Document:

Exhibit 10.5

 

MATCH GROUP, INC.
 2015 STOCK AND ANNUAL INCENTIVE PLAN

 

SECTION 1.                         PURPOSE; DEFINITIONS

 

The purposes of this Plan are to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and/or consultants and to provide the Company and its Subsidiaries and Affiliates with a stock and incentive plan providing incentives directly linked to stockholder value.  Certain terms used herein have definitions given to them in the first place in which they are used.  This Plan is intended to replace the Amended and Restated 2009 Match.com, Inc. Equity Incentive Program and the Amended and Restated Match Group, Inc. 2014 Incentive Plan (together, the “Prior Plans”), which Prior Plans shall be automatically terminated and replaced and superseded by this Plan upon the consummation of the IPO, except that any awards granted under the Prior Plans (“Prior Plan Awards”) shall remain in effect under this Plan pursuant to their terms.  In addition, for purposes of this Plan, the following terms are defined as set forth below:

 

(a)                                 “Adjusted Award” means any equity-based award granted by IAC that is converted into an equity-based award relating to the Company upon the occurrence of a spin-off of the Company from IAC.

 

(b)                                 “Affiliate” means a corporation or other entity controlled by, controlling or under common control with, the Company.

 

(c)                                  “Applicable Exchange” means the NASDAQ or such other securities exchange as may at the applicable time be the principal market for the Common Stock.

 

(d)                                 “Award” means an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, other stock-based award or Cash-Based Award granted or assumed pursuant to the terms of this Plan or the Prior Plans, including Prior Plan Awards, Subsidiary Equity Awards and Adjusted Awards.

 

(e)                                  “Award Agreement” means a written or electronic document or agreement setting forth the terms and conditions of a specific Award.

 

(f)                                   “Board” means the Board of Directors of the Company.

 

(g)                                  “Cash-Based Award” means an Award denominated in a dollar amount.

 

(h)                                 “Cause” means, unless otherwise provided in an Award Agreement, (i) “Cause” as defined in any Individual Agreement to which the applicable Participant is a party, or (ii) if there is no such Individual Agreement or if it does not define Cause:  (A) the willful or gross neglect by a Participant of his employment duties; (B) the plea of guilty or nolo contendere to, or conviction for, the commission of a felony offense by a Participant; (C) a material breach by a Participant of a fiduciary duty owed to the Company or any of its subsidiaries; (D) a material breach by a Participant of any nondisclosure, non-solicitation or non-competition obligation owed to the Company or any of its Affiliates; or (E) before a Change in Control, such other events as shall be determined by the Committee and set forth in a Participant’s Award

 

 

Agreement.  Notwithstanding the general rule of Section 2(c), following a Change in Control, any determination by the Committee as to whether “Cause” exists shall be subject to de novo review.

 

(i)                                     “Change in Control” has the meaning set forth in Section 10(a).

 

(j)                                    “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or the Treasury Department.  Reference to any specific section of the Code shall be deemed to include such regulations and guidance, as well as any successor provision of the Code.

 

(k)                                 “Commission” means the Securities and Exchange Commission or any successor agency.

 

(l)                                     “Committee” has the meaning set forth in Section 2(a).

 

(m)                             “Common Stock” means common stock, par value $0.001 per share, of the Company.

 

(n)                                 “Company” means Match Group, Inc., a Delaware corporation, or its successor.

 

(o)                                 “Disability” means (i) “Disability” as defined in any Individual Agreement to which the Participant is a party, or (ii) if there is no such Individual Agreement or it does not define “Disability,” (A) permanent and total disability as determined under the Company’s long-term disability plan applicable to the Participant, or (B) if there is no such plan applicable to the Participant or the Committee determines otherwise in an applicable Award Agreement, “Disability” as determined by the Committee.  Notwithstanding the above, with respect to an Incentive Stock Option, Disability shall mean Permanent and Total Disability as defined in Section 22(e)(3) of the Code and, with respect to all Awards, to the extent required by Section 409A of the Code, Disability shall mean “disability” within the meaning of Section 409A of the Code.

 

(p)                                 “Disaffiliation” means a Subsidiary’s or Affiliate’s ceasing to be a Subsidiary or Affiliate for any reason (including, without limitation, as a result of a public offering, or a spinoff or sale by the Company, of the stock of the Subsidiary or Affiliate) or a sale of a division of the Company and its Affiliates.

 

(q)                                 “EBITA” means for any period, operating profit (loss) plus, if applicable, (i) amortization and impairment of intangibles, (ii) goodwill impairment, (iii) non-cash compensation expense, (iv) restructuring charges, (v) non cash write-downs of assets, (vi) charges relating to disposal of lines of business, (vii) litigation settlement amounts and (viii) costs incurred for proposed and completed acquisitions.

 

(r)                                    “EBITDA” means for any period, operating profit (loss) plus, if applicable, (i) depreciation, (ii) amortization and impairment of intangibles, (iii) goodwill impairment, (iv) non-cash compensation expense, (v) restructuring charges, (vi) non cash write-downs of

 

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assets, (vii) charges relating to disposal of lines of business, (viii) litigation settlement amounts and (ix) costs incurred for proposed and completed acquisitions.

 

(s)                                   “Eligible Individuals” means directors, officers, employees and consultants of the Company or any of its Subsidiaries or Affiliates, and prospective directors, officers, employees and consultants who have accepted offers of employment or consultancy from the Company or its Subsidiaries or Affiliates.

 

(t)                                    “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.

 

(u)                                 “Fair Market Value” means, unless otherwise determined by the Committee, the closing price of a share of Common Stock on the Applicable Exchange on the date of measurement, or if Shares were not traded on the Applicable Exchange on such measurement date, then on the next preceding date on which Shares were traded, all as reported by such source as the Committee may select. If the Common Stock is not listed on a national securities exchange, Fair Market Value shall be determined by the Committee in its good faith discretion, provided that such determination shall be made in a manner consistent with any applicable requirements of Section 409A of the Code.

 

(v)                                 “Free-Standing SAR” has the meaning set forth in Section 5(b).

 

(w)                               “Grant Date” means (i) the date on which the Committee by resolution selects an Eligible Individual to receive a grant of an Award and determines the number of Shares to be subject to such Award or the formula for earning a number of shares or cash amount, (ii) such later date as the Committee shall provide in such resolution, (iii) the initial date on which an a Prior Plan Award was granted or (iv) the initial date on which an Adjusted Award was granted by IAC.

 

(x)                                 “IAC” means IAC/InterActiveCorp, a Delaware corporation.

 

(y)                                 “Incentive Stock Option” means any Option that is designated in the applicable Award Agreement as an “incentive stock option” within the meaning of Section 422 of the Code, and that in fact so qualifies.

 

(z)                                  “Individual Agreement” means an employment, consulting or similar agreement between a Participant and the Company or one of its Subsidiaries or Affiliates.

 

(aa)                          “IPO” means the initial public offering of Shares pursuant to the registration statement on Form S-1 (File No. 333-207472), dated October 16, 2015, as thereafter amended from time to time.

 

(bb)                          “NASDAQ” means the National Association of Securities Dealers Inc. Automated Quotation System.

 

(cc)                            “Nonqualified Option” means any Option that is not an Incentive Stock Option.

 

(dd)                          “Option” means an Award described under Section 5.

 

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(ee)                            “Outside Directors” has the meaning set forth in Section 11(a).

 

(ff)                              “Participant” means an Eligible Individual to whom an Award is or has been granted.

 

(gg)                            “Performance Goals” means the performance goals established by the Committee in connection with the grant of an Award.  In the case of Qualified-Performance Based Awards that are intended to qualify under Section 162(m)(4)(C) of the Code, (i) such goals shall be based on the attainment of one or any combination of the following:   specified levels of earnings per share from continuing operations, net profit after tax, EBITDA, EBITA, gross profit, cash generation, unit volume, market share, sales, asset quality, earnings per share, operating income, revenues, return on assets, return on operating assets, return on equity, profits, total stockholder return (measured in terms of stock price appreciation and/or dividend growth), cost saving levels, marketing- spending efficiency, core non-interest income, change in working capital, return on capital, and/or stock price, with respect to the Company or any Subsidiary, Affiliate, division or department of the Company and (ii) such Performance Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code and related regulations.  Such Performance Goals also may be based upon the attaining of specified levels of Company, Subsidiary, Affiliate or divisional performance under one or more of the measures described above relative to the performance of other entities, divisions or subsidiaries.

 

(hh)                          “Plan” means the Match Group, Inc. 2015 Stock and Annual Incentive Plan, as set forth herein and as hereafter amended from time to time.

 

(ii)                                  “Qualified Performance-Based Award” means an Award intended to qualify for the Section 162(m) Exemption, as provided in Section 11.

 

(jj)                                “Restricted Stock” means an Award described under Section 6.

 

(kk)                          “Restricted Stock Units” means an Award described under Section 7.

 

(ll)                                  “Retirement” means retirement from active employment with the Company, a Subsidiary or Affiliate at or after the Participant’s attainment of age 65.

 

(mm)                  “RS Restriction Period” has the meaning set forth in Section 6(b)(ii).

 

(nn)                          “RSU Restriction Period” has the meaning set forth in Section 7(b)(ii).

 

(oo)                          “Section 162(m) Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.

 

(pp)                          “Share” means a share of Common Stock.

 

(qq)                          “Stock Appreciation Right” has the meaning set forth in Section 5(b).

 

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(rr)                                “Subsidiary” means any corporation, partnership, joint venture, limited liability company or other entity during any period in which at least a 50% voting or profits interest is owned, directly or indirectly, by the Company or any successor to the Company.

 

(ss)                              “Subsidiary Equity Awards” means awards that are outstanding as of November 16, 2016 that correspond to shares of a Subsidiary, which awards may be settled in Shares under this Plan.

 

(tt)                                “Tandem SAR” has the meaning set forth in Section 5(b).

 

(uu)                          “Term” means the maximum period during which an Option or Stock Appreciation Right may remain outstanding, subject to earlier termination upon Termination of Employment or otherwise, as specified in the applicable Award Agreement.

 

(vv)                          “Termination of Employment” means the termination of the applicable Participant’s employment with, or performance of services for, the Company and any of its Subsidiaries.  Unless otherwise determined by the Committee, if a Participant’s employment with, or membership on a board of directors of, the Company terminates but such Participant continues to provide services to the Company in a non-employee director capacity or as an employee, as applicable, such change in status shall not be deemed a Termination of Employment.  A Participant employed by, or performing services for, a Subsidiary or a division of the Company shall be deemed to incur a Termination of Employment if, as a result of a Disaffiliation, such Subsidiary, or division ceases to be a Subsidiary or division, as the case may be, and the Participant does not immediately thereafter become an employee of (or service provider for), or member of the board of directors of, the Company or another Subsidiary.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and its Subsidiaries shall not be considered Terminations of Employment.  Notwithstanding the foregoing, with respect to any Award that constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code, “Termination of Employment” shall mean a “separation from service” as defined under Section 409A of the Code.

 

SECTION 2.                         ADMINISTRATION

 

(a)                                 Committee.  The Plan shall be administered by the Compensation Committee of the Board or such other committee of the Board as the Board may from time to time designate (the “Committee”), which committee shall be composed of not less than two directors, and shall be appointed by and serve at the pleasure of the Board.  The Committee shall have plenary authority to grant Awards pursuant to the terms of the Plan to Eligible Individuals.  Among other things, the Committee shall have the authority, subject to the terms of the Plan:

 

(i)                                     to select the Eligible Individuals to whom Awards may from time to time be granted;

 

(ii)                                  to determine whether and to what extent Incentive Stock Options, Nonqualified Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, other stock-based awards, Cash-Based Awards or any combination thereof, are to be granted hereunder;

 

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(iii)                               to determine the number of Shares to be covered by each Award granted hereunder or the amount of any Cash-Based Award;

 

(iv)                              to determine the terms and conditions of each Award granted hereunder, based on such factors as the Committee shall determine;

 

(v)                                 subject to Section 12, to modify, amend or adjust the terms and conditions of any Award, at any time or from time to time;

 

(vi)                              to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable;

 

(vii)                           to accelerate the vesting or lapse of restrictions of any outstanding Award, based in each case on such considerations as the Committee in its sole discretion determines;

 

(viii)                        to interpret the terms and provisions of the Plan and any Award issued under the Plan or any Prior Plan (and any agreement relating thereto);

 

(ix)                              to establish any “blackout” period that the Committee in its sole discretion deems necessary or advisable;

 

(x)                                 to decide all other matters that must be determined in connection with an Award; and

 

(xi)                              to otherwise administer the Plan.

 

(b)                                 Procedures.  (i)  The Committee may act only by a majority of its members then in office, except that the Committee may, except to the extent prohibited by applicable law or the listing standards of the Applicable Exchange and subject to Section 11, allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it.

 

(ii)                                  Subject to Section 11(c), any authority granted to the Committee may also be exercised by the full Board.  To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control.

 

(c)                                  Discretion of Committee.  Subject to Section 1(h), any determination made by the Committee or by an appropriately delegated officer pursuant to delegated authority under the provisions of the Plan with respect to any Award shall be made in the sole discretion of the Committee or such delegate at the time of the grant of the Award or, unless in contravention of any express term of the Plan, at any time thereafter.  All decisions made by the Committee or any appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company, Participants, and Eligible Individuals.

 

(d)                                 Award Agreements.  The terms and conditions of each Award (other than any Cash-Based Award), as determined by the Committee, shall be set forth in an Award Agreement, which shall be delivered to the Participant receiving such Award upon, or as promptly as is

 

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reasonably practicable following, the grant of such Award.  The effectiveness of an Award shall not be subject to the Award Agreement’s being signed by the Company and/or the Participant receiving the Award unless specifically so provided in the Award Agreement.  Award Agreements may be amended only in accordance with Section 12 hereof.

 

SECTION 3.                         COMMON STOCK SUBJECT TO PLAN

 

(a)                                 Plan Maximums.  The maximum number of Shares that may be delivered pursuant to Awards under the Plan shall be the sum of (i) the number of Shares that may be issuable upon exercise, vesting or settlement of Prior Plan Awards, Subsidiary Equity Awards and Adjusted Awards and (ii) 20,000,000 Shares.  The maximum number of Shares that may be granted pursuant to Options intended to be Incentive Stock Options shall be 10,000,000 Shares.  Shares subject to an Award under the Plan may be authorized and unissued Shares or may be treasury Shares.

 

(b)                                 Individual Limits.

 

(i)                                     During a calendar year, no single Participant (excluding non-employee directors of the Company) may be granted:

 

(A)       Options or Stock Appreciation Rights covering in excess of 10,000,000 Shares in the aggregate; or

 

(B)       Qualified Performance-Based Awards (other than Options or Stock Appreciation Rights) covering in excess of 10,000,000 Shares in the aggregate.

 

(c)                                  Rules for Calculating Shares Delivered.

 

(i)                                     With respect to Awards other than Prior Plan Awards, Subsidiary Equity Awards and Adjusted Awards, to the extent that any Award is forfeited, terminates, expires or lapses without being exercised, or any Award is settled for cash, the Shares subject to such Award not delivered as a result thereof shall again be available for Awards under the Plan.

 

(ii)                                  With respect to Awards other than Prior Plan Awards, Subsidiary Equity Awards and Adjusted Awards, if the exercise price of any Option and/or the tax withholding obligations relating to any Award are satisfied by delivering Shares to the Company (by either actual delivery or by attestation), only the number of Shares issued net of the Shares delivered or attested to shall be deemed delivered for purposes of the limits set forth in Section 3(a).

 

(iii)                               With respect to Awards other than Prior Plan Awards, Subsidiary Equity Awards and Adjusted Awards, to the extent any Shares subject to an Award are withheld to satisfy the exercise price (in the case of an Option) and/or the tax withholding obligations relating to such Award, such Shares shall not be deemed to have been delivered for purposes of the limits set forth in Section 3(a).

 

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(d)                                 Adjustment Provisions.

 

(i)                                     In the event of a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation, disposition for consideration of the Company’s direct or indirect ownership of a Subsidiary or Affiliate (including by reason of a Disaffiliation), or similar event affecting the Company or any of its Subsidiaries (each, a “Corporate Transaction”), the Committee or the Board may in its discretion make such substitutions or adjustments as it deems appropriate and equitable to (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the various maximum limitations set forth in Sections 3(a) and 3(b) upon certain types of Awards and upon the grants to individuals of certain types of Awards, (C) the number and kind of Shares or other securities subject to outstanding Awards; and (D) the exercise price of outstanding Options and Stock Appreciation Rights.

 

(ii)                                  In the event of a stock dividend, stock split, reverse stock split, reorganization, share combination, or recapitalization or similar event affecting the capital structure of the Company or a Disaffiliation, separation or spinoff, in each case without consideration, or other extraordinary dividend of cash or other property, the Committee or the Board shall make such substitutions or adjustments as it deems appropriate and equitable to (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the various maximum limitations set forth in Sections 3(a) and 3(b) upon certain types of Awards and upon the grants to individuals of certain types of Awards, (C) the number and kind of Shares or other securities subject to outstanding Awards; and (D) the exercise price of outstanding Options and Stock Appreciation Rights.

 

(iii)                               In the case of Corporate Transactions, the adjustments contemplated by clause (i) of this paragraph (d) may include, without limitation, (A) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Committee or the Board in its sole discretion (it being understood that in the case of a Corporate Transaction with respect to which holders of Common Stock receive consideration other than publicly traded equity securities of the ultimate surviving entity, any such determination by the Committee that the value of an Option or Stock Appreciation Right shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each Share pursuant to such Corporate Transaction over the exercise price of such Option or Stock Appreciation Right shall conclusively be deemed valid); (B) the substitution of other property (including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the Shares subject to outstanding Awards; and (C) in connection with any Disaffiliation, arranging for the assumption of Awards, or replacement of Awards with new awards based on other property or other securities (including, without limitation, other securities of the Company and securities of entities other than the Company), by the affected Subsidiary, Affiliate, or division or by the entity that controls such Subsidiary, Affiliate, or division following such Disaffiliation (as well as any corresponding adjustments to Awards that remain based upon Company securities).  The Committee may adjust the Performance Goals applicable to any Awards to reflect any Share Change

 

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and any Corporate Transaction and any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations, and the cumulative effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in the Company’s financial statements, notes to the financial statements, management’s discussion and analysis or the Company’s other filings with the Commission.  Any adjustments made pursuant to this Section 3(d) to Awards that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code.  Any adjustments made pursuant to this Section 3(d) to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code or (B) comply with the requirements of Section 409A of the Code.

 

(iv)                              Any adjustment under this Section 3(d) need not be the same for all Participants.

 

SECTION 4.                         ELIGIBILITY

 

Awards may be granted under the Plan to Eligible Individuals and to any individuals who hold IAC Awards that are converted into Awards in the event of a spin-off of the Company from IAC; provided, however, that Incentive Stock Options may be granted only to employees of the Company and its subsidiaries or parent corporation (within the meaning of Section 424(f) of the Code).

 

SECTION 5.                         OPTIONS AND STOCK APPRECIATION RIGHTS

 

With respect to Prior Plan Awards and Adjusted Awards, the provisions below will be applicable only to the extent that they are not inconsistent with the terms of the applicable Prior Plan Award or Adjusted Award.

 

(a)                                 Types of Options.  Options may be of two types:  Incentive Stock Options and Nonqualified Options.  The Award Agreement for an Option shall indicate whether the Option is intended to be an Incentive Stock Option or a Nonqualified Option.

 

(b)                                 Types and Nature of Stock Appreciation Rights.  Stock Appreciation Rights may be “Tandem SARs,” which are granted in conjunction with an Option, or “Free-Standing SARs,” which are not granted in conjunction with an Option.  Upon the exercise of a Stock Appreciation Right, the Participant shall be entitled to receive an amount in cash, Shares, or both, in value equal to the product of (i) the excess of the Fair Market Value of one Share over the exercise price of the applicable Stock Appreciation Right, multiplied by (ii) the number of Shares in respect of which the Stock Appreciation Right has been exercised.  The applicable Award Agreement shall specify whether such payment is to be made in cash or Common Stock or both, or shall reserve to the Committee or the Participant the right to make that determination prior to or upon the exercise of the Stock Appreciation Right.

