text or other content used on the Product Packaging which is not
Licensed IPR.

 

	 	10.3	Subject to clauses 10.4 and
10.5, PMI shall not use the KBI Branding or anything confusing similar to the KBI Branding for or as a part of the Product Branding or
Product Packaging without KBI’s prior written consent, save where required for any Regulatory Approval or by Applicable Law. Where
such use is required for any Regulatory Approval or by Applicable Law and displayed publically, PMI shall only use the name “Bidi”
in word format and not any stylised logo as depicted in Schedule 2. For the avoidance of doubt, the Product Branding may include any
trade marks owned or licensed from a Third Party by PMI and/or its Affiliates.

 

	 	10.4	PMI may use images, shapes
and other graphical representations of the Products (or parts thereof) in the Product Branding and Product Packaging. For the avoidance
of doubt, PMI’s use of colours shall also be unrestricted.

 

	 	10.5	PMI may apply for and register
trade marks that include representations of the Products and/or the Product Packaging on the condition that such trade marks are surrendered
upon expiry or termination of the Sell-Out Period.

 

	 	10.6	PMI shall ensure that the Products
and Product Packaging made pursuant to this agreement shall contain all patent markings, disclosures and disclaimers required by Applicable
Law in the Markets in which they are intended for sale.

 

	 	11	initial MARKETS AND expansion

 

	 	11.1	PMI shall have the right to
determine, on a Market by Market and Product by Product basis:

 

    21

     

    

 

	 	(a)	in which of the Markets to
Launch the Products;

 

	 	(b)	which of the Products shall
be Promoted, sold and/or distributed in such Market from time to time; and

 

	 	(c)	subject to clause 9.8, when
the Launch of such Products in the Markets will take place, based on the Expansion Criteria.

 

	 	11.2	Subject to clause 9.8, PMI
shall initially Launch the Product currently known at the Effective Date as the “BIDI Stick” in [***] (the “Initial
Markets”). PMI shall have the right to substitute the Initial Markets for alternate Markets by giving KBI written notice reasonably
in advance.

 

	 	11.3	After Launching in the Initial
Markets as set out in clause 11.1, PMI will provide KBI with a business plan detailing the process for expanding into additional Markets
(and PMI shall have the sole discretion to select such additional Markets having reasonable regard to the anticipated Market opportunity).

 

    22

     

    

 

	 	11.4	PMI will provide KBI with a
further Expansion Business Plan detailing the process for expanding into further Markets (and PMI shall have the sole discretion to select
all such additional Markets having reasonable regard to the anticipated Market opportunity).

 

	 	11.5	PMI shall use reasonable endeavours
to follow the Expansion Business Plan, subject always to Applicable Law, Regulatory Approvals being in place, and PMI’s discretion
having regard to the anticipated Market opportunity and any Negative Factors.

 

	 	11.6	Notwithstanding that the Expansion
Criteria are not met in the relevant number of Markets as set out in clauses 11.3 and 11.4, PMI shall be entitled to Launch the Products
in any new Markets.

 

	 	12	regulatory approvals

 

	 	12.1	Prior to Launching any Product
in any Market, PMI shall, at PMI’s cost, apply for and obtain the necessary Regulatory Approvals to Promote, sell and distribute
that Product in that Market.

 

	 	12.2	Without limiting clause 12.1
but subject to clause 3.3, KBI shall promptly provide PMI with:

 

	 	(a)	the Product Regulatory Data
and such other assistance, data and information as PMI reasonably requests to enable PMI and/or its Affiliates to apply for, obtain and
maintain Regulatory Approvals or any antitrust approvals required in connection with this agreement (including by applying in its own
name and/or with PMI); and

 

	 	(b)	updates and relevant information
relating to any Regulatory Approvals that KBI and/or its Affiliates have applied for or shall apply for and keep KBI updated (including
details of the progress of any such Regulatory Approvals).

 

	 	13	marketing and sales

 

	 	13.1	PMI shall invest in the commercialization
of or marketing the Products in each Market where they have been Launched at a level commensurate to achieve the KPIs for such Markets.

 

	 	13.2	PMI shall have full discretion
on all commercial decisions relating to the Exploitation of the Products in the Markets in accordance with the Licensed Rights, including
marketing toolbox, online, channels and pricing.

 

	 	13.3	KBI shall from time to time
and upon reasonable request provide a set of professionals, representatives or other persons designated by PMI with timely access to
KBI’s and its Affiliates’ marketing materials concerning the Products. Use of such marketing materials shall be at PMI’s
sole risk.

 

	 	13.4	PMI shall from time to time
and upon reasonable request provide KBI with copies of PMI’s and its Affiliates’ marketing materials relating to the Products.
KBI shall have the right to consult on the marketing activities conducted by PMI in relation to the Products, but PMI shall not be required
to implement any changes or suggestions made by KBI except where necessary to rectify any breach of legal duty, non-compliance with Applicable
Law or Regulatory Approvals.

 

	 	13.5	PMI shall be responsible for
the sales and marketing plan for each Launched Market (the “Sales and Marketing Plan”), which shall include specific
implementation measures for, without limitation, distribution/penetration ratio, advertising (if legally permitted), promotion, customer
service, after-sales service, and the costs and expenses relating thereto.

 

	 	13.6	PMI shall provide KBI with
an annual business plan (“Annual Business Plan”) per Launched Market which shall set out the business direction and
key figures for the upcoming twelve (12) month period in the relevant Launched Market and shall include the then current Sales and Marketing
Plan. PMI shall use its reasonable endeavours to achieve the sales and marketing goals set out in such Annual Business Plan. Each Annual
Business Plan shall be updated at the latest sixty (60) days after the start of each calendar year following the Effective Date.

 

	 	13.7	PMI shall be entitled to amend
or revise the Sales and Marketing Plan and the Annual Business Plan in its sole discretion and shall provide KBI with any such amended
or revised Sales and Marketing Plan or Annual Business Plan.

 

	 	13.8	PMI shall promptly inform KBI
of any material changes (whether prospective or actual) in Market Applicable Law or of any other material new developments (whether prospective
or actual) in any Launched Market which PMI reasonably expects to have an adverse effect on the Sales and Marketing Plan in the Launched
Markets.

 

	 	13.9	KBI shall provide PMI with
details of any material complaints KBI or any of its Affiliates has received, or may receive in the future, relating to the Products
(including those sold or intended for sale in the KBI Markets), together with reports on the manner in which such complaints are being,
or have been, dealt with. If a complaint relates to a Product sold in the Markets, including where applicable under clauses 18.5, 22.4,
22.8 and 23.5, the relevant complaint shall be handled and controlled by PMI. KBI shall otherwise handle and control complaints related
to a Product sold in the KBI Markets.

 

	 	14	Key performance indicators

 

	 	14.1	Following Launch of a Product
in a Market, PMI shall use reasonable endeavours to ensure that the KPIs for that Product with respect to such Market are met.

 

	 	14.2	Subject to clause 14.3, if
PMI fails to meet the Minimum KPIs in a Market in the Initial Period then KBI may give PMI written notice that it wishes PMI to terminate
sales of the Products in that Market. Upon receipt of such notice, PMI shall be entitled to a [***] grace period to remedy such failure.
At the end of such [***] grace period, if PMI has still not satisfied such Minimum KPIs then KBI shall be entitled to terminate the sales
of the Products in such Market on [***] written notice to PMI, whereupon the Sell-Out Period and the associated rights of PMI and obligations
of KBI under clause 30.1 shall apply in respect of that Market.

 

	 	14.3	PMI shall not be liable and
KBI shall not serve notice to terminate the sales of Products in any Market under clause 14.2 where PMI’s failure to meet the Minimum
KPIs in that Market was due to any Negative Factors and/or a cessation of sales under clause 15.2 and such failure would not have occurred
but for those matters.

 

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	 	15	cessation of sales

 

	 	15.1	If in the reasonable judgment
of PMI, the commercialisation of a Product in a Launched Market has not been profitable (including, for example, if revenue earned by
PMI minus all sales and marketing expenses incurred by PMI minus royalties, costs of production and other costs paid or due to be paid
by PMI in connection with such Market results in a profit margin [***] as per the Expansion Business Plan, PMI shall have the right (in
its absolute discretion) to cease sales of the Product in such Market by providing KBI with not less than [***].

 

	 	15.2	Notwithstanding any provision
to the contrary in this agreement, PMI may unilaterally cease, without prior notice, the sale of any Products in any Launched Market
if, in respect of that Launched Market:

 

	 	(a)	there are allegations or proceedings
issued for infringement of any third party IPR in connection with the Products or facts and circumstances exist that are reasonably likely
to give rise to such allegations or proceedings;

 

	 	(b)	there is any administrative
order, governmental direction, order, revocation of approval, decree or similar arrangement with, or commitment letter or similar submission
to, or instances that may breach or infringe Applicable Law or create a risk of non-compliance, or threat of any of the foregoing, which
PMI reasonably believes will adversely or materially affect sales of such Products in that Launched Market; or

 

	 	(c)	there is any event which PMI
reasonably believes will adversely or materially affect sales of such Products in that Launched Market, and/or cause significant adverse
reputational issues (such as product Recalls, product liability Claims, product defects, product, health and scientific standards, PMI’s
public principles, or youth access issues in that Launched Market or in other jurisdictions) and/or result or be reasonably likely to
result in material liabilities, fines, or other punitive or restrictive measures imposed by any Governmental Official or Governmental
Authority (including any actual or anticipated failure to obtain or maintain any Regulatory Approval).

 

	 	15.3	PMI shall have the right, upon
providing prior written notice to KBI, to recommence or reintroduce sales or commercialization of any or all Products in any or all Markets
in which it has previously ceased sales (excluding any Markets terminated by KBI pursuant to clauses 14.2) if, in PMI’s reasonable
opinion, the underlying conditions or reasons for which sales were discontinued in such Markets have materially improved or ceased to
exist or are likely to do so unless, where sales ceased under clause 15.2(a), no order for Products for the affected Market is placed
by PMI or its Affiliates and no Products have been sold in the affected Market in the period of [***] after the related allegations have
been withdrawn or the proceedings have been settled or finally determined in circumstances where no right of appeal (or further right
of appeal) subsists and KBI has, [***], given PMI written notice that PMI that PMI will longer have the right to sell or commercialise
the affected Product in the affected Market on such date.

 

	 	16	Royalty payments

 

	 	16.1	In consideration for the grant
of the Licensed Rights by KBI to PMI, PMI shall, subject to the remainder of this clause 16 and clause 20.12, pay to KBI a royalty calculated
by reference to the Base Price of the First Sale of each unit of each Product manufactured pursuant to this agreement as follows:

 

	Base
    Price (USD) (per Product)	Royalty
    (per Product)
	[***]	[***]
	[***]	[***]
    of Base Price
	[***]	[***]
    of Base Price

 

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	 	16.2	The parties agree that only
a single royalty shall be payable in respect of each unit of a Product and that if any Base Price has more than two decimal places it
shall be rounded up to the nearest two decimal places.

 

	 	16.3	PMI shall give KBI written
notice of any change in Recommended Sales Prices for Products sold in the Markets as soon as reasonably practicable.

 

	 	16.4	Before the Launch of the first
Product in a Market and each anniversary of such Launch (unless the parties mutually agree to a different date), PMI shall pre-pay to
KBI a guaranteed minimum royalty equal to twenty (20%) per cent of the estimated Royalties payable by PMI to KBI in relation to all Markets
in the twelve (12)-month period following the first Launch or each successive anniversary of the first Launch (as the case may be), based
on PMI’s reasonable projections for such Markets in the Annual Business Plan (“Guaranteed Royalty”), subject
to an aggregate maximum Guaranteed Royalty payment of one million ($1,000,000) USD for all Markets for each applicable twelve (12)-month
period.

 

	 	16.5	The Guaranteed Royalty constitutes
an advanced payment of Royalties by PMI and shall be credited against any and all Royalties due to KBI from PMI under this agreement
before any other credits are applied ([***]). PMI shall not be obliged to pay any Royalties to KBI until the Guaranteed Royalty has been
fully utilised.

 

	 	16.6	The value of any [***] paid
by or due from PMI under this agreement [***] that accrue with respect to the Product (but not, for the avoidance of doubt, any other
Products) arising out of [***], or in the case of any [***], any Royalties that accrue with respect to such Product, in each case, irrespective
of which Market the Product is sold in (in each case, the “Relevant Royalties”) as set out in clause 16.7 below. For
the purposes of this clause 16.6, [***].

 

	 	16.7	[***] shall, subject to clause
16.8, be [***] the Relevant Royalties due from PMI with respect to [***], provided that if:

 

		(a)	[***];

 

		(b)	[***];

 

		(c)	[***];
                                            and

 

		(d)	[***].

 

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		16.8	[***]:

 

		(a)	[***];

 

		(b)	[***];

 

		(c)	[***];
                                            and

 

		(d)	[***].

 

		16.9	[***].

 

		16.10	Within
                                            sixty (60) days of the end of each Quarter, PMI shall submit or cause to be submitted to
                                            KBI a statement in writing (“Royalty Statement”) recording, in reasonably
                                            sufficient detail for KBI’s audit purposes, the calculation of:

 

		(a)	Royalties
                                            due under this agreement in respect of that Quarter (including any credits against such Royalties);
                                            and

 

		(b)	[***].

 

		16.11	Following
                                            receipt of a Royalty Statement from PMI under clause 16.10, KBI shall invoice PMI for the
                                            Royalties [***] specified in such Royalty Statement.

 

		16.12	Royalties
                                            payable under this agreement shall be paid within thirty (30) days following receipt of an
                                            undisputed and valid invoice from KBI pursuant to clause 16.11 to a bank account notified
                                            by KBI to PMI in writing.

 

		16.13	Disputes
                                            over the accuracy of Royalty Statements or invoices rendered under clause 16.11 shall be
                                            raised within ten (10) Business Days of receipt and shall be determined in accordance with
                                            clauses 48 and 49. Any undisputed amounts in Royalty Statements shall be invoiced and paid
                                            in accordance with the foregoing, notwithstanding that other amounts are disputed. Interest
                                            will be payable on any disputed amounts that are resolved in KBI’s favour at the rate
                                            specified in clause 16.17 from the date payment would have been due (but for such dispute)
                                            and the payment date inclusive.

