Document:

Exhibit 10.1

 

Subscription Agreement

 

Inpixon 

2479 E. Bayshore Road 

Suite 195 

Palo Alto, CA 94303

 

Ladies and Gentlemen:

 

The undersigned service provider (the “Service
Provider”) hereby confirms and agrees with Inpixon, a Nevada corporation (the “Company”),
as follows:

 

1.       Subject
to the terms and conditions hereof, the Service Provider will accept from the Company and the Company will issue and sell to the
Service Provider such number of shares of common stock (the “Shares”), par value $0.001 per share (the
“Common Stock”), as is set forth on the signature page hereto (the “Signature Page”)
for a purchase price of $1.09 per Share.

 

2.       The
closing shall occur at such time and place (or remotely by facsimile or other electronic transmission) as shall be agreed upon
by the Service Provider and the Company, subject to the satisfaction of certain closing conditions set forth herein. The hour and
date of delivery and payment for the Shares is called the “Closing Date.”

 

3.       The
offering and sale of the Shares (the “Offering”) is being made pursuant to a registration statement on
Form S-3 (Registration File No. File No. 333-223960) (the "Registration Statement"), under the Securities
Act of 1933, as amended (the “Securities Act”), which became effective on June 5, 2018; and the prospectus
included therein and the related prospectus supplement (such prospectus, as supplemented by such prospectus supplement, the “Prospectus”
) dated April 13, 2020 containing certain information regarding the Shares and terms of the Offering that has been delivered to
the Service Provider on or prior to the date hereof. The Prospectus, together with the documents incorporated by reference therein,
is also referred to herein as the “General Disclosure Package.”

 

4.       On
the Closing Date, the Company shall deliver irrevocable instructions (the “Irrevocable Instructions”)
to Computershare Trust Company, N.A. (the “Transfer Agent”) authorizing the issuance of the Shares (subject
to proportionate adjustment for any stock split or combination or similar recapitalization event) (the “Closing Shares”)
on the Closing Date, via the Depository Trust Company’s (“DTC”) Deposit or Withdrawal at Custodian
system in accordance with the DTC instructions set forth therein.

 

5.       The
Company’s obligation to issue the Shares to the Service Provider shall be subject to (a) the Service Provider’s agreement
that the Shares will be issued in satisfaction of an aggregate of $200,000 due to the Service Provider from the Company for the
payment of services provided and (b) the accuracy of the representations and warranties made by the Service Provider herein and
the fulfillment of those undertakings herein of the Service Provider to be fulfilled prior to the Closing Date.

  

6.       The
Service Provider represents that (a) it has had full access to the General Disclosure Package prior to or in connection with its
receipt of this Subscription Agreement and is relying only on such information and documents in making its decision to purchase
the Shares, and (b) it is acquiring the Shares for its own account, or an account over which it has investment discretion, and
(c) it is not aware of any material nonpublic information concerning the Company or any of its securities (including the Stock)
and is entering into this Agreement in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1.

 

7.       The
Service Provider and the Company each has the requisite power and authority to enter into this Subscription Agreement and to consummate
the transactions contemplated hereby.

 

8.       Neither
the Company nor the Service Provider are making any other representations or warranties beyond those included herein.

 

9.     This
Subscription Agreement will be binding and irrevocable upon execution by the Service Provider; provided that the Shares are issued
in accordance with the terms hereof.

 

    

     

    

 

10.     All
covenants, agreements, representations and warranties herein will survive the execution of this Subscription Agreement and the
delivery of the Shares.

 

11.     On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Service Provider the following:

 

(i)       this
Subscription Agreement duly executed by the Company;

 

(ii)      the
Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act);

 

(iii)     the
Shares; and

 

(iv)     the
Irrevocable Instructions.

   

12.       All
notices or other communications required or permitted to be provided hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed e-mail, telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. The address for such notices and communications shall
be as follows:

 

If to the Company, to:

 

Inpixon  

2479 E. Bayshore Road  

Suite 195  

Palo Alto, CA 94303

Attn: Nadir Ali, CEO

Email: notices@inpixon.com

 

If to the Service Provider, at its address
on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in writing

 

13.       The
Company acknowledges that the only material, non-public information relating to the Company or its subsidiaries that the Company,
its employees or agents has provided to the Service Provider in connection with the Offering prior to the date hereof is the existence
of the Offering. The Service Provider shall not at any time attempt to exercise any influence over how, when or whether to exercise
the Rights pursuant to this Agreement.

 

14.       This
Subscription Agreement may be terminated by the Service Provider, as to Service Provider’s obligations hereunder only and
without effect whatsoever on the obligations of the Company, by notice to the Company, if a closing has not occurred and the Shares
or irrevocable instructions to the Transfer Agent authorizing the issuance of the Shares have not been delivered to the Service
Provider by the close of trading on the Nasdaq Stock Market on the Closing Date; provided, however, that no such termination will
affect the right of any party to sue for any breach by the other party.

 

15.       This
Subscription Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the
Service Provider. This Subscription Agreement will be governed by the internal laws of the State of New York, without giving effect
to the principles of conflicts of law. This Subscription Agreement may be executed in one or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute but one instrument, and signatures may be delivered
by facsimile or by e-mail delivery of a “.pdf” format data file. Notwithstanding the foregoing, this Agreement, may
not be amended, modified or terminated except with a written instrument signed by the Service Provider and the Company and the
Service Provider will be required to restate and reaffirm, as of the date of such amendment or modification, each of the representations
and warranties contained in Section 7 of this Agreement.

 

[signature page follows]

 

 

 

    

     

    

 

SIGNATURE PAGE

 

	Number of Shares	 183,486	 

 

	Purchase Price Per Share:	$	 1.09	 

 

	Aggregate Purchase Price:	$	 200,000	 

 

 

Please confirm that the foregoing correctly
sets forth the agreement between us by signing in the space provided below for that purpose.

