Document:

REGISTRATION
RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is made and entered into as of January 27, 2016, between Epic
Stores Corp., a Nevada corporation (the “Company”), and each of
the purchasers signatory hereto (each such purchaser, the “Purchaser” and, collectively, the “Purchasers”).

 

This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser
(the “Purchase Agreement”).

 

The
Company and each Purchaser hereby agree as follows:

 

1.
Definitions.

 

Capitalized
terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms
in the Purchase Agreement.

 

As
used in this Agreement, the following terms shall have the following meanings:

 

“Advice”
shall have the meaning set forth in Section 6(d).

 

“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 90th calendar day
following the Filing Date, and with respect to any additional Registration Statements which may be required pursuant to Section
2(c) or Section 3(c), the 90th calendar day following the date on which an additional Registration Statement is required to be
filed hereunder; provided, however, that in the event the Company is notified by the Commission that one or more
of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness
Date as to such Registration Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified
if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is
not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

 

“Effectiveness
Period” shall have the meaning set forth in Section 2(a).

 

“Event”
shall have the meaning set forth in Section 2(d).

 

“Event
Date” shall have the meaning set forth in Section 2(d).

 

“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 45th calendar day after the
initial Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c)
or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration
Statement related to the Registrable Securities.

 

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“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified
Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall have the meaning set forth in Section 5(c).

 

“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

 

“Losses”
shall have the meaning set forth in Section 5(a).

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.

 

“Registrable
Securities” means, as of any date of determination, (a) all of the shares of Common Stock then issued and issuable upon
conversion in full of the Notes (assuming on such date the Notes are converted in full without regard to any conversion limitations
therein), (b) all shares of Common Stock issued and issuable as interest or principal on the Notes assuming all permissible interest
and principal payments are made in shares of Common Stock and the Notes are held until maturity, (c) any additional shares of
Common Stock issued and issuable in connection with any anti-dilution provisions in the Notes (without giving effect to any limitations
on conversion set forth in the Notes) and (d) any securities issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities
shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file
another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the
sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities
have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities
have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities
issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable,
were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to
the Company.

 

 

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“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional
registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and
supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

 

“SEC
Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.

 

2.
Registration.

 

(a) 
Not later than the Filing Date, the Company shall file with the Commission a draft Registration Statement on Form S-1 relating
to the resale by the Holders of all (or such other number as the Commission will permit) of the Registrable Securities. Subject
to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement
(including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to
keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such
Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale
restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed
and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”).

 

(b)  Notwithstanding
the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities
cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly inform each of the Holders thereof and use its

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commercially
reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum
number of Registrable Securities permitted to be registered by the Commission, on Form S-1 or such other form available to register
for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); with respect to filing
on Form S-1 or other appropriate form, and subject to the provisions of Section 2(d) with respect to the payment of liquidated
damages; provided, however, that prior to filing such amendment, the Company shall be obligated to use diligent
efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance,
including without limitation, Compliance and Disclosure Interpretation 612.09.

 

(c) Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission
or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular
Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by
a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement
will be reduced as follows:

 

i.  First,
the Company shall reduce or eliminate any securities to be included by any Person other than a Holder;

 

ii.  Second,
the Company shall reduce Registrable Securities represented by Conversion Shares (applied, in the case that some Conversion Shares
may be registered, to the Holders on a pro rata basis based on the total number of unregistered Conversion Shares held by such
Holders).

 

In
the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along
with the calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement
in accordance with the foregoing, the Company will use its best efforts to file with the Commission, as promptly as allowed by
Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements
on Form S-1 or such other form available to register for resale those Registrable Securities that were not registered for resale
on the Initial Registration Statement, as amended.

 

(d) If:
(i) the Initial Registration Statement is not filed on or prior to the Filing Date (if the Company files the Initial Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein,
the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request
for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities
Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii)
prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond
in writing to comments made by the

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Commission
in respect of such Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the Commission
that such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement
registering for resale all of the Registrable Securities (or such lower number of the Registrable Securities as may be requested
by the Commission) is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement,
or (v) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously
effective as to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted
to utilize the Prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more
than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days) during any 12-month period (any
such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date
on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and
for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purpose of clause (v) the date
on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event Date”),
then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each
monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable
Event is cured or the Registrable Securities may be sold without volume or manner-of-sale restrictions pursuant to Rule 144, as
determined by the counsel to the Company pursuant to a written opinion letter to such effect, the outstanding principal amount
of the Note shall be increased, as partial liquidated damages and not as a penalty, in an amount equal to the product of 2% multiplied
by the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If the Company fails to pay any partial
liquidated damages pursuant to this Section in full within seven (7) days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid
in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of
a month prior to the cure of an Event.

 

(e) If
Form S-1 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities
on Form S-1 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-1 covering the Registrable Securities has been
declared effective by the Commission.

  

3.
Registration Procedures.

 

In
connection with the Company’s registration obligations hereunder, the Company shall:

 

(a) Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated
or

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deemed
to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to
be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review
of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide
the Holders advance copies of any universal registration statement registering securities in addition to those required hereunder,
or any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith,
provided that, the Company is notified of such objection in writing no later than three (3) Trading Days after the Holders have
been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of
any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire
in the form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) on a date
that is not less than two (2) Trading Days prior to the Filing Date or by the end of the third (3rd) Trading Day following the
date on which such Holder receives draft materials in accordance with this Section.

 

(b) (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and,
as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably
possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement
(provided that, the Company shall excise any information contained therein which would constitute material non-public information
regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of
the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration
Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition
by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

  

(c) If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than
the number of such Registrable Securities.

 

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(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing
on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same
has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission
or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose,
(v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be,
it will not contain any untrue statement of a material fact or omit to state any 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, and (vi) of
the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be
material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability
of a Registration Statement or Prospectus, provided, however, in no event shall any such notice contain any information
which would constitute material, non-public information regarding the Company or any of its Subsidiaries.

 

(e) Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

 

(f) Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

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(g) Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

 

(h)  The
Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting
a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the Company
shall pay the filing fee required by such filing within two (2) Business Days of request therefor.

 

(i) Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall
not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company
to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in
any such jurisdiction.

 

(j) If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Holder may request.

 

(k) Upon
the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into
account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit 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. If the Company notifies the
Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite
changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best
efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to
exercise its right under this Section 3(k) to suspend the availability of a Registration Statement

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and
Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not
to exceed sixty (60) calendar days (which need not be consecutive days) in any 12-month period.

 

(l) Comply
with all applicable rules and regulations of the Commission.

 

(m) The
Company shall use its best efforts to maintain eligibility for use of Form S-1 (or any successor form thereto) for the registration
of the resale of Registrable Securities.

 

(n) The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and the natural persons thereof that have voting and dispositive control over the shares. During
any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities
solely because any Holder fails to furnish such information within three Trading Days of the Company’s request, any liquidated
damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because
of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

 

4.
Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect
to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common
Stock is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by
the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue
Sky qualifications or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with
an Issuer Filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make
sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.
In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company
be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents,
any legal fees or other costs of the Holders.

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5.
Indemnification.

 

(a) Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and
all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement
of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto,
in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with
the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements
or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly
for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution
of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration
Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex
A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi),
the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice
the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by
this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders
in accordance with Section 6(h).

 

(b) Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of

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the
Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or
(y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the
extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company
expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that
such information relates to such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder
has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the
case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the extent, related
to the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice
the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling
Holder under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by such Holder upon the
sale of the Registrable Securities giving rise to such indemnification obligation.

 

(c) Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal
or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

 An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or
(3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe that a material

    	 	11	 

    	 	 	 

    

conflict
of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense
of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees
and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement
of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

 Subject
to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

(d) Contribution.
If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement
or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its terms.

 

 The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute pursuant to this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually
received by such Holder from the sale of the Registrable

    	 	12	 

    	 	 	 

    

Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

 

The
indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.

 

6.
Miscellaneous.

 

(a) Remedies.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company
and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

 

(b) No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Except for 1,000,000 shares of Common Stock
sold to an investor on December 10, 2015 and December 31, 2015, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than
the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities are
registered pursuant to a Registration Statement that is declared effective by the Commission; provided, however, that this Section
6(b) shall not prohibit (i) the Company from filing amendments to registration statements filed prior to the date of this Agreement
(whether effective or not), including any new registration statement filed in connection with securities covered by a registration
statement filed prior to the date of this Agreement, and (ii) the Company from filing a registration statement on Form S-1 for
a primary offering by the Company, provided that the Company makes no offering of securities pursuant to such registration statement
prior to the effective date of the Registration Statement required hereunder that includes all of the Registrable Securities,
and (iii) the Company from filing a registration statement on Form S-8.

 

(c) Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

(d) Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its best efforts to

    	 	13	 

    	 	 	 

    

ensure
that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges that any periods
during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to
the provisions of Section 2(d).

 

(e) Piggy-Back
Rights of Holders. Other than in connection with the filing of a registration statement pursuant to Section 6(b)(i) and 6(b)(ii)
herein, if, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than
on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
the Company’s stock option, equity incentive or other employee benefit plans, then the Company shall deliver to each Holder
a written notice of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such
Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register
any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 (without volume restrictions
or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject
of a then effective Registration Statement.

 

(f) Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and the Holders of 67% or more of the then outstanding Registrable Securities (for purposes of clarification,
this includes any Registrable Securities issuable upon exercise or conversion of any Security). If a Registration Statement does
not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence,
then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each
Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders
may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the
provisions of the first sentence of this Section 6(f). No consideration shall be offered or paid to any Person to amend or consent
to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties
to this Agreement.

