Document:

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURIRTIES PURCHASE AGREEMENT (this “Agreement”) is entered into as of May 10, 2018 by and among YA
II PN, LTD., a Cayman Islands exempted company (the “Investor”), SOLIS TEK INC. (the “Borrower”),
a Nevada corporation, SOLIS TEK INC. (“S-Tek”), a California corporation, SOLIS TEK EAST CORPORATION
(“S-East”), a New Jersey corporation, and ZELDA HORTICULTURE, INC. (“Zelda”),
a California corporation (S-Tek, S-East and Zelda are collectively referred to as the “Guarantors”). The Borrower
and the Guarantors are sometimes individually referred to as a “Credit Party” and collectively referred to
as the “Credit Parties.”

 

WITNESSETH

 

WHEREAS,
the Borrower and the Investor are entering into two transactions as more particularly described in this Agreement, consisting
of the Investor purchasing (i) 500,000 shares (the “Shares”) of the Borrower’s common stock, warrants
(the “Warrants”) to purchase up to 7.5 million Shares, and (iii) a Secured Promissory Note (a “Note”);

 

WHEREAS,
the Guarantors are wholly-owned subsidiaries of the Borrower and will receive direct economic benefits by the Borrower entering
into this Agreement and from the extension of credit by the Investor to the Borrower to be evidenced by the Note;

 

WHEREAS,
each Guarantor will jointly and severally guaranty the payment and performance of all of the Borrower’s obligations (collectively,
the “Obligations”) under this Agreement, the Note and all other Transaction Documents (as defined below) pursuant
to the terms of an Amended and Restated Global Guaranty Agreement (the “Global Guaranty Agreement”) of even
date herewith;

 

WHEREAS,
each Credit Party will jointly and severally secure all of the Obligations under this Agreement, the Note, the Global Guaranty
Agreement, and all other Transaction Documents by granting to the Investor an unconditional and continuing first priority security
interest in all of the assets and properties of each Credit Party, whether now existing or hereafter acquired, pursuant to an
Amended and Restated Global Security Agreement (the “Global Security Agreement”) of even date herewith;

 

WHEREAS,
as used herein the term “Transaction Documents” shall mean this Agreement, the Note, the Global Guaranty Agreement,
the Global Security Agreement, and any other agreement or item entered into, or delivered to the Investor, in connection with
any of the forgoing, all as amended or extended from time to time.

 

NOW,
THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement, each Credit Party and
the Investor hereby agree as follows:

 

1.
PURCHASE AND SALE OF UNIT AND NOTE.

 

(a)
Purchase of Unit. The Investor shall purchase from the Borrower, and the Borrower shall sell to the Investor, the Unit
consisting of (i) 500,000 Shares and (ii) the Warrants to purchase 7.5 million Shares. The terms of the Warrants will be set forth
in four (4) separate warrants. The purchase price of the Unit shall be $500,000, payable by the Investor to the Borrower by wire
transfer. On the date hereof, the Borrower shall issue to the Investor (i) a stock certificate evidencing the Shares and (ii)
the Warrants.

 

    	 	 

     

    

 

(b)
Purchase of the Note. The Investor shall purchase from the Borrower, and the Borrower shall sell to the Investor, the Note
in the original principal amount of $1.5 million. The purchase price of the Note shall be $1.5 million, payable by the Investor
to the Borrower by wire transfer.

 

(c)
The purchase and sale of the Unit and the Note shall occur concurrently on the date hereof (the “Closing Date”),
subject to the satisfaction of all the conditions precedent set forth below.

 

(d)
Form of Payment. Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date (i) the
Investor shall deliver to the Borrower purchase price for the Unit and the Note, and (ii) the Borrower shall deliver to the Investor,
the stock certificate evidencing the 500,000 Shares, the Warrants and a Note, all duly executed on behalf of the Borrower. Each
Guarantor hereby acknowledges and consents to the issuance of the Note by the Borrower to the Investor, and further acknowledges
and agrees that the payment and performance of any and all Obligations owed by the Borrower to the Investor under such Note shall
be subject to the Global Guaranty Agreement and such Guarantor’s obligations shall be secured by a first priority continuing
security interest as evidenced by the Global Security Agreement.

