EXHIBIT A
 
FORM OF SUBSCRIPTION AGREEMENT
 
 
 
Diamondhead Casino Corporation
1013 Princess Street
Alexandria, Virginia 22314
 
Ladies and Gentlemen:
 
1.      Subscription.  The undersigned (the “Purchaser”), intending to be
legally bound, hereby irrevocably agrees to purchase from Diamondhead Casino
Corporation, a Delaware corporation (the “Company”), subject to the terms and
conditions described herein and in the confidential Private Placement Memorandum
of the Company dated February 14, 2014, as amended or supplemented from time to
time, and including all attachments, schedules and exhibits thereto (the
“Memorandum”), the number of securities subscribed for on the signature page
hereof.
 
The Company is offering up to three million dollars ($3,000,000) of securities
consisting of the following:
 
(a) an aggregate in principal of $1,000,000 of First Tranche Collateralized
Convertible Senior Debentures (the “First Tranche Debentures”), convertible into
an aggregate of 3,333,333 shares of Common Stock of the Company, par value
$0.001 per share (the “Common Stock”);
 
(b) an aggregate in principal of $1,000,000 of Second Tranche Collateralized
Convertible Senior Debentures, convertible into an aggregate of 2,222,222 shares
of Common Stock of the Company (the “Second Tranche Debentures”); and
 
(c) an aggregate in principal of $1,000,000 of Third Tranche Collateralized
Convertible Senior Debentures, convertible into an aggregate of either 1,818,182
shares of Common Stock or 1,333,333 shares of Common Stock of the Company,
depending upon certain conditions described in the Memorandum (the “Third
Tranche Debentures”).
 
The First Tranche Debentures, Second Tranche Debentures and Third Tranche
Debentures are referred to herein as the “Offered Securities”. The terms of the
Offering are more completely described in the Memorandum and such terms are
incorporated herein by reference in their entirety.
 
2. Minimum Purchase.  The minimum principal amount of First Tranche Debentures
that may be purchased is $50,000. A Purchaser wishing to purchase the First
Tranche Debentures must also subscribe for and purchase the Second Tranche
Debentures in an amount equal to that amount tendered for the First Tranche
Debentures and must also subscribe for and purchase the Third Tranche Debentures
in an amount equal to that amount tendered for the First Tranche Debentures.
Thus, the total minimum purchase required for all three Debentures is $150,000.
 

 
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3. Payment.  The Purchaser encloses herewith a check made payable to, or will
immediately make a wire transfer payment to, “CST&T AAF Diamondhead Escrow
Account” for the full amount of the purchase price of the Offered Securities
being subscribed for. Wire transfer instructions are set forth on the
instruction page accompanying this Subscription Agreement. Such funds will be
held in Escrow for the Purchaser’s benefit, and will be returned promptly,
without interest or offset if the Purchaser’s subscription is not accepted by
the Company or the Offering is terminated by the Termination Date (as defined
below).
 
4.     Deposit of Funds.  All payments made shall be deposited with Continental
Stock Transfer and Trust Company (the “Escrow Agent”). The Escrow Agent will
release the first $1,000,000 held in Escrow to the Company when subscriptions in
the aggregate amount of $3,000,000 have been deposited in Escrow and accepted by
the Company. If subscriptions in the aggregate amount of $3,000,000 have not
been deposited in Escrow on or before March 1, 2014, unless this date has been
extended, with or without notice to the Investors, by the Company, for up to two
additional 30-day periods (the “Termination Date”), the Escrow Agent will return
any and all subscriptions held by it without interest or deduction of any sort.
In the event a closing with respect to the Second Tranche Debentures (the
“Second Closing”) has not occurred on or before December 31, 2014, the Escrow
Agent will return all subscriptions then held in the Escrow Account ($2,000,000)
to the Iinvestors, without interest or deduction of any sort. In the event the
Second Closing has occurred, but a closing with respect to the Third Tranche
Debentures has not occurred on or before December 31, 2014, the Escrow Agent
will return all subscriptions then held in Escrow ($1,000,000) to the Investors,
without interest or deduction of any sort. If the Company rejects a
subscription, either in whole or in part (which decision is in its sole
discretion), the rejected subscription funds or the rejected portion thereof
will be returned promptly to such Purchaser without interest accrued thereon.
 
