SIGMA LABS, INC.


REGULATION S SUBSCRIPTION AGREEMENT
AND


CONFIDENTIAL PURCHASER QUESTIONNAIRE


 


Sigma Labs, Inc.


100 Cienega Street, Suite C


Santa Fe, NM 8750


 


Gentlemen:


 


1.Securities.  Subject to the
terms and conditions of this subscription agreement (this “Subscription Agreement”), Rockville Asset Management
Ltd., a Hong Kong company (the “Purchaser”), hereby subscribes for and agrees to purchase from the Company 43,750,000
shares (the "Shares") of Common Stock (the "Common Stock") of the Company, at an aggregate purchase
price of $3,500,000 (the "Purchase Price"). In connection with the purchase and sale of the Shares, for no additional
consideration, the Purchaser will receive a warrant (the "Warrant," and together with the Shares, the "Securities"),
substantially in the form attached hereto as Exhibit A, to purchase up to 14,259,259 shares of Common Stock at an exercise
price of $0.15 per share (the "Warrant Shares"), in accordance with the terms and conditions set forth in Section
5 hereof. The Securities are being purchased from the Company pursuant to Regulation S (“Regulation S”)
promulgated by the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities
Act”). Capitalized terms used herein and not defined herein shall have the meanings given them in Regulation S.


 


2.Representations, Warranties and
Covenants of the Purchaser. The Purchaser hereby represents and warrants to and covenants with the Company as follows:


 


		(a)	Offshore Transaction.



 


		(i)	The Purchaser is not a U.S. Person within the meaning of Regulation S or the Purchaser was not formed for the purpose of investing
in securities which have not been registered under the Securities Act for the benefit of a U.S. person;



 


		(ii)	At the time the buy order was originated, the Purchaser was outside the United States;



 


		(iii)	To the Purchaser’s knowledge, no offer to sell or purchase the Securities was made in the United States;



 


		(iv)	The Purchaser is purchasing the Securities for its own account and for investment purposes and not with the view towards distribution
or for the account of a U.S. Person;



 


		(v)	The Purchaser agrees that it will not hedge the Securities except in compliance with the Securities Act;



 


		(vi)	All subsequent offers and sales of the Securities shall be made in compliance with Regulation S, and/or pursuant to registration
of the Securities under the Securities Act or pursuant to an exemption from registration under the Securities Act;



 


		(vii)	The Purchaser agrees that it will not, during the Restricted Period set forth under Rule 903(b)(iii)(A), act as a distributor,
either directly or through any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the Securities other than
to a non-U.S. Person except in compliance with applicable securities laws;



 


		(viii)	The Purchaser acknowledges that the Common Stock purchased (including shares of Common Stock issuable upon the exercise of
the Warrant) will bear a legend in substantially the following form:



 






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THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN OFFERED AND SOLD IN AN “OFFSHORE TRANSACTION” IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE SECURITIES
AND EXCHANGE COMMISSION. ACCORDINGLY, THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH REGULATION S, PURSUANT
TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY. THE SHARES REPRESENTED BY THIS CERTIFICATE CANNOT
BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.


 


(b)The
Purchaser has reviewed the reports, forms or other information filed by the Company with the Securities and Exchange Commission
under the Securities Act and the Securities Exchange Act of 1934 (the foregoing materials being collectively referred to herein
as the “SEC Reports”), and the “Risk Factors” contained therein, including those described in the
Company’s Annual Report on Form 10-K at http://www.sec.gov/Archives/edgar/data/788611/000114420413022123/v337273_10k.htm.
The Purchaser has relied solely upon the review of the SEC Reports and investigations made by or on behalf of the Purchaser or
its representative in evaluating the suitability of an investment in the Company. Purchaser recognizes that an investment in
the Company involves a high degree of risk. Purchaser also has been advised that, due to the dates of the SEC Reports, the
SEC Reports may not contain the latest information pertaining to the Company;


 


(c)The
Purchaser has been advised of the risks set forth in the Risk Factors contained in the SEC Reports, including (i) the risks regarding
the Company’s financial position; (ii) that it may not be possible to readily liquidate this investment; (iii) the Company
is an early-stage company that has only generated limited revenues from its operations; and (iv) the Company may need to raise
additional capital in order to operate and fund its proposed operations;