 

(e)
Conditions Precedent to the Closing. The obligation of the Investor hereunder to consummate the transactions set forth
herein on the Closing Date is subject to the satisfaction, at or before the Closing Date, of each of the following conditions,
provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its
sole discretion:

 

(f)
No Credit Party shall be in material breach or default of, and no Event of Default (an “Event of Default”)
shall have occurred on, this Agreement, the Note or any other Transaction Document, and no Event of Default would exist after
giving effect to the closing of the transactions. An Event of Default on this Agreement, the Note or any other Transaction Document
shall constitute an Event of Default of each other Transaction Document;

 

(g)
There shall not have been any “Material Adverse Effect,” where “Material Adverse Effect” shall
mean any condition, circumstance, or situation that may result in, or reasonably be expected to result in (1) a material adverse
effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (2) a material adverse
effect on the results of operations, assets, business or condition (financial or otherwise) of any Credit Party, or (3) a material
adverse effect on any Credit Party’s ability to perform in any material respect on a timely basis its obligations under
the Transaction Documents.

 

(h)
The representations and warranties contained in Section 3 shall be true and correct in all material respects on and as of the
Closing Date;

 

(i)
The Borrower’s common stock (“Common Stock”) shall be authorized for quotation or trading on the OTC
Markets (the “Principal Market”) and trading in the Common Stock shall not have been suspended for any reason.
The Borrower shall have timely made all of its filings with the SEC, including, without limitation, any filings on Form 10-K and
10-Q; and

 

    	 	2	 

     

    

 

(j)
The Credit Parties shall execute and deliver to the Investor the Transaction Documents.

 

2.
INVESTOR’S REPRESENTATIONS AND WARRANTIES.

 

Investor
hereby represents and warrants to the Borrower that the following are true and correct as of the date hereof:

 

(a)
Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of
the Cayman Islands and has all requisite power and authority to execute, deliver and perform this Agreement, including all transactions
contemplated hereby. The decision to invest, the execution and delivery by the Investor of this Agreement and the other Transaction
Documents to which the Investor is a party, the performance by the Investor of its obligations hereunder and thereunder, and the
consummation by the Investor of the transactions contemplated hereby and thereby have been duly authorized and require no other
proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement
and the other Transaction Documents to which the Investor is a party, on behalf of the Investor or its shareholders. This Agreement
and such other Transaction Documents have been (or, when executed and delivered, will be) duly executed and delivered by the Investor
and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
other laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except
as rights to indemnification and to contribution may be limited by federal or state securities law.

 

(b)
Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable
of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Borrower and of protecting
its interests in connection with this transaction.

 

(c)
Investment Purpose. The Unit and the Note are being purchased by the Investor for its own account, and for investment purposes.
The Investor agrees not to assign or in any way transfer the Investor’s rights to the Unit or the Note or any interest therein
and acknowledges that the Borrower will not recognize any purported assignment or transfer of the Note except in accordance with
applicable Federal and state securities laws.

 

(d)
Accredited Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3)
of Regulation D of the Securities Act of 1933 (the “Securities Act”).

 

(e)
Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to
the business, finances and operations of the Borrower and information it deemed material to making an informed investment decision.
The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Borrower and its management.
Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives
shall modify, amend or affect the Investor’s right to rely on the Borrower’s representations and warranties contained
in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting,
legal and tax advice, as it has considered necessary to make an informed investment decision with respect to this transaction.

 

    	 	3	 

     

    

 

(f)
No General Solicitation. Neither the Borrower, nor any of its affiliates, nor any person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities
Act) in connection with the offer or sale of the Unit and the Note offered hereby.

 

(g)
Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with the Borrower or any “Affiliate”
of the Borrower (as that term is defined in Rule 405 of the Securities Act).

 

3.
REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES.

 

Each
Credit Party hereby jointly and severally represents and warrants to the Investor that each of the representations and warranties
set forth in Article IV of the Standby Equity Distribution Agreement dated as of April 16, 2018 are true and correct as of the
date hereof, as if each representation and warranty set forth in Article IV of the SEDA were set forth herein in its entirety.
For the purposes of this Agreement, references to the Company and the Subsidiaries in the SEDA shall mean the Credit Parties.