 

Dated as of: April 13, 2020

 

 

 

MITCHELL SILBERBERG & KNUPP LLP

 

	By:	/s/ Nimish Patel	 

        
  

	Print Name:	 Nimish Patel	 

 

	Title:	 Partner	 

 

	Taxpayer Identification Number:	 *	 

 

Address: 2049 Century Park East, 18th Floor

 

  Los Angeles, CA 90067

 

  

DWAC Instructions for Shares:

 

	Name of DTC Participant:

(broker-dealer at which the account or accounts to be credited with the Shares are maintained)	*
	DTC Participant Number:	*
	Account Name:	*
	Account Number:	*
	Person to contact to initiate DWAC at closing:	 
	Name:	*
	Tel:	*
	Email:	*

 

 

    

     

    

 

 

SUBSCRIPTION AGREEMENT 

 

Agreed and accepted April 13, 2020

 

Inpixon 

 

	By:	 /s/ Nadir Ali	 
	 	Name: Nadir Ali	 
	 	Title: Chief Executive OfficerExhibit 10.1

 

NON-EXCLUSIVE
SUB-DISTRIBUTION AGREEMENT

THIS
NON-EXCLUSIVE SUB-DISTRIBUTION AGREEMENT (this “Agreement”) is entered into effect as of the 11th day of
April, 2020 (the “Effective Date”) by and between KAIVAL BRANDS INNOVATIONS GROUP, INC., a Delaware
corporation (“Distributor”), and COLONIAL WHOLESALE DISTRIBUTING, INC., a Florida corporation (“Sub-Distributor”).
Distributor and Sub-Distributor are each referred to herein as a “Party” and collectively, the “Parties.”

RECITALS

WHEREAS,
Bidi Vapor, LLC, a Florida limited liability company (“Manufacturer”), is in the business of developing electronic
nicotine delivery systems and related components (all such products whether now or hereafter made available for sale by Manufacturer
being hereinafter referred to as “Products”).

WHEREAS,
Distributor has entered into that certain Exclusive Distribution Agreement dated March 9, 2020 (as the same may be amended or
otherwise modified from time to time, the “Distribution Agreement”) with Manufacturer pursuant to which Manufacturer
has granted Distributor an exclusive worldwide right to distribute the Products for sale and resale to both retail level customers
(“Retail Customers”) and non-retail level customers, including without limitation, to wholesale customers and
sub-distributors (“Non-Retail Customers”).

WHEREAS,
subject to the terms and conditions of this Agreement, Sub-Distributor wishes to be appointed, and Distributor is willing to appoint
Sub-Distributor, as a non-exclusive sub-distributor of the Products solely to Non-Retail Customers (“Non-Retail Customers”)
located within the Continental United States (the “Territory”; all Non-Retail Customers located within the
Territory being hereinafter referred to as “Authorized Customers”).

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual representations and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Distributor and Sub-Distributor,
intending to be legally bound, hereby agree as follows:

1.                 
APPOINTMENT; NO EXCLUSIVITY; MARKETING AND SUPPORT.

A.               
Appointment; No Exclusivity. Subject to the terms and conditions set forth in this Agreement, Distributor hereby appoints
Sub-Distributor as a non-exclusive sub-distributor of the Products solely to Authorized Customers. Sub-Distributor accepts the
appointment as one of Distributor’s non-exclusive sub-distributors of the Products solely to Authorized Customers and agrees
to buy for resale, upon the terms and conditions set forth herein, Products in such quantities as Sub-Distributor shall need to
properly service the market comprised solely of Authorized Customers. Distributor represents and warrants that the appointment
of and sale of Products to Sub-Distributor under this Agreement does not violate any obligations or contracts of Distributor.
As a condition of appointment hereunder, Sub-Distributor agrees not to represent or sell other products which Distributor may
reasonably determine to be competitive with the Products, without written approval from Distributor, to be given or withheld in
Distributor’s sole and absolute discretion. For purposes of clarification, during the term of this Agreement (i) Distributor
shall be free to sell any Products to any Non-Retail Customer located within the Territory (i.e., Sub-Distributor’s rights
hereunder are non-exclusvie) and (ii) Sub-Distributor will not directly sell any Products to any Retail Customer anywhere in the
world or to any Non-Retail Customer located outside of the Territory.

    	 	1	 

     

    

 

B.                
Marketing and Support. Distributor will be solely responsible to provide Sub-Distributor with all branding, logos and marketing
materials to be utilized by Sub-Distributor in connection with Sub-Distributor’s marketing and promotion of the Products;
provided, however, Sub-Distributor shall bear all expenses related to reproduction and distribution of the same. Sub-Distributor
agrees to use its best efforts to promote, develop a market, sell, and distribute the Products to Authorized Customers. Among
such other actions as may be necessary to generate sales of the Products, Sub-Distributor will perform at its expense and to the
reasonable satisfaction of Distributor the following duties:

		i.	Sub-Distributor
                                         will engage in sales promotion activities in which Products shall be designated by their
                                         correct names and identified as Products of Manufacturer being marketed by Sub-Distributor
                                         as an independent distributor.

		ii.	Sub-Distributor
                                         will process all sales by Sub-Distributor to Authorized Customers.

		iii.	Sub-Distributor
                                         shall at all times conduct its business in a manner that will reflect favorably on Manufacturer,
                                         Distributor and the Products and will not engage in any deceptive, misleading, illegal
                                         or unethical business practice. In performing its obligations hereunder, Sub-Distributor
                                         agrees not to make any representations or give any warranties or guarantees to any person
                                         with respect to the Products, other than in compliance with Section 7.A. hereof or otherwise
                                         expressly authorized in writing by Distributor.

		iv.	Sub-Distributor
                                         will comply with all applicable laws and regulations and will not assist or participate
                                         in any violation of laws or regulations applicable to Manufacturer, Distributor or Sub-Distributor.

