Exhibit 10.14
 
SUBSCRIPTION AGREEMENT
 
1.           Subscription for Units; Conversion of Preferred Stock.  The
undersigned (the “Purchaser”), intending to be legally bound, hereby irrevocably
agrees to purchase from Green Energy Management Services Holdings, Inc., a
Delaware corporation (the “Company”), the number of units (the “Units” or the
“PPO Units”) set forth on the signature page hereof at a purchase price of
$10,000 per Unit (the “Purchase Price”). Each Unit consists of (i) Company’s
Promissory Note in the principal amount of $10,000 (each a “Note” and
collectively the “Notes”), and (ii) one hundred (100) shares of preferred stock
of the Company, $0.0001 par value per share (the “Preferred Stock”, and together
with the Notes, the “Securities”), with each share of Preferred Stock
convertible at any time prior to the 2nd aniversary of their issuance date, in
whole or in part, at the Purchaser’s option, into five hundred (500) shares of
the Company’s common stock, $0.0001 par value per share (the “Common Stock”),
without the payment of additional consideration (the “Conversion Shares”).  The
form of Note is annexed hereto as Exhibit A. The form of Certificate of
Designations, Preferences and Rights of Series A Convertible Preferred Stock is
annexed hereto as Exhibit B (the “Certificate of Designations”).
 
The Notes mature two (2) years from the date of issuance, provided that for each
share of Preferred Stock that is converted by the Purchaser pursuant to its
terms, the outstanding principal amount of the Note issued to the Purchaser
shall be automatically reduced by an amount equal to (x) $100 for (y) each one
(1) converted share of Preferred Stock.  The interest payable on the Notes will
accrue until the earlier of payment or conversion of the corresponding part of
the shares of Preferred Stock and will be payable in cash, or at the discretion
of the Purchaser in shares of Common Stock at a conversion price of $0.20 per
share, subject to adjustment as provided in the Notes (the “Interest Shares”,
and collectively with the Preferred Stock, the Notes, the Conversion Shares and
the Interest Shares, the “Securities”).
 
The Common Stock underlying the Preferred Shares and the Interest Shares will
have piggyback registration rights.
 
2.           Offering.  This subscription is submitted to you in accordance with
and subject to the terms and conditions described in this Subscription
Agreement, as amended or supplemented from time to time, including all
attachments, schedules and exhibits hereto, relating to the offering (the
“Offering”) by the Company of a maximum of five hundred (500) Units or
$5,000,000 (the “Maximum Offering Amount”). No minimum amount of Units must be
sold to close and complete the Offering.
 
3.           Payment.  The Purchaser will send directly a check payable to, or
will make a wire transfer payment to the Company in the full amount of the
Purchase Price of the Units being subscribed for.  Wire transfer instructions
are set forth under the heading “To subscribe for Units in the private offering
of Green Energy Management Services Holdings, Inc.”  Together with a check for,
or wire transfer of, the full Purchase Price, the Purchaser is delivering a
completed and executed Signature Page to this Subscription Agreement, together
with the Purchaser’s completed Accredited Investor Certification, in the form
attached to this Subscription Agreement, and any other documents, agreements,
supplements and additions thereto required by the Company (collectively, the
“Subscription Documents”).
 
 
 

--------------------------------------------------------------------------------

 
 
4.           Deposit of Funds.  The initial closing of the purchase and sale of
the Units (the “Closing”) shall take place as soon as practicable following the
satisfaction of the conditions to the Closing set forth herein. There may be
multiple Closings until such time as all the Units offered pursuant to this
Subscription Agreement are sold (the date of any such Closing is hereinafter
referred to as a “Closing Date”).  Subject to the satisfaction of the terms and
conditions of this Subscription Agreement, on each Closing Date, (i) the
Purchaser shall deliver to the Company or to persons as otherwise directed by
the Company the full Purchase Price for the Units to be issued and sold to the
Purchaser(s) on such Closing Date, and (ii) the Company shall promptly
thereafter deliver directly to the Purchaser(s), the Notes and Shares of
Preferred Stock comprising the purchased Units, duly executed on behalf of the
Company.  The last of such Closings will occur on or before November 30, 2013
(the “Initial Offering Period”), which date may be mutually extended at the
discretion of the Issuer for up to an additional 90 days (this additional period
and the Initial Offering Period shall be referred to as the “Offering Period”,
and the last date of the Offering shall be referred to as the “Termination
Date”).  Each Closing shall occur on a Closing Date at the offices of the
Company at Green Energy Management Services Holdings, Inc., 2251 Drusilla Lane,
Suite B, Baton Rouge, Louisiana 70809 (or such other place as is mutually agreed
to by the Company and the Purchaser).
 
5.           Acceptance of Subscription.  The Purchaser understands and agrees
that the Company, in its sole and absolute discretion, reserves the right to
accept or reject this or any other subscription for Units, in whole or in part,
prior to the Closing of such Units, notwithstanding prior receipt by the
Purchaser of notice of acceptance of this subscription.  The Company shall have
no obligation hereunder until the Company shall execute and deliver to the
Purchaser an executed copy of this Subscription Agreement.  If this subscription
is rejected in whole or the Offering is terminated, all funds received from the
Purchaser will be returned without interest or offset, and this Subscription
Agreement shall thereafter be of no further force or effect.  If this
subscription is rejected in part, the funds for the rejected portion of this
subscription will be returned without interest or offset, and this Subscription
Agreement will continue in full force and effect to the extent this subscription
was accepted.
 
6.           [Reserved].
 