 

4.
INDEMNIFICATION. In consideration of the Investor’s execution and delivery of this Agreement and acquiring the Unit
and the Note hereunder, and in addition to all of the Credit Party’s other obligations under this Agreement, each Credit
Party hereby jointly and severally agrees to defend and indemnify Investor and its Affiliates and subsidiaries and their respective
directors, officers, employees, agents and representatives, and the successors and assigns of each of them (collectively, the
“Investor Indemnified Parties”) and each Credit Party does hereby agree to hold the Investor Indemnified Parties
forever harmless, from and against any and all Claims made, brought or asserted against the Investor Indemnified Parties, or any
one of them, and each Credit Party hereby jointly and severally agrees to pay or reimburse the Investor Indemnified Parties for
any and all Claims payable by any of the Investor Indemnified Parties to any Person, including reasonable attorneys’ and
paralegals’ fees and expenses, court costs, settlement amounts, costs of investigation and interest thereon from the time
such amounts are due at the highest non-usurious rate of interest permitted by applicable Law, through all negotiations, mediations,
arbitrations, trial and appellate levels, as a result of, or arising out of, or relating to: (i) any misrepresentation or breach
of any representation or warranty made by any Credit Party in this Agreement, the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby; (ii) any breach of any covenant, agreement or Obligation of each Credit
Party contained in this Agreement, the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby; or (iii) any Claims brought or made against the Investor Indemnified Parties, or any one of them, by a third party
and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement, the Transaction Documents
or any other instrument, document or agreement executed pursuant hereto or thereto, any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance of the Unit or the Note, or the status of the Investor
or holder of any of the Unit and/or the Note, as a buyer and holder of such Unit and Note of the Borrower. To the extent that
the foregoing undertakings by a Credit Party may be unenforceable for any reason, each Credit Party shall make the maximum contribution
to the payment and satisfaction of each of the Claims covered hereby, which is permissible under applicable law.

 

    	 	4	 

     

    

 

5.
COVENANTS OF THE CREDIT PARTIES.

 

(a)
Indebtedness. No Credit Party shall, either directly or indirectly, create, assume, incur or have outstanding any indebtedness
for borrowed money of any nature or kind (but excluding purchase money indebtedness), or become liable, whether as endorser, guarantor,
surety or otherwise, for any obligation of any other person or entity, except for: (i) the Note and (iii) obligations for accounts
payable, other than for money borrowed, incurred in the ordinary course of business of the Credit Parties.

 

(b)
Encumbrances. No Credit Party shall, either directly or indirectly, create, assume, incur or suffer or permit to exist
any encumbrance, lien or security interest upon any asset or properties of the Credit Parties, whether owned at the date hereof
or hereafter acquired.

 

(c)
Compliance with Laws. Each Credit Party shall comply with all applicable laws, statutes, rules, regulations, orders, executive
orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended
from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing,
financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records
and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws, and will
not take any action which will cause the Investor to be in violation of any such laws.

 

(d)
Use of Proceeds. The Credit Parties shall use the proceeds from the issuance of the Unit and the Note for working capital
purposes. So long as any amounts are outstanding on the Note, no Credit Party shall pay any related party obligations, all of
which related party obligations shall be subordinated to the obligations owed to the Investor. No Credit Party shall, directly
or indirectly, use any portion of the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or
otherwise make available such proceeds to any Person (i) to make any payment towards any indebtedness or other obligations of
the Credit Parties; (ii) to pay any obligations of any nature or kind due or owing to any officers, directors, employees, or shareholders
of the Credit Parties, other than salaries payable in the ordinary course of business of the Credit Parties; (iii) to fund, either
directly or indirectly, any activities or business of or with any Person that is identified on the list of Specially Designated
Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose
government is, the subject of Sanctions or Sanctions Programs, or (iv) in any other manner that will result in a violation of
Sanctions.

 

(e)
Business Activities; Change of Legal Status and Organizational Documents. No Credit Party shall: (i) engage in any line
of business other than the businesses engaged in as of the Effective Date and business reasonably related thereto; (ii) change
its name, organizational identification number (if applicable), its type of organization, its jurisdiction of organization or
other legal structure; or (iii) permit its Certificate of Incorporation, Bylaws or other organizational documents to be amended
or modified in any way which could reasonably be expected to have a Material Adverse Effect; provided that the proposed
amendment to the Borrower’s Certificate of Incorporation and/or other organizational documents to (y) increase its authorized
shares of Common Stock and (ii) change the Borrower’s name shall not be deemed to be a violation of this Section.