5.           Acceptance of Subscription.  The Purchaser understands and agrees
that the Company, in its sole discretion, reserves the right to accept or reject
this or any other subscription for Offered Securities, in whole or in part, for
any reason or no reason, 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. The Company shall not be bound by
any representation made to a Subscriber that a subscription has been accepted,
whether made orally or in writing, by anyone other than the Company.
 
6.           Representations and Warranties of the Purchaser.  The Purchaser
hereby acknowledges, represents and warrants to the Company as follows (it being
specifically acknowledged and agreed that Henley and Company LLC, the Placement
Agent with respect to the Offering (the “Placement Agent”), is and shall be a
third party beneficiary of the following):
 
(a)           The Purchaser is aware that an investment in the Offered
Securities involves a significant degree of risk, involving a number of very
significant risks and has carefully read and considered the matters set forth in
the Memorandum, including but not limited to those under the caption “Risk
Factors”
 

 
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(b)           None of the Offered Securities or the Common Stock issuable upon
conversion of the Offered Securities or issued with respect to interest
payments, 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 Offered Securities (including the underlying Common
Stock) are intended to be exempt from registration under the Securities Act, by
virtue of Section 4(2) thereof and the provisions of Regulation D promulgated
thereunder (“Regulation D”), based, in part, upon the representations,
warranties and agreements of the Purchaser contained in this Subscription
Agreement.
 
(c)           The Purchaser meets the requirements of at least one of the
suitability standards for an “accredited investor” as that term is defined in
Regulation D and as set forth on the Accredited Investor Certification contained
herein.
 
(d)           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 the
Memorandum and all other documents requested by the Purchaser, have carefully
reviewed them and understand the information contained therein.
 
(e)           Neither the Securities and Exchange Commission nor any state
securities commission or other regulatory authority has approved the Offered
Securities or the underlying Common Stock, or passed upon or endorsed the merits
of the offering of the Offered Securities, or confirmed the accuracy or
determined the adequacy of the Memorandum. The Memorandum has not been reviewed
by any federal, state or other regulatory authority.
 
(f)           All documents, records, and books pertaining to the investment in
the Offered Securities (including, without limitation, the Memorandum) have been
made available for inspection by such Purchaser and its Advisers, if any.
 
(g)           The Purchaser and its Advisers, if any, have had a reasonable
opportunity to ask questions of and receive answers from the Company concerning
the offering of the Offered Securities, the business and financial condition of
the Company, and all such questions have been answered to the full satisfaction
of the Purchaser and its Advisers, if any.
 
(h)           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 in the Memorandum.
 
(i)           The Purchaser is unaware of, is in no way relying on, and did not
become aware of the Offering of the Offered Securities 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 Offered Securities and is not subscribing for the
Offered Securities and did not become aware of the Offering of the Offered
Securities 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.
 

 
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(j)           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, in
turn, to be paid to its selected dealers).
 
(k)           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 Offered Securities and the Company and
to make an informed investment decision with respect thereto.
 
(l)           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 Offered Securities,
and the Purchaser has relied on the advice of, or has consulted with, only its
own Advisers.
 
(m)           The Purchaser is acquiring the Offered Securities and the
underlying Common Stock 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. The Purchaser has no agreement or arrangement,
formal or informal, with any person to offer, sell, transfer, assign, pledge,
hypothecate or otherwise dispose of all or any part of the Offered Securities or
the underlying Common Stock, and the Purchaser has no plans to enter into any
such agreement or arrangement.
 
(n)           The Purchaser must bear the substantial economic risks of the
investment in the Offered Securities indefinitely because neither the Offered
Securities nor the underlying Common Stock 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. Legends shall be placed on the Offered Securities and the
certificates representing the underlying Common Stock to the effect that they
have not been registered under the Securities Act or applicable state securities
laws. Appropriate notations will be made in the Company’s stock books to the
effect that the Offered Securities and the underlying Common Stock have not been
registered under the Securities Act or applicable state securities laws. Stop
transfer instructions will be placed with the transfer agent, if any, of the
securities. There can be no assurance that there will be any market for resale
of the Offered Securities or the underlying Common Stock nor can there be any
assurance that such securities will be freely transferable at any time in the
foreseeable future.
 
(o)           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 Offered Securities for an indefinite period
of time.
 