 

(c)                                  Tandem SARs.  A Tandem SAR may be granted at the Grant Date of the related Option.  A Tandem SAR shall be exercisable only at such time or times and to the extent that the

 

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related Option is exercisable in accordance with the provisions of this Section 5, and shall have the same exercise price as the related Option.  A Tandem SAR shall terminate or be forfeited upon the exercise or forfeiture of the related Option, and the related Option shall terminate or be forfeited upon the exercise or forfeiture of the Tandem SAR.

 

(d)                                 Exercise Price.  The exercise price per Share subject to an Option or Stock Appreciation Right shall be determined by the Committee and set forth in the applicable Award Agreement, and shall not be less than the Fair Market Value of a share of the Common Stock on the applicable Grant Date. In no event may any Option or Stock Appreciation Right granted under this Plan be amended, other than pursuant to Section 3(d), to decrease the exercise price thereof, be cancelled in exchange for cash or other Awards or in conjunction with the grant of any new Option or Stock Appreciation Right with a lower exercise price or otherwise be subject to any action that would be treated under the Applicable Exchange listing standards or for accounting purposes, as a “repricing” of such Option or Stock Appreciation Right, unless such amendment, cancellation, or action is approved by the Company’s stockholders.

 

(e)                                  Term.  The Term of each Option and each Stock Appreciation Right shall be fixed by the Committee, but shall not exceed ten years from the Grant Date.

 

(f)                                   Vesting and Exercisability.  Except as otherwise provided herein, Options and Stock Appreciation Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee.  If the Committee provides that any Option or Stock Appreciation Right will become exercisable only in installments, the Committee may at any time waive such installment exercise provisions, in whole or in part, based on such factors as the Committee may determine.  In addition, the Committee may at any time accelerate the exercisability of any Option or Stock Appreciation Right.

 

(g)                                  Method of Exercise.  Subject to the provisions of this Section 5, Options and Stock Appreciation Rights may be exercised, in whole or in part, at any time during the applicable Term by giving written notice of exercise to the Company or through the procedures established with the Company’s appointed third-party Plan administrator specifying the number of Shares as to which the Option or Stock Appreciation Right is being exercised; provided, however, that, unless otherwise permitted by the Committee, any such exercise must be with respect to a portion of the applicable Option or Stock Appreciation Right relating to no less than the lesser of the number of Shares then subject to such Option or Stock Appreciation Right or 100 Shares.  In the case of the exercise of an Option, such notice shall be accompanied by payment in full of the aggregate purchase price (which shall equal the product of such number of Shares subject to such Option multiplied by the applicable per Share exercise price) by certified or bank check or such other instrument as the Company may accept.  If approved by the Committee, payment, in full or in part, may also be made as follows:

 

(i)                                     Payment may be made in the form of unrestricted Shares already owned by Participant (by delivery of such Shares or by attestation) of the same class as the Common Stock subject to the Option (based on the Fair Market Value of the Common Stock on the date the Option is exercised); provided, however, that, in the case of an Incentive Stock Option, the right to make a payment in the form of already owned Shares 

 

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of the same class as the Common Stock subject to the Option may be authorized only at the time the Option is granted.

 

(ii)                                  To the extent permitted by applicable law, payment may be made by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale proceeds necessary to pay the purchase price, and, if requested, the amount of any federal, state, local or foreign withholding taxes.  To facilitate the foregoing, the Company may, to the extent permitted by applicable law, enter into agreements for coordinated procedures with one or more brokerage firms.  To the extent permitted by applicable law, the Committee may also provide for Company loans to be made for purposes of the exercise of Options.

 

(iii)                               Payment may be made by instructing the Company to withhold a number of Shares having a Fair Market Value (based on the Fair Market Value of the Common Stock on the date the applicable Option is exercised) equal to the product of (A) the exercise price per Share multiplied by (B) the number of Shares in respect of which the Option shall have been exercised.

 

(h)                                 Delivery; Rights of Stockholders.  No Shares shall be delivered pursuant to the exercise of an Option until the exercise price therefor has been fully paid and applicable taxes have been withheld.  The applicable Participant shall have all of the rights of a stockholder of the Company holding the class or series of Common Stock that is subject to the Option or Stock Appreciation Right (including, if applicable, the right to vote the applicable Shares and the right to receive dividends), when the Participant (i) has given written notice of exercise, (ii) if requested, has given the representation described in Section 14(a), and (iii) in the case of an Option, has paid in full for such Shares.

 

(i)                                     Terminations of Employment.  Subject to Section 10(b), a Participant’s Options and Stock Appreciation Rights shall be forfeited upon such Participant’s Termination of Employment, except as set forth below:

 

(i)                                     Upon a Participant’s Termination of Employment by reason of death, any Option or Stock Appreciation Right held by the Participant that was exercisable immediately before the Termination of Employment may be exercised at any time until the earlier of (A) the first anniversary of the date of such death and (B) the expiration of the Term thereof;

 

(ii)                                  Upon a Participant’s Termination of Employment by reason of Disability or Retirement, any Option or Stock Appreciation Right held by the Participant that was exercisable immediately before the Termination of Employment may be exercised at any time until the earlier of (A) the first anniversary of such Termination of Employment and (B) the expiration of the Term thereof;

 

(iii)                               Upon a Participant’s Termination of Employment for Cause, any Option or Stock Appreciation Right held by the Participant shall be forfeited, effective as of such Termination of Employment;

 

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(iv)                              Upon a Participant’s Termination of Employment for any reason other than death, Disability, Retirement or for Cause, any Option or Stock Appreciation Right held by the Participant that was exercisable immediately before the Termination of Employment may be exercised at any time until the earlier of (A) the 90th day following such Termination of Employment and (B) expiration of the Term thereof; and

 

(v)                                 Notwithstanding the above provisions of this Section 5(i), if a Participant dies after such Participant’s Termination of Employment but while any Option or Stock Appreciation Right remains exercisable as set forth above, such Option or Stock Appreciation Right may be exercised at any time until the later of (A) the earlier of (1) the first anniversary of the date of such death and (2) expiration of the Term thereof and (B) the last date on which such Option or Stock Appreciation Right would have been exercisable, absent this Section 5(i)(v).

 

Notwithstanding the foregoing, the Committee shall have the power, in its discretion, to apply different rules concerning the consequences of a Termination of Employment; provided, however, that if such rules are less favorable to the Participant than those set forth above, such rules are set forth in the applicable Award Agreement.  If an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Option will thereafter be treated as a Nonqualified Option.

 

(j)                                    Nontransferability of Options and Stock Appreciation Rights.  No Option or Stock Appreciation Right shall be transferable by a Participant other than (i) by will or by the laws of descent and distribution, or (ii) in the case of a Nonqualified Option or Stock Appreciation Right, pursuant to a qualified domestic relations order or as otherwise expressly permitted by the Committee including, if so permitted, pursuant to a transfer to the Participant’s family members or to a charitable organization, whether directly or indirectly or by means of a trust or partnership or otherwise.  For purposes of this Plan, unless otherwise determined by the Committee, “family member” shall have the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.  A Tandem SAR shall be transferable only with the related Option as permitted by the preceding sentence.  Any Option or Stock Appreciation Right shall be exercisable, subject to the terms of this Plan, only by the applicable Participant, the guardian or legal representative of such Participant, or any person to whom such Option or Stock Appreciation Right is permissibly transferred pursuant to this Section 5(j), it being understood that the term “Participant” includes such guardian, legal representative and other transferee; provided, however, that the term “Termination of Employment” shall continue to refer to the Termination of Employment of the original Participant.

 

SECTION 6.                         RESTRICTED STOCK

 

With respect to Prior Plan Awards and Adjusted Awards, the provisions below will be applicable only to the extent that they are not inconsistent with the terms of the applicable Prior Plan Award or Adjusted Award.

 

(a)                                 Nature of Awards and Certificates.  Shares of Restricted Stock are actual Shares issued to a Participant, and shall be evidenced in such manner as the Committee may deem

 

12

 

appropriate, including book-entry registration or issuance of one or more stock certificates.  Any certificate issued in respect of Shares of Restricted Stock shall be registered in the name of the applicable Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:

 

“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Match Group, Inc. 2015 Stock and Annual Incentive Plan and an Award Agreement.  Copies of such Plan and Agreement are on file at the offices of Match Group, Inc.”

 

The Committee may require that the certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the applicable Participant shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award.

 

(b)                                 Terms and Conditions.  Shares of Restricted Stock shall be subject to the following terms and conditions:

 

(i)                                     The Committee shall, prior to or at the time of grant, condition the vesting or transferability of an Award of Restricted Stock upon the continued service of the applicable Participant or the attainment of Performance Goals, or the attainment of Performance Goals and the continued service of the applicable Participant. In the event that the Committee conditions the grant or vesting of an Award of Restricted Stock upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the applicable Participant, the Committee may, prior to or at the time of grant, designate such an Award as a Qualified Performance-Based Award. The conditions for grant, vesting, or transferability and the other provisions of Restricted Stock Awards (including without limitation any Performance Goals) need not be the same with respect to each Participant.

 

(ii)                                  Subject to the provisions of the Plan and the applicable Award Agreement, so long as a Restricted Stock Award remains subject to the satisfaction of vesting conditions (the “RS Restriction Period”), the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Shares of Restricted Stock.

 

(iii)                               Except as provided in this Section 6 and in the applicable Award Agreement, the applicable Participant shall have, with respect to the Shares of Restricted Stock, all of the rights of a stockholder of the Company holding the class or series of Common Stock that is the subject of the Restricted Stock, including, if applicable, the right to vote the Shares and the right to receive any cash dividends.  If so determined by the Committee in the applicable Award Agreement and subject to Section 14(e), (A) cash dividends on the class or series of Common Stock that is the subject of the Restricted Stock Award shall be automatically reinvested in additional Restricted Stock, held subject to the vesting of the underlying Restricted Stock, and (B) subject to any adjustment pursuant to Section 3(d), dividends payable in Common Stock shall be paid in

 

13

 

the form of Restricted Stock of the same class as the Common Stock with which such dividend was paid, held subject to the vesting of the underlying Restricted Stock.

 

(iv)                              Except as otherwise set forth in the applicable Award Agreement and subject to Section 10(b), upon a Participant’s Termination of Employment for any reason during the RS Restriction Period or before the applicable Performance Goals are satisfied, all Shares of Restricted Stock still subject to restriction shall be forfeited by such Participant; provided, however, that the Committee shall have the discretion to waive, in whole or in part, any or all remaining restrictions with respect to any or all of such Participant’s Shares of Restricted Stock.

 

(v)                                 If and when any applicable Performance Goals are satisfied and the RS Restriction Period expires without a prior forfeiture of the Shares of Restricted Stock for which legended certificates have been issued, unlegended certificates for such Shares shall be delivered to the Participant upon surrender of the legended certificates.

 

SECTION 7.                         RESTRICTED STOCK UNITS

 

With respect to Prior Plan Awards and Adjusted Awards, the provisions below will be applicable only to the extent that they are not inconsistent with the terms of the applicable Prior Plan Award or Adjusted Award.

 

(a)                                 Nature of Awards.  Restricted Stock Units are Awards denominated in Shares that will be settled, subject to the terms and conditions of the Restricted Stock Units, in an amount in cash, Shares or both, based upon the Fair Market Value of a specified number of Shares.

 

(b)                                 Terms and Conditions.  Restricted Stock Units shall be subject to the following terms and conditions:

 

(i)                                     The Committee shall, prior to or at the time of grant, condition the grant, vesting, or transferability of Restricted Stock Units upon the continued service of the applicable Participant or the attainment of Performance Goals, or the attainment of Performance Goals and the continued service of the applicable Participant. In the event that the Committee conditions the grant or vesting of Restricted Stock Units upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the applicable Participant, the Committee may, prior to or at the time of grant, designate such Awards as Qualified Performance-Based Awards. The conditions for grant, vesting or transferability and the other provisions of Restricted Stock Units (including without limitation any Performance Goals) need not be the same with respect to each Participant.

 

(ii)                                  Subject to the provisions of the Plan and the applicable Award Agreement, so long as an Award of Restricted Stock Units remains subject to the satisfaction of vesting conditions (the “RSU Restriction Period”), the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Restricted Stock Units.

 

(iii)                               The Award Agreement for Restricted Stock Units shall specify whether, to what extent and on what terms and conditions the applicable Participant shall be entitled

 

14

 

to receive current or delayed payments of cash, Common Stock or other property corresponding to the dividends payable on the Common Stock (subject to Section 14(e) below).

 

(iv)                              Except as otherwise set forth in the applicable Award Agreement, and subject to Section 10(b), upon a Participant’s Termination of Employment for any reason during the RSU Restriction Period or before the applicable Performance Goals are satisfied, all Restricted Stock Units still subject to restriction shall be forfeited by such Participant; provided, however, that the Committee shall have the discretion to waive, in whole or in part, any or all remaining restrictions with respect to any or all of such Participant’s Restricted Stock Units.

 

(v)                                 Except to the extent otherwise provided in the applicable Award Agreement, an award of Restricted Stock Units shall be settled as and when the Restricted Stock Units vest (but in no event later than March 15 of the calendar year following the end of the calendar year in which the Restricted Stock Units vest).

 

SECTION 8.                         OTHER STOCK-BASED AWARDS

 

Other Awards of Common Stock and other Awards that are valued in whole or in part by reference to, or are otherwise based upon or settled in, Common Stock, including (without limitation), unrestricted stock, performance units, dividend equivalents, and convertible debentures, may be granted under the Plan.

 

SECTION 9.                         CASH-BASED AWARDS

 

Cash-Based Awards may be granted under this Plan.  Cash-Based Awards that are Qualified Performance-Based Awards shall be subject to the provisions of Section 11 of this Plan.  In addition, no Eligible Individual may be granted Cash-Based Awards that are Qualified Performance-Based Award that have an aggregate maximum payment value in any calendar year in excess of $10.0 million.  Cash-Based Awards may be paid in cash or in Shares (valued at Fair Market Value as of the date of payment) as determined by the Committee.

 

SECTION 10.                  CHANGE IN CONTROL PROVISIONS

 

(a)                                 Definition of Change in Control.  Except as otherwise may be provided in an applicable Award Agreement, for purposes of the Plan, a “Change in Control” shall mean any of the following events:

 

(i)                                     The acquisition by any individual entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than Barry Diller and his Affiliates (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of equity securities of the Company representing more than 50% of the voting power of the then outstanding equity securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company, (B) any acquisition directly from the Company, (C) any acquisition by

 

15

 

any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii); or

 

(ii)                                  Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, or whose election was not opposed by Barry Diller voting as a stockholder, shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

(iii)                               Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the purchase of assets or stock of another entity (a “Business Combination”), in each case, unless immediately following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination will beneficially own, directly or indirectly, more than 50% of the then outstanding combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent governing body, if applicable) of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, (B) no Person (excluding Barry Diller and his Affiliates, any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) will beneficially own, directly or indirectly, more than a majority of the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership of the Company existed prior to the Business Combination and (C) at least a majority of the members of the board of directors (or equivalent governing body, if applicable) of the entity resulting from such Business Combination will have been members of the Incumbent Board at the time of the initial agreement, or action of the Board, providing for such Business Combination; or

 

(iv)                              Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

For the avoidance of doubt, a spin-off of the Company from IAC shall not constitute a Change in Control.

 

(b)                                 Impact of Event/Double Trigger.  Unless otherwise provided in the applicable Award Agreement, subject to Sections 3(d), 10(d) and 14(k), notwithstanding any other

 

16

 

provision of this Plan to the contrary, upon a Participant’s Termination of Employment, during the two-year period following a Change in Control, by the Company other than for Cause or Disability or by the Participant for Good Reason (as defined below):

 

(i)                                     any Options and Stock Appreciation Rights outstanding as of such Termination of Employment which were outstanding as of the date of such Change in Control shall be fully exercisable and vested and shall remain exercisable until the later of (i) the last date on which such Option or Stock Appreciation Right would be exercisable in the absence of this Section 10(b) and (ii) the earlier of (A) the first anniversary of such Change in Control and (B) expiration of the Term of such Option or Stock Appreciation Right;

 

(ii)                                  all Restricted Stock outstanding as of such Termination of Employment which were outstanding as of the date of such Change in Control shall become free of all restrictions and become fully vested and transferable; and

 

(iii)                               all Restricted Stock Units outstanding as of such Termination of Employment which were outstanding as of the date of such Change in Control shall be considered to be earned and payable in full, and any restrictions shall lapse and such Restricted Stock Units shall be settled as promptly as is practicable (but in no event later than March 15 of the calendar year following the end of the calendar year in which the Restricted Stock Units vest).

 

(c)                                  For purposes of this Section 10, “Good Reason” means (i) “Good Reason” as defined in any Individual Agreement or Award Agreement to which the applicable Participant is a party, or (ii) if there is no such Individual Agreement or if it does not define Good Reason, without the Participant’s prior written consent:  (A) a material reduction in the Participant’s rate of annual base salary from the rate of annual base salary in effect for such Participant immediately prior to the Change in Control, (B) a relocation of the Participant’s principal place of business more than 35 miles from the city in which such Participant’s principal place of business was located immediately prior to the Change in Control or (C) a material and demonstrable adverse change in the nature and scope of the Participant’s duties from those in effect immediately prior to the Change in Control.  In order to invoke a Termination of Employment for Good Reason, a Participant shall provide written notice to the Company of the existence of one or more of the conditions described in clauses (A) through (C) within 90 days following the Participant’s knowledge of the initial existence of such condition or conditions, and the Company shall have 30 days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition.  In the event that the Company fails to remedy the condition constituting Good Reason during the Cure Period, the Participant must terminate employment, if at all, within 90 days following the Cure Period in order for such Termination of Employment to constitute a Termination of Employment for Good Reason.

 

(d)                                 Notwithstanding the foregoing, if any Award is subject to Section 409A of the Code, this Section 10 shall be applicable only to the extent specifically provided in the Award Agreement or in the Individual Agreement.

 

17

 

SECTION 11.                  QUALIFIED PERFORMANCE-BASED AWARDS; SECTION 16(b)

 

(a)                                 The provisions of this Plan are intended to ensure that all Options and Stock Appreciation Rights granted hereunder to any Participant who is or may be a “covered employee” (within the meaning of Section 162(m)(3) of the Code) in the tax year in which such Option or Stock Appreciation Right is expected to be deductible to the Company qualify for the Section 162(m) Exemption, and all such Awards shall therefore be considered Qualified Performance-Based Awards and this Plan shall be interpreted and operated consistent with that intention (including, without limitation, to require that all such Awards be granted by a committee composed solely of members who satisfy the requirements for being “outside directors” for purposes of the Section 162(m) Exemption (“Outside Directors”)).  When granting any Award other than an Option or Stock Appreciation Right, the Committee may designate such Award as a Qualified Performance-Based Award, based upon a determination that (i) the recipient is or may be a “covered employee” (within the meaning of Section 162(m)(3) of the Code) with respect to such Award, and (ii) the Committee wishes such Award to qualify for the Section 162(m) Exemption, and the terms of any such Award (and of the grant thereof) shall be consistent with such designation (including, without limitation, that all such Awards be granted by a committee composed solely of Outside Directors).

 

(b)                                 The full Board shall not be permitted to exercise authority granted to the Committee to the extent that the grant or exercise of such authority would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption.

 

(c)                                  The provisions of this Plan are intended to ensure that no transaction under the Plan is subject to (and all such transactions will be exempt from) the short-swing recovery rules of Section 16(b) of the Exchange Act (“Section 16(b)”).  Accordingly, the composition of the Committee shall be subject to such limitations as the Board deems appropriate to permit transactions pursuant to this Plan to be exempt (pursuant to Rule 16b-3 promulgated under the Exchange Act) from Section 16(b), and no delegation of authority by the Committee shall be permitted if such delegation would cause any such transaction to be subject to (and not exempt from) Section 16(b).

 

SECTION 12.                  TERM, AMENDMENT AND TERMINATION

 

(a)                                 Effectiveness.  The Plan shall be effective as of November 18, 2015 (the “Effective Date”).