Sub-Distributor
shall be responsible for all expenses incurred by it in connection with the implementation and performance of its duties and obligations
under this Agreement, including, without limitation: (i) salaries or compensation for its personnel; (ii) costs and expenses associated
with establishing and maintain its sales organization and offices; and (iii) marketing, advertising and promotion expenses.

2.                 
PURCHASE ORDERS; PRICING.

A.               
Purchase Orders. Sub-Distributor shall order Products in accordance with the terms and conditions of this Agreement. Each
order for the purchase of Products (a “Purchase Order”) must be submitted to Distributor by Sub-Distributor
by email or Distributor’s electronic data interchange (EDI) system. Each Purchase Order shall specify (i) the quantity of
Products being ordered, (ii) the applicable Wholesale Minimum Price for the Products ordered, (iii) the price to be paid by Sub-Distributor
to Distributor for the Products ordered, (iv) payment terms granted by Distributor, and (v) the requested receipt date and delivery
instructions for the applicable Products ordered. Receipt dates must be during the term of this Agreement, except Sub-Distributor
may request, subject to Distributor’s acceptance in Distributor’s sole and absolute discretion, a Purchase Order with
a requested receipt date after the expiration or termination of this Agreement, in which case, if accepted by Distributor, the
terms and conditions of this Agreement shall apply to such shipment, but under no circumstances should such shipment be deemed
to be or construed as being a renewal or extension of this Agreement or the exclusivity rights granted to Sub-Distributor herein.
The Parties agree that to the extent that any of the terms and conditions of this Agreement conflict or are inconsistent with
the terms or conditions of any Purchase Order submitted by Sub-Distributor, the terms and conditions of this Agreement shall prevail
and control to the extent of any such conflict or inconsistency, unless the Purchase Order containing such conflicting or inconsistent
terms and conditions is countersigned by Distributor, in which case the terms and conditions set forth in such Purchase Order
shall prevail and control to the extent of any such conflict or inconstancy.

    	 	2	 

     

    

B.                
Acceptance of Purchase Order. A Purchase Order submitted by Sub-Distributor shall be deemed to have been accepted by, and
shall be binding upon, Distributor when it is countersigned by Distributor or if it is not rejected by Distributor, in whole or
in part, by written notice to Sub-Distributor sent within five (5) business days of its receipt by Distributor. Notwithstanding
anything contained herein to the contrary, Distributor may only reject, cancel, or delay any Purchase Order placed by Sub-Distributor,
whether or not such Purchase Order has been previously accepted by Distributor, pursuant to Section 3.B. below. In the event Distributor
is unable to fill all of a Purchase Order for any reason, it shall promptly notify Sub-Distributor and Sub-Distributor shall have
the right, in its discretion, to cancel the subject Purchase Order. Sub-Distributor may change or cancel any of its Purchase Orders
without penalty so long as Sub-Distributor provides written notice to Distributor and the Products have not yet been shipped;
provided that Sub-Distributor shall pay to Distributor a fee of twenty five percent (25%) of the aggregate purchase price of the
Products that are subject to any Purchase Order which has been materially changed or canceled by Sub-Distributor.

C.               
Invoices and Payment Terms. Distributor shall send Sub-Distributor invoices via mail or email for each shipment. Sub-Distributor
shall notify Distributor in writing if Sub-Distributor disputes any charges set forth on an invoice within fifteen (15) calendar
days after receipt of such invoice, specifying in reasonable detail the items disputed and basis for the dispute. Thereafter,
the Parties will work in good faith to resolve such dispute as quickly as is reasonably possible. If any such dispute is not resolved
within thirty (30) calendar days after Sub-Distributor’s receipt of the applicable invoice, then Distributor may suspend
any further shipments of Products under this Agreement until such time as the dispute is resolved and all amounts agreed upon
by the Parties to be due are paid in full. All undisputed amounts on each invoice are due and payable within thirty (30) calendar
days from the date of Sub-Distributor’s receipt of the invoice. Payments due hereunder must be made, at Sub-Distributor’s
option, by ACH, wire transfer, certified check or such other method as may be agreed to by the Parties. Distributor reserves the
right to change or modify payment terms upon thirty (30) calendar days’ written notice to Sub-Distributor at any time following
a default by Sub-Distributor of its payment obligations under this Agreement with such changes or modifications to be effective
for Purchase Orders submitted after such thirty (30) calendar day period. Invoices will be issued upon shipment of the Product
to Sub-Distributor or to Sub-Distributor’s customer via direct shipment.

D.               
Prices; Price Reductions. Distributor has a legitimate interest in ensuring that a minimum price be maintained for all sales
by Sub-Distributor of its Products. Accordingly, Distributor will establish minimum pricing for all sales by Sub-Distributor of
its Products to Authorized Customers (“Wholesale Minimum Price”) and Sub-Distributor will not sell any Products
to Authorized Customers below the applicable Wholesale Minimum Price. The initial Wholesale Minimum Price for the Products are
included as Exhibit A attached hereto. Sub-Distributor agrees to pay Distributor the price per Product identified in Exhibit
A attached hereto. Distributor retains the right to make changes to Wholesale Minimum Pricing and Sub-Distributor pricing
upon providing not less than three (3) days’ prior written notice to Sub-Distributor. Any price reduction to the Wholesale
Minimum Pricing or Sub-Distributor pricing with respect to affected Products shall apply to Purchase Orders that have not yet
been accepted or deemed accepted by Distributor and Purchase Orders thereafter submitted by Sub-Distributor. Any price increase
to the Wholesale Minimum Pricing or Sub-Distributor pricing with respect to affected Products shall apply to Purchase Orders thereafter
submitted by Sub-Distributor; provided that Sub-Distributor shall have the right, at its option, to cancel, in whole or in part,
any outstanding Purchase Orders for affected Products not yet accepted by Distributor. Prices do not include, and Distributor
shall not be responsible for any required federal, state or local sales or other taxes, duties, export or custom charges, VAT
charges, brokerage or other fees.

