SUBSCRIPTION
AGREEMENT


 


This
Subscription Agreement (this “Agreement”) is being delivered to the purchaser identified on the signature page
to this Agreement (the “Subscriber”) in connection with its investment in the securities of Bitcoin Shop Inc.,
a Nevada corporation (the “Company”). The Company is conducting a private placement (the “Offering”)
of up to $2,500,000 (the “Maximum Offering Amount”) of units (the “Units”) at a purchase price
of $0.30 per Unit (the “Purchase Price”) with each Unit consisting of (i) one share (the “Shares”)
of the Company’s common stock $0.001 par value per share (the “Common Stock”), and (ii) a five year warrant,
in the form attached hereto as Exhibit A (the “Warrant”) to purchase 1.40 shares of Common Stock (the
“Warrant Shares”) at an exercise price of $0.375 per share. For purposes of this Agreement, the term “Securities”
shall refer to the Shares, the Warrants and the Warrant Shares. The Company, in its sole discretion, may increase the Maximum
Offering Amount to $3,000,000 without further notification to the Subscribers.


 


IMPORTANT
INVESTOR NOTICES


 


NO
OFFERING LITERATURE OR ADVERTISEMENT IN ANY FORM MAY BE RELIED UPON IN THE OFFERING OF THESE SECURITIES EXCEPT FOR THIS SUBSCRIPTION
AGREEMENT AND ANY SUPPLEMENTS HERETO, AND NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS EXCEPT THOSE CONTAINED HEREIN.


 


THIS
AGREEMENT IS CONFIDENTIAL AND THE CONTENTS HEREOF MAY NOT BE REPRODUCED, DISTRIBUTED OR DIVULGED BY OR TO ANY PERSONS OTHER THAN
THE RECIPIENT OR ITS REPRESENTATIVE, ACCOUNTANT OR LEGAL COUNSEL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. EACH PERSON
WHO ACCEPTS DELIVERY OF THIS AGREEMENT, ACKNOWLEDGES AND AGREES TO THE FOREGOING RESTRICTIONS.


 


THIS
AGREEMENT DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION THAT YOU MAY DESIRE IN EVALUATING THE COMPANY,
OR AN INVESTMENT IN THE OFFERING. THIS AGREEMENT DOES NOT CONTAIN ALL OF THE INFORMATION THAT WOULD NORMALLY APPEAR IN A PROSPECTUS
FOR AN OFFERING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). YOU MUST CONDUCT AND
RELY ON YOUR OWN EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, IN DECIDING
WHETHER TO INVEST IN THE OFFERING.


 


THIS
AGREEMENT CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF VARIOUS DOCUMENTS RELATING TO THE OPERATIONS OF THE COMPANY. THESE SUMMARIES
DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS.


 


THIS
AGREEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO ANY PERSON OR IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION
IS UNLAWFUL OR NOT AUTHORIZED. EACH PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT AGREES TO RETURN IT AND ALL RELATED DOCUMENTS
IF SUCH PERSON DOES NOT PURCHASE ANY OF THE SECURITIES DESCRIBED HEREIN.


 


NEITHER
THE DELIVERY OF THIS AGREEMENT AT ANY TIME NOR ANY SALE OF SECURITIES HEREUNDER SHALL IMPLY THAT INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THE COMPANY WILL EXTEND TO EACH PROSPECTIVE INVESTOR (AND TO ITS REPRESENTATIVE,
ACCOUNTANT OR LEGAL COUNSEL, IF ANY) THE OPPORTUNITY, PRIOR TO ITS PURCHASE OF UNITS, TO ASK QUESTIONS OF AND RECEIVE ANSWERS
FROM THE COMPANY CONCERNING THE OFFERING AND TO OBTAIN ADDITIONAL INFORMATION, TO THE EXTENT THE COMPANY POSSESSES THE SAME OR
CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE, IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION SET FORTH HEREIN. ALL
SUCH ADDITIONAL INFORMATION SHALL ONLY BE PROVIDED IN WRITING AND IDENTIFIED AS SUCH BY THE COMPANY THROUGH ITS DULY AUTHORIZED
OFFICERS AND/OR DIRECTORS ALONE; NO ORAL INFORMATION OR INFORMATION PROVIDED BY ANY BROKER OR THIRD PARTY MAY BE RELIED UPON.


 




    	 



    	 



    


  


NO
REPRESENTATIONS, WARRANTIES OR ASSURANCES OF ANY KIND ARE MADE OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN, IF ANY,
THAT MAY ACCRUE TO AN INVESTOR IN THE COMPANY.


 


THIS
AGREEMENT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING THE COMPANY’S PERFORMANCE, STRATEGY, PLANS, OBJECTIVES, EXPECTATIONS,
BELIEFS AND INTENTIONS. THE OUTCOME OF THE EVENTS DESCRIBED IN THESE FORWARD-LOOKING STATEMENTS IS SUBJECT TO SUBSTANTIAL RISKS,
AND ACTUAL RESULTS COULD DIFFER MATERIALLY. THE SECTIONS ENTITLED “EXECUTIVE SUMMARY,” “RISK FACTORS,”
AND “DESCRIPTION OF BUSINESS,” IN ANY SECURITIES AND EXCHANGE COMMISSION (“SEC”) FILING OR REPORT (THE
“SEC FILINGS”), AS WELL AS THIS AGREEMENT GENERALLY, CONTAINS DISCUSSIONS OF SOME OF THE FACTORS THAT COULD CONTRIBUTE
TO THESE DIFFERENCES.


 


THIS
SUBSCRIPTION AGREEMENT AND THE SEC FILINGS AND REPORTS INCLUDE DATA OBTAINED FROM INDUSTRY PUBLICATIONS AND REPORTS, WHICH THE
COMPANY BELIEVES TO BE RELIABLE SOURCES; HOWEVER, NEITHER THE ACCURACY NOR THE COMPLETENESS OF THIS DATA IS GUARANTEED AND WE
HAVE NEITHER INDEPENDENTLY VERIFIED THIS DATA NOR SOUGHT THE CONSENT OF SUCH SOURCES TO REFER TO THEIR REPORTS.