 


(d)The
Purchaser’s overall commitment to high risk investments is not disproportionate to the Purchaser’s net worth; the Purchaser’s
investment in the Company will not cause such overall commitment to become excessive; and the Purchaser can afford to bear the
loss of its entire investment in the Company;


 


(e)The
Purchaser has adequate means of providing for the Purchaser’s current needs and personal contingencies and has no need for
liquidity in its investment in the Company;


 


(f)The
Purchaser satisfies any special suitability or other applicable requirements of its state of residence and/or the state in which
the transaction by which the Securities is purchased occurs;


 


(g)The
Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits
and risks of an investment in the Company, or the Purchaser has employed the services of an independent investment advisor, attorney
or accountant to read all of the documents furnished or made available by the Company to the Purchaser and to evaluate the merits
and risks of such an investment on the Purchaser’s behalf;


 


(h)The
execution, delivery and performance by the Purchaser of the Subscription Agreement are within the powers of the Purchaser, have
been duly authorized and will not constitute or result in a breach or default under, or conflict with, any order, ruling or regulation
of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the
Purchaser is a party or by which the Purchaser is bound; and will not violate any provision of the charter documents, by-laws,
indenture of trust, partnership agreement or similar documents, as applicable, of the Purchaser. The signatures on the Subscription
Agreement are genuine; and the signatory has been duly authorized to execute the same; and the Subscription Agreement constitutes
the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms;


 






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(i)The
Purchaser acknowledges that the Securities have not 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 document. Any representation to the contrary is a criminal offense. The Securities are subject to restrictions
on transferability and resale and may not be transferred or resold except as permitted under the Securities Act, and the applicable
state securities laws, pursuant to registration or exemption therefrom;


 


(j)The
information contained in the Purchaser's Confidential Purchaser Questionnaire (the “Questionnaire”) attached
hereto is complete, accurate and true in all respects; and


 


(k)The
Purchaser acknowledges that the Company may engage one or more finders, placement agents or registered broker-dealers in connection
with the private placement of the Securities subject to this Subscription Agreement and may pay a finder’s fee or placement
commission to such finders, placement agents or registered broker-dealers.


 


3.Representations, Warranties and
Covenants of the Company. The Company hereby represents and warrants to and covenants with the Purchaser as follows:


 


(a)The Company
is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and it has full
corporate power and authority to enter into this Subscription Agreement and to carry out the provisions hereof;


 


(b)The execution
and delivery of this Subscription Agreement has been duly authorized by all necessary corporate action on the part of the Company
and such Agreement constitutes the valid and legally binding obligations of the Company, enforceable against it in accordance
with the terms hereof, except as such enforceability may be limited by bankruptcy, insolvency or other laws affecting generally
the enforceability of creditors’ rights, by general principles of equity and by limitations on the availability of
equitable remedies;


 


(c)Neither
the execution and delivery of this Subscription Agreement by the Company, nor compliance by the Company with the provisions
hereof, violates any provision of its Articles of Incorporation or By Laws, as amended, or any law, statute, ordinance, regulation,
order, judgment or decree of any court or governmental agency, or conflicts with or will result in any breach of the terms
of or constitute a default under or result in the termination of or the creation of any lien pursuant to the terms of any
agreement or instrument to which the Company is a party or by which it or any of its properties is bound;


 


(d)No authorization,
consent, approval, license or exemption of, and no registration, qualification, designation or filing with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or foreign is or was necessary to (i) the valid
execution and delivery by the Company of this Subscription Agreement and all other instruments, documents and agreements contemplated
hereby or (ii) the issuance of the Securities hereunder;


 


(e)There are
no claims, actions, disputes, suits, investigations or proceedings pending or, to the best knowledge of the Company, threatened
against the Company or any of the properties or assets of the Company, by or before any court, administrative agency or other
governmental authority or any arbitrator which could prevent performance or enforcement of the transactions contemplated hereby
or have an adverse effect on the business, assets or condition of the Company;


 


