Document:

Exhibit 10.26

 

 

SUBSCRIPTION AGREEMENT

 

Ladies and Gentlemen:

 

1.Subscription.  The
undersigned (the “Purchaser”), intending to be legally bound, hereby irrevocably agrees to purchase from Rackwise,
Inc., a Nevada corporation (the “Company”), the number of units (the “Units” or the “PPO Units”)
set forth on the signature page hereof at a purchase price of $0.15 per Unit (the “Purchase Price”). Each Unit consists
of (i) one (1) share of the Company’s common stock, par value $0.0001 per share (“Common Stock”), and (ii) a
five (5) year warrant (each, an “Investor Warrant” and collectively, the “Investor Warrants”) to purchase
one (1) share of Common Stock at an exercise price of $0.30 per share. The form of Investor Warrant is annexed hereto as Exhibit
A. The Investor Warrants will have “weighted average” anti-dilution protection subject to customary exceptions,
including but not limited to, issuances under the Company’s 2011 Equity Incentive Plan.

 

2.Offering.  (a)This
subscription is submitted to you in accordance with and subject to the terms and conditions described in this Subscription Agreement,
as amended or supplemented from time to time, including all attachments, schedules and exhibits hereto, relating to the offering
(the “Offering”) by the Company of a maximum of twenty five million (25,000,000) Units (the “Maximum Offering
Amount”). In the event the Maximum Offering Amount is sold, the Placement Agent (as defined below) and the Company shall
have the right to place an additional five million (5,000,000) Units to cover over-allotments.

 

(b)Subject to Section
5 of this Subscription Agreement, provided that the Purchaser subscribes for the Units in the Offering for the amount equal to
at least fifty percent (50%) of the subscription amount(s) such Purchaser previously invested in the aggregate in the private placements
conducted by the Company since September 21, 2011 (collectively, “Prior Offerings”), the Company will reduce the exercise
price of such Purchaser’s unexercised warrants, if any, issued by the Company in the Prior Offerings (the “Prior Warrants”)
to $0.30 (“New Warrant Exercise Price”). The Purchaser understands and agrees that the Company, in its sole and absolute
discretion, reserves the right to determine if the Purchaser’s subscription(s) in the Prior Offerings entitles such Purchaser’s
Prior Warrants to have the New Warrant Exercise Price, notwithstanding the acceptance of the Purchaser’s subscription by
the Company under this Subscription Agreement. Subject to Section 5 of this Subscription Agreement, in the event such determination
is made by the Company, no action in connection with the Prior Warrants will be required by the Purchaser and the Company will
provide such Purchaser with a determination letter setting forth which Prior Warrants and the number of such warrants were deemed
by the Company to have the exercise price equal to the New Warrant Exercise Price. The Purchaser acknowledges and agrees that any
such determination shall be binding upon the Purchaser.

 

3.Payment.  The Purchaser
will send directly a check payable to, or will make a wire transfer payment to, “CSC Trust Company of Delaware, Escrow Agent
for Rackwise, Inc.” in the full amount of the Purchase Price of the Units being subscribed for. Wire transfer instructions
are set forth under the heading “To subscribe for Units in the private offering of Rackwise, Inc.” Such funds will
be held for the Purchaser’s benefit in escrow pursuant to the terms of the Escrow Agreement entered into by and among the
Company, Escrow Agent (as defined below) and the Placement Agent (as defined below), in the form attached hereto as Exhibit
B, and will be returned promptly, without interest or offset if this Subscription Agreement is not accepted by the Company
or the Offering is terminated pursuant to its terms by the Company prior to the Closing (as defined in Section 4). Together with
a check for, or wire transfer of, the full Purchase Price, the Purchaser is delivering a completed and executed Signature Page
to this Subscription Agreement, together with the Purchaser’s completed Accredited Investor Certification, Investor Profile
and Anti-Money Laundering Information Form, in the form attached to this Subscription Agreement, and any other documents, agreements,
supplements and additions thereto required by the Company (collectively, the “Subscription Documents”).

 

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4.Deposit of Funds.  All
payments made as provided in Section 3 hereof shall be sent directly to CSC Trust Company of Delaware (the “Escrow Agent”)
or by the Company and credited as soon as practicable after receipt thereof with the Escrow Agent, in a non-interest-bearing escrow
account (the “Escrow Account”). The initial closing of the purchase and sale of the Units (the “Closing”)
shall take place as soon as practicable following the satisfaction of the conditions to the Closing set forth herein. There may
be multiple Closings until such time as all the Units offered pursuant to this Subscription Agreement are sold, subject to over-allotment
(the date of any such Closing is hereinafter referred to as a “Closing Date”). Subject to the satisfaction of the terms
and conditions of this Subscription Agreement, on each Closing Date, (i) the Escrow Agent shall deliver to the Company in accordance
with the terms of the Escrow Agreement the full Purchase Price for the Units to be issued and sold to the Purchaser(s) on such
Closing Date, and (ii) the Company shall promptly thereafter deliver directly to the Purchaser(s), the shares of Common Stock comprising
the purchased Units and the applicable number of Investor Warrants, duly executed on behalf of the Company. The last of such Closings
will occur on or before December 30, 2012, which date may be mutually extended by the Company and the Placement Agent in writing
until February 1, 2013 (the “Termination Date”). Each Closing shall occur on a Closing Date at the offices of Gottbetter
& Partners, LLP, 488 Madison Avenue, 12th Floor, New York, New York 10022 (or such other place as is mutually agreed
to by the Company and the Purchaser(s)).

 

5.Acceptance of Subscription.  The
Purchaser understands and agrees that the Company, in its sole and absolute discretion, reserves the right to accept or reject
this or any other subscription for Units, in whole or in part, prior to the Closing of such Units, notwithstanding prior receipt
by the Purchaser of notice of acceptance of this subscription. The Company shall have no obligation hereunder until the Company
shall execute and deliver to the Purchaser an executed copy of this Subscription Agreement. If this subscription is rejected in
whole or the Offering is terminated, all funds received from the Purchaser will be returned without interest or offset, and this
Subscription Agreement shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds for
the rejected portion of this subscription will be returned without interest or offset, and this Subscription Agreement will continue
in full force and effect to the extent this subscription was accepted.