 


THE
OFFERING PRICE OF THE SECURITIES HAS BEEN DETERMINED ARBITRARILY. THE PRICE OF THE SECURITIES DOES NOT NECESSARILY BEAR ANY RELATIONSHIP
TO THE ASSETS, EARNINGS OR BOOK VALUE OF THE COMPANY, OR TO POTENTIAL ASSETS, EARNINGS, OR BOOK VALUE OF THE COMPANY. THERE IS
NO ACTIVE TRADING MARKET IN THE COMPANY’S COMMON STOCK AND THERE CAN BE NO ASSURANCE THAT AN ACTIVE TRADING MARKET IN ANY
OF THE COMPANY’S SECURITIES WILL DEVELOP OR BE MAINTAINED. A LIMITED NUMBER OF SHARES OF COMMON STOCK MAY BE ELIGIBLE FOR
TRADING PRIOR TO REGISTRATION OF THE SECURITIES SOLD IN THE OFFERING, AND SUCH REGISTRATION MAY BE DELAYED IN CERTAIN CIRCUMSTANCES.
THE PRICE OF COMMON STOCK TRADED ON ANY EXCHANGE MAY BE IMPACTED BY A LACK OF LIQUIDITY OR AVAILABILITY OF COMMON STOCK FOR PUBLIC
SALE AND ALSO WILL NOT NECESSARILY BEAR ANY RELATIONSHIP TO THE ASSETS, EARNINGS, BOOK VALUE OR POTENTIAL PROSPECTS OF THE COMPANY
OR APPLICABLE QUOTED OR TRADING PRICES THAT MAY EXIST FOLLOWING REGISTRATION OR THE LAPSE OF RESTRICTIONS ON THE SECURITIES SOLD
PURSUANT TO THE OFFERING OR OTHER RESTRICTIONS. SUCH PRICES SHOULD NOT BE CONSIDERED ACCURATE INDICATORS OF FUTURE QUOTED OR TRADING
PRICES THAT MAY SUBSEQUENTLY EXIST FOLLOWING THE OFFERING.


 


THE
COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART FOR ANY REASON OR FOR NO REASON.
THE COMPANY IS NOT OBLIGATED TO NOTIFY RECIPIENTS OF THIS AGREEMENT WHETHER ALL OF THE SECURITIES OFFERED HEREBY HAVE BEEN SOLD.


 


SUBSCRIBERS
MAY BE DEEMED TO BE IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATION WITHIN THE MEANING OF THE UNITED STATES SECURITIES LAWS AND
REGULATIONS REGARDING A PUBLIC COMPANY. THIS AGREEMENT CONTAINS CONFIDENTIAL INFORMATION CONCERNING THE COMPANY, AND HAS BEEN
PREPARED SOLELY FOR USE IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN. ANY USE OF THIS INFORMATION FOR ANY PURPOSE OTHER THAN
IN CONNECTION WITH THE CONSIDERATION OF AN INVESTMENT IN THE SECURITIES OF THE COMPANY THROUGH THE OFFERING DESCRIBED HEREIN MAY
SUBJECT THE USER TO CIVIL AND/OR CRIMINAL LIABILITY. THE RECIPIENT, BY ACCEPTING THIS AGREEMENT, AGREES (I) NOT TO DISTRIBUTE
OR REPRODUCE THIS AGREEMENT, IN WHOLE OR IN PART, AT ANY TIME, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY; (II) TO KEEP
CONFIDENTIAL THE EXISTENCE OF THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN OR MADE AVAILABLE IN CONNECTION WITH ANY FURTHER
INVESTIGATION OF THE COMPANY; AND (III) TO REFRAIN FROM TRADING IN THE PUBLICLY-TRADED SECURITIES OF THE COMPANY OR ANY OTHER
RELEVANT COMPANY FOR SO LONG AS SUCH RECIPIENT IS IN POSSESSION OF THE MATERIAL NON-PUBLIC INFORMATION CONTAINED HEREIN. SUBSCRIBERS
ARE ADVISED THAT THEY SHOULD SEEK THEIR OWN LEGAL COUNSEL PRIOR TO EFFECTUATING ANY TRANSACTIONS IN THE PUBLICLY TRADED COMPANY’S
SECURITIES.


 




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FOR RESIDENTS
OF ALL STATES


 


THIS
OFFERING IS BEING MADE SOLELY TO “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 OF REGULATION D UNDER
THE SECURITIES ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND WILL
BE OFFERED AND SOLD IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(A)(2) THEREUNDER AND REGULATION D (RULE
506) OF THE SECURITIES ACT AND CORRESPONDING PROVISIONS OF STATE SECURITIES LAWS.


 


THE
SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD
BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


 


THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, 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 THIS AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.


 


PROSPECTIVE
INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS AGREEMENT AS INVESTMENT, LEGAL, BUSINESS, OR TAX ADVICE. EACH INVESTOR SHOULD
CONTACT HIS, HER OR ITS OWN ADVISORS REGARDING THE APPROPRIATENESS OF THIS INVESTMENT AND THE TAX CONSEQUENCES THEREOF, WHICH
MAY DIFFER DEPENDING ON AN INVESTOR’S PARTICULAR FINANCIAL SITUATION. IN NO EVENT SHOULD THIS AGREEMENT BE DEEMED OR CONSIDERED
TO BE TAX ADVICE PROVIDED BY THE COMPANY.


 


1.SUBSCRIPTION
AND PURCHASE PRICE


 


(a)Subscription.
Subject to the conditions set forth in Section 2 hereof, the Subscriber hereby subscribes for and agrees to purchase the number
of Units indicated on page 18 hereof on the terms and conditions described herein.


 


(b)Purchase
of Units. The Subscriber understands and acknowledges that the purchase price to be remitted to the Company in exchange for
the Units shall be set at $0.30 per Unit, for an aggregate purchase price as set forth on page 18 hereof (the “Aggregate
Purchase Price”), which shall be equivalent to $0.30 per Share, exclusive of the value of the Warrants. The Subscriber’s
delivery of this Agreement to the Company shall be accompanied by payment for the Units subscribed for hereunder, payable in bitcoins
at a mutually agreed exchange rate or in United States Dollars, by check or wire transfer of immediately available funds delivered
to the Company. The Subscriber understands and agrees that, subject to Section 2 and applicable laws, by executing this Agreement,
it is entering into a binding agreement.