 

		16.14	PMI
                                            shall maintain records regarding the Royalties, their calculation and related sales and orders
                                            of Products. Such records shall be accurate in all respects and applied on a consistent basis.
                                            KBI shall have the right to request access to copies of such records once every calendar
                                            year during the Term and Sell-Out Period upon providing thirty (30) days’ prior written
                                            notice to PMI and PMI shall not unreasonably deny such request or access to copies of specific
                                            records, unless such information is legally privileged and/or its provision would breach
                                            any duty of confidence owed by PMI and/or its Affiliates. Where PMI denies access to any
                                            such information on the basis that it is legally privileged and/or its provision would breach
                                            any duty of confidence owed by PMI and/or its Affiliates, KBI may request that PMI provides
                                            such information to an independent auditor appointed by PMI and who owes a duty of confidence
                                            to PMI, to verify the calculation of the Royalties at KBI’s cost, provided that the
                                            provision of such information does not itself breach confidence or result in the loss of
                                            privilege.

 

		16.15	KBI
                                            shall maintain records regarding the sums charged to PMI under this agreement [***], and
                                            the calculation of such sums. Such records shall be accurate in all respects and applied
                                            on a consistent basis. PMI shall have the right to request access to copies of such records
                                            once every calendar year during the Term and Sell-Out Period upon providing thirty (30) days’
                                            prior written notice to KBI and KBI shall not unreasonably deny such request or access to
                                            copies of specific records, unless such information is legally privileged and/or its provision
                                            would breach any duty of confidence owed by KBI and/or its Affiliates. Where KBI denies access
                                            to any such information on the basis that it is legally privileged and/or its provision would
                                            breach any duty of confidence owed by KBI and/or its Affiliates, PMI may request that KBI
                                            provides such information to an independent auditor appointed by KBI and who owes a duty
                                            of confidence to KBI, to verify the calculation of the Royalties at PMI’s cost, provided
                                            that the provision of such information does not itself breach confidence or result in the
                                            loss of privilege.

 

    26

     

    

 

		16.16	Where
                                            this agreement states or requires that an amount shall be converted from a local currency
                                            to the USD or vice versa (including to calculate the Recommended Sales Price or any other
                                            sum used to calculate the Base Price and for the purposes of this clause 16), the parties
                                            agree that the rate of exchange shall be the USD rate against an applicable currency based
                                            on the PMI Monthly Income Statement Standard Exchange Rate applicable for that month. The
                                            PMI Monthly Income Statement Standard Exchange Rate is specified by PMI and is generally
                                            calculated as the average rate for the USD against the applicable currency based on data
                                            from BGN Bloomberg over a period of thirty (30) consecutive days, for which the last day
                                            of such period shall be five (5) Business Days before the last Business Day of the month
                                            preceding the applicable month. By way of example, the PMI Monthly Income Statement Standard
                                            Exchange Rate for May 2022 shall be calculated with the last day of such period being April
                                            22, 2022 and the first day of such period being March 23, 2022.

 

		16.17	If
                                            either party fails to pay any sum due under this agreement by the due date for payment, such
                                            failure shall not, subject to clause 29.2(e), entitle the other party to terminate this agreement,
                                            but the non-paying party shall pay to the other interest (calculated on a daily basis) upon
                                            demand on the overdue payment from the date when such payment was due to the date of actual
                                            payment at a rate of two (2%) per cent above the Bank of England base rate per annum.

 

		16.18	Any
                                            payments to be made by a party to the other party under this agreement shall be reduced by
                                            the amount that such paying party is required to withhold pursuant to any Applicable Law
                                            (“Withholding Taxes”). The withholding party shall submit proof of payment
                                            of the Withholding Taxes to the other party within a reasonable period of time after such
                                            Withholding Taxes are remitted to the proper taxing authority.

 

		17	defects

 

		17.1	Subject
                                            to clause 17.2, KBI shall be responsible for, and shall ensure that there are no Design Defects
                                            or E-Liquid Defects (any Design Defect or E-Liquid Defect being a “Relevant Defect”).

 

		17.2	Save
                                            in respect of E-Liquid Defects (for which KBI shall be responsible), KBI shall not be responsible
                                            and shall have no liability for:

 

		(a)	any
                                            defect in a Product that results from a deviation from the Design Specification for the Product
                                            during its manufacture or the manufacture of a Product in accordance with a Design Specification
                                            that KBI has updated or replaced where, at the date of manufacture of the relevant Product,
                                            KBI has advised PMI of the particular defect in writing and a Handover Confirmation for the
                                            new Design Specification has been has been signed in accordance with clause 9.6 ([***]) (a
                                            “Manufacturing Defect”);

 

		(b)	any
                                            defect in a Product that originates from a change made to the Product or its Design Specification
                                            at PMI’s request or to ensure compliance with PMI Product Standards or Applicable Law
                                            in a Market where, in each case, KBI advised PMI of such defect in writing before implementation
                                            of the change and PMI elected to proceed with the change notwithstanding that advice (an
                                            “Excluded Defect”); or

 

		(c)	any
                                            defect in the KBI Packaging that results from any unauthorised change or addition made by
                                            PMI to such KBI Packaging (including to the Design Specification for such KBI Packaging).

 

		17.3	In
                                            the event of a Relevant Defect, without limiting PMI’s other rights and remedies, PMI
                                            may (at its sole discretion):

 

    27

     

    

 

		(a)	require
                                            KBI to modify the Design Specification and other Documentation for the relevant Product to
                                            remedy the Relevant Defect promptly at KBI’s own cost. The parties shall discuss such
                                            modifications as necessary (including any reasonable concerns KBI may have around cost proportionality
                                            and timing that PMI may take into account when exercising its rights under this clause 17.3(a)),
                                            provided that PMI shall retain discretion over its decision to require KBI to make such modifications;

 

		(b)	replace
                                            or, where commercially practicable, repair the Products that are affected by the Relevant
                                            Defect itself at the expense of KBI; and/or

 

		(c)	require
                                            KBI to provide financial compensation to PMI for any loss, damage, cost or expense suffered
                                            or reasonably incurred by PMI and/or its Affiliates as a result of such Relevant Defect (including
                                            reasonable associated shipping, insurance and legal costs) and PMI shall comply with its
                                            duty to mitigate any such losses, damages, costs and expenses.

 

		17.4	If
                                            the number of units of any Product affected by a Defect (including any Relevant Defect, Manufacturing
                                            Defect and/or Excluded Defect) in any given period exceeds one per cent (1)% of the total
                                            number of units of such Product sold by PMI or its Affiliates in the Markets in such period,
                                            PMI shall be entitled to conduct a root cause analysis in accordance with Schedule 7. The
                                            terms of Schedule 7 shall apply with respect to the root cause analysis and the results thereof.
                                            Without limiting Schedule 7 or any of KBI’s other rights or remedies, to the extent
                                            the results of such root cause analysis relate to Relevant Defects, KBI shall address the
                                            findings and implement the outcomes of such analysis if required by PMI pursuant to clause
                                            17.3 above.

 

		18	PRODUCT
                                            INDEMNITIES

 

		18.1	During
                                            and after the Term of this agreement, KBI shall indemnify and keep indemnified PMI, its Affiliates,
                                            and its and their respective officers, directors, employees and agents (together, “PMI
                                            Indemnitees”) from and against any and all damages, losses, liabilities, costs
                                            and expenses (including reasonable legal and professional fees and costs) suffered or incurred
                                            by the PMI Indemnities to the extent arising out of or in connection with any Relevant Defect
                                            (including any and all suits, causes of action, disputes, controversies, investigations,
                                            notices, Claims, demands and Recalls relating to or arising out of any Relevant Defect) save
                                            to the extent such damages, losses, liabilities, costs or expenses are caused by a Manufacturing
                                            Defect or an Excluded Defect. PMI shall, and shall procure that the PMI Indemnities, take
                                            reasonable steps to mitigate any such damages, losses, liabilities, costs and expenses.

 

		18.2	During
                                            and after the Term, PMI shall indemnify and keep indemnified KBI, its Affiliates, and its
                                            and their respective officers, directors, employees and agents (together “KBI Indemnitees”)
                                            from and against any loss, damage, liability, cost and expense (including reasonable legal
                                            and professional fees) suffered or incurred by the KBI Indemnitees as a result of any Claim
                                            associated with the Products where an Excluded Defect constitutes the main cause of such
                                            Claim save to the extent that KBI or an Affiliate of KBI is liable for such Claims, demands,
                                            actions or proceedings, costs, damages, losses, liabilities or expenses under this agreement.
                                            KBI shall, and shall procure that the KBI Indemnities, take reasonable steps to mitigate
                                            any such damages, losses, liabilities, costs and expenses.

 

		18.3	Each
                                            party shall notify the other as soon as reasonably practicable of any suit, causes of action,
                                            dispute, controversy, investigation, notice, Claim, demand or Recall arising from or alleging
                                            a Relevant Defect, Manufacturing Defect, Excluded Defect and/or other kind of defect brought
                                            against it and/or any of its Affiliates in relation to any Market (“Product Defect
                                            Claim”) and shall provide promptly to the other party copies of all papers and
                                            official documents received in respect of any such Product Defect Claim.

 

		18.4	If
                                            either party elects to investigate a Product Defect Claim or the circumstances surrounding
                                            a Product Defect Claim, the other party shall use its reasonable efforts to cooperate promptly
                                            with the investigating party’s investigations, but such investigation shall not in
                                            any way limit or affect the rights and obligations of PMI and KBI under clauses 18.1, 18.2,
                                            18.3, 18.5 and 18.6.

 

    28

     

    

 

		18.5	In
                                            respect of any Product Defect Claim brought against a PMI Indemnitee and/or a KBI Indemnitee:

 

		(a)	PMI
                                            shall have the exclusive right, exercisable at its sole discretion, to control the conduct
                                            of such Product Defect Claim, including any counterclaim to, and defence and settlement of,
                                            such Product Defect Claim, subject to clause 18.5(e);

 

		(b)	KBI
                                            shall not make any admission of liability, agreement or compromise in relation to the Product
                                            Defect Claim to any Third Party, without the prior written consent of PMI (not to be unreasonably
                                            withheld or delayed);

 

		(c)	KBI
                                            shall, at its own cost (in respect of Product Defect Claims arising from Relevant Defects
                                            but in all other cases at PMI’s cost), provide reasonable technical and such other
                                            forms of assistance (including reasonable access on reasonable notice to its premises and
                                            its officers, directors, employees, agents, representatives or advisers, and to any relevant
                                            accounts, documents and records within the power or control of KBI and/or its Affiliates,
                                            subject always to clauses 3.2 and 3.3, and becoming a named party in proceedings) as are
                                            necessary to assist PMI in relation to the Product Defect Claim and shall ensure that its
                                            counsel cooperates closely with PMI’s counsel in relation to such Product Defect Claim,
                                            provided that PMI shall have the final decision-making authority in relation to such Product
                                            Defect Claim, subject to clause 18.5(e);

 

		(d)	except
                                            to the extent any Claim arises from a Manufacturing Defect and/or Excluded Defect, KBI shall
                                            have a right actively to consult on the conduct of such Product Defect Claim and PMI shall
                                            take KBI’s reasonable views into account, provided that PMI shall have the final decision-making
                                            authority in relation to the conduct of such Product Defect Claim subject to clause 18.5(e),
                                            and where KBI requests in writing information relating to the Product Defect Claim for such
                                            purpose, PMI shall not unreasonably withhold or condition the provision of such information
                                            unless such information is legally privileged and/or its provision would breach any duty
                                            of confidence owed by a PMI Indemnitee; and

 

		(e)	[***].

 

		18.6	KBI
                                            shall notify PMI in writing as soon as practicable and in any event within two (2) Business
                                            Days of any interaction or communication (including questions, notice of inspection, correspondence
                                            and sample requests) it and/or any of its Affiliates has with a Governmental Authority in
                                            any Market related to a Product. PMI shall have the exclusive right to lead and control the
                                            interaction or communication with the Governmental Authority (other than with a Governmental
                                            Authority in the US) and KBI shall, subject to clause 3.3, provide to PMI all information
                                            and documents as PMI may reasonably request regarding such interaction or communication.
                                            KBI shall:

 

		(a)	provide
                                            PMI with a reasonable opportunity to comment on the proposed response to such interaction
                                            or communication before the same is sent by KBI or the Affiliate of KBI;

 

		(b)	make
                                            all reasonable efforts to incorporate any observation or recommendation of PMI in any response
                                            or reply to such interaction or complaint; and

 

		(c)	not
                                            make any admission of liability without the prior written consent of PMI (not to be unreasonably
                                            withheld or delayed).

 

    29

     

    

 

		19	new
                                            PROPERTY

 

		19.1	If
                                            KBI and/or any Affiliate of KBI develops or has developed on its behalf any New Property,
                                            PMI shall have a separate right [***] on an exclusive basis subject to the following terms.

 

		19.2	KBI
                                            shall notify PMI in writing of the New Property (“New Property Notice”)
                                            as soon as KBI or an Affiliate of KBI is reasonably certain of: [***], subject to clauses
                                            3.2 and 3.3 and subject to a non-disclosure agreement, to allow PMI to decide whether to
                                            [***]. If PMI notifies KBI that such information is [***].

 

		19.3	Subject
                                            to clause 19.4, PMI shall have [***] from the date of receipt of a New Property Notice to
                                            decide whether to [***].

 

		19.4	If
                                            PMI notifies KBI [***].

 

		19.5	If
                                            PMI decides to [***], it shall send a written notice [***] to KBI within the [***] and the
                                            parties shall negotiate in good faith to agree the [***] and any amendments to this agreement.
                                            If the parties agree on [***], which shall as agreed under this clause 19.5).

 

		19.6	The
                                            parties shall take all relevant factors into account in relation to the [***] resulting from
                                            [***], including: (a) legal review and changes necessary for compliance with any Applicable
                                            Laws; and (b) any regulatory clearances/approvals that may be required ([***]) in the Markets
                                            to which the [***] relates (including providing for the consequences of a failure to obtain
                                            such clearances/approvals).

 

		19.7	Save
                                            as set out in clause 4, KBI and its Affiliates shall not be restricted pursuant to this agreement
                                            with respect to the New Property [***] if:

 

		(a)	[***];

 

		(b)	[***];
                                            or

 

		(c)	[***].

 

		19.8	KBI
                                            shall not and shall procure that its Affiliates shall not [***] to the New Property [***].

 

		19.9	[***].