 

(b)                                 Termination.  The Plan will terminate on the tenth anniversary of the Effective Date.  Awards outstanding as of such date shall not be affected or impaired by the termination of the Plan.

 

(c)                                  Amendment of Plan.  The Board may amend, alter, or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which would materially impair the rights of the Participant with respect to a previously granted Award without such Participant’s consent, except such an amendment made to comply with applicable law (including without limitation Section 409A of the Code), stock exchange rules or accounting rules.  In addition, no amendment

 

18

 

shall be made without the approval of the Company’s stockholders to the extent such approval is required by applicable law or the listing standards of the Applicable Exchange.

 

(d)                                 Amendment of Awards.  Subject to Section 5(d), the Committee may unilaterally amend the terms of any Award theretofore granted, but no such amendment shall, without the Participant’s consent, materially impair the rights of any Participant with respect to an Award, except such an amendment made to cause the Plan or Award to comply with applicable law, stock exchange rules or accounting rules.

 

SECTION 13.                  UNFUNDED STATUS OF PLAN

 

It is intended that the Plan constitute an “unfunded” plan.  Solely to the extent permitted under Section 409A, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments; provided, however, that the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Plan.

 

SECTION 14.                  GENERAL PROVISIONS

 

(a)                                 Conditions for Issuance.  The Committee may require each person purchasing or receiving Shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the Shares without a view to the distribution thereof.  The certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer.  Notwithstanding any other provision of the Plan or agreements made pursuant thereto, the Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to fulfillment of all of the following conditions:  (i) listing or approval for listing upon notice of issuance, of such Shares on the Applicable Exchange; (ii) any registration or other qualification of such Shares of the Company under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and (iii) obtaining any other consent, approval, or permit from any state or federal governmental agency which the Committee shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable.

 

(b)                                 Additional Compensation Arrangements.  Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting other or additional compensation arrangements for its employees.

 

(c)                                  No Contract of Employment.  The Plan shall not constitute a contract of employment, and adoption of the Plan shall not confer upon any employee any right to continued employment, nor shall it interfere in any way with the right of the Company or any Subsidiary or Affiliate to terminate the employment of any employee at any time.

 

(d)                                 Required Taxes.  No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal, state, local or foreign income or employment or other tax purposes with respect to any Award under the Plan, such Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld

 

19

 

with respect to such amount.  If determined by the Company, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement.  The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to such Participant.  The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Common Stock.

 

(e)                                  Limitation on Dividend Reinvestment and Dividend Equivalents.  Reinvestment of dividends in additional Restricted Stock at the time of any dividend payment, and the payment of Shares with respect to dividends to Participants holding Awards of Restricted Stock Units, shall only be permissible if sufficient Shares are available under Section 3 for such reinvestment or payment (taking into account then outstanding Awards).  In the event that sufficient Shares are not available for such reinvestment or payment, such reinvestment or payment shall be made in the form of a grant of Restricted Stock Units equal in number to the Shares that would have been obtained by such payment or reinvestment, the terms of which Restricted Stock Units shall provide for settlement in cash and for dividend equivalent reinvestment in further Restricted Stock Units on the terms contemplated by this Section 14(e).

 

(f)                                   Designation of Death Beneficiary.  The Committee shall establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable in the event of such Participant’s death are to be paid or by whom any rights of such eligible Individual, after such Participant’s death, may be exercised.

 

(g)                                  Subsidiary Employees.  In the case of a grant of an Award to any employee of a Subsidiary, the Company may, if the Committee so directs, issue or transfer the Shares, if any, covered by the Award to the Subsidiary, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Subsidiary will transfer the Shares to the employee in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan.  All Shares underlying Awards that are forfeited or canceled shall revert to the Company.

 

(h)                                 Governing Law and Interpretation.  The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws.  The captions of this Plan are not part of the provisions hereof and shall have no force or effect.

 

(i)                                     Non-Transferability.  Except as otherwise provided in Section 5(j) or as determined by the Committee, Awards under the Plan are not transferable except by will or by laws of descent and distribution.

 

(j)                                    Foreign Employees and Foreign Law Considerations.  The Committee may grant Awards to Eligible Individuals who are foreign nationals, who are located outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause the Company to be subject to) legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different

 

20

 

from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, or subplans as may be necessary or advisable to comply with such legal or regulatory provisions.

 

(k)                                 Section 409A of the Code.  It is the intention of the Company that no Award shall be “deferred compensation” subject to Section 409A of the Code, unless and to the extent that the Committee specifically determines otherwise as provided in this Section 14(k), and the Plan and the terms and conditions of all Awards shall be interpreted accordingly.  The terms and conditions governing any Awards that the Committee determines will be subject to Section 409A of the Code, including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto and any rules regarding treatment of such Awards in the event of a Change in Control, shall be set forth in the applicable Award Agreement, and shall comply in all respects with Section 409A of the Code.  Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that constitutes a “nonqualified deferred compensation plan” subject to Section 409A of the Code, if the Participant is a “specified employee” within the meaning of Section 409A of the Code, any payments (whether in cash, Shares or other property) to be made with respect to the Award upon the Participant’s Termination of Employment shall be delayed until the earlier of (A) the first day of the seventh month following the Participant’s Termination of Employment and (B) the Participant’s death. Each payment under any Award shall be treated as a separate payment for purposes of Section 409A of the Code.  In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under any Award.

 

(l)                                     Prior Plan Awards; Adjusted Awards.  Notwithstanding anything in this Plan to the contrary, to the extent that the terms of this Plan are inconsistent with the terms of a Prior Plan Award or an Adjusted Award, the terms of the Prior Plan Award or Adjusted Award shall be governed by the applicable plan under which the Prior Plan Award or Adjusted Award was granted and the award agreement thereunder.  Any reference to a “change in control,” “change of control” or similar definition in an Award Agreement or the applicable plan for any Adjusted Award or Prior Plan Award shall be deemed to refer to a “change in control,” “change of control” or similar transaction with respect to the Company (as successor to the originally-referenced entity) for such Adjusted Award or Prior Plan Award.

 

21Exhibit 10.1

 

CREDIT AND SECURITY AGREEMENT

 

THIS CREDIT AND SECURITY AGREEMENT (this
“Agreement”), dated as of November 23, 2015, is entered into by and among Long Island Brand Beverages
LLC, a New York limited liability company (“Borrower”), Long Island Iced Tea Corp., a Delaware corporation
(“Parent”), and Brentwood LIIT Inc., a Delaware corporation (the “Lender”).

 

RECITALS

 

WHEREAS, the Lender desires to provide Borrower
with a secured convertible line of credit (the “Line of Credit”) in the original principal amount of
up to One Million Dollars ($1,000,000), subject to increase as provided herein (the “Available Amount”),
up to a maximum principal amount of Five Million Dollars ($5,000,000) (the “Facility Amount”), all on
the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the
covenants, promises and representations set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby expressly and mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as
follows:

 

ARTICLE I.

LINE OF CREDIT

 

1.1           The
Line of Credit.

 

(a)          Subject
to the terms and conditions set forth below, the Lender shall make Advances (as hereafter defined) to Borrower, which Borrower
may repay and reborrow, so long as the aggregate amount of Advances outstanding at any one time shall not exceed the then current
Available Amount; provided, however, that the amount of any interest and fees that have been capitalized in accordance
with this Agreement shall be excluded in calculating whether the Available Amount has been exceeded. Subject to the terms and
conditions set forth below, the original Available Amount shall be made in two Advances, the first of which (the “First
Available Amount”) shall be in a principal amount of up to Three Hundred Fifty Thousand Dollars ($350,000) and shall
be made no later than November 23, 2015, and the second of which (the “Second Available Amount”) shall
be in a principal amount of up to Six Hundred Fifty Thousand Dollars ($650,000) (the “Second Available Amount Maximum”)
and shall be made no later than the last to occur of December 7, 2015. Amounts not Advanced to Borrower under the First Available
Amount will not increase the amount of the Second Available Amount Maximum.

 

     

     

    

 

(b)          The
Available Amount shall be subject to increase, but in no event in excess of the Facility Amount, as follows:

 

(i)          After
the First Available Amount and the Second Available Amount have been Advanced and prior to the Maturity Date (as defined in the
Note (as hereinafter defined)), but provided that prior to January 31, 2016, Borrower has furnished Lender with a financial projection
of the Borrower which shall include but not be limited to projected revenue targets, gross margins, net operating profits and proposed
debt and capital raisings of Borrower (each a “Projection”) for each fiscal quarter ending on the third
anniversary of the date of the request provided herein, the Borrower may deliver, not more than once during each calendar month,
a written request to the Lender, certified by Borrower’s Chief Executive Officer, President or Chief Accounting Officer,
for an increase from the Available Amount (as it may have been previously increased), which request shall (1) specify the amount
of the increase, which shall be in increments of Five Hundred Thousand Dollars ($500,000) but in no event in an amount in excess
of the Facility Amount (the amount of any interest and fees that have been capitalized in accordance with this Agreement shall
be excluded in calculating whether the Facility Amount has been exceeded), (2) include a schedule of proposed payments the Borrower
intends to make with the proceeds (each a “Schedule of Payments”) of the requested increase from the
Available Amount, and (3) set forth in reasonable detail the Borrower’s actual performance through the date of such request
against the Projections delivered to Lender prior to the date hereof.

 

(ii)         Within
five (5) business days of the receipt by the Lender of a written request by Borrower pursuant to clause (i), the Lender shall notify
Borrower in writing of the amount, if any, of the increase from the Available Amount (as it may have been previously increased)
that has been approved by the Lender; provided, however, the Lender shall have no obligation under any circumstance
to approve any increase from the Available Amount (as it may have been previously increased), and nothing set forth herein shall
constitute a commitment, express or implied, from the Lender to do so, and Borrower acknowledges that it is not relying on the
availability of Advances in an amount in excess of the Available Amount in planning its cash needs.

 

(iii)        If
the Available Amount has been increased pursuant to this Section 1.1(b), (1) it shall not be reduced without the prior written
consent of Borrower, except that the availability of the Available Amount may, in the Lender’s discretion, be terminated
if an Event of Default (as defined in the Note) has occurred and is continuing, and (2) from time to time prior to the Maturity
Date and subject to the terms and conditions set forth below, the Lender shall make Advances to Borrower, which Borrower may repay
and reborrow, so long as the aggregate amount of Advances outstanding at any one time shall not exceed the Available Amount as
it has been increased pursuant to the terms hereof; provided, however, that the amount of any interest and fees that
have been capitalized in accordance with this Agreement shall be excluded in calculating whether the increased Available Amount
has been exceeded.

 

    	 	2	 

     

    

 

1.2           Note.
The indebtedness of Borrower to the Lender will be evidenced by a secured convertible promissory note in the form of Exhibit A made
by the Borrower in favor of the Lender (the “Note”). The original face amount of the Note will
be Three Hundred Fifty Thousand Dollars ($350,000); provided, however, that notwithstanding the face amount
of the Note, Borrower’s liability under the Note shall be at all times equal to such lesser or greater amount of its actual
indebtedness, principal, interest, fees, charges, expenses and reasonable attorneys’ fees and costs and other amounts, obligations,
covenants and duties owing by Borrower to the Lender (or any permitted assignee) of any kind and description (whether pursuant
to or evidenced by the Note or this Agreement), whether direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, including Lender’s Expenses (collectively, the “Obligations”), in each
case as then outstanding hereunder and under the Note. As used herein, “Lender’s Expenses” means
all reasonable attorneys’ fees, costs and expenses incurred by the Lender in amending, enforcing or defending its
rights hereunder and under the Loan Documents (as hereinafter defined) (including fees and expenses of appeal or review), including
the exercise of any rights or remedies afforded under the Note or under applicable law, whether or not suit is brought, whether
before or after bankruptcy or insolvency, including without limitation all fees and costs incurred by the Lender in connection
with the enforcement of its rights in a bankruptcy or insolvency proceeding filed by or against Borrower. The records of the Lender
with respect to the amount of Obligations outstanding at any time shall be conclusive, absent manifest error.

 

1.3           Use
of Proceeds. The proceeds of each Advance shall be used to pay the amounts set forth in the Schedule of Payments relating to
such Advance.

 

1.4           Payment
of Outstanding Obligations. The aggregate Obligations outstanding on the Maturity Date shall be due and payable in full on
the Maturity Date. 

 

1.5           Interest.
Interest on the outstanding principal amount of each Advance shall accrue at a rate equal to the Prime Rate (as published in the
Wall Street Journal) plus seven and one-half percent (7.5%) per annum (the “Interest Rate”), and on each
monthly anniversary of the making of each Advance such accrued interest shall be capitalized by adding it to the outstanding principal
amount of the Line of Credit until the repayment in full of all Obligations, the termination of this Agreement and cancellation
of the Note. Each change in the Prime Rate (as published in the Wall Street Journal) shall result in a change to the Interest Rate.
All computations of interest shall be made on the basis of a year of 360 days, as the case may be, and the actual number of days
elapsed. Notwithstanding the foregoing, in no event shall the Interest Rate exceed the greater of 25% and the maximum rate of interest
payable under applicable law.

 

1.6           Default
Rate. Upon the Maturity Date or any acceleration thereof, and at Lender’s option upon the occurrence of any Event of
Default and during the continuance thereof, the outstanding principal amount of each Advance shall bear interest at a rate that
shall be equal to the Interest Rate then in effect plus eight percent (8.0%) per annum, but in no event greater than the maximum
rate of interest payable under applicable law (the “Default Rate”). The Default Rate shall continue to
apply whether or not judgment shall be entered on the Note. The Default Rate is imposed as liquidated damages for the purpose of
defraying the Lender’s expenses incident to the handling of delinquent payments, but is in addition to, and not in lieu of,
the Lender exercise of any rights and remedies hereunder or under applicable law, and any fees and expenses of any agents or attorneys
which the Lender may employ. In addition, the Default Rate reflects the increased credit risk to the Lender of carrying an Advance
that is in default. Borrower agrees that the Default Rate is a reasonable forecast of just compensation for anticipated and actual
harm incurred by the Lender, and that the actual harm incurred by the Lender cannot be estimated with certainty and without difficulty.

 

    	 	3	 

     

    

 

1.7           Advances.
Borrower shall give Lender written notice not later than 3:00 p.m., Eastern time, on the third business day prior to the date of
any requested advance (the “Advance Date”) of credit pursuant to the Line of Credit (each an “Advance”).
Any such notice shall be in the form set forth as Exhibit B (the “Borrowing Notice”),
shall be certified by the Chief Executive Officer, President or Chief Accounting Officer of Borrower, shall have attached thereto
the Schedule of Payments relating to the use of the proceeds of such Advance, shall set forth the aggregate amount of the requested
Advance (which shall in no event exceed the aggregate of the amounts set forth in such Schedule of Payments) and the proposed Advance
Date of such Advance. After receiving a request for an Advance to which Borrower is entitled hereunder and under the Note pursuant
to a Borrowing Notice complying with the terms hereof, but no later than the business day prior to the proposed Advance Date, Lender
shall notify Borrower if it approves the requested Advance in the amount so requested; provided, that the initial Advance of up
to $350,000 under the First Available Amount and the second Advance of up to $650,000 under the Second Available Amount shall be
deemed to have been approved. The actual amount of each Advance will be the amount, if any, approved or deemed approved by Lender
of the amount set forth in the Schedule of Payments relating to such Advance and, provided the terms and conditions set forth below
have been satisfied in full, Lender shall make available to Borrower on the Advance Date in U.S. dollars the amount of the Advance
so approved by Lender by wire transfer of immediately available funds to a bank account designated by Borrower in the Borrowing
Notice. Notwithstanding the foregoing, Borrower shall not be required to provide three business days’ advance notice of funding
for the initial Advance. In no event will Lender have an obligation to make (i) the initial Advance in an amount in excess of $350,000,
(ii) the second Advance in an amount in excess of the Second Available Amount Maximum or (iii) an Advance which, when added to
the principal amount of Advances then outstanding, exceed the then current Available Amount.

 

1.8           Prepayment.
Borrower may prepay the outstanding Obligations under the Line of Credit, in whole or in part, at any time without premium or penalty.
Prepayments of all or any portion of the Obligations shall not reduce the Available Amount (as it may have been increased), and
funds may be reborrowed hereunder up to the Available Amount, subject to the provisions hereof and of the Note.

 

1.9           Payments;
Payment Application. Any and all payments on account of the Obligations will be applied first, to accrued and unpaid interest
and second, to the outstanding principal amount (including any capitalized interest and fees) and other sums due hereunder and
under the Note. If Borrower makes a payment or payments and such payment or payments, or any part thereof, are subsequently invalidated,
declared to be fraudulent or preferential, set aside or are required to be repaid to a trustee, receiver, or any other Person (as
defined in the Note) under any bankruptcy act, state, provincial or federal law, common law or equitable cause, then to the extent
of such payment or payments, the Obligations or part thereof hereunder intended to be satisfied shall be revived and continued
in full force and effect as if said payment or payments had not been made.

 

1.10         Conditions
to Initial Advance. The obligation of the Lender to make the initial Advance under the First Available Amount shall be subject
to:

 

    	 	4	 

     

    

 

(a)          Documentation.
The Lender’s receipt of the following documents, each in form and substance satisfactory to the Lender:

 

(i)          This
Agreement. This Agreement, duly executed by Borrower and Parent.

 

(ii)         Secured
Convertible Promissory Note. The Note, duly executed by Borrower.

 

(iii)        Registration
Rights Agreement. A registration rights agreement, in a form mutually agreeable to the parties, duly executed by Parent.

 

(iv)        Warrant.
A Warrant, in the form of Exhibit C, duly executed by Parent (the “Warrant”).

 

(v)         Borrowing
Notice. A signed and completed Borrowing Notice, with all attachments thereto (including a Schedule of Payments with respect
to the First Available Amount).

 

(vi)        Borrower
Secretary’s Certificate. A copy of Borrower’s articles of organization and limited liability company agreement,
each as amended and/or restated, and resolutions duly adopted by its board of directors authorizing this Agreement, the Note and
the transactions contemplated hereby and thereby, as certified by the duly authorized Secretary of Borrower, together with a good
standing certificate of Borrower from its state of formation and from each state in which it is required to be authorized to do
business.

 

(vii)       Parent
Secretary’s Certificate. A copy of Parent’s certificate of incorporation and by-laws, each as amended and/or restated,
and resolutions duly adopted by its board of directors authorizing this Agreement, the Parent Guaranty (as hereinafter defined),
the Warrant and the transactions contemplated hereby and thereby, as certified by the duly authorized Secretary of Parent, together
with a good standing certificate of Parent from its state of formation and from each state in which it is required to be authorized
to do business.

 

(viii)      UCC
Search. A completed UCC search with respect to Borrower and Parent in each jurisdiction requested by Lender and evidence that
the security interest granted Lender hereunder shall be prior to any other Liens, other than Permitted Liens (as such terms are
defined in the Note).

 

(ix)         Opinion
of Counsel. An opinion of Borrower’s counsel with respect to such matters as Lender shall reasonably request.

 

(x)          Validity
Guaranty and Liquidation Assistance Letter. A Validity Guaranty and Liquidation Assistance Letter, in a form mutually agreeable
to the parties, duly executed by those officers of the Borrower as is determined by the Lender.

 

(xi)         Parent
Guaranty. A Guaranty, in the form of Exhibit D, duly executed by the Parent (the “Parent Guaranty”).

 

    	 	5	 

     

    

 

(xii)        Pledge
and Security Agreement. A Pledge and Security Agreement, in a form mutually agreeable to the parties, duly executed by Parent,
providing for original certificates representing Parent’s and Borrower’s equity interest in each Subsidiary (as hereinafter
defined), including, without limitation, the Borrower Membership Interest (as hereinafter defined), together with stock powers
executed in blank with respect thereto, to be held by a collateral agent as security for the Obligations.

 

(xiii)       Insurance.
Evidence that the Lender has been named as Lender Loss Payee on all of Borrower’s insurance in accordance with the provisions
of Section 7(d) of the Note.

 

(b)          Initial
Funding Fee. Borrower having paid to the Lender a one-time initial funding fee of one and three-quarters percent (1.75%)
of the Facility Amount, which fee will be capitalized by adding it to the outstanding principal amount of the Line of Credit (after
which, interest shall accrue on such additional principal amount at the applicable rate prescribed herein).