 
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(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 Offered Securities, 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 Offered Securities, 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 the Advisers, if any, have had the opportunity
to obtain any additional information, to the extent the Company had such
information in its possession or could acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information contained in the
Memorandum and all documents received or reviewed in connection with the
purchase of the Offered Securities 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, if any, 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, if any.
 
(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 securities as described
in the Memorandum. 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 Offered Securities.
 

 
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(s)           The Purchaser has significant prior investment experience,
including investment in non-registered, high risk securities. The Purchaser is
knowledgeable about investment considerations in development-stage and other
companies. 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 Offered Securities 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 the Purchaser’s decision to make this investment.
 
(u)           The Purchaser acknowledges that any estimates or forward-looking
statements or projections included in the Memorandum 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 in the Memorandum.
 
(w)           Within five (5) business 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 Offered Securities
predates the Placement Agent’s or such subagent’s contact with the Purchaser
regarding an investment in the Offered Securities.
 
(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 OFFERED, SOLD, TRANSFERED, ASSIGNED,
PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER SAID
ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
SECURITIES HAVE NOT BEEN 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.
 

 
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(z)           The Purchaser acknowledges that none of the Offered Securities or
the underlying Common Stock have been recommended by any federal or state
securities commission or regulatory authority. 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. Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
Subscription Agreement or the Memorandum. Any representation to the contrary is
a criminal offense. The Offered Securities and the underlying Common Stock are
subject to restrictions on transferability and resale and may not be offered,
sold, transferred, assigned, pledged, hypothecated or otherwise disposed of
except as permitted under the Securities Act, and the applicable state
securities laws, pursuant to registration or exemption therefrom. 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.
 

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1           These individuals include specially designated nationals, specially
designated narcotics traffickers and other parties subject to OFAC sanctions and
embargo programs.
 

 
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(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
figure,2 or any immediate family3 member or close associate4 of a senior foreign
political figure, as such terms are defined in the footnotes below.
 
(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.
 

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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.

 
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(ff)           The Purchaser understands and acknowledges that a Private
Placement Memorandum dated January 14, 2014 (the “Original PPM”), which the
Purchaser may have received, has been rescinded and has been replaced and
superseded in its entirety by the Memorandum defined in Section 1 of this
Subscription Agreement. The Purchaser and the Purchaser's advisors further
understand and acknowledge that they may not rely on the Original PPM or the
exhibits thereto in evaluating this Offering and whether to subscribe to this
Offering. The Purchaser understands and acknowledges that the Purchaser and his
advisors may rely only upon the Memorandum defined in Section 1 of this
Subscription Agreement in evaluating this Offering and whether to subscribe to
this Offering.
 
7.           Company Representations and Warranties.  The Company represents and
warrants to and agrees with the Purchaser that:
 
(a)           This Subscription Agreement and any other agreements delivered or
required to be delivered together with or pursuant to this Agreement or in
connection herewith (collectively “Transaction Documents”) have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
generally and to general principles of equity. The Company has full corporate
power and authority necessary to enter into and deliver the Transaction
Documents and to perform its obligations thereunder.
 
(b)           The Holder acknowledges that the Company does not, at the time of
acceptance of this Subscription or as of the Issue Date of the First Tranche
Debentures offered herein, have sufficient Common Stock authorized to convert
the Offered Securities to Common Stock of the Company pursuant to the terms of
the Offered Securities and this Offering. The Company intends to hold an Annual
Meeting of Stockholders in accordance with applicable state and Federal law, to
seek stockholder approval to increase the number of authorized shares of Common
Stock from fifty million to one hundred million shares or the Company will seek
to obtain such approval by written consent of its stockholders pursuant to
Section 228 of the Delaware General Corporation Law. Thereafter, the Company
shall at all times, reserve and keep available out of its authorized, but
unissued shares of Common Stock, solely for the purpose of issuance upon the
conversion of the Offered Securities, such number of shares of Common Stock as
are issuable upon the conversion of the Offered Securities at the respective
Conversion Prices set forth in the Memorandum. All shares of Common Stock that
are so issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all liens and charges. The Company shall take all
such actions as may be necessary to assure that all such shares of Common Stock
may be so issued without violation of any Applicable Law or any requirements of
any national securities exchange or over-the-counter market upon which shares of
Common Stock may be listed or quoted (except for official notice of issuance
which shall be immediately delivered by the Company upon each such issuance).
 