(f)The Company
(i) has authorized 750,000,000 shares of Common Stock, of which 559,266,061 shares are issued as of December 13, 2013, (ii)
is authorized to issue 10,000,000 shares of preferred stock, of which no shares are outstanding, and (iii) the Company granted
to a director 500,000 shares of Common Stock, subject to restrictions, pursuant to the Company's 2011 Equity Incentive Plan,
on October 31, 2013 in connection with the appointment of such director to the Company's Board of Directors. Such shares
will vest in accordance with the following schedule: (i) 300,000 vested immediately; (ii) 100,000 will vest on April 30, 2014;
and (iii) 100,000 will vest on October 31, 2014.  Other than as described in the SEC Reports, there are no outstanding
subscriptions, options, warrants or convertible securities obligating the Company to issue or sell any shares of the capital
stock of the Company;


 


 



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(g)The Shares
and the Warrant have been duly authorized and, when issued upon payment thereof in accordance with this Subscription Agreement,
will have been validly issued, fully paid and non-assessable. The Warrant Shares have been duly authorized and validly reserved
for issuance, and when issued upon exercise of the Warrant in accordance with the terms thereof, will have been validly issued,
fully paid and non-assessable; and


 


(h)B6 Sigma,
Inc., a Delaware corporation, and Sumner & Lawrence Limited (dba Sumner Associates), a New Mexico corporation, are the
Company's only subsidiaries, each of which is wholly-owned by the Company, has been duly incorporated, and is validly existing
and in good standing as a corporation under the laws of its jurisdiction of incorporation.


 


4.Exemption.


 


(a)Purchase
and Sale Under Regulation S. The Purchaser understands that the offer and sale of the Securities are not being registered under
the Securities Act. The Company is relying on the rules governing offers and sales made outside the United States pursuant to Regulation
S as an exemption from registration for this transaction between the Company and the Purchaser.


 


(b)Restricted
Securities. The Purchaser agrees that the Securities will be acquired from the Company in a transaction not involving any public
offering and are deemed to be “restricted securities” as defined in SEC Rule 144(a)(3). The Purchaser further understands
that “restricted securities” cannot be resold publicly within the United States except, pursuant to an effective registration
statement or an exemption from such registration. The Purchaser acknowledges that SEC Rule 144 permits the public resale of “restricted
securities” in reliance upon an exemption from registration under Section 4(1) of the Securities Act only if the conditions
of Rule 144 are met. The Purchaser acknowledges that because the Company was previously a "shell" company as defined
in Rule 144, the safe harbor provided by Rule 144 will only be available to the Purchaser at such times as the Company is current
in all of its reporting obligations under the Securities Exchange Act of 1934, as amended. Although the Company is current in the
filing of such reports as of the date hereof, the Purchaser acknowledges that the Company cannot assure the Purchaser that the
Company will remain in compliance.


 


(c)Compliance
With Securities Laws. The Purchaser understands and agrees that because the Securities are being acquired under Regulation
S and are “restricted securities,” The Purchaser will be required to comply with both the provisions of Regulation
S and Rule 144 in any resale of the Common Stock, absent registration of the Common Stock or an exemption therefrom.


 


5.Purchase,
Sale, Exchange and Delivery of the Securities.


 


(a)On
the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to the Purchaser, and Purchaser agrees to purchase from the Company, the
Shares in exchange for the payment to the Company by the Purchaser of the Purchase Price. In connection with the purchase and sale
of the Shares, for no additional consideration, the Purchaser will receive the Warrant to purchase the Warrant Shares, as set forth
below.


 


(b)Subject
to the fulfillment of each of the conditions to closing set forth herein, the closing of the transactions described herein (the
"Closing") shall take place on December 31, 2013 or such later date as may be specified by the parties,
but in no event later than January 8, 2014 (i.e., five business days after December 31, 2013) (the "Closing Date").
On the Closing Date, the Purchaser shall acquire 43,750,000 Shares
of Common Stock and the Warrant to purchase up to 14,259,259 Warrant Shares. The Company
shall deliver to the Purchaser (i) a stock certificate representing the Shares promptly after the Closing Date, and (ii) the
Warrant to purchase the Warrant Shares. On the Closing Date, the Purchaser shall deliver to the Company the Purchase Price (i.e.,
$3,500,000) by wire transfer of immediately available funds to an account as directed by the Company. The Warrant shall have a
term of nine-months from the date of issuance and shall have an exercise price of $0.15 per share. The Closing will occur when
all documents and instruments necessary or appropriate to effect the transactions contemplated herein are exchanged by the parties
and all actions taken at the Closing will be deemed to be taken simultaneously.