7.           Representations and Warranties of the Purchaser.  The Purchaser
hereby acknowledges, represents, warrants, and agrees as follows:
 
(a)         None of the Securities offered pursuant to this Subscription
Agreement are registered under the Securities Act of 1933, as amended (the
“Securities Act”), or any state securities laws.  The Purchaser understands that
the offering and sale of the Units is intended to be exempt from registration
under the Securities Act, by virtue of Section 4(2) thereof and the provisions
of Regulation D (“Regulation D”) and/or Regulation S (“Regulation S”) each as
promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
thereunder, based, in part, upon the representations, warranties and agreements
of the Purchaser contained in this Subscription Agreement;
 
(b)        Prior to the execution of this Subscription Agreement, the Purchaser
and the Purchaser’s attorney, accountant, purchaser representative and/or tax
adviser, if any (collectively, the “Advisers”), have received this Subscription
Agreement and all other documents requested by the Purchaser, have carefully
reviewed them and understand the information contained therein;
 
(c)         Neither the SEC nor any state securities commission or other
regulatory authority has approved the Securities or passed upon or endorsed the
merits of the offering of the Units or any of the other Securities;
 
 
2

--------------------------------------------------------------------------------

 
 
(d)        All documents, records, and books pertaining to the investment in the
Units have been made available for inspection by such Purchaser and its
Advisers, if any;
 
(e)         The Purchaser and/or its Advisers, if any, have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the offering of the Units and the
business, financial condition and results of operations of the Company, and all
such questions have been answered to the full satisfaction of the Purchaser and
its Advisers, if any;
 
(f)          In evaluating the suitability of an investment in the Company, the
Purchaser has not relied upon any representation or information (oral or
written) other than as stated herein;
 
(g)        The Purchaser is unaware of, is in no way relying on, and did not
become aware of the Offering of the Units through or as a result of, any form of
general solicitation or general advertising including, without limitation, any
article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television, radio or the
Internet (including, without limitation, internet “blogs,” bulletin boards,
discussion groups and social networking sites) in connection with the Offering
and sale of the Units and is not subscribing for the Units and did not become
aware of the Offering of the Units through or as a result of any seminar or
meeting to which the Purchaser was invited by, or any solicitation of a
subscription by, a person not previously known to the Purchaser in connection
with investments in securities generally;
 
(h)        The Purchaser has taken no action that would give rise to any claim
by any person for brokerage commissions, finders’ fees or the like relating to
this Subscription Agreement or the transactions contemplated hereby (other than
commissions to be paid by the Company to the Placement Agent and other
participating broker-dealers, if any);
 
(i)          The Purchaser, together with its Advisers, if any, has such
knowledge and experience in financial, tax, and business matters, and, in
particular, investments in securities, so as to enable it to utilize the
information made available to it in connection with the Offering to evaluate the
merits and risks of an investment in the Units and the Company and to make an
informed investment decision with respect thereto;
 
(j)          The Purchaser is not relying on the Company, the Placement Agent or
any of their respective employees or agents with respect to the legal, tax,
economic and related considerations of an investment in the Units, and the
Purchaser has relied on the advice of, or has consulted with, only its own
Advisers;
 
(k)         The Purchaser is acquiring the Units solely for such Purchaser’s own
account for investment purposes only and not with a view to or intent of resale
or distribution thereof, in whole or in part. Except as permitted by such
Purchaser’s constituent documents, the Purchaser has no agreement or
arrangement, formal or informal, with any person to sell or transfer all or any
part of the Units, Notes, Preferred Stock or Conversion Shares, and the
Purchaser has no plans to enter into any such agreement or arrangement;
 
(l)         The Purchaser must bear the substantial economic risks of the
investment in the Units indefinitely because none of the securities included in
the Units may be sold, hypothecated or otherwise disposed of unless subsequently
registered under the Securities Act and applicable state securities laws or an
exemption from such registration is available (including, without limitation,
under Regulation S).  Legends to the following effect shall be placed on the
securities included in the Units to the effect that they have not been
registered under the Securities Act or applicable state securities laws:
 
 
3

--------------------------------------------------------------------------------

 
 
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH (I)
REGULATION S UNDER THE SECURITIES ACT, IF AVAILABLE, (II) ANY OTHER EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, IF AVAILABLE, OR (III) UNDER AN
EFFECTIVE REGISTRATION STATEMENT, AND, IN EACH CASE, IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF, MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.  RELIANCE ON AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO
PROVIDE THE COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST
BE SATISFACTORY TO THE COMPANY.
 
Appropriate notations will be made in the Company’s stock books to the effect
that the securities included in the Units have not been registered under the
Securities Act or applicable state securities laws.  Stop transfer instructions
will be placed with the transfer agent with respect to the Conversion Shares and
on the Company’s books with respect to Units, the Notes and the Preferred Stock.
The Company has agreed that purchasers of the Units will have with respect to
the Conversion Shares and the Interest Shares piggyback registration rights, the
terms of which are discussed in Section 18 hereof. Notwithstanding such
piggyback registration rights, there can be no assurance that there will be any
market for resale of the Conversion Shares, nor can there be any assurance that
such securities will be freely transferable at any time in the foreseeable
future.  In addition, Notes and the shares of Preferred Stock issued to
Purchasers purchasing Units in this Offering in an offshore transaction outside
the United States in reliance on Regulation S will bear an additional
restrictive legend to the following effect:
 
THIS SECURITY MAY NOT BE CONVERTED OR EXERCISED IN THE UNITED STATES OR BY OR ON
BEHALF OF A “U.S. PERSON” OR A PERSON IN THE UNITED STATES UNLESS THIS SECURITY
AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE APPLICABLE SECURITIES
LEGISLATION OF ANY SUCH STATE OR ANY OTHER EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY
REGULATION S UNDER THE SECURITIES ACT. RELIANCE ON AN EXEMPTION FROM
REGISTRATION WILL REQUIRE THE HOLDER TO PROVIDE THE COMPANY WITH AN OPINION OF
COUNSEL, WHICH COUNSEL AND OPINION MUST BE SATISFACTORY TO THE COMPANY.
 
 
4

--------------------------------------------------------------------------------

 
 
(m)        The Purchaser has adequate means of providing for such Purchaser’s
current financial needs and foreseeable contingencies and has no need for
liquidity of its investment in the Units for an indefinite period of time;
 
(n)         The Purchaser is aware that an investment in the Units is high risk,
involving a number of very significant risks and has carefully read and
considered the matters set forth in the “Risk Factors” section of the Company’s
Annual Report on Form 10-K, initially filed with the SEC on April 16, 2013 (File
No. 000-33491) and, in particular, acknowledges that the Company has a large
stockholders’ deficit, has operating losses, and is engaged in a highly
competitive business;
 
(o)         The Purchaser either
 
i.  
meets the requirements of at least one of the suitability standards for an
“accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D
and as set forth on the Accredited Investor Certification contained herein; or

 
ii.  
is not a “U.S. Person” as defined in Regulation S; and specifically the
Purchaser is not (all Purchasers who are not a U.S. Person must INITIAL the
appropriate section of the Accredited Investor Certification to confirm their
careful review and understanding of this Section 7(o)(ii)):

 
A.  
a natural person resident in the United States of America, including its
territories and possessions (“United States”);

 
B.  
a partnership or corporation organized or incorporated under the laws of the
United States;

 
C.  
an estate of which any executor or administrator is a U.S. Person;

 
D.  
a trust of which any trustee is a U.S. Person;

 
E.  
an agency or branch of a foreign entity located in the United States;

 
F.  
a non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S. Person;

 
G.  
a discretionary account or similar account (other than an estate or trust) held
by a dealer or other fiduciary organized, incorporated, or (if an individual)
resident in the United States; and

 
H.  
a partnership or corporation: (A) organized or incorporated under the laws of
any foreign jurisdiction; and (B) formed by a U.S. Person principally for the
purpose of investing in securities not registered under the Securities Act,
unless it is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a) under the Act) who are not natural persons, estates or
trusts.