 

6.Placement Agent.  Gottbetter
Capital Markets, LLC has been engaged as non-exclusive placement agent in connection with the Offering (the “Placement Agent”).
The Placement Agent, a licensed broker-dealer with the Financial Industry Regulatory Authority (“FINRA”), has been
engaged as the non-exclusive Placement Agent for the Offering on a best efforts basis pursuant to the terms of a placement agency
agreement (the “Placement Agency Agreement), dated as of September 1, 2012, entered into between the Company and the Placement
Agent. The Placement Agent together with other participating broker-dealers, including sub-agents, if any, will be paid a cash
commission of up to 10% of funds raised in the Offering plus broker warrants to purchase such number of shares of Common Stock
up to a maximum of 10% of the number of shares of Common Stock contained in the Units sold in the Offering, which warrants shall
be identical to the Investor Warrants in all material respects, except that (i) the resale of the Common Stock underlying broker
warrants will not be covered by a registration statement and (ii) the broker warrants will have an exercise price of $0.15 per
share.

 

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7.Representations and Warranties
of the Purchaser.  The Purchaser hereby acknowledges, represents, warrants, and agrees as follows:

 

(a)None of the
Units, the shares of Common Stock underlying the Units, the Investor Warrants or the shares of Common Stock issuable upon exercise
of the Investor Warrants (the “Investor Warrant Shares”) offered pursuant to this Subscription Agreement are registered
under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The Purchaser understands
that the offering and sale of the Units is intended to be exempt from registration under the Securities Act, by virtue of Section
4(2) thereof and the provisions of Regulation D (“Regulation D”) and/or Regulation S (“Regulation S”) each
as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) thereunder, based, in part, upon the representations,
warranties and agreements of the Purchaser contained in this Subscription Agreement;

 

(b)Prior to the
execution of this Subscription Agreement, the Purchaser and the Purchaser’s attorney, accountant, purchaser representative
and/or tax adviser, if any (collectively, the “Advisers”), have received this Subscription Agreement and all other
documents requested by the Purchaser, have carefully reviewed them and understand the information contained therein;

 

(c)Neither the
SEC nor any state securities commission or other regulatory authority has approved the Units, the Common Stock, the Investor Warrants
or the Investor Warrant Shares, or passed upon or endorsed the merits of the offering of the Units;

 

(d)All documents,
records, and books pertaining to the investment in the Units have been made available for inspection by such Purchaser and its
Advisers, if any;

 

(e)The Purchaser
and/or its Advisers, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the offering of the Units and the business, financial condition and results of operations
of the Company, and all such questions have been answered to the full satisfaction of the Purchaser and its Advisers, if any;

 

(f)In evaluating
the suitability of an investment in the Company, the Purchaser has not relied upon any representation or information (oral or written)
other than as stated herein;

 

(g)The Purchaser
is unaware of, is in no way relying on, and did not become aware of the Offering of the Units through or as a result of, any form
of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet (including, without limitation,
internet “blogs,” bulletin boards, discussion groups and social networking sites) in connection with the Offering and
sale of the Units and is not subscribing for the Units and did not become aware of the Offering of the Units through or as a result
of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription by, a person not previously
known to the Purchaser in connection with investments in securities generally;

 

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(h)Subject to Section
6(a), the Purchaser has taken no action that would give rise to any claim by any person for brokerage commissions, finders’
fees or the like relating to this Subscription Agreement or the transactions contemplated hereby (other than commissions to be
paid by the Company to the Placement Agent and other participating broker-dealers, if any);

 

(i)The Purchaser,
together with its Advisers, if any, has such knowledge and experience in financial, tax, and business matters, and, in particular,
investments in securities, so as to enable it to utilize the information made available to it in connection with the Offering to
evaluate the merits and risks of an investment in the Units and the Company and to make an informed investment decision with respect
thereto;

 

(j)The Purchaser
is not relying on the Company, the Placement Agent or any of their respective employees or agents with respect to the legal, tax,
economic and related considerations of an investment in the Units, and the Purchaser has relied on the advice of, or has consulted
with, only its own Advisers;

 

(k)The Purchaser
is acquiring the Units solely for such Purchaser’s own account for investment purposes only and not with a view to or intent
of resale or distribution thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with
any person to sell or transfer all or any part of the Units, the shares of Common Stock, the Investor Warrants or the Investor
Warrant Shares, and the Purchaser has no plans to enter into any such agreement or arrangement;

 

(l)The Purchaser
must bear the substantial economic risks of the investment in the Units indefinitely because none of the securities included in
the Units may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable
state securities laws or an exemption from such registration is available (including, without limitation, under Regulation S).
Legends to the following effect shall be placed on the securities included in the Units to the effect that they have not been registered
under the Securities Act or applicable state securities laws:

 

THE SECURITIES REPRESENTED
HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH (I) REGULATION S UNDER THE
SECURITIES ACT, IF AVAILABLE, (II) ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IF AVAILABLE, OR (III) UNDER
AN EFFECTIVE REGISTRATION STATEMENT, AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF, MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. RELIANCE ON AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO PROVIDE THE
COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE SATISFACTORY TO THE COMPANY.

 

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Appropriate notations will be made in the
Company’s stock books to the effect that the securities included in the Units have not been registered under the Securities
Act or applicable state securities laws. Stop transfer instructions will be placed with the transfer agent with respect to the
Common Stock comprising part of the Units and the Investor Warrant Shares and on the Company’s books with respect to Units
and the Investor Warrants. The Company has agreed that purchasers of the Units will have, with respect to the shares of Common
Stock comprising part of the Units and the Investor Warrant Shares, piggyback registration rights, the terms of which are discussed
in Section 18 hereof. Notwithstanding such piggyback registration rights, there can be no assurance that there will be any market
for resale of the Common Stock or the Investor Warrant Shares, nor can there be any assurance that such securities will be freely
transferable at any time in the foreseeable future. In addition, the Investor Warrants issued to Purchasers purchasing Units in
this Offering in an offshore transaction outside the United States in reliance on Regulation S will bear an additional restrictive
legend to the following effect:

 

THIS WARRANT MAY NOT BE EXERCISED
IN THE UNITED STATES OR BY OR ON BEHALF OF A “U.S. PERSON” OR A PERSON IN THE UNITED STATES UNLESS THE WARRANT AND
THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR ANY OTHER EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.
“UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT. RELIANCE ON
AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO PROVIDE THE COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION
MUST BE SATISFACTORY TO THE COMPANY.