 

		20	registration
                                            and maintenance of intellectual property

 

		20.1	The
                                            parties shall meet and discuss a strategy for the registration of the Licensed IPR (including
                                            Joint Improvement IPR) in the Markets as a whole and on a Market-by-Market basis by KBI (“Registration
                                            Strategy”) as soon as reasonably practicable following the Effective Date and shall
                                            meet from time to time during the Term (including promptly after the development of any Improvement
                                            to a Product or any Joint Improvement IPR, and at either party’s request) to review
                                            and update the Registration Strategy.

 

		20.2	PMI
                                            shall, in its sole discretion, set the Registration Strategy provided that: (a) PMI may not
                                            require KBI to register any Licensed IPR outside of the Markets pursuant to the Registration
                                            Strategy, and (b) nothing shall prevent KBI from registering any Licensed IPR in a Market,
                                            if KBI requests that the registration of such Licensed IPR in that Market is included on
                                            the Registration Strategy but PMI fails to add it to the Registration Strategy within thirty
                                            (30) days of such request.

 

    30

     

    

 

		20.3	KBI
                                            shall, at its own cost and expense, implement, or procure that Bidi implements, the Registration
                                            Strategy diligently and in a timely manner having regard to any reasonable comments and suggestions
                                            made by PMI and shall keep PMI informed and up to date in relation to the progress of any
                                            applications including if KBI misses or is likely to miss any material date.

 

		20.4	PMI
                                            shall provide all assistance and co-operation reasonably requested by KBI or its Affiliates
                                            in relation to any application and related proceedings made by or on behalf of KBI or its
                                            Affiliates in relation to Licensed IPR to be registered under the Registration Strategy (together
                                            the “Licensed IPR Registration Process”).

 

		20.5	KBI
                                            shall notify PMI of all material dates relevant to the application and registration of any
                                            Licensed IPR in the Markets (including dates of disclosure, grace periods and similar) as
                                            soon as reasonably practicable and shall use best efforts to notify at least ninety (90)
                                            days before any filing date or deadline or thirty (30) days before any other key dates or
                                            deadlines relating to the application or registration process (including dates relating to
                                            objections, oppositions or similar).

 

		20.6	Where
                                            the Registration Strategy requires KBI to register any Licensed IPR in a Market:

 

		(a)	KBI
                                            may by giving PMI written notice request that PMI takes exclusive control of the conduct
                                            of any application and related proceedings made by or on behalf of KBI or an Affiliate of
                                            KBI in relation to such IPR and/or apply to register such IPR in KBI’s name and at
                                            KBI’s cost, [***]; and

 

		(b)	if
                                            KBI is in breach of clause 20.3 then PMI may, by giving not less than [***] written notice
                                            to KBI if KBI has failed to remedy the breach during such period, [***],

 

and
each such circumstance:

 

		(c)	KBI
                                            shall provide all assistance and co-operation requested by PMI in relation to such application
                                            and related proceedings (including requiring any agent or counsel to take instructions from
                                            PMI directly);

 

		(d)	KBI
                                            hereby irrevocably appoints PMI to be its attorney in its name and on its behalf to execute
                                            documents, use KBI’s name and do all things which are necessary or desirable for PMI
                                            to conduct any such application and related proceedings and to register such Licensed IPR.
                                            PMI may appoint one or more persons (including counsel) to act as substitute attorneys for
                                            PMI and to exercise such of the powers conferred by this power of attorney as PMI thinks
                                            fit and revoke such appointment and KBI shall do all things necessary to effect such appointment;

 

		(e)	KBI
                                            shall promptly [***] received by or on behalf of KBI and/or an Affiliate of KBI;

 

		(f)	unless
                                            required by Applicable Law, KBI shall not interact or communicate with any registry or applicable
                                            Governmental Authority in relation to the application and related proceedings for registration
                                            of the relevant Licensed IPR without PMI’s prior written approval and KBI shall submit
                                            to such registry or applicable Governmental Authority such documentation and information
                                            as reasonably required by PMI when required by PMI;

 

		(g)	KBI
                                            shall indemnify and keep indemnified PMI from and against all costs and expenses properly
                                            incurred by PMI and/or its Affiliates arising out of or in connection with the exercise of
                                            PMI’s rights and/or obligations under this clause 20.6; and

 

		(h)	PMI
                                            shall keep KBI informed and up to date in relation to the progress of any applications.

 

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		20.7	PMI
                                            shall have the exclusive right to register and apply to register IPR anywhere in the world
                                            in respect of the Product Branding and in any Improvement to any PMI Background IP and/or
                                            the Product Branding.

 

		20.8	Subject
                                            to clauses 10.4, 10.5 and 20.6, PMI shall not and shall procure that none of its Affiliates
                                            shall, at any time, apply to register any IPR identical or confusingly similar to the KBI
                                            Branding for any goods and services, or otherwise use any such IPR unless permitted or required
                                            under this agreement.

 

		20.9	KBI
                                            shall not, and shall procure that none of its Affiliates shall, at any time apply to register
                                            any IPR identical to or confusingly similar to or that incorporates the Product Branding
                                            for any goods and services, or otherwise use any such IPR.

 

		20.10	KBI
                                            shall, and shall procure that Bidi shall, promptly provide any and all assistance and do
                                            all things reasonably required by PMI, at PMI’s reasonable cost, to enable PMI or any
                                            of its Affiliates to record the licence of the Licensed IPR under this agreement in any registry
                                            or with any applicable Governmental Authority in a Market, including by entering into separate
                                            or short form sub-licences, letters of consent, power-of-attorneys, applications to record
                                            sub-licences, and schedules related to the aforementioned, which reflect the licences granted
                                            herein and the terms thereof.

 

		20.11	KBI
                                            shall, or shall procure that Bidi shall, at its own cost, maintain and renew any Licensed
                                            IPR that are registered at the Effective Date in the Markets or which become registered after
                                            the Effective Date and, subject to clause 20.6(a), diligently continue the prosecution of
                                            all applications for Licensed IPR in the Markets.

 

		20.12	[***]:

 

		(a)	[***];
                                            or

 

		(b)	[***],

 

[***].

 

		20.13	KBI
                                            shall, and shall procure its Affiliates shall:

 

		(a)	not,
                                            save with the prior written consent of PMI (not to be unreasonably withheld or delayed) assign,
                                            transfer, surrender or abandon any of the registrations or applications for Licensed IPR,
                                            or allow any of them to lapse;

 

		(b)	not
                                            take any action or omit to do any thing that harms or materially diminishes the value of,
                                            or the goodwill associated with, the Licensed IPR or that jeopardises or potentially invalidates
                                            the Licensed IPR.

 

		20.14	Each
                                            party acknowledges and agrees that damages alone would not be an adequate remedy for any
                                            breach of this clause 20.

 

		21	development
                                            of intellectual property

 

		21.1	Subject
                                            to clause 21.2 and any agreement between the parties to the contrary, where the parties agree
                                            in writing that they are developing [***]:

 

		(a)	the
                                            IPR in and to such [***] shall belong to KBI and, [***];

 

    32

     

    

 

		(b)	the
                                            [***] that [***] (including as set out in clauses 3.1(a), 3.1(b) and 3.1(c)) and: (i) [***]
                                            during the Term of this agreement and the Sell-Out Period and (ii) [***]; and

 

		(c)	the
                                            parties’ decisions and related rights and obligations regarding [***] shall be governed
                                            by clauses 20.1 to 20.6 (inclusive) and clauses 20.10 to 20.14 (inclusive) shall apply in
                                            relation to [***].

 

		21.2	The
                                            parties agree that any [***] shall belong to PMI. To the extent such [***] vest in KBI and/or
                                            an Affiliate of KBI, KBI hereby assigns, or shall procure the assignment by its Affiliate
                                            of, such [***] to PMI with full title guarantee.

 

		21.3	Subject
                                            to clause 21.2, if KBI and/or its Affiliates [***]:

 

		(a)	if
                                            PMI so requests (and without charge), subject to clauses 3.2 and 3.3, KBI shall [***] under
                                            clause 3;

 

		(b)	[***]
                                            shall automatically become an integral part of the Licensed Rights and licensed to PMI under
                                            the terms of clause 3 at [***]; and

 

		(c)	the
                                            parties’ decisions and related rights and obligations regarding the [***] shall be
                                            governed by clauses 20.1 to 20.6 (inclusive) and clauses 20.10 to 20.14 (inclusive) shall
                                            apply in relation to maintenance of such [***].

  

		22	ENFORCEMENT
                                            OF INTELLECTUAL PROPERTY

 

		22.1	Subject
                                            to clause 22.11, each party shall notify the other as soon as reasonably practicable of any
                                            information it has or its Affiliates have relating to any actual, suspected or threatened
                                            infringement by a Third Party of the Licensed IPR or breach of confidence, passing off or
                                            actionable act of unfair competition by a Third Party in relation to the Products in any
                                            of the Markets (including any application for, or grant of, any IPR in the Markets which
                                            conflict with any of the Licensed IPR) (“Infringing Action”).

 

		22.2	On
                                            a Quarterly basis, or as reasonably necessary during the Term of this agreement, the parties
                                            shall, subject to clause 22.11, [***]:

 

		(a)	[***];

 

		(b)	[***];

 

		(c)	[***];

  

		(d)	[***].

 

		22.3	Subject
                                            to clause 22.4, KBI shall implement and execute, at its own cost, the [***] and in doing
                                            so:

 

		(a)	KBI
                                            shall only use professional outside counsel, and shall commit a reasonable budget to [***];

 

		(b)	KBI
                                            shall keep PMI reasonably and promptly informed of the [***];

 

		(c)	PMI
                                            shall have the right, but not the obligation, to [***] according to clause 22.2(d) above,
                                            and in case such [***]; and

 

    33

     

    

 

		(d)	to
                                            the extent permitted by law, cooperate and coordinate with [***].

 

		22.4	Subject
                                            to clause 22.7, PMI shall have the exclusive right, exercisable at its sole discretion, to
                                            [***].

 

		22.5	Subject
                                            to clause 22.11, PMI shall give KBI [***] written notice of its or its Affiliates intention
                                            to [***], in sufficient detail to enable KBI to [***]:

 

		(a)	bear
                                            all cost and expense related to any action or proceedings brought in relation to [***] equally,
                                            save for any costs and expenses that are expressly allocated to a party under clause 22.8
                                            or for which a party is otherwise responsible for under this agreement; and

 

		(b)	[***].

 

		22.6	If
                                            duly notified under clause 22.5 and KBI does not approve [***] in writing before [***], PMI
                                            may [***] and shall:

 

		(a)	[***];
                                            and

 

		(b)	[***].

 

		22.7	If
                                            PMI notifies KBI in writing that it will not pursue [***], KBI may, based solely on [***]:

 

		(a)	bear
                                            all cost and expense related to any action or proceedings brought in relation to such [***];
                                            and

 

		(b)	[***].

 

		22.8	In
                                            respect of any action and/or proceedings brought by PMI against a Third Party in relation
                                            to any Infringing Action in accordance with this clause 22 then, subject to clause 22.11:

 

		(a)	to
                                            the extent it is based on the Licensed IPR, KBI shall have the right to appoint its own counsel
                                            at its own cost to advise KBI in relation to and to participate in (but not control) the
                                            proceedings initiated and conducted by PMI in relation to the Infringing Action and shall
                                            ensure that its counsel cooperates closely with PMI’s counsel in relation to such Infringing
                                            Action, provided that PMI shall have the final decision-making authority in relation to such
                                            Infringing Action;

 

		(b)	KBI
                                            shall have a right actively to consult on such Infringing Action prior to PMI initiating
                                            any proceedings in relation to the Infringing Action against a Third Party (provided such
                                            consultation does not prejudice the Licensed IPR, Licensed Rights or the Products or PMI’s
                                            interest in them) and during such proceedings, and PMI shall take KBI’s reasonable
                                            views into account, provided that PMI shall have the final decision-making authority in relation
                                            to such Infringing Action, and where KBI requests in writing information relating to the
                                            Infringing Action for any purpose, PMI shall not unreasonably withhold or condition the provision
                                            of such information unless to the extent that any such information is legally privileged
                                            and/or its provision would breach any duty of confidence owed by a PMI Indemnitee; and

 

		(c)	KBI
                                            shall, at its own cost, provide technical and such other forms of assistance (including access
                                            to its premises and its officers, directors, employees, agents, representatives or advisers,
                                            and to any relevant assets, accounts, documents and records within the power or control of
                                            KBI and/or its Affiliates and becoming a named party in proceedings) as are necessary to
                                            provide reasonable assistance to PMI in relation to the Infringing Action.

 

    34

     

    

 

		22.9	In
                                            respect of any Infringing Action brought by KBI against a Third Party in accordance with
                                            this clause 22 then:

 

		(a)	KBI
                                            shall keep PMI updated in relation to any progress and developments regarding such Infringing
                                            Action;

 

		(b)	PMI
                                            shall have the right to appoint its own counsel at its own cost to advise PMI in relation
                                            to and to participate in (but not control) the Infringing Action proceedings initiated and
                                            conducted by KBI in relation to the Infringing Action and shall ensure that its counsel cooperates
                                            closely with KBI’s counsel in relation to such Infringing Action, provided that KBI
                                            shall have the final decision-making authority in relation to such Infringing Action; and

 

		(c)	PMI
                                            shall have a right actively to consult on such Infringing Action prior to KBI initiating
                                            any proceedings in relation to the Infringing Action against a Third Party (provided such
                                            consultation does not prejudice the KBI IP or the interest of KBI, Bidi and their respective
                                            Affiliates in them) and during such proceedings, and KBI may take PMI’s reasonable
                                            views into account, provided that KBI shall have the final decision-making authority in relation
                                            to such Infringing Action, and where PMI requests in writing information relating to the
                                            Infringing Action for such purpose, KBI shall not unreasonably withhold or condition the
                                            provision of such information unless to the extent that such information is legally privileged
                                            and/or its provision would breach any duty of confidence owed by KBI.

 

		22.10	Each
                                            party shall within [***] provide to the other party a breakdown of the [***] that are to
                                            [***] the parties under clause 22.5(a). [***].

 

		22.11	Nothing
                                            in this clause 22 shall restrict PMI’s and/or any of its Affiliate’s right to
                                            [***].

 

		22.12	Each
                                            party acknowledges and agrees that damages alone would not be an adequate remedy for any
                                            breach of this clause 22.