 

    	 	5	 

     

    

 

(f)
Transactions with Affiliates. No Credit Party shall enter into any transaction with any of its Affiliates, officers, directors,
employees, shareholders or other insiders, except in the ordinary Course of business of the Credit Parties and upon fair and reasonable
terms that are no less favorable to the Credit Parties than it would obtain in a comparable arm’s length transaction with
a Person not an Affiliate of the Credit Parties; provided that the Borrower’s proposed acquisition of YLK Partners NV, LLC
shall not be deemed to be a violation of this Section.

 

(g)
No Material Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated
by this Agreement, all of which shall be publicly disclosed by the Borrower as soon as possible after the date hereof, each Credit
Party covenants and agrees that none of them, nor any other person acting on its behalf, will provide the Investor or its agents
or counsel with any information that such Credit Party believes constitutes material non-public information, unless prior thereto
the Investor shall have entered into a written agreement with such Credit Party regarding the confidentiality and use of such
information. Each Credit Party understands and confirms that the Investor shall be relying on the foregoing covenant in agreeing
to enter into this Agreement and the other Transaction Documents.

 

6.
GOVERNING LAW; MANDATORY JURIDICTION. TO INDUCE INVESTOR TO PURCHASE THE UNIT AND THE NOTE, THE CREDIT PARTIES IRREVOCABLY
AGREE THAT ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR RELATED TO
ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT (WHETHER OR NOT SUCH CLAIM IS
BASED UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS
LOCATED IN UNION COUNTY, NEW JERSEY; PROVIDED, HOWEVER, INVESTOR MAY, AT ITS SOLE OPTION, ELECT TO BRING ANY ACTION IN
ANY OTHER JURISDICTION. THIS PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND
INTERPRETED CONSISTENT WITH NEW JERSEY LAW. EACH CREDIT PARTY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE
OR FEDERAL COURT HAVING ITS SITUS IN SAID COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. EACH CREDIT PARTY HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO EACH CREDIT PARTY AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF
COURT OR OTHERWISE.

 

7.
NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

    	 	6	 

     

    

 

	If
    to a Credit Party, to:	Solis
    Tek Inc.
	 	16926
    S. Keegan Ave, Suite A
	 	Carson,
    CA 90746
	 	Attention:
                                         Alan Lien

        Telephone:
        (888)998-8881

	 	Email:
    alien@solis-tek.com
	 	 
	With
a copy to:
	Bingham
& Associates Law Group, APC

	 	1106
                                         Second Street, Suite 195

        Encinitas,
        CA 92024

        Attention:
        Stanley Moskowitz, Esq.

        Telephone:
        (858)523-0100

        Email:
        smoskowitz@san.rr.com

 

	If
    to the Investor:	YA
    II PN, Ltd.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Attention:
    Mark Angelo
	 	Telephone:
                                         (201) 985-8300

        Email:
        mangelo@yorkvilleadvisors.com

	 	 
	With
    a copy to:	David
    Gonzalez, Esq. 
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Telephone:
    (201) 985-8300
	 	Email:
    dgonzalez@yorkvilleadvisors.com

 

or
at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation
of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

8.
MISCELLANEOUS.

 

(a)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party.

 

(b)
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Borrower
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor (other
than by merger). The Investor may assign any or all of its rights under this Agreement to any person to whom the Investor assigns
or transfers the Unit or the Note, or a portion thereof, provided that such transferee agrees in writing to be bound, with respect
to the Unit and the Note, by the provisions of this Agreement that apply to the Investor.

 

    	 	7	 

     

    

 

(c)
Usury. To the extent it may lawfully do so, each Credit Party hereby agrees not to insist upon or plead or in any manner
whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by the
Investor in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary
contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Borrower under the
Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable
law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default
interest, or both of them, when aggregated with any other sums in the nature of interest that the Borrower may be obligated to
pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed
by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent
to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction
Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Borrower to the Investor with respect to indebtedness evidenced
by the Transaction Documents, such excess shall be applied by the Investor to the unpaid principal balance of any such indebtedness
or be refunded to the Borrower, the manner of handling such excess to be at the Investor’s election.