 

(m)The Purchaser
has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies and has no need
for liquidity of its investment in the Units for an indefinite period of time;

 

(n)The Purchaser
is aware that an investment in the Units is high risk, involving a number of very significant risks and has carefully read and
considered the matters set forth in the “Risk Factors” section of the Company’s Registration Statement on Form
S-1, as amended (Registration No. 333-179020) filed with the SEC on May 29, 2012 and, in particular, acknowledges that the Company
has a limited operating history, has had operating losses since inception, and is engaged in a highly competitive business;

 

(o)The Purchaser
either

 

		i.	meets the requirements of at least one of the suitability standards for an “accredited investor”
as that term is defined in Rule 501(a)(3) of Regulation D and as set forth on the Accredited Investor Certification contained herein;
or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

And, in addition:

 

		I.	the Purchaser was not offered the Units in the United States;

 

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

 

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

 

(p)The Purchaser
(i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority to execute and
deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and
thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company,
trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring
the Units, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization,
the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its
charter or other organizational documents, such entity has full power and authority to execute and deliver this Subscription Agreement
and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the
securities constituting the Units, the execution and delivery of this Subscription Agreement has been duly authorized by all necessary
action, this Subscription Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding
obligation of such entity; or (iii) if executing this Subscription Agreement in a representative or fiduciary capacity, represents
that it has full power and authority to execute and deliver this Subscription Agreement in such capacity and on behalf of the subscribing
individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom
the Purchaser is executing this Subscription Agreement, and such individual, partnership, ward, trust, estate, corporation, or
limited liability company or partnership, or other entity has full right and power to perform pursuant to this Subscription Agreement
and make an investment in the Company, and represents that this Subscription Agreement constitutes a legal, valid and binding obligation
of such entity. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment,
injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound;

 

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(q)The Purchaser
and its Advisors have been furnished with all documents and materials relating to the business, finances and operations of the
Company and all such other information that the Purchaser and/or its Advisors have requested and deemed material to making an informed
investment decision regarding its the Securities. The Purchaser and the Advisers, if any, have had the opportunity to obtain any
additional information, to the extent the Company has such information in its possession or could acquire it without unreasonable
effort or expense, necessary to verify the accuracy of the information contained herein and all documents received or reviewed
in connection with the purchase of the Units and have had the opportunity to have representatives of the Company provide them with
such additional information regarding the terms and conditions of this particular investment and the financial condition, results
of operations, business of the Company deemed relevant by the Purchaser or the Advisers, including the annual reports, quarterly
reports, current reports, registration statements and other information filed by the Company with the SEC (see www.sec.gov), and
all such requested information, to the extent the Company had such information in its possession or could acquire it without unreasonable
effort or expense, has been provided to the full satisfaction of the Purchaser and the Advisers;

 

(r)Any information
which the Purchaser has heretofore furnished or is furnishing herewith to the Company or the Placement Agent is complete and accurate
and may be relied upon by the Company and the Placement Agent in determining the availability of an exemption from registration
under federal and state securities laws in connection with the offering of the Units. The Purchaser further represents and warrants
that it will notify and supply corrective information to the Company and the Placement Agent immediately upon the occurrence of
any change therein occurring prior to the Company’s issuance of the securities contained in the Units;

 

(s)The Purchaser
has significant prior investment experience, including investment in non-listed and non-registered securities. The Purchaser is
knowledgeable about investment considerations in development-stage companies with limited operating histories. The Purchaser has
a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The Purchaser’s
overall commitment to investments which are not readily marketable is not excessive in view of the Purchaser’s net worth
and financial circumstances and the purchase of the Units will not cause such commitment to become excessive. The investment is
a suitable one for the Purchaser;

 

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(t)The Purchaser
is satisfied that the Purchaser has received adequate information with respect to all matters which it or the Advisers, if any,
consider material to its decision to make this investment;

 

(u)The Purchaser
acknowledges that any estimates or forward-looking statements or projections included in this Subscription Agreement were prepared
by the Company in good faith but that the attainment of any such projections, estimates or forward-looking statements cannot be
guaranteed by the Company and should not be relied upon;

 

(v)No oral or written
representations have been made, or oral or written information furnished, to the Purchaser or the Advisers, if any, in connection
with the Offering which are in any way inconsistent with the information contained herein;

 

(w)Within five
(5) days after receipt of a request from the Company or the Placement Agent, the Purchaser will provide such information and deliver
such documents as may reasonably be necessary to comply with any and all laws and ordinances to which the Company or the Placement
Agent is subject;

 

(x)The Purchaser’s
substantive relationship with the Placement Agent or subagent through which the Purchaser is subscribing for Units predates the
Placement Agent’s or such subagent’s contact with the Purchaser regarding an investment in the Units;

 

(y)THE SECURITIES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. RELIANCE ON AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO PROVIDE
THE COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE SATISFACTORY TO THE COMPANY. THE SECURITIES HAVE NOT
BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THE MEMORANDUM OR THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL;

 

The Purchaser acknowledges
that the Company was, until September 21, 2011, a “shell company” as defined in Rule 12b-2 under the U.S. Securities
Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to Rule 144(i), securities issued by a current or former
shell company (that is, the securities included in the Units) that otherwise meet the holding period and other requirements of
Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the Company (a) is no longer a shell company;
and (b) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer
a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by Section
13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was
required to file such reports and materials), other than Current Reports on Form 8-K reports. As a result, the restrictive legends
on certificates for the securities included in the Units cannot be removed except in connection with an actual sale meeting the
foregoing requirements or pursuant to an effective registration statement. The Company included current “Form 10 information”
reflecting that it was no longer a shell company in its Current Report on Form 8-K, as amended, which was initially filed with
the SEC on September 27, 2011.