 

		23	INFRINGEMENT
                                            CLAIMS BY THIRD PARTIES

 

		23.1	During
                                            and after the Term of this agreement, subject always to clause 23.2 and the IP Waiver Letter,
                                            KBI shall indemnify and keep indemnified the PMI Indemnitees from and against any and all
                                            damages, losses, liabilities, costs and expenses (including reasonable legal and professional
                                            fees and costs, and costs and expenses of any Recall and mitigating action) suffered or reasonably
                                            incurred by the PMI Indemnitees arising out of or in connection with any Claim that any Product
                                            or KBI Packaging made in accordance with this agreement and/or the exercise of the Licensed
                                            Rights in accordance with the terms of this agreement infringes, misuses or misappropriates
                                            any third party’s IPR, save to the extent such Claim results from use of any PMI Background
                                            IP or results from a Manufacturing Defect (“IP Claim”).

 

		23.2	KBI
                                            shall not be liable under this agreement for infringement, misuse or misappropriation of:

 

		(a)	[***];
                                            or

 

		(b)	certain
                                            specific third party IPR in a particular Market where:

 

		(i)	[***];
                                            and

 

		(ii)	[***]

 

[***].

 

    35

     

    

 

		23.3	For
                                            the avoidance of doubt, KBI’s liability for infringement, misuse or misappropriation
                                            of third party IPR shall only be excluded by virtue of clause 23.2 with respect to the specific
                                            third party IPR and Market identified by KBI under clauses 23.2(b)(i)(A) and (if applicable)
                                            23.2(b)(i)(B) and not any other third party IPR or Market.

 

		23.4	Each
                                            party shall notify the other as soon as reasonably practicable of any IP Claim brought by
                                            a Third Party against it and/or any of its Affiliates, any opposition to any of the Licensed
                                            IPR, any claim that any of the Licensed IPR is invalid, and any other form of attack, charge
                                            or claim to which the Licensed IPR may be subject (together, an “Infringement Claim”).

 

		23.5	In
                                            respect of any Infringement Claim brought against a PMI Indemnitee, Bidi or KBI and/or any
                                            of their respective Affiliates:

 

		(a)	PMI
                                            shall have the exclusive right, exercisable at its sole discretion, to control the conduct
                                            of such Infringement Claim, including any counterclaim to, and defence and settlement of,
                                            save that, to the extent the Infringement Claim relates to the Licensed IPR:

 

		(i)	KBI
                                            shall have a right to actively consult on such Infringement Claim and PMI shall take KBI’s
                                            reasonable views into account, provided that PMI shall have the final decision-making authority
                                            in relation to such Infringement Claim, and where KBI requests in writing information relating
                                            to the Infringement Claim for such purpose (including reasonably regular updates and material
                                            draft pleadings relating to the defence in advance), PMI shall not unreasonably withhold
                                            or condition the provision of such information, provided such information is not legally
                                            privileged and/or its provision would not breach any duty of confidence owed by the PMI Indemnitees;

 

		(ii)	KBI
                                            shall have the right to appoint its own counsel at its own cost to advise KBI in relation
                                            to and to participate in (but not control) the Infringement Claim proceedings initiated and
                                            conducted by PMI and shall ensure that its counsel cooperates closely with PMI’s counsel
                                            in relation to such Infringement Claim, provided that PMI shall have the final decision-making
                                            authority in relation to such Infringement Claim; and

 

		(iii)	PMI
                                            shall not, without the prior consent of KBI (such consent not to be unreasonably withheld
                                            or delayed): (i) make any admission that the Product or Licensed IPR in issue infringes the
                                            IPR asserted by the third party; (ii) conclude a settlement where the terms of such settlement
                                            require a payment to the third party that would be met by KBI under the indemnity in clause
                                            23; or (iii) take any decision to appeal or not to appeal a relevant judgment against KBI
                                            or its Affiliates, or the Products;

 

		(b)	each
                                            of PMI and KBI shall act in good faith with one another in defending and settling such Infringement
                                            Claim;

 

		(c)	KBI
                                            shall not make any admission of liability, agreement or compromise in relation to the Infringement
                                            Claim without the prior written consent of PMI other than to PMI; and

 

		(d)	KBI
                                            shall, at its own cost, provide technical and such other forms of assistance (including access
                                            to its premises and its officers, directors, employees, agents, representatives or advisers,
                                            and to any relevant assets, accounts, documents and records within the power or control of
                                            KBI and/or its Affiliates and becoming a named party in proceedings) as are necessary to
                                            assist PMI in relation to the Infringement Claim and shall ensure that its counsel cooperates
                                            closely with PMI’s counsel in relation to such Infringement Claim, provided that PMI
                                            shall have the final decision-making authority in relation to such Infringement Claim.

 

    36

     

    

 

		23.6	Each
                                            party acknowledges and agrees that damages alone would not be an adequate remedy for any
                                            breach of this clause 23.

 

		24	liability

 

		24.1	Nothing
                                            in this agreement shall limit or exclude:

 

		(a)	either
                                            party’s liability for:

 

		(i)	death
                                            or personal injury caused by its negligence;

 

		(ii)	fraud
                                            or fraudulent misrepresentation; or

 

		(iii)	any
                                            other liability which cannot be limited or excluded by applicable law;

 

		(b)	either
                                            party’s liability:

 

		(i)	under
                                            clause 23 (Infringement Claims by Third Parties);

 

		(ii)	for
                                            breach of clause 31 (Confidentiality);

 

		(iii)	for
                                            any claim or action relating to any liability suffered or incurred as a result of gross negligence
                                            or intentional or wilful misconduct; or

 

		(c)	KBI’s
                                            liability for any claim or action relating to any liability suffered or incurred as a result
                                            of death or personal injury arising out of or relating to Defect (other than a Manufacturing
                                            Defect or the Excluded Defect).

 

		24.2	Subject
                                            to clause 24.1, neither party shall be liable for any punitive, exemplary, treble or other
                                            multiple damages, or for any indirect or consequential losses, or for any loss of anticipated
                                            savings or business goodwill, under or in connection with this agreement.

 

		24.3	Subject
                                            to clause 24.1, the total aggregate liability of KBI and its Affiliates under this agreement
                                            in the Initial Period, and then separately in each Extension Period, (whether from breach
                                            of contract, tort (including negligence), breach of statutory duty, strict liability or otherwise)
                                            shall in no circumstances exceed the greater of:

 

		(a)	ten
                                            million ($10,000,000) USD; and

 

		(b)	an
                                            amount equal to the total of the Royalties due to KBI (but not yet paid) plus the Royalties
                                            (including the Guaranteed Royalty) paid to KBI under this agreement during the immediately
                                            preceding twelve (12) consecutive months

 

provided
that the amount under (b) shall never exceed thirty million ($30,000,000) USD.

 

		24.4	Any
                                            liability on the part of KBI in respect of the matters set out in clauses 24.1 shall not
                                            utilise or reduce the cap on KBI’s liability under clause 24.3.

 

		24.5	If
                                            a payment due from either party under any indemnity in this agreement is subject to tax (whether
                                            by way of direct assessment or withholding at its source), the receiving party shall be entitled
                                            to receive from the paying party such amounts as shall ensure that the net receipt, after
                                            tax, to the receiving party in respect of the payment is the same as it would have been were
                                            the payment not subject to tax but if the receiving party receives a credit from the relevant
                                            tax authority on account of such additional sum paid, the receiving party shall pay such
                                            credit to the paying party within thirty (30) days of receipt.

 

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		25	Parent
                                            company guarantee, ip side letter and IP WAIVER LETTER

 

		25.1	On
                                            or before the Effective Date KBI shall procure that each Guarantor shall:

 

		(a)	execute
                                            and deliver to PMI the Parent Company Guarantee; and

 

		(b)	deliver
                                            to PMI a certified copy of the board minutes of each Guarantor approving the execution of
                                            such Parent Company Guarantee.

 

		25.2	On
                                            or before the Effective Date PMI shall execute and deliver the IP Side Letter to Bidi and
                                            Kaival and KBI shall procure that Bidi and Kaival shall execute and deliver to PMI the IP
                                            Side Letter.

 

		25.3	On
                                            or before the Effective Date PMI shall execute and deliver to KBI the IP Waiver Letter and
                                            KBI shall execute and deliver the IP Waiver Letter to PMI.

 

		26	insurance

 

		26.1	During
                                            the Term of this agreement and for a period of six (6) years after the expiry or termination
                                            of this agreement, KBI shall maintain in force, with a reputable A rated insurance company,
                                            such insurance as may be necessary to cover KBI’s liabilities that may arise under
                                            or in connection with this agreement including:

 

		(a)	public
                                            liability insurance at an amount not less than ten million ($10,000,000) USD per event;

 

		(b)	if
                                            KBI employs any person, employer’s liability insurance at an amount not less than ten
                                            million ($10,000,000) USD per event; and

 

		(c)	professional
                                            indemnity insurance at an amount not less than ten million ($10,000,000) USD per event.

 

		26.2	At
                                            the PMI’s request KBI shall promptly provide both the insurance certificate giving
                                            details of cover and the receipt for the current year’s premium in respect of each
                                            insurance.

 

		26.3	KBI
                                            shall ensure that PMI’s interest is noted on each insurance policy, or that a generic
                                            interest clause has been included.

 

		26.4	KBI
                                            shall notify PMI promptly in writing of:

 

		(a)	any
                                            material changes to the level, type or other material provisions of insurance cover from
                                            those notified to PMI; and

 

		(b)	any
                                            fact, relevant circumstance or matter that it becomes aware of which has caused or is reasonably
                                            likely to cause the relevant insurer to give notice to cancel, rescind, suspend or avoid
                                            any insurance or any cover or claim under any insurance.

 

		27	corporate
                                            REPRESENTATIONS and WARRANTIES

 

		27.1	PMI
                                            warrants and represents to KBI that:

 

    38

     

    

 

		(a)	it
                                            is a company duly incorporated and validly existing under the laws of Switzerland;

 

		(b)	it
                                            has all corporate power, authority and approvals required to enter into, execute, and deliver
                                            this agreement and to perform its obligations under this agreement;

 

		(c)	it
                                            has obtained and shall maintain throughout the Term of this agreement and the Sell-Out Period
                                            all consents, approvals, licenses, permits, authorisations, certifications, and registrations
                                            with any Governmental Authority required for the performance of its obligations under this
                                            agreement.

 

		27.2	KBI
                                            warrants and represents to PMI that:

 

		(a)	it
                                            is a company duly incorporated and validly existing under the laws of Delaware, the US;

 

		(b)	it
                                            has all corporate power, authority and approvals required to enter into, execute, and deliver
                                            this agreement and to perform its obligations under this agreement;

 

		(c)	it
                                            has obtained and shall maintain throughout the Term of this agreement and the Sell-Out Period
                                            all consents, approvals, licenses, permits, authorisations, certifications, and registrations
                                            with any Governmental Authority required for the performance of its obligations under this
                                            agreement except for the Regulatory Approvals.

 

		28	KBI
                                            REPRESENTATIONS and WARRANTIES

 

		28.1	KBI
                                            warrants, represents and undertakes to PMI on an ongoing basis (unless otherwise stated below)
                                            that:

 

		(a)	it
                                            is the sole legal and beneficial owner of all Licensed IPR or the exclusive licensee in relation
                                            to the Markets of all Licensed IPR, with the right to license Licensed IPR to PMI on an exclusive
                                            basis and otherwise on the terms of this agreement;

 

		(b)	the
                                            Licensed IPR are free from all Encumbrances other than the right for Kaival to distribute
                                            products in the KBI Markets under the Distribution Agreement;

 

		(c)	KBI
                                            and/or its Affiliates have not as at the Effective Date, and shall not on or after the Effective
                                            Date grant any third party any right, licence, waiver, covenant not to assert or sue, option
                                            or other beneficial right under or in connection with: (i) any Product in any Market other
                                            than New Property in respect of which KBI is unrestricted pursuant to clause 19.7 or (ii)
                                            the IPR licensed or to be licensed under this agreement in relation to any Market (including
                                            any right to obtain ownership or a licence of such IPR);

 

		(d)	without
                                            limiting clauses 28.1(c) and 28.1(k), the Distribution Agreement has been amended before
                                            the Effective Date such that, after the Effective Date and for the duration of the Agreement
                                            and Sell-Out Period, Kaival has no right to distribute any present or future Product in any
                                            Market and, subject to clause 19.7, no right of first refusal or first offer in relation
                                            to any New Property (or the IPR therein) in any Markets, and KBI shall promptly provide PMI
                                            with written evidence of such amendment upon request;

 

		(e)	save
                                            for Regulatory Approvals, and the PMI Branding which PMI shall provide, and subject to clause
                                            23.2 [***], the Licensed Rights are reasonably sufficient for, and comprise all the Materials
                                            and IPR reasonably necessary for, the Exploitation of the Products and KBI Packaging as permitted
                                            under this agreement;

 

    39

     

    

 

		(f)	subject
                                            to clause 23.2 [***], from the date on which PMI begins to Exploit the Products or Licensed
                                            Rights in that Market in accordance with clause 3, the Licensed IPR are, or upon issuance
                                            will be, valid, subsisting and enforceable against any Third Party;

 

		(g)	as
                                            at the Effective Date, [***] nothing has been done or failed to be done by KBI and/or its
                                            Affiliates that will or may cause the Licensed IPR with respect to the Markets to be invalid,
                                            vulnerable to cancellation or revocation, or unenforceable, or for any application comprised
                                            in such Licensed IPR not to proceed to grant;

 

		(h)	all
                                            maintenance and renewal fees in relation to the Licensed IPR have been duly paid in full
                                            and on time and there are no outstanding or missed official actions or other responses required
                                            by any patent or trademark office or registry in respect of the same;

 

		(i)	subject
                                            to clause 23.2 [***], save for any PMI Background IP, the Products and KBI Packaging made
                                            pursuant to this agreement, their Exploitation, and the exercise of the Licensed Rights in
                                            relation to the Markets and other territories as permitted in this agreement, will not infringe,
                                            misuse or misappropriate any third party’s IPR;

 

		(j)	as
                                            at the Effective Date, so far as KBI is aware, there has been no infringement by any third
                                            party of any Licensed IPR, nor any third party breach of confidence, passing off or actionable
                                            act of unfair competition in relation to such Licensed IPR and no such infringement, breach
                                            of confidence, passing off or actionable act of unfair competition is current or anticipated;

 

		(k)	it
                                            has not granted, and will not grant, any rights that conflict with the rights it grants to
                                            PMI under this agreement or that would otherwise prevent PMI from exercising its rights or
                                            performing its obligations under this agreement;

 

		(l)	it
                                            shall perform the Development Services and ensure that its staff provide services and give
                                            advice pursuant to clause 5.4 in a professional manner, using reasonable skill and care and
                                            personnel who are sufficiently qualified, skilled and experienced, and in compliance with
                                            Applicable Law;

 

		(m)	that
                                            it does not have, and its Affiliates do not have, any officers, directors or employees who
                                            are Government Officials and it shall inform PMI in writing as soon as reasonably practicable
                                            if any officers, directors or employees become Government Officials;

 

		(n)	as
                                            at the Effective Date, KBI and/or its Affiliates does not sell and has not sold any Product
                                            outside of the US, nor has KBI and/or its Affiliates applied for any Regulatory Approval
                                            in relation to any Product outside the US; and

 

		(o)	[***],
                                            no instances of material property damage, serious or disabling personal injury, or death
                                            caused by or associated with any of the Products or KBI Packaging including any (i) adverse
                                            event or experience report accompanied by a medical certificate; or (ii) any report of life-threatening
                                            event, persistent or significant disability or incapacity, long-term hospitalization, medical
                                            treatment or birth defect are known by or have been reported to KBI and/or KBI’s Affiliates,
                                            and KBI will promptly notify PMI and provide PMI with all relevant details upon KBI and/or
                                            KBI’s Affiliates becoming aware of the occurrence of any of the foregoing events.