 

(d)
Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor
and the Borrower with respect to the matters discussed herein, and this Agreement, and the instruments referenced herein, contain
the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set
forth herein or therein, neither the Borrower nor the Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.

 

9.
BORROWER AND GUARANTORS.

 

(a)
Each Credit Party is jointly and severally liable for all debt, principal, interest, and other amounts owed to the Investor by
Borrower pursuant to this Agreement, the Transaction Documents, or any other agreement, whether absolute or contingent, due or
to become due, now existing or hereafter arising (the “Obligations”) and the Investor may proceed against any
Credit Party (or all of them) to enforce the Obligations without waiving its right to proceed against any other party. This Agreement
and the Notes are a primary and original obligation of the Credit Parties and shall remain in effect notwithstanding future changes
in conditions, including any change of law or any invalidity or irregularity in the creation or acquisition of any Obligations
or in the execution or delivery of any agreement between the Investor and any Credit Party. Each Credit Party shall be liable
for existing and future Obligations as fully as if all of the funds advanced by the Investor hereunder were advanced to such Credit
Party. The Investor may rely on any certificate or representation made by any Credit Party as made on behalf of, and binding on,
the other parties hereto. Each Credit Party appoints each other Credit Party as its agent with all necessary power and authority
to give and receive notices, certificates or demands for and on behalf of each Credit Party, to act as disbursing agent for receipt
of any funds advanced by the Investor hereunder on behalf of each Credit Party. This authorization cannot be revoked, and the
Investor need not inquire as to any Credit Party’s authority to act for or on behalf of another Credit Party.

 

(b)
Notwithstanding any other provision of this Agreement or any other Transition Documents, each Credit Party irrevocably waives,
until all obligations are paid in full, all rights that it may have at law or in equity (including, without limitation, any law
subrogating a Credit Party to the rights of Investor under the Transaction Documents) to seek contribution, indemnification, or
any other form of reimbursement from any other Credit Party, or any other person now or hereafter primarily or secondarily liable
for any of the Obligations, for any payment made by a Credit Party with respect to the Obligations in connection with the Transaction
Documents or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations
as a result of any payment made by a Credit Party with respect to the Obligations in connection with the Transaction Documents
or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section
shall be null and void. If any payment is made to a Credit Party in contravention of this Section, such Credit Party shall hold
such payment in trust for the Investor and such payment shall be promptly delivered to the Investor for application to the Obligations,
whether matured or unmatured.

 

[signature
page follows]

 

    	 	8	 

     

    

 

IN
WITNESS WHEREOF, each of the Investor, each Credit Party has affixed their respective signatures to this Securities
Purchase Agreement as of the date first written above.

 

	 	BORROWER:
	 	 
	 	SOLIS
    TEK INC., a Nevada corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	GUARANTORS:
	 	 
	 	SOLIS
    TEK INC., a California corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	SOLIS
    TEK EAST CORPORATION, a New Jersey corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	ZELDA
    HORTICULTURE, INC., a California corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	INVESTOR:
    
	 	 
	 	YA
    II PN, LTD.
	 	 
	 	By:	Yorkville
    Advisors Global LP
	 	Its:	Investment
    Manager
	 	 	 
	 	By:	Yorkville
    Advisors Global LLC
	 	Its:	General
    Partner
	 	 	 
	 	By:	 
	 	Name:	
	 	Title:	 

 

    	 	9THIS
NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS NOTE
HAS BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

SOLIS
TEK INC.

(a
Nevada Corporation)

 

Secured
Promissory Note

 

	No.
    SLTK-1	Original
    Principal Amount:$1,500,000
	Issuance
    Date:  May 10, 2018	 

 

FOR
VALUE RECEIVED, SOLIS TEK INC. (the “Borrower”), a Nevada corporation, hereby promise to pay to the order
of YA II PN, Ltd. or its registered assigns (the “Holder”) (i) the outstanding portion of the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to scheduled payment, redemption, conversion,
or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration, redemption
or otherwise (in each case in accordance with the terms hereof); and (ii) to pay interest (“Interest”) on any
outstanding Principal at the applicable Interest Rate (as defined below) from the Issuance Date until the same is paid, whether
upon the Maturity Date or acceleration, redemption or otherwise (in each case in accordance with the terms hereof) pursuant to
the terms of this Secured Promissory Note (the “Note”). All amounts to be paid by the Borrower to the Holder
shall be made by wire transfer of immediately available funds to the account listed on Schedule I hereto (or to
any other account specified by the Holder to the Borrower in writing) to be received on or before Maturity Date.