 

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(z)In making an
investment decision investors must rely on their own examination of the Company and the terms of the Offering, including the merits
and risks involved. The Purchaser should be aware that it will be required to bear the financial risks of this investment for an
indefinite period of time;

 

(aa)(For ERISA
plans only).  The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed
of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification
of plan assets and impose other fiduciary responsibilities. The Purchaser fiduciary or Plan (a) is responsible for the decision
to invest in the Company; (b) is independent of the Company or any of its affiliates; (c) is qualified to make such investment
decision; and (d) in making such decision, the Purchaser fiduciary or Plan has not relied primarily on any advice or recommendation
of the Company or any of its affiliates;

 

(bb)The Purchaser
should check the Office of Foreign Assets Control (“OFAC”) website at <http://www.treas.gov/ofac> before making
the following representations. The Purchaser represents that the amounts invested by it in the Company in the Offering were
not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit,
among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories,
entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website
at <http://www.treas.gov/ofac>. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit
dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear
on the OFAC lists;

 

(cc)To the best
of the Purchaser’s knowledge, none of: (1) the Purchaser; (2) any person controlling or controlled by the Purchaser; (3)
if the Purchaser is a privately-held entity, any person having a beneficial interest in the Purchaser; or (4) any person for whom
the Purchaser is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named
on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any
amounts from a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph.
The Purchaser agrees to promptly notify the Company and the Placement Agent should the Purchaser become aware of any change in
the information set forth in these representations. The Purchaser understands and acknowledges that, by law, the Company may be
obligated to “freeze the account” of the Purchaser, either by prohibiting additional subscriptions from the Purchaser,
declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and
the Placement Agent may also be required to report such action and to disclose the Purchaser’s identity to OFAC. The Purchaser
further acknowledges that the Company may, by written notice to the Purchaser, suspend the redemption rights, if any, of the Purchaser
if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company
and the Placement Agent or any of the Company’s other service providers. These individuals include specially designated nationals,
specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs;

 

 

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

 

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(dd)To the best
of the Purchaser’s knowledge, none of: (1) the Purchaser; (2) any person controlling or controlled by the Purchaser; (3)
if the Purchaser is a privately-held entity, any person having a beneficial interest in the Purchaser; or (4) any person for whom
the Purchaser is acting as agent or nominee in connection with this investment is a senior foreign political figure2,
or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms
are defined in the footnotes below; and

 

(ee)If the Purchaser
is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Purchaser receives deposits from, makes
payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Purchaser represents and warrants
to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the
Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking
activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking
activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

 

(ff)The Purchaser
acknowledges that Adam S. Gottbetter is the owner of Gottbetter Capital Group, Inc., Gottbetter & Partners, LLP (“G&P”)
and Gottbetter Capital Markets, LLC (collectively, the “G&P Entities”). Gottbetter Capital Group, Inc. and/or its
affiliates may from time to time own shares of the Company. G&P is the corporate and securities counsel to the Company and
receives legal fees in accordance with an executed retainer agreement between the Company and G&P. Gottbetter Capital Markets,
LLC is the placement agent for this Offering, for which it will receive placement agent fees in accordance with the executed Placement
Agency Agreement.

 

 

2 A
“senior foreign political figure” is defined as a senior official in the executive, legislative, administrative,
military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign
political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign
political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a
senior foreign political figure.

 

3
“Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse,
children and in-laws.

 

4 A “close associate” of
a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with
the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international
financial transactions on behalf of the senior foreign political figure.

 

    	10

    	 

    

 

(gg)The Purchaser
acknowledges that the net proceeds from the Offering will be used by the Company as general working capital.

 

8.Representations
and Warranties of the Company. Except as previously disclosed herein or in the Company’s SEC Filings (as defined
below), the Company represents and warrants to each of the Purchasers that:

 

(a)          The
Company is a corporation duly organized and validly existing in good standing under the laws of the State of Nevada, and has the
requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified
as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted
by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would
not have a Material Adverse Effect, as defined below. Except as set forth on Schedule 8(a), the Company has no subsidiaries.

 

(b)          (i) The
Company has the requisite corporate power and authority to enter into and perform this Subscription Agreement and the Escrow Agreement
and all other documents necessary or desirable to effect the transactions contemplated hereby (collectively the “Transaction
Documents”) to which it is a party and to issue the shares of Common Stock comprising the Units (the “Shares”),
the Investor Warrants and the Warrant Shares, if any (the Shares, the Investor Warrants and the Warrant Shares are collectively
referred to herein as the “Securities”), in accordance with the terms hereof and thereof, (ii) the execution and delivery
of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Securities have been duly authorized by the Company’s Board of Directors (the “Board
of Directors”) and no further consent or authorization is required by the Company, the Board of Directors or the Company’s
stockholders, (iii) the Transaction Documents will be duly executed and delivered by the Company, (iv) the Transaction Documents
when executed will constitute the valid and binding obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.

 

(c)          The
authorized and outstanding capital stock of the Company is described on Schedule 8(c) attached hereto. Except as set forth on Schedule
8(c) or as contemplated by the Transaction Documents, there are no subscriptions, convertible securities, options, warrants or
other rights (contingent or otherwise) currently outstanding to purchase any of the authorized but unissued capital stock of the
Company. Except as set forth in Schedule 8(c) or as contemplated by the Transaction Documents, the Company has no obligation to
issue shares of its capital stock, or subscriptions, convertible securities, options, warrants, or other rights (contingent or
otherwise) to purchase any shares of its capital stock or to distribute to holders of any of its equity securities, any evidence
of indebtedness or asset. No shares of the Company’s capital stock are subject to a right of withdrawal or a right of rescission
under any applicable securities law. Except as set forth in Schedule 8(c), there are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Company. To the knowledge of the Company, except as described in Schedule 8(c)
or otherwise contemplated by this Subscription Agreement, there are no agreements to which the Company is a party or by which it
is bound with respect to the voting (including without limitation voting trusts or proxies), registration under any applicable
securities laws, or sale or transfer (including without limitation agreements relating to pre-emptive rights, rights of first refusal,
co-sale rights or “drag-along” rights) of any securities of the Company. Except as provided in Schedule 8(c), to the
knowledge of the Company, there are no agreements among other parties, to which the Company is not a party and by which it is not
bound, with respect to the voting (including without limitation voting trusts or proxies) or sale or transfer (including without
limitation agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any securities
of the Company.

 

    	11

    	 

    

 

(d)          
The Units, the Shares, the Investor Warrants and the Warrant Shares are duly authorized and, upon issuance in accordance with the
terms hereof, shall be duly issued, fully paid and nonassessable, are free from all taxes, liens and charges with respect to the
issue thereof.