 

(g) Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.

 

    	 	14	 

    	 	 	 

    

(h) Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder
may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.

 

(i) No
Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied
in full.

 

(j) Execution
and Counterparts. 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.

 

(k) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.

 

(l) Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

(m) Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

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

 

    	 	15	 

    	 	 	 

    

(o) Independent
Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association,
a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert
or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters,
and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not asset any such
claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as
an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company
contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that
each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders
collectively and not between and among Holders.

 

********************

 

(Signature
Pages Follow)

 

    	 	16	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

 epic
stores Corp.

 

 

by:
/s/ Brian Davidson

Name: Brian Davidson

Title: CEO

 

 

 

 

 

 

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

    	 	17	 

    	 	 	 

    

 

[SIGNATURE
PAGE OF HOLDERS TO REGISTRATION RIGHTS AGREEMENT]

 

	Name of
    Holder:	Old
    Main Capital, LLC
		
	Signature of Authorized
    Signatory of Holder:	/s/ Mark Rozeboom
		
	Name of Authorized
    Signatory:	Mark Rozeboom
		
	Title of Authorized
    Signatory:	Managing Partner

 

    	 	18	 

    	 	 	 

    

Schedule
6(i) Registration Rights 

 

Effective
June 24, 2015, we entered into the Rights Agreement pursuant to which we agreed to register for resale the Registrable Securities
acquired by the investors in our June 2015 private placement financing. Pursuant to the Rights Agreement, we agreed to use our
reasonable best efforts to file a registration statement with the SEC for the resale of the Registrable Securities within 60 days
following the closing of the financing and to use our reasonable best efforts to cause the registration statement to be declared
effective as soon as practicable after the filing thereof, but in any event no later than 90 days following the closing of the
financing.

In
the event that the registration statement, among other things, (i) has not been filed by 60 days following the closing of the
financing, (ii) has not been declared effective by 90 days following the closing of the financing, or (iii) ceases to remain continuously
effective as to all Registrable Securities for more than 10 consecutive days or 20 days during any 12-month period, then we have
agreed to make payments to each investor as liquidated damages in an amount equal to 1.5% of the aggregate amount invested by
each such investor per 30-day period. In addition, we have agreed to keep the registration statement continuously effective until
the earliest to occur of (i) the date on which all of the Registrable Securities registered thereunder have been sold and (ii)
the date on which all of the Registrable Securities covered by the registration statement may be sold without restriction pursuant
to Rule 144 under the Securities Act.

 

Effective
October 7, 2015, the Company issued 1,250,000 units of the Company, at a price of $0.20 per unit, for proceeds of $250,000. Each
unit was comprised of one share of common stock in the capital of the Company and one share purchase warrant, with each warrant
being exercisable into one additional share at an exercise price of $0.30 per share for a period of two years after the closing
of the financing. The shares are included in our most recently filed S-1.

 

Effective
November 20, 2015, the Company issued 1,250,000 units of the Company, at a price of $0.20 per unit, for proceeds of $250,000.
Each unit was comprised of one share of common stock in the capital of the Company and one share purchase warrant, with each warrant
being exercisable into one additional share at an exercise price of $0.30 per share for a period of two years after the closing
of the financing. The shares are included in our most recently filed S-1.

 

Effective
December 31, 2015, the Company issued 500,000 shares of common stock in the capital of the Company, at a price of $0.30 per share,
for proceeds of $150,000. The Shareholder was granted piggy back rights.

 

Effective
December 31, 2015, the Company issued 500,000 shares of common stock to one investor at a price of $0.30 per share for total consideration
of $150,000. The Shareholder was granted piggy back rights.

    	 	19	 

    	 	 	 

    

ANNEX
A

 

 

    	 	20	 

    	 	 	 

    

 

ANNEX
B

 

Selling
Stockholder Questionnaire

    	 	21SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT, dated as of January 27, 2016 (this “Agreement”), is among Epic Stores Corp., a Nevada corporation
(the “Company”), all of the subsidiaries of the Company (such subsidiaries, the “Guarantors,”
and together with the Company, the “Debtors”) and the holders of the Company’s 10% Senior Secured Convertible
Promissory Notes, in the original aggregate principal amount of up to $543,478 (the “Notes”) signatory hereto,
their endorsees, transferees and assigns (collectively, the “Secured Parties”).

 

W
I T N E S S E T H:

 

WHEREAS,
pursuant to the Purchase Agreement (as defined in the Notes), the Secured Parties have severally agreed to extend the loans to
the Company evidenced by the Notes;

 

WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors have
jointly and severally agreed to guarantee and act as surety for payment of such Notes; and

 

WHEREAS,
in order to induce the Secured Parties to extend the loans evidenced by the Notes, each Debtor has agreed to execute and deliver
to the Secured Parties this Agreement and to grant each Secured Party, pari passu with each other
Secured Party, and through the Agent (as defined in Section 18 hereof), a security interest in certain property of such Debtor
to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the Notes and
the Guarantors’ obligations under the Guarantee.

 

NOW,
THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1.              Certain
Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.  Terms
used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”,
“fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”,
“investment property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the UCC.

 

(a)           “Collateral”
means the collateral in which the Secured Parties are granted a security interest by this Agreement and which shall include the
following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds,
products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of
insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities,
equity interest or other property at any time and from time to time acquired, receivable or otherwise

    	 	1	 

    	 	 	 

    

distributed
in respect of, or in exchange for, any or all of the Pledged Securities (as defined below):

 

(i)           
All goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships,
appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind
and nature and wherever situated, together with all documents of title and documents representing the same, all additions and
accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items
used and useful in connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

 

(ii)           All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests,
stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses,
distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed
by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and
rights, goodwill, Intellectual Property and income tax refunds;

 

(iii)          All
accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising,
goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties
with respect to each account, including any right of stoppage in transit;

 

(iv)          All
documents, letter-of-credit rights, instruments and chattel paper;

 

(v)           All
commercial tort claims;

 

(vi)          All
deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

(vii)         All
investment property;

 

(viii)        All
supporting obligations;

  

(ix)          All
files, records, books of account, business papers, and computer programs; and

 

(x)           the
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

 

Without
limiting the generality of the foregoing, the “Collateral” shall include all investment property and general
intangibles respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of
capital stock and the other equity interests listed on Schedule H hereto (as the same may be modified from
time to time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests of any other

    	 	2	 

    	 	 	 

    

direct
or indirect subsidiary of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or
equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter
be received, receivable or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in
connection with the Pledged Securities, including, but not limited to, all dividends, interest and cash.

 

Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the
extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable
law); provided, however, that to the extent permitted by applicable law, this Agreement shall create a
valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security
interest in the proceeds of such asset.

 

(b)           “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all
letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof,
and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part
thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress,
service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing
or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether
in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade
secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to
obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes
of action for infringement of the foregoing.

 

(c)           “Majority
in Interest” means, at any time of determination, the majority in interest (based on then-outstanding principal amounts
of Notes at the time of such determination) of the Secured Parties.

 

(d)           “Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and
such other instruments or documents as the Agent (as that term is defined below) may reasonably request.

 

    	 	3	 

    	 	 	 

    

(e)           “Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become
due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties, including,
without limitation, all obligations under this Agreement, the Notes, the Guarantee and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly
or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.  Without limiting the generality of the foregoing,
the term “Obligations” shall include, without limitation: (i) principal of, and interest on the Notes and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time
to time under or in connection with this Agreement, the Notes, the Guarantee and any other instruments, agreements or other documents
executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.

 

(f)           “Organizational
Documents” means with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate
of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates
of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor
(such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

 

(g)           “Permitted
Liens” means the following:

 

(i)Liens
(as defined in the Purchase Agreement) imposed by law for taxes that are not yet due or are being contested in good faith, which
in each case, have been appropriately reserved for;

(ii)carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in
the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested
in good faith;

(iii)pledges
and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations;

(iv)deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course of business;

    	 	4	 

    	 	 	 

    

(v)Liens
under this Agreement; and

(vi)any
other Liens in favor of the Secured Parties.

(h)           “Pledged
Interests” means the ownership and other equity interests in partnerships and limited liability companies (if any) included
in the Collateral.

 

(i)           “Pledged
Securities” shall have the meaning ascribed to such term in Section 4(i).

 

(j)        
   “UCC” means the Uniform Commercial Code of the State of New York and or any other applicable
law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from
time to time.  It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense
so that the term “Collateral” will be construed in its broadest sense.  Accordingly if there are, from time
to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions
in the UCC are broader than the amended definitions, the existing ones shall be controlling.

 

2.              Grant
of Security Interest in Collateral. As an inducement for the Secured Parties to extend the loans as evidenced by the Notes
and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations,
each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties a perfected, first
priority security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest
of whatsoever kind and nature in and to, the Collateral (a “Security Interest” and, collectively, the “Security
Interests”).

 

3.              Delivery
of Certain Collateral.  Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver
or cause to be delivered to the Agent (a) any and all certificates and other instruments representing or evidencing the Pledged
Securities, and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each
case, together with all Necessary Endorsements.  The Debtors are, contemporaneously with the execution hereof, delivering
to Agent, or have previously delivered to Agent, a true and correct copy of each Organizational Document governing any of the
Pledged Securities. Each Guarantor has, pursuant to Section 8-103(c) of the UCC, elected in its Organizational Documents that
the Pledged Interests shall be treated as securities governed by Article 8 of the UCC.

