STOCK PLEDGE AGREEMENT

THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made as of December 28, 2016,
but effective as of December 20, 2016, by JayHawk Energy, Inc., a Nevada
corporation ("Pledgor”), for the benefit of Kelly Stopher, a married individual,
(“Pledgee”) and Cameron Sutherland, PLLC, a Washington professional limited
liability company, having an office at 421 W. Riverside Ave., Suite 660 Spokane,
WA 99201 (the “Escrow Agent”).

RECITALS:

1.

Subject to either a reverse split of its equity securities or an increase in the
authorized capital of Pledgor, Pledgor has good and marketable title to the
authorized and unissued Common Stock of Pledgor. Pledgee acknowledges the
validity of the aforementioned representation is subject to either a reverse
split or increase in the authorized capital of Pledgor.  

2.

The Pledgor has executed a Convertible Promissory Note (the “Note”) in the
amount of One Hundred Seventy-Seven Thousand One Hundred Seventy-Three and
49/100 Dollars 100ths ($177,173.49), on even date herewith for the benefit of
Pledgee.

3.

As additional collateral and security the Pledgor has agreed to pledge its
ownership of Three Hundred Fifty Thousand (350,000) shares of Common Stock of
the Pledgor to Pledgee.  

      

4.

The Pledgor has agreed to pledge to the Pledgee the Common Stock, on the terms
and conditions set forth below, to secure the full performance of the Pledgor's
obligations under the Note and this Agreement.

AGREEMENT:

NOW, THEREFORE, in consideration of the matters described in the foregoing
Recitals, which Recitals are incorporated herein and made a part hereof, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Pledgor hereby agrees as follows:

1.

Definitions.

(a)

Certificates. The term "Certificates" means the certificates evidencing
ownership of the Collateral.

(b)

Collateral. The term "Collateral" means Three Hundred Fifty Thousand (350,000)
shares of Common Stock of the Company.

(c)

The Company. The term "Company" means JayHawk Energy, Inc., a Nevada
corporation.

(d)

Cure Period. The term "Cure Period" shall having the meaning set forth in the
Note.

(e)

Default or Event of Default. The term "Default" and “Event of Default” shall
have the meaning set forth in the Note.

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(f)

Note. The term "Note" means that certain Convertible Promissory Note with an
effective date of December 20, 2016, the amount of One Hundred Seventy-Seven
Thousand One Hundred Seventy-Three and 49/100 Dollars 100ths ($177,173.49),
tendered by the Pledgor to the Pledgee.

2.

Pledge of Shares and Creation of Security Interest. The Pledgor pledges the
Collateral to the Pledgee to secure the full and punctual payment and discharge
of the Note, and grants to the Pledgee a continuing security interest in the
Collateral.

3.

Escrow Agent. The Pledgor and the Pledgee appoint the law firm Cameron
Sutherland, PLLC to serve as Escrow Agent. The Pledgor agrees to deposit the
Certificates, together with a stock power endorsed in blank for each
Certificate, with the Escrow Agent within thirty (30) business days of, either
(i) the Pledgor having completed a reverse split of its equity securities, or
(ii) increasing its authorized capital such that it can issue the Certificate.

4.

Covenants and Warranties of Pledgor.  The Pledgor covenants and warrants as
follows:

(a)

Payment of Indebtedness. The Pledgor will promptly pay the Note amounts when
due. In doing so, the Pledgor shall comply fully with all terms and provisions
of the Note and this Agreement, and any other related documents.

(b)

Ownership of Collateral. The Pledgor has marketable title to the Collateral,
free from prior liens, encumbrances, or pledges of any kind, subject to the
following: The Pledgee confirms its understanding that Pledgor has insufficient
authorized capital to issue Common Stock evidenced by a Certificate and until
such time as the Pledgor has sufficient authorized capital this Agreement shall
constitute an unperfected security interest in the Collateral.

(c)

Liens. The parties will neither create nor permit the creation of any lien or
other encumbrance of the Collateral without each party’s the prior written
consent.

(d)

Transfers. The parties will neither make nor permit any transfer of the
Collateral, except as provided in this Agreement, without each party’s prior
written consent.

(e)

Placement of Legend. The Pledgor shall place a legend on the Certificates
stating that the shares represented by the Certificates are subject to the
restrictions imposed by state and federal securities laws and this Agreement.

(f)

Maintain Corporation Existence. The Pledgor shall cause the Company to maintain
its corporate existence and comply with all applicable federal, state, or local
statutes and regulations.

(g)

Merger or Sale of Assets. The Pledgor shall not permit the Company to enter into
any merger agreement or to sell or lease all or substantially all of its assets
without prior written notice to Pledgee.

5.

Duties of Pledgee. The Pledgee covenants and warrants as follows:

(a)

Return of Collateral. The Pledgee shall ensure the return of the Collateral to
the Pledgor upon the complete and satisfactory performance of the Note. If the
Pledgee or Escrow Agent refuses to return the Collateral within five (5)
business days of full repayment of the Note the Certificates evidencing the
Collateral will be automatically cancelled and the Company will pursue legal
action against the party refusing to return the Collateral.