 
And, in addition:
 
I.  
the Purchaser was not offered the Units in the United States;

 
 
5

--------------------------------------------------------------------------------

 
 
J.  
at the time the buy-order for the Units was originated, the Purchaser was
outside the United States; and

 
K. 
the Purchaser is purchasing the Units for its own account and not on behalf of
any U.S. Person (as defined in Regulation S) and a sale of the Units has not
been pre-arranged with a purchaser in the United States.

 
(p)         The Purchaser (i) if a natural person, represents that the Purchaser
has reached the age of 21 and has full power and authority to execute and
deliver this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Units, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, the consummation of
the transactions contemplated hereby is authorized by, and will not result in a
violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Subscription
Agreement and all other related agreements or certificates and to carry out the
provisions hereof and thereof and to purchase and hold the securities
constituting the Units, the execution and delivery of this Subscription
Agreement has been duly authorized by all necessary action, this Subscription
Agreement has been duly executed and delivered on behalf of such entity and is a
legal, valid and binding obligation of such entity; or (iii) if executing this
Subscription Agreement in a representative or fiduciary capacity, represents
that it has full power and authority to execute and deliver this Subscription
Agreement in such capacity and on behalf of the subscribing individual, ward,
partnership, trust, estate, corporation, or limited liability company or
partnership, or other entity for whom the Purchaser is executing this
Subscription Agreement, and such individual, partnership, ward, trust, estate,
corporation, or limited liability company or partnership, or other entity has
full right and power to perform pursuant to this Subscription Agreement and make
an investment in the Company, and represents that this Subscription Agreement
constitutes a legal, valid and binding obligation of such entity.  The execution
and delivery of this Subscription Agreement will not violate or be in conflict
with any order, judgment, injunction, agreement or controlling document to which
the Purchaser is a party or by which it is bound;
 
(q)         The Purchaser and its Advisors have been furnished with all
documents and materials relating to the business, finances and operations of the
Company and all such other information that the Purchaser and/or its Advisors
have requested and deemed material to making an informed investment decision
regarding its securities.  The Purchaser and the Advisers, if any, have had the
opportunity to obtain any additional information, to the extent the Company has
such information in its possession or could acquire it without unreasonable
effort or expense, necessary to verify the accuracy of the information contained
herein and all documents received or reviewed in connection with the purchase of
the Units and have had the opportunity to have representatives of the Company
provide them with such additional information regarding the terms and conditions
of this particular investment and the financial condition, results of
operations, business of the Company deemed relevant by the Purchaser or the
Advisers, including the annual reports, quarterly reports, current reports,
registration statements and other information filed by the Company with the SEC
(see www.sec.gov), and all such requested information, to the extent the Company
had such information in its possession or could acquire it without unreasonable
effort or expense, has been provided to the full satisfaction of the Purchaser
and the Advisers;
 
 
6

--------------------------------------------------------------------------------

 
 
(r)          Any information which the Purchaser has heretofore furnished or is
furnishing herewith to the Company or the Placement Agent is complete and
accurate and may be relied upon by the Company and the Placement Agent in
determining the availability of an exemption from registration under federal and
state securities laws in connection with the offering of the Units.  The
Purchaser further represents and warrants that it will notify and supply
corrective information to the Company and the Placement Agent immediately upon
the occurrence of any change therein occurring prior to the Company’s issuance
of the securities contained in the Units;
 
(s)         The Purchaser has significant prior investment experience, including
investment in non-listed and non-registered securities.  The Purchaser is
knowledgeable about investment considerations in development-stage companies
with limited operating histories.  The Purchaser has a sufficient net worth to
sustain a loss of its entire investment in the Company in the event such a loss
should occur.  The Purchaser’s overall commitment to investments which are not
readily marketable is not excessive in view of the Purchaser’s net worth and
financial circumstances and the purchase of the Units will not cause such
commitment to become excessive.  The investment is a suitable one for the
Purchaser;
 
(t)          The Purchaser is satisfied that the Purchaser has received adequate
information with respect to all matters which it or the Advisers, if any,
consider material to its decision to make this investment;
 
(u)         The Purchaser acknowledges that any estimates or forward-looking
statements or projections included in this Subscription Agreement were prepared
by the Company in good faith but that the attainment of any such projections,
estimates or forward-looking statements cannot be guaranteed by the Company and
should not be relied upon;
 
(v)         No oral or written representations have been made, or oral or
written information furnished, to the Purchaser or the Advisers, if any, in
connection with the Offering which are in any way inconsistent with the
information contained herein;
 
(w)        Within five (5) days after receipt of a request from the Company or
the Placement Agent, the Purchaser will provide such information and deliver
such documents as may reasonably be necessary to comply with any and all laws
and ordinances to which the Company or the Placement Agent is subject;
 
(x)         The Purchaser’s substantive relationship with the Placement Agent or
subagent through which the Purchaser is subscribing for Units predates the
Placement Agent’s or such subagent’s contact with the Purchaser regarding an
investment in the Units;
 
(y)         THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SAID ACT AND SUCH LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. RELIANCE ON AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO
PROVIDE THE COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST
BE SATISFACTORY TO THE COMPANY. THE SECURITIES HAVE NOT BEEN RECOMMENDED,
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE
SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE
ACCURACY OR ADEQUACY OF THE MEMORANDUM OR THIS SUBSCRIPTION AGREEMENT.  ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL;
 
 
7

--------------------------------------------------------------------------------

 
 
The Purchaser acknowledges that the Company was, until August 26, 2010, a “shell
company” as defined in Rule 12b-2 under the Exchange Act.  Pursuant to Rule
144(i), securities issued by a current or former shell company (that is, the
Securities) that otherwise meet the holding period and other requirements of
Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year
after the Company (a) is no longer a shell company; and (b) has filed current
“Form 10 information“ (as defined in Rule 144(i)) with the Commission reflecting
that it is no longer a shell company, and provided that at the time of a
proposed sale pursuant to Rule 144, the Company is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act and has filed all
reports and other materials required to be filed by section 13 or 15(d) of the
Exchange Act, as applicable, during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports and materials), other
than Form 8-K reports.  As a result, the restrictive legends on certificates for
the Securities cannot be removed except in connection with an actual sale
meeting the foregoing requirements or pursuant to an effective registration
statement.
 