 

(c)          No
Event of Default. The absence of any Event of Default, or any event that with notice or lapse of time, would constitute an
Event of Default.

 

(d)          Expenses.
Borrower having paid all reasonable legal costs, out of pocket expenses, lien search charges and filing fees incurred by the Lender
in connection with the preparation, delivery and/or filing of the Loan Documents.

 

(e)          Other
Documents. Borrower and Parent having executed or cause to be executed and delivered or cause to be delivered to the Lender
such documents, instructions, certificates, opinions and assurances, guaranties, security agreements, facility agreements, or other
agreements, containing such warranties, covenants and conditions as are normally contained in such documents relating to similar
credit facilities, as Lender shall reasonably require (collectively the “Loan Documents”).

 

1.11         Subsequent
Advances. The obligation of the Lender to make Advances after the Advance under the First Available Amount shall be subject
to:

 

(a)          Lender’s
receipt of the following documents, each in form and substance satisfactory to the Lender:

 

(i)          Except
in the case of the Advance under the Second Available Amount, a written certification from the Chief Executive Officer, President
or Chief Accounting Officer of Borrower that Borrower has met the most recently provided Projections for each of the two most recent
fiscal quarters included therein ended at least 45 days prior to the date of the Borrowing Notice.

 

(ii)         A
signed and completed Borrowing Notice, with all attachments thereto (including a Schedule of Payments with respect to such Advance,
and with respect only to the Advance constituting the Second Available Amount, a Schedule of Payments that provides for payment
of up to $150,000 with the proceeds of such Advance for alcohol related expenditures and up to $500,000 for non-alcohol related
expenditures).

 

    	 	6	 

     

    

 

(iii)        
Except in the case of the Advance under the Second Available Amount, a good standing certificate of each of Parent and Borrower
from its state of formation and from each state in which it is required to be authorized do business.

 

(b)          Except
in the case of the Advance under the Second Available Amount, Borrower having executed or caused to be executed and delivered or
caused to be delivered such Loan Documents as Lender shall reasonably require.

 

(c)          No
Event of Default. The absence of any Event of Default, or any event that with notice or lapse of time, would constitute an
Event of Default.

 

(d)          Lender
Approval. With respect to any Advance after making the Advance constituting the Second Available Amount, the approval of the
Lender to an increase in the Available Amount in accordance with the terms of Section 1.1(b).

 

1.12         Conversion
Rights and Mechanics. The Lender shall have the right, at its discretion, pursuant to the terms of, and as provided for in,
the Note, to convert the outstanding principal amount of the Line of Credit and all accrued and unpaid interest thereon into shares
of common stock, par value $0.0001 per share, of the Parent (the “Common Stock”). The conversion price
shall be $4.00 per share of Common Stock (the “Conversion Price”). The number of Conversion Shares (as
hereinafter defined) issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (i) the outstanding
principal amount of the Line of Credit to be converted and all accrued and unpaid interest thereon by (ii) the Conversion Price.
The provisions of Section 2 of the Note are hereby incorporated by reference herein as if set forth herein in full. Parent agrees
to perform each of its obligations under Section 2 of the Note as if it were a party thereto.

 

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF PARENT

 

Except as set forth on the Schedule of Exceptions
delivered to the Lender in connection with this Agreement, Parent represents and warrants to the Lender as follows:

 

2.1           Borrower
Representations. The representations and warranties of Borrower set forth in Article III are true and correct.

 

2.2           Existence;
Compliance with the Law. The Parent (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation; (b) has the corporate power and authority and the legal right to own and operate its property, and to conduct
the business in which it is currently engaged; (c) is duly qualified as a corporation and is in good standing under the laws of
each jurisdiction where its ownership or operation of property or the conduct of its business require such qualification; and (d)
is in compliance with its certificate of incorporation and bylaws or other organizational or governing documents, and all laws,
treaties, rules or regulations, and all determinations of any arbitrator or a court or other governmental authority (“Requirements
of Law”), in each case applicable to or binding upon Parent or any of its property or to which Parent or any of its
property is subject.

 

    	 	7	 

     

    

 

2.3           SEC
Reports and Financial Statements. The Parent has filed all proxy statements, reports and other documents required to be filed
by it (“SEC Reports”) with the Securities and Exchange Commission (the “SEC”)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Each SEC Report was, at the
time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis during
the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the
case of unaudited interim statements, to the extent they may not include footnotes or may be condensed) and fairly present in all
material respects the financial condition, the results of operations and the cash flows of Parent and any Subsidiaries, on a consolidated
basis, as of, and for, the periods presented in each such SEC Report. Since the date of Parent’s last quarterly report on
Form 10-Q, there has been no event that has occurred that could result in a Material Adverse Change (as hereinafter defined).

 

2.4           Power;
Authorization; Enforceable Obligations. The Parent has the corporate power, authority and legal right to make, execute, deliver
and perform its obligations under this Agreement and each Loan Document to which it is a party; and has taken all requisite action
to authorize the terms and conditions of this Agreement, the Warrant and the Parent Guaranty and to authorize the execution, delivery
and performance of this Agreement and each Loan Document to which it is a party. No consent or authorization of, filing with, or
other act by or in respect of any other Person (including shareholders and creditors of the Parent) or any governmental authority,
other than the filing of UCC-1 Financing Statements with the Secretary of State of New York and Delaware in connection with perfecting
the security interest granted to Lender hereunder (the “Financing Statements”), is required in connection
with the execution, delivery, performance, validity or enforceability of this Agreement or the Loan Documents. This Agreement and
each Loan Document to which Parent is a party has been duly executed and delivered on behalf of the Parent, and constitutes a legal,
valid and binding obligation of the Parent enforceable against the Parent in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting
the enforcement of creditors’ rights generally.

 

2.5           Capitalization.
The authorized capital stock of Parent consists of thirty-six million (36,000,000) shares, of which thirty-five million (35,000,000)
shares are designated as Common Stock and one million (1,000,000) shares are designated as preferred stock. As of the date of this
Agreement, Parent has four million six hundred seventeen thousand five hundred thirty-three (4,617,533) shares of Common Stock
issued and outstanding and no shares of preferred stock issued and outstanding. All of the outstanding shares of capital stock
of Parent are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities
laws and none of such outstanding shares were issued in violation of any preemptive rights or similar rights to subscribe for or
purchase securities. The Common Stock currently trades on the OTCQB Venture Market (the “OTCQB”) under
the trading symbol “LTEA” and satisfies all requirements for the continuation of such trading. The Parent has received
no notice, either oral or written, with respect to the continued eligibility of its Common Stock for quotation on the OTCQB, and
the Parent has maintained all requirements on its part for the continuation of such quotation. As of the date of this Agreement
and except as disclosed in the SEC Reports, the Parent has no other shares of capital stock authorized, issued or outstanding,
and neither the Parent, Borrower or any other Person has any rights, options or warrants outstanding or other agreements or arrangements
(contingent or otherwise), in each case, pursuant to which any Person has the right to acquire (contingently or otherwise), or
obligating the Parent, Borrower or any other Person to issue or grant (contingently or otherwise), any shares of capital stock
or other equity interests of Parent. As of the date of this Agreement and except as disclosed in the SEC Reports, (i) none of the
outstanding shares of capital stock of Parent are subject to or were issued in violation of any preemptive rights or similar rights
created by statute or the organizational documents of Parent, (ii) all of the outstanding shares of capital stock of Parent are
owned by Parent thereof free and clear of all Liens, and (iii) there are no outstanding obligations of Parent to repurchase, redeem
or otherwise acquire any outstanding shares of capital stock of Parent.

 

    	 	8	 

     

    

 

2.6           Reservation
of Common Stock.

 

(a) The Common Stock issued by Parent
upon (i) receipt of a Conversion Notice by Lender pursuant to Section 1.12 and (ii) upon exercise of the Warrant, when issued in
accordance with the provisions thereof, will be duly authorized and, upon issuance in accordance with the terms hereof and thereof
and upon payment therefor, shall be duly issued, fully paid and non-assessable, and free from all Liens, claims, charges, taxes,
or other encumbrances with respect to the issue thereof, and will be issued in compliance with all applicable federal and state
securities laws and the laws of any foreign jurisdiction applicable to the issuance thereof.

 

(b) Parent shall take all action reasonably
necessary to at all times have authorized, and reserved for the purpose of issuance, such number of shares of Common Stock as shall
be necessary to effect (i) the full conversion of the Note into Conversion Shares pursuant to Section 1.12 and (ii) upon exercise
of the Warrant. If at any time the number of shares authorized and reserved is insufficient to effect the full conversion of the
Note then outstanding or the exercise of the Warrant, Parent shall increase the number of shares of Common Stock authorized and
reserved accordingly. If Parent does not have sufficient authorized and unissued shares of Common Stock available, Parent shall
call and hold a special meeting of Parent’s shareholders within sixty (60) days of such occurrence, or take action by the
written consent of the holders of a majority of the outstanding shares of Common Stock, if possible, for the purpose of increasing
the number of shares authorized to an amount of shares equal to three (3) times the number of shares necessary to effect the full
conversion of the Note then outstanding or the exercise of the Warrant, as applicable. Subject to its fiduciary duty obligations
under applicable law, Parent’s management shall recommend to Parent’s shareholders to vote in favor of increasing the
number of shares of Common Stock authorized.

 

2.8           No
Legal Bar. The execution, delivery and performance by Parent of each Loan Document to which it is a party, will not violate
any Requirement of Law applicable to Parent or any material contract, agreement, commitment or legally binding undertaking to which
Parent is a party, and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues
pursuant to any Requirement of Law or any such contract, agreement, commitment or legally binding undertaking to which Parent is
a party, except those Liens in favor of the Lender provided herein.

 

    	 	9	 

     

    

 

2.9           Solvency.
Parent is solvent and has the necessary capital to pay its liabilities and obligations (including, without limitation, the Obligations)
as they become due.

 

2.10         Taxes.
Parent has filed or caused to be filed all tax returns which are required to be filed or has received extensions that are validly
in effect, and have paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of
its property.         

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF BORROWER

 

Except as set forth on the Schedule of Exceptions
delivered to the Lender in connection with this Agreement, Borrower represents and warrants to the Lender as follows:

 

3.1           Financial
Condition. The balance sheet of the Borrower as at December 31, 2014, and the related statements of income, retained earnings
and cash flows for the fiscal year ended on such date, audited by Marcum LLP and included in Parent’s final proxy statement/prospectus
dated May 1, 2015, are complete and correct and present fairly the financial condition of the Borrower as at such date, and the
results of its operations and changes in financial position for the fiscal period then ended. Such financial statements, including
schedules and notes thereto, have been prepared in accordance with GAAP, consistently applied. The Borrower does not have any contingent
obligations, contingent liabilities or liabilities for taxes, long term leases or forward or long term commitments, which are not
reflected in the foregoing statements or in the notes thereto that are required to be disclosed in accordance with GAAP. The Borrower
is consolidated with Parent in Parent’s financial statements as at September 30, 2015 and for the fiscal period then ended.
Since the date of Parent’s most recent quarterly report, there has been no material adverse change in the business, operations,
assets, prospects or financial or other condition of the Borrower, its Subsidiaries (as defined below) and Parent, taken as a whole
(a “Material Adverse Change”).

 

3.2           Existence;
Compliance with the Law. The Borrower and each subsidiary of the Borrower or the Parent (the “Subsidiaries”)
(a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation;
(b) has the corporate or limited liability power and authority and the legal right to own and operate its property, and to conduct
the business in which it is currently engaged; (c) is duly qualified as a corporation or limited liability company and is in good
standing under the laws of each jurisdiction where its ownership or operation of property or the conduct of its business require
such qualification; and (d) is in compliance with the certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and all Requirements of Law. None of the Subsidiaries conducts any material operations or has any material
assets. No Person, other than Parent, has any beneficial interest in any of the membership interests of Borrower.

 

    	 	10	 

     

    

 

3.3           Power;
Authorization; Enforceable Obligations. The Borrower has the limited liability company power, authority and legal right to
make, execute, deliver and perform its obligations under this Agreement and each Loan Document to which it is a party and to borrow
and repay hereunder; and has taken all requisite action to authorize the borrowings on the terms and conditions of this Agreement
and the Note and to authorize the execution, delivery and performance of this Agreement and each Loan Document to which it is a
party. No consent or authorization of, filing with, or other act by or in respect of any other Person (including shareholders and
creditors of the Borrower) or any governmental authority, other than the filing of the Financing Statements, is required in connection
with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or the
Loan Documents. This Agreement and each Loan Document to which Borrower is a party has been duly executed and delivered on behalf
of the Borrower, and constitutes a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the enforcement of creditors’ rights generally.

 

3.4           No
Legal Bar. The execution, delivery and performance by Borrower of each Loan Document to which it is a party and the borrowings
hereunder and the use of the proceeds thereof by Borrower, will not violate any Requirement of Law applicable to Borrower or any
material contract, agreement, commitment or legally binding undertaking to which Borrower or any Subsidiary is a party (a “Contract”),
and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues pursuant to any
Requirement of Law or any Contract, except those Liens in favor of the Lender provided herein.

 

3.5           No
Material Litigation. No litigation, investigation or proceeding of or before any court, arbitrator or governmental authority
is pending by or against the Borrower or any of the Subsidiaries, or against any of their properties or revenues (a) with respect
to this Agreement, the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) which if adversely determined,
could result in a Material Adverse Change.

 

3.6           No
Default. The Borrower is not in default under or with respect to any Contract in any respect which could result in a Material
Adverse Change, or which could materially and adversely affect the ability of the Borrower to perform its obligations under this
Agreement and each Loan Document to which it is a party. No Event of Default has occurred and is continuing.

 

3.7           No
Burdensome Restrictions. No Contract and no Requirement of Law materially and adversely affects the business, operations, property
or financial or other condition of the Borrower or the Subsidiaries.

 

3.8           Taxes.
Each of the Borrower and the Subsidiaries has filed or caused to be filed all tax returns which are required to be filed or has
received extensions that are validly in effect, and have paid all taxes shown to be due and payable on said returns or on any assessments
made against them or any of their property.

 

3.9           Environmental
Matters.

 

(a)          None
of the real property owned or leased by the Borrower or any the Subsidiaries (“Real Property”) contains,
or to the best knowledge of the Borrower, has previously contained, any hazardous or toxic waste or substances or underground storage
tanks.

 

    	 	11	 

     

    

 

(b)          The
Real Property is in material compliance with all applicable Federal, state and local environmental standards and requirements affecting
the Real Property, and there are no environmental conditions which could materially interfere with the continued use of the Real
Property.

 

(c)          None
of the Borrower or any of the Subsidiaries has received any notices of violations or advisory action by regulatory agencies regarding
environmental control matters or permit compliance.

 

(d)          Hazardous
waste has not been transferred from any of the Real Property to any other location which is not in compliance with all applicable
environmental laws, regulations or permit requirements.

 

(e)          With
respect to the Real Property, there are no proceedings, governmental administrative actions or judicial proceedings pending or,
to the best knowledge of the Borrower, contemplated under any Federal, state or local law regulating the discharge of hazardous
or toxic materials or substances into the environment, to which the Borrower or any the Subsidiaries is named as a party.

 

3.10         Ownership
of Property; Liens. Each of the Borrower and the Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all Real Property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject
to any Lien, except for Permitted Liens.

 

3.11         Intellectual
Property. Each of Borrower and the Subsidiaries owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted and proposed to be conducted. No claim has been asserted and is pending by any Person challenging
or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does Borrower
know of any valid basis for any such claim. To the knowledge of Borrower, the use of Intellectual Property by Borrower and the
Subsidiaries does not infringe on the rights of any Person in any material respect. “Intellectual Property”
means all rights, provisions and privileges relating to intellectual property, whether arising under United States, multinational,
or foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages therefrom.

 

3.12         Labor
Matters. There are no strikes or other labor disputes pending against Borrower or any Subsidiary, or, to the knowledge of Borrower,
threatened that (individually or in the aggregate) could reasonable be expected to result in a Material Adverse Change. Hours worked
by, and any payment to, employees of Borrower and each Subsidiary have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could result in a Material
Adverse Change. All payments due from the Borrower on account of employee health and welfare insurance have been paid or accrued
as a liability on the books of Borrower, other than those, the failure to pay, could not result in a Material Adverse Change.

 

    	 	12	 

     

    

 

3.13         Regulatory
Permits. Borrower and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess
such permits could not result in a Material Adverse Change (“Material Permits”), and neither Borrower
nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

3.14         Insurance.
Borrower and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent to the knowledge of Borrower and customary in the businesses in which they are engaged.

 

3.15         Investment
Company. Neither the Parent nor Borrower is, nor immediately after receipt of the proceeds of the Advances, will be or be an
affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

3.16         Disclosure.
All disclosure furnished by or on behalf of Borrower to the Lender regarding the Parent, the Subsidiaries, Borrower, their business
and the transactions contemplated hereby, are true and correct and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, none of Parent, the Borrower or its Subsidiaries nor any of their respective
directors or Representatives or any other Person makes any representation or warranty to Lender not specifically set forth herein
with respect to any projections, estimates or forecasts for Parent, Borrower or its Subsidiaries. Borrower acknowledges and agrees
that the Lender has not made any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Article IV.

 

3.17         Solvency.
Borrower is solvent and has the necessary capital to pay its liabilities and obligations (including, without limitation, the Obligations)
as they become due.

 

3.18         Security
Interest. No financing statement or similar instrument covering the Collateral (as hereinafter defined) is or will be on file
in any public office, except the Financing Statement, and no security interest, other than the one herein created, has attached
or been perfected in the Collateral or any part thereof. Upon the filing of the Financing Statement with the Secretary of State
of New York and Delaware, Lender will have a perfected, first priority security interest in the Collateral.

 

3.19         Seniority.
No Indebtedness (as defined in the Note) is senior to the Obligations in right of payment, whether with respect to interest or
upon liquidation or dissolution, or otherwise.

 

3.20         Brokers
or Finders. Lender has not engaged any brokers, finders or agents, or incurred, directly or indirectly, any liability for brokerage
or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement and the transactions
contemplated hereby.

 

    	 	13	 

     

    

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF LENDER

 

Except as set forth on the Schedule of Exceptions
delivered to Borrower in connection with this Agreement, Lender represents and warrants to Borrower as of the date of this Agreement
as follows:

 

4.1            Capacity;
Execution of Agreement. Lender has all requisite power and authority, to enter into this Agreement and to perform the transactions
and obligations to be performed by it hereunder. The execution and delivery of this Agreement, and the performance by Lender of
the transactions and obligations contemplated hereby have been duly authorized by all requisite action of Lender. This Agreement
has been duly executed and delivered by Lender and constitutes a valid and legally binding agreement of Lender, enforceable in
accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws, both state and federal, affecting the enforcement of creditors’ rights or remedies in general from time
to time in effect and the exercise by courts of equity powers or their application of principles of public policy.

 

4.2           Formation
and Standing. Lender is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation.
Lender has the requisite power and authority to own and operate its properties and assets, and to carry on its business as currently
conducted.

 

4.3           Brokers
or Finders. Lender has not engaged any brokers, finders or agents, or incurred, directly or indirectly, any liability for brokerage
or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement and the transactions
contemplated hereby.

 

4.4           No
Disqualification Events. The Lender is not subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act of 1933, as amended (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Lender has exercised reasonable care to determine whether
Lender is subject to a Disqualification Event. The Lender shall notify the Borrower and the Parent in writing of (i) any Disqualification
Event relating to the Lender and (ii) any event that would, with the passage of time, become a Disqualification Event relating
to the Lender, in each case prior to the date of this Agreement.

 

    	 	14	 

     

    

  

ARTICLE V.