 

		29	termination

 

		29.1	Without
                                            affecting any other right or remedy available to it, PMI may terminate this agreement (in
                                            whole or in part):

 

    40

     

    

 

		(a)	at
                                            any time by giving not less than [***] written notice to KBI;

 

		(b)	[***]
                                            upon written notice or [***] as specified by PMI in such notice if:

 

		(i)	KBI
                                            commits a material breach of any term of this agreement and (if such breach is remediable)
                                            fails to remedy that breach within a period of [***] after being notified in writing to do
                                            so;

 

		(ii)	if
                                            there is a Change of Control; or

 

		(iii)	if
                                            an Insolvency Event occurs in relation to KBI.

 

		29.2	Without
                                            affecting any other right or remedy available to it, KBI
                                            may terminate this agreement (in its entirety):

 

		(a)	at
                                            any time by giving not less than [***] written notice to PMI; 

 

		(b)	by
                                            giving not less than [***];

 

		(c)	[***];

 

		(d)	[***]
                                            upon written notice or [***] as specified by KBI in such notice if PMI commits a material
                                            breach of any term of this agreement (excluding failure to meet the KPIs which is governed
                                            by clause 14.2) and (if such breach is remediable) fails to remedy that breach within a period
                                            of [***] after being notified in writing to do so;

 

		(e)	[***]
                                            upon written notice or upon such date as specified by KBI in such notice if PMI fails to
                                            [***] payments due under this agreement before, on or within [***] of the applicable due
                                            date for payment provided that KBI has notified PMI in writing that [***] is overdue at least
                                            [***] before serving its notice to terminate; or

 

		(f)	at
                                            the end of the Initial Period by giving PMI at least [***] written notice if the Products
                                            [***]provided that such failure is due to PMI’s deliberate acts or omissions.

 

		30	consequences
                                            of termination

 

		30.1	Upon
                                            expiry or termination of this agreement (in whole or in part) for any reason, a six (6) month
                                            period (“Sell-Out Period”) shall commence to allow for the sell-off of
                                            Products made or ordered and scale down the business. Without prejudice to clause 30.6, during
                                            the Sell-Out Period:

 

		(a)	KBI
                                            shall collaborate with PMI to enable PMI to continue to sell Products and KBI Packaging whilst
                                            scaling down the business in a smooth and orderly fashion;

 

		(b)	notwithstanding
                                            the termination or expiry of this agreement, PMI’s exclusive licence pursuant to clause
                                            3.1 and KBI’s obligations under clauses 4 and 5, together all provisions in clauses
                                            20, 22 and 28, shall continue during the Sell-Out Period; and

 

		(c)	PMI
                                            shall continue to pay to KBI the Royalties for sales of Products it makes and sells in accordance
                                            with clause 16, after the application of applicable credits thereunder.

 

		30.2	On
                                            expiry or termination of this agreement for any reason and subject to any express provisions
                                            set out elsewhere in this agreement:

 

		(a)	all
                                            rights, licences and sub-licences granted pursuant to this agreement shall cease; and

 

    41

     

    

 

		(b)	each
                                            party shall cease to use, and (at the other party’s election) return or destroy, the
                                            other party’s Confidential Information save to the extent such party requires that
                                            Confidential Information to continue to perform its obligations and exercise its rights under
                                            this agreement and except for one copy of such Confidential Information which may be kept
                                            solely for archival purposes and/or for legal and/or regulatory purposes for no longer than
                                            permitted by Applicable Law.

 

		30.3	In
                                            the event of termination of this agreement by PMI for breach by KBI, without limiting PMI’s
                                            other rights and remedies, KBI shall promptly and not later than [***] from the date of a
                                            notice by PMI to KBI, repay any [***] to PMI.

 

		30.4	In
                                            the event of termination or expiry of this agreement (other than termination by KBI due to
                                            a breach by PMI), KBI shall promptly and within ninety (90) days from the date of a notice
                                            by PMI repay to PMI any portion of the Guaranteed Royalty paid by PMI that has not been utilised
                                            as payment for Royalties due under this agreement.

 

		30.5	Termination
                                            or expiry of this agreement shall not affect any rights, remedies, obligations or liabilities
                                            of the parties that have accrued up to the date of termination or expiry, including the right
                                            to claim damages in respect of any breach of the agreement which existed at or before the
                                            date of termination or expiry.

 

		30.6	Any
                                            provision of this agreement that expressly or by implication is intended to come into or
                                            continue in force on or after termination or expiry of this agreement, including clauses
                                            15, 17, 18, 21.1(b)(ii), 21.3(c), 23, 25, 26 and 30 to 48, shall remain in full force and
                                            effect.

 

		31	CONFIDENTIALITY

 

		31.1	Subject
                                            to clauses 31.2 and 31.3, each party undertakes to the other:

 

		(a)	to
                                            keep all Confidential Information strictly confidential;

 

		(b)	not
                                            to disclose the Confidential Information in whole or in part to any third party; and

 

		(c)	to
                                            use the Confidential Information solely in order to comply with its obligations under this
                                            agreement or to receive the benefit of this agreement (the “Purpose”)
                                            and not otherwise for its own benefit or the benefit of any third party.

 

		31.2	Each
                                            party may disclose the other party’s Confidential Information:

 

		(a)	to
                                            its Affiliates and its and their respective its employees, officers, contractors, subcontractors,
                                            representatives and advisers (“Representatives”) who need to know such
                                            information for the Purpose. Each party shall ensure that Representative to whom a disclosure
                                            is made is subject to equivalent obligations of confidentiality as those that bind the party
                                            under this clause 31.2 and each party shall be liable for the acts and omissions of each
                                            such Representative that lead to a breach of that party’s obligations under this clause
                                            31.2; and

 

		(b)	as
                                            may be required by law, a court of competent jurisdiction, a Governmental Authority or a
                                            recognised securities exchange provided that: (i) the party to which the Confidential Information
                                            relates has been notified by the party intending to disclose it of the intended disclosure
                                            prior to the disclosure taking place (where permitted); and (ii) the party intending to disclose
                                            the Confidential Information has provided (where permitted) such assistance as has been reasonably
                                            requested by the party to which the Confidential Information relates in order to restrict
                                            the scope of the intended disclosure to the maximum effect;

 

    42

     

    

 

		(c)	as
                                            is reasonably necessary: (i) in order to comply with, or take the benefit of, clause 3; (ii)
                                            to apply for, obtain and maintain Regulatory Approvals and make related filings in relation
                                            to the Products in any Markets and to respond to Regulatory Authorities; and (iii) to apply
                                            for, prosecute, enforce, defend and maintain any IPR where permitted under this agreement;

 

		(d)	in
                                            the case of the PMI only, to PMI’s actual or potential sub-licensees and/or other third
                                            parties permitted to Exploit the Licensed Rights in accordance with this agreement and Sub
                                            Licences, provided that PMI shall be liable for the compliance of such third parties and
                                            sub-licensees with the obligations in this clause 31 and shall ensure that any such third
                                            party and sub-licensees to whom a disclosure is made is subject to equivalent obligations
                                            of confidentiality as those that bind PMI under this clause 31.2.

 

		31.3	The
                                            obligations of confidentiality under this agreement shall not apply (or shall cease to apply
                                            as the case may be) to any Confidential Information which:

 

		(a)	becomes
                                            public knowledge other than as a result of a breach of this clause 31;

 

		(b)	was
                                            or is lawfully obtained by the receiving party without any obligation of confidentiality
                                            from a third party who was or is entitled to disclose it; or

 

		(c)	was
                                            independently created by the receiving party without the use of, or reference to, any of
                                            the disclosing party’s Confidential Information.

 

		31.4	Save
                                            as permitted under clause 31.2(b), neither party shall otherwise make, or permit any person
                                            to make, any public announcement concerning the subject matter or terms of this agreement,
                                            the transactions contemplated by it, or the relationship between the parties, without the
                                            prior written consent of the other party.

 

		31.5	Each
                                            party acknowledges and agrees that damages alone would not be an adequate remedy for any
                                            breach of this clause 31.

 

		32	Child/Forced
                                            labour

 

		32.1	Neither
                                            party shall employ any person who is younger than the age of fifteen (15) or the applicable
                                            minimum employment age, whichever is higher.

 

		32.2	Each
                                            party shall procure that its permitted employees under the age of eighteen (18) shall not
                                            be engaged by it or its Affiliates in work that by its nature or the circumstances in which
                                            it is carried out, is likely to harm the health or safety of that employee and that the weekly
                                            and daily working schedules of such permitted employees under the age of eighteen (18) comply
                                            with all Applicable Laws.

 

		32.3	Neither
                                            party shall employ persons under conditions where work or service is exacted from them under
                                            the menace of any penalty or for which such person has not offered himself or herself voluntarily.

 

		33	Anti-Bribery
                                            and Corruption and Anti-Money Laundering

 

		33.1	Each
                                            party represents and warrants that:

 

		(a)	it
                                            and its Relevant Affiliates have complied, and throughout the Term and Sell-Out Period, it
                                            and its Relevant Affiliates will comply with all Anti-Bribery and Corruption Laws, all Applicable
                                            Laws relating to anti-money laundering and any implementing regulations and/or amendments
                                            thereto (the “Anti-Money Laundering Laws”), and all Applicable Laws relating
                                            to sanctions and any implementing regulations and/or amendments thereto (the “Sanctions
                                            Laws”);

 

    43

     

    

 

		(b)	it
                                            and its Relevant Affiliates have not engaged, and throughout the Term and Sell-Out Period,
                                            it and its Relevant Affiliates will not engage in any activity, practice, or conduct which
                                            would constitute an offence under any Anti-Bribery and Corruption Laws, Anti-Money Laundering
                                            Laws, or Sanctions Laws;

 

		(c)	it
                                            and its Relevant Affiliates have not created, and throughout the Term and Sell-Out Period
                                            shall not create, any arrangement with a Government Official that would compromise its ability
                                            to perform its obligations under this agreement;

 

		(d)	throughout
                                            the Term and Sell-Out Period, it and its Relevant Affiliates shall not take any actions in
                                            furtherance of an offer, payment, promise to pay, or authorization of the payment or giving
                                            of money, or anything else of value, to any Government Official or to any other person while
                                            knowing that all or some portion of the money or value shall be offered, given, or promised
                                            to a Government Official for the purposes of:

 

		(i)	influencing
                                            a Government Official in his official capacity in order to assist any party, its Relevant
                                            Affiliates, or any other person in obtaining or retaining business or a business advantage,
                                            or in directing business to any Third Party;

 

		(ii)	securing
                                            an improper advantage;

 

		(iii)	being
                                            a facilitating payment (as defined in the FCPA);

 

		(iv)	inducing
                                            any such Government Official to use his influence to affect or influence any act, omission,
                                            or decision of a Governmental Authority in order to assist any party, its Relevant Affiliates,
                                            or any other person in obtaining or retaining business, or in directing business to any Third
                                            Party; or

 

		(v)	providing
                                            an unlawful personal gain or benefit, of financial or other value, to any such Government
                                            Official;

 

throughout
the Term and Sell-Out Period, no part of any revenue or income accruing, directly or indirectly, to it or its Relevant Affiliates in
connection with this agreement or any remuneration it receives from the other party under this agreement shall be used for any purpose
which would cause a violation of Anti-Bribery and Corruption Laws;

 

		(e)	it
                                            and its Relevant Affiliates do not have and shall not create or maintain any secret or unrecorded
                                            fund or asset for the purpose of facilitating any prohibited payment according to Anti-Bribery
                                            and Corruption Laws throughout the Term and Sell-Out Period;

 

		(f)	it
                                            and its Relevant Affiliates have not, unless permitted (or not restricted) by the relevant
                                            Governmental Authority responsible for the imposition of Sanctions (if any) or its rules
                                            or regulations, conducted any direct or indirect business dealings of any nature whatsoever
                                            with an individual or entity (i) that is a Sanctioned Party or (ii) is located or organized
                                            within, or doing business or operating from a country or territory that is, or whose government
                                            is, the subject of Sanctions at the relevant time as long as such dealings have a material
                                            adverse impact on the operation of this agreement or any aspect of its operation;

 

		(g)	neither
                                            it nor any of its Relevant Affiliates is a Sanctioned Party; and

 

    44

     

    

 

		(h)	there
                                            is no pending investigation by a Governmental Authority, enquiry, or proceeding concerning
                                            it or any Person or entity acting on its behalf in relation to non-compliance with any Anti-Bribery
                                            and Corruption Laws, Anti-Money Laundering Laws or Sanctions Laws.

 

		33.2	Each
                                            party shall promptly notify the other party in writing providing full details if at any time:

 

		(a)	it,
                                            or any of its Relevant Affiliates, is or becomes a Sanctioned Party;

 

		(b)	it
                                            becomes aware of any breach of any of the representations, warranties, undertakings, or obligations
                                            contained in or referred to in this clause 33; or

 

		(c)	it
                                            becomes aware of any fact, matter, or circumstance that has or will or might reasonably be
                                            expected to put the other party in breach of Anti-Bribery and Corruption Laws, Anti-Money
                                            Laundering Laws, or Sanctions Laws.