    	 	3	 

     

    

E.                
Past Due Amounts. If any undisputed amount due Distributor by Sub-Distributor, for any reason, becomes past due, Distributor
shall provide written notice to Sub-Distributor and, if such amounts remain outstanding for fifteen (15) calendar days following
receipt of such notice, Distributor may at its option and without further notice withhold further shipments or deliveries of Products
under this Agreement until such past due invoices are paid in full.

F.                
Taxes. Sub-Distributor shall be responsible for any national, state or local sales, use, value added, or other tax, tariff,
duty or assessment levied or imposed by the United States or any foreign governmental authority arising out of or related to any
of the transactions contemplated by this Agreement, including sales of Product to Sub-Distributor, other than taxes based upon
Distributor’s income. Sub-Distributor must pay directly, or reimburse Distributor for the amount of such sales, use, value
added or other tax, tariff, duty or assessment which Distributor is at any time obligated to pay or collect with respect to or
arising out of the sale of Products under this Agreement.

		3.	SHIPMENTS;
                                         PRODUCTS.

A.       Shipment
Terms; Title and Risk of Loss. All Products purchased by Sub-Distributor under this Agreement will be packaged for shipment
in Distributor’s and/or Manufacturer’s standard containers, marked for shipment to either Sub-Distributor or the applicable
Authorized Customer at the address specified by Sub-Distributor in the Purchase Order (the applicable destination being hereinafter
referred to as the “Destination”). All costs of shipment shall be paid by Distributor. Title and risk of loss
will pass F.O.B. Destination. Distributor shall ship Products on or before the requested receipt date designated in a Purchase
Order (provided that such receipt date is not less than twenty (20) business days after the Purchase Order is received by Distributor)
and shall promptly notify Sub-Distributor when Distributor knows or has reason to believe that a shipment will not be delivered
by the requested receipt date. Any expense for any special packaging or any special delivery requested by Sub-Distributor shall
be borne by Sub-Distributor.

B.       Distributor’s
Right to Delay or Cancel. Notwithstanding Distributor’s obligations in this Agreement, Distributor may refuse, cancel
or delay any shipment of Products when Sub-Distributor is delinquent in any payment for more than (30) calendar days, or when
Sub-Distributor is in material breach of its obligations under this Agreement which has not been cured pursuant to Section 11.A.

C.       Acceptance
of Shipments. Sub-Distributor shall have ten (10) business days from the date of arrival of the shipment of the Products at
the applicable Destination to inspect the Products and notify Distributor in writing of any discrepancies with respect to such
Products, including but not limited to any discrepancies in the quantity or quality of the Products. Products with respect to
which Sub-Distributor does not notify Distributor of any discrepancies in writing shall be deemed accepted by Sub-Distributor.

    	 	4	 

     

    

 

D.
       Adding or Deleting Products; Manufacturing Changes to the Products. Distributor
shall have the right at any time upon seven (7) calendar days’ prior written notice to Sub-Distributor to add or delete
Products. Should Distributor want to make any changes to the Products, it shall first notify the Sub-Distributor at least seven
(7) calendar days before the change is implemented, and such changes shall be agreed to by the Parties in writing before shipment
of any Products which include any such changes. Notwithstanding the foregoing, for changes required by regulatory or certification
authorities or otherwise deemed necessary by Distributor for any reason, including health, safety, welfare, technology intellectual
property, trade secret, competitive, materials sourcing, or other matters, Distributor will notify Sub-Distributor at least three
(3) calendar days before the change is implemented, but Sub-Distributor’s approval of such changes shall not be required.

		4.	INTELLECTUAL
                                         PROPERTY RIGHTS.

A.               
Manufacturer’ Marks. Subject to the terms and conditions of this Agreement and the Distribution Agreement, during the
term of this Agreement, Distributor hereby grants to Sub-Distributor a revocable, sublicensable, non-transferable, non-exclusive,
limited license to use Manufacturer’s logos, trademarks, and trade names, together with all branding and marketing materials
created by or on behalf of Manufacturer in connection with the Products (collectively the “Manufacturer IP”),
solely in connection with the marketing, advertisement and sale of the Products to Authorized Customers. Such license shall immediately
terminate upon the expiration or termination of this Agreement. Sub-Distributor shall strictly comply with all standards of use
for the Manufacturer IP and must at all times display appropriate trademark and copyright notices as instructed by Distributor.
Sub-Distributor acknowledges and agrees that the Manufacturer IP and other intellectual property provided to Sub-Distributor by
Distributor, if any, are the sole and exclusive property of Manufacturer and/or Distributor, as applicable. Sub-Distributor shall
not acquire any right, title or interest under this Agreement in any patent, copyright, Manufacturer IP or other intellectual
property right of any kind of either Manufacturer or Distributor. No implied license, patent, copyright or other intellectual
property right of Manufacturer or Distributor is granted under this Agreement or otherwise. During the term of this Agreement
and thereafter, Sub-Distributor shall not do anything that will in any manner infringe, impeach, dilute or lessen the value of
the Manufacturer IP, patents, copyrights or other intellectual property of either Manufacturer or Distributor or the goodwill
associated therewith or that will tend to prejudice the reputation of the Manufacturer or Distributor or the sale of any Products.