 

4.              Representations,
Warranties, Covenants and Agreements of the Debtors. Except as set forth under the corresponding section of the disclosure
schedules delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties
as follows:

 

(a)   Each
Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement
and the filings contemplated therein have been duly authorized by all necessary action on the part of

    	 	5	 

    	 	 	 

    

such
Debtor and no further action is required by such Debtor.  This Agreement has been duly executed by each Debtor.  This
Agreement constitutes the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with
its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of
general application relating to or affecting the rights and remedies of creditors and by general principles of equity.

 

 (b)           The
Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily
at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached
hereto.  Except as specifically set forth on Schedule A, each Debtor is the record owner of the real
property where such Collateral is located, and there exist no mortgages or other liens on any such real property except for Liens
(as defined in the Purchase Agreement) as set forth on Schedule A.  Except as disclosed on Schedule A,
none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.

 

(c)       
    Except as set forth on Schedule B attached hereto, the Debtors are the sole owners
of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear
of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interests.  Except
as set forth on Schedule C attached hereto, there is not on file in any governmental or regulatory authority,
agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the
foregoing (other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting
any of the Collateral.   Except as set forth on Schedule C attached hereto and except pursuant
to this Agreement, as long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit
to be on file in any such office or agency any other financing statement or other document or instrument (except to the extent
filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement).

 

(d)           No
written claim has been received that any Collateral or any Debtor's use of any Collateral violates the rights of any third party.
There has been no adverse decision to any Debtor's claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to any Debtor's right to keep and maintain such Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative
or regulatory agency, arbitrator or other governmental authority.

 

(e)        
   Each Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal
place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not
relocate such books of account and records or tangible Collateral unless it delivers to the Secured Parties at least thirty (30)
days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and
recorded and other steps have been taken to

    	 	6	 

    	 	 	 

    

perfect
the Security Interests to create in favor of the Secured Parties a valid, perfected and continuing perfected first priority lien
in the Collateral.

 

(f)        
   This Agreement creates in favor of the Secured Parties a valid first priority security interest in the Collateral,
securing the payment and performance of the Obligations.  Upon making the filings described in the immediately following
paragraph, all security interests created hereunder in any Collateral which may be perfected by filing Uniform Commercial Code
financing statements shall have been duly perfected.  Except for (i) the filing of the Uniform Commercial Code
financing statements referred to in the immediately following paragraph, (ii) the recordation of the Intellectual Property
Security Agreement (as defined in Section 4(p) hereof) with respect to copyrights and copyright applications in the United
States Copyright Office referred to in Section 4(mm), (iii) the recordation of the Intellectual Property Security Agreement
(as defined in Section 4(p) hereof) with respect to patents and trademarks of the Debtors in the United States Patent and
Trademark Office referred to in Section 4(oo), (iv) the execution and delivery of deposit account control agreements satisfying
the requirements of Section 9-104(a)(2) of the UCC with respect to each deposit account of the Debtors, (v) if there
is any investment property or deposit account included as Collateral that can be perfected by “control” through an
account control agreement, the execution and delivery of securities account control agreements satisfying the requirements of
9-106 of the UCC with respect to each such investment property of the Debtors, and (vi) the delivery of the certificates
and other instruments provided in Section 3, Section 4(aa) and Section 4(cc), no action is necessary to create,
perfect or protect the security interests created hereunder.  Without limiting the generality of the foregoing, except
for the foregoing, no consent of any third parties and no authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for (x) the execution, delivery and performance of this Agreement,
(y) the creation or perfection of the Security Interests created hereunder in the Collateral or (z) the enforcement
of the rights of the Agent and the Secured Parties hereunder.

 

 (g)           Each
Debtor hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.

 

 (h)           The
execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational
Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable
law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
any Debtor's debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any
Debtor is bound or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any
Debtor) necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.

 

 (i)           The
capital stock and other equity interests listed on Schedule H hereto (the “Pledged Securities”)
represent all of the capital stock and other equity interests of the

    	 	7	 

    	 	 	 

    

Guarantors,
and represent all capital stock and other equity interests owned, directly or indirectly, by the Company.  All of the
Pledged Securities are validly issued, fully paid and nonassessable, and the Company is the legal and beneficial owner of the
Pledged Securities, free and clear of any lien, security interest or other encumbrance except for the security interests created
by this Agreement and other Permitted Liens as set forth on Schedule A hereto.

 

(j)         
  [Intentionally Omitted.]

 

(k)           Each
Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and perfected, first priority
liens and security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 14 hereof.  Each Debtor hereby agrees to defend the same against
the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the account of the
Secured Parties.  At the request of the Agent, each Debtor will sign and deliver to the Agent on behalf of the Secured
Parties at any time or from time to time one or more financing statements pursuant to the UCC in form reasonably satisfactory
to the Agent and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Agent to be,
necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing,
each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder,
and each Debtor shall obtain and furnish to the Agent from time to time, upon demand, such releases and/or subordinations of claims
and liens which may be required to maintain the priority of the Security Interests hereunder.

  

(l)          
  No Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral
(except for non-exclusive licenses granted by a Debtor in its ordinary course of business, sales of inventory by a Debtor in its
ordinary course of business and the replacement of worn-out or obsolete equipment by a Debtor in its ordinary course of business)
without the prior written consent of a Majority in Interest.

 

(m)           Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and
shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

 

(n)           Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances
by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof.  Each Debtor shall cause each insurance policy issued in connection herewith to provide,
and the insurer issuing such policy to certify to the Agent, that (a) the Agent will be named as lender loss payee and additional
insured under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason
whatsoever, such insurer will promptly notify the Agent and such cancellation or change shall not be effective as to the Agent
for at least thirty (30) days after receipt by the Agent of such notice, unless the effect of such

    	 	8	 

    	 	 	 

    

change
is to extend or increase coverage under the policy; and (c) the Agent will have the right (but no obligation) at its election
to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default.  If
no Event of Default (as defined in the Notes) exists and if the proceeds arising out of any claim or series of related claims
do not exceed $100,000, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement
of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance
thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor; provided, however,
that payments received by any Debtor after an Event of Default occurs and is continuing or in excess of $100,000 for any occurrence
or series of related occurrences shall be paid to the Agent on behalf of the Secured Parties and, if received by such Debtor,
shall be held in trust for the Secured Parties and immediately paid over to the Agent unless otherwise directed in writing by
the Agent.   Copies of such policies or the related certificates, in each case, naming the Agent as lender loss
payee and additional insured shall be delivered to the Agent at least annually and at the time any new policy of insurance is
issued.

 

(o)           Each
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail,
of any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect
on the value of the Collateral or on the Secured Parties’ security interest, through the Agent, therein.

  

 (p)           Each
Debtor shall promptly execute and deliver to the Agent such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take such further action as the Agent may from time
to time request and may in its sole discretion deem necessary to perfect, protect or enforce the Secured Parties’ security
interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security agreement
with respect to each Debtor’s Intellectual Property (“Intellectual Property Security Agreement”) in which
the Secured Parties have been granted a security interest hereunder, substantially in a form reasonably acceptable to the Agent,
which Intellectual Property Security Agreement, other than as stated therein, shall be subject to all of the terms and conditions
hereof.

 

(q)           Upon
reasonable prior notice (so long as no Event of Default has occurred or continuing, which in either such event, no prior notice
is required), each Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during normal business
hours and to make copies of records pertaining to the Collateral as may be reasonably requested by the Agent from time to time.

 

(r)         
  Each Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect
any rights, claims, causes of action and accounts receivable in respect of the Collateral.

 

(s)           Each
Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other information received by such Debtor that may materially

    	 	9	 

    	 	 	 

    

affect
the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.

 

(t)         
  All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of any Debtor with
respect to the Collateral is accurate and complete in all material respects as of the date furnished.

 

(u)           The
Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any
rights and franchises material to its business.

 

(v)           No
Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has
one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least thirty (30) days prior
written notice to the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced
by this Agreement.

  

(w)           Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold,
sale or return, sale on approval, or other conditional terms of sale without the consent of the Agent which shall not be unreasonably
withheld.

 

(x)        
   No Debtor may relocate its chief executive office to a new location without providing thirty (30) days prior
written notification thereof to the Secured Parties and so long as, at the time of such written notification, such Debtor provides
any financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted
and evidenced by this Agreement.

 

 (y)           Each
Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule D attached
hereto, which Schedule D sets forth each Debtor’s organizational identification number or, if any
Debtor does not have one, states that one does not exist.

 

(z)           
(i) The actual name of each Debtor is the name set forth in Schedule D attached hereto; (ii) no Debtor has
any trade names except as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other
than that stated in the preamble hereto or as set forth on Schedule E for the preceding five (5) years; and (iv)
no entity has merged into any Debtor or been acquired by any Debtor within the past five years except as set forth on Schedule E.

 

(aa)          At
any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require
or permit possession by the secured party to perfect the security interest created hereby, the applicable Debtor shall deliver
such Collateral to the Agent.

 

    	 	10	 

    	 	 	 

    

(bb)         Each
Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Agent regarding the Pledged
Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by Section 8-106
(or any successor section) of the UCC.  Further, each Debtor agrees that it shall not enter into a similar agreement
(or one that would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

 

(cc)          Each
Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Agent, or, if such delivery is not
possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created
by this Agreement.  To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall
cause the underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor
Section thereto).

 

(dd)           If
there is any investment property or deposit account included as Collateral that can be perfected by “control” through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each
case satisfactory to the Agent, to be entered into and delivered to the Agent for the benefit of the Secured Parties.

 

(ee)          To
the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds thereof to the Secured Parties.

 

(ff)           To
the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Agent in notifying
such third party of the Secured Parties’ security interest in such Collateral and shall use its best efforts to obtain an
acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory
to the Agent.

 

(gg)           If
any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in
a writing signed by such Debtor of the particulars thereof and grant to the Secured Parties in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory
to the Agent.