(z)          In making an investment decision investors must rely on their own
examination of the Company and the terms of the Offering, including the merits
and risks involved.  The Purchaser should be aware that it will be required to
bear the financial risks of this investment for an indefinite period of time;
 
(aa)       (For ERISA plans only).  The fiduciary of the ERISA plan (the “Plan”)
represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities.  The Purchaser fiduciary or
Plan (a) is responsible for the decision to invest in the Company; (b) is
independent of the Company or any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Purchaser
fiduciary or Plan has not relied primarily on any advice or recommendation of
the Company or any of its affiliates;
 
(bb)      The Purchaser should check the Office of Foreign Assets Control
(“OFAC”) website at <http://www.treas.gov/ofac> before making the following
representations. The Purchaser represents that the amounts invested by it in the
Company in the Offering were not and are not directly or indirectly derived from
activities that contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and
Executive Orders administered by OFAC prohibit, among other things, the
engagement in transactions with, and the provision of services to, certain
foreign countries, territories, entities and individuals.  The lists of OFAC
prohibited countries, territories, persons and entities can be found on the OFAC
website at <http://www.treas.gov/ofac>.  In addition, the programs administered
by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in
certain countries regardless of whether such individuals or entities appear on
the OFAC lists;
 
 
8

--------------------------------------------------------------------------------

 
 
(cc)       To the best of the Purchaser’s knowledge, none of: (1) the Purchaser;
(2) any person controlling or controlled by the Purchaser; (3) if the Purchaser
is a privately-held entity, any person having a beneficial interest in the
Purchaser; or (4) any person for whom the Purchaser is acting as agent or
nominee in connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs.  Please be advised that the Company may not accept any amounts from a
prospective investor if such prospective investor cannot make the representation
set forth in the preceding paragraph.  The Purchaser agrees to promptly notify
the Company and the Placement Agent should the Purchaser become aware of any
change in the information set forth in these representations.  The Purchaser
understands and acknowledges that, by law, the Company may be obligated to
“freeze the account” of the Purchaser, either by prohibiting additional
subscriptions from the Purchaser, declining any redemption requests and/or
segregating the assets in the account in compliance with governmental
regulations, and the Placement Agent may also be required to report such action
and to disclose the Purchaser’s identity to OFAC.  The Purchaser further
acknowledges that the Company may, by written notice to the Purchaser, suspend
the redemption rights, if any, of the Purchaser if the Company reasonably deems
it necessary to do so to comply with anti-money laundering regulations
applicable to the Company and the Placement Agent or any of the Company’s other
service providers.  These individuals include specially designated nationals,
specially designated narcotics traffickers and other parties subject to OFAC
sanctions and embargo programs;
 
(dd)       To the best of the Purchaser’s knowledge, none of: (1) the Purchaser;
(2) any person controlling or controlled by the Purchaser; (3) if the Purchaser
is a privately-held entity, any person having a beneficial interest in the
Purchaser; or (4) any person for whom the Purchaser is acting as agent or
nominee in connection with this investment is a senior foreign political
figure2, or any immediate family3 member or close associate4 of a senior foreign
political figure, as such terms are defined in the footnotes below; and
 
____________
 
1 These individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.
 
2 A “senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.
 
3 “Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.
 
4 A “close associate” of a senior foreign political figure is a person who is
widely and publicly known to maintain an unusually close relationship with the
senior foreign political figure, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on behalf
of the senior foreign political figure.
 
 
9

--------------------------------------------------------------------------------

 
 
(ee)       If the Purchaser is affiliated with a non-U.S. banking institution (a
“Foreign Bank”), or if the Purchaser receives deposits from, makes payments on
behalf of, or handles other financial transactions related to a Foreign Bank,
the Purchaser represents and warrants to the Company that: (1) the Foreign Bank
has a fixed address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities; (2) the
Foreign Bank maintains operating records related to its banking activities; (3)
the Foreign Bank is subject to inspection by the banking authority that licensed
the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does
not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate.
 
(ff)        The Purchaser acknowledges that the net proceeds from the Offering
will be used by the Company for working capital.
 
(gg)      The Purchaser will not engage in any short sales with respect to the
Common Stock.
 
(hh)      In evaluating the suitability of an investment in the Units, the
Purchaser has read and is making the representations set forth in Exhibit C to
this Agreement.
 
8.          Representations and Warranties of the Company.  Except as previously
disclosed herein, in the Company’s SEC Filings (as defined below) and the
schedules referred to in this Section 8 (collectively with the other Schedules
to this Agreement, the “Schedules”), which Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein, the
Company represents and warrants to each of the Purchasers that:
 
(a)         The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted.  The Company is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect, as defined below.  Except as set forth on Schedule
8(a), the Company has no subsidiaries.
 
(b)         Subject to the filing of the of the Certificate of Designations with
the Secretary of State of the State of Delaware, (i) the Company has the
requisite corporate power and authority to enter into and perform this
Subscription Agreement and all other documents necessary or desirable to effect
the transactions contemplated hereby (collectively with the Notes, the
Certificate of Designations and all exhibits and schedules hereto and thereto
and any other documents or agreements executed in connection with the
transactions contemplated hereunder, the “Transaction Documents”) to which it is
a party and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Securities have been
duly authorized by the Company’s Board of Directors (the “Board of Directors”)
and no further consent or authorization is required by the Company, the Board of
Directors or the Company’s stockholders, (iii) the Transaction Documents will be
duly executed and delivered by the Company or its subsidiary (as applicable),
(iv) the Transaction Documents when executed will constitute the valid and
binding obligations of the Company or its subsidiary (as applicable) enforceable
against the Company or its subsidiary (as applicable) in accordance with their
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.
 