 

This
Note is being issued pursuant to that certain Securities Purchase Agreement of even date herewith, as amended and supplemented
from time to time (the “Securities Purchase Agreement”) among the Holder, the Borrower and the Guarantors.
Certain capitalized terms used herein but otherwise not defined herein are defined in Section 16 or in the Securities Purchase
Agreement. The payment and performance of the Borrower’s obligations under this Note and the other Transaction Documents
are being jointly and severally guaranteed by Solis Tek Inc. (“S-Tek”), a California corporation, Solis Tek
East Corporation (“S-East”), a New Jersey corporation, and Zelda Horticulture, Inc. (“Zelda”),
a California corporation, pursuant to that certain Global Guaranty Agreement (the “Global Guaranty Agreement”)
of even date herewith. S-Tek, S-East and Zelda are collectively referred to as the “Guarantors.”

 

The
obligations under this Note and the other Transaction Documents are secured by that certain Amended and Restated Global Security
Agreement (the “Security Agreement”) of even date herewith among the Borrower, the Guarantors and the Holder.

 

    	 

    	 

    

 

		1.	GENERAL
                                         TERMS

 

(a)       Maturity
Date. All amounts owed under this Note shall be due and payable on February 9, 2019 (the “Maturity Date”).
On the Maturity Date, the Borrower shall pay to the Holder an amount in cash representing all then outstanding Principal and accrued
and unpaid Interest.

 

(b)       Interest.
Interest shall accrue on the outstanding Principal balance hereof at a rate equal to 8% per annum (“Interest Rate”);
provided that upon an Event of Default hereunder the Interest Rate shall be 18% per annum until all amounts outstanding
hereunder received by the Holder. Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed,
to the extent permitted by applicable law.

 

2.       NO
PREPAYMENT PENALTY. The Borrower may prepay all or any part of the balance outstanding hereunder at any time without penalty.

 

3.       REPRESENTATIONS
AND WARRANTIES. The Borrower hereby represents and warrants to the Holder that the following are true and correct as of the
date hereof:

 

(a)(i)
The Borrower has the requisite corporate power and authority to enter into and perform its obligations under this Note and any
related agreements, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Note and any related
agreements by the Borrower and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized
by the each Borrower’s Board of Directors and no further consent or authorization is required by any Borrower, Board of
Directors, or stockholders, (iii) this Note and any related agreements have been duly executed and delivered by the Borrower,
(iv) this Note and any related agreements, constitute the valid and binding obligations of the Borrower enforceable against each
Borrower in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.

 

(b)
The execution, delivery and performance by the Borrower of its obligations under this Note will not (i) result in a violation
of any Borrower’s incorporation documents or any certificate of designation of any outstanding series of preferred stock
or (ii) conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Borrower or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market on
which the Common Stock is quoted) applicable to the Borrower or any of its subsidiaries or by which any material property or asset
of the Borrower is bound or affected and which would cause a Material Adverse Effect.

 

    	2

    	 

    

 

4.       EVENTS
OF DEFAULT. 

 

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

 

(i)       any
representation, warranty or covenant made in this Note, any other Transaction Document shall be or shall be untrue or inaccurate
in any material respect as of the date when made or on any Closing Date (as defined in the Securities Purchase Agreement);

 

(ii)       the
Borrower’s or any Guarantor’s failure to observe or perform, or comply with, in any material respect, any covenant,
agreement, warranty or obligation contained in, or otherwise commit any material breach or default of any provision of this Note,
any other Transaction Document, or any Event of Default shall have occurred on this Note, the Securities Purchase Agreement or
any other Transaction Document;

 

(iii)       the
Borrower’s failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due and payable under
this Note or any other Transaction Document;

 