B.       Sub-Distributor
Marks. Subject to the terms and conditions of this Agreement, during the term of this Agreement, Sub-Distributor hereby grants
Distributor a non-exclusive, royalty free license to use Sub-Distributor’s logos, trademarks, and trade names (the “Sub-Distributor
Marks”) on Distributor’s web sites and marketing materials. Such license shall immediately terminate upon the
expiration or termination of this Agreement. Distributor shall strictly comply with all standards of use for the Sub-Distributor
Marks and must at all times display appropriate trademark and copyright notices as instructed by Sub-Distributor. Distributor
acknowledges and agrees that the Sub-Distributor Marks and other intellectual property provided to Distributor by Sub-Distributor,
if any, are the sole and exclusive property of Sub-Distributor. Distributor shall not acquire any right, title or interest under
this Agreement in any patent, copyright, Sub-Distributor Marks or other intellectual property right of any kind of Sub-Distributor.
No implied license, patent, copyright or other intellectual property right of Sub-Distributor is granted under this Agreement
or otherwise. During the term of this Agreement and thereafter, Distributor shall not do anything that will in any manner infringe,
impeach, dilute or lessen the value of the Sub-Distributor Marks, patents, copyrights or other intellectual property of Sub-Distributor
or the goodwill associated therewith or that will tend to prejudice the reputation of the Sub-Distributor.

    	 	5	 

     

    

  

		5.	CONFIDENTIAL
                                         INFORMATION.

 

A.               
Confidential Information. The Parties acknowledge and agree that during the term of this Agreement, each may receive confidential
information from the other Party. “Confidential Information” shall mean (i) information relating to a Party’s
and its affiliates’ products or business including, but not limited to, the business plans, financial records, customers,
suppliers, products, product samples, strategies, inventions, procedures, sales aids or literature, technical data, advice or
knowledge, contractual agreements, pricing, price lists, product white papers, plans, designs, specifications, and know-how or
other intellectual property, that may be at any time furnished, communicated or delivered by either Party to the other Party whether
in oral, tangible, electronic or other form and (ii) all other non-public information provided by one Party to the other including,
but not limited, to financial, technical and business information, and all non-promotional materials furnished by one Party to
another.

B.                
Exceptions. The “Receiving Party” shall not have any obligations to preserve the confidential nature of
any Confidential Information that (a) Receiving Party can demonstrate by competent evidence was rightfully in the Receiving Party’s
possession before receipt from the “Disclosing Party”; (b) is or becomes a matter of public knowledge through
no fault of the Receiving Party; (c) is rightfully received by Receiving Party from a third party without, to the best of Receiving
Party’s knowledge, a duty of confidentiality; (d) is independently developed by Receiving Party without use of the Confidential
Information; or (e) is disclosed by Receiving Party with Disclosing Party’s prior written approval.

C.               
Use of Confidential Information; Standard of Care. The Receiving Party shall maintain the Confidential Information in confidence
and disclose the Confidential Information only to its employees, subcontractors and consultants who have a need to know such Confidential
Information in order to fulfill the business affairs and transactions between the Parties contemplated by this Agreement and who
are under confidentiality obligations no less restrictive as, or who have been advised of the confidentiality obligations set
forth in, this Agreement. The Receiving Party shall remain responsible for breaches of this Agreement arising from the acts of
its employees, subcontractors and consultants to whom it provides the Disclosing Party’s Confidential information. The Receiving
Party shall protect Confidential Information by using the same degree of care as Receiving Party uses to protect its own information
of a like nature, but no less than a reasonable degree of care, to prevent the unauthorized use, disclosure, dissemination, or
publication of the Confidential Information. The Receiving Party agrees not to use the Disclosing Party’s Confidential Information
for its own purpose other than in connection with the transactions contemplated by this Agreement or for the benefit of any third
party, without the prior written approval of the Disclosing Party. The Receiving Party shall promptly return or certify destruction
of all copies of Confidential Information upon request by the Disclosing Party or upon the expiration or earlier termination of
this Agreement.

    	 	6	 

     

    

 

D.               
Equitable Relief. The Receiving Party hereby agrees and acknowledges that any breach or threatened breach of this Agreement
regarding the treatment of the Confidential Information may result in irreparable harm to the Disclosing Party for which there
may be no adequate remedy at law. In addition to other remedies provided by law or at equity, in such event the Disclosing Party
shall be entitled to seek an injunction, without bond, preventing any further breach of this Agreement by the Receiving Party.

6.                 
INSURANCE. Distributor shall maintain, during the term of this Agreement, Commercial General Liability Insurance with minimum
limits, including under any General Liability Umbrella Policies, of not less than $2,000,000 combined single limit for bodily
injury and property damage on Products purchased by Sub-Distributor for resale. Distributor shall use commercially reasonable
efforts to provide Sub-Distributor with thirty (30) calendar days’ prior written notice of any change or cancellation in
any applicable insurance policies.

Sub-Distributor
shall maintain, during the term of this Agreement, Commercial General Liability Insurance with minimum limits, including under
any General Liability Umbrella Policies, of not less than $2,000,000 combined single limit for bodily injury and property damage.
Sub-Distributor shall use commercially reasonable efforts to provide Distributor with thirty (30) calendar days’ prior written
notice of any change or cancellation in any applicable insurance policies.