 
10

--------------------------------------------------------------------------------

 
 
(c)         The authorized and outstanding capital stock of the Company as of
August 14, 2013 is described in the Company’s Quarterly Report on Form 10-Q
filed with the SEC on August 14, 2013. Except as set forth in the SEC Filings or
as contemplated by the Transaction Documents, there are no subscriptions,
convertible securities, options, warrants or other rights (contingent or
otherwise) currently outstanding to purchase any of the authorized but unissued
capital stock of the Company.  Except as set forth in the SEC Filings or as
contemplated by the Transaction Documents, the Company has no obligation to
issue shares of its capital stock, or subscriptions, convertible securities,
options, warrants, or other rights (contingent or otherwise) to purchase any
shares of its capital stock or to distribute to holders of any of its equity
securities, any evidence of indebtedness or asset. No shares of the Company’s
capital stock are subject to a right of withdrawal or a right of rescission
under any applicable securities law.  There are no outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to the
Company.  To the knowledge of the Company, except as set forth in the SEC
Filings or otherwise contemplated by this Subscription Agreement, there are no
agreements to which the Company is a party or by which it is bound with respect
to the voting (including without limitation voting trusts or proxies),
registration under any applicable securities laws, or sale or transfer
(including without limitation agreements relating to pre-emptive rights, rights
of first refusal, co-sale rights or “drag-along” rights) of any securities of
the Company.  To the knowledge of the Company, there are no agreements among
other parties, to which the Company is not a party and by which it is not bound,
with respect to the voting (including without limitation voting trusts or
proxies) or sale or transfer (including without limitation agreements relating
to rights of first refusal, co-sale rights or “drag-along” rights) of any
securities of the Company.
 
(d)         Subject to the filing of the of the Certificate of Designations with
the Secretary of State of the State of Delaware, the Securities are duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, are free from all taxes, liens and charges
with respect to the issue thereof.
 
(e)         Subject to the filing of the of the Certificate of Designations with
the Secretary of State of the State of Delaware, the execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby will not (i) result in a
violation of the Certificate of Incorporation of the Company (the “Certificate
of Incorporation”), any certificate of designations of any outstanding series of
preferred stock of the Company or the By-Laws of the Company (the “By-Laws”) or
(ii) violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected except for those which
could not reasonably be expected to have a material adverse effect on the
assets, business, condition (financial or otherwise), results of operations or
future prospects of the Company (a “Material Adverse Effect”).  Except those
which could not reasonably be expected to have a Material Adverse Effect, the
Company is not in violation of any term of or in default under its Certificate
of Incorporation or By-Laws.  Except those which could not reasonably be
expected to have a Material Adverse Effect, the Company is not in violation of
any term of or in default under any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company. The business of the Company is not
being conducted, and shall not be conducted in violation of any material law,
ordinance, or regulation of any governmental entity, except to the extent it
could reasonably be expected not to have a Material Adverse Effect.  Except as
specifically contemplated by this Subscription Agreement and as required under
the Securities Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by this
Subscription Agreement or the Escrow Agreement in accordance with the terms
hereof or thereof.  All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof.  The
Company is unaware of any facts or circumstance, which might give rise to any of
the foregoing.
 
 
11

--------------------------------------------------------------------------------

 
 
(f)          Since August 14, 2013, the Company has filed (and, except for
certain Current Reports on Form 8-K), has timely filed (subject to 12b-25
filings with respect to certain periodic filings) all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Exchange Act (all of the foregoing and all
other documents filed with the SEC prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to herein as the
“SEC Filings”).  The SEC Filings are available to the Purchasers via the SEC’s
EDGAR system.  As of their respective dates, the SEC Filings complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Filings, at
the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  As of their
respective dates, the audited financial statements of the Company included in
the Company’s SEC Filings for the fiscal years ended December 31, 2012 and
December 31, 2011, and the subsequent unaudited interim financial statements
included in the Company’s SEC Filings (collectively, the “Financial Statements”)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto.  Such financial statements were prepared in accordance with generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such Financial Statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may exclude footnotes or may be condensed or summary
statements), and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).  As of the date hereof, there
are no outstanding or unresolved comments in comment letters received from the
staff of the SEC with respect to any of the SEC Filings.  No other information
provided by or on behalf of the Company to the Purchaser including, without
limitation, information referred to in this Subscription Agreement, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
 
 
12

--------------------------------------------------------------------------------

 
 
(g)         Except as set forth in the SEC Filings, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or
affecting the Company, wherein an unfavorable decision, ruling or finding would
(i) adversely affect the validity or enforceability of, or the authority or
ability of the Company to perform its obligations under, this Subscription
Agreement or any of the documents contemplated herein, or (ii) have a Material
Adverse Effect.
 
(h)        The Company acknowledges and agrees that each Purchaser is acting
solely in the capacity of an arm’s length purchaser with respect to this
Subscription Agreement and the transactions contemplated hereby. The Company
further acknowledges that each Purchaser is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Subscription Agreement and the transactions contemplated hereby and any advice
given by such Purchaser or any of their respective representatives or agents in
connection with this Subscription Agreement and the transactions contemplated
hereby is merely incidental to such Purchaser’s purchase of the Securities. The
Company further represents to the Purchasers that the Company’s decision to
enter into this Subscription Agreement has been based solely on the independent
evaluation by the Company and its representatives.
 
(i)          Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of any of the Securities.
 
(j)          Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would require registration of the Securities under the
Securities Act or cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act.
 
(k)         The Company is not involved in any labor dispute nor, to the
knowledge of the Company, is any such dispute threatened.  None of the Company’s
employees is a member of a union, and the Company believes that its relations
with its one employee are good.
 
(l)          Except as set forth in the SEC Filings, the Company has no
proprietary intellectual property.  Except as set forth in the SEC Filings, the
Company has not received any notice of infringement of, or conflict with, the
asserted rights of others with respect to any intellectual property that it
utilizes.
 
(m)        [Reserved].
 
(n)        The Company does not own any real property.  The Company has good and
marketable title to all of its personal property and assets free and clear of
any material restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance which would have a Company
Material Adverse Effect.  With respect to properties and assets it leases, the
Company is in material compliance with such leases and holds a valid leasehold
interest free of any liens, claims or encumbrances which would have a Material
Adverse Effect.
 
 
13

--------------------------------------------------------------------------------

 
 
(o)        The Company is not subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company’s officers has or is expected in the future to have a
Material Adverse Effect.
 
(p)        Except as set forth in Schedule 8(p), the Company has made and filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject and (unless and only to the
extent that the Company has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes) has paid all taxes
and other governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and declarations, and has
set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply.  Except as set forth in Schedule 8(p), there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction and the officers of the Company know of no basis for any such
claim.
 