(iv)       the
Borrower or any Guarantor shall default in any of its obligations under any other note or any mortgage, credit agreement or other
facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may
be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement
of the Borrower or any Guarantor in an amount exceeding $100,000, whether such indebtedness now exists or shall hereafter be created
and such default shall result in such indebtedness becoming or being declared due and payable and such default is not cured within
five (5) Business Days

 

(v)       any
Borrower or any subsidiary of any Borrower shall commence, or there shall be commenced against any Borrower or any subsidiary
of any Borrower under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or
any Borrower or any subsidiary of any Borrower commences, or there shall be commenced against any Borrower or any subsidiary of
any Borrower, any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any Borrower or any
subsidiary of any Borrower, in each case which remains un-dismissed for a period of 61 days; or any Borrower or any subsidiary
of any Borrower is adjudicated insolvent or bankrupt pursuant to a final, non-appealable order; or any order of relief or other
order approving any such case or proceeding is entered; or any Borrower or any subsidiary of any Borrower suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues
un-discharged or un-stayed for a period of 61 days; or any Borrower or any subsidiary of any Borrower makes a general assignment
for the benefit of creditors; or any Borrower or any subsidiary of any Borrower shall admit in writing that it is unable to pay
its debts generally as they become due; or any Borrower or any subsidiary of any Borrower shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts; or any corporate or other action is taken by
any Borrower or any subsidiary of any Borrower for the purpose of effecting any of the foregoing;

 

(vi)       the
common stock of the Borrower shall cease to be authorized for quotation or trading on the OTC Markets, or trading in the common
stock of the Borrower has been suspended for any reason, for a period of more than ten Trading Days or the Borrower shall not
have timely made any filing with the SEC that it is required to file in accordance with applicable securities laws or the rules
promulgated thereunder; or

 

    	3

    	 

    

 

(vii)       the
Borrower is a party to any agreement memorializing (1) the consummation of any transaction or event (whether by means of a share
exchange or tender offer applicable to the Common Stock, a liquidation, consolidation, recapitalization, reclassification, combination
or merger of the Borrower or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Borrower)
or a series of related transactions or events pursuant to which all of the outstanding shares of Common Stock are exchanged for,
converted into or constitute solely the right to receive, cash, securities or other property, (2) a consolidation or merger in
which the Borrower is not the surviving corporation, or (3) a sale, assignment, transfer, conveyance or other disposal of all
or substantially all of the properties or assets of the Borrower to another person or entity (each of (1), (2) and (3) a “Change
in Control”) unless in connection with such Change in Control, all Principal and accrued and unpaid Interest due under
this Note will be paid in full or the Holder consents to such Change in Control.

 

5.       REMEDIES
UPON DEFAULT.

 

(a)       During
the time that any portion of this Note is outstanding, if (i) any Event of Default has occurred, the Holder, by notice in writing
to any Borrower, may at any time and from time to time declare the full unpaid Principal of this Note or any portion thereof,
plus Interest accrued thereon (the “Accelerated Amount”) to be due and payable immediately or (ii) any Event
of Default specified in Section 4(a)(v) has occurred the unpaid Principal of the Note and the Interest accrued thereon shall be
immediately and automatically due and payable without necessity of further action.

 

(b)       The
Holder need not provide and the Borrower hereby waives any presentment, demand, protest or other notice of any kind, (other than
required notice of conversion) and the Holder may immediately enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior
to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon

 

6.       REISSUANCE
OF THIS NOTE. Upon receipt by any Borrower of evidence reasonably satisfactory to such Borrower of the loss, theft, destruction
or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to
such Borrower in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Borrower shall
execute and deliver to the Holder a new Note representing the outstanding Principal which Note (i) shall be of like tenor with
this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (iii) shall have
an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have
the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.

 

    	4

    	 

    

 

7.       NOTICES.
Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

	If
    to the Borrower, to:	Solis
    Tek Inc.
	 	16926
    S. Keegan Ave, Suite A
	 	Carson,
    CA 90746
	 	Attention:
        Alan Lien

        Telephone:
        (888)998-8881

	 	Email:
    alien@solis-tek.com
	 

        With
        a copy to:
	 

        Bingham
        & Associates Law Group, APC

	 	1106
        Second Street, Suite 195

        Encinitas,
        CA 92024

        Attention:
        Stanley Moskowitz, Esq.