 

(e)          The
execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Articles of Incorporation of the Company (the “Articles of
Incorporation”), any certificate of designations of any outstanding series of preferred stock of the Company or the By-Laws
of the Company (the “By-Laws”) or (ii) violate or conflict with, or result in a breach of any provision of, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party,
or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the Company is bound or affected except for those which
could not reasonably be expected to have a material adverse effect on the assets, business, condition (financial or otherwise),
results of operations or future prospects of the Company (a “Material Adverse Effect”). Except those which could not
reasonably be expected to have a Material Adverse Effect, the Company is not in violation of any term of or in default under its
Articles of Incorporation or By-Laws. Except those which could not reasonably be expected to have a Material Adverse Effect, the
Company is not in violation of any term of or in default under any material contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company. The business of the Company
is not being conducted, and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental
entity, except to the extent it could reasonably be expected not to have a Material Adverse Effect. Except as specifically contemplated
by this Subscription Agreement and as required under the Securities Act and any applicable state securities laws, the Company is
not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Subscription Agreement
or the Escrow Agreement in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date
hereof. The Company is unaware of any facts or circumstance, which might give rise to any of the foregoing.

 

(f)          Since
September 27, 2011, the Company has filed (and, except for certain Current Reports on Form 8-K), has timely filed (subject to 12b-25
filings with respect to certain periodic filings) all reports, schedules, forms, statements and other documents required to be
filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing and all other documents
filed with the SEC prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to herein as the “SEC Filings”). The SEC Filings
are available to the Purchasers via the SEC’s EDGAR system. As of their respective dates, the SEC Filings complied in all
material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and
none of the SEC Filings, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As of their respective dates, the audited financial statements of the Company included
in the Company’s SEC Filings for the fiscal years ended December 31, 2011 and December 31, 2010, and the subsequent unaudited
interim financial statements included in the Company’s SEC Filings (collectively, the “Financial Statements”)
complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements were prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such Financial Statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements), and fairly present in all material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). As of the date hereof, there are no outstanding or unresolved comments in comment letters received
from the staff of the SEC with respect to any of the SEC Filings. No other information provided by or on behalf of the Company
to the Purchaser including, without limitation, information referred to in this Subscription Agreement, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

    	12

    	 

    

 

(g)          There
is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending against or affecting the Company, wherein an unfavorable decision, ruling or finding would (i) adversely
affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Subscription
Agreement or any of the documents contemplated herein, or (ii) have a Material Adverse Effect.

 

(h)          The
Company acknowledges and agrees that each Purchaser is acting solely in the capacity of an arm’s length purchaser with respect
to this Subscription Agreement and the transactions contemplated hereby. The Company further acknowledges that each Purchaser is
not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Subscription Agreement
and the transactions contemplated hereby and any advice given by such Purchaser or any of their respective representatives or agents
in connection with this Subscription Agreement and the transactions contemplated hereby is merely incidental to such Purchaser’s
purchase of the Securities. The Company further represents to the Purchasers that the Company’s decision to enter into this
Subscription Agreement has been based solely on the independent evaluation by the Company and its representatives.

 

(i)          Neither
the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with the offer or sale of any of the Securities.

 

(j)          Neither
the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the
Securities under the Securities Act or cause this offering of the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act.

 

(k)         The
Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened. None of the
Company’s employees is a member of a union, and the Company believes that its relations with its one employee are good.

 

    	13

    	 

    

 

(l)          The
Company has no proprietary intellectual property. The Company has not received any notice of infringement of, or conflict with,
the asserted rights of others with respect to any intellectual property that it utilizes.

 

(m)        Environmental
Laws. (i) The Company has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental
Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.
There is no pending or, to the knowledge of the Company, threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving
the Company, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information
requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.
For purposes of this Subscription Agreement, “Environmental Law” means any federal, state or local law, statute, rule
or regulation or the common law relating to the environment or occupational health and safety, including without limitation any
statute, regulation, administrative decision or order pertaining to (A) treatment, storage, disposal, generation and transportation
of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (B) air, water and noise pollution; (C)
groundwater and soil contamination; (D) the release or threatened release into the environment of industrial, toxic or hazardous
materials or substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes
or dumping of pollutants, contaminants or chemicals; (E) the protection of wild life, marine life and wetlands, including without
limitation all endangered and threatened species; (F) storage tanks, vessels, containers, abandoned or discarded barrels, and other
closed receptacles; (G) health and safety of employees and other persons; and (H) manufacturing, processing, using, distributing,
treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic
or hazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used above, the terms “release”
and “environment” shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (“CERCLA”).

 

(ii)         To
the knowledge of the Company there is no material environmental liability with respect to any solid or hazardous waste transporter
or treatment, storage or disposal facility that has been used by the Company.

 

(iii)        Except
to the extent it could reasonably be expected not to have a Material Adverse Effect, the Company (A) has received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct its business and (B) is in compliance
with all terms and conditions of any such permit, license or approval.

 

(n)          The
Company does not own any real property. Except as set forth on Schedule 8(n), the Company has good and marketable title to all
of its personal property and assets free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance which would have a Company Material Adverse Effect. Except as set forth on Schedule
8(n), with respect to properties and assets it leases, the Company is in material compliance with such leases and holds a valid
leasehold interest free of any liens, claims or encumbrances which would have a Material Adverse Effect.

 

(o)          The
Company is not subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect.

 

    	14

    	 

    

 

(p)          Except
as set forth in Schedule 8(p), the Company has made and filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company has set aside
on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, and
has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. Except as set forth in Schedule 8(p), there are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction and the officers of the Company know of no basis for any such
claim.

 

(q)          Except
as set forth in Schedule 8(q) and except for arm’s length transactions pursuant to which the Company makes payments in the
ordinary course of business upon terms no less favorable than the Company could obtain from third parties, none of the officers,
directors, or employees of the Company is presently a party to any transaction with the Company (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

(r)          The
Company is not obligated to offer the securities offered hereunder on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former stockholders of the Company, underwriters, brokers, agents or other third
parties.