(q)         Except for arm’s length transactions pursuant to which the Company
makes payments in the ordinary course of business upon terms no less favorable
than the Company could obtain from third parties, none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
 
(r)         The Company is not obligated to offer the securities offered
hereunder on a right of first refusal basis or otherwise to any third parties
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers, agents or other third parties.
 
(s)        The Company acknowledges that the Purchasers are relying on the
representations and warranties made by the Company hereunder and in the
Company’s SEC Filings and that such representations and warranties are a
material inducement to the Purchasers purchasing the Units.  The Company further
acknowledges that without such representations and warranties of the Company
made hereunder, the Purchasers would not enter into this Subscription Agreement.
 
(t)         The Company does not have any liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Subscription Agreement, except for applicable
brokerage and consulting fees.
 
(u)         Each award granted by the Company under the Company’s equity
compensation plan was granted (i) in accordance with the terms of the Company’s
equity compensation plan and (ii) with an exercise price (if applicable) at
least equal to the fair market value of the Common Stock on the date such award
would be considered granted under GAAP and applicable law. No award granted
under the Company’s stock option plan has been backdated. The Company has not
knowingly granted, and there is no and has been no Company policy or practice to
knowingly grant, equity compensation awards prior to, or otherwise knowingly
coordinate the grant of such awards with, the release or other public
announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.
 
 
14

--------------------------------------------------------------------------------

 
 
(v)         Neither the Company nor any subsidiary of the Company nor, to the
Company's knowledge, any director, officer, agent, employee or Affiliate of the
Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).
 
9.           Indemnification.  The Purchaser agrees to indemnify and hold
harmless the Company and its officers, directors, employees, agents, control
persons and affiliates from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not limited to, any
and all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of any actual or
alleged false acknowledgment, representation or warranty, or misrepresentation
or omission to state a material fact, or breach by the Purchaser of any covenant
or agreement made by the Purchaser herein or in any other document delivered in
connection with this Subscription Agreement.
 
10.        Irrevocability; Binding Effect.  The Purchaser hereby acknowledges
and agrees that the subscription hereunder is irrevocable by the Purchaser,
except as required by applicable law, and that this Subscription Agreement shall
survive the death or disability of the Purchaser and shall be binding upon and
inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives, and permitted assigns.  If the Purchaser is
more than one person, the obligations of the Purchaser hereunder shall be joint
and several and the agreements, representations, warranties, and acknowledgments
herein shall be deemed to be made by and be binding upon each such person and
such person’s heirs, executors, administrators, successors, legal
representatives, and permitted assigns.
 
11.        Modification.  This Subscription Agreement shall not be modified or
waived except by an instrument in writing signed by the party against whom any
such modification or waiver is sought.
 
12.        Notices.  Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given (a) if to the Company, at 2251 Drusilla Lane, Suite B, Baton
Rouge, Louisiana 70809, Attn: John Tabacco, CEO, with a copy to Gottbetter &
Partners, LLP, 488 Madison Avenue, 12th Floor, New York, NY 10022, Attn: Adam S.
Gottbetter, Esq., or (b) if to the Purchaser, at the address set forth on the
signature page hereof (or, in either case, to such other address as the party
shall have furnished in writing in accordance with the provisions of this
Section 12). Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a notice changing
a party’s address which shall be deemed given at the time of receipt thereof.
 
13.        Assignability.  This Subscription Agreement and the rights, interests
and obligations hereunder are not transferable or assignable by the Purchaser
and the transfer or assignment of the Notes or the shares of Preferred Stock
shall be made only in accordance with all applicable laws.
 
14.        Applicable Law.  This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts to be wholly performed within said State.
 
 
15

--------------------------------------------------------------------------------

 
 
15.        Arbitration/Mediation.  The parties agree to submit all controversies
to arbitration in accordance with the provisions set forth below and understand
that:
 
 THE PARTIES HERETO AGREE TO SUBMIT ALL CONTROVERSIES TO THE EXCLUSIVE
JURISDICTION OF FINRA ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH
BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES,
(B) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE
LIMITED AND DIFFERENT FROM COURT PROCEEDINGS, (D) THE ARBITRATOR’S AWARD IS NOT
REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY’S RIGHT TO
APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E)
THE PANEL OF FINRA ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS
WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL
CONTROVERSIES WHICH MAY ARISE BETWEEN THE PARTIES CONCERNING THIS SUBSCRIPTION
AGREEMENT SHALL BE DETERMINED BY ARBITRATION PURSUANT TO THE RULES THEN
PERTAINING TO FINRA.  ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.  JUDGMENT ON ANY AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE
SUPREME COURT OF THE STATE OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION
OVER THE PERSON OR PERSONS AGAINST WHOM SUCH AWARD IS RENDERED.  THE PARTIES
AGREE THAT THE DETERMINATION OF THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE
UPON THEM.  THE PREVAILING PARTY, AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL
PROCEEDING SHALL BE ENTITLED TO COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE
ATTORNEY’S FEES FROM THE OTHER PARTY.  PRIOR TO FILING AN ARBITRATION, THE
PARTIES HEREBY AGREE THAT THEY WILL ATTEMPT TO RESOLVE THEIR DIFFERENCES FIRST
BY SUBMITTING THE MATTER FOR RESOLUTION TO A MEDIATOR, ACCEPTABLE TO ALL
PARTIES, AND WHOSE EXPENSES WILL BE BORNE EQUALLY BY ALL PARTIES.  THE MEDIATION
WILL BE HELD IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, ON AN EXPEDITED
BASIS.  IF THE PARTIES CANNOT SUCCESSFULLY RESOLVE THEIR DIFFERENCES THROUGH
MEDIATION, THE MATTER WILL BE RESOLVED BY ARBITRATION.  THE ARBITRATION SHALL
TAKE PLACE IN THE COUNTY OF NEW YORK, THE STATE OF NEW YORK, ON AN EXPEDITED
BASIS.
 
16.        Blue Sky Qualification.  The purchase of Units under this
Subscription Agreement is expressly conditioned upon the exemption from
qualification of the offer and sale of the Units from applicable federal and
state securities laws.  The Company shall not be required to qualify this
transaction under the securities laws of any jurisdiction and, should
qualification be necessary, the Company shall be released from any and all
obligations to maintain its offer, and may rescind any sale contracted, in the
jurisdiction.
 