 

		33.3	Each
                                            party (the “Breaching Party”) shall indemnify and keep indemnified the
                                            other party (the “Non-Breaching Party”), its Affiliates, and its and their
                                            respective officers, directors, employees and agents (together, “Non-Breaching Indemnitees”)
                                            from and against any and all Claims, demands, actions or proceedings, costs, damages, losses,
                                            liabilities and expenses (including legal and professional fees and costs) suffered or incurred
                                            by such Non-Breaching Indemnitees as a result of any breach by the Breaching Party of its
                                            obligations under clauses 28, 32 and 33. Notwithstanding the foregoing, each party acknowledges
                                            and agrees that damages alone may not be an adequate remedy for a breach of the obligations
                                            under clauses 28, 32 and 33 and, as an arbitral remedy, the Non-Breaching Party shall be
                                            entitled in its sole discretion to seek the remedies of injunction, specific performance,
                                            and other equitable relief for any threatened or actual breach of obligations under clauses
                                            28, 32 and 33.

 

		34	FORCE
                                            MAJEURE EVENT

 

		34.1	If
                                            either party is affected by Force Majeure Event which prevents that party from performing
                                            its obligations under this agreement, the affected party shall:

 

		(a)	promptly
                                            notify the other of the nature and extent of the circumstances in question;

 

		(b)	use
                                            all reasonable endeavours to mitigate and/or eliminate the consequences of such Force Majeure
                                            Event and inform the other party of the steps which it is taking and proposes to take to
                                            do so; and

 

		(c)	give
                                            written notice to the other party as soon as reasonably possible after the Force Majeure
                                            Event has ended, that it has ended and resume performance of its obligations under this agreement.

 

		34.2	Provided
                                            it complies with clause 34.1, neither party will be liable to the other party for any delay
                                            or failure in performing its obligations under this agreement. In such circumstances the
                                            time for performance shall be extended by a period equivalent to the period during which
                                            performance of the obligation has been delayed or failed to be performed.

 

		35	Notices

 

		35.1	A
                                            notice or other communication under or in connection with this agreement shall be in writing
                                            and shall be delivered personally, by courier or sent by email to the party due to receive
                                            the notice or communication, to the person and at its address or email address set out in
                                            clause 35.3 or another person, address or email address specified by that party by written
                                            notice to the other party.

 

    45

     

    

 

		35.2	Unless
                                            there is evidence that it was received earlier, a notice or other communication is deemed
                                            given:

 

		(a)	if
                                            delivered personally or by courier, when left at the address set out in clause 35.3;

 

		(b)	if
                                            sent by email, when the email is sent, or, if this time falls outside business hours in the
                                            place of receipt, when business hours resume, provided that a copy of the notice is sent
                                            by another method referred to in this clause 35.2 within one (1) Business Day of sending
                                            the email unless an email acknowledgement (other than an automated response or “read
                                            receipt”) of the notice is received by the other party.

 

		35.3	The
                                            address referred to in clause 35.1 is:

 

If
to PMI:

 

		Addressee:	[***]

 

		Address:	[***]

 

Email
address:[***]

 

If
to KBI:

 

		35.4	Addressee:
                                            [***]

 

		Address:	4460
                                            Old Dixie Highway, Grant, Florida 32949, United States of America

 

Email
address:[***]

 

		35.5	This
                                            clause does not apply to the service of any proceedings or other documents in any legal action
                                            or, where applicable, any arbitration or other method of dispute resolution.

 

		36	Further
                                            assurance

 

Each
party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, promptly execute and deliver such
documents and perform such acts as may reasonably be required for the purpose of giving full effect to this agreement.

 

		37	Assignment
                                            and other dealings

 

		37.1	Save
                                            as expressly set out in this agreement, neither party shall assign, transfer, mortgage, charge,
                                            sub-license, subcontract, delegate, declare a trust over or deal in any other manner with
                                            any of its rights or obligations under this agreement without the prior written consent of
                                            the other party.

 

		37.2	KBI
                                            may subcontract any of its obligations under this agreement to any Affiliate of KBI upon
                                            prior written notice to an Affiliate of KBI.

 

		37.3	Without
                                            limiting clause 3, PMI may assign, novate, transfer, subcontract and/or delegate this agreement
                                            or any or all of its rights and/or obligations under this agreement to any Affiliate of PMI
                                            upon written notice to KBI or to any Third Party that is not an Affiliate of PMI with KBI’s
                                            written consent (not to be unreasonably withheld or delayed).

 

    46

     

    

 

		38	Waiver

 

No
failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that
or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or
partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.

 

		39	Entire
                                            agreement

 

		39.1	This
                                            agreement and [***] constitute the entire agreement between the parties and supersedes and
                                            extinguishes all previous agreements, promises, assurances, warranties, representations and
                                            understandings between them, whether written or oral, relating to their subject matter.

 

		39.2	Each
                                            party agrees that it shall have no remedies in respect of any statement, representation,
                                            assurance or warranty (whether made innocently or negligently) that is not set out in this
                                            agreement. Each party agrees that it shall have no claim for innocent or negligent misrepresentation
                                            based on any statement in this agreement.

 

		40	Variation

 

No
variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

 

		41	Severance

 

		41.1	If
                                            any provision or part-provision of this agreement is or becomes invalid, illegal or unenforceable,
                                            or if either party receives written legal advice from a reputable and independent professional
                                            legal advisor that, or any Governmental Authority finds that, any provision or part-provision
                                            of this agreement is or will be in breach of or prohibited or unenforceable under Applicable
                                            Law, it shall be deemed deleted in relation only to the Markets affected by the relevant
                                            invalidity, unenforceability, Applicable Law or finding, but that shall not affect the validity
                                            and enforceability of:

 

		(a)	the
                                            rest of this agreement in relation to those Markets; or

 

		(b)	that
                                            provision or part-provision and the rest of this agreement in relation to any other Markets.

 

		41.2	If
                                            any provision or part-provision of this agreement is deemed deleted under clause 41.1 the
                                            parties shall use their best endeavours, acting in good faith, to find a legal and commercially
                                            viable alternative to the relevant provision or part thereof that, to the greatest extent
                                            possible, achieves the intended commercial result of the original provision.

 

		42	Third
                                            party rights

 

		42.1	No
                                            one other than a party to this agreement shall have any right to enforce any of its terms.
                                            The parties agree that any damages, losses and liabilities suffered, and costs and expenses
                                            incurred, by:

 

    47

     

    

 

		(a)	KBI
                                            Indemnitees or PMI Indemnitees which are recoverable under the indemnities in this agreement
                                            shall be deemed to have been suffered or incurred by, and shall be recoverable by, KBI and
                                            PMI (respectively) on their behalf; and

 

		(b)	an
                                            Affiliate of a party under or in connection with this agreement which would have been recoverable
                                            by that party had such party suffered or incurred them directly, shall be deemed to have
                                            been suffered or incurred by, and shall be recoverable by, such party on behalf of its Affiliate.

 

		43	No partnership or agency

 

		43.1	Nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture
between any of the parties, constitute either party the agent of the other party, or authorise either party to make or enter into any
commitments for or on behalf of the other party.

 

		43.2	Each party confirms it is acting on its own behalf and not for the benefit of any other person.

 

		44	COSTS

 

Except as otherwise expressly
provided in this agreement, each party shall pay its own costs and expenses of and incidental to the negotiation, preparation, and execution
by it of this agreement and of all other documents referred to in it.

 

		45	Counterparts

 

This agreement may be
executed in any number of counterparts, each of which shall constitute a duplicate original, but all the counterparts shall together constitute
the one agreement.

 

		46	Language

 

This agreement is drawn
up in the English language. If this agreement is translated into another language, the English language version shall prevail.

 

		47	Governing law

 

This agreement and any dispute or claim
(including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation (a “Dispute”)
shall be governed by and construed in accordance with the law of England and Wales.

 

		48	dispute resolution

 

		48.1	Subject to clause 50, the parties shall attempt to settle any Dispute by negotiation in accordance with
this clause 48.1. Either party shall give to the other written notice of a Dispute, setting out its nature and full particulars (“Dispute Notice”),
together with relevant supporting documents. On service of the Dispute Notice, [***] of PMI and [***] of KBI shall attempt in
good faith to resolve the Dispute.

 

		48.2	If the [***] of PMI and [***] of KBI are for any reason unable to resolve the Dispute within
thirty (30) Business Days of service of the Dispute Notice, the Dispute may be referred to mediation in accordance
with clause 48.3 and/or arbitration in accordance with clause 49 and no party may commence any arbitral proceedings or mediation before
the end of such period without the prior written agreement of the other party.

 

    48

     

    

 

		48.3	If both parties consent, the parties may, without prejudice to any other proceedings, seek to settle any
Dispute by mediation in accordance with the International Chamber of Commerce (the “ICC”) Mediation Rules. Unless otherwise
agreed by the parties, the place of mediation shall be nominated by the mediator and the cost of the mediator shall be split equally between
the parties.

 

		49	arbitration

 

		49.1	Subject to clauses 48 and 50, any Dispute shall be exclusively, definitely, and finally settled by arbitration
under the Rules of Arbitration (the “Rules”) of the ICC in effect at the time of the submission of the request for
arbitration, which Rules are deemed to be incorporated by reference into this clause and:

 

		(a)	the seat of arbitration shall be London, and hearings relating to the arbitration, unless the parties
agree otherwise, shall be heard in London;

 

		(b)	the language of the arbitration proceedings shall be English;

 

		(c)	the arbitration tribunal shall consist of three arbitrators. PMI shall nominate one arbitrator (the “first
arbitrator”) and KBI shall nominate one arbitrator (the “second arbitrator”). The two arbitrators thus appointed
shall nominate the third arbitrator, who shall act as chairman. If (i) within thirty (30) days of a request from KBI, PMI fails to nominate
the first arbitrator, (ii) within thirty (30) days of a request from PMI, KBI fails to nominate the second arbitrator, or (iii) if the
first and second arbitrators fail to nominate the third arbitrator within thirty (30) days after the appointment of the first arbitrator
or the second arbitrator (whichever is later), the appointment shall be made by the International Court of Arbitration of the ICC in accordance
with the Rules;

 

		(d)	if any Dispute raises issues which are substantially the same as or connected with issues raised in a
Dispute which has already been referred to arbitration (an “Existing Dispute”) or arises out of substantially the same
facts as are the subject of an Existing Dispute (a “Related Dispute”), then the arbitral tribunal appointed or to be
appointed in respect of any such Existing Dispute shall also be appointed as the arbitral tribunal in respect of any Related Dispute,
save where that arbitral tribunal considers such appointment would be inappropriate;

 

		(e)	where the same arbitral tribunal has been appointed in relation to two or more Disputes under clause 49.1(d),
the arbitral tribunal may order that the whole or part of the matters at issue shall be heard together upon such terms or conditions as
the arbitral tribunal thinks fit;

 

		(f)	any arbitral award rendered shall be in writing and shall set forth in reasonable detail the facts of
the dispute and the reasons for the arbitrators’ decision, and each party shall bear its own costs save as otherwise determined
in the arbitration award; and

 

		(g)	any award or other outcome of such arbitration shall be final and binding upon the parties from the day
it is made.

 

		49.2	This arbitration agreement is subject to English law.

 

		50	Interim relief

 

		50.1	At any time during a Dispute between the parties, either party shall have a right to apply for interim
relief, including pre-arbitration attachments and injunctions, necessary to preserve the parties’ rights under this agreement or
to maintain the parties’ relative positions with respect thereto until such time as the arbitration award is rendered or the Dispute
is otherwise resolved. Solely for the purposes of interim relief, each party:

 

    49

     

    

 

		(a)	irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of Delaware;

 

		(b)	agrees that it will not attempt to deny or defeat such exclusive jurisdiction by motion or other request
for leave from any such court;

 

		(c)	agrees that any actions or proceedings arising in connection with this agreement or the transactions contemplated
by this agreements shall be brought and determined in the courts of the State of Delaware;

 

		(d)	waives any claim of improper venue or any claim that those courts are an inconvenient forum; and

 

		(e)	agrees that it will not bring any action for interim relief relating to this agreement or the transactions
contemplated by this agreement in any court other than the aforesaid courts.

  

    50

     

    

 

IN WITNESS of which this agreement has been executed and, on the
date set out above, delivered as a deed.

 

	Executed
and delivered as a deed by PHILIP MORRIS PRODUCTS S.A. acting by [***], who, in accordance with the laws of the Switzerland,
are acting under the authority of the company 	 	..............................
                                            

                                                                  Authorised
                                            Signatory   ..............................

                                                                  
                                            Authorised Signatory 

	 	 
	Executed
and delivered as a deed by KAIVAL BRANDS INTERNATIONAL, LLC acting by NIRAJKUMAR PATEL and ERIC MOSSER, who, in
accordance with the laws of the United States of America, are acting under the authority of the company	 	..............................  

                                                                        Authorised Signatory   ..............................

                                                                         Authorised Signatory    

 

    51

     

    

  

Schedule
1

The Markets

 

    52

     

    

 

	Market
                                            Countries

     

     
	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	[***]	 
	OTHER
    MarketS 
	[***]	 

 

 

    53

     

    

 

Schedule
2

KBI Intellectual Property Rights

 

    54

     

    

 

		1	Patents

 

[***]

 

		2	registered designs

 

		[***]	

 

		3	Unregistered rights

 

[***]

 

		4	documentation

 

[***]

 

    55

     

    

 

Schedule
3

KBI Branding

  

[***]

 

    56

     

    

 

Schedule
4

PMI Product Standards

 

[***]

 

    57

     

    

 

Schedule
5

Key   Performance Indicators

 

		1	non-binding expansion criteria and key performance indicators

 

		1.1	For each Market:

 

[***]

 

		2	MINIMUM key performance indicators:

 

[***]

    58

     

    

 

 

Schedule
6

Market Specific Terms

 

Intentionally
left blank

 

    59

     

    

 

Schedule
7

Root Cause Analysis and Attributable Replacement Cost

 

		1	definitions

 

For the purposes of this Schedule, the following
definitions shall apply:

 

		2	[***]

  

    60

     

    

 

Schedule
8

Parent Company Guarantee

 

THIS DEED is dated [DATE]

 

Parties

 

		(1)	Philip Morris Products S.A. incorporated and registered in Switzerland with company number (registered
no. CH-105-950.151) whose registered office is at Quai Jeanrenaud 3, 2000 Neuchatel, Switzerland (“PMI”).