 

(hh)           Each
Debtor shall immediately provide written notice to the Secured Parties of any and all accounts which arise out of contracts with
any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests
in such accounts and proceeds thereof, shall execute and deliver to the Agent an assignment of claims for such accounts and cooperate
with the Agent in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar
federal, state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts
and proceeds thereof.

 

    	 	11	 

    	 	 	 

    

 (ii)           Each
Debtor shall cause each subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”),
by executing and delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto
and comply with the provisions hereof applicable to the Debtors.  Concurrent therewith, the Additional Debtor shall
deliver replacement schedules for, or supplements to all other Disclosure Schedules to (or referred to in) this Agreement, as
applicable, which replacement schedules shall supersede, or supplements shall modify, the Disclosure Schedules then in effect.  The
Additional Debtor shall also deliver such opinions of counsel, authorizing resolutions, good standing certificates, incumbency
certificates, organizational documents, financing statements and other information and documentation as the Agent may reasonably
request.  Upon delivery of the foregoing to the Agent, the Additional Debtor shall be and become a party to this Agreement
with the same rights and obligations as the Debtors, for all purposes hereof as fully and to the same extent as if it were an
original signatory hereto and shall be deemed to have made the representations, warranties and covenants set forth herein as of
the date of execution and delivery of such Additional Debtor Joinder, and all references herein to the “Debtors” shall
be deemed to include each Additional Debtor.

  

(jj)        
   Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and
in the Notes.

 

(kk)          Each
Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor.  Each Debtor shall
notify each issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured
Parties on the books of such issuer.  Further, except with respect to certificated securities delivered to the Agent,
the applicable Debtor shall deliver to Agent an acknowledgement of pledge (which, where appropriate, shall comply with the requirements
of the relevant UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which
acknowledgement shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by
Agent during the continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities
into the name of any designee of Agent, will take such steps as may be necessary to effect the transfer, and will comply with
all other instructions of Agent regarding such Pledged Securities without the further consent of the applicable Debtor.

 

(ll)        
   In the event that, upon an occurrence of an Event of Default, Agent shall sell all or any of the Pledged Securities
to another party or parties (herein called the “Transferee”) or shall purchase or retain all or any of the
Pledged Securities, each Debtor shall, to the extent applicable: (i) deliver to Agent or the Transferee, as the case may be, the
articles of incorporation, bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements,
evidences of indebtedness, books of account, financial records and all other Organizational Documents and records of the Debtors
and their direct and indirect subsidiaries (but not including any items subject to the attorney-client privilege related to this
Agreement or any of the transactions hereunder); (ii) use its best efforts to obtain resignations of the persons then serving
as officers and directors of the Debtors and their direct and indirect subsidiaries, if so requested; and (iii) use its best efforts
to obtain any approvals that are required by any governmental or regulatory body in order to permit the sale of the Pledged Securities
to

    	 	12	 

    	 	 	 

    

the
Transferee or the purchase or retention of the Pledged Securities by Agent and allow the Transferee or Agent to continue the business
of the Debtors and their direct and indirect subsidiaries.

 

(mm)        Without
limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered
at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with
respect to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office
to be duly recorded at the applicable office, and (iii) give the Agent notice whenever it acquires (whether absolutely or by license)
or creates any additional material Intellectual Property.

  

 (nn)        Each
Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further
instruments and documents, and take all such further action as may be necessary or desirable, or as the Agent may reasonably request,
in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties
to exercise and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes
of this Agreement.

 

(oo)         Schedule F attached
hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain names
owned by any of the Debtors as of the date hereof.  Schedule F lists all material licenses in favor
of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof.  All material
patents and trademarks of the Debtors have been duly recorded at the United States Patent and Trademark Office and all material
copyrights of the Debtors have been duly recorded at the United States Copyright Office.

 

(pp)         Except
as set forth on Schedule G attached hereto, none of the account debtors or other persons or entities obligated
on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state
or local statute or rule in respect of such Collateral.

 

(qq)         Until
the Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct or
indirect subsidiary of the Company formed or acquired after the date hereof to enter into a Subsidiary Guarantee in favor of the
Secured Party, in the form attached as an exhibit to the Purchase Agreement.

 

5.           
 Effect of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting
equity or ownership interests (regardless of class, designation, preference or rights) that may be converted into voting equity
or ownership interests upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of
the other stock or assets of the issuer), it is agreed by Debtors that the pledge of such equity or ownership interests pursuant
to this Agreement or the enforcement of any of Agent’s rights hereunder shall not be deemed to be the type of event which
would trigger such conversion rights notwithstanding any provisions in the Organizational Documents or agreements to which any
Debtor is subject or to which any Debtor is party.

    	 	13	 

    	 	 	 

    

 

6.          
  Defaults. The following events shall be “Events of Default”:

 

(a)           
The occurrence of an Event of Default (as defined in the Notes) under the Notes;

  

(b)           
Any representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when
made;

 

(c)           
The failure by any Debtor to observe or perform any of its obligations hereunder for five (5) days after delivery to such Debtor
of notice of such failure by or on behalf of a Secured Party unless such default is capable of cure but cannot be cured within
such time frame and such Debtor is using best efforts to cure same in a timely fashion; or

 

(d)          
 If any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or
enforceability thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental
authority having jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor
shall deny that any Debtor has any liability or obligation purported to be created under this Agreement.

 

7.              Duty
to Hold in Trust.

 

(a)       
    Upon the occurrence of any Event of Default and at any time thereafter, each Debtor shall, upon receipt
of any revenue, income, dividend, interest or other sums subject to the Security Interests, whether payable pursuant to the Notes
or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both,
to the Secured Parties, pro-rata in proportion to their respective then-currently outstanding principal amount of Notes for application
to the satisfaction of the Obligations (and if any Notes are not outstanding, pro-rata in proportion to the initial purchases
of the remaining Notes).

 

(b)           If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation,
shares of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants,
rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of
its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in
exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties;
(ii) hold the same in trust on behalf of and for the benefit of the Secured Parties; and (iii) to deliver any and all certificates
or instruments evidencing the same to Agent on or before the close of business on the fifth (5th) business day following the receipt
thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by Agent subject to the
terms of this Agreement as Collateral.

    	 	14	 

    	 	 	 

    

  

8.              Rights
and Remedies Upon Default.

 

(a)          
 Upon the occurrence of any Event of Default and at any time thereafter, the Secured Parties, acting through the Agent, shall
have the right to exercise all of the remedies conferred hereunder and under the Notes, and the Secured Parties shall have all
the rights and remedies of a secured party under the UCC.  Without limitation, the Agent, for the benefit of the Secured
Parties, shall have the following rights and powers:

 

(i)            
The Agent shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance
of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor
shall assemble the Collateral and make it available to the Agent at places which the Agent shall reasonably select, whether at
such Debtor's premises or elsewhere, and make available to the Agent, without rent, all of such Debtor’s respective premises
and facilities for the purpose of the Agent taking possession of, removing or putting the Collateral in saleable or disposable
form.

 

(ii)           
Upon notice to the Debtors by Agent, all rights of each Debtor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise
be authorized to receive and retain, shall cease.  Upon such notice, Agent shall have the right to receive, for the
benefit of the Secured Parties, any interest, cash dividends or other payments on the Collateral and, at the option of Agent,
to exercise in such Agent’s discretion all voting rights pertaining thereto.  Without limiting the generality
of the foregoing, Agent shall have the right (but not the obligation) to exercise all rights with respect to the Collateral as
it were the sole and absolute owner thereof, including, without limitation, to vote and/or to exchange, at its sole discretion,
any or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other readjustment
concerning or involving the Collateral or any Debtor or any of its direct or indirect subsidiaries.

 

(iii)          
The Agent shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either
with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and
at such time or times and at such place or places, and upon such terms and conditions as the Agent may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to
any Debtor or right of redemption of a Debtor, which are hereby expressly waived.  Upon each such sale, lease, assignment
or other transfer of Collateral, the Agent, for the benefit of the Secured Parties, may, unless prohibited by applicable law which
cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of any Debtor, which are hereby waived and released.

 

(iv)         
The Agent shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts
to make payments directly to the

    	 	15	 

    	 	 	 

    

Agent,
on behalf of the Secured Parties, and to enforce the Debtors’ rights against such account debtors and obligors.

 

(v)         
 The Agent, for the benefit of the Secured Parties, may (but is not obligated to) direct any financial intermediary or any
other person or entity holding any investment property to transfer the same to the Agent, on behalf of the Secured Parties, or
its designee.

 

(vi)       
  The Agent may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor
at the United States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or any designee
or any purchaser of any Collateral.

 

(b)           The
Agent shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.  The Agent may sell the Collateral
without giving any warranties and may specifically disclaim such warranties.  If the Agent sells any of the Collateral
on credit, the Debtors will only be credited with payments actually made by the purchaser.  In addition, each Debtor
waives (except as shall be required by applicable statute and cannot be waived) any and all rights that it may have to a judicial
hearing in advance of the enforcement of any of the Agent’s rights and remedies hereunder, including, without limitation,
its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.

 

(c)           For
the purpose of enabling the Agent to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement
or applicable law, each Debtor hereby grants to the Agent, for the benefit of the Agent and the Secured Parties, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense
following an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same
may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout thereof.