 


(c)The
Company intends to offer the Units directly to Subscribers. Although there are no present agreements or arrangements, the Company
may offer some or all of the Units through members of the Financial Industry Regulatory Authority (“FINRA”). In the
event Units are sold by FINRA members, it is anticipated that the Company will pay customary commissions to any participating
FINRA member. Such figures do not include deductions for expenses related to the Offering including filing fees, legal, accounting,
transfer agent fees, and other miscellaneous expenses.


 


2.Acceptance,
Offering Term and Closing Procedures


 


(a)Acceptance.
Subject to full, faithful and punctual performance and discharge by the Company of all of its duties, obligations and responsibilities
as set forth in this Agreement, the Warrant and any other agreement entered into between the Subscriber and the Company relating
to this subscription (collectively, the “Transaction Documents”), the Subscriber shall be legally bound to purchase
the Units pursuant to the terms and conditions set forth in this Agreement.


 




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(b)Closing.
The closing of the purchase and sale of the Units hereunder (the “Closing”) shall take place at such time and
place as determined by the Company. The Closing shall take place on a Business Day promptly following the satisfaction of the
conditions set forth in Section 6 below, as determined by the Company (the “Closing Date”). “Business
Day” shall mean from the hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday,
Sunday or other day on which commercial banks in New York, New York are authorized or required to be closed. The Shares and the
Warrants purchased by the Subscriber will be delivered by the Company promptly following the Closing Date.


 


(c)Following
Acceptance or Rejection. The Subscriber acknowledges and agrees that this Agreement and any other documents delivered in connection
herewith will be held by the Company. In the event that this Agreement is not accepted by the Company for whatever reason, which
the Company expressly reserves the right to do, this Agreement, the Aggregate Purchase Price received (without interest thereon)
and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as
set forth in this Agreement. If this Agreement is accepted by the Company, the Company is entitled to treat the Aggregate Purchase
Price received as an interest free loan to the Company until such time as the Subscription is accepted. In the event the Closing
does not take place because of (i) the election not to purchase the Units by the Subscriber or (ii) the failure to effectuate
the Closing (as defined below) on or prior to May 8, 2015 (unless extended in the discretion of the Board of Directors) for any
reason or no reason, this Agreement and any other Transaction Documents shall thereafter be terminated and have no force or effect,
and the parties shall take all steps, including the execution of instructions to the Company, to ensure that the Aggregate Purchase
Price shall promptly be returned or caused to be returned to the Subscriber without interest thereon or deduction therefrom. Notwithstanding
anything herein to the contrary, no Subscriber shall be required to fund any portion of the Purchase Price until immediately prior
to the Closing.


 


(d)
Favored Nations Provision. For a period of two (2) years from the Closing Date, other than in connection with (i) full
or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of
the securities or assets of a corporation or other entity which holders of such securities or debt are not at any time granted
registration rights equal to or greater than those granted to the Subscribers, (ii) the Company’s issuance of securities
in connection with strategic license agreements and other partnering arrangements so long as such issuances are not primarily
for the purpose of raising capital and which holders of such securities or debt are not at any time granted registration rights
equal to or greater than those granted to the Subscribers, (iii) the Company’s issuance of Common Stock or the issuances
or grants of options to purchase Common Stock to employees, and directors, pursuant to plans that have been approved by a majority
of the stockholders and a majority of the independent members of the board of directors of the Company or in existence as such
plans are constituted on the date of this Agreement, (iv) the Company’s issuance of securities upon the exercise or exchange
of or conversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement on the terms in effect on the Closing Date, (v) an issuance by the Company of securities resulting
from the exercise of Warrants or conversion of the Shares, (vi) the Company’s issuance of up to 450,000 shares of Common
Stock to its advisors pursuant the independent contractor agreements dated October 1, 2014, and (vii) any and all securities required
to be assumed by the Company by the terms thereof as a result of any of the foregoing even if issued by a predecessor acquired
in connection with a business combination, merger or share exchange (collectively, the foregoing (i) through (vii) are “Excepted
Issuances”), if at any time the Company shall issue any Common Stock or securities convertible into or exercisable for
shares of Common Stock (or modify any of the foregoing which may be outstanding) to any person or entity (including issuances
to service providers or consultants) at a price per share or conversion or exercise price per share which shall be less than $0.30
per share, being the per share price of the Shares hereunder (disregarding any value attributable to the Warrants) or as in effect
at such time, (the “Lower Price Issuance”), then the Company shall issue the Subscriber such number of additional
Units to reflect such lower price for the Shares such that the Subscriber shall hold such number of Units, in total, had Subscriber
paid a per Unit price equal to the Lower Price Issuance; provided further the Company shall lower the Warrant exercise price to
the price that is the product of: (i) one hundred and twenty five percent (125%), and (ii) the issuance price of the Lower Price
Issuance. Common Stock issued or issuable by the Company for no consideration or for consideration that cannot be determined at
the time of issue will be deemed issuable or to have been issued for $0.001 per share of Common Stock. The rights of Subscribers
set forth in this Section 2 are in addition to any other rights the Subscribers have pursuant to this Agreement, or the Warrants,
and any other agreement referred to or entered into in connection herewith or to which Subscribers and Company are parties. The
Company shall be required to make one or many adjustments with respect to a Lower Price Issuance provided that the provisions
of this Section 2(d) remain in full force and effect.


 




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(e)Extraordinary
Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of Common Stock as a dividend
or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter
be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein. The number of Units that the Subscriber shall thereafter be entitled to receive
(including number of shares of Common Stock or Warrant Shares the Subscriber may thereafter be entitled to receive upon exercise
of the Warrants) shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise
(but for the provisions of this Section) be issuable on such conversion or exercise by a fraction of which (a) the numerator is
the Purchase Price that would otherwise (but for the provisions of this Section) be in effect, and (b) the denominator is the
Purchase Price then in effect.