 
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8.        “Piggyback” Registration Rights.  The Company hereby grants to the
Purchaser “piggyback” registration rights, on all registrations of equity
securities of the Company under the Securities Act for sale to the public, with
respect to the Common Stock underlying the Offered Securities. The Company will
bear the cost (exclusive of underwriting discounts and commissions) of such
registrations. The Company will notify the Subscriber not less than 20 calendar
days prior to the anticipated filing date of the registration statement. If the
Subscriber desires to have its registrable shares included in such registration
statement, it shall advise the Company, in writing, within 10 calendar days of
such notice, of the number of registrable shares it desires to register. The
Company reserves the right, at any time, to withdraw or cease proceeding with
any such registration if it shall at the same time withdraw or cease proceeding
with the registration of all other equity securities originally proposed to be
registered.
 
9.           Indemnification.  The Purchaser agrees to indemnify and hold
harmless the Company, the Placement Agent (including its selected dealers, if
any), and their respective 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
each of 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.
 

 
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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 by e-mail transmission, or delivered
against receipt to the party to whom it is to be given (a) if to the Company, at
the address set forth above, 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. Any notice or other communication given by certified mail shall be
deemed given at the time of receipt thereof. The Purchaser agrees that notice
may be served upon the Purchaser in accordance with the foregoing procedures by
the Placement Agent or other agent that introduced the Purchaser to the Company.
 
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 Offered Securities and
underlying Common 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 Delaware.
 
15.           Blue Sky Qualification.  The purchase of Offered Securities under
this Subscription Agreement is expressly conditioned upon the exemption from
qualification of the offer and sale of the Offered Securities 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.           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.
 
17.           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 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.
 
18.           Miscellaneous.
 
(a)           This Subscription Agreement, together with the Transaction
Documents (which are to be issued or executed at closing), 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. 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.
 

 
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(b)           The representations and warranties and covenants of the Company
and the Purchaser made in this Subscription Agreement shall survive the
execution and delivery hereof and delivery of the Offered Securities and the
Common Stock underlying the Offered Securities.
 
(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 shall be deemed an original (including signatures
sent by facsimile transmission or by email transmission of a PDF scanned
document), but all of which shall together constitute one and the same
instrument.
 
(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.
 
(g)           The Purchaser understands and acknowledges that there may be
multiple closings for this Offering.
 

 
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INSTRUCTIONS TO SUBSCRIBERS
 
 
To subscribe to this offering:
 
1)   Date and complete the subscription information that follows for the
securities being purchased.
 
2)   Complete and sign the signature pages in full, where applicable.
 
3)   Initial and sign the Accredited Investor Certification where applicable.
 
4)   Complete and sign the Investor Profile.
 
5)   Deliver the Subscription Agreement to the Company at the following address:
 
Diamondhead Casino Corporation
1013 Princess Street
Alexandria, Virginia 22314
 
6)   Forward a check to the Company, together with the Subscription Agreement,
for the total amount of the securities purchased made payable to: "CST&T AAF
Diamondhead Escrow Account" or wire said amount to the Escrow Agent as follows:
 
JP Morgan Chase Bank, NA
ABA#: 021000021
A/C Continental Stock Transfer & Trust Co. A/A/F Diamondhead Escrow Account
A/C 530158124
Ref:
 
 

 

 
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SIGNATURE PAGES TO SUBSCRIPTION AGREEMENT
 
 
 
I.     SECURITIES TO BE PURCHASED:
 
The undersigned Subscriber hereby executes the Subscription Agreement and
subscribes under the Subscription Agreement to purchase the following:
 
1. First Tranche Collateralized Convertible Senior Debentures in the principal
amount of: $____________
 
2. Second Tranche Collateralized Convertible Senior Debentures in the principal
amount of: $_________
 
3. Third Tranche Collateralized Convertible Senior Debentures in the principal
amount of: $___________
 
(Note: The dollar amounts for all three of the above purchases must be
identical.)
 