 

9.              Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on
account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Agent
in enforcing the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing of the Collateral,
and then to satisfaction of the Obligations pro rata among the Secured Parties (based on then-outstanding principal amounts of
Notes at the time of any such determination), and to the payment of any other amounts required by applicable law, after which
the Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition of
the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured

    	 	16	 

    	 	 	 

    

Parties
are legally entitled, the Debtors will be liable for the deficiency, together with interest thereon, at the rate of 18% per annum
or the lesser amount permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys
employed by the Secured Parties to collect such deficiency.  To the extent permitted by applicable law, each Debtor
waives all claims, damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale
of the Collateral, unless due solely to the gross negligence or willful misconduct of the Secured Parties as determined by a final
judgment (not subject to further appeal) of a court of competent jurisdiction.

 

10.           Securities
Law Provision.  Each Debtor recognizes that Agent may be limited in its ability to effect a sale to the public of
all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal
or state securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more
sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account,
for investment and not with a view to the distribution or resale thereof.  Each Debtor agrees that sales so made may
be at prices and on terms less favorable than if the Pledged Securities were sold to the public, and that Agent has no obligation
to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the
public under the Securities Laws.  Each Debtor shall cooperate with Agent in its attempt to satisfy any requirements
under the Securities Laws (including, without limitation, registration thereunder if requested by Agent) applicable to the sale
of the Pledged Securities by Agent.

 

11.            Costs
and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with
any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements,
partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Agent.  The
Debtors shall also pay all other claims and charges which in the reasonable opinion of the Agent is reasonably likely to prejudice,
imperil or otherwise affect the Collateral or the Security Interests therein.  The Debtors will also, upon demand, pay
to the Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which the Agent, for the benefit of the Secured Parties, may incur in connection with the creation, perfection,
protection, satisfaction, foreclosure, collection or enforcement of the Security Interest and the preparation, administration,
continuance, amendment or enforcement of this Agreement and pay to the Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and agents, which the Agent, for the benefit of the Secured
Parties, and the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured Parties under the Notes. Until so paid, any fees payable hereunder shall be added to the principal
amount of the Notes and shall bear interest at the Default Rate.

 

12.            Responsibility
for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations
shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its

    	 	17	 

    	 	 	 

    

unavailability
for any reason.  Without limiting the generality of the foregoing and except as required by applicable law, (a) neither
the Agent nor any Secured Party (i) has any duty (either before or after an Event of Default) to collect any amounts in respect
of the Collateral or to preserve any rights relating to the Collateral, or (ii) has any obligation to clean-up or otherwise prepare
the Collateral for sale, and (b) each Debtor shall remain obligated and liable under each contract or agreement included in the
Collateral to be observed or performed by such Debtor thereunder.  Neither the Agent nor any Secured Party shall have
any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt
by the Agent or any Secured Party of any payment relating to any of the Collateral, nor shall the Agent or any Secured Party be
obligated in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to
make inquiry as to the nature or sufficiency of any payment received by the Agent or any Secured Party in respect of the Collateral
or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Agent
or to which the Agent or any Secured Party may be entitled at any time or times.

 

13.           Security
Interests Absolute. All rights of the Secured Parties and all obligations of each Debtor hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Notes or any agreement entered
into in connection with the foregoing, or any portion hereof or thereof, against any other Debtor; (b) any change in the time,
manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Notes or any other agreement entered into in connection with the foregoing;
(c) any exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure
from any other collateral for, or any guarantee, or any other security, for all or any of the Obligations; (d) any action by the
Secured Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense
available to a Debtor, or a discharge of all or any part of the Security Interests granted hereby.  Until the Obligations
shall have been paid and performed in full, the rights of the Secured Parties shall continue even if the Obligations are barred
for any reason, including, without limitation, the running of the statute of limitations.  Each Debtor expressly waives
presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time
any transfer of any Collateral or any payment received by the Secured Parties hereunder shall be deemed by final order of a court
of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws
of the United States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event,
each Debtor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied
by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof.  Each Debtor waives all right to require the Secured Parties to
proceed against any other person or entity or to apply any Collateral which the Secured Parties may hold at any time, or to marshal
assets, or to pursue any other remedy. Each Debtor waives any defense arising by reason of the application of the statute of limitations
to any obligation secured hereby.

    	 	18	 

    	 	 	 

    

 

14.            Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Notes
have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all indemnities
of the Debtors contained in this Agreement (including, without limitation, Annex B hereto) shall survive and remain operative
and in full force and effect regardless of the termination of this Agreement.

 

15.        
   Power of Attorney; Further Assurances.

 

 (a)           Each
Debtor authorizes the Agent, and does hereby make, constitute and appoint the Agent and its officers, agents, successors or assigns
with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the Agent
or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts,
money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect
of the Collateral that may come into possession of the Agent; (ii) to sign and endorse any financing statement pursuant to the
UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv)
to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual
Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Agent, and at the
expense of the Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to
do all acts and things which the Agent deems necessary to protect, preserve and realize upon the Collateral and the Security Interests
granted therein in order to effect the intent of this Agreement and the Notes all as fully and effectually as the Debtors might
or could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.  This
power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as
any of the Obligations shall be outstanding.  The designation set forth herein shall be deemed to amend and supersede
any inconsistent provision in the Organizational Documents or other documents or agreements to which any Debtor is subject or
to which any Debtor is a party.  Without limiting the generality of the foregoing, after the occurrence and during the
continuance of an Event of Default, each Secured Party is specifically authorized to execute and file any applications for or
instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United States
Patent and Trademark Office and the United States Copyright Office.

 

(b)           On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C attached
hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested
by the Agent, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring

    	 	19	 

    	 	 	 

    

and
confirming to the Agent the grant or perfection of a perfected security interest in all the Collateral under the UCC.

 

(c)       
    Each Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact, with full authority
in the place and instead of such Debtor and in the name of such Debtor, from time to time in the Agent’s discretion, to
take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto,
relative to any of the Collateral without the signature of such Debtor where permitted by law, which financing statements may
(but need not) describe the Collateral as “all assets” or “all personal property” or words of like import,
and ratifies all such actions taken by the Agent.  This power of attorney is coupled with an interest and shall be irrevocable
for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.

 

16.            Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement
(as such term is defined in the Notes).

 

17.            Other
Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by
the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Agent shall have the right,
in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any
way modifying or affecting any of the Secured Parties’ rights and remedies hereunder.

 

18.           Appointment
of Agent.  The Secured Parties hereby appoint Old Main Capital, LLC to act as their agent (“Old Main”
or “Agent”) for purposes of exercising any and all rights and remedies of the Secured Parties hereunder. Such
appointment shall continue until revoked in writing by a Majority in Interest, at which time a Majority in Interest shall appoint
a new Agent, provided that Old Main may not be removed as Agent unless Old Main shall then hold less than $100,000 in principal
amount of Notes; provided, further, that such removal may occur only if each of the other Secured Parties
shall then hold not less than an aggregate of $250,000 in principal amount of Notes. The Agent shall have the rights, responsibilities
and immunities set forth in Annex B hereto.

 

19.            Miscellaneous.

 

(a)          
 No course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising,
on the part of the Secured Parties, any right, power or privilege hereunder or under the Notes shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

    	 	20	 

    	 	 	 

    

(b)           All
of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Notes or
by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

 

(c)           This
Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtors
and the Secured Parties holding 67% or more of the principal amount of Notes then outstanding, or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is sought.

  

(d)           If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(e)           No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

(f)         
  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The
Company and the Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Secured Party (other than by merger).  Any Secured Party may assign any or all of its rights under this Agreement
to any Person (as defined in the Purchase Agreement) to whom such Secured Party assigns or transfers any Obligations, provided
such transferee agrees in writing to be bound, with respect to the transferred Obligations, by the provisions of this Agreement
that apply to the “Secured Parties.”

 

(g)           Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.

 

(h)          
Except to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning
the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in
accordance

    	 	21	 

    	 	 	 

    

with
the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Except to
the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the Notes (whether
brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan.  Except
to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, each Debtor 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 proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such proceeding is improper.  Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such 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 Agreement
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.  Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.

 

(i)          
 This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

(j)        
   All Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties
hereunder.

 

(k)           Each
Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured Parties and their respective partners, members,
shareholders, officers, directors, employees and agents (and any other persons with other titles that have similar functions)
(collectively, “Indemnitees”) from and against any and all losses, claims, liabilities, damages, penalties,
suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the
foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise
from this Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses
which result from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision
of a court of competent jurisdiction.  This indemnification provision is in addition to, and not in limitation of, any
other indemnification provision in the Notes, the Purchase Agreement (as such term is defined in the Notes) or any

    	 	22	 

    	 	 	 

    

other
agreement, instrument or other document executed or delivered in connection herewith or therewith.

 

(l)         
  Nothing in this Agreement shall be construed to subject Agent or any Secured Party to liability as a partner in any
Debtor or any if its direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or
indirect subsidiaries that is a limited liability company, nor shall Agent or any Secured Party be deemed to have assumed any
obligations under any partnership agreement or limited liability company agreement, as applicable, of any such Debtor or any of
its direct or indirect subsidiaries or otherwise, unless and until any such Secured Party exercises its right to be substituted
for such Debtor as a partner or member, as applicable, pursuant hereto.

 

(m)           To
the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or
compliance with any provisions of any of the Organizational Documents, the Debtors hereby represent that all such consents and
approvals have been obtained.

 

 

[SIGNATURE
PAGE OF DEBTORS FOLLOWS]

    	 	23	 

    	 	 	 

    

            IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.

 

 

	
        EPIC STORES CORP.