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Payment by wire
transfer should be sent referencing the subscriber’s name to:


 


	Bank Name: 	Wells Fargo Bank (Santa Fe Business Banking)
	Address: 	
        241 Washington Ave.

        Santa Fe, NM 87501

	SWIFT Code: 	 
	Account Name: 	 
	Account Number: 	 
	Reference: 	Rockville Asset Management Ltd


 


6.Certain Covenants of the Company.
The Company covenants and agrees with the Purchaser as follows:


 


(a)Use
of Proceeds. The net proceeds of the sale of the Securities hereunder shall be used, in addition to funding working capital
and other general corporate purposes of the Company, primarily by the Company in connection with (i) PrintRite3D; (ii) 3D scanner
technology; (iii) high productivity 3D (Service Bureau); and (iv) activities related to the foregoing. The exact amount to allocate
by the company to each of these areas is at the discretion of the company.


 


(b)Listing
of Common Stock. The Company shall use its best efforts to list the Common Stock on the New York Stock Exchange, NASDAQ or
any other securities exchange acceptable to the Purchaser within 24-months from the Closing, to the extent the Common Stock is
qualified to be listed on such securities exchanges.


 


(c)Actions
Requiring Purchaser Approval. The Company shall not take any of the following actions during the 12-months following the Closing
without the written approval of the Purchaser, provided that the Purchaser has not sold in excess of 40% of the Shares during such
period:


 


(i)Approve
any amendment or modification to the Company's Articles of Incorporation, as amended;


 


(ii)Declare
or pay any cash dividends on the Common Stock; and


 


(iii)Sell
all or substantially all of the property and assets of the Company.


 


  


7.Conditions to Closing. 


 


(a)The
obligation of the Purchaser to consummate the Closing is subject to the following conditions unless waived in writing by the Purchaser:


 


(i)The Purchaser's
Investment Committee or similar governing body shall have approved the purchase of the Securities by the Purchaser;


 






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(ii)The Purchaser
shall have completed its business, legal, financial and tax due diligence to the satisfaction of the Purchaser;


 


(iii)The representations and warranties of the Company
contained in this Subscription Agreement shall be true and correct in all material respects on and as of the Closing
Date, and the Company shall have complied in all material respects with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing Date;


 


(iv)None of the issuance and sale of the Securities
pursuant to this Subscription Agreement shall be enjoined (temporarily or permanently) and no restraining order or other
injunctive order shall have been issued in respect thereof; and there shall not have been any legal action, order, decree
or other administrative proceeding instituted or, to the Company's knowledge, threatened against the Company; and


 


(v)The Company shall have delivered the Subscription
Agreement to the Purchaser, duly executed on behalf of the Company.


 


(b)The
obligation of the Company to consummate the Closing is subject to the following conditions unless waived in writing by the Company:


 


(i)The
representations and warranties of the Purchaser contained in this Subscription Agreement shall be true and correct in all material
respects on and as of the Closing Date, and the Purchaser shall have complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; and


 


(ii)The
Purchaser shall have delivered the Subscription Agreement to the Company, duly executed on behalf of the Purchaser.


 


8.Indemnification.


 


(a)The Purchaser
acknowledges that it understands the meaning and legal consequences of the representations, warranties and covenants in Section
2 hereof and in the Questionnaire, and that the Company has relied upon such representations, warranties and covenants, as
applicable, and the Purchaser hereby agrees to indemnify and hold harmless the Company, its officers, directors, controlling
persons, agents, advisors, representatives and employees, from and against any and all loss, damage, expense, claim, action,
suit or proceeding (including reasonable attorneys’ fees and expenses) or liabilities due to or arising out of a breach
of any representation, warranty, covenant or acknowledgements made by the Purchaser herein.