COLLATERAL SECURITY

 

5.1           Collateral.
In order to secure the payment of all Obligations, each of Borrower and Parent hereby grants to the Lender a security interest
in and lien upon all of its property, whether now owned or hereafter acquired and wherever located, including, without limitation,
all of its right, title and interest in and to (a) all Accounts (as such term is defined in the Uniform Commercial Code (the “UCC”)),
contract rights and general intangibles, receivables and claims whether now or hereafter arising, all guaranties and security therefor
and all of its right, title and interest in the goods purchased and represented thereby, if any, including all of its rights in
and to returned goods and rights of stoppage in transit, replevin and reclamation as unpaid vendor; (b) all chattel paper; (c)
all documents and instruments; (d) all letters of credit and letter-of-credit rights; (e) all deposit accounts; (f) all investment
property, financial assets and all Investment Securities (as such term is defined in the UCC), including, without limitation, all
shares of capital stock, membership interests, limited partnership interests and other equity securities of each of its Subsidiaries,
whether now owned or hereafter acquired (including, without limitation, Parent’s membership interest, now owned or hereafter
acquired, in the Borrower (the “Borrower Membership Interest”)); (g) all inventory and all accessions
thereto and products thereof and documents therefor, including raw materials and work-in process; (h) all furniture, fixtures,
equipment and machinery, wherever located and whether now or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or relating thereto; (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and any other designs
or sources of business identifiers, indicia of origin or similar devices, all registrations with respect thereto, all applications
with respect to the foregoing, and all extensions and renewals with respect to any of the foregoing, together with all of the goodwill
associated therewith, in each case whether now or hereafter existing, and all rights and interest associated with the foregoing;
(j) all software, computer programs, chattel paper, commercial tort claims, copyrights, and all copyrights of works based on, incorporated
in, derived from or relating to works covered by such copyrights, and all right, title and interest to make and exploit all derivative
works based on or adopted from works covered by such copyrights, all registrations with respect thereto, all applications with
respect to the foregoing, and all extensions and renewals with respect to any of the foregoing, together with all rights and interests
associated with the foregoing, the right to sue for past, present, and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under any of the foregoing, and all other rights and benefits
relating to any of the foregoing throughout the world; (k) all patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions, continuations-in-part, or reissues of any of the foregoing, the
right to sue for past, present, and future infringements of any of the foregoing, all income, royalties, profits, damages, awards,
and payments relating to or payable under any of the foregoing, and (l) all other rights and benefits relating to any of the foregoing
throughout the world, all books and records pertaining to the foregoing, including but not limited to computer programs, data,
certificates, records, circulation lists, subscriber lists, advertiser lists, supplier lists, customer lists, customer and supplier
contracts, sales orders, and purchasing records; and all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies (collectively, the “Collateral”).

 

    	 	15	 

     

    

 

5.2           Perfection
of Lender’s Lien. Each of Parent and Borrower agree to comply with all Requirements of Law, and to take all actions necessary
or desirable in the Lender’s judgment, to perfect the Lender’s security interest in and to the Collateral, to authorize
and (to the extent required) execute and deliver any financing statement or additional documents as the Lender may request and
to deliver to the Lender a list of all locations of its inventory, equipment and machinery and landlord and or mortgagee lien subordinations
or waivers with respect to each site where inventory, equipment or machinery is located and which is either leased by Parent or
Borrower or has been mortgaged by Parent or Borrower, upon request by the Lender. If any item of Collateral or the proceeds thereof
is or becomes evidenced by a note, chattel paper, or instrument, Parent or Borrower, as applicable, immediately shall deliver possession
thereof, duly endorsed to the Lender, on behalf of the Lender, to be held by the Lender as Collateral hereunder. Each of Parent
and Borrower agree that it will notify the Lender of any commercial tort claim.

 

5.3           Filings.
The Lender may at any time and from time to time, file financing statements, continuation statements, and amendments thereto that
describe the Collateral as all assets of Parent and Borrower of the kind pledged hereunder and which contain any other information
required by Part 5 of Article 9 of the UCC for the sufficiency of filing office acceptance of any financing statement, continuation
statement, or amendment, including whether Parent and Borrower is an organization, the type of organization, and any organizational
identification number issued to Parent and Borrower. Each of Parent and Borrower agree to furnish any such information to the Lender
promptly upon request.

 

5.4           Actions
With Respect to the Collateral. Borrower hereby consents to the pledge by the Parent to the Lender of the Borrower Membership
Interest. Each of Parent and Borrower will properly preserve the Collateral, maintain the Collateral consisting of inventory, machinery
or equipment in good working order (ordinary wear and tear excepted), defend the Collateral against any adverse claims and demands
and keep accurate books and records. Neither Parent nor Borrower has granted and will not grant any security interest in any of
the Collateral except to Lender, and will keep the Collateral free of all Liens, except the security interest of Lender and Permitted
Liens. Parent and Borrower will promptly notify Lender in writing of any event which materially affects the value of the Collateral,
the ability of Parent, Borrower or Lender to dispose of the Collateral, or the rights and remedies of Lender in relation thereto,
including, but not limited to, the levy of any legal process against any Collateral and the adoption of any marketing order, arrangement
or procedure affecting the Collateral, whether governmental or otherwise. Parent and Borrower shall pay all costs necessary to
preserve, defend, enforce and collect the Collateral, including but not limited to taxes, assessments, insurance premiums, repairs,
rent, storage costs and expenses of sales (collectively, the “Collateral Costs”). Without waiving Parent’s
or Borrower's default for failure to make any such payment, Lender at its option may pay any such Collateral Costs, and discharge
encumbrances on the Collateral, and such Collateral Costs payments shall be a part of the Obligations and bear interest at the
rate set out herein. Each of Parent and Borrower agrees to reimburse Lender on demand for any Collateral Costs so incurred. Each
of Parent and Borrower will diligently collect all Collateral.

 

5.5           Further
Assurances. Each of Parent and Borrower shall at any time and from time to time take such steps as the Lender may reasonably
request for Lender (i) to obtain an acknowledgment, in form and substance satisfactory to the Lender , of any bailee having possession
of any of the Collateral that the bailee holds such Collateral for the Lender, (ii) obtain “control” of any Collateral
consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such terms are defined
in Article 9 of the UCC with corresponding provisions in Sections 9-104, 9-105, 9-106, and 9-107 relating to what constitutes “control”
for such items of Collateral), with any agreements establishing control to be in form and substance satisfactory to the Lender,
and (iii) otherwise to insure the continued perfection and priority of the Lender’s security interest in any of the Collateral
and of the preservation of its rights therein.

 

    	 	16	 

     

    

  

ARTICLE VI.

MISCELLANEOUS

 

6.1           Survival
of Representations and Warranties; Indemnification.

 

(a)          The
representations and warranties of Borrower and of the Lender contained in or made pursuant to this Agreement will survive the execution
and delivery of this Agreement, and for the time period during which any Obligations are outstanding.

 

(b)          Lender
shall indemnify and hold harmless Borrower and, as applicable, its officers, managers, directors, stockholders, members, agents
and representatives from and against any and all claims, demands, losses, damages, expenses or liabilities (including reasonable
attorneys’ fees) due to or arising out of a material breach of any representation, warranty or covenant provided, made or
agreed to by the Lender hereunder or under the Note.

 

6.2           Successors
and Assigns. This Agreement is binding upon and inures to the benefit of the parties and their successors and assigns. Borrower
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Lender. The Lender
may assign its rights and obligations hereunder to an entity directly or indirectly controlled by or under common control with
Lender.

 

6.3           Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together
shall constitute one instrument.

 

6.4           Facsimile.
A facsimile copy of an original written signature shall be deemed to have the same effect as an original written signature.

 

6.5           Captions
and Headings. The captions and headings used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

6.6           Notices.
Unless otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement will
be in writing and will be conclusively deemed to have been duly given (i) when hand delivered to the other party; (ii) upon receipt,
when sent by facsimile to the number set forth below or email to the address set forth below; (iii) five business days after deposit
in the U.S. mail, postage prepaid and addressed to the other party at the address set forth below; or (iv) the next business day
after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next
business day delivery guaranteed. Each party making a communication hereunder by facsimile or email will promptly confirm by telephone
to the person to whom such communication was addressed each communication made by it by facsimile or email pursuant hereto but
the absence of such confirmation will not affect the validity of any such communication. A party may change or supplement the addresses
given below, or designate additional addresses for purposes of this Section 6.6, by giving the other party written notice of the
new address in the manner set forth above.

 

    	 	17	 

     

    

 

If to Parent or Borrower:

 

Long Island Brand Beverages LLC

116 Charlotte Avenue

Hicksville, NY 11801

Attention:

Phone: (855) 542-2832

Facsimile:

 

with a copy to:

 

Graubard Miller

405 Lexington Avenue

New York, NY 10174

Attention: David Alan Miller and Jeffrey M. Gallant

Phone: 212-818-8800

Facsimile: 212-818-8881

 

If to the Lender:

 

Brentwood LIIT Inc.

Level 2 Suite 9, 20 Augustus Terrace

Parnell, Auckland

New Zealand

 

with a copy to:

 

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY 10105

Attention: Douglas Ellenoff

Phone: 212-370-1300

Facsimile: 212-370-7889

 

6.7           Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the written consent of Borrower and
the Lender.

 

6.8           Enforceability;
Severability. The parties hereto agree that each provision of this Agreement will be interpreted in such a manner as to be
effective and valid under applicable law. If one or more provisions of this Agreement are nevertheless held to be prohibited, invalid
or unenforceable under applicable law, such provision will be effective to the fullest extent possible excluding the terms affected
by such prohibition, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions
of this Agreement. If the prohibition, invalidity or unenforceability referred to in the prior sentence requires such provision
to be excluded from this Agreement in its entirety, the balance of the Agreement will be interpreted as if such provision were
so excluded and will be enforceable in accordance with its terms.

 

    	 	18	 

     

    

 

6.9           Governing
Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of New York.
Each of Parent and Borrower agrees that any action or proceeding against it hereunder may be commenced in state or federal court
in any county in the State of New York, and each of Parent and Borrower waives personal service of process and agrees that a summons
and complaint commencing an action or proceeding in any such court shall be properly served and shall confer personal jurisdiction
if served by registered or certified mail in accordance with the notice provisions set forth herein.

 

6.10         Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF. EACH
OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
THE OTHER PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT EACH HAS REVIEWED
OR HAD THE OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS RESPECTIVE LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

6.11         Further
Assurances; Access. The Lender and Borrower will from time to time and at all times hereafter make, do, execute, or cause or
procure to be made, done and executed such further acts, deeds, conveyances, consents and assurances without further consideration,
which may reasonably be required to effect the transactions contemplated by this Agreement and the Loan Documents. Upon reasonable
written notice, Borrower shall afford the officers, employees and authorized agents and representatives of the Lender reasonable
access, during normal business hours, to the offices, properties, books, records and such additional financial and operating data
and other information regarding the assets, goodwill and business of the Borrower as Lender may from time to time reasonably request.

 

6.12         Entire
Agreement. This Agreement and all exhibits hereto and thereto constitute the entire agreement among the parties with respect
to the subject matter hereof and thereof and no party will be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.

 

    	 	19	 

     

    

 

6.13         Delays
or Omissions. No delay or omission to exercise any right power or remedy accruing to any party under this Agreement, or upon
any breach or default of any other party under this Agreement, will impair any such right, power or remedy of such non-breaching
or non-defaulting party nor will it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor will any waiver of any single breach or default be deemed a waiver
of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character
on the part of any party of any provisions or conditions of this Agreement, must be in writing and will be effective only to the
extent specifically set forth in such writing. Except as otherwise set forth herein, all remedies, either under this Agreement
or by law or otherwise afforded to any party, will be cumulative and not alternative.

 

6.14         Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

6.15         Equitable
Relief. The parties hereto recognize that, if such party fails to perform or discharge any of its obligations under this Agreement,
any remedy at law may prove to be inadequate relief to the other parties. Each party hereto therefore agrees that the other parties
are entitled to seek temporary and permanent injunctive relief and any other equitable remedy a court of competent jurisdiction
may deem appropriate in any such case.

 

6.16         No
Strict Construction. The language used in this Agreement is deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party.

 

6.17         Public
Announcements. No public announcements shall be made by any party hereto relating to the transactions contemplated by this
Agreement without the prior written consent of the other party, such consent not to be unreasonably withheld, except where required
by applicable law; provided, however, that in the event of such a legally required disclosure, the disclosing party
will consult with the other consenting party with respect to the text of such disclosure and will provide the other consenting
party with a copy of the disclosure prior to its publication.

 

6.18         Expenses.
Each party shall bear its own costs and expenses in connection with the transactions contemplated hereby, except (i) to the extent
that Lender’s Expenses shall be Obligations subject to the provisions hereof and (ii) Borrower shall pay the reasonable fees
and expenses of Lender’s counsel incurred in connection with the preparation and negotiation of this Agreement and the Loan
Documents and the consummation of the transactions contemplated hereby and thereby.

 

6.19         Exhibits
and Schedule of Exceptions. All exhibits, annexes and schedules, including the Schedules of Exceptions, annexed hereto or referred
to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. A disclosure in any particular
schedule of the Schedules of Exceptions or otherwise in this Agreement will be deemed adequate to disclose another exception to
a representation or warranty made herein if the disclosure identifies the exception with reasonable particularity so that any exception
to any other schedule is reasonably apparent.

 

[Signatures begin on
next page.]

 

    	 	20	 

     

    

 

IN WITNESS THEREOF, this Agreement has been
executed by the undersigned as of the day, month and year first above written.

 

	 	BORROWER:
	 	 
	 	LONG ISLAND BRAND BEVERAGES LLC
	 	 
	 	By:	/s/ Philip Thomas
	 	 	Name: Philip Thomas
	 	 	Title: Chief Executive Officer
	 	 	 
	 	PARENT:
	 	 
	 	LONG ISLAND ICED TEA CORP.
	 	 
	 	By:	/s/ Philip Thomas
	 	 	Name: Philip Thomas
	 	 	Title: Chief Executive Officer
	 	 	 
	 	LENDER:
	 	 
	 	Brentwood LIIT Inc.
	 	 
	 	By:	/s/ Kerry Finnigan
	 	 	Name: Kerry Finnigan
	 	 	Title: Director

 

     

     

    

  

EXHIBIT A

 

FORM OF NOTE

 

SECURED CONVERTIBLE PROMISSORY NOTE

 

	$1,000,000	New York, New York

 

Dated as of November 23, 2015

 

FOR VALUE RECEIVED,
Long Island Brand Beverages LLC, a New York limited liability company with offices at 116 Charlotte Avenue, Hicksville, NY 11801
(“Borrower”), pursuant to this secured convertible promissory note (“Note”),
hereby promises to pay to Brentwood LIIT Inc., a Delaware corporation (“Lender”), at such place as the
Lender may designate from time to time in writing, in lawful money of the United States of America, the principal amount of One
Million Dollars ($1,000,000), subject to increase as provided in that certain Credit and Security Agreement, dated as of the date
hereof, by and among Borrower, Long Island Iced Tea Corp., a Delaware corporation (“Parent”), and the
Lender (the “Credit Agreement”) and in this Note, or such lesser or greater amount as shall equal the
outstanding principal amount under the Line of Credit and accrued interest thereon, and all other Obligations, on the dates and
in the amounts set forth in the Credit Agreement and in this Note. This Note is the Note referred to in the Credit Agreement, is
entitled to the benefits and subject to the terms and conditions thereof, is secured by the Collateral and may be prepaid, in whole
or in part, as provided in the Credit Agreement.

 

1.            Definitions.
All terms used, but not defined herein, shall have the meanings ascribed to them in the Credit Agreement. In addition, the terms
set forth below shall have the following meanings:

 

(a)          “Event
of Default” shall mean the occurrence of one or more of the following events:

 

(1)         Borrower
shall fail to make any payment due to the Lender under the Credit Agreement or this Note when the same shall become due and payable,
whether at maturity, by acceleration or otherwise, and, other than with respect to a payment of principal or interest, a period
of three (3) business days shall have elapsed after receipt of written notice from the Lender that such payment is due and unpaid.

 

(2)         Borrower
or Parent violates any of the covenants or agreements of the Borrower or Parent (other than as provided in Section 1(a)(1) above)
contained in the Credit Agreement, the Loan Documents or in Sections 7 and 8 of this Note and, with respect to any such violation
that is capable of being cured, such violation is not remedied within ten (10) days after receipt of written notice from the Lender
that such a violation has occurred.

 

(3)         Any
portion of Parent’s or Borrower’s assets in excess of $170,000 is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such
attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) business days,
or if Parent or Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any
part of its business affairs, or if a judgment or other claim becomes a Lien upon any material portion of Parent’s or Borrower’s
assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Parent’s or Borrower’s
assets by the United States government, or any department, agency, or instrumentality thereof, or by any state, county, municipal
or governmental agency, and the same is not paid within ten (10) business days after Parent or Borrower receives notice thereof;
provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed pending a good faith
contest by appropriate proceedings by Parent or Borrower.

 

     

     

    

  

(4)         Any
Loan Document executed and delivered to Lender in connection with the Line of Credit ceases to be, or any party thereto (other
than Lender) asserts that such Loan Document is not, in any material respect, a legal, valid and binding obligation of such party,
enforceable in accordance with its terms.

 

(5)         A
proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of Parent
or Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or for the appointment of a receiver, liquidator, assignee, custodian, trustee (or similar official) of Parent or Borrower or for
any substantial part of their property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed
or unstayed and in effect for a period of forty five (45) consecutive days or such court shall enter a decree or order granting
the relief sought in such proceeding.

 

(6)         Parent
or Borrower commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
consents to the entry of an order for relief in an involuntary case under any such law, or consents to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian (or other similar official) of Parent or Borrower or for any
substantial part of its property, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay
its debts, other than debts contested in good faith by appropriate proceedings, as they become due, or shall take any action in
furtherance of any of the foregoing.

 

(7)         One
or more defaults shall exist under any Indebtedness in an amount in excess of $170,000.

 

(8)         A
final, non-appealable judgment or judgments entered by a court or courts of competent jurisdiction for the payment of money in
an amount, individually or in the aggregate, of at least $170,000 shall be rendered against Parent or Borrower and shall remain
unsatisfied, unbonded and unstayed for a period of thirty (30) days or more.

 

(9)         Any
written warranty, representation, statement, certification or report made to the Lender by Parent or Borrower or any officer, employee,
agent or director of Parent or Borrower shall prove to have been false or misleading in any material respect when made or furnished.

 

(10)        Lender
fails to have a perfected, first priority security interest in the Collateral.

 

(11)        Lender
fails to receive, prior to the 7th business day after the date hereof, any of the items listed in Section 1.10(a) of
the Credit Agreement (other than the Warrant, the Credit Agreement, this Note and the Parent Guaranty, each of which shall be executed
and delivered to Lender on the date hereof).

 

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(b)          “Indebtedness”
means, with respect to Parent and Borrower, the aggregate amount of, without duplication, (a) all obligations of Parent or Borrower
for borrowed money, (b) all obligations of Parent or Borrower evidenced by bonds, debentures, notes or other similar instruments,
(c) all obligations of Parent or Borrower to pay the deferred purchase price of property or services (excluding trade payables
incurred in the ordinary course of business), (d) all capital lease obligations of Parent or Borrower, (e) all obligations or liabilities
of others secured by a Lien on any asset of Parent or Borrower, whether or not such obligation or liability is assumed, (f) all
obligations or liabilities of others guaranteed by Parent or Borrower, and (g) any other obligations or liabilities which are required
by GAAP to be shown as debt on the balance sheet of Parent or Borrower.

 

(c)          “Lien”
means any voluntary or involuntary security interest, pledge, bailment, lease, mortgage, hypothecation, conditional sales and title
retention agreement, encumbrance or other lien with respect to any property of Parent or Borrower in favor of any Person.

 

(d)          “Permitted
Indebtedness” means and includes:

 

(1)         Indebtedness
of Parent or Borrower to Lender;

 

(2)         Indebtedness
arising from the endorsement of instruments in the ordinary course of business;

 

(3)         Indebtedness
existing on the date hereof and disclosed in the Schedule of Exceptions to the Credit Agreement;

 

(4)         Indebtedness
(excluding any Indebtedness permitted under any other clause of this definition, but including capital lease obligations), incurred
at the time of, or within twenty (20) days after, the acquisition of any assets for the purpose of financing all or any part of
the acquisition cost thereof, in an aggregate principal amount outstanding at any one time not in excess of $50,000;

 

(5)         Indebtedness
of Parent or Borrower which is subordinated to the Obligations pursuant to a subordination agreement satisfactory to Lender; and
which is in an aggregate original principal amount not to exceed $75,000 at any time; and

 

(6)         Extensions,
refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness above, provided that the principal
amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Parent or Borrower.