 

(s)          The
Company acknowledges that the Purchasers are relying on the representations and warranties made by the Company hereunder and in
the Company’s SEC Filings and that such representations and warranties are a material inducement to the Purchasers purchasing
the Units. The Company further acknowledges that without such representations and warranties of the Company made hereunder, the
Purchasers would not enter into this Subscription Agreement.

 

(t)          
The Company does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect
to the transactions contemplated by this Subscription Agreement, except for applicable brokerage and consulting fees.

 

9.Indemnification.  The
Purchaser agrees to indemnify and hold harmless the Company, the Placement Agent, and their respective officers, directors, employees,
agents, control persons and affiliates from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever
(including, but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced
or threatened) based upon or arising out of any actual or alleged false acknowledgment, representation or warranty, or misrepresentation
or omission to state a material fact, or breach by the Purchaser of any covenant or agreement made by the Purchaser herein or in
any other document delivered in connection with this Subscription Agreement.

 

10.Irrevocability; Binding Effect.  The
Purchaser hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Purchaser, except as required by
applicable law, and that this Subscription Agreement shall survive the death or disability of the Purchaser and shall be binding
upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and
permitted assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder shall be joint and several
and the agreements, representations, warranties, and acknowledgments herein shall be deemed to be made by and be binding upon each
such person and such person’s heirs, executors, administrators, successors, legal representatives, and permitted assigns.

 

    	15

    	 

    

 

11.Modification.  This
Subscription Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom any
such modification or waiver is sought.

 

12.Notices.  Any notice
or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be given (a) if to the Company, at 2365 Iron Point
Road, Suite 190, Folsom, CA 95630, Attn: Guy A. Archbold, CEO, with a copy to Gottbetter & Partners, LLP, 488 Madison Avenue,
12th Floor, New York, NY 10022, Attn: Scott E. Rapfogel, Esq., or (b) if to the Purchaser, at the address set forth
on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance
with the provisions of this Section 12). Any notice or other communication given by certified mail shall be deemed given at the
time of certification thereof, except for a notice changing a party’s address which shall be deemed given at the time of
receipt thereof.

 

13.Assignability.  This
Subscription Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser
and the transfer or assignment of the shares of Common Stock or the Investor Warrants shall be made only in accordance with all
applicable laws.

 

14.Applicable Law.  This
Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts
to be wholly performed within said State.

 

15.Arbitration/Mediation. The
parties agree to submit all controversies to arbitration in accordance with the provisions set forth below and understand that:

 

THE
PARTIES HERETO AGREE TO SUBMIT ALL CONTROVERSIES TO the exclusive jurisdiction of finra ARBITRATION IN ACCORDANCE WITH THE PROVISIONS
SET FORTH BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES, (B) THE PARTIES ARE WAIVING THEIR RIGHTS
TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND DIFFERENT
FROM COURT PROCEEDINGS, (D) THE ARBITRATOR’S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY
PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E) THE PANEL OF FINRA ARBITRATORS
WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL CONTROVERSIES
WHICH MAY ARISE BETWEEN THE PARTIES CONCERNING THIS SUBSCRIPTION AGREEMENT SHALL BE DETERMINED BY ARBITRATION PURSUANT TO THE RULES
THEN PERTAINING TO FINRA. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS SUBSCRIPTION
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEw york. JUDGMENT ON ANY
AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME COURT OF THE STATE OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION
OVER THE PERSON OR PERSONS AGAINST WHOM SUCH AWARD IS RENDERED. THE PARTIES AGREE THAT THE DETERMINATION OF THE ARBITRATORS SHALL
BE BINDING AND CONCLUSIVE UPON THEM. THE PREVAILING PARTY, AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE ENTITLED
TO COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE ATTORNEY’S FEES FROM THE OTHER PARTY. 
PRIOR TO FILING AN ARBITRATION, THE PARTIES HEREBY AGREE THAT THEY WILL ATTEMPT TO RESOLVE THEIR DIFFERENCES FIRST BY SUBMITTING
THE MATTER FOR RESOLUTION TO A MEDIATOR, ACCEPTABLE TO ALL PARTIES, AND WHOSE EXPENSES WILL BE BORNE EQUALLY BY ALL PARTIES. THE
MEDIATION WILL BE HELD IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, ON AN EXPEDITED BASIS. IF THE PARTIES CANNOT SUCCESSFULLY
RESOLVE THEIR DIFFERENCES THROUGH MEDIATION, THE MATTER WILL BE RESOLVED BY ARBITRATION. THE ARBITRATION SHALL TAKE PLACE IN THE
COUNTY OF NEW YORK, THE STATE OF NEW YORK, ON AN EXPEDITED BASIS. 

 

    	16

    	 

    

 

16.Blue Sky Qualification.  The
purchase of Units under this Subscription Agreement is expressly conditioned upon the exemption from qualification of the offer
and sale of the Units from applicable federal and state securities laws. The Company shall not be required to qualify this transaction
under the securities laws of any jurisdiction and, should qualification be necessary, the Company shall be released from any and
all obligations to maintain its offer, and may rescind any sale contracted, in the jurisdiction.

 

17.Use of Pronouns.  All
pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.

 

18.Piggyback Registration Rights.  If
the Company at any time proposes to register any of its securities under the Securities Act for sale to the public, whether for
its own account or for the account of other security holders or both, except with respect to registration statements on Form S-4,
S-8 or another form not available for registering (i) shares of Common Stock included in the Units and (ii) the Investor Warrant
Shares (collectively, the “Registrable Securities”) for sale to the public, provided the Registrable Securities are
not otherwise registered for resale by the Purchasers pursuant to an effective registration statement, each such time it will give
at least ten (10) days’ prior written notice to each record holder of Registrable Securities of its intention so to do. Upon
the written request of the holder, received by the Company within ten (10) days after the giving of any such notice by the Company,
to register any of the Registrable Securities not previously registered, the Company will cause such Registrable Securities as
to which registration shall have been so requested to be included with the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent required to permit the sale or other disposition of the Registrable Securities
so registered by the holder of such Registrable Securities; provided that the holder provides the Company in writing with such
information regarding the holder and such holder’s securities ownership as the Company may reasonably request in connection
with preparing a registration statement. In the event that any registration pursuant to this Section 18 shall be, in whole or in
part, an underwritten public offering of Common Stock of the Company, the number of shares of Registrable Securities to be included
in such an underwriting may be reduced by the managing underwriter if and to the extent that the Company and the underwriter shall
reasonably be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that the Company shall notify the holder in writing of any such reduction. Notwithstanding anything
to the contrary herein, the Company may withdraw or delay or suffer a delay of any registration statement referred to in this Section
18 without thereby incurring any liability to the holders. Further, the foregoing piggyback registration rights shall not apply
to any Registrable Securities that may be sold under the Securities Act without volume limitations either pursuant to Rule 144
of the Securities Act or otherwise during any ninety (90) day period.