7.                 
WARRANTY; RECALL.

A.               
Warranty. Distributor warrants to Sub-Distributor, for a period of one year from the date of delivery by Distributor to the
intended recipient thereof, that any Products delivered by Distributor pursuant to this Agreement shall conform in all material
respects to the written specifications for such Products, a copy of which is attached hereto as Exhibit B, and shall be
free of defects in materials and workmanship. Distributor further warrants to Sub-Distributor that it has title to the Products
to be conveyed hereunder and has the right to sell the same and that at the time of delivery, such Products shall be free of any
security interest or other lien or any other encumbrances whatsoever (the warranties provided in the preceding two sentences being
hereinafter referred to as the “Limited Warranty”). Except for the Limited Warranty, Distributor makes no warranties
or representations to Sub-Distributor or any other person with respect to the Products or any services provided to Sub-Distributor
or any other person. Distributor may not change any of the terms of the Limited Warranty at any time, without written consent
from Sub-Distributor unless Distributor notifies Sub-Distributor in writing at least one hundred and twenty (120) calendar days
prior to any such change. Any such change shall not apply to any Products sold to or ordered by Sub-Distributor prior to the change.
Sub-Distributor will not alter the Limited Warranty, warranty disclaimers and limitation of liability without the prior written
authorization of Distributor, nor extend or make any additional warranty or representation regarding the Products unless expressly
authorized by Distributor.

    	 	7	 

     

    

 

THE
LIMITED WARRANTY REFERRED TO IN THIS SECTION IS THE ONLY WARRANTY, EXPRESS OR IMPLIED, THAT DISTRIBUTOR MAKES WITH RESPECT TO
THE PRODUCTS. DISTRIBUTOR SPECIFICALLY DISCLAIMS ALL OTHER IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

B.                
Warranty Claims. The Limited Warranty is effective only if Sub-Distributor gives prompt written notice to Distributor of any
alleged breach of the Limited Warranty, which notice shall specifically describe the problem and shall state the date of sale
and name and location of the recipient of the Product originally shipped by Distributor. Notwithstanding anything to the contrary
contained herein, Distributor shall have no obligation under the Limited Warranty unless it receives such notice within thirty
(30) days following the expiration of the warranty period. In the event of any breach of the Limited Warranty Distributor’s
sole obligation is to replace each non-conforming Product within a reasonable period of time and to pay for the costs of shipment
to the original recipient of the Product or as otherwise specified by Sub-Distributor.

 

C.               
Recall. In the event that: (i) any applicable federal, state or foreign regulatory authority should issue a request, directive
or order that a Product be recalled; (ii) a court of competent jurisdiction orders such a recall; or (iii) Distributor determines
that the Product represents a risk of injury or customer deception or is otherwise defective and that the recall of a Product
is appropriate (“Recall”), Distributor shall have sole right and responsibility for implementing the Recall.
Sub-Distributor will provide cooperation and assistance to Distributor in connection therewith, as may be reasonably requested
by Distributor. Distributor shall be solely responsible for all expenses affecting such Recall (including any reasonable out-of-pocket
expenses incurred by Sub-Distributor in connection with such cooperation, as directed in writing by Distributor).

 

		8.	INDEMNIFICATION.

A.               
Indemnity Obligations for Intellectual Property Infringement. Distributor agrees to defend, indemnify and hold harmless Sub-Distributor
from and against any and all claims, losses, damages, suits, expenses (including reasonable attorneys’ fees) and costs (collectively
“Claims”) brought or alleged by a third party that the Manufacturer IP or any Products sold to Sub-Distributor
infringe any U.S. patent, trademark or copyright. Sub-Distributor shall reasonably cooperate with Distributor, its insurance company
and its legal counsel in its defense of such Claims. If the use or sale of any Products furnished under this Agreement is enjoined
as a result of a Claim, Distributor shall either obtain on behalf of the Sub-Distributor the right to continue to use or sell
such Products, substitute an equivalent product reasonably acceptable to Sub-Distributor in its place, or reimburse Sub-Distributor
the purchase price of the Products, costs incurred by Sub-Distributor as a result of such cancellation, and any and all losses
or costs incurred as a result of Sub-Distributor’s breach of any purchaser order or other agreement with its customers.
Notwithstanding the foregoing, this indemnity shall not apply or cover any Claims based upon any infringement or alleged infringement
of any patent, trademark or copyright resulting from the alteration or unauthorized use of any Manufacturer IP or Products by
Sub-Distributor or a Sub-Distributor representative or the combination of any Products with any other products or the combination
of any Manufacturer IP with any other mark, if such infringement claim would have been avoided but for such alteration, combination
or unauthorized use by Sub-Distributor or any Sub-Distributor representative. Sub-Distributor shall also have the right to participate
in the defense of any such action and have the right to hire its own legal counsel at Sub-Distributor’s expense. This indemnity
shall not cover any Claims in which Sub-Distributor fails to provide Distributor with prompt written notice of the Claim which
lack of notice materially prejudices the defense of the Claim.

    	 	8	 

     

    

B.                
Sub-Distributor agrees to defend, indemnify and hold harmless Distributor from and against any and all Claims brought or alleged
by a third party based upon any infringement or alleged infringement of any patent, trademark or copyright resulting from the
alteration or unauthorized use of any Manufacturer IP or Products by Sub-Distributor or a Sub-Distributor representative or the
combination of any Products with any other products or the combination of any Manufacturer IP with any other mark, if such infringement
claim would have been avoided but for such alteration, combination or unauthorized use by Sub-Distributor or any Sub-Distributor
representative. Distributor shall reasonably cooperate with Sub-Distributor, its insurance company and its legal counsel in its
defense of such Claims. Distributor shall also have the right to participate in the defense of any such action and have the right
to hire its own legal counsel at Sub-Distributor’s expense. This indemnity shall not cover any Claims in which Distributor
fails to provide Sub-Distributor with prompt written notice of the Claim which lack of notice materially prejudices the defense
of the Claim.