 


(b)The Company
acknowledges that it understands the meaning and legal consequences of the representations, warranties and covenants in Section
3 hereof, and that the Purchaser has relied upon such representations, warranties and covenants, as applicable, and the Company
hereby agrees to indemnify and hold harmless the Purchaser, its officers, directors, controlling persons, agents, advisors,
representatives and employees, from and against any and all loss, damage, expense, claim, action, suit or proceeding (including
reasonable attorneys’ fees and expenses) or liabilities due to or arising out of a breach of any representation, warranty,
covenant or acknowledgements made by the Company herein.


 


All representations,
warranties, covenants and acknowledgements contained in this Subscription Agreement and in the Questionnaire and the indemnification
contained in this Section 8 shall survive the delivery of the Securities. If, in any respect, any representations and warranties
shall not be true and accurate on or prior to the Closing Date, the relevant party shall immediately give written notice to the
other party specifying which representations and warranties are not true and accurate and the reason therefor.


 






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9.Purchaser Information. The
Purchaser has furnished a completed and executed Questionnaire as part of the Subscription Agreement, the information in which
is true and correct in all respects and which is hereby incorporated by reference herein.


 


10.Standstill. Unless
approved in advance in writing by the Company's board of directors, the Purchaser agrees that neither the Purchaser nor any of
the Purchaser's representatives acting on behalf of or in concert with the Purchaser or the Purchaser's affiliates will, for a
period of two years after the Closing Date, directly or indirectly:


 


(a)make any statement or proposal
to the Company's board of directors or the Company, any of the Company's representatives or any of the Company's other stockholders
regarding, or make any public announcement, proposal or offer (including any “solicitation” of “proxies”
as such terms are defined or used in Regulation 14A of the Securities Exchange Act of 1934, as amended) with respect to, or otherwise
solicit, seek or offer to effect (including, for the avoidance of doubt, indirectly by means of communication with the press or
media) (i) any business combination, merger, tender offer, exchange offer or similar transaction involving the Company's or any
of the Company's subsidiaries, (ii) any restructuring, recapitalization, liquidation or similar transaction involving the Company's
or any of the Company's subsidiaries, (iii) any proposal to seek representation on the Company's board or otherwise seek to control
or influence the management, board of directors or policies of the Company, (iv) any request or proposal to waive, terminate or
amend the provisions of this Section 10 or (v) any proposal, arrangement or other statement that is inconsistent with the terms
of this Section 10;


 


(b)instigate, encourage or
assist any third party (including forming a "group" with any such third party) to do, or enter into any discussions or
agreements with any third party with respect to, any of the actions set forth in clause (a), above; or


 


(c)take any action which would
reasonably be expected to require the Company or any of the Company's affiliates to make a public announcement regarding any of
the actions set forth in clause (a), above.


 


11.Entire Agreement. This Subscription
Agreement and the documents and instruments and other agreements between the parties as contemplated by or referred to herein
constitute the entire agreement of the parties with respect to the subject matter of this Subscription Agreement and supersede
all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof,
it being understood that the Non-Disclosure Agreement previously signed by Greg Xie in favor of the Company shall continue in full
force and effect, and shall apply in all respects to the Purchaser, who shall be bound by such agreement to the same extent as
if the Purchaser was a party to such Non-Disclosure Agreement.


 


12.Assignability. This Subscription
Agreement is not transferable or assignable by the undersigned or any successor thereto.


 


13.Applicable Law. This Subscription
Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada, without reference to
the principles thereof relating to conflicts of law.


 


14.Counterparts. This Subscription
Agreement may be executed in two or more counterparts and may be delivered by facsimile transmission or e-mail, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.


 


[Signature
page follows]


 









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IN WITNESS WHEREOF,
the undersigned has executed this Subscription Agreement as of the 26th day of December, 2013.


 


	 	Rockville Asset Management Ltd.
	 	 
	 	By: 	/s/ Guoqiang Xie
	 	 	Name: Guoqiang Xie
	 	 	Title: CEO & Director




 





	Address for notice:  	RM 6A, UNIT K, YIHONG XUAN, ZHUJIANG DI
	 	JING, YIZHOU ROAD,
	 	GUANGZHOU CITY, CHINA
	 	ZIP CODE 510300







 










	 	Accepted as of this 8 day of January, 2014
	 	SIGMA LABS, INC.
	 	 
	 	By:	/s/ Mark Cola
	 	 	Name: Mark Cola
	 	 	Title: President and Chief Executive Officer











 






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