 

    	17

    	 

    

 

19.Confidentiality.  The
Purchaser acknowledges and agrees that any information or data the Purchaser has acquired from or about the Company, not otherwise
properly in the public domain, was received in confidence. The Purchaser agrees not to divulge, communicate or disclose, except
as may be required by law or for the performance of this Subscription Agreement, or use to the detriment of the Company or for
the benefit of any other person or persons, or misuse in any way, any confidential information of the Company, including any scientific,
technical, trade or business secrets of the Company and any scientific, technical, trade or business materials that are treated
by the Company as confidential or proprietary, including, but not limited to, ideas, discoveries, inventions, developments and
improvements belonging to the Company and confidential information obtained by or given to the Company about or belonging to third
parties.

 

20.Miscellaneous.

 

(a)This Subscription
Agreement, together with the attached Exhibits constitute the entire agreement between the Purchaser and the Company with respect
to the subject matter hereof and supersede all prior oral or written agreements and understandings, if any, relating to the subject
matter hereof. The terms and provisions of this Subscription Agreement may be waived, or consent for the departure therefrom granted,
only by a written document executed by the party entitled to the benefits of such terms or provisions.

 

(b)The representations
and warranties of the Company and the Purchaser made in this Subscription Agreement shall survive the execution and delivery hereof
and delivery of the shares of Common Stock and Investor Warrants contained in the Units.

 

(c)Each of the
parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.

 

(a)This Subscription
Agreement may be executed in one or more counterparts each of which may be executed by less than all of the parties and shall be
deemed an original, but all of which shall together constitute one and the same instrument, enforceable against the parties actually
executing such counterparts. The exchange of copies of the Subscription Agreement and of signature pages by facsimile transmission
or in pdf format shall constitute effective execution and delivery of this Subscription Agreement as to the parties and may be
used in lieu of the original Subscription Agreement for all purposes. Signatures of the parties transmitted by facsimile or in
pdf format shall be deemed to be their original signatures for all purposes.

 

    	18

    	 

    

 

(b)Each provision
of this Subscription Agreement shall be considered separable and, if for any reason any provision or provisions hereof are determined
to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remaining
portions of this Subscription Agreement.

 

(c)Paragraph titles
are for descriptive purposes only and shall not control or alter the meaning of this Subscription Agreement as set forth in the
text.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

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To subscribe for Units in the private
offering of Rackwise, Inc.:

 

		1.	Date and Fill in the number of Units being purchased and Complete and Sign the Signature
Page of the Subscription Agreement.

 

		2.	Complete and Sign the Anti-Money Laundering Information Form.

 

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

 

		4.	Complete and Sign the Investor Profile.

 

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

 

Gottbetter & Partners, LLP

488 Madison Avenue, 12th
Floor

New York, NY 10022

Facsimile Number: 212.400.6901

Telephone Number: 212.400.6900

Attention: Kathleen Rush

Email: klr@gottbetter.com

 

		6.	If you are paying the Purchase Price by check, a check for the exact dollar amount of the
Purchase Price for the number of Units you are offering to purchase should be made payable to the order of “CSC Trust Company
of Delaware, as Escrow Agent for Rackwise, Inc.” and should be sent to CSC Trust Company of Delaware, Little Falls Centre
One, 2711 Centerville Road, Wilmington, DE 19808, Attention: Alan R. Halpern.

 

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

 

	 	Bank Name:	PNC Bank
	 		300 Delaware Avenue
	 		Wilmington, DE 19899
	 	ABA Routing Number:	031100089
	 	Account Name:	CSC Trust Company of Delaware
	 	Account Number:	5605012373
	 	Reference:	Rackwise, Inc.; 79-1782; [insert Purchaser’s name]
	 	Escrow Agent Contact:	Alan R. Halpern

 

    	20

    	 

    

 

RACKWISE, INC.

SIGNATURE PAGE TO THE

SUBSCRIPTION AGREEMENT

 

Purchaser hereby elects to subscribe
under the Subscription Agreement for a total of __________ ($__________) at a price of $0.15 per Unit (NOTE: to be completed by
Purchaser) and executes the Subscription Agreement.

 

Date (NOTE: To be completed by Purchaser):
__________________

 

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

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

 

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

	 	 	 
	 	 	 
	Name of Partnership, Corporation, Limited Liability Company or Trust	 	Federal Taxpayer Identification Number
	 	 	 
	By:	 	 	 
	
        Name:

        Title:
	 	State of Organization
	 	 	 
	Date	 	Address
	 	 	 
	
        RACKWISE, INC.

        a Nevada corporation

         
	 	 
	 	 	 
	By:	 	 	 	 
	Authorized Officer	 	 
	 	 	 

 

    	21

    	 

    

 

ANTI MONEY LAUNDERING REQUIREMENTS

 

The USA PATRIOT Act

 

The USA PATRIOT Act is designed to detect,
deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage
firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money
laundering programs.

 

To help you understand these efforts, we
want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.

 

What is money laundering?

 

Money laundering is the process of disguising
illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection
with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

 

How big is the problem and why is it
important?

 

The use of the U.S. financial system by
criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department,
one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.

 

What are we required to do to eliminate
money laundering?

 

Under rules required by the USA PATRIOT
Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent
audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws.
As part of our required program, we may ask you to provide various identification documents or other information. Until you provide
the information or documents we need, we may not be able to effect any transactions for you.

 

    	22

    	 

    

 

 

MEMBER: FINRA, SIPC

 

ANTI-MONEY LAUNDERING INFORMATION FORM

The following is required in accordance
with the AML provision of the USA PATRIOT ACT.

(Please fill out and return with requested
documentation.)