 

		(2)	Bidi Vapor, LLC, a Florida limited liability company organized and registered in the United States
of America as a- Florida limited liability company whose registered office is at 200 S. Orange Ave. Suite 2300, Orlando FL 32801 United
States of America (“Bidi”).

 

		(3)	Kaival Brands Innovations Group, Inc., a Delaware corporation incorporated and registered in the
United States of America as a Delaware limited liability company whose registered office is at 4460 Old Dixie Hwy, Grant, FL 32949 United
States of America (“Kaival”).

 

(Bidi and Kaival each
being a “Guarantor” and together the “Guarantors”)

 

Background

 

		(A)	By an agreement dated on or about the date of this guarantee PMI and Kaival Brands International, LLC
of 4460 Old Dixie Hwy Grant, FL 32949, United States of America (“KBI”) entered into a deed of licensing agreement
dated on or around the date of this guarantee under which KBI licenses various intellectual property rights to PMI on an exclusive basis
to enable PMI to, inter alia, make and sell ‘e-cigarettes’ (“Agreement”).

 

		(B)	The Guarantors would derive substantial direct and indirect benefits from the transactions contemplated
by the Agreement.

 

		(C)	The Guarantors have agreed to guarantee the financial obligations and liabilities of KBI under and in
connection with the Agreement on the terms set out below.

 

Agreed
Terms

 

		1	Interpretation

 

		1.1	Any capitalised terms used herein will have the meanings set forth in the Agreement unless defined otherwise
in this guarantee.

 

		1.2	In this guarantee, save where the context requires otherwise:

 

		(a)	a reference to a person includes a natural person, corporate or unincorporated body (whether or
not having separate legal personality).

 

		(b)	a reference to a company shall include any company, corporation or other body corporate, wherever
and however incorporated or established.

 

		(c)	words in the singular shall include the plural and in the plural include the singular.

 

    61

     

    

 

		(d)	a reference to writing or written includes email but not fax.

 

		(e)	a reference to this guarantee or to any other agreement or document is a reference to this guarantee
or such other guarantee or document, in each case as varied from time to time.

 

		(f)	references to clauses are to the clauses of this guarantee.

 

		(g)	any words following the terms including, include, in particular, for example
or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase
or term preceding those terms.

 

		2	financial Guarantee and indemnity

 

		2.1	Each Guarantor, severally and not jointly:

 

		(a)	guarantee to PMI and its successors, transferees and assignees the due and punctual performance of fifty
percent (50.0%) of all of KBI’s present and future obligations under and in connection with the Agreement if and when they become
due and performable in accordance with the terms of the Agreement (“Guaranteed Obligations”);

 

		(b)	shall pay to PMI from time to time within ten (10) business days after written demand fifty percent (50.0%)
of all monies (together with interest on such sum accrued before and after the date of demand until the date of payment) which have become
payable by KBI to PMI under the Agreement but which has not been paid at the time the demand is made.

 

		2.2	Each Guarantor, as a principal obligor and as a separate and independent obligation and liability from
its obligations and liabilities under clause 2.1(a) agrees severally (and not jointly) to indemnify and keep indemnified PMI in full and
on demand from and against fifty percent (50.0%) of all and any losses, costs and expenses suffered or incurred by PMI arising out of,
or in connection with:

 

		(a)	any failure by KBI to perform or discharge the Guaranteed Obligations; or

 

		(b)	any of the Guaranteed Obligations being or becoming totally or partially unenforceable by reason of illegality,
capacity, lack or exceeding of powers, ineffectiveness of execution or any other matter,

 

but the total liability
of each Guarantor under this clause 2.2 shall be no greater than fifty percent (50.0%) of KBI’s liability under the Agreement was
(or would have been, had the relevant obligation been fully enforceable).

 

		3	PMI protections

 

		3.1	This guarantee is and shall, at all times, be a continuing security until the Guaranteed Obligations have
been satisfied or performed in full, and is not revocable and is in addition to and not in substitution for and shall not merge with any
other right, remedy, guarantee or security which PMI may at any time hold for the performance of such obligations and may be enforced
without first having recourse to any such security.

 

		3.2	The Guarantors’ liability under this guarantee shall not be reduced, discharged or otherwise adversely
affected by:

 

		(a)	any arrangement made between KBI and PMI;

 

    62

     

    

 

		(b)	any alteration in the obligations undertaken by KBI whether by way of any addendum or variation or otherwise;

 

		(c)	any waiver or forbearance by PMI whether as to payment, time, performance or otherwise;

 

		(d)	the taking, variation, renewal or release of, the enforcement or neglect to perfect or enforce any right,
guarantee, remedy or security from or against KBI or any other person;

 

		(e)	any unenforceability, illegality or invalidity of any of the provisions of the Agreement or any of KBI’s
obligations under the Agreement, so that this guarantee shall be construed as if there were no such unenforceability, illegality or invalidity;

 

		(f)	any legal limitation, disability, incapacity or other circumstances relating to KBI, or any other person;

 

		(g)	the dissolution, amalgamation, reconstruction, reorganisation, change in status, function, control or
ownership, insolvency, liquidation or the appointment of an administrator or receiver of KBI or any other person; or

 

		(h)	any act, omission, matter or thing which would not have discharged or affected the liability of the Guarantors
had it been a principal obligor instead of a guarantor; or

 

		(i)	any other act or omission except an express written release of the Guarantors by PMI.

 

		3.3	The Guarantors waive any right they may have to require PMI (or any trustee or agent on its behalf) to
proceed against or enforce any other right or claim for payment against any person before claiming from either Guarantor under this guarantee.

 

		3.4	Until all amounts which may be or become payable under the Agreement or this guarantee have been irrevocably
paid in full, each Guarantor agrees it shall not, as a result of this guarantee or any payment performance under this guarantee:

 

		(a)	be subrogated to any right or security of PMI;

 

		(b)	claim or prove in competition with PMI against KBI or any other person with respect to amounts owed by
KBI to such Guarantor;

 

		(c)	demand or accept repayment of any monies or claim any right of contribution, set-off or indemnity (except
during times when no amounts are payable and delinquent under the Agreement or this guarantee), and

 

any sums received by a Guarantor in breach
of this clause 3.4 shall be held by such Guarantor in trust for and shall be promptly paid to PMI.

 

		3.5	This guarantee is in addition to and shall not affect nor be affected by or merge with any other judgment,
security, right or remedy obtained or held by PMI from time to time in respect of the discharge and performance of the Guaranteed Obligations
by KBI.

 

		3.6	No Guarantor may assign or novate this guarantee, or any rights or obligations hereunder, whether by operation
of contract, law or otherwise, except with the prior, express written consent of PMI, and any attempted assignment or novation by either
Guarantor in violation of this clause 3.6 shall be void.

 

    63

     

    

 

		4	Addendum or variation to the Agreement

 

The Guarantors authorise KBI and PMI to
make any addendum or variation to the Agreement, the due and punctual performance of which addendum and variation shall, subject to the
terms of this guarantee and, amongst other things, be guaranteed by the Guarantors in accordance with the terms of this guarantee.

 

		5	Payment

 

		5.1	All sums payable by a Guarantor under this guarantee shall be paid in full to PMI by that Guarantor in
the currency in which the Guaranteed Obligations are payable:

 

		(a)	without any set-off, condition or counterclaim whatsoever; and

 

		(b)	free and clear of any deductions or withholdings whatsoever except as may be required by law or regulation
which is binding on the Guarantor.

 

		5.2	If any deductions or withholding is required by any law or regulation to be made by a Guarantor, the amount
of the payment due from such Guarantor shall be increased to an amount which (after making any deduction or withholding) leaves an amount
equal to the payment which would have been due if no deduction or withholding had been required.

 

		5.3	Each Guarantor shall promptly deliver or procure delivery to PMI of all receipts issued to it evidencing
each deduction or withholding which it has made.

 

		5.4	Neither Guarantor shall, and neither Guarantor may, direct the application by PMI of any sums received
by PMI from a Guarantor under any of the terms in this guarantee.

 

		5.5	Each Guarantor shall pay interest on any sum due by that Guarantor under this guarantee, calculated as
2% a year above the Bank of England’s base rate from time to time from when the overdue sum became due, until it is repaid, whether
before or after judgment.

 

		5.6	PMI shall not be entitled to recover any amount in respect of interest under both this guarantee and any
arrangements entered into between KBI and PMI in respect of any failure by KBI to make any payment in respect of the Guaranteed Obligations.

 

		6	Costs

 

		6.1	Each Guarantor shall severally (and not jointly) on a full indemnity basis pay to PMI on demand fifty
percent (50.0%) of the amount of all costs and expenses (including legal and out-of-pocket expenses and any VAT on those costs and expenses)
which PMI incurs in connection with:

 

		(a)	the preservation, or exercise and enforcement, of any rights under or in connection with this guarantee
or any attempt to do so; and

 

		(b)	any discharge or release of this guarantee.

 

		6.2	Each party shall pay its own costs in connection with the negotiation, preparation, and execution of this
guarantee, and all documents ancillary to it.

 

		7	guarantor Representations and warranties

 

		7.1	Each Guarantor represents and warrants to PMI, severally and not jointly:

 

    64

     

    

 

		(a)	that it is a duly incorporated limited liability company and/or corporation, as applicable, validly existing
under the law of its jurisdiction of incorporation or organization and it has the power to own its assets and carry on its business as
it is being conducted;

 

		(b)	that it has full power under its constitution or equivalent governing documents in the jurisdiction in
which it is established to enter into this guarantee and to perform the obligations expressed to be assumed by it or contemplated by this
guarantee;

 

		(c)	that it has been duly authorised to enter into this guarantee and that it has taken all necessary corporate
action to authorise the execution, delivery and performance of this guarantee;

 

		(d)	that this guarantee when executed and delivered will constitute a legally binding obligation on it enforceable
in accordance with its terms;

 

		(e)	that all necessary consents and authorisations for the giving and implementation of this guarantee have
been obtained;

 

		(f)	that its entry into and performance of its obligations under this guarantee will not constitute any breach
of or default under any contractual, government or public obligation binding on it; and

 

		(g)	that it is not engaged in any litigation or arbitration proceedings that might affect its capacity or
ability to perform its obligations under this guarantee and to the best of its knowledge no such legal or arbitration proceedings have
been threatened or are pending against it.

 

		8	Confidentiality

 

		8.1	Each party undertakes that it shall not at any time during this guarantee or after its termination or
expiry, disclose to any person any confidential information concerning the business, affairs, customer, clients or suppliers or another
party or any of its Affiliates, except as permitted by clause 8.2.

 

		8.2	Each party may disclose another party’s confidential information:

 

		(a)	to its employees, officers, representatives, contractors, subcontractors or advisers who need to know
such information for the purposes of exercising the party’s rights of carrying out its obligations under or in connection with this
guarantee. Each party shall ensure that its employees, officers, representatives, contractors, subcontractors or advisers to whom it discloses
another party’s confidential information comply with this clause 8; and

 

		(b)	as may be required by law, a court of competent jurisdiction or any governmental or regulatory authority.

 

		8.3	No party shall use any other party’s confidential information for any purpose other than to exercise
its rights and perform its obligations under or in connection with this guarantee.

 

		8.4	Each party shall ensure that its employees, officers, representatives or advisers to whom it discloses
the other party’s confidential information comply with this clause 8.

 

		8.5	Notwithstanding the provisions of clause 10.4 to the contrary, this clause 8 is in addition to, and not
in lieu of, all other agreements of one or more of the parties containing confidentiality, non-disclosure, and similar provisions.

 

    65

     

    

 

		9	Notices

 

		9.1	A notice or other communication under or in connection with this guarantee shall be in writing and shall
be delivered personally, by courier or sent by email, to the party due to receive the notice or communication, to the person and at its
address or email address set out in clause 9.3 or another person, address or email address specified by that party by written notice to
the other parties.

 

		9.2	Unless there is evidence that it was received earlier, a notice or other communication is deemed given:

 

		(a)	if delivered personally or by courier, when left at the address set out in clause 9.3;

 

		(b)	if sent by email, when the email is sent, or, if this time falls outside business hours in the place of
receipt, when business hours resume, provided that a copy of the notice is sent by another method referred to in this clause 9.2 within
one (1) Business Day of sending the email unless an email acknowledgement (other than an automated response or “read receipt”)
of the notice is received by the sending party.

 

		9.3	The address referred to in clause 9.1 is:

 

If to PMI:

 

		Addressee:	[***]

 

		Address:	[***]

 

Email address:[***]

 

If to Bidi:

 

		Addressee:	[***]

 

		Address:	[***]

 

Email address:[***]

 

With a copy to (which
shall not constitute notice)

 

		Addressee:	[***]

 

		Address:	[***]

 

Email address:[***]

 

If to Kaival:

 

		Addressee:	Eric Mosser, COO Kaival Brands Innovations Group, Inc.

 

		Address:	4460 Old Dixie Highway, Grant, Florida 32949

 

    66

     

    

 

Email address:[***]

 

With a copy to (which
shall not constitute notice)

 

		Addressee:	[***]

 

		Address:	[***]

 

Email address:[***]

 

		10	general

 

		10.1	PMI shall be entitled by notice in writing to the Guarantors to assign the benefit of this guarantee at
any time to any person without the consent of either Guarantor being required and any such assignment shall not release either Guarantor
from liability under this guarantee.

 

		10.2	Each party shall, and shall use all reasonable endeavours to procure that any necessary third party shall,
promptly execute and deliver such documents and perform such acts as may be required for the purpose of giving full effect to this guarantee.

 

		10.3	No variation of this guarantee shall be effective unless it is in writing and signed by the parties (or
their authorised representatives).

 

		10.4	Except as otherwise set forth in clause 8.5, this guarantee constitutes the entire agreement between the
parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings
between them, whether written or oral, relating to its subject matter.

 

		10.5	Each party agrees that it shall have no remedies in respect of any statement, representation, assurance
or warranty (whether made innocently or negligently) that is not set out in this guarantee. Each party agrees that it shall have no claim
for innocent or negligent misrepresentation based on any statement in this guarantee.

 

		10.6	No failure or delay by a party to exercise any right or remedy provided under this guarantee or by law
shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other
right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other
right or remedy.

 

		10.7	If any provision or part-provision of this guarantee is or becomes invalid, illegal or unenforceable,
it shall be deemed deleted, but that shall not affect the validity and enforceability of the rest of this guarantee.