 
16

--------------------------------------------------------------------------------

 
 
17.        Use of Pronouns.  All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.
 
18.        Piggyback Registration Rights.  If the Company at any time proposes
to register any of its securities under the Securities Act for sale to the
public, whether for its own account or for the account of other security holders
or both, except with respect to registration statements on Form S-4, S-8 or
another form not available for registering the Conversion Shares and the
Interest Shares (collectively, the “Registrable Securities”) for sale to the
public, provided the Registrable Securities are not otherwise registered for
resale by the Purchasers pursuant to an effective registration statement, each
such time it will give at least five (5) days’ prior written notice to each
record holder of Registrable Securities of its intention so to do.  Upon the
written request of the holder, received by the Company within five (5) days
after the giving of any such notice by the Company, to register any of the
Registrable Securities not previously registered, the Company will cause such
Registrable Securities as to which registration shall have been so requested to
be included with the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent required to permit the
sale or other disposition of the Registrable Securities so registered by the
holder of such Registrable Securities; provided that the holder provides the
Company in writing with such information regarding the holder and such holder’s
securities ownership as the Company may reasonably request in connection with
preparing a registration statement.  In the event that any registration pursuant
to this Section 18 shall be, in whole or in part, an underwritten public
offering of Common Stock of the Company, the number of shares of Registrable
Securities to be included in such an underwriting may be reduced by the managing
underwriter if and to the extent that the Company and the underwriter shall
reasonably be of the opinion that such inclusion would adversely affect the
marketing of the securities to be sold by the Company therein; provided,
however, that the Company shall notify the holder in writing of any such
reduction.  Notwithstanding anything to the contrary herein, the Company may
withdraw or delay or suffer a delay of any registration statement referred to in
this Section 18 without thereby incurring any liability to the
holders.  Further, the foregoing piggyback registration rights shall not apply
to any Registrable Securities that may be sold under the Securities Act without
volume limitations either pursuant to Rule 144 of the Securities Act or
otherwise during any ninety (90) day period.
 
19.        Confidentiality.  The Purchaser acknowledges and agrees that any
information or data the Purchaser has acquired from or about the Company, not
otherwise properly in the public domain, was received in confidence.  The
Purchaser agrees not to divulge, communicate or disclose, except as may be
required by law or for the performance of this Subscription Agreement, or use to
the detriment of the Company or for the benefit of any other person or persons,
or misuse in any way, any confidential information of the Company, including any
scientific, technical, trade or business secrets of the Company and any
scientific, technical, trade or business materials that are treated by the
Company as confidential or proprietary, including, but not limited to, ideas,
discoveries, inventions, developments and improvements belonging to the Company
and confidential information obtained by or given to the Company about or
belonging to third parties.
 
 
17

--------------------------------------------------------------------------------

 
 
20.        Miscellaneous.
 
(a)         This Subscription Agreement, together with the attached Exhibits
constitute the entire agreement between the Purchaser and the Company with
respect to the subject matter hereof and supersede all prior oral or written
agreements and understandings, if any, relating to the subject matter
hereof.  In the event that any signature is delivered by facsimile transmission
or by electronic delivery of a data file containing an electronic facsimile of a
signature, 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 were an original thereof.  The terms and
provisions of this Subscription Agreement may be waived, or consent for the
departure therefrom granted, only by a written document executed by the party
entitled to the benefits of such terms or provisions.
 
(b)         The representations and warranties of the Company and the Purchaser
made in this Subscription Agreement shall survive the execution and delivery
hereof and delivery of the Notes and shares of Preferred Stock contained in the
Units.
 
(c)         Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Subscription Agreement and the
transactions contemplated hereby whether or not the transactions contemplated
hereby are consummated.
 
(d)         This Subscription Agreement may be executed in one or more
counterparts each of which may be executed by less than all of the parties and
shall be deemed an original, but all of which shall together constitute one and
the same instrument, enforceable against the parties actually executing such
counterparts.  The exchange of copies of the Subscription Agreement and of
signature pages by facsimile transmission or in pdf format shall constitute
effective execution and delivery of this Subscription Agreement as to the
parties and may be used in lieu of the original Subscription Agreement for all
purposes. Signatures of the parties transmitted by facsimile or in pdf format
shall be deemed to be their original signatures for all purposes.
 
(e)          Each provision of this Subscription Agreement shall be considered
separable and, if for any reason any provision or provisions hereof are
determined to be invalid or contrary to applicable law, such invalidity or
illegality shall not impair the operation of or affect the remaining portions of
this Subscription Agreement.
 
(f)           Paragraph titles are for descriptive purposes only and shall not
control or alter the meaning of this Subscription Agreement as set forth in the
text.
 
[remainder of page intentionally left blank]
 
 
18

--------------------------------------------------------------------------------

 
 
To subscribe for Units in the private offering of
Green Energy Management Services Holdings, Inc.:
 
1.  
Date and Fill in the number of Units being purchased and Complete and Sign the
Signature Page of the Subscription Agreement.

 
2.  
Initial the Accredited Investor Certification page attached to this letter.

 
3.  
Review and Sign Exhibit C attached to the Subscription Agreement.

 
4.  
Fax or email all forms and then send all signed original documents to:

 
Green Energy Management Services Holdings, Inc.
2251 Drusilla Lane, Suite
B                                                                 
Baton Rouge, Louisiana 70809
Email:   jt@gempowered.com
 
5.  
If you are paying the Purchase Price by check, a check for the exact dollar
amount of the Purchase Price for the number of Units you are offering to
purchase should be made payable to the order of “Green Energy Management
Services Holdings, Inc.” and should be sent to Green Energy Management Services
Holdings, Inc., at 2251 Drusilla Lane, Suite B, Baton Rouge, Louisiana 70809,
Attention: John Tabacco, CEO.

 
6.  
If you are paying the Purchase Price by wire transfer, you should send a wire
transfer for the exact dollar amount of the Purchase Price of the number of PPO
Units you are offering to purchase according to the following instructions:

 
BANK:                [to be provided by the Company]
                               [to be provided by the Company]
ABA #:                [to be provided by the Company]
Acct No.:             [to be provided by the Company]
Acct Name:         Green Energy Management Services Holdings, Inc.
Email:                    jt@gempowered.com
 
 
19

--------------------------------------------------------------------------------

 
 
GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.
SIGNATURE PAGE TO
SUBSCRIPTION AGREEMENT

Purchaser hereby elects to subscribe under the Subscription Agreement for a
total of __________ Units (NOTE: to be completed by Purchaser)
($____________________) at a price of $10,000 per Unit (NOTE: to be completed by
Purchaser) and executes the Subscription Agreement.
 