        Telephone:
        (858)523-0100

        Email:
        smoskowitz@san.rr.com

 

	If
    to the Holder:	YA
    II PN, Ltd.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Attention:Mark
    Angelo
	 	Telephone:(201)
        985-8300

        Email:mangelo@yorkvilleadvisors.com

	 	 
	With
    a copy to:	David
    Gonzalez, Esq. 
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Telephone:(201)
    985-8300
	 	Email:  dgonzalez@yorkvilleadvisors.com

 

or
at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation
of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

    	5

    	 

    

 

8.       No
provision of this Note shall alter or impair the obligations of the Borrower, which are absolute and unconditional, to pay the
Principal of or Interest (if any) on, this Note at the time, place, and rate, and in the currency, herein prescribed. This Note
is a direct obligation of each Borrower. As long as this Note is outstanding, the Borrower shall not and shall cause its subsidiaries
not to, without the consent of the Holder, (i) amend its articles of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder under this Note; or (ii) enter into any agreement with respect to any of the foregoing.

 

9.       GOVERNING
LAW; MANDATORY JURIDICTION. TO INDUCE HOLDER TO PURCHASE THE NOTES, THE BORROWER IRREVOCABLY AGREE THAT ANY DISPUTE ARISING
UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT
OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT
OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN UNION COUNTY,
NEW JERSEY; PROVIDED, HOWEVER, HOLDER MAY, AT ITS SOLE OPTION, ELECT TO BRING ANY ACTION IN ANY OTHER JURISDICTION. THIS
PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW
JERSEY LAW. BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN
SAID COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER
AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.

 

10.       If
an Event of Default has occurred, then the Borrower shall reimburse the Holder promptly for all reasonable out-of-pocket fees,
costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses incurred by the Holder in any
action in connection with this Note, including, without limitation, those incurred: (i) during any workout, attempted workout,
and/or in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting
any sums which become due to the Holder in accordance with the terms of this Note, (iii) defending or prosecuting any proceeding
or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement of any rights or remedies
of the Holder.

 

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

 

12.       If
any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision
is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any Interest or other amount deemed Interest due hereunder shall violate applicable laws governing usury,
the applicable rate of Interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.
The Borrower covenant (to the extent that it may lawfully do so) that each Borrower shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Borrower from paying all or any portion of the Principal of or Interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Borrower (to the extent they may lawfully do so) hereby expressly waive all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law had been enacted.

 

    	6

    	 

    

 

13.       Whenever
any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

 

14.       Assignment
of this Note by the Borrower shall be prohibited without the prior written consent of the Holder. Holder shall be entitled to
assign this Note in whole or in part to any person or entity without the consent of the Borrower.

 

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

 

16.CERTAIN
DEFINITIONS For purposes of this Note, the following terms shall have the following meanings:

 

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

 

(b)       “Issuance
Date” means the date this Note is executed and delivered by the Borrower to the Holder as set forth on the first page
of this Note.

 

(c)       “Trading
Day” means a day on which the principal Trading Market is open for trading.

 

(d)       “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
or the OTC Markets (or any successors to any of the foregoing).

 

(e)       “Transaction
Documents” shall have the meaning set forth in the Securities Purchase Agreement.

 

    	7

    	 

    

 

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

 

	 	BORROWER:
	 	SOLIS TEK INC.
	 	 	               
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	8

    	 

    

 

Schedule
I

 

(Holder
Account Information)

 

YA
II PN, LTD.

 

	-Wiring Instructions-	 
	 	 
	*Account Currency: 	USD
	Intermediary Bank: 	The Bank of New York Mellon 
	 	One Wall Street 
	 	New York, NY10286 

 

Routing
# 021 000 018

Swift
Code: IRVTUS3N

Account
# 890 1050 210

	Beneficiary Bank:
    	DMS Bank and Trust Ltd. 
	 	20 Genesis Close 
	 	Grand Cayman KY1-1104

 

Swift
Code: CAYIKYKY

 

	Beneficiary Account Name:
    	YA
II PN, Ltd 
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092

 

Beneficiary
Account # 01680100

 

FBO:
YA II PN, LTD (Please instruct your bank to include the FBO details in the wire payment- Bank to Bank reference) 

 

    	9

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