 


(f)Certificate
as to Adjustments. In each case of any adjustment or readjustment in (i) the number of Shares (ii) the number of Warrant Shares
issuable upon the exercise of the Warrants, and/or (iii) the exercise price of the Warrants, the Company, at its expense, will
promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance
with the terms hereof or the Warrant, as applicable, and prepare a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based. The Company will forthwith mail a copy of each
such certificate to the Subscriber.


 


3.THE
SUBSCRIBER’s Representations, Warranties AND cOVENANTS


 


Each
Subscriber, severally and not jointly, hereby acknowledges, agrees with and represents, warrants and covenants to the Company,
as follows:


 


(a)The
Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized,
if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement
of rights of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or law).


 


(b)The
Subscriber acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt from registration
under the Securities Act, by virtue of Section 4(a)(2) of the Securities Act and the provisions of Regulation D promulgated thereunder
(“Regulation D”). In furtherance thereof, the Subscriber represents and warrants to the Company and its affiliates
as follows:


 


(i)The
Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding the Subscriber’s
representations contained herein, the Subscriber is merely acquiring the Securities for a fixed or determinable period in the
future, or for a market rise, or for sale if the market does not rise. The Subscriber does not have any such intention.


 


(ii)The
Subscriber realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities laws, except sales pursuant to a registration statement
or sales that are exempted under the Securities Act.


 


(iii)The
Subscriber is acquiring the Securities solely for the Subscriber’s own beneficial account, for investment purposes, and
not with a view towards, or resale in connection with, any distribution of the Securities.


 


(iv)The
Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.


 




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(v)The
Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
the “Advisors”) has such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of a prospective investment in the Securities. If other than an individual, the Subscriber also represents
it has not been organized solely for the purpose of acquiring the Securities.


 


(vi)The
Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any, and has carefully
reviewed them and understands the information contained therein, prior to the execution of this Agreement.


 


(c)The
Subscriber is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal, tax,
economic and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted
with, only its Advisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this
Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor
and the Company or any affiliate or sub-agent thereof.


 


(d)The
Subscriber has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fully understands
that the Securities are a speculative investment that involves a high degree of risk of loss of the Subscriber’s entire
investment. Among other things, the Subscriber has carefully considered each of the risks described under the heading “Risk
Factors” in the Company’s SEC Filings (as defined below) and any additional disclosures in the nature of Risk
Factors described herein.


 


(e)The
Subscriber will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemption therefrom,
and fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other reasons,
the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot
be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under
the applicable securities laws of such states, or an exemption from such registration is available. In particular, the Subscriber
is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated under the
Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of
Rule 144 are met. The Subscriber also understands that the Company is under no obligation to register the Securities on behalf
of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable
state securities laws. The Subscriber understands that any sales or transfers of the Securities are further restricted by state
securities laws and the provisions of this Agreement.


 


(f)No
oral or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors, if
any, by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection
with the Offering, other than any representations of the Company contained herein, and in subscribing for the Units the Subscriber
is not relying upon any representations other than those contained herein.


 


(g)The
Subscriber’s overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’s
net worth, and an investment in the Securities will not cause such overall commitment to become excessive.


 




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(h)The
Subscriber understands and agrees that the certificates for the Securities shall bear substantially the following legend:


 


“[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”


 


(i)Certificates
evidencing Securities shall not be required to contain the legend set forth in Section 3(h) above or any other legend (i) while
a registration statement covering the resale of such Securities is effective under the Securities Act, (ii) following any sale
of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 (provided that the Subscriber provides the Company with reasonable
assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion
of the Subscriber’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144),
provided that the Subscriber provides the Company with an opinion of counsel to the Subscriber, in a generally acceptable form,
to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements
of the Securities Act or (v) if such legend is not required under applicable requirements of the Securities Act (including, without
limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to
the foregoing, the Company shall no later than three (3) business days following the delivery by the Subscriber to the Company
or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable),
together with any other deliveries from the Subscriber as may be required above in this Section 3(i), as directed by the Subscriber,
either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program
and such Securities are shares of Common Stock issuable upon conversion of the Shares, credit the aggregate number of shares of
Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver (via reputable overnight courier) to the Subscriber, a certificate representing
such Securities that is free from all restrictive and other legends, registered in the name of the Subscriber or its designee.
The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal
of any legends with respect to any Securities in accordance herewith.


 


(j)Neither
the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering.
There is no government or other insurance covering any of the Securities.


 


(k)The
Subscriber and its Advisors, 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 and the business, financial condition, results of operations and
prospects of the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors,
if any.


 


(l)(i)In
making the decision to invest in the Securities the Subscriber has relied solely upon the information provided by the Company
in the Transaction Documents. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the
Securities hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity
in the course of Subscriber’s consideration of an investment in the Securities other than the Transaction Documents. 


 


(ii)The
Subscriber represents and warrants that: (i) the Subscriber was contacted regarding the sale of the Securities by the Company
(or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship
and (ii) no Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in
connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published
in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available;
or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or
general advertising; or (C) observe any website or filing of the Company with the SEC in which any offering of securities by the
Company was described and as a result learned of any offering of securities by the Company.


 




    	- 7 -



    	 



    





 


(m)The
Subscriber 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 Agreement or the transactions contemplated hereby.


 


(n)The
Subscriber is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic
and related considerations of an investment in the Securities, and the Subscriber has relied on the advice of, or has consulted
with, only its own Advisors.


 


(o)
The Subscriber acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the
Subscriber were prepared by the management of the Company in good faith, but that the attainment of any such projections, estimates
or forward-looking statements cannot be guaranteed by the Company or its management and should not be relied upon.


 


(p)No
oral or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors, if
any, in connection with the Offering that are in any way inconsistent with the information contained herein.


 


(q)(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 Subscriber or Plan fiduciary (i) is responsible for the decision
to invest in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment
decision; and (iv) in making such decision, the Subscriber or Plan fiduciary has not relied primarily on any advice or recommendation
of the Company or any of its affiliates.


 


(r)This
Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges and
agrees that the Company reserves the right to reject any subscription for any reason.


 


(s)The
Subscriber is an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited
Investor” is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of
$1,000,000 (excluding such person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.


