LEAK-OUT AGREEMENT

 

This LEAK-OUT AGREEMENT (this “Agreement”) is made and entered into as of this
27th day of January 2016, by and between Conner Clay (the “Holder”) and Epic
Stores Corp., a Nevada corporation (the “Company”).

 

 

RECITALS

 

WHEREAS, the Company sold 500,000 shares of common stock of the Company (the
“Common Stock”) to the Holder on December 10, 2015 and the Company sold 500,000
shares of Common Stock to the Holder on December 31, 2015; and

 

WHEREAS, the Company and the Holder agree to enter into this Agreement in order
to provide for the orderly sale of shares of Common Stock;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1. Representations and Warranties. Each of the parties hereto, by their
respective execution and delivery of this Agreement, hereby represents and
warrants to the others and to all third party beneficiaries of this Agreement
that: (a) such party has the full right, capacity and authority to enter into,
deliver and perform its respective obligations under this Agreement, (b) this
Agreement has been duly executed and delivered by such party and is the binding
and enforceable obligation of such party, enforceable against such party in
accordance with the terms of this Agreement, and (c) the execution, delivery and
performance of such party’s obligations under this Agreement will not conflict
with or breach the terms of any other agreement, contract, commitment or
understanding to which such party is a party or to which the assets or
securities of such party are bound.

 

2. Leak-Out. Except as otherwise expressly provided herein, and subject to any
other restrictions prohibiting the conversion, offer, sale or transfer of the
Common Stock under applicable United States federal or state securities laws,
rules and regulations (collectively, the “Regulations”), the Company and the
Holder agree that, commencing on the date of this Agreement, subject to any
applicable Regulations, the Holder shall be entitled to sell shares of Common
Stock in an amount not more than 20% of the volume of the Common Stock on any
given day of trading (the “Daily Allotment”) until the six (6)-month anniversary
of the date hereof (such six (6)-month period, the “Leak-Out Period”), unless
otherwise extended by the Holder, at which time the Holder shall no longer be
subject to the Daily Allotment restrictions and shall be entitled to sell shares
of Common Stock as the Holder in its sole discretion may elect.

 

3. No Shorting. The Holder agrees that neither it, nor any of its affiliates,
shall short sell any of the Company’s securities during the term of this
Agreement.

4. Remedies. The Holder shall have the right to specifically enforce all of the
obligations of the Company under this Agreement (without posting a bond or other
security), in addition to recovering damages by reason of any breach by the
Company of any provision of this Agreement and to exercise all other rights
granted by law. For the avoidance of doubt, this foregoing provision is drafted
by all parties in a manner that is intended to apportion fault and
responsibility in a fair and equitable manner and the Company shall not be
responsible for any violation of the Daily Allotment by the Holder during the
Leak-Out Period so long as the Company uses reasonable care to assure compliance
with these provisions and does not authorize the Holder to sell shares of Common
Stock in a manner that is inconsistent with the Daily Allotment. Furthermore,
the Company recognizes that if it fails to perform, observe, or discharge any of
its obligations under this Agreement, any remedy at law may prove to be
inadequate relief to the Holder. Therefore, the Company agrees that the Holder
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of

 

 

proving actual damages and without posting a bond or other security. If the
Holder prevails in an action to enforce this Agreement, it shall be entitled to
receive from the Company reimbursement for all fees and expenses incurred in
connection therewith, including reasonable fees of counsel.

5. Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

6. Notices. All notices, instructions or other communications required or
permitted to be given pursuant to this Agreement shall be given in writing and
delivered by facsimile, certified mail, return receipt requested or overnight
courier by a nationally recognized courier service to the respective addresses
set forth on the signature page hereto. All notices shall be deemed to be given
on the same day if delivered by facsimile, on the following business day if sent
by overnight delivery or on the third business day following the date of
mailing.

 

7. Entire Agreement; Amendments. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
and may not be amended except by a written instrument executed by the parties
hereto. This Agreement supersedes any prior agreement (including, without
limitation any prior lock-up or leak-out agreements), representation or
understanding with respect to such subject matter.

 

8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada applicable to contracts entered
into and to be performed wholly within said state. The Company and the Holder
agree that any action based upon this Agreement may be brought in the United
States and state courts of Nevada only and the Holder submits to the
jurisdiction of such courts for all purposes hereunder.

 

9. Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

 

10. Severability. In the event any provision of this Agreement is held to be
invalid, illegal or unenforceable for any reason and in any respect, such
invalidity, illegality, or unenforceability shall in no event affect, prejudice
or disturb the validity of the remainder of this Agreement, which shall remain
in full force and effect, enforceable in accordance with its terms.

 

11. Effectiveness. This Agreement shall become effective immediately upon the
full execution of this Agreement by the Company and the Holder.

 

 

[Signature Page Follows]

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as of the day and year first above written.

 

By: /s/ Connor Clay

Name: Connor Clay

Title:

 

Address and Facsimile No. for Notice:

 

6816 Sunnyvale Rd

Paradise Valley, AZ 85253 

  

Attn: ________________________

 

Fax No: ______________________

 

 

 

EPIC STORES CORP.

 

By: /s/ Brian Davidson

Name: Brian Davidson

Title: CEO

 

Address and Facsimile No. for Notice:

___________________________

 

___________________________

 

Attn: ________________________

 

Fax No: ______________________

 

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