         

        By: /s/ Brian Davidson

             
        Name: Brian Davidson

             
        Title: CEO

	
	
        EPIC
        STORES llC

         

        By: /s/ Brian Davidson

            
         Name: Brian Davidson

             
        Title: Managing Partner

         

	
	
        EPIC
        STORES 2, LLC

         

        By: /s/ Brian Davidson

            
         Name: Brian Davidson

             
        Title: Managing Partner

	
	
        EPIC
        STORES III, LLC

         

        By: /s/ Brian Davidson

           
          Name: Brian Davidson

            
         Title: Managing Partner

 

 

[SIGNATURE
PAGE OF SECURED PARTIES FOLLOWS] 

    	 	24	 

    	 	 	 

    

[SIGNATURE
PAGE OF SECURED PARTIES TO SECURITY AGREEMENT]

 

 

Name
of Investing Entity: Old Main Capital, LLC

 

Signature
of Authorized Signatory of Investing Entity: /s/ Mark Rozeboom

 

Name
of Authorized Signatory: Mark Rozeboom

 

Title
of Authorized Signatory: Managing Partner

 

 

    	 	25	 

    	 	 	 

    

 

 DISCLOSURE
SCHEDULES

 

Security
Agreement

 

The
following are the Disclosure Schedules (the “Disclosure Schedules”) referred to in that certain Security Agreement,
dated as of January 27, 2016 (the “Agreement”), by and between Epic Stores Corp., a Nevada corporation (the
“Company”), all of the subsidiaries of the Company (such subsidiaries, the “Guarantors,”
and together with the Company, the “Debtors”) and the holders of the Company’s 10% Senior Secured Convertible
Promissory Notes, in the original aggregate principal amount of up to $543,478 (the “Notes”) signatory thereto,
their endorsees, transferees and assigns (collectively, the “Secured Parties”).

 

Schedule
A

Principal
Place of Business of Debtors;

Locations
Where Collateral is Located or Stored; 

Permitted
Liens

 

 

Schedule
B

Ownership
Interest to Collateral

 

 

Schedule
C

Filing
Jurisdictions

 

 

Schedule
D

Legal
Names and Organizational Identification Numbers

 

 

Schedule
E

Names;
Mergers and Acquisitions

 

 

Schedule
F

Intellectual
Property

 

 

Schedule
G

Account
Debtors

 

 

Schedule
H

Pledged
Securities

    	 	26	 

    	 	 	 

    

Schedule
A

Principal
Place of Business of Debtors;

Locations
Where Collateral is Located or Stored; 

Permitted
Liens

 

All
below properties are leased from Landlord or Property Manager

 

EPIC
Corporate Office Pacific Rose Garden, LLC

20805
N 19th Ave # 2

Phoenix,
AZ 85027

 

	Property
    Address	City
    State	Property
    Manager
	1927
    E. Gilbert Rd.	Mesa,
    AZ 85203	Village
    Grove Plaza Investors
	1435
    W. Craig Rd.	N.
    Las Vegas, NV 89032	BGM
    Red Rock, Inc
	3145
    E. Tropicana Ave.	Las
    Vegas, NV 89121	MDL
    Group
	18631
    N. 19th Ave. #133	Phoenix,
    AZ 85027	Ethan
    Christopher AZ, LLC
	4377
    W. Bell Rd.	Glendale,
    AZ 85308	Sunburst
    Station LLC
	1110
    W. Southern Ave. Suite 20	Mesa,
    AZ 85210	HH-POCA
    Fiesta, LLC
	3446
    W. Camelback Rd. Suite 1-121	Phoenix,
    AZ 85017	Arizona
    College Park, LLC
	1717
    E. Southern Ave.	Tempe,
    AZ 85282	McClintock
    Trade Partners, LLLP
	1102
    N. Higley Rd. #101 & 104	Mesa,
    AZ 85205	Northpoint
    Village, LLC
	4001
    S. Decatur Boulevard	Las
    Vegas, NV 89103	B33
    Renaissance West, LLC
	12455
    E. Mississippi #101	Aurora,
    CO 80012	One
    Earh Future Foundation, Inc.
	310
    FM 1960 West. Suite 310	Houston,
    TX 77090	Blossom
    Devlopment, Inc
	9592
    FM 1960  Bypass	Humble,
    TX 77338	Deerbrook
    Commons, Ltd.

 

 

    	 	27	 

    	 	 	 

    

 

Schedule
B

Ownership
Interest to Collateral 

 

	Equip.
    Type	Make	Model	Model
    Year	VIN/Serial
    Number	City	 Purchase
    Price 	Lien
    Holder
	Forklift	Cat
    	C500	2005	AT9002542	Mesa,
    AZ	 $    13,900.00
    	Wells
    Fargo Equipment Finance 
	Pup
    Trailer	Fruehauf	FBB9	-	MEK-7970-12	Mesa,
    AZ	 $               -   	-
	Trailer	Stoughton	8241	1989	1DW1A452XKS147348	Las
    Vegas, NV	 $      6,966.04
    	 -
    
	Forklift	Mitsubishi	FGC15K	2008	AF81F20194	North
    Las Vegas, NV	 $    10,400.00
    	Wells
    Fargo Equipment Finance 
	Forklift	CAT	CC4000-LP	2009	AT81F70139	Las
    Vegas, NV	 $    10,750.00
    	Wells
    Fargo Equipment Finance 
	Forklift	Hyster	S50FT	2004	F187V09184E	Phoenix,
    AZ	 $    10,500.00
    	Dimension
    Funding (Financial Pacific Leasing)
	Forklift	Toyota	5FBCU25	2014	61806	Mesa,
    AZ	 $    13,500.00
    	De
    Lage Landen
	Forklift	Mitsubishi	FGC15K	2004	AF81E00244	Las
    Vegas, NV	 $      9,500.00
    	De
    Lage Landen
	Forklift	Nissan	AF30LP	2015	AP1f1-9T1322	Aurora,
    CO 	 $    21,800.00
    	De
    Lage Landen
	Forklift	Hyundai	15LC-7M	2014	HHG07PC0000015	Houston,
    TX	 $    17,995.00
    	De
    Lage Landen
	Forklift	Hyundai	15LC-7M	2014	HHG07EC0000012	Humble,
    TX	 $    17,995.00
    	De
    Lage Landen
	Box
    Truck	Isuzu	NQR	2006	JALE5B16X67902322	Denver,
    Co	 $    19,743.19
    	Direct
    Capital Corporation
	Box
    Truck	GMC	W4500	2007	J8DC4B16777012405	Los
    Angeles, CA	 $    17,255.20
    	Direct
    Capital Corporation
	Box
    Truck	Isuzu	NQR	2007	JALE5B16477901653	Mesa,
    AZ	 $    23,621.91
    	Nile
    River Leasing, LLC
	Box
    Truck	Isuzu	NQR	2007	JALE5B16477901653	Mesa,
    AZ	 $               -   	-
	Box
    Truck	Isuzu	NPR	2012	54DC4W1B3CS800591	Houston,
    TX	 $    46,883.89
    	Direct
    Capital Corporation
	Box
    Truck	International
    Box 	4300	2004	1HTMMAAM24GH682662	Phoenix,
    AZ	 $               -   	E-10
    Pickups
	Car	Toyota	Prius	2013	JTDKDTB35D1041973	Houston,
    TX	 $    22,600.00
    	Direct
    Capital Corporation
	Car	Toyota	Prius
    5-DR	2015	JTDDKW3DU6F0405250	Phoenix,
    AZ	 $    26,832.95
    	Direct
    Capital Corporation
	Forklift	Toyota	7FGCU25	2006	1428	Phoenix,
    AZ	 $    13,250.00
    	Dimension
    Funding (Financial Pacific Leasing)
	Pup
    Trailer	TrailMobile	N/A	1983	1PT08AAE4E9001440	Phoenix,
    AZ	 $               -   	-
	Pup
    Trailer	Fruehauf	FBB9	1987	2V02818HL00F580	Phoenix,
    AZ	 $               -   	-

    	 	28	 

    	 	 	 

    

On
April 16, 2015, Epic Corp. issued a secured convertible promissory note to an investor in the principal amount of $200,000 to
Epic Funding Corp (Not a Related Party). The note bears a 23% annual interest rate and matured on June 30, 2015. The note was
convertible into one Class B Unit of Epic LLC. The note is secured by all assets of Epic Corp. At the time of issuance, the Company
evaluated the conversion feature and determined that the value associated with the conversion feature was $0. 

 

On
August 13, 2015, Epic Corp. issued a secured promissory note in the principal amount of $195,000 to Power Up Lending Group. The
note carried an original issue discount of $45,000, therefore $150,000 was received by the Company, net of the discount. The loan
will be repaid over 126 equal payments of $1,547 over the six month term and is secured by all assets of the Company. The original
issue discount was recorded as a reduction of the principal balance and is being amortized over the life of term of the note.

 

On
November 3, 2015, Epic Corp. issued a secured promissory note to New Era Lending in the principal amount of $217,500. The note
carried an original issue discount of $67,000, therefore $150,000 was received by the Company, net of the discount. The loan will
be repaid over 126 equal payments of $1,726 and is secured by all assets of the Company. The original issue discount was recorded
as a reduction of the principal balance and will be amortized over the life of term of the agreement.

 

On
November 4, 2015, Epic Corp. issued a secured promissory note to Quarterspot in the principal amount of $180,461. The note carried
an original issue discount of $30,461, therefore $150,000 was received by the Company, net of the discount. The loan will be repaid
over 187 equal payments of $968 and is secured by all assets of the Company. The original issue discount was recorded as a reduction
of the principal balance and will be amortized over the life of term of the agreement. 

 

    	 	29	 

    	 	 	 

    

SCHEDULE
C – FILING JURISDICTION

 

 

A
UCC Financing Statement was filed in the State of Nevada on July 28, 2015 granting Epic Store Funding Corp. a security interest
in all of the Company’s tangible and intangible property and assets.