 


(t)The
Subscriber, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the Offering, and has so evaluated the merits and
risks of such investment. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as that
term is defined in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering.
The Subscriber is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford
a complete loss of such investment.


 


(u)The
Subscriber has reviewed, or had the opportunity to review, all of the SEC Filings (as defined below) and all “Risk Factors”
and “Forward Looking Statements” disclaimers contained therein. In addition, the Subscriber has reviewed and acknowledges
it has such knowledge, sophistication and experience in securities matters.


 




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4.THE
COMPANY’S Representations, Warranties and Covenants


 


The
Company hereby acknowledges, agrees with and represents, warrants and covenants to each Subscriber, as follows:


 


(a)
Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation. The Company is duly qualified to do business, and is in good standing in the states required
due to (a) the ownership or lease of real or personal property for use in the operation of the Company’s business or (b)
the nature of the business conducted by the Company. The Company has all requisite power, right and authority to own, operate
and lease its properties and assets, to carry on its business as now conducted, to execute, deliver and perform its obligations
under this Agreement and the other Transaction Documents to which it is a party, and to carry out the transactions contemplated
hereby and thereby. All actions on the part of the Company and its officers and directors necessary for the authorization, execution,
delivery and performance of this Agreement and the other Transaction Documents, the consummation of the transactions contemplated
hereby and thereby, and the performance of all of the Company’s obligations under this Agreement and the other Transaction
Documents have been taken or will be taken prior to the Closing. This Agreement has been, and the other Transaction Documents
to which the Company is a party on the Closing will be, duly executed and delivered by the Company, and this Agreement is, and
each of the other Transaction Documents to which it is a party on the Closing will be, a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, reorganization,
insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors,
and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or law).


 


(b)Issuance
of Securities. The Securities to be issued to the Subscriber pursuant to this Agreement, when issued and delivered in accordance
with the terms of this Agreement, will be duly and validly issued and will be fully paid and non-assessable.


 


(c)Authorization;
Enforcement. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company,
and the consummation of the transactions contemplated hereby and thereby, will not (a) constitute a violation (with or without
the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule
of any court, agency or other governmental authority applicable to the Company, (b) require any consent, approval or authorization
of, or declaration, filing or registration with, any person, (c) result in a default (with or without the giving of notice or
lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate,
modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which the Company is
a party or by which it is bound or to which any assets of the Company are subject, (d) result in the creation of any lien or encumbrance
upon the assets of the Company, or upon any shares of Common Stock, preferred stock or other securities of the Company, (e) conflict
with or result in a breach of or constitute a default under any provision of the certificate of incorporation or bylaws of the
Company, or (f) invalidate or adversely affect any permit, license, authorization or status used in the conduct of the business
of the Company.


 


(d)SEC
Filings. The Company is subject to, and in full compliance with, the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has made available to each Subscriber
through the EDGAR system true and complete copies of the Company’s filings for the prior two full fiscal years plus any
interim period (collectively, the “SEC Filings”), and all such SEC Filings are incorporated herein by reference.
The SEC Filings, when they were filed with the SEC (or, if any amendment with respect to any such document was filed, when such
amendment was filed), complied in all material respects with the applicable requirements of the Exchange Act and the rules and
regulations thereunder and did not, as of such date, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. All reports and statements required to be filed by the Company under the Exchange Act have
been filed, together with all exhibits required to be filed therewith. The Company and each of its direct and indirect subsidiaries,
if any (collectively, the “Subsidiaries”), are engaged in all material respects only in the business described
in the SEC Filings, and the SEC Filings contain a complete and accurate description in all material respects of the business of
the Company and the Subsidiaries.


 


(e)No
Financial Advisor. The Company acknowledges and agrees that each Subscriber is acting solely in the capacity of an arm’s
length purchaser with respect to the Securities and the transactions contemplated hereby. The Company further acknowledges that
Subscriber is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by any Subscriber or any of its representatives or agents
in connection with this Agreement and the transactions contemplated hereby is merely incidental to such Subscriber’s purchase
of the Securities. The Company further represents to each Subscriber that the Company’s decision to enter into this Agreement
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 




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(f)Indemnification.
The Company will indemnify and hold harmless each Subscriber and, where applicable, its directors, officers, employees, agents,
advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but
not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against
any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any
representation or warranty of the Company contained herein or in any document furnished by the Company to each Subscriber in connection
herewith being untrue in any material respect or any breach or failure by the Company to comply with any covenant or agreement
made by the Company to each Subscriber in connection therewith; provided, however, that the Company’s liability
shall not exceed such Subscriber’s Aggregate Purchase Price tendered hereunder.


 


(g)Capitalization
and Additional Issuances. The authorized and outstanding capital stock of the Company on a fully diluted basis as of the date
of this Agreement and the Closing Date (not including the Securities) are set forth in the Company’s SEC Filings. Except
as set forth in the Company’s SEC Filings, there are no options, warrants, or rights to subscribe to, securities, rights,
understandings or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital
stock or other equity interest of the Company or any of its subsidiaries. The only officer, director, employee and consultant
stock option or stock incentive plan or similar plan currently in effect or contemplated by the Company are described in the Company’s
SEC Filings. There are no outstanding agreements or preemptive or similar rights affecting the Company’s Common Stock.


 


(h)Private
Placements. Assuming the accuracy of each Subscriber’s representations and warranties set forth in Section 3, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Subscribers as contemplated
hereby.


  


(j)Investment
Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Shares will not
be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.


 


(k)Shell
Company Status. To the Company’s knowledge, the Company is not an issuer identified in Rule 144(i)(1) of the Securities
Act. The Company is, and has been for a period of at least 90 days, subject to the reporting requirements of Section 13 or Section
15(d) of the Exchange Act. The Company has filed its current “Form 10 information” with the SEC pursuant to and in accordance
with applicable requirements reflecting its status as an entity that is no longer an issuer described in Rule 144(i)(1) and at
least one (1) year has elapsed from the date that the Company filed “Form 10 information” with the SEC.