 

    3 

     

    

  

(e)          “Permitted
Liens” means:

 

(1)         Liens
for fees, taxes, levies, imposts, duties or other governmental charges of any kind which are not yet delinquent or which are being
contested in good faith by appropriate proceedings which suspend the collection thereof (provided that Parent or Borrower has adequately
bonded such Lien or reserves sufficient to discharge such Lien have been provided on the books of Parent or Borrower);

 

(2)         Liens
existing as of the date of this Note and identified in the Schedule of Exceptions to the Credit Agreement;

 

(3)         Carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens arising in the ordinary course
of business and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate
proceedings (provided that Parent or Borrower has adequately bonded such Lien or reserves sufficient to discharge such Lien have
been provided on the books of Parent or Borrower);

 

(4)         Liens
upon any equipment or other personal property acquired by Parent or Borrower after the date hereof to secure (i) the purchase price
of such equipment or other personal property, or (ii) Indebtedness incurred solely for the purpose of financing the acquisition
of such equipment or other personal property; provided that such Liens are confined solely to the equipment or other personal property
so acquired and the proceeds thereof and the amount secured does not exceed the acquisition price thereof;

 

(5)         Bankers’
liens, rights of setoff and similar Liens incurred on deposits made in the ordinary course of business and Liens in favor of financial
institutions arising in connection with Parent’s or Borrower’s deposit accounts or securities accounts held at such
institutions to secure customary fees and charges;

 

(6)         Any
judgment, attachment or similar Lien not resulting in an Event of Default hereunder; and

 

(7)         Liens
incurred in the extension, renewal or refinancing of the Indebtedness secured by Liens described above but any extension, renewal
or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness
may not increase.

 

(f)          “Person”
means and includes any individual, any partnership, any corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or foreign national, state or local government, any
political subdivision thereof, and any department, agency, authority or bureau of any of the foregoing.

 

2.            Conversion.
At any time and from time to time while this Note is outstanding, this Note may be, at the sole option of the Lender, convertible
into shares of the common stock, par value $0.0001 per share, (the “Common Stock”) of the Parent,
in accordance with the terms and conditions set forth below:

 

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(a)          At
any time while this Note is outstanding, the Lender may convert all or any portion of the outstanding principal amount of the Note
and all accrued and unpaid interest thereon, and any other sums due and payable hereunder or under the Credit Agreement (such total
amount, the “Conversion Amount”) into shares of Common Stock of the Parent (the “Conversion
Shares”) at a price equal to $4.00 per share of Common Stock (the “Conversion Price”),
upon written notice of conversion (in the form attached hereto as Exhibit A, the “Conversion Notice”)
by Lender specifying the (i) date of conversion (ii) the Conversion Amount and (iii) where such Conversion Shares shall be delivered.

 

(b)          Mechanics.

 

(1)         To
convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Lender (the “Conversion
Date”), the Lender shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed
Conversion Notice to the Parent and Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion
Notice to the Parent’s transfer agent (the “Transfer Agent”)).

 

(2)         Upon
receipt by the Parent and Borrower of a copy of a Conversion Notice, the Parent shall as soon as practicable, but in no event later
than five (5) business days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver)
a confirmation of receipt of such Conversion Notice (the “Conversion Confirmation”) to the Lender indicating
that the Parent will process such Conversion Notice in accordance with the terms herein. In the event the Parent fails to issue
its Conversion Confirmation within said five (5) business day time period, the Lender shall have the absolute and irrevocable right
and authority to deliver the fully executed Conversion Notice to the Transfer Agent, and pursuant to the terms of the Credit Agreement,
the Transfer Agent shall issue the applicable Conversion Shares to Lender as hereby provided. Within five (5) business days after
the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Parent fails to issue the Conversion Confirmation),
the Parent shall instruct and cause its Transfer Agent to issue and surrender to a nationally recognized overnight courier for
delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Lender, or its designees,
for the number of Conversion Shares to which the Lender shall be entitled. To effect conversions hereunder, the Lender shall not
be required to physically surrender this Note to the Parent or Borrower unless the entire principal amount of this Note, plus all
accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding
principal amount of this Note in an amount equal to the applicable conversion. The Lender, the Parent and the Borrower shall maintain
records showing the principal amount(s) converted and the date of such conversion(s). The Lender, and any assignee by acceptance
of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this
Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

(3)         The
Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes
as the record holder(s) of such shares of Common Stock as of the Conversion Date.

 

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(4)         If
in the case of any Conversion Notice, the certificate or certificates required hereunder to be delivered are not delivered to or
as directed by the Lender by the date required hereby, the Lender shall be entitled to elect by written notice to the Parent and
the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which
event the Parent or the Borrower, as applicable, shall promptly return to the Lender any original Note delivered to the Parent
or the Borrower and the Lender shall promptly return to the Parent the Common Stock certificates representing the principal amount
of this Note unsuccessfully tendered for conversion to the Parent.

 

(5)         The
Parent’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms
hereof are absolute and, unless specified otherwise herein, unconditional, irrespective of any action or inaction by the Lender
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person
or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Lender or any other person or entity of any obligation to the Parent or any violation or alleged violation
of law by the Lender or any other person or entity, and irrespective of any other circumstance which might otherwise limit such
obligation of the Parent to the Lender in connection with the issuance of such Conversion Shares; provided, however, that such
delivery shall not operate as a waiver by the Parent of any such action the Parent may have against the Lender. In the event the
Lender shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in
accordance with the terms of this Note, the Parent may not refuse conversion based on any claim that the Lender or anyone associated
or affiliated with the Lender has been engaged in any violation of law, agreement or for any other reason, unless an injunction
from a court, on notice to Lender, restraining and or enjoining conversion of all or part of this Note shall have been sought and
obtained, and the Parent posts a surety bond for the benefit of the Lender in the amount of 150% of the outstanding principal amount
of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Lender to the extent it obtains judgment. In the absence
of such injunction, the Parent shall issue Conversion Shares upon a properly noticed conversion. Nothing herein shall limit a Lender’s
right to pursue actual damages or declare an Event of Default pursuant to the Credit Agreement, this Note or any agreement securing
the indebtedness under this Note for the Parent’s failure to deliver Conversion Shares within the period specified herein
and such Lender shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Lender
from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the
Lender from having the Conversion Shares issued directly by the Transfer Agent in the event for any reason the Parent fails to
issue or deliver, or cause its Transfer Agent to issue and deliver, the Conversion Shares to the Lender upon exercise of Lender’s
conversion rights hereunder.

 

(c)          Adjustments
to Conversion Price.

 

(1)         If
the Parent, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions
payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a
smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock
of the Parent, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock (excluding any treasury shares of the Parent) outstanding immediately before such event, and the denominator of
which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the determination of shareholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination,
or re-classification.

 

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(2)         If,
at any time while this Note is outstanding: (i) the Parent effects any merger or consolidation of the Parent with or into another
Person, (ii) the Parent effects any sale of all or substantially all of its assets in one transaction or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Parent or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Parent effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (in any such case, a “Fundamental Transaction”), then upon any
subsequent conversion of this Note, the Lender shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the “Alternate
Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1)
share of Common Stock in such Fundamental Transaction, and the Parent shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Lender shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following
such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Parent or surviving
entity in such Fundamental Transaction shall issue to the Lender a new note consistent with the foregoing provisions and evidencing
the Lender’s right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring (i) any such successor or surviving entity to comply with the provisions
of this Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction or (ii) the satisfaction of all outstanding principal and interest hereunder.

 

(3)         Whenever
the Conversion Price is adjusted pursuant to any provision of this Note, the Parent shall promptly deliver to Lender a notice setting
forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

    7 

     

    

  

(4)         If:
(i) the Parent shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (ii) the Parent shall
authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (iii) the approval of any stockholders of the Parent shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Parent is a party, any sale or transfer of all
or substantially all of the assets of the Parent, of any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (iv) the Parent shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Parent, then, in each case, the Parent shall cause to be filed at each office or agency maintained for
the purpose of conversion of this Note, and shall cause to be delivered to the Lender at its last address as it shall appear upon
the Parent’s records, fifteen (15) calendar days prior to the applicable record or effective date hereinafter specified or
such lesser number of days between the announcement of such applicable record date or effective date and the anticipated closing
of such transaction, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice.

 

3.           Advances.
From time to time prior to the Maturity Date (as hereafter defined), subject to the terms and conditions of the Credit Agreement,
the Lender shall make Advances to Borrower.

 

4.           Payments
of Obligations. The outstanding principal amount of the Line of Credit, together with any accrued and unpaid interest, and
any and all other Obligations, shall be due and payable on November 23, 2018 (the “Maturity Date”). In
addition, on the Maturity Date, Borrower shall, without presentation of any supporting documentation by Lender, pay Lender $30,000
as reimbursement for Lender’s due diligence and loan management costs.

 

5.           Interest.
All principal amounts outstanding from time to time hereunder (including capitalized interest and fees) shall bear interest at
the Interest Rate as provided in the Credit Agreement and be payable as provided in the Credit Agreement. All computations of interest
shall be made on the basis of a year of 360 days, as the case may be, and the actual number of days elapsed. Upon the Maturity
Date or any acceleration thereof, this Note shall bear interest at the Default Rate as provided in the Credit Agreement, but not
more than maximum rate allowed by law.

 

6.           Prepayments.
Borrower may prepay the outstanding Obligations, in whole or in part, at any time without premium or penalty.

 

7.           Security.
In order to secure the payment of all Obligations, Parent and Borrower have granted to the Lender a security interest in and lien
upon the Collateral.

 

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8.            Affirmative
Covenants. Borrower covenants that, so long as any Obligations are outstanding or any commitment to make Advances under the
Line of Credit still exists, Borrower shall:

 

(a)          Maintain
its existence and its good standing in its jurisdiction of formation and maintain qualification in each jurisdiction in which the
failure to so qualify could reasonably be expected to result in a Material Adverse Change. Borrower shall maintain in force all
Material Permits.

 

(b)          Comply
with all Requirements of Law to which it is subject, noncompliance with which could reasonably be expected to result in a Material
Adverse Change.

 

(c)          As
soon as possible, and in any event within five (5) days after the discovery of a default or an Event of Default, provide the Lender
with an Officer’s Certificate setting forth the facts relating to or giving rise to such default or Event of Default and
the action which Borrower proposes to take with respect thereto.

 

(d)          The
Lender shall be named as Lender Loss Payee on all insurance of which the Borrower or any Subsidiary is named as insured, including
without limitation, warehouse, contents and business interruption insurance.

 

(e)          The
Lender shall have access during normal business hours to Borrower’s financial and reporting information it reasonably requires,
including without limitation, an accounts receivable and accounts payable aging, a perpetual inventory report, bank statements,
monthly internal financial statements and the latest audited financial statements. Such information is to be provided within ten
(10) days after a written request by Lender to Borrower.

 

9.          Negative
Covenants. Borrower covenants that, so long as any Obligations are outstanding or any commitment to make Advances under the
Line of Credit still exists, Borrower shall not:

 

(a)          Change
its name, jurisdiction of formation, or principal place of business without thirty (30) days prior written notice to Lender.

 

(b)          Create,
incur, assume or suffer to exist any Lien of any kind upon any of Borrower’s property, whether now owned or hereafter acquired,
except Permitted Liens.

 

(c)          (i)
Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled repayment thereof any Indebtedness
(other than amounts due or permitted to be prepaid under this Note) or lease obligations, or (ii) amend, modify or otherwise change
the terms of any Indebtedness so as to accelerate the scheduled repayment thereof.

 

(d)          Create,
incur, assume or permit to exist any Indebtedness, except Permitted Indebtedness.

 

(e)          Liquidate,
dissolve, cease operations, dispose of any of its assets for less than the fair market value thereof (other than obsolete equipment),
change the type of business that it operates or transfer any of its assets to any Subsidiary or cause or permit any Subsidiary
to have any material operations.

 

    9 

     

    

  

10.         Acceleration;
Lender’s Rights and Remedies.

 

(a)          On
the occurrence of an Event of Default, while such Event of Default is continuing (provided that an Event of Default shall be continuing
at all times after any cure period therefor expires), the Lender shall not have any further obligation to advance money or extend
credit to or for the benefit of Borrower. In addition, upon the occurrence and during the continuance of an Event of Default, the
entire unpaid principal sum hereunder, plus any and all interest accrued thereon, plus all other Obligations shall, at the option
of the Lender, become due and payable immediately without presentment, demand, notice of nonpayment, protest, notice of protest,
or other notice of dishonor, all of which are hereby expressly waived by Borrower.

 

(b)          On
the occurrence of an Event of Default, the Lender shall have the following rights and remedies, which are cumulative in nature
and shall be immediately available to the Lender: (i) all rights and remedies provided by law or in equity, including but not limited
to those provided to a secured party by the UCC, especially those provided in Part 5 of Article 9, and equitable remedies for specific
performance and injunctive relief; and (ii) all rights and remedies provided in the Credit Agreement and the Loan Documents. In
furtherance of the foregoing:

 

(1)         The
Lender shall have the right to take possession of the Collateral and to exercise all voting rights with respect to the Borrower
Membership Interest. Borrower will cooperate fully with the Lender in the exercise of the Lender’s right to take possession
of the Collateral. This shall include, but is not limited to, an obligation to assemble and deliver the Collateral or some portion
of the Collateral or some part or component of the Collateral on request of the Lender to a place designated by the Lender where
it shall be made available to the Lender.

 

(2)         The
Lender shall have the right to sell or dispose of the Collateral by public or private proceeding and may do so by way of one or
more contracts. Such sale or other disposition of the Collateral may be made as a unit or in parcels and at any time and place
and on any terms as is permitted by the UCC. Any actions so taken shall be considered commercially reasonable if made in the good
faith exercise of the Lender’s business judgment in the matter.

 

(3)         The
Lender shall give Borrower notice of the time and place of any public sale of the Collateral or, in the case of a private sale
or disposition, of the time after which such private sale or disposition is intended to be consummated, in accordance with Section
13, not later than seven (7) business days prior to the public sale or the time after which the private sale or other disposition
is intended to be consummated; provided that, the failure of the Lender to give any such notice shall not affect
in any manner the validity or finality of any such sale or disposition.

 

(4)         The
proceeds of any disposition shall be applied as provided in Section 9-504 of the Uniform Commercial Code and shall include any
and all expenses provided in this Note and the Credit Agreement, including attorney's fees and expenses to the extent such items
are not prohibited by law.

 

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11.         Remedies
Cumulative, Etc.

 

(a)          No
right or remedy conferred upon or reserved to the Lender hereunder or now or hereafter existing at law or in equity is intended
to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and in
addition to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion
of the Lender, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefor shall
occur.

 

(b)          Borrower
hereby waives presentment, demand, notice of nonpayment, protest, notice of protest, notice of dishonor and any and all other notices
in connection with any Event of Default, including, without limitation, default in the payment of, or any enforcement of the payment
of, all amounts due under this Note. To the extent permitted by law, Borrower waives the right to any stay of execution and the
benefit of all exemption laws now or hereafter in effect.

 

(c)          Following
the occurrence of any Event of Default, Borrower shall pay upon demand all Lender’s Expenses and any amount thereof not paid
promptly following demand therefor shall be added to the outstanding principal amount under the Line of Credit and shall bear interest
as provided in the Credit Agreement.

 

12.         Indemnification
and Waiver. Whether or not the transactions contemplated hereby shall be consummated:

 

(a)          General
Indemnity. Borrower agrees upon demand to pay or reimburse the Lender for all liabilities, obligations and out-of-pocket expenses,
including Lender’s Expenses and reasonable fees and expenses of counsel for the Lender from time to time arising in connection
with the enforcement or collection of sums due under this Note or the Credit Agreement, and in connection with any amendment or
modification of such documents or any “work-out” in connection with such documents. Borrower shall indemnify, reimburse
and hold the Lender, and its successors, assigns, agents, attorneys, officers, directors, shareholders, servants, agents and employees
(each an “Indemnified Person”) harmless from and against all liabilities, losses, damages, actions, suits,
demands, claims of any kind and nature (including claims relating to environmental discharge, cleanup or compliance), all costs
and expenses whatsoever to the extent they may be incurred or suffered by such Indemnified Person in connection therewith (including
reasonable attorneys’ fees and expenses), fines or penalties (and other charges of any applicable governmental authority)
(each, a “Claim”), directly or indirectly relating to or arising out of (i) the Credit Agreement or any
Loan Document, (ii) any credit extended or committed by Lender to Borrower hereunder or under the Credit Agreement, (iii) any litigation
or proceeding related to or arising out of the Credit Agreement or any Loan Document, (iv) any breach of any representation, warranty
or covenant provided, made or agreed to by Borrower or Parent under the Credit Agreement or any Loan Document, (v) the use of the
proceeds of the Line of Credit or otherwise, (vi) the falsity of any representation or warranty of Parent or Borrower or (vi) Parent’s
or Borrower’s failure to comply with the terms of the Credit Agreement or any Loan Document; except to the extent such Claim
is determined by a court of competent jurisdiction to have resulted from the gross negligence or the willful misconduct of such
Indemnified Party. Such indemnities shall continue in full force and effect, notwithstanding the expiration or termination of the
Credit Agreement or any Loan Document. Upon the Lender’s written demand, Borrower shall assume and diligently conduct, at
its sole cost and expense, the entire defense of the Lender and each Indemnified Person against any indemnified Claim, and Lender
may have its own counsel participate in the defense thereof at Lender’s expense. Borrower shall not settle or compromise
any Claim against or involving the Lender without first obtaining the Lender’s written consent thereto, which consent shall
not be unreasonably withheld.

 

    11 

     

    

  

13.         Notices.
All notices required to be given to any of the parties hereunder shall be in writing and shall be deemed to have been sufficiently
given for all purposes when given in accordance with Section 6.6 of the Credit Agreement.

 

14.         Severability.
In the event that any provision of this Note is held to be invalid, illegal or unenforceable in any respect or to any extent, such
provision shall nevertheless remain valid, legal and enforceable in all such other respects and to such extent as may be permissible.
Any such invalidity, illegality or unenforceability shall not affect any other provisions of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

15.         Successors
and Assigns. This Note inures to the benefit of the Lender and binds Borrower, and inures to the benefit of and binds their
respective successors and assigns, and the words “Lender” and “Borrower” whenever occurring herein shall
be deemed and construed to include such respective successors and assigns; provided, however, that neither this Note
nor any rights hereunder may be assigned by Borrower without the Lender’s prior written consent, which consent may be granted
or withheld in the Lender’s sole discretion.

 

16.         Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of New York. Borrower agrees that
any action or proceeding against it to enforce the Note may be commenced in state or federal court in any county in the State of
New York, and Borrower waives personal service of process and agrees that a summons and complaint commencing an action or proceeding
in any such court shall be properly served and shall confer personal jurisdiction if served by registered or certified mail in
accordance with the notice provisions set forth herein.

 

17.         Entire
Agreement; Construction; Amendments and Waivers.

 

(a)          Entire
Agreement. This Note, the Credit Agreement and each of the Loan Documents, taken together, constitute and contain the entire
agreement between Parent, Borrower, the Lender with respect to the subject matter hereof and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications between the parties, whether written or oral, with respect to such
subject matter. Borrower acknowledges that it is not relying on any representation or agreement made by the Lender or any employee,
attorney or agent thereof, other than the specific agreements set forth in this Note, the Credit Agreement and the Loan Documents.

 

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(b)          Construction.
This Note is the result of negotiations between and has been reviewed by each of Borrower and the Lender as of the date hereof
and their respective counsel; accordingly, this Note shall be deemed to be the product of the parties hereto, and no ambiguity
shall be construed in favor of or against Borrower or the Lender. Borrower and the Lender agree that they intend the literal words
of this Note, the Credit Agreement and the Loan Documents and that no parol evidence shall be necessary or appropriate to establish
Borrower’s or the Lender’s actual intentions.