 
TOTAL AMOUNT OF SUBSCRIPTION: $________________________________________
 
 
DATE: ____________________________
 
 
II. SUBSCRIBER INFORMATION TO BE COMPLETED BY INDIVIDUAL SUBSCRIBERS, JOINT
TENANTS AND TENANTS IN COMMON:
 
INDIVIDUAL
 
______________________________________________________________________________
Print Name of Individual Subscriber
 
______________________________________________________________________________
Signature of Individual Subscriber
 
______________________________________________________________________________
Social Security Number
 
______________________________________________________________________________
Home Address
 
______________________________________________________________________________
Office Address
 
______________________________________________________________________________
Home Email Address                                            Office Email
Address
 
______________________________________________________________________________
Home Phone Number                                            Office Phone Number

 
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______________________________________________________________________________
Cell Phone Number
 
Correspondence is to be sent to:  __ home address above or __ office address
above.
 
 
 
JOINT TENANT, TENANT IN COMMON OR OTHER JOINT SUBSCRIBER
 
______________________________________________________________________________
Print Name of Joint Tenant, Tenant in Common or other Joint Subscriber
 
______________________________________________________________________________
Signature of Joint Tenant, Tenant in Common or other Joint Subscriber
 
______________________________________________________________________________
Social Security Number of Joint Tenant, Tenant in Common or other Joint
Subscriber
 
______________________________________________________________________________
Home Address of Joint Tenant, Tenant in Common or other Joint Subscriber
 
______________________________________________________________________________
Office Address
 
______________________________________________________________________________
Home Email Address                                           Office Email
Address
 
______________________________________________________________________________
Home Phone Number                                           Office Phone Number
 
______________________________________________________________________________
Cell Phone Number
 
Correspondence is to be sent to: __ home address above or __ office address
above.
 
 
 
III. SUBSCRIBER INFORMATION TO BE COMPLETED BY PARTNERSHIP, CORPORATION, LIMITED
LIABILITY COMPANY OR TRUST:
 
______________________________________________________________________________
Print Name of Partnership, Corporation, Limited Liability Company, or Trust
 
By:  __________________________________________________________________________
 
Name and
Title:  ________________________________________________________________
 
State of
Organization:   ___________________________________________________________
 
______________________________________________________________________________

 
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Address of Subscriber
 
______________________________________________________________________________
Federal Taxpayer Identification Number
 
______________________________________________________________________________
Office Phone
Number                                                                           Cell
Phone Number
 
______________________________________________________________________________
Address to which correspondence should be sent

 
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ACCREDITED INVESTOR CERTIFICATION
 
FOR INDIVIDUAL INVESTORS ONLY
(All Individual Investors must INITIAL where appropriate):
 
Initial
   
I have a net worth 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.  For
purposes of the foregoing net worth calculation, I have excluded the value of
my/our primary residence, after deducting any mortgage securing such primary
residence).
     
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 Diamondhead Casino Corporation
     

FOR NON-INDIVIUAL INVESORS
(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, or a registered investment company.
 
     

 
Investor Signature:
___________________________________       Date:  _________________

 
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INVESTOR PROFILE
(Must be completed by Investor)
 
 
Investor Name(s):
______________________________________________________________________________
 
 
 
 
 
Individual executing Profile or Trustee:
______________________________________________________________________________
 
 
 
 
 
Date of
Birth:_________________                                                                             Marital
Status:_________________________________
 
 
 
 
 
Joint Party Date of Birth:_________________   Investment Experience (Years):
____________
 
 
 
 
 
Annual
Income:_________________                                                                             Liquid
Net Worth: ______________________
 
 
 
Net Worth (excluding value of primary residence, after deducting any mortgage
securing such residence):
 
______________________________________________________________________________
 
 
 
 
Tax Bracket:                                ______ 15% or below       _____ 25%
- 27.5%       _____ Over 27.5%
 
 
 
 
 
Occupation:
 
 
 __________________________________________________________________________
 
 
 
 
 
Employer Address:
_____________________________________________________________________________
 
 
 
 
 
Type of Business:  __________________________________________
 
 
 
 
 
 
 
 
 
 
___________________________________                                                                                                ___________________
Investor
Signature                                                                                                Date
 
 
 

 
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ACCEPTANCE OF SUBSCRIPTION
 
 
 
The foregoing subscription is accepted and the Company agrees to be bound by its
terms.
 
DIAMONDHEAD CASINO CORPORATION
 
By: __________________________________
DEBORAH A. VITALE, PRESIDENT
 
 
DATE:  _________________________ , 2014
 
 
 
 

 
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