Date (NOTE: to be completed by Purchaser): __________________
 

--------------------------------------------------------------------------------

 
If the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS
IN COMMON, or as COMMUNITY PROPERTY:

           
Print Name(s)
 
Social Security Number(s)
           
Signature(s) of Purchaser(s)
 
Signature
           
Date
 
Address

 
If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY OR
TRUST:

           
Name of Partnership, Corporation, Limited Liability Company or Trust
 
Federal Taxpayer Identification Number
     
By:
     
Name:
Title:
 
State of Organization
     
Date
 
Address
     
GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.
a Delaware corporation
 
         
By:
       
Authorized Officer
         

 

--------------------------------------------------------------------------------

 
 
20

--------------------------------------------------------------------------------

 
 
GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.
ACCREDITED INVESTOR CERTIFICATION
 

       
For Individual Investors Only
(all Individual Investors must INITIAL where appropriate):
         
Initial
  _____  
I have a net worth (including homes, furnishings and automobiles, but excluding
for these purposes the value of my primary residence) in excess of $1 million
either individually or through aggregating my individual holdings and those in
which I have a joint, community property or other similar shared ownership
interest with my spouse.
Initial
  _____  
I have had an annual gross income for the past two years of at least $200,000
(or $300,000 jointly with my spouse) and expect my income (or joint income, as
appropriate) to reach the same level in the current year.
Initial
  _____  
I am a director or executive officer of Green Energy Management Services
Holdings, Inc.
                 
For Non-Individual Investors
(all Non-Individual Investors must INITIAL where appropriate):
         
Initial
  _____  
The investor certifies that it is a partnership, corporation, limited liability
company or business trust that is 100% owned by persons who meet at least one of
the criteria for Individual Investors set forth above.
Initial
  _____  
The investor certifies that it is a partnership, corporation, limited liability
company or business trust that has total assets of at least $5 million and was
not formed for the purpose of investing in the Company.
Initial
  _____  
The investor certifies that it is an employee benefit plan whose investment
decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a
bank, savings and loan association, insurance company or registered investment
adviser.
Initial
  _____  
The investor certifies that it is an employee benefit plan whose total assets
exceed $5,000,000 as of the date of this Agreement.
Initial
  _____  
The undersigned certifies that it is a self-directed employee benefit plan whose
investment decisions are made solely by persons who meet either of the criteria
for Individual Investors.
Initial
  _____  
The investor certifies that it is a U.S. bank, U.S. savings and loan association
or other similar U.S. institution acting in its individual or fiduciary
capacity.
Initial
  _____  
The undersigned certifies that it is a broker-dealer registered pursuant to §15
of the Securities Exchange Act of 1934.
Initial
  _____  
The investor certifies that it is an organization described in §501(c)(3) of the
Internal Revenue Code with total assets exceeding $5,000,000 and not formed for
the specific purpose of investing in the Company.
Initial
  _____  
The investor certifies that it is a trust with total assets of at least
$5,000,000, not formed for the specific purpose of investing in the Company, and
whose purchase is directed by a person with such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of the prospective investment.
Initial
  _____  
The investor certifies that it is a plan established and maintained by a state
or its political subdivisions, or any agency or instrumentality thereof, for the
benefit of its employees, and which has total assets in excess of $5,000,000.
Initial
  _____  
The investor certifies that it is an insurance company as defined in §2(13) of
the Securities Act of 1933, as amended, or a registered investment company.

 
 
 
21

--------------------------------------------------------------------------------

 
 
 

       
For Non-U.S. Person Investors
(all Investors who are not a U.S. Person must INITIAL this section):
         
Initial
  _____  
The investor is not a “U.S. Person” as defined in Regulation S; and specifically
the investor is not:
 
A.      a natural person resident in the United States of America, including its
territories and possessions (“United States”);
 
B.       a partnership or corporation organized or incorporated under the laws
of the United States;
 
C.       an estate of which any executor or administrator is a U.S. Person;
 
D.       a trust of which any trustee is a U.S. Person;
 
E.       an agency or branch of a foreign entity located in the United States;
 
F.       a non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a U.S.
Person;
 
G.       a discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States; or
 
H.      a partnership or corporation: (i) organized or incorporated under the
laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally
for the purpose of investing in securities not registered under the Securities
Act, unless it is organized or incorporated, and owned, by accredited investors
(as defined in Rule 501(a) under the Securities Act) who are not natural
persons, estates or trusts.
 
And, in addition:
 
I.        the investor was not offered the securities in the United States;
 
J.        at the time the buy-order for the securities was originated, the
investor was outside the United States; and
 
K.       the investor is purchasing the securities for its own account and not
on behalf of any U.S. Person (as defined in Regulation S) and a sale of the
securities has not been pre-arranged with a purchaser in the United States.

 
22

--------------------------------------------------------------------------------

 
 

 
EXHIBIT A
 
Form of Note
 
[See Exhibit 10.15 filed as part of the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2013 (File No. 000-33491)]
 
 
 
23

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
Form of Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock
 
[See Exhibit 3.7 filed as part of the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2013 (File No. 000-33491)]
 

 
 
24

--------------------------------------------------------------------------------

 

 
EXHIBIT C
 
PURCHASER ACKNOWLEDGMENTS
 
These Acknowledgements are being made in connection with the Subscription
Agreement, dated as of _______________ ___, 2013, by and among the Company and
the undersigned Purchaser (the “Agreement”).  Capitalized terms used and not
defined herein have the respective meanings ascribed to them in the Agreement.
 
Without limiting the representations and warranties of the undersigned Purchaser
(“I” or “me”) contained in the Agreement, I hereby acknowledge:
 
•  
I have carefully studied the Agreement with my tax, accounting and legal
advisors and understand their provisions.

 
•  
I am an “accredited investor” under the Securities Act and have extensive
knowledge and experience in financial and business matters.

 
•  
I have adequate means of providing such my current financial needs and
foreseeable contingencies and have no need for liquidity of my investment in the
Units for an indefinite period of time.

 
•  
My investment in the Units is extremely risky.  I can afford a complete loss of
my investment and have been advised not to invest if this is not the case.

 
PURCHASER:
 

 
By:                                                                      
Name of Purchaser:  
Name of Signatory:  
Title of Signatory:  
 
 
 25

--------------------------------------------------------------------------------