 

On
February 11, 2015, Epic Stores LLC (“Epic LLC”), a Nevada limited liability company, was formed. On February
11, 2015, Epic 1 merged with and into Epic LLC, with Epic LLC as the surviving corporation, for the purposes of changing its jurisdiction
of formation from Arizona to Nevada.

 

Epic
Stores LLC is a foreign corporation in Arizona, Colorado, and Texas.

  

    	 	30	 

    	 	 	 

    

 

SCHEDULE
D – LEGAL NAMES AND ORGANIZATIONAL STRUCTURE

 

Effective
August 18, 2015, Epic Stores Corp., a Nevada corporation was formed. 

As
a result of the closing of the Exchange Agreement, our principal offices are now located at 20805 North 19th Avenue,
Suite 2, Phoenix, Arizona, USA 85027. As of the date of this prospectus, Epic and its wholly-owned subsidiaries, Epic LLC, Epic
2 and Epic 3, each as defined below, are our sole wholly-owned subsidiaries.

Epic
Stores, L.L.C.  (“Epic 1”) was incorporated on December 2, 2010 as an Arizona limited liability company.
It then formed a company, Epic Stores 2 LLC (“Epic 2”), a Nevada limited liability company, on September 20,
2011 On February 16, 2012, a second company, Epic Stores III LLC (“Epic 3”), a Nevada limited liability company.

On
February 11, 2015, Epic Stores LLC (“Epic LLC”), a Nevada limited liability company, was formed. On February
11, 2015, Epic 1 merged with and into Epic LLC, with Epic LLC as the surviving corporation, for the purposes of changing its jurisdiction
of formation from Arizona to Nevada. On May 4, 2015, Epic was incorporated under the laws of the State of Nevada. Pursuant to
a contribution agreement dated May 12, 2015, Epic LLC contributed all of its assets, including all of the membership interests
in Epic 2 and Epic 3, to Epic.

 

Epic
Stores Corp - EIN = 45-5355653

Epic
Stores LLC – EIN 38-3955110

Epic
Stores 2, LLC - EIN 45-3593054

Epic
Stores III, LLC - EIN 45-4675513 

 

    	 	31	 

    	 	 	 

    

 

Schedule
E

Names;
Mergers and Acquisitions

 

We
were incorporated in the State of Nevada on April 30, 2012 under the name “SBOR, Inc”. Effective December 20, 2013,
we completed a merger with our wholly-owned subsidiary, Be At TV, Inc., a Nevada corporation, which was incorporated solely to
effect a change in our name.  As a result, we changed our name from “SBOR, Inc.” to “Be At TV, Inc.”
Also effective December 20, 2013, we effected a 16.5 to 1 forward stock split of our authorized and issued and outstanding common
stock.

On
June 24, 2015, we entered into and closed the Exchange Agreement and completed the acquisition of Epic, a Nevada corporation.
In connection with the closing of the Exchange Agreement, we acquired all 27,083,493 issued and outstanding shares of common stock
in the capital of Epic from Epic’s stockholders in consideration for the issuance of: (i) 19,959,975 shares of our common
stock, and (ii) 1,133,813 warrants, each of which is exercisable into one share of our common stock at a price of $1.02 per share
until June 24, 2018, with all of the foregoing numbers adjusted to reflect the reverse stock split described below. The shares
of common stock we issued to the former stockholders of Epic represented approximately 58.1% of our issued and outstanding shares
of common stock, on an undiluted basis, at the time of closing of the Exchange Agreement. As a result of our acquisition of Epic,
we ceased to be a “shell company” as defined in Rule 12b-2 of the Exchange Act.

Effective
August 18, 2015, we completed a merger with our wholly-owned subsidiary, Epic Stores Corp., a Nevada corporation, which was incorporated
solely to effect a change in our name.  As a result, we changed our name from “Be At TV, Inc.” to “Epic
Stores Corp.”. Also effective August 18, 2015, we effected a reverse stock split of our authorized, issued and outstanding
common stock, on the basis of one new share of common stock for each 2.4 old shares of common stock. As a result, our authorized
capital of common stock decreased from 1,650,000,000 shares of common stock with a par value of $0.0001 per share to 687,500,000
shares of common stock with a par value of $0.0001 per share, and our previously outstanding 82,519,461 shares of common stock
decreased to 34,383,120 shares of common stock outstanding. Our authorized preferred stock was not affected by the reverse split
of common stock and continues to be comprised of 10,000,000 shares of preferred stock having a par value of $0.0001 per share,
of which no shares of preferred stock are currently outstanding.

As
a result of the closing of the Exchange Agreement, our principal offices are now located at 20805 North 19th Avenue,
Suite 2, Phoenix, Arizona, USA 85027. As of the date of this prospectus, Epic and its wholly-owned subsidiaries, Epic LLC, Epic
2 and Epic 3, each as defined below, are our sole wholly-owned subsidiaries.

Epic
Stores, L.L.C.  (“Epic 1”) was incorporated on December 2, 2010 as an Arizona limited liability company. 
Epic 1 opened its first store in Phoenix, Arizona in 2011. It then formed a company, Epic Stores 2 LLC (“Epic 2”),
a Nevada limited liability company, on September 20,

    	 	32	 

    	 	 	 

    

2011
to open its second retail location in Las Vegas, Nevada. On February 16, 2012, a second company, Epic Stores III LLC (“Epic
3”), a Nevada limited liability company, was formed to open the third retail location in Las Vegas, Nevada. After opening
the third store, Epic 1 determined that its growth plans would be more efficiently reached if all the stores were operated under
the same limited liability company. As a result, Epic 1 opened three locations in 2013 and five additional locations in 2014.
Effective January 1, 2015, the sole member of each of Epic 2 and Epic 3 assigned all of its membership interest in Epic 2 and
Epic 3 to Epic 1 pursuant to the terms of an assignment and assumption of membership interests agreement.

On
February 11, 2015, Epic Stores LLC (“Epic LLC”), a Nevada limited liability company, was formed. On February
11, 2015, Epic 1 merged with and into Epic LLC, with Epic LLC as the surviving corporation, for the purposes of changing its jurisdiction
of formation from Arizona to Nevada. On May 4, 2015, Epic was incorporated under the laws of the State of Nevada. Pursuant to
a contribution agreement dated May 12, 2015, Epic LLC contributed all of its assets, including all of the membership interests
in Epic 2 and Epic 3, to Epic. On May 21, 2015, Epic LLC and its members executed a conversion and liquidation agreement converting
all units of Epic LLC into Class A Units of Epic LLC, which in turn were converted into an aggregate of 10,034,789 shares of
common stock of Epic. Upon execution of the conversion and liquidation agreement, the members of Epic LLC authorized its manager
to take action as needed to dissolve Epic LLC. As at the date hereof, Epic LLC has not yet been dissolved and continues to be
a wholly-owned subsidiary of Epic.

    	 	33	 

    	 	 	 

    

 

Schedule
F

Intellectual
Property

 

 

All
of our trademarks, service marks, and certain other trademarks have been registered with the U.S. Patent and Trademark Office
and Epic is the registered owner of the Epic Thrift Stores TM trademark. We have licensed certain logos and
designs from third-parties for use in products featuring those logos and designs, but have no material licensed intellectual property.

 

Epic
Further Owns the following domain names:

 

EpicThriftStores.com

OnlyAtEpic.com

EpicStores.net 

    	 	34	 

    	 	 	 

    

 

Schedule
G

Account
Debtors

 

No
debtors below are a governmental authority

 

On
August 15, 2014, Epic Corp. issued two unsecured promissory notes to two investors The Kuehner Family Trust, and Steven G Sogge
And Linda J Sogge Revocable Family Trust, each in the principal amount of $250,000. The notes bear a 16% annual interest rate,
maturing at the earlier of the sale of Epic Corp. or December 31, 2018. The notes also carry provisions that allow the holder
to call the balance prior to maturity subject to early withdrawal penalties as follows: 12% if called in 2015, 8% if called in
2016 and 4% if called in 2017. On May 20, 2015, the Company and the noteholders agreed to settle 50% of the noteholders’
respective balances outstanding under the notes in consideration for the issuance of an aggregate of 233,791 shares of the common
stock of Epic Corp. to each of the note holders.

 

On
January 15, 2015, Epic Corp. issued an unsecured promissory note to an investor in the principal amount of $100,000 to Marc Barnoli.
The note bears no interest and is due upon demand.

 

On
April 16, 2015, Epic Corp. issued a secured convertible promissory note to an investor in the principal amount of $200,000 to
Epic Funding Corp (Not a Related Party). The note bears a 23% annual interest rate and matured on June 30, 2015. The note was
convertible into one Class B Unit of Epic LLC. The note is secured by all assets of Epic Corp. At the time of issuance, the Company
evaluated the conversion feature and determined that the value associated with the conversion feature was $0.

 

In
connection with the contribution of all of the assets of Epic LLC to Epic Corp., the Company offer the noteholder the opportunity
to convert the note into 352,941 shares of Epic Corp.’s common stock, which represented the pro rata value provided to each
Class B Unit holder at the time of the contribution. The note holder did not accept the proposed terms and as a result the note
was not converted.

 

The
note carries a break-up provision which states that the parties shall use commercially reasonable efforts to negotiate future
financing and convert the then outstanding principal and interest of the note into securities of Epic Corp. The note provided
that, in the event the parties were unable to agree on mutually agreeable terms on or prior to June 30, 2015, the Company
was to pay the noteholder, in addition to any other amounts due and owing under the note, a break-up fee in an amount equal to
$50,000. The contingent balance of $50,000 has been accrued as of September 30, 2015. As the parties were unable to finalize the
negotiation of a future financing by June 30, 2015, this contingent fee became contractually due to the note holder as of July
1, 2015.. As of the date of this filing, the Company has only made interest payments and the note is in default. The Company and
the note holder continue to negotiate the final terms of settlement.