 


(l)Litigation.
Except as set forth in the SEC Filings, there is no action, suit, proceeding, by the Principal Market, any court, public board,
other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors which is outside of the ordinary course of business or individually or in the aggregate material to the
Company or any of its Subsidiaries. No director, officer or employee of the Company or any of its subsidiaries has willfully violated
18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. The SEC has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company under the Securities Act or the
Exchange Act. “Governmental Entity” means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal),
multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity
or enterprise owned or controlled by a government or a public international organization or any of the foregoing. “Principal
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the
New York Stock Exchange, OTCQB or the OTC Bulletin Board (or any successors to any of the foregoing).


  


(m)
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement
or employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or
any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction
Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations
under any of the Transaction Documents.


 




    	- 10 -



    	 



    





 


(n)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely 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, except those being contested in good faith and (iii) 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.
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 and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.


 


(o)
Indebtedness and Other Contracts. Except as set forth in the SEC Filings, neither the Company nor any of its Subsidiaries,
(i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation
of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected
to result in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or
instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. For purposes
of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without
limitation, “capital leases” in accordance with generally accepted accounting principles) (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with
respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently
applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through
(F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in
any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets
or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental
Entity or any department or agency thereof.


 


(p)No
Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Filings, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any
of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof)
or condition (financial or otherwise), that (i) would be required to be disclosed by the Company under applicable securities laws
on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly announced, (ii) could have a material adverse effect on any Subscriber’s investment hereunder
or (iii) would reasonably be expected to have a Material Adverse Effect.


 




    	- 11 -



    	 



    





 


(q)No
Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Subscriber
with respect to the transactions contemplated by the Transaction Documents other than pursuant to documents substantially identical
to the Transaction Documents.


 


(r)No
Disqualification Events. To the Company’s Knowledge, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor
any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the
time of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event.


 


(s)General
Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the Securities Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.


 


5. OTHER AGREEMENTS OF THE PARTIES


 


(a)Furnishing
of Information. As long as any Subscriber owns Securities, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant
to the Exchange Act. As long as any Subscriber owns Securities, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to the Subscribers and make publicly available in accordance with Rule 144(c) under
the Securities Act such information as is required for the Subscribers to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required
from time to time to enable such person to sell such Securities without registration under the Securities Act within the limitation
of the exemptions proved by Rule 144 under the Securities Act.


 


(b)Shareholder
Rights Plan. No claim will be made or enforced by the Company or, to the knowledge of the Company, any other person that any
Subscriber is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Subscriber could be deemed to trigger the provisions of any such plan or arrangement,
by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Subscribers.


 


(c)Securities
Laws Disclosure; Publicity. The Company shall by 9 a.m. (New York City time) (a) on or prior to the fourth Business Day after
the Closing Date, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) within
four (4) Business Days after the Closing Date the Company shall, file a Current Report on Form 8-K with the SEC, including the
Transaction Documents as exhibits thereto. The Subscriber authorizes the Company at its discretion to include the Subscriber’s
name and amount of investment in the Offering. The Company shall not be required to consult with any Subscriber which is a Qualified
Institutional Buyer (“QIB”), as defined in SEC Rule 501 of Regulation D, in regards to the issuing of any press releases
with respect to the transactions contemplated hereby, and no Subscriber shall issue any such press release or otherwise make any
such public statement without the prior consent of the Company. The Company shall consult with each other Subscriber prior to
using the name of such Subscriber or any of its affiliates in any press release or other publicly filed materials.


 


(d)Integration.
The Company shall not, and shall use its best efforts to ensure that no affiliate of the Company shall, after the date hereof,
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated with
the offer or sale of the Units in a manner that would require the registration under the Securities Act of the sale of the Units
to the Subscribers.


 


(e)Reservation
of Securities. The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents.
In the event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy its obligations
in full under the Transaction Documents, the Company shall promptly take such actions as may be required to increase the number
of authorized shares.


 




    	- 12 -



    	 



    

  


(f)Use
of Proceeds. The Company covenants and agrees to use all of the proceeds of this Offering for: (i) its digital currency mining
expansion (ii) strategic investments, and (iii) general working capital purposes. Provided, further that the 2015 calendar year
cash salaries and bonuses for each of Charles Allen the Company’s CEO, CFO and Chairman, and Michal Handerhan the Company’s
COO, Secretary and Director will be no more than $125,000 each. The restrictions set forth in this Section 5(f) shall not apply
to securities issued or issuable pursuant to the Company’s current equity incentive plan (the “2014 Plan”) or
any new equity incentive plans the Company may adopt.


 


6.CONDITIONS
TO ACCEPTANCE OF SUBSCRIPTION


 


(a)
The Subscriber’s obligation to purchase the Units is conditioned upon satisfaction of the following conditions precedent
on or before the Closing Date:


 


(i)As
of the Closing, no legal action, suit or proceeding shall be pending against the Company that seeks to restrain or prohibit the
transactions contemplated by this Agreement.


 


(ii)The
representations and warranties of the Company contained in this Agreement shall have been true and correct in all material respects
on the date of this Agreement and shall be true and correct as of the Closing as if made on the Closing Date.


 


(iii)
The Company’s counsel shall, upon request, have delivered to each Subscriber a legal opinion as to the matters set forth
in Exhibit C, in form and substance reasonably satisfactory to such Subscriber.


 


 7. MISCELLANEOUS PROVISIONS




 


(a)All
parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue of
the fact that such party’s counsel was or was not the principal draftsman of this Agreement.


 


(b)Each
of the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with the preparation
and review of this Agreement and related documentation.


 


(c)Neither
this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or termination is sought.


 


(d)The
representations, warranties and agreement of each Subscriber and the Company made in this Agreement shall survive the execution
and delivery of this Agreement and the delivery of the Securities.


 


(e)Any
party may send any notice, request, demand, claim or other communication hereunder to the Subscriber at the address set forth
on the signature page of this Agreement or to the Company at its primary office (including personal delivery, expedited courier,
messenger service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will
be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the
address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other
parties written notice in the manner herein set forth.


 


(f)Except
as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement
and their heirs, executors, administrators, successors, legal representatives and assigns. If any Subscriber is more than one
person or entity, the obligation of any Subscriber shall be joint and several and the agreements, representations, warranties
and acknowledgments contained herein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs,
executors, administrators, successors, legal representatives and assigns. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.