C.               
Distributor’s Additional Indemnity Obligations. Notwithstanding anything herein to the contrary, in addition to all
other rights and remedies available at law or in equity, Distributor hereby agrees to defend, indemnify and hold harmless Sub-Distributor
from and against any and all third party Claims (i) arising out of any defects in any Products existing at the time such Products
are sold by Distributor to Sub-Distributor, or (ii) arising out of the negligent acts or omissions or willful misconduct of Distributor,
its employees, agents or representatives with respect to the Products or its performance of this Agreement. Sub-Distributor shall
reasonably cooperate with Distributor, its insurance company and its legal counsel in its defense of such Claims. Sub-Distributor
shall also have the right to participate in the defense of any such action and have the right to hire its own legal counsel at
Sub-Distributor’s expense. This indemnity shall not cover any Claims in which Sub-Distributor fails to provide Distributor
with prompt written notice of the Claim which lack of notice materially prejudices the defense of the Claim.

D.               
Sub-Distributor’s Indemnity Obligations to Distributor. Sub-Distributor hereby agrees to defend, indemnify and hold
harmless Distributor, its affiliates and their respective officers directors, employees and agents from and against any and all
Claims (i) arising out of the negligent acts or omissions or willful misconduct of Sub-Distributor, its employees, agents or representatives
with respect to its performance of this Agreement, sale of Products, or otherwise, (ii) arising out of the alteration or modification
of the Products or Distributor IP by Sub-Distributor or its employees, agents or representatives, or (iii) alleging that the Sub-Distributor’s
Marks infringe or otherwise violate the intellectual property rights of a third party. This indemnity shall not cover any Claims
in which Distributor fails to provide Sub-Distributor with prompt written notice which lack of notice prejudices the defense of
the Claim. Distributor shall also have the right to participate in the defense of any such action and have the right to hire its
own legal counsel at Distributor’s expense.

    	 	9	 

     

    

E.                
Settlement of Claims. In no event shall a party seeking or entitled to indemnification from a Party hereunder settle, compromise,
agree to a judgment or take any similar action with respect to any Claim without the written consent of the Party from whom indemnification
is sought.

9.                 
LIMITATION OF LIABILITY.

EXCEPT
FOR THE PARTIES’ INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 OF THIS AGREEMENT AND CONFIDENTIALITY OBLIGATIONS UNDER SECTION
5 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BY LIABLE UNDER THIS AGREEMENT TO THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL,
INDIRECT, STATUTORY, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE, LOSS OF TIME, INCONVENIENCE,
LOSS BUSINESS OPPORTUNITIES, DAMAGE TO GOOD WILL OR REPUTATION, OR LOSS OF DATA, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED
ON BREACH OF CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES
COULD HAVE BEEN REASONABLY FORESEEN.

10.             
TERM. This Agreement shall commence on the Effective Date and shall end on the first anniversary of the Effective Date (the
“Initial Term”) unless earlier terminated pursuant to Section 11 hereof. The Initial Term shall automatically
renew for successive renewal terms of one (1) year each (each, a “Renewal Term”), unless either Party provides
the other Party with written notice of its intention not to renew the Initial Term or any Renewal Term, as applicable, at least
sixty (60) days prior to the expiration of the then current Initial Term or Renewal Term.

11.             
TERMINATION.

A.               
Termination for Breach. Either Party may terminate this Agreement at any time in the event of a material breach by the other
Party that remains uncured after thirty (30) calendar days following written notice thereof. Such termination shall be effective
immediately and automatically upon the expiration of the applicable notice period, without further notice or action by either
Party. Termination shall be in addition to any other remedies that may be available to the non-breaching Party.

B.                
Termination for Financial Insecurity. Either Party may terminate this Agreement and any outstanding Purchase Orders (to the
extent Products have not already been delivered to the carrier for shipment) immediately at its option upon written notice if
the other Party: (i) becomes or is declared insolvent or bankrupt; (ii) is the subject of a voluntary or involuntary bankruptcy
or other proceeding related to its liquidation or solvency, which proceeding is not dismissed within sixty (60) calendar days
after its filing; (iii) ceases to do business in the normal course; or (iv) makes an assignment for the benefit of creditors.
This Agreement shall terminate immediately and automatically upon any determination by a court of competent jurisdiction that
either Party is excused or prohibited from performing in full all obligations hereunder, including, without limitation, rejection
of this Agreement pursuant to 11 U.S.C. §365.

    	 	10	 

     

    

C.               
Termination for Failure to Meet Minimum Purchase Commitments. Distributor may terminate this Agreement at any time upon written
notice to Sub-Distributor if Sub-Distributor fails to satisfy any of the following minimum purchase obligations: (i) purchase
by Sub-Distributor of not less than 500,000 Units from Distributor on or before April 30, 2020, and (ii) purchase by Sub-Distributor
of not less than 1,000,000 Units from Distributor for each subsequent fiscal quarter throughout the balance of the term. At Distributor’s
option, Distributor may elect to suspend a decision to terminate this Agreement as permitted under this Section 11.C. for an indefinite
period, but may, in the meantime upon written notice to Sub-Distributor, terminate Sub-Distributor’s rights under Section
1.A. above. A used herein, a “Unit” means each Product as may ultimately be packaged and sold by Distributor
to a Retail Customer.

D.               
Cross Termination with the Distribution Agreement. Sub-Distributor acknowledges and agrees that the appointment by Distributor
of Sub-Distributor of the distribution rights set forth in this Agreement are dependent upon the continuation of the Distribution
Agreement. In the event the Distribution Agreement expires or is otherwise terminated for any reason, this Agreement shall immediately
and automatically terminate without any further action of the Parties.