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(b)

Protection of Collateral. Pledgee and/or the Escrow Agent shall not sell the
Collateral or engage in any acts which will cause or contribute to the
depreciation of the value of the Collateral, other than to take action necessary
to levy upon the Collateral pursuant to a Default.

6.

Exercise of Shareholder Rights.

(a)

Receipt of Dividends and Distributions. As long as the Pledgor is not in
Default, the Pledgor shall have the right to receive and retain any dividends or
other distributions approved and paid on the Collateral.

(b)

Right to Vote. As long as the Pledgor is not in Default, the Pledgor may vote
the Collateral for all purposes allowed within the restrictions set by this
Agreement, the Note, and related documents.

(c)

Compliance with Securities Laws. The requirements of the federal securities
laws, applicable blue sky or other state securities laws, and similar laws
analogous in purpose or effect may limit the Pledgee's actions if the Pledgee
elects, following a Default, to dispose of any part of the Collateral, and also
may limit the subsequent transferee's ability to transfer the Collateral.
Accordingly, the Pledgee agrees that if the Pledgee sells the Collateral at any
public or private sale, the Pledgee will sell only to a buyer who will give
further assurances, reasonably satisfactory in form and substance to Pledgor and
its counsel, to the effect that the sale is exempt from registration under the
federal Securities Act of 1933, as amended, and under applicable state
securities laws.

7.

Default and Return of Collateral.

(a)

Notice of Default and Cure. The Pledgee shall deliver notice of any Default to
the Pledgor and to the Escrow Agent. The Pledgor shall have the right to cure
any Default specified under the Note. If the Pledgor fails to cure a Default as
described in the Note, then, after expiration of such applicable cure period,
the Pledgee may pursue any and all remedies provided in this Agreement.

(b)

Pledgee May Register Shares. Should a Default occur, upon expiration of any
applicable cure period, the Pledgee may, immediately upon receipt of the
Certificates and stock powers from the Escrow Agent, cause the Collateral to be
transferred to the Pledgee's name on the stock records of the Company and may
exercise any right normally incident to the ownership of the Collateral.

(c)

Sale of Collateral. Upon receipt of the Certificates and stock powers, the
Pledgee may sell all or any part of the Collateral at public or private sale.
The Pledgor may purchase all or any part of the Collateral at the sale. Proceeds
of any sale shall be applied first to pay all costs and expenses related to the
Default and sale of the Collateral, including all attorneys' fees and the costs
and expenses of the Escrow Agent, and second, to pay all amounts owed on the
Note on the date of sale. The balance of the proceeds, if any, shall be remitted
to the Pledgor.

(d)

Remedies Cumulative. Upon Default, the Pledgee shall have all rights available
to the Pledgee at law or in equity, including all rights available under the
Commercial Code of Nevada, and all rights and remedies granted under this
Agreement, the Note, and any related documents. These rights and remedies shall
be cumulative, and may be exercised singly or concurrently with all other rights
and remedies the Pledgee may have.

8.

Duties of Escrow Agent. The obligations and duties of the Escrow Agent are
confined to those specifically enumerated in the following escrow instructions:

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(a)

Retain Certificates. The Escrow Agent shall retain possession of the
Certificate(s) and the stock powers, as agent of both the Pledgor and the
Pledgee, until the Note has been fully paid and all of the Pledgor's duties
under the Note have been performed, or until delivery of the Certificates and
stock powers pursuant to paragraph (c) below.

(b)

Notice to Escrow Agent upon Default. In the event of a Default, the Pledgee
shall give written notice of the Default to the Pledgor and to the Escrow Agent.

(c)

Delivery of Collateral. If the Escrow Agent has received satisfactory evidence
that written notice of Default has been delivered to the Pledgor, then, upon
expiration any applicable cure period described in the Note, the Escrow Agent
shall deliver the Certificates and stock powers to the Pledgee, unless prior to
the expiration of such cure period the Pledgor has notified the Pledgee and the
Escrow Agent to withhold delivery of the Certificates and stock powers to the
Pledgee.

(d)

Agent May Withhold Delivery. Should the Pledgor notify the Escrow Agent to
withhold delivery of the Collateral to the Pledgee, the Escrow Agent shall not
deliver the Collateral to either party until the controversy is settled by
written agreement of the parties, by an order or decree of a court of competent
jurisdiction, or by the delivery of a certificate of an arbitration decision.

(e)

Controversies with Third Parties. If any controversy arises between the Pledgor
or the Pledgee and a third party, the Escrow Agent shall not be required to
determine the controversy or to take any action. The Escrow Agent may await the
settlement of any controversy by final, appropriate, legal proceedings, by
written agreement, or by the certificate of an arbitration decision before
taking any action with regard to the Collateral.

(f)

Agent Institutes Legal Proceedings. The Escrow Agent may institute interpleader
or other appropriate legal proceedings in connection with determining how and
when to distribute the Collateral if the parties have failed to act for one
hundred twenty (120) days after the Escrow Agent receives notice of Default
under Paragraph (b) above.