 




    	- 13 -



    	 



    





 


(g)This
Agreement is not transferable or assignable by any Subscriber.


 


(h)The
Company hereby represents and warrants as of the date hereof and as of the Closing Date that none of the terms offered to any
Person with respect to any offer, sale or subscription of Securities (each a “Subscription Document”), is or
will be more favorable to such Person than those of the Subscriber and this Agreement shall be, without any further action by
the Subscriber or the Company, deemed amended and modified in an economically and legally equivalent manner such that the Subscriber
shall receive the benefit of the more favorable terms contained in such Subscription Document. Notwithstanding the foregoing,
the Company agrees, at its expense, to take such other actions (such as entering into amendments to the Transaction Documents)
as the Subscriber may reasonably request to further effectuate the foregoing.


 


(i)Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except in writing signed by both (a) the
Company and (b) Subscribers in the Offering holding 75% of the Units issued in the Offering then held by the original Subscribers.
The Company shall be prohibited from offering any additional consideration to any Subscriber in this Offering (or such original
Subscriber’s transferee) for the purposes of inducing such person to change, modify, waive or amend any term of this Agreement
or any other Transaction Document without making the same offer on a pro-rata basis to all other Subscribers (and those transferees)
in this offering allocable to the securities acquired by such transferee(s).


 


(j)This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts
of law principles.


 


(k)The
Company and each Subscriber hereby agree that any dispute that may arise between them arising out of or in connection with this
Agreement shall be adjudicated before a court located in the City of New York, Borough of Manhattan, and they hereby submit to
the exclusive jurisdiction of the federal and state courts of the State of New York located in the City of New York, Borough of
Manhattan with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now
or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that
such court is an inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the sale
of the securities hereunder, and consent to the service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, postage prepaid, in care of the address set forth herein or such other address as
either party shall furnish in writing to the other.


 


(l)WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


(m)This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.


 


[Signature
Pages Follow]


 




    	- 14 -



    	 



    





 


ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE


 


IN
WITNESS WHEREOF, the Subscriber has executed this Agreement on the ____ day of _______, 2015.


 


	 	x
    $0.30 for per Unit =	 
	Units subscribed
    for	 	 Aggregate
    Purchase Price


 


Manner in
which Title is to be held (Please Check One):


 


	1.	 	___	 	Individual	7.	 	___	 	Trust/Estate/Pension or Profit sharing Plan
	 	 	 	 	 	 	 	 	 	Date Opened: ______________
	2.	 	___	 	Joint Tenants with Right of Survivorship	8.	 	___	 	As a Custodian for
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	Under the Uniform Gift to Minors Act of the State of
	 	 	 	 	 	 	 	 	 	 
	3.	 	___	 	Community Property	9.	 	___	 	Married with Separate Property
	4.	 	___	 	Tenants in Common	10.	 	___	 	Keogh
	5.	 	___	 	Corporation/Partnership/ Limited Liability Company	11.	 	___	 	Tenants by the Entirety
	6.	 	___	 	IRA	 	 	 	 	 


 


ALTERNATIVE
DISTRIBUTION INFORMATION


 


To
direct distribution to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THIS SECTION
IF THIS IS AN IRA INVESTMENT.


 


Name of
Firm (Bank, Brokerage, Custodian):


 


Account
Name:


 


Account
Number:


 


Representative
Name:


 


Representative
Phone Number:


 


Address:


 


City, State,
Zip:


 




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IF
MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.


INDIVIDUAL
SUBSCRIBERS MUST COMPLETE THIS PAGE 16.


SUBSCRIBERS
WHICH ARE ENTITIES MUST COMPLETE PAGE 17.


 


EXECUTION
BY NATURAL PERSONS


 


	 
	Exact
                                                                            Name in Which Title is to be Held



 


	 	 	 
	Name (Please
    Print)	 	Name of Additional
    Purchaser
	 	 	 
	 	 	 
	Residence: Number
    and Street	 	Address of Additional
    Purchaser
	 	 	 
	 	 	 
	City, State and
    Zip Code	 	City, State and
    Zip Code
	 	 	 
	 	 	 
	Social Security
    Number	 	Social Security
    Number
	 	 	 
	 	 	 
	Telephone Number	 	Telephone Number
	 	 	 
	 	 	 
	Fax Number (if
    available)	 	Fax Number (if
    available)
	 	 	 
	 	 	 
	E-Mail (if available)	 	E-Mail (if available)
	 	 	 
	 	 	 
	(Signature)	 	(Signature of
    Additional Purchaser)


 


ACCEPTED
this ___ day of _________ 2015, on behalf of the Company.


 


	 	By:	 
	 	Name: 	 
	 	Title:	 


 


[SIGNATURE
PAGE FOR SUBSCRIPTION AGREEMENT]


 




    	- 16 -



    	 



    


 


EXECUTION
BY SUBSCRIBER WHICH IS AN ENTITY


(Corporation,
Partnership, LLC, Trust, Etc.)


 


	 
	Name
    of Entity (Please Print)


 


	Date
    of Incorporation or Organization:


 


	State
    of Principal Office:


 


	Federal
    Taxpayer Identification Number:	 
	 	 
	 	 
	Office Address	 
	 	 
	 	 
	City, State and
    Zip Code	 
	 	 
	 	 
	Telephone Number	 
	 	 
	 	 
	Fax Number (if
    available)	 
	 	 
	 	 
	E-Mail (if available)	 
	 	 


 


	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	[seal]	 	 	 	 
	 	 	 	 	 
	Attest:	 	 	 	 
		(If Entity is a Corporation)	 	 	 
	 	 	 	 	 
	 	 	 	Address	 


 


ACCEPTED
this ____ day of __________ 2015, on behalf of the Company.


 


	 	By:	 
	 	Name:	 
	 	Title:	 


  


[SIGNATURE
PAGE FOR SUBSCRIPTION AGREEMENT]


 




    	- 17 -



    	 



    


 


INVESTOR
QUESTIONNAIRE


 


Instructions:
Check all boxes below which correctly describe you.