E.                
Obligations upon Termination. Upon termination of this Agreement, Sub-Distributor shall cease to be an authorized sub-distributor
of the Products and (i) all unaccepted Purchase Orders may be cancelled by Sub-Distributor or Distributor without liability, and
(ii) Sub-Distributor may, at its option, resell and deliver to Distributor, free and clear of all liens and encumbrances, any
or all Products that (A) are subject to Purchase Orders accepted by Distributor whether or not the applicable Products have been
shipped as of the date of termination and (B) were manufactured, shipped or received as of the date of termination, in each case
that are in new condition and in the original factory packaging at the original purchase price of any such Products that Sub-Distributor
elects to resell to Distributor less a restocking charge of 50% of such amount payable by Distributor upon receipt of such Products.
Restocking is waived in the event the Distributor terminates Sub-Distributor, other than if termination is a Termination pursuant
to 11.A., 11.B. or 11.C.. Within ninety (90) calendar days of termination of this Agreement, Sub-Distributor shall remove and
not thereafter use any sign, display, or other advertising or marketing means containing Manufacturer IP, except as provided in
this section. Sub-Distributor may continue to use in-store materials containing the Manufacturer IP as reasonably required for
the resale of the Products which may be remaining in Sub-Distributor’s possession after termination, which materials Sub-Distributor
may continue to utilize until all remaining Products have been sold or one hundred eighty (180) calendar days after termination,
whichever comes first, after which Sub-Distributor shall cease the use of any such Manufacturer IP.

12.             
COMPLIANCE WITH LAWS. Sub-Distributor acknowledges and understands that the Products may be subject to restrictions upon export
from the United States and upon resale after export. Sub-Distributor therefore represents and warrants that it shall comply fully
with all relevant regulations of the U.S. Department of Commerce, with the U.S. Export Administration Act, and with any other
import and/or export control laws or regulations of the United States or any other jurisdiction.

    	 	11	 

     

    

13.             
GENERAL TERMS.

A.               
Independent Contractors. 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 Distributor nor Sub-Distributor 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.

B.                
Assignment. Neither this Agreement, nor any right or interest herein, may be assigned, in whole or in part, by Sub-Distributor
without the express written consent of Distributor. Any assignment without such consent shall be null and void. For purposes hereof,
any assignment that is carried out as part of a merger, restructuring, or reorganization, or sale or transfer of all or substantially
all Sub-Distributor’s assets shall require the express written consent of Distributor. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto, their successors and legal representatives. Except as set forth in Section 8,
there are no third-party beneficiaries to this Agreement.

C.               
Notices. 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) fax with confirmation,
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 Distributor:

Kaival
Brands Innovations Group, Inc.

4460
Old Dixie Highway

Grant,
Florida 32949

Attn:
Eric Mosser

Email:
eric@kaivalbrands.com

Fax:
833-452-8252

 

If
to Sub-Distributor:

COLONIAL
WHOLESALE DISTRIBUTING, INC.

10889
CROSSROADS COMMERCE BLVD.

TAMPA,
FL 33610

Attn:
Yasin Saad

Email:
yasinsaad@colonialdistributing.com

Fax:
850-341-7222

 

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

    	 	12	 

     

    

D.               
Force Majeure. Neither Party shall liable hereunder for any failure or delay in the performance of its obligations under this
Agreement if such failure or delay is on account of causes beyond its control, including labor disputes, civil commotion, war,
fires, floods, inclement weather, governmental regulations or controls, casualty, government authority, strikes, or acts of God,
in which event the non-performing party shall be excused from its obligations for the period of the delay and for a reasonable
time thereafter. Each Party shall use reasonable efforts to notify the other Party of the occurrence of such an event within three
(3) business days of its occurrence.

E.                
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.

F.                
Attorney’s Fees. If either Party incurs any legal fees associated with the enforcement of this Agreement or any rights
under this Agreement, the prevailing Party shall be entitled to recover its reasonable attorney’s fees and any court, arbitration,
mediation, or other litigation expenses from the other Party.

G.               
Survival. The provisions of this Agreement which by their sense and context should survive any termination of expiration of
this Agreement, including without limitation sections 5 (confidentiality), 7 (warranty), 8 (indemnification), 9 (limitation of
liability), 12 (compliance with laws) and 13 (general terms) shall so survive.

H.               
Authorized Signatories. It is agreed and warranted by the Parties that the individuals singing this Agreement on behalf of
the respective Parties are authorized to execute such an agreement. No further proof of authorization shall be required.

I.                  
Severability. If any provision or portion of this Agreement shall be held by a court of competent jurisdiction to be illegal,
invalid, or unenforceable, the remaining provisions or portions shall remain in full force and effect.

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.               
Counterparts. This Agreement may be executed by facsimile and 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.

    	 	13	 

     

    

L.                
Entire Agreement; Modification; Waiver. This Agreement is the entire agreement between the Parties with respect to the subject
matter and supersedes any prior agreement or communications between the Parties hereto, whether written or oral. This Agreement
may be modified only by a written amendment signed by authorized representatives of both Parties. No waiver of any term or right
in this Agreement shall be effective unless in writing, signed by an authorized representative of the waiving Party. The failure
of either Party to enforce any provision of this Agreement shall not be construed as a waiver or modification of such provision,
or impairment of its right to enforce such provision thereafter.

 

[SIGNATURES
ON FOLLOWING PAGE]

 

    	 	14	 

     

    

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

DISTRIBUTOR

 

KAIVAL
BRANDS INNOVATIONS GROUP, INC.

 

By:
/s/ Eric Mosser

Name:
Eric Mosser

Title:
Chief Operating Officer

 

 

SUB-DISTRIBUTOR

 

COLONIAL
WHOLESALE DISTRIBUTING, INC.

 

 

By:
/s/ Yasin Saad

Name:
Yasin Saad

Title:
President

 

 

 

ACKNOWLEDGMENT
AND CONSENT

 

By
signing below, Manufacturer hereby acknowledges and consents to Distributor entering into this Agreement with Sub-Distributor.

 

 

BIDI
VAPOR, LLC

 

By:
/s/ Nirajkumar Patel

Name:
Nirajkumar Patel

Title:
Manager

 

    	 	15

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