On January 11, 2018 HPIL Holding signed a Merchandise Licensing Agreement with Royal Blue (the Licensee). HPIL HOLDING (Licensor) has licensed the use of the Marks to Licensee solely in connection with the retail sale of merchandise by Licensee and its Affiliates pursuant to the terms of this Agreement. Licensee will pay royalties to Licensor based on Net Revenues from sales of Merchandise during the Term or subsequent to the termination of this Agreement for any reason. The applicable Royalty percentage will be calculated based on total Net Revenues from sales of all Merchandise during the Term of this Agreement. The Royalty percentages agreed to are as follows: 10% of Net Revenues up to $2,000,000 accrued during the Term of this Agreement, plus 12.5% of Net Revenues between $2,000,001 and $5,000,000 accrued during the Term of this Agreement, plus 15% of Net Revenues in excess of $5,000,000 accrued during the Term of this Agreement. The Licensee is authorized to sell in USA and Canada. The Term of this Agreement is five years from the effective date (January 11, 2018) and it is renewable for an additional five-year period.