 

		10.8	If any provision or part-provision of this guarantee is deemed deleted under clause 10.7 the parties shall
negotiate in good faith to agree a replacement provision that, to the greatest extent possible, achieves the intended commercial result
of the original provision.

 

		10.9	No one other than a party to this guarantee shall have any right to enforce any of its terms. The parties
agree that any damages, losses and liabilities suffered, and costs and expenses incurred, by:

 

		(a)	PMI Indemnitees which are recoverable under the indemnities in the Agreement shall be deemed to have been
suffered or incurred by, and shall be recoverable by, PMI on their behalf; and

 

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		(b)	an Affiliate of a PMI under or in connection with the Agreement which would have been recoverable by PMI
had such party suffered or incurred them directly, shall be deemed to have been suffered or incurred by, and shall be recoverable by,
PMI on behalf of its Affiliate.

 

		10.10	This guarantee may be executed in any number of counterparts, including electronically by DocuSign or
AdobeSign, each of which shall constitute a duplicate original, but all the counterparts shall together constitute the one deed.

 

		11	law and Jurisdiction

 

		11.1	This guarantee and any dispute or claim (including non-contractual disputes or claims) arising out of
or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and
Wales.

 

		11.2	Each party irrevocably agrees that the courts of England and Wales shall have non-exclusive jurisdiction
to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this guarantee or its
subject matter or formation.

 

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IN WITNESS of which this agreement has been
executed and, on the date set out above, delivered as a deed.

 

	Executed
and delivered as a deed by PHILIP MORRIS PRODUCTS S.A. acting by [***], who, in accordance with the laws of the Switzerland, are
acting under the authority of the company 	 	..............................

                                                                    Authorised Signatory   ..............................

                                                                    Authorised Signatory  

 

GUARANTORS:

 

	Executed
and delivered as a deed by KAIVAL BRANDS INNOVATIONS GROUP, INC. acting by NIRAJKUMAR PATEL and ERIC MOSSER, who,
in accordance with the laws of the United States of America, are acting under the authority of the company	 	..............................

                                                                    Authorised Signatory   ..............................

                                                                    Authorised Signatory    

 

	Executed
and delivered as a deed by BIDI VAPOR, LLC acting by NIRAJKUMAR PATEL, who, in accordance with the laws of the United States
of America, is acting under the authority of the company	 	..............................

                                                                    Authorised Signatory    

  

    69

     

    

 

Schedule
9

IP Side Letter

 

Deed of Letter

 

1.                Bidi Vapor, LLC

   [***]

    United States of America

   (“Bidi”)

 

2.                 Kaival
Brands Innovations Group, Inc. 

    4460 Old Dixie Hwy 

   Grant, FL 32949 

   United States of America 

   (“Kaival”)

 

10 June, 2022

 

Dear Sir/Madam,

 

Re.: Philip Morris Products S.A. – Rights with respect to certain
intellectual property and distribution rights under the Licensing Agreement

 

As you, Bidi and Kaival, are aware, we, Philip Morris
Products S.A., [***] (“we”, “us”, “our” and “PMI”) have entered
into a deed of licensing agreement (the “Licensing Agreement”) with Kaival Brands International, LLC of 4460 Old Dixie
Hwy Grant, FL 32949, United States of America (“KBI”) dated on or around the date of this deed of letter, under which
KBI sublicenses various intellectual property rights to PMI on an exclusive basis in the Markets to enable PMI to, inter alia, make and
sell the Products, including, without limitation, disposable Nicotine E-Cigarettes as more fully set forth in the Licensing Agreement.
A copy of the Licensing Agreement is attached in the Schedule to this letter and is incorporated herein by this reference in its entirety
as if originally set forth herein.

 

We are writing to:

 

	 	●	Bidi as you are the owner of
the various intellectual property rights sub-licensed to PMI by KBI under the Licensing Agreement, which rights you have licensed to
KBI to enable the grant of the sub-licence to PMI under the Licensing Agreement;

 

	 	●	Kaival as you are Bidi’s
exclusive worldwide distributor of various ‘e-cigarette’ products and the owner of all the outstanding and issued membership
interests in KBI.

 

Capitalised terms used in this deed of letter that
are not defined herein shall have the meanings given to them in the Licensing Agreement.

 

In consideration of the payment of £1 by PMI
to each of you, Bidi and Kaival (the receipt and sufficiency of which is hereby acknowledged), it is hereby agreed that:

 

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		1.	Bidi, as the owner of the Licensed IPR, agrees that if a KBI Failure occurs (as such term is defined in
clause 2(a) of this Deed of Letter), then Bidi hereby: (a) grants PMI a direct license of the Licensed IPR (in the case of a License Failure);
and/or (b) shall perform KBI’s obligations, and/or hereby grants the same rights directly as contemplated, under the Relevant Clauses
to which that KBI Failure relates, in each case as to the foregoing (a) and (b), under the same terms and conditions as set forth in the
Licensing Agreement for the duration of that KBI Failure and to the extent (but only to the extent) of that KBI Failure, but except as
follows in each instance: (y) Bidi is not responsible for causing KBI, Kaival, or any of their Affiliates (other than Bidi and entities
controlled by Bidi, where applicable) to grant any rights or perform any obligation set out in (a) or (b); and (z) Bidi is entitled to
the same rights, accommodations, and protections as KBI that relate to the Relevant Clauses of the Licensing Agreement, mutatis mutandis
(the “Direct Agreement”). Notwithstanding the foregoing or any other provision in this Deed of Letter to the contrary:
(a) to the extent that any KBI Failure or Bidi’s performance of its obligations under this Deed of Letter leads to any monetary
damages, losses or liabilities, all claims, actions, and proceedings pertaining thereto (collectively, the “Monetary Losses”)
shall, for all purposes, be treated exclusively as Monetary Losses of KBI under the Licensing Agreement but subject always to the terms
and provisions thereto and any ancillary document arising out of or relating to the Licensing Agreement, including, but not limited to
the Deed of Guarantee dated of even date herewith between Bidi, Kaival, and PMI (the “Guarantee”) and in the event
of any conflict between the provisions of the Guarantee and this Deed of Letter, the provisions of the Guarantee shall prevail; (b) at
no time shall KBI’s Failure excuse or discharge PMI’s performance of any of its duties, obligations, or conditions set forth
in the Licensing Agreement or any ancillary documents arising out of or relating to the Licensing Agreement as long as PMI benefits from
the Direct Agreement as set out above; and (c) nothing shall be construed to require Kaival to provide the Direct Agreement to PMI.

 

		2.	For purposes of this Deed of Letter, the terms “KBI Failure” or “KBI’s
Failure” shall mean: (a) in the context of the Direct Agreement, that KBI is not able or fails to: (i) sub-license all or any
portion of the Licensed IPR to PMI (“License Failure”), and/or (ii) perform its obligations or grant the rights as
contemplated in the exclusive grant of license under clause 3 (to the extent it applies to Bidi), clauses 10.5, 17.3(a), 18.5, 19, 20.6
(other than clause 20.6(g)), 22.4, 22.8(c), 23.5, 28.1(c) (to the extent it is within Bidi’s power with respect to the exclusive
license) or 28.1(k) of the Licensing Agreement (“Relevant Clauses”), in each case of (i) and (ii) of this sentence,
pursuant to the terms and conditions of the Licensing Agreement due to any fact, condition, or circumstance that is not caused indirectly
or directly by breach of the Licensing Agreement, and any other written agreement relating thereto between PMI and/or its Affiliates on
the one hand, KBI, Kaival, Bidi and/or their Affiliates, on the other hand, gross negligence, wilful misconduct or bad-faith actions or
omissions by PMI or on PMI’s behalf; and (b) in the context of the Direct Grant of Limited International Distribution Rights, that
KBI is not able or fails to provide the Limited International Distribution Rights to PMI pursuant to the terms and conditions of the Licensing
Agreement due to any fact, condition, or circumstance that is not caused indirectly or directly by breach of the Licensing Agreement,
and any other written agreement relating thereto between PMI and/or its Affiliates on the one hand, KBI, Kaival, Bidi and/or their Affiliates,
on the other hand, gross negligence, wilful misconduct or bad-faith actions or omissions by PMI or on PMI’s behalf.

 

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		3.	Kaival, as the exclusive worldwide distributor (subject to the Licensing Agreement) of certain products
manufactured by Bidi as more particularly set forth in that certain Third Amended and Restated Exclusive Distribution Agreement dated
of even date herewith by and between Kaival and Bidi, has contributed to KBI the necessary international distribution rights so the Products
can be sold by PMI in the Markets (the “Limited International Distribution Rights”) and solely with respect
to the Limited International Distribution Rights granted to KBI by Kaival to allow KBI to fulfil its duties and obligations set forth
in the Licensing Agreement, Kaival hereby directly grants to PMI the Limited International Distribution Rights under the same terms as
set forth in the Licensing Agreement for the duration of KBI’s Failure and to the extent (but only to the extent) of KBI’s
Failure as defined in clause 2(b) of this Deed of Letter (the “Direct Grant of Limited International Distribution Rights”).
Notwithstanding the foregoing or any other provision in this Deed of Letter to the contrary: (a) any Monetary Losses shall, for all purposes,
be treated exclusively as Monetary Losses of KBI under the Licensing Agreement but subject always to the terms and conditions thereto
and any ancillary document arising out of or relating to the Licensing Agreement, including, but not limited to the Guarantee and in the
event of any conflict between the provisions of the Guarantee and this Deed of Letter, the provisions of the Guarantee shall prevail;
(b) at no time shall KBI’s Failure excuse or discharge PMI’s performance of any of its duties, obligations, or conditions
set forth in the Licensing Agreement or any ancillary documents arising out of or relating to the Licensing Agreement as long as PMI benefits
from the Direct Grant of Limited International Distribution Rights as set out above; and (c) nothing shall be construed to require Bidi
to provide the Direct Grant of Limited International Distribution Rights to PMI.

 

		4.	[***].

 

		5.	Bidi hereby confirms that it owns the Licensed IPR and that it will not, save with the prior written consent
of PMI (which consent shall not be unreasonably withheld, delayed, or conditioned) assign, transfer, surrender or abandon any of the registrations
or applications for Licensed IPR, or allow any of them to lapse, in each case to the extent that such actions (or failure to take such
actions, as applicable) would result in a breach of a representation, warranty, covenant, agreement or obligation (including, without
limitation, an obligation to procure) of KBI under the Licensing Agreement.

 

		6.	Kaival hereby confirms that it contributed the Limited International Distribution Rights to KBI in accordance
with the Capital Contribution Agreement dated even date herewith and that neither KBI nor Kaival, without the prior written consent of
PMI (which consent shall not be unreasonably withheld, delayed, or conditioned) shall assign, transfer, terminate, surrender, or abandon
the Limited International Distribution Rights in each case to the extent that such actions would result in breach of a representation,
warranty, covenant, agreement or obligation (including, without limitation, an obligation to procure) of KBI under the Licensing Agreement.

 

		7.	Kaival, Bidi, and PMI acknowledge and agree that the end of the Sell-Out Period following expiry or termination
of the Licensing Agreement shall void Bidi’s and Kaival’s obligations under clauses 1, 3, 4, 5, and 6 of this Deed of Letter.

 

		8.	PMI hereby: (a) makes each of the covenants set forth in clauses 3.6, 20.8, and 31 of the Licensing Agreement
to and for the benefit of Bidi (provided, however, that if KBI’s prior written consent is required for an action under clause 3.6
of the Licensing Agreement, this covenant does not require Bidi’s prior written consent therefor); and (b) acknowledges and agrees
that clause 42 of the Licensing Agreement does not preclude Bidi from receiving and exercising the rights under the Licensing Agreement
that are provided to Bidi pursuant to this Deed of Letter, and acknowledges that Bidi is an intended beneficiary thereof for all purposes
described in this Deed of Letter, provided that Bidi and KBI may not recover or claim from PMI the same loss, damage, liability, cost
or expense.

 

    72

     

    

 

		9.	This Deed of Letter cannot be varied or amended unless in writing and signed by PMI, Kaival, and Bidi.

 

		10.	Bidi and Kaival confirm that PMI and KBI are authorized to agree to any addendum or variation to the Licensing
Agreement in writing and that clauses 1, 3, and 4 above shall apply in relation to the Licensed IPR and the Limited International Distribution
Rights under the Licensing Agreement that are agreed between PMI and KBI.

 

		11.	The parties acknowledge and agree that damages alone would not be an adequate remedy for any breach of
this deed of letter.

 

		12.	This Deed of Letter is governed by English law and subject to the non-exclusive jurisdiction of the English
courts.

 

We would be grateful if you would confirm your agreement
to the terms set out in this Deed of Letter by signing below and returning this Deed of Letter.

  

    73

     

    

 

This Deed of Letter has been executed and, on the
date set out above, delivered as a deed.

 

Yours sincerely,

  

	Executed
and delivered as a deed by PHILIP MORRIS PRODUCTS S.A. acting by [***], who, in accordance with the laws of the Switzerland, are
acting under the authority of the company 	 	..............................

                                                                   
                                            Authorised Signatory

                                                                   

                                                                    ..............................

                                                                   
                                            Authorised Signatory    

 

	Executed
and delivered as a deed by KAIVAL BRANDS INNOVATIONS GROUP, INC. acting by NIRAJKUMAR PATEL and ERIC MOSSER, who,
in accordance with the laws of the United States of America, are acting under the authority of the company	 	 
                                            ..............................

                                                                   
                                            Authorised Signatory

                                                                   

                                                                   

                                                                    .............................

                                                                   
                                            Authorised Signatory    

 

	Executed
and delivered as a deed by BIDI VAPOR, LLC acting by NIRAJKUMAR PATEL, who, in accordance with the laws of the United States
of America, is acting under the authority of the company	 	..............................

                                                                   
                                            Authorised Signatory    

 

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Schedule

 

Licensing Agreement

 

[To
insert]

 

    75

     

    

 

Schedule
10

IP Waiver Letter

  

[***]

 

[***]

 

[***]

 

This letter is governed by English law and subject
to the exclusive jurisdiction of the English courts.

 

We would be grateful if you would confirm your agreement
to the terms set out in this deed of letter by signing below and returning this deed of letter.

 

Yours sincerely,

 

Philip Morris Products S.A.

 

Name: [***]

 

Title: Authorized Signatory

 

Signature: ............................................

 

Name: [***]

 

Title: Authorized Signatory

 

Signature: ............................................

 

[***]

 

76

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