 

(c)          Amendments
and Waivers. Any and all amendments, modifications, discharges or waivers of, or consents to any departures from any provision
of this Note or of any of the related loan documents shall not be effective without the written consent of the Lender and Borrower.
Any waiver or consent with respect to any provision of such Loan Documents shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances. Any amendment, modification, waiver or consent affected in accordance
with this Section shall be binding upon the Lender and on Borrower.

  

18.         Reliance
by Lender. All covenants, agreements, representations and warranties made herein and the Credit Agreement by Borrower and Parent
shall be deemed to be material to and to have been relied upon by the Lender, notwithstanding any investigation by the Lender.

 

19.         No
Set-Offs by Borrower. All sums payable by Borrower pursuant to this Note or any of the related loan documents shall be payable
without notice or demand and shall be payable in United States Dollars without set-off or reduction of any manner whatsoever.

 

20.         Survival.
All covenants, representations and warranties made in this Note shall continue in full force and effect so long as any obligations
hereunder or commitment to fund Advances remain outstanding. The obligations of Borrower to indemnify the Lender with respect to
all Claims shall survive until all applicable statute of limitations periods with respect to actions that may be brought against
the Lender have run.

 

21.         WAIVER
OF TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY.

 

[Signature Page Follows]

 

    13 

     

    

 

IN WITNESS WHEREOF, Borrower
has duly executed this Note as of the day and year first above written.

 

	 	LONG ISLAND BRAND BEVERAGES LLC
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    14 

     

    

  

Exhibit A

 

NOTICE OF CONVERSION

 

[NAME]

[ADDRESS]

 

RE: Notice of Conversion

 

Ladies and Gentlemen:

 

The undersigned hereby elects to convert
principal and/or interest under the Secured Convertible Promissory Note (the “Note”) of Long Island
Iced Tea Corp., a Delaware corporation (the “Company”), into shares of common stock, par value $0.0001
per share (the “Common Stock”), of the Company in accordance with the conditions of the Note, as of
the date written below.

 

	Conversion Calculations Date of Conversion:	 	 
	Conversion Price	 	 
	Principal Amount and/or Interest to be Converted: 	 	 
	Number of Common Shares to be Issued:	 	 
	 	 	 
	 	[HOLDER]	 

 

	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	Address:	 	 

  

 

    15 

     

    

 

EXHIBIT B

 

FORM OF NOTICE
OF BORROWING

 

Date _______________

 

Brentwood LIIT Inc.

 

RE: Notice
of Borrowing

 

Ladies and Gentlemen:

 

Pursuant to the
terms of a Credit and Security Agreement dated as of __________, 2015 (“Credit Agreement”), between you, Long
Island Iced Tea Corp., a Delaware corporation, and the undersigned, we hereby request you to make an Advance on _________, 201_
in the amount of $_________. Attached hereto is the Schedule of Payments for such advance.

 

This notice constitutes
a reaffirmation by the undersigned that the representations and warranties in the Credit Agreement are true, correct and accurate
in all material respects as of the date hereof and that no Event of Default has occurred and is continuing.

 

Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

	 	LONG ISLAND BRAND BEVERAGES LLC
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

Attachment

 

     

     

    

 

EXHIBIT C

 

FORM OF WARRANT

 

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

LONG ISLAND ICED TEA CORP.

 

WARRANT TO PURCHASE

 

1,111,111 SHARES

 

OF COMMON STOCK

 

	Warrant No. 2015-11-23-01	Dated:  November 23, 2015

 

Long Island Iced Tea
Corp., a Delaware corporation (the “Company”), hereby certifies that, for value received, Brentwood LIIT
Inc., a Delaware corporation, or its registered assigns (including permitted transferees, the “Holder”),
as registered owner of this warrant (the “Warrant”), is entitled to purchase from the Company up to a
total of 1,111,111 shares (as adjusted from time to time as provided in Section 9) of Common Stock (as defined
below), at an exercise price a price per share equal to $4.50 (as adjusted from time to time as provided in Section 9,
the “Exercise Price”), at any time and
from time to time from and after the date hereof (the “Initial Exercise Date”) to and including November
23, 2018 (the “Expiration Date”), and subject to the following terms and conditions.

 

1.
Definitions. The capitalized terms used herein and not otherwise defined shall have the meanings set forth below:

 

“Affiliate”
of any specified Person means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, “control” means the power
to direct the management and policies of such Person or firm, directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common Stock”
means the common stock of the Company, $0.0001 par value per share.

 

“Eligible
Market” means any of the New York Stock Exchange, the NYSE Amex or Nasdaq (as defined below), and any successor markets
thereto.

 

     

     

    

 

“Market Price”
shall mean (i) if the principal trading market for such securities is an exchange, the average of the last reported sale prices
per share for the last ten previous Trading Days in which a sale was reported, as officially reported on any consolidated tape,
(ii) if clause (i) is not applicable, the average of the closing bid price per share for the last ten previous Trading
Days as quoted by OTC Markets, Inc. for such securities. Notwithstanding the foregoing, if there is no reported sales price or
closing bid price, as the case may be, on any of the ten Trading Days preceding the event requiring a determination of Market Price
hereunder, then the Market Price shall be determined in good faith after reasonable investigation by resolution of the Board of
Directors of the Company.

 

“Nasdaq”
means the Nasdaq Global Market or Nasdaq Capital Market, and any successor markets thereto.

 

“Other Securities”
refers to any capital stock (other than Common Stock) and other securities of the Company or any other Person which the Holder
of this Warrant at any time shall be entitled to receive, or shall have received, pursuant to the terms hereof upon the exercise
of this Warrant, in lieu of or in addition to Common Stock.

 

“Person”
means any court or other federal, state, local or other governmental authority or other individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or
an agency or subdivision thereof) or other entity of any kind.

 

“Trading
Day” means (a) any day on which the Common Stock is listed or quoted and traded on any Eligible Market or (b) if
the Common Stock is not then quoted and traded on any Eligible Market, then a day on which trading occurs on the OTCQB or OTCQX
markets maintained by OTC Markets, Inc.(or any successor thereto).

 

“Warrant
Shares” shall initially mean shares of Common Stock and in addition may include Other Securities and Substituted
Property (as defined in Section 9(e)(x)) issued or issuable from time to time upon exercise of this Warrant.

 

2.
Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for
that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof
or any distribution to the Holder, and for all other purposes.

 

3.
Registration of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant
Register, upon surrender of this Warrant, with the Form of Assignment attached hereto as Appendix A duly completed
and signed, to the Company at its address specified herein. Upon any such registration and transfer, a new warrant in substantially
the form of a Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant
so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed
the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant. Notwithstanding the foregoing,
the Company shall not be obligated to register the transfer of all or any portion of this Warrant unless such transfer is 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 as
evidenced by a legal opinion of counsel to the transferor to such effect, the substance of which shall be reasonably acceptable
to the company.

 

4.
Exercise and Duration of Warrant.

 

(a)
This Warrant shall be exercisable, either in its entirety or for a portion of the number of Warrant Shares, by the registered
Holder at any time and from time to time from and after the initial Exercise Date (as defined below) to and including the Expiration
Date. At 5:00 P.M. New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value, and the Holder hereof shall have no right to purchase any additional Warrant Shares hereunder.

 

    	 	-2-	 

     

    

 

(b)
A Holder may exercise this Warrant by delivering to the Company, in accordance with Section 12, this Warrant, together
with (i) an exercise notice, in the form attached hereto as Appendix B (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) (A) payment of the Exercise Price for the number of Warrant Shares as to which
this Warrant is being exercised pursuant to a Cash Exercise (as set forth in Section 4(c) below) or (B) by notifying
the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as set forth in Section 4(d) below), and
the date such items are received by the Company is an “Exercise Date.” Execution and delivery of an Exercise
Notice in respect of less than all of the Warrant Shares issuable upon exercise of this Warrant shall result in the cancellation
of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
For clarity, the Holder may exercise any or all for the remaining portion of this Warrant notwithstanding that the Company has
not returned a physical New Warrant certificate to the Holder, by delivering a further Exercise Notice and tendering payment of
the Exercise Price (or Cashless Exercise notice) as aforesaid.

 

(c)
Cash Exercise. In the event the Holder has elected to pay the Exercise Price in cash, it shall pay the Exercise Price
by certified bank check payable to the order of the Company or by wire transfer of immediately available funds in accordance with
the Company’s instructions (a “Cash Exercise”).

 

(d)
Cashless Exercise. The Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in its
sole discretion, elect either (i) to pay the Exercise Price in cash or (ii) to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

 

For purposes of the foregoing formula,

 

A = the total number of shares
with respect to which this Warrant is then being exercised.

 

B = the average VWAP per share
of the Common Stock (as reported by Bloomberg) for the ten Trading Days immediately preceding the date of the Exercise Notice.

 

C = the Exercise Price then in
effect for the applicable Warrant Shares at the time of such exercise.

 

“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a national securities exchange, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the exchange on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted
for trading on a national securities exchange and if prices for the Common Stock are then reported by OTC Markets, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the
Company, the reasonable fees and expenses of which shall be paid by the Company.

 

    	 	-3-	 

     

    

 

(e)
Except as otherwise provided for herein, this Warrant shall not entitle the Holder to any voting rights or other rights
as a stockholder of the Company by virtue of the ownership hereof.

 

5.
Delivery of Warrant Shares.

 

(a)
Upon exercise of this Warrant, the Company shall promptly (but in no event later than ten (10) Trading Days after the Exercise
Date) issue or cause to be issued and deliver or cause to be delivered to the Holder, in such name or names as the Holder may designate,
a certificate for the Warrant Shares issuable upon such exercise (the “Certificate”), which may bear
a restrictive legend. The Holder, or any Person so designated by the Holder to receive the Warrant Shares, shall be deemed to have
become holder of record of such Warrant Shares as of the Exercise Date.

 

(b)
This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares.
Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense,
a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

 

(c)
To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective
of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance
of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder,
in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.

 

6.
Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this
Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the
Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issue, delivery or registration of any certificates for Warrant Shares or Warrant in a name other
than that of the Holder and that the Holder will be required to pay any tax with respect to cash received in lieu of fractional
shares. The Holder shall be responsible for all other tax liability of the Holder that may arise as a result of holding or transferring
this Warrant or receiving Warrant Shares upon exercise hereof.

 

7.
Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company, at the sole expense
of the Holder (such expenses, if any imposed by the Company to be reasonable), shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and in substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity,
if requested by the Company.

 

    	 	-4-	 

     

    

 

8.
Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of
the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from all taxes, liens, claims, encumbrances with respect to the issuance of such
Warrant Shares and will not be subject to any pre-emptive rights or similar rights (taking into account the adjustments and restrictions
of Section 9 hereof). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued, fully
paid and nonassessable. The Company will take all such action as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed or quoted, as the case may be.

 

9.
Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject
to adjustment from time to time as set forth in this Section 9.

 

(a)
Stock Dividends. If the Company, at any time while this Warrant is outstanding, pays a dividend on its Common Stock
payable in additional shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, then in each such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of
which shall be the number of shares of Common Stock outstanding immediately prior to the opening of business on the day after the
record date for the determination of stockholders entitled to receive such dividend or distribution and (B) the denominator
of which shall be the number of shares of Common Stock outstanding immediately after the distribution date of such dividend or
distribution. Any adjustment made pursuant to this Section 9(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution; provided, however, that if
following such record date the Company rescinds or modifies such dividend or distribution, the Exercise Price shall be appropriately
adjusted (as of the date that the Company effectively rescinds or modifies such dividend or distribution) to take into account
the effect of such rescinded or modified dividend or distribution on the Exercise Price pursuant to this Section 9(a).

 

(b)
Stock Splits. If the Company, at any time while this Warrant is outstanding, (i) subdivides outstanding shares
of Common Stock into a larger number of shares, or (ii) combines outstanding shares of Common Stock into a smaller number
of shares, then in each such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be
the number of shares of Common Stock outstanding immediately before such event and (B) the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such event. Any adjustment pursuant to this Section 9(b)
shall become effective immediately after the effective date of such subdivision or combination.

 

(c)
Reclassifications. A reclassification of the Common Stock (other than any such reclassification in connection with
a merger or consolidation to which Section 9(e) applies) into shares of any other class of stock shall be deemed:

 

(i)         a
distribution by the Company to the holders of its Common Stock of such shares of such other class of stock for the purposes and
within the meaning of this Section 9; and

 

(ii)         if
the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as part of such
reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common
Stock for the purposes and within the meaning of Section 9(b).

 

    	 	-5-	 

     

    

 

(d)
Other Distributions. If the Company, at any time while this Warrant is outstanding, distributes to holders of Common
Stock (i) evidences of its indebtedness, (ii) shares of any class of capital stock, (iii) rights or warrants to
subscribe for or purchase any shares of any class of capital stock or (iv) any other asset, other than a distribution of Common
Stock covered by Section 9(a), or ordinary cash dividends not to exceed $0.50 per year (in each case, “Distributed
Property”), then in each such case the Exercise Price in effect immediately prior to the record date fixed for determination
of stockholders entitled to receive such distribution (and the Exercise Price thereafter applicable) shall be adjusted (effective
on and after such record date) to equal the product of such Exercise Price multiplied by a fraction, (A) the numerator of
which shall be Market Price on such record date less the then fair market value of the Distributed Property distributed in respect
of one outstanding share of Common Stock, which, if the Distributed Property is other than cash or marketable securities, shall
be as reasonably determined in good faith by the Board of Directors of the Company whose determination shall be described in a
board resolution, and (B) the denominator of which shall be the Market Price on such record date; provided, however,
that if following the record date for such distribution the Company rescinds or modifies such distribution, the Exercise Price
shall be appropriately adjusted (as of the date that the Company effectively rescinds or modifies such distribution) to take into
account the effect of such rescinded or modified distribution on the Exercise Price pursuant to this Section 9(d).

 

(e)
Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger
or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its
assets or a majority of its stock acquired by a third party, in each case in one or a series of related transactions, (iii) any
tender offer or exchange offer by another Person is completed pursuant to which all or substantially all of the holders of Common
Stock are permitted to tender or exchange their shares for other securities, cash or property or (iv) there shall occur any
merger of another Person into the Company whereby the Common Stock is cancelled, converted or reclassified into or exchanged for
other securities, cash or property (in any such case, a “Fundamental Transaction”), then, as a condition
to the consummation of such Fundamental Transaction, the Company shall (or, in the case of any Fundamental Transaction in which
the Company is not the surviving entity, the Company shall take all reasonable steps to cause such other Person) to execute and
deliver to the Holder of this Warrant a written instrument providing that:

 

(x)         so
long as this Warrant remains outstanding, upon the exercise hereof at any time on or after the consummation of such Fundamental
Transaction and on such terms and subject to such conditions as shall be nearly equivalent as may be practicable to the provisions
set forth in this Warrant, this Warrant shall be exercisable into, in lieu of Common Stock issuable upon such exercise prior to
such consummation, the securities or other property (the “Substituted Property”) that would have been
received in connection with such Fundamental Transaction by a holder of the number of shares of Common Stock into which this Warrant
was exercisable immediately prior to such Fundamental Transaction, assuming such holder
of Common Stock:

 

(A)         is
not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be (a “Constituent Person”), or an Affiliate of a Constituent
Person; and

 

(B)         failed
to exercise such Holder’s rights of election, if any, as to the kind or amount of securities, cash and other property receivable
in connection with such Fundamental Transaction (provided, however, that if the kind or amount of securities, cash
or other property receivable in connection with such Fundamental Transaction is not the same for each share of Common Stock held
immediately prior to such Fundamental Transaction by a Person other than a Constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised (a “Non-Electing Share”), then, for the
purposes of this Section 9(e), the kind and amount of securities, cash and other property receivable in connection with
such Fundamental Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares); and

 

(y)         the rights and
obligations of the Company (or, in the event of a transaction in which the Company is not the surviving Person, such other Person)
and the Holder in respect of Substituted Property shall be as nearly equivalent as may be practicable to the rights and obligations
of the Company and Holder in respect of Common Stock hereunder.

 

    	 	-6-	 

     

    

 

Such written instrument
shall provide for adjustments which, for events subsequent to the effective date of such written instrument, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section 9. The above provisions of this Section 9(e)
shall similarly apply to successive Fundamental Transactions.

 

(f)
Adjustment of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs (a)
through (d) of this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall
be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the
increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price payable for the Warrant Shares
immediately prior to such adjustment.

 

(g)
Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale
of Common Stock.

 

(h)
Adjustments. Notwithstanding any provision of this Section 9, no adjustment of the Exercise Price shall
be required if such adjustment is less than $0.01; provided, however, that any adjustments which by reason of this Section 9(h)
are not required to be made shall be carried forward and taken into account for purposes of any subsequent adjustment required
to be made hereunder.

 

(i)
Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company
will promptly deliver to the Holder a certificate executed by the Company’s Chief Financial Officer setting forth, in reasonable
detail, the event requiring such adjustment and the method by which such adjustment was calculated, the adjusted Exercise Price
and the adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable). The
Company will retain at its office copies of all such certificates and cause the same to be available for inspection at said office
during normal business hours by the Holder or any prospective purchaser of the Warrant designated by the Holder.

 

(j)
Notice of Corporate Events.  If the Company (i) declares a dividend or any other distribution of cash, securities
or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe
for or purchase any capital stock of the Company or any subsidiary of the Company, (ii) authorizes, approves, enters into
any agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction fifteen (15) Trading Days prior to the applicable record or effective date
on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction (but not
prior to the public announcement thereof to the Company’s common stockholders at large) or such lesser number of Trading
Days between the announcement of such Fundamental Transaction and the anticipated closing of such Fundamental Transaction, and
the Company will take all steps reasonably necessary in order to ensure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however,
that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to
be described in such notice.

 

10.
Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on
the exercise of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section 10, be
issuable upon exercise of this Warrant, the Company shall make a cash payment to the Holder equal to (a) such fraction multiplied
by (b) the Market Price on the Exercise Date of one full Warrant Share.

 

    	 	-7-	 

     

    

 

11.
Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default
or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will
not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or otherwise.

 

12.
Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise
Notice) shall be in writing and shall be mailed by certified mail, return receipt requested, or by a nationally recognized courier
service or delivered (in person, by facsimile or by email), against receipt to the party to whom such notice or other communication
is to be given. Any notice or other communication given by means permitted by this Section 12 shall be deemed given at the
time of receipt thereof. The address for such notices or communications shall be as set forth below:

 

	If to the Company:	Long Island Brand Beverages LLC
	 	116 Charlotte Avenue
	 	Hicksville, NY 11801
	 	Attention:
	 	Phone: (855) 542-2832
	 	Facsimile:
	 	 
	with a copy to:	Graubard Miller
	 	405 Lexington Avenue
	 	New York, NY 10174
	 	Attention: Jeffrey M. Gallant
	 	Phone: 212-818-8800
	 	Facsimile: 212-818-8881
	 	 
	If to the Holder: 	As set forth in the Credit and Security Agreement, dated November 23, 2015, by and among the Company, Long Island Brand Beverages LLC and the Holder.
	 	 
	with a copy to:	Ellenoff Grossman & Schole LLP
	 	1345 Avenue of the Americas
	 	New York, NY 10105
	 	Attention: Douglas Ellenoff
	 	Phone: 212-370-1300
	 	Facsimile: 212-370-7889

 

Or such other address as is provided to
such other party in accordance with this Section 12.

 

13.
Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon a prompt written notice to the Holder,
the Company may appoint a new warrant agent. Any Person into which any new warrant agent may be merged, any Person resulting from
any consolidation to which any new warrant agent shall be a party or any Person to which any new warrant agent transfers substantially
all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any
further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first
class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

 

    	 	-8-	 

     

    

 

14.
Miscellaneous.

 

(a)
This Warrant may be assigned by the Holder, subject to compliance with applicable securities laws. This Warrant may not
be assigned by the Company, except to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and
inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing
in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy
or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

 

(b)
The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without
limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount
payable therefor upon exercise thereof, and (ii) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant,
free from all taxes, or liens, claims and encumbrances created by the Company and (iii) will not close its shareholder books or
records in any manner which interferes with the timely exercise of this Warrant.