 

On
August 13, 2015, Epic Corp. issued a secured promissory note in the principal amount of $195,000 to Power Up Lending Group.
The note carried an original issue discount of $45,000, therefore $150,000 was received by the Company, net of the discount.
The loan will be repaid over 126 equal payments of $1,547 over the six month term and is secured by all assets of the
Company. The original issue discount was recorded as a reduction of the principal balance and is being amortized over the
life of term of the note.

 

On
November 3, 2015, Epic Corp. issued a secured promissory note to New Era Lending in the principal amount of $217,500. The note
carried an original issue discount of $67,000, therefore $150,000 was received by the Company, net of the discount. The loan will
be repaid over 126 equal payments of $1,726 and is secured by all assets of the Company. The original issue discount was recorded
as a reduction of the principal balance and will be amortized over the life of term of the agreement.

 

On
November 4, 2015, Epic Corp. issued a secured promissory note to Quarterspot in the principal amount of $180,461. The note carried
an original issue discount of $30,461, therefore $150,000 was received by the Company, net of the discount. The loan will be repaid
over 187 equal payments of $968 and is secured by all assets of the Company. The original issue discount was recorded as a reduction
of the principal balance and will be amortized over the life of term of the agreement. 

 

    	 	35	 

    	 	 	 

    

 

Schedule
H

Pledged
Securities

 

All
of the equity interests of each Guarantor.

    	 	36	 

    	 	 	 

    

ANNEX
A

to

SECURITY

AGREEMENT

 

FORM
OF ADDITIONAL DEBTOR JOINDER

 

Security
Agreement dated as of January 27, 2016 made by Epic Stores Corp. and its subsidiaries party thereto from time to time, as Debtors
to and in favor of the Secured Parties identified therein (the “Security Agreement”).

 

Reference
is made to the Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in, or by reference in, the Security Agreement.

 

The
undersigned hereby agrees that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above, the undersigned
shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the
Security Agreement as fully and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to
have made the representations and warranties set forth therein as of the date of execution and delivery of this Additional Debtor
Joinder.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES
A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER
OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

 

Attached
hereto are supplemental and/or replacement Schedules to the Security Agreement, as applicable.

 

An
executed copy of this Additional Debtor Joinder shall be delivered to the Secured Parties, and the Secured Parties may rely on
the matters set forth herein on or after the date hereof.  This Additional Debtor Joinder shall not be modified, amended
or terminated without the prior written consent of the Secured Parties.

 

IN
WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.

  

 

		[Name
    of Additional Debtor]
		
		By:
		Name:
		Title:
		
		Address:

 Dated:

    	 	37	 

    	 	 	 

    

ANNEX
B

to

SECURITY

AGREEMENT

 

THE
AGENT

 

1.     Appointment. The
Secured Parties (all capitalized terms used herein and not otherwise defined shall have the respective meanings provided in the
Security Agreement to which this Annex B is attached (the "Agreement")), by their acceptance of the benefits
of the Agreement, hereby designate Old Main Capital, LLC (“Old Main” or “Agent”) as the
Agent to act as specified herein and in the Agreement.  Each Secured Party shall be deemed irrevocably to authorize
the Agent to take such action on its behalf under the provisions of the Agreement and any other Transaction Document (as such
term is defined in the Purchase Agreement) and to exercise such powers and to perform such duties hereunder and thereunder as
are specifically delegated to or required of the Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto.  The Agent may perform any of its duties hereunder by or through its agents or employees.

 

2.   
 Nature of Duties.  The Agent shall have no duties or responsibilities except those expressly set
forth in the Agreement.  Neither the Agent nor any of its partners, members, shareholders, officers, directors, employees
or agents shall be liable for any action taken or omitted by it as such under the Agreement or hereunder or in connection herewith
or therewith, be responsible for the consequence of any oversight or error of judgment or answerable for any loss, unless caused
solely by its or their gross negligence or willful misconduct as determined by a final judgment (not subject to further appeal)
of a court of competent jurisdiction.  The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of the Agreement or any other Transaction Document a fiduciary relationship in respect of any Debtor
or any Secured Party; and nothing in the Agreement or any other Transaction Document, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of the Agreement or any other Transaction Document
except as expressly set forth herein and therein.

 

3.     Lack
of Reliance on the Agent.  Independently and without reliance upon the Agent, each Secured Party, to the extent
it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and
affairs of the Company and its subsidiaries in connection with such Secured Party’s investment in the Debtors, the creation
and continuance of the Obligations, the transactions contemplated by the Transaction Documents, and the taking or not taking of
any action in connection therewith, and (ii) its own appraisal of the creditworthiness of the Company and its subsidiaries, and
of the value of the Collateral from time to time, and the Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Secured Party with any credit, market or other information with respect thereto, whether coming
into its possession before any Obligations are incurred or at any time or times thereafter.  The Agent shall not be
responsible to the Debtors or any Secured Party for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection herewith, or for the execution,

    	 	38	 

    	 	 	 

    

effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of the Agreement or any other Transaction
Document, or for the financial condition of the Debtors or the value of any of the Collateral, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions or conditions of the Agreement or any other Transaction
Document, or the financial condition of the Debtors, or the value of any of the Collateral, or the existence or possible existence
of any default or Event of Default under the Agreement, the Notes or any of the other Transaction Documents.

 

4.     Certain
Rights of the Agent.  The Agent shall have the right to take any action with respect to the Collateral, on behalf
of all of the Secured Parties.  To the extent practical, the Agent shall request instructions from the Secured Parties
with respect to any material act or action (including failure to act) in connection with the Agreement or any other Transaction
Document, and shall be entitled to act or refrain from acting in accordance with the instructions of a Majority in Interest; if
such instructions are not provided despite the Agent’s request therefor, the Agent shall be entitled to refrain from such
act or taking such action, and if such action is taken, shall be entitled to appropriate indemnification from the Secured Parties
in respect of actions to be taken by the Agent; and the Agent shall not incur liability to any person or entity by reason of so
refraining.  Without limiting the foregoing, (a) no Secured Party shall have any right of action whatsoever against
the Agent as a result of the Agent acting or refraining from acting hereunder in accordance with the terms of the Agreement or
any other Transaction Document, and the Debtors shall have no right to question or challenge the authority of, or the instructions
given to, the Agent pursuant to the foregoing and (b) the Agent shall not be required to take any action which the Agent believes
(i) could reasonably be expected to expose it to personal liability or (ii) is contrary to this Agreement, the Transaction Documents
or applicable law.

 

5.     Reliance.  The
Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made
by the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the other Transaction Documents
and its duties thereunder, upon advice of counsel selected by it and upon all other matters pertaining to this Agreement and the
other Transaction Documents and its duties thereunder, upon advice of other experts selected by it.  Anything to the
contrary notwithstanding, the Agent shall have no obligation whatsoever to any Secured Party to assure that the Collateral exists
or is owned by the Debtors or is cared for, protected or insured or that the liens granted pursuant to the Agreement have been
properly or sufficiently or lawfully created, perfected, or enforced or are entitled to any particular priority.

   

6.  
  Indemnification.  To the extent that the Agent is not reimbursed and indemnified by the Debtors,
the Secured Parties will jointly and severally reimburse and indemnify the Agent, in proportion to their initially purchased respective
principal amounts of Notes, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against
the Agent in performing its duties hereunder or under the Agreement or any other Transaction Document, or in any way relating
to or arising out of the Agreement or any other Transaction Document except for those determined by a final judgment (not subject
to

    	 	39	 

    	 	 	 

    

further
appeal) of a court of competent jurisdiction to have resulted solely from the Agent's own gross negligence or willful misconduct.  Prior
to taking any action hereunder as Agent, the Agent may require each Secured Party to deposit with it sufficient sums as it determines
in good faith is necessary to protect the Agent for costs and expenses associated with taking such action.

 

7.  
  Resignation by the Agent.

 

(a)   
The Agent may resign from the performance of all its functions and duties under the Agreement and the other Transaction Documents
at any time by giving thirty (30) days' prior written notice (as provided in the Agreement) to the Debtors and the Secured Parties.  Such
resignation shall take effect upon the appointment of a successor Agent pursuant to clauses (b) and (c) below.

 

(b)   
Upon any such notice of resignation, the Secured Parties, acting by a Majority in Interest, shall appoint a successor Agent hereunder.

 

(c)    If
a successor Agent shall not have been so appointed within said 30-day period, the Agent shall then appoint a successor Agent who
shall serve as Agent until such time, if any, as the Secured Parties appoint a successor Agent as provided above.  If
a successor Agent has not been appointed within such 30-day period, the Agent may petition any court of competent jurisdiction
or may interplead the Debtors and the Secured Parties in a proceeding for the appointment of a successor Agent, and all fees,
including, but not limited to, extraordinary fees associated with the filing of interpleader and expenses associated therewith,
shall be payable by the Debtors on demand.

 

8.     Rights
with respect to Collateral.  Each Secured Party agrees with all other Secured Parties and the Agent (i) that
it shall not, and shall not attempt to, exercise any rights with respect to its security interest in the Collateral, whether pursuant
to any other agreement or otherwise (other than pursuant to this Agreement), or take or institute any action against the Agent
or any of the other Secured Parties in respect of the Collateral or its rights hereunder (other than any such action arising from
the breach of this Agreement) and (ii) that such Secured Party has no other rights with respect to the Collateral other than as
set forth in this Agreement and the other Transaction Documents.  Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from its duties and obligations under the Agreement. 
After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of the Agreement including this Annex
B shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent.

    	 	40

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