 


	[  ]	 	You are (i) a bank, as defined
    in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), (ii) a savings
    and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual
    or fiduciary capacity, (iii) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of
    1934, as amended (the “Exchange Act”), (iv) an insurance company as defined in Section 2(13) of
    the Securities Act, (v) an investment company registered under the Investment Company Act of 1940, as amended (the
    “Investment Company Act”), (vi) a business development company as defined in Section 2(a)(48) of
    the Investment Company Act, (vii) a Small Business Investment Company licensed by the U.S. Small Business Administration
    under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, (viii) a plan established and
    maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions,
    for the benefit of its employees and you have total assets in excess of $5,000,000, or (ix) an employee benefit plan
    within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (1)
    the decision that you shall subscribe for and purchase shares of common stock or preferred stock, is made by a plan fiduciary,
    as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered
    investment adviser, or (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe for and
    purchase the Units is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation
    D promulgated under the Securities Act (“Regulation D”) or (3) you are a self-directed plan and the decision
    that you shall subscribe for and purchase the Securities is made solely by persons or entities that are accredited investors.
	 	 	 
	[  ]	 	You are a private business development
    company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.
	 	 	 
	[  ]	 	You are an organization described in
    Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation, Massachusetts
    or similar business trust or a partnership, in each case not formed for the specific purpose of making an investment in the
    Securities and its underlying securities in excess of $5,000,000.
	 	 	 
	[  ]	 	You are a director or executive officer
    of the Company.
	 	 	 
	[  ]	 	You are a natural person whose individual
    net worth, or joint net worth with your spouse, exceeds $1,000,000 (excluding residence) at the time of your subscription
    for and purchase of the Securities.
	 	 	 
	[  ]	 	You are a natural person who had an
    individual income in excess of $200,000 in each of the two most recent years or joint income with your spouse in excess of
    $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching the same income level in the
    current year.
	 	 	 
	[  ]	 	You are a trust, with total assets
    in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities and whose subscription for and purchase
    of the Securities is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D.
	 	 	 
	[  ]	 	You are an entity in which all of the
    equity owners are persons or entities described in one of the preceding paragraphs.


 




    	- 18 -



    	 



    





 


Check
all boxes below which correctly describe you.


 


With respect
to this investment in the Securities, your:


 





	Investment Objectives: 	[  ] Aggressive Growth 	[  ] Speculation	 
	 	 	 	 
	Risk Tolerance: 	[  ] Low Risk	[  ] Moderate Risk 	[  ] High Risk 




 


	Are you associated with a FINRA Member Firm?
    	[  ] Yes 	[  ] No


 


Your
initials (purchaser and co-purchaser, if applicable) are required for each item below:


 


	____	 	____ 	 	I/We
    understand that this investment is not guaranteed.
	 	 	 	 	 
	____	 	____ 	 	I/We
    are aware that this investment is not liquid.
	 	 	 	 	 
	____	 	____ 	 	I/We
    are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in this
    offering.
	 	 	 	 	 
	____	 	____ 	 	I/We
    confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to
    the inherent risks including lack of liquidity and lack of diversification. Success or failure of private placements such
    as this is dependent on the corporate issuer of these securities and is outside the control of the investors. While potential
    loss is limited to the amount invested, such loss is possible.)


 


The
Subscriber hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its
execution of the Subscription Agreement pursuant to which it purchased the Securities.


 


	 	 	 
	Name of Purchaser [please print]	 	Name of Co-Purchaser [please print]
	 	 	 
	 	 	 
	Signature of Purchaser (Entities please provide signature of Purchaser’s
    duly authorized signatory.)	 	Signature of Co-Purchaser
	 	 	 
	 	 	 
	Name of Signatory (Entities only)	 	 
	 	 	 
	 	 	 
	Title of Signatory (Entities only)	 	 


 


[SIGNATURE
PAGE FOR INVESTOR QUESTIONNAIRE]


 




    	- 19 -



    	 



    


 


Exhibit
A


 


Form
of Warrant


 


See
attached.


 




    	- 20 -



    	 



    


  


Exhibit
B


 


Form
of Registration Rights Agreement


 


See
attached.


 




    	- 21 -



    	 



    


 


Exhibit
C


 


Legal
Opinion of Company Counsel


 


1. The
Company is existing as a corporation under the laws of Nevada and has the requisite corporate power to enter into and perform
its obligations under the Agreement.


 


2.
The Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding obligation
of the Company, enforceable against it in accordance with its terms.


 


3. The
Shares have been duly authorized and, when issued, delivered and paid for in accordance with the terms of the Agreement, will
be validly issued, fully paid and non-assessable and free of preemptive or similar rights arising from the Governing
Documents or the Specified Agreements.


 


4. The
execution, delivery and performance of the Agreement by the Company, the issuance and sale of the Shares and the consummation
by the Company of the transactions contemplated by the Agreement will not (i) result in a breach or violation of any of the
terms of the Governing Documents, or (ii) violate in any material respect any New York, Nevada or federal law, statute, rule
or regulation which in our experience is applicable to similar transactions, or any judgment, order or decree of any Nevada,
New York, or federal court or governmental agency or body known to us.


 


5. Except
for the filing of a Form D under the Securities Act, the post-closing registration of the Shares under the Securities Act as
contemplated by the Agreement, and except for such consents, approvals, authorizations, registrations or qualifications as
may be required under applicable state securities laws in connection with the sale of the Shares (as to which no opinion is
given), no consent, approval, authorization or order of, or filing, qualification or registration with, any court or
governmental or non-governmental agency or body, which has not been obtained or taken and is not in full force and effect, is
required for the execution, delivery and performance of the Agreement by the Company, the offer, issue and sale of the Shares
or the consummation by the Company of the transactions contemplated by the Agreement.


 


6. The offer and sale of the Shares by the Company to the Investors
as contemplated by the Agreement are exempt from the registration requirements of the Securities Act. We do not express any opinion
regarding the circumstances under which the Investors may resell or otherwise dispose of the Shares.


 


7.
The Company is not, and after giving effect to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Agreement will not be, an “investment company” within the meaning of such term as
defined in the Investment Company Act and the rules and regulations of the Commission thereunder.


 




    	- 22 -