 

(c)
This Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and Federal courts sitting in the City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding that it is
not personally subject to the jurisdiction of any such court or that such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

 

(d)
Neither party shall be deemed in default of any provision of this Warrant, to the extent that performance of its obligations
or attempts to cure a breach hereof are delayed or prevented by any event reasonably beyond the control of such party, including,
without limitation, war, hostilities, acts of terrorism, revolution, riot, civil commotion, national emergency, strike, lockout,
unavailability of supplies, epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or any other Act of God, or
any law, proclamation, regulation, ordinance, or other act or order of any court, government or governmental agency, provided
that such party gives the other party written notice thereof promptly upon discovery thereof and uses reasonable best efforts to
cure or mitigate the delay or failure to perform.

 

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

 

(f)
In case any one or more of the provisions of this Warrant shall be deemed invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and
the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

 

    	 	-9-	 

     

    

 

IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

	 	LONG ISLAND ICED TEA CORP.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Brentwood LIIT Inc.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

[Signature Page To Warrant]

 

     

     

    

 

APPENDIX A

 

FORM OF ASSIGNMENT

 

(to be completed and signed only upon transfer
of Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto ________________________________________ the right represented by the within Warrant to purchase
_____________ shares of Common Stock of Long Island Iced Tea Corp. to which the within warrant relates and appoints __________________________
attorney to transfer said right on the books of Long Island Iced Tea Corp. with full power of substitution in the premises.

 

	Dated:____________	 	 
	 	 	(Signature must conform in all respects to name of Holder as specified on face of the Warrant)
	 	 	 
	 	 	Address of Transferee:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	In the presence of:	 	 
	 	 	 
	 	 	 

 

The Transferee hereby represents and warrants
to Long Island Iced Tea Corp. that it is an “accredited investor” within the meaning of SEC Rule 501(a), and that it
is not purchasing this Warrant (or portion thereof) pursuant to any general solicitation by the transferor nor on the basis of
any information about the Company other than materials posted on the SEC’s EDGAR website or the Company’s press releases.

 

	 	 	 
	Transferee	 	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

     

     

    

 

APPENDIX B

 

FORM OF EXERCISE NOTICE

 

(To be executed by the Holder to exercise the right to purchase
shares of Common Stock under the foregoing Warrant)

 

To:          Long Island Iced Tea Corp.

 

The undersigned is the Holder of Warrant No. [      ] (the “Warrant”)
issued by Long Island Iced Tea Corp., a Delaware corporation (the “Company”). Capitalized terms used herein
and not otherwise defined have the respective meanings set forth in the Warrant.

 

		1.	The Warrant is currently exercisable to purchase a total of _________ Warrant Shares.

 

		2.	The undersigned Holder hereby exercises its right to purchase _________ Warrant Shares pursuant to the Warrant.

 

		3.	The Holder intends that payment of the Exercise Price shall be made as:

 

		a.	A “Cash Exercise” with respect to _________ Warrant Shares; and/or

 

		b.	A “Cashless Exercise” with respect to __________ Warrant Shares.

 

		4.	In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder shall pay the sum of $________ to the Company in accordance with the terms of the Warrant.

 

		5.	Pursuant to this exercise, the Company shall deliver to the Holder _________ Warrant Shares in accordance with the terms of
the Warrant

 

		6.	Following this exercise, the Warrant shall be exercisable to purchase a total of __________ Warrant Shares.

 

		7.	The Holder is an “accredited investor” within the meaning of SEC Rule 501(a).

 

	Dated: ____________	Name of Holder:
	 	 	 
	 	(Print)	 
	 	 	 
	 	By:	 
	 	 	 
	 	Title:	 
	 	 	 
	 	(Signature must conform in all respects to name of Holder as specified on face of the Warrant)

 

     

     

    

 

EXHIBIT D

 

FORM OF PARENT
GUARANTY

 

 

GUARANTY

 

1. The Guaranty. For valuable consideration,
Long Island Iced Tea Corp., a Delaware corporation ("Guarantor"), hereby unconditionally guarantees and
promises to pay promptly to Brentwood LIIT Inc., a Delaware corporation (“Lender”), or order, in lawful
money of the United States, any and all Obligations of Long Island Brand Beverages LLC, a New York limited liability company ("Borrower"),
to Lender when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter. The liability of Guarantor
under this Guaranty is not limited as to the principal amount of the Obligations guaranteed and includes, without limitation, liability
for all interest, fees, indemnities, and other costs and expenses relating to or arising out of the Obligations, now or hereafter
owing from Borrower to Lender. The liability of Guarantor is continuing and relates to any Obligations, including that arising
under successive transactions which shall either continue the Obligations or from time to time renew them after they has been satisfied.
This Guaranty is cumulative and does not supersede any other outstanding guaranties.

 

2. Obligations Independent. The obligations
under this Guaranty are independent of the obligations of Borrower or any other guarantor, and a separate action or actions may
be brought and prosecuted against Guarantor whether action is brought against Borrower or any other guarantor or whether Borrower
or any other guarantor be joined in any such action or actions.

 

3. Rights of Lender. Guarantor authorizes
Lender, without notice or demand and without affecting its liability hereunder, from time to time to:

 

(a) renew, compromise, extend, accelerate,
or otherwise change the time for payment, or otherwise change the terms, of the Obligations or any part thereof, including increase
or decrease of the rate of interest, or otherwise change the terms of any Loan Documents;

 

(b) receive and hold security for
the payment of this Guaranty or any Obligations and exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose
of any such security;

 

(c) apply such security and direct
the order or manner of sale thereof as Lender in its discretion may determine;

 

(d) release or substitute any one
or more of any endorsers or other guarantors of any of the Obligations; and

 

    10 

     

    

 

(e)
permit the Obligations to exceed Guarantor's liability under this Guaranty, and Guarantor agrees that any amounts received by
Lender from any source other than Guarantor shall be deemed to be applied first to any portion of the Obligations not guaranteed
by Guarantor.

 

4. Guaranty to be Absolute. Guarantor
agrees that until the Obligations have been paid in full in immediately available funds and any commitments of Lender or facilities
provided by Lender with respect to the Obligations have been terminated, Guarantor shall not be released by or because of the taking,
or failure to take, any action that might in any manner vary, discharge or otherwise reduce, limit, or modify Guarantor's obligations
under this Guaranty. Guarantor waives and surrenders any defense to any liability under this Guaranty based upon any such action,
including but not limited to any action of Lender described in the immediately preceding paragraph of this Guaranty. It is the
express intent of Guarantor that Guarantor’s obligations under this Guaranty are and shall be absolute and unconditional.
If this Guaranty is revoked, returned, or canceled, and subsequently any payment or transfer of any interest in property by
Borrower to Lender is rescinded or must be returned by Lender to Borrower, this Guaranty shall be reinstated with respect to any
such payment or transfer, regardless of any such prior revocation, return, or cancellation; and any guaranty of any indemnities,
shall survive any termination of this Guaranty. In the event that acceleration of the time for payment of any of the Obligations
is stayed upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise, all such Obligations guaranteed by Guarantor
shall nonetheless be payable by Guarantor immediately if requested by Lender. All payments by Guarantor hereunder shall be paid
in full, without setoff or counterclaim or any deduction or withholding whatsoever, including, without limitation, for any and
all present and future taxes.

 

5. Guarantor's Waivers of Certain Rights
and Certain Defenses. Guarantor waives:

 

(a) any right to require Lender
to:

 

(i) proceed against Borrower or
any other person;

 

(ii) marshal assets or proceed against
or exhaust any security held from the Borrower or any other person;

 

(iii) give notice of the terms, time
and place of any public or private sale or other disposition of personal property security held from Borrower or any other person;

 

(iv) take any other action or pursue
any other remedy in Lender's power; or

 

    11 

     

    

 

(v) make any presentment or demand
for performance, or give any notice of nonperformance, acceleration, protest, notice of protest or notice of dishonor hereunder
or in connection with any obligations or evidences of indebtedness held by Lender as security for or which constitute in whole
or in part the Obligations guaranteed hereunder, or in connection with the creation of new or additional Obligations, or give any
notice of acceptance of this Guaranty, or notices of any fact that might increase Guarantor’s risk.

 

(b) any defense to its obligations
under this Guaranty based upon or arising by reason of:

 

(i) any defense of Borrower or
any other Person;

 

(ii) the cessation or limitation from
any cause whatsoever, other than payment in full, of the Obligations;

 

(iii) any lack of authority of any
officer, director, partner, agent or any other person acting or purporting to act on behalf Borrower, or any defect in the formation
of Borrower;

 

(iv) the application by Borrower of
the proceeds of any Obligations for purposes other than the purposes represented by Borrower to, or intended or understood by,
Lender or Guarantor;

 

(v) any act or omission by Lender
which directly or indirectly results in or aids the discharge of Borrower or any portion of the Obligations by operation of law
or otherwise, or which in any way impairs or suspends any rights or remedies of Lender against Borrower;

 

(vi) any impairment of the value of
any interest in any security for the Obligations, including without limitation, the failure to obtain or maintain perfection or
recordation of any interest in any such security, the release of any such security without substitution, and/or the failure to
preserve the value of, or to comply with applicable law in disposing of, any such security;

 

(vii) any modification of the Obligations,
in any form whatsoever, including any modification made after revocation hereof to any Obligations incurred prior to such revocation,
and including without limitation the renewal, extension, acceleration or other change in time for payment of, or other change in
the terms of, the Obligations, including increase or decrease of the rate of interest;

 

(viii) any requirement that Lender
give any notice of acceptance of this Guaranty;

 

(ix) any defense based on any claim
that Guarantor's obligations exceed or are more burdensome than those of Borrower;

 

(x) the benefit of any statute of
limitations affecting Guarantor's liability under this Guaranty; or

 

    12 

     

    

 

(xi) any election of remedies by Lender,
even though that election of remedies, such as a non-judicial foreclosure with respect to any security for any portion of the Obligations,
destroys Guarantor's rights of subrogation or Guarantor's rights to proceed against Borrower for reimbursement.

 

(c) until the Obligations have been
paid in full and any commitments of Lender or facilities provided by Lender with respect to the Obligations have been terminated,
even though the Obligations may be in excess of Guarantor’s liability hereunder, to the extent permitted by applicable law,
any right of subrogation, reimbursement, indemnification, and contribution (contractual, statutory, or otherwise).

 

No provision or waiver in this Guaranty shall be construed as
limiting the generality of any other waiver contained in this Guaranty.

 

6. Subordination. Any obligations
of Borrower to Guarantor, now or hereafter existing, including but not limited to any obligations to Guarantor as subrogee of Lender
or resulting from Guarantor's performance under this Guaranty, are hereby subordinated to the Obligations. Guarantor agrees that,
if Lender so requests, Guarantor shall not demand, take, or receive from Borrower, by setoff or in any other manner, payment of
any other obligations of Borrower to Guarantor until the Obligations have been paid in full and any commitments of Lender or facilities
provided by Lender with respect to the Obligations have been terminated. If any payments are received by Guarantor in violation
of such waiver or agreement, such payments shall be received by Guarantor as trustee for Lender and shall be paid over to Lender
on account of the Obligations, but without reducing or affecting in any manner the liability of Guarantor under the other provisions
of this Guaranty. Any Lien that Guarantor may now or hereafter have on any property of Borrower is hereby subordinated to any Lien
that Lender may have on any such property.

 

7. Extent of Guaranty. Guarantor's
liability hereunder shall not exceed at any one time the largest amount during the period commencing with Guarantor's execution
of this Guaranty and thereafter that would not render Guarantor's obligations hereunder subject to avoidance under Section 548
of the bankruptcy Code (Title 11, United States Code) or any comparable provisions of any applicable state law.

 

8. Information Relating to Borrower.
Guarantor acknowledges and agrees that it has made such independent examination, review, and investigation of the Loan Documents
as Guarantor deems necessary and appropriate, and shall have sole responsibility to obtain from Borrower any information required
by Guarantor about any modifications to the Loan Documents. Guarantor further acknowledges that Lender has no duty, and Guarantor
is not relying on Lender, at any time to disclose to Guarantor any information relating to the business operations or financial
condition of Borrower.

 

9. Borrower's Authorization. It is
not necessary for Lender to inquire into the powers of Borrower or of the officers, directors, or agents acting or purporting to
act on its behalf, and any Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed
under this Guaranty.

 

    13 

     

    

 

10. Remedies.

 

(a)         On the occurrence of an Event of Default, while such
Event of Default is continuing (provided that an Event of Default shall be continuing at all times after any cure period therefor
expires), the Lender shall not have any further obligation to advance money or extend credit to or for the benefit of Borrower.
In addition, upon the occurrence and during the continuance of an Event of Default, the entire Obligations shall, at the option
of the Lender, become due and payable immediately without presentment, demand, notice of nonpayment, protest, notice of protest,
or other notice of dishonor, all of which are hereby expressly waived by Guarantor.

 

(b)         On the occurrence of an Event of Default, the Lender
shall have the following rights and remedies, which are cumulative in nature and shall be immediately available to the Lender:
(i) all rights and remedies provided by law or in equity, including but not limited to those provided to a secured party by the
UCC, especially those provided in Part 5 of Article 9, and equitable remedies for specific performance and injunctive relief; and
(ii) all rights and remedies provided in the Credit Agreement and the Loan Documents. In furtherance of the foregoing:

 

(1)         The Lender shall have the right to take possession
of the Collateral and to exercise all voting rights with respect to the Borrower Membership Interest. Guarantor will cooperate
fully with the Lender in the exercise of the Lender’s right to take possession of the Collateral. This shall include, but
is not limited to, an obligation to assemble and deliver the Collateral or some portion of the Collateral or some part or component
of the Collateral on request of the Lender to a place designated by the Lender where it shall be made available to the Lender.

 

(2)         The Lender shall have the right to sell or dispose
of the Collateral by public or private proceeding and may do so by way of one or more contracts. Such sale or other disposition
of the Collateral may be made as a unit or in parcels and at any time and place and on any terms as is permitted by the UCC. Any
actions so taken shall be considered commercially reasonable if made in the good faith exercise of the Lender’s business
judgment in the matter.

 

(3)         The Lender shall give Guarantor notice of the time
and place of any public sale of the Collateral or, in the case of a private sale or disposition, of the time after which such private
sale or disposition is intended to be consummated, in accordance with the terms of the Credit Agreement, not later than seven (7)
business days prior to the public sale or the time after which the private sale or other disposition is intended to be consummated;
provided that, the failure of the Lender to give any such notice shall not affect in any manner the validity or finality of any
such sale or disposition.

 

(4)         The proceeds of any disposition shall be applied
as provided in Section 9-504 of the Uniform Commercial Code and shall include any and all expenses provided in the Note and the
Credit Agreement, including attorney's fees and expenses to the extent such items are not prohibited by law.

 

    14 

     

    

 

11. Notices. All notices required
under this Guaranty shall be given as provided in the Credit Agreement.

 

12. Successors and Assigns. This
Guaranty (a) binds Guarantor and Guarantor's successors, and assigns, provided that Guarantor may not assign its rights or obligations
under this Guaranty without the prior written consent of Lender, and (b) inures to the benefit of Lender and Lender's indorsees,
successors, and assigns.

 

13. Amendments, Waivers, and Severability.
No provision of this Guaranty may be amended or waived except in writing. No failure by Lender to exercise, and no delay in exercising,
any of its rights, remedies, or powers shall operate as a waiver of such rights, remedies or powers, and no single or partial exercise
of any such right, remedy, or power shall preclude any other or further exercise thereof or the exercise of any other right, remedy,
or power. The unenforceability or invalidity of any provision of this Guaranty shall not affect the enforceability or validity
of any other provision of this Guaranty.

 

14. Costs and Expenses. Guarantor
agrees to pay all reasonable attorneys' fees and all other costs and expenses that may be incurred by Lender (a) in the enforcement
of this Guaranty or (b) in the preservation, protection, or enforcement of any rights of Lender in any case commenced by or against
Guarantor under the bankruptcy Code (Title 11, United States Code) or any similar or successor statute.

 

15. Representations, Warranties and Covenants.
When Guarantor signs this Guaranty, and until the Obligations are repaid in full and any commitments or facilities provided by
Lender with respect to the Obligations have been terminated, Guarantor makes the following representations, warranties and covenants:

 

(a)
All financial and other information that has been or will be supplied to Lender is sufficiently complete to give Lender accurate
knowledge of Guarantor's financial condition, including all material contingent liabilities. Since the date of the most recent
financial statement provided to Lender, there has been no material adverse change in the business condition (financial or otherwise),
operations, properties or prospects of Guarantor.

 

(b)
There is no lawsuit, tax claim or other dispute pending or threatened against Guarantor which, if lost, would impair Guarantor's
financial condition or ability to repay the Obligations, except as have been disclosed in writing to Lender.

 

(c)
Guarantor is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment,
contract, instrument or obligation, except as have been disclosed in writing to Lender.

 

(d) Guarantor has no knowledge
of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except as have been
disclosed in writing to Lender.

 

    15 

     

    

 

(e)
There is no event which is, or with notice or lapse of time or both would be, a default by Guarantor under this Guaranty or under
any other instrument or agreement executed in connection with the Obligations or this Guaranty.

 

(f)
Guarantor will not be rendered insolvent by the execution, delivery, and performance of its obligations under this Guaranty.

 

(g)
Guarantor shall maintain its existence and its good standing in its jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify could reasonably be expected to result in a Material Adverse Change.

 

(h)Comply with all Requirements
of Law to which it is subject, noncompliance with which could reasonably be expected to result in a Material Adverse Change.

 

(i)The Lender shall
have access during normal business hours to Guarantor’s financial and reporting information it reasonably requires, including
without limitation, an accounts receivable and accounts payable aging, a perpetual inventory report, bank statements, monthly internal
financial statements and the latest audited financial statements. Such information is to be provided within ten (10) days after
a written request by Lender to Guarantor.

 

(j)Guarantor shall not
change its name, jurisdiction of formation, or principal place of business without thirty (30) days prior written notice to Lender.

 

(k)Guarantor shall not
create, incur, assume or suffer to exist any Lien of any kind upon any of Guarantor’s property, whether now owned or hereafter
acquired, except Permitted Liens.

 

(l) Guarantor shall not
prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled repayment thereof any Indebtedness
or lease obligations, or (ii) amend, modify or otherwise change the terms of any Indebtedness (as such Term is defined in the Note)
so as to accelerate the scheduled repayment thereof.

 

(m)Guarantor shall not
create, incur, assume or permit to exist any Indebtedness, except Permitted Indebtedness.

 

(n)Guarantor shall not
liquidate, dissolve, cease operations, dispose of any of its assets for less than the fair market value thereof (other than obsolete
equipment), change the type of business that it operates or transfer any of its assets to any Subsidiary or cause or permit any
Subsidiary to have any material operations. 

 

    16 

     

    

 

16. Governing Law. This Guaranty shall
be governed by and construed in accordance with the laws of the State of New York. Guarantor agrees that any action or proceeding
against it to enforce this Guaranty may be commenced in state or federal court in any county in the State of New York, and Guarantor
waives personal service of process and agrees that a summons and complaint commencing an action or proceeding in any such court
shall be properly served and shall confer personal jurisdiction if served by registered or certified mail in accordance with the
notice provisions set forth herein.

 

17. Waiver of Jury Trial. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS GUARANTY OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF. EACH OF THE PARTIES HERETO
ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTY. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE
TO THE SUBJECT MATTER OF THIS GUARANTY, INCLUDING, BUT NOT LIMITED TO, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO THIS GUARANTY. EACH OF THE PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT EACH HAS REVIEWED OR HAD THE
OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS RESPECTIVE LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

18. Final Agreement. This Guaranty
and the other Loan Documents constitute the entire agreement between Guarantor and Lender with respect to the subject matter of
this Guaranty and with respect to the credit facilities provided by Lender to Borrower and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. In the event of any conflict between this Guaranty and any
other agreements required by this Guaranty, this Guaranty will prevail.

 

    17 

     

    

 

This Guaranty is dated as of November __, 2015.

 

	 	LONG ISLAND ICED TEA CORP.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    18

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