(g)

Agent Not Liable. The Escrow Agent shall not be liable for any loss which may
occur by reason of false representations or other actions of the Pledgor or the
Pledgee. The Escrow Agent shall not be liable for the exercise of its discretion
in any particular manner except in instances of gross negligence or willful
misconduct by the Escrow Agent.

(h)

Division of Agent's Fees. The Pledgor and Pledgee share in the payment of the
fees and charges of the Escrow Agent in connection with this Agreement. The fee
agreed upon for the Escrow Agent's services is the fee normally charged by the
Escrow Agent for its services at its customary hourly rates for time spent in
connection with the escrow, which shall not exceed $300 per hour without the
prior written consent of the Pledgor and Pledgee.

9.

Arbitration.  Any dispute concerning the release of the Collateral from escrow
or arising out of the sale or transfer of the Collateral pursuant to Section
7(c) of this Agreement will be settled by arbitration as set forth in the Note.
No legal right of action may arise out of any such dispute until arbitration has
been completed. Each party, however, will have full access to the courts to
compel compliance with these arbitration provisions, to enforce an arbitration
award, or to seek injunctive relief, whether or not arbitration is available or
under way.

10. Termination of Agreement. This Agreement shall remain in effect until the
obligations under the Note have been discharged in full, at which time it shall
terminate, and the Escrow Agent shall return the Collateral to the Pledgor or
its assigns.

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11. Miscellaneous.

(a)

Waiver. No right or obligation under this Agreement will be deemed to have been
waived unless evidenced by a writing signed by the party against which the
waiver is asserted, or by its duly authorized representative. Any waiver will be
effective only with respect to the specific instance involved, and will not
impair or limit the right of the waiving party to insist upon strict performance
of the right or obligation in any other instance, in any other respect, or at
any other time.

(b)

Notice. Any notice or other communication required or permitted under this
Agreement shall be in accordance with the notice provision in the Note.

(c)

Modifications to be in Writing. To be effective, any modification to this
Agreement must be in writing signed by all parties to the Agreement.

(d)

Agreement Binding upon Successors and Assigns. This Agreement shall bind the
Pledgor and its successors and assigns. All rights, privileges, and powers
granted to the Pledgee under this Agreement shall benefit the Pledgee and its
successors and assigns.

(e)

Assignment of Agreement. At any time, the Pledgee may assign or transfer any of
its rights or powers under this Agreement to any person or entity. The Pledgor
may not transfer its rights, duties, or obligations under this Agreement without
the prior written consent of the Pledgee.

(f)

Further Assurances. Both the Pledgor and the Pledgee agree to take any further
actions and to make, execute, and deliver any further written instruments which
may be reasonably required to carry out the terms, provisions, intentions, and
purposes of this Agreement.

(g)

Attorneys' Fees and Costs. If the Pledgor or the Pledgee institutes legal
proceedings, other than an arbitration as provided under Section 9, to settle
any controversy arising under this Agreement, then the prevailing party shall be
entitled to reasonable attorney’s fees and costs.  

(h)

Governing Law. This Agreement shall be enforced, governed, and construed in all
respects in accordance with the substantive and procedural laws of the State of
Nevada.

(i)

Venue. The parties to this Agreement agree that the proper venue of any action
on this Agreement shall be in the City of Las Vegas, Clark County, Nevada.

(j)

Severability. If any provision of this Agreement or any application of any
provision is determined to be unenforceable, the remainder of this Agreement
shall be unaffected. If the provision is found to be unenforceable when applied
to particular persons or circumstances, the application of the provision to
other persons or circumstances shall be unaffected.

(k)

Headings. Headings used in this Agreement have been included for convenience and
ease of reference only, and will not in any manner influence the construction or
interpretation of any provision of this Agreement.

(l)

References. Except as otherwise specifically indicated, all references in this
Agreement to numbered or lettered sections or subsections refer to sections or
subsections of this Agreement. All references to Exhibits refer to Exhibits
attached to this Agreement. All references to "this Agreement," or to any
Exhibit to this Agreement, shall include any subsequent amendments to this
Agreement, or to the Exhibit, as the case may be.

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(m)

Number and Gender. When required by the context, the word "it" will include the
plural and the word "its" will include the singular; the masculine will include
the feminine gender and the neuter, and vice versa; and the word "person" will
include corporation, inn, partnership, or other form of association.

(n)

Counterparts. This Agreement may be executed in any number of counterparts,
including via DocuSign, each of which will be deemed to be an original and all
of which together will constitute a single agreement.

(o)

Entire Agreement. This Agreement, the Note and any related documents represent
the entire understanding of the parties with respect to the subject matter of
the Agreement. There are no other prior or contemporaneous agreements, either
written or oral, among the parties with respect to this subject.

EXECUTED AND DELIVERED, as of the date first above written.

PLEDGOR:

/s/ Scott Mahoney

______________________________

JayHawk Energy, Inc.  

By: Scott Mahoney

Its: Interim President & Chief Executive Officer

PLEDGEE:

/s/ Kelly Stopher

______________________________

Kelly Stopher, Individually  

ESCROW AGENT:

/s/ Shayne Sutherland

_______________________________

Cameron Sutherland, PLLC

By: Shayne Sutherland

Title: Manager/Member

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