 

	INVESTOR NAME:	________________________________________________
	 	 
	LEGAL ADDRESS:	________________________________________________
	 	 
	 	________________________________________________
	SSN# or TAX ID#	 
	OF INVESTOR:	________________________________________________
	 	 
	FOR INVESTORS WHO ARE INDIVIDUALS: 
	 	 

	YEARLY INCOME:  _________________	AGE:  _________
	 	 

	NET WORTH (excluding value of primary residence):  ____________________
	 	 
	OCCUPATION:   ___________________________________________________
	 	 
	ADDRESS OF EMPLOYER: __________________________________________
	 	 
	    __________________________________________
	 	 
	INVESTMENT OBJECTIVE(S):   ______________________________________

 

IDENTIFICATION & DOCUMENTATION
AND SOURCE OF FUNDS:

 

		1.	Please submit a copy of non-expired identification for the authorized signatory(ies) on the investment
documents, showing name, date of birth, address and signature. The address shown on the identification document MUST match the
Investor’s address shown on the Investor Signature Page.

 

	Current Driver’s License	or	Valid Passport	or	Identity Card

(Circle one or more)

 

		2.	If the Investor is a corporation, limited liability company, trust or other type of entity, please
submit the following requisite documents: (i) Articles of Incorporation, By-Laws, Certificate of Formation, Operating Agreement,
Trust or other similar documents for the type of entity; and (ii) Corporate Resolution or power of attorney or other similar document
granting authority to signatory(ies) and designating that they are permitted to make the proposed investment.

 

		3.	Please advise where the funds were derived from to make the proposed investment:

 

	Investments	Savings	Proceeds of Sale	Other ____________

(Circle one or more)

 

Signature:  _________________________________

 

Print Name:  _______________________________

 

Title (if applicable):  _________________________

 

Date:  ____________________________________

 

 

488 Madison Ave., 12th Fl., New
York, NY 10022-5718

T 212.400.6990              F 212.400.6999

 

    	23

    	 

    

 

RACKWISE, INC.

ACCREDITED INVESTOR CERTIFICATION

 

	 	 	 	 	
        For Individual Investors Only

        (all Individual Investors must INITIAL
        where appropriate):

	 	 	 	 	 
	Initial	 	______	 	I have a net worth (including homes, furnishings and automobiles, but excluding for these purposes the value of my primary residence) in excess of $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse.
	 	 	 	 	 
	Initial	 	______	 	I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
	 	 	 	 	 
	Initial	 	______	 	I am a director or executive officer of Rackwise, Inc.
	 	 	 	 	 
	 	 	 	 	
        For Non-Individual Investors

        (all Non-Individual Investors must INITIAL
        where appropriate):

	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this Agreement.
	 	 	 	 	 
	Initial	 	______	 	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
	 	 	 	 	 
	Initial	 	______	 	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
	 	 	 	 	 
	Initial	 	______	 	The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act of 1933, as amended, or a registered investment company.

 

    	24

    	 

    

 

	 	 	 	 	
        For Non-U.S.
        Person Investors

        (all Investors who are not a U.S. Person
        must INITIAL this section):

	 	 	 	 	 
	Initial	 	______	 	
        The investor
        is not a “U.S. Person” as defined in Regulation S; and specifically the investor is not:

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        And, in
        addition:

         

        I.the
        investor was not offered the securities in the United States;

         

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

         

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

 

    	25

    	 

    

 

RACKWISE, INC.

Investor Profile

(Must be completed by Investor)

 

Section A - Personal Investor Information

 

	Investor Name(s):	 
	Individual executing Profile or Trustee:	 
	Social Security Numbers / Federal I.D. Number:	 
	Date of Birth:	 	 	 	Marital Status:	 	 
	Joint Party Date of Birth:	 	 	 	Investment Experience (Years):	 	 
	Annual Income:	 	 	 	Liquid Net Worth:	 	 
	Net Worth (excluding value of primary residence):	 
	Tax Bracket:	 	 	15% or below	 	 	25% - 27.5%	 	 	Over 27.5%
	 	 
	Home Street Address:	 
	Home City, State & Zip Code:	 
	Home Phone:	 	Home Fax:	 	Home Email:	 
	Employer:	 
	Employer Street Address:	 
	Employer City, State & Zip Code:	 
	Bus. Phone:	 	Bus. Fax:	 	Bus. Email:	 
	Type of Business:	 
	(PLACEMENT AGENT) Account Executive / Outside Broker/Dealer:
	 
	If you are a United States citizen, please list the number and jurisdiction of issuance of any other government-issued document evidencing residence and bearing a photograph or similar safeguard (such as a driver’s license or passport), and provide a photocopy of each of the documents you have listed.
	 
	If you are NOT a United States citizen, for each jurisdiction of which you are a citizen or in which you work or reside, please list (i) your passport number and country of issuance or (ii) alien identification card number AND (iii) number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard, and provide a photocopy of each of these documents you have listed.  These photocopies must be certified by a lawyer as to authenticity.  
	 
	 
	Section B – Certificate Delivery Instructions
	 
	 	 	Please deliver certificate to the Employer Address listed in Section A.
	 	 	Please deliver certificate to the Home Address listed in Section A.
	 	 	Please deliver certificate to the following address:	 
	 
	Section C – Form of Payment – Check or Wire Transfer
	 
	 	 	Check payable to CSC Trust Company of Delaware , as Escrow Agent for Rackwise, Inc.
	 	 	Wire funds from my outside account according to the “How to subscribe for Units” Page.
	 	 	The funds for this investment are rolled over, tax deferred from __________ within the allowed 60 day window.
	 
	Please check if you are a FINRA member or affiliate of a FINRA member firm: ________
	
         

         

	 	 	 
	Investor Signature	 	Date
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

    	26

    	 

    

 

EXHIBIT A

 

Form of Investor Warrant

 

[See Exhibit 4.10]

 

    	27

    	 

    

 

EXHIBIT B

 

Escrow Agreement

 

[See Exhibit 10.25]

 

    	28Exhibit 10.27

 

 

 

PLACEMENT AGENCY AGREEMENT

 

 

September 1, 2012

 

Gottbetter Capital Markets, LLC

Mr. Julio A. Marquez, President

488 Madison Avenue

12th Floor

New York, New York 10022

 

Re:RACKWISE, INC.

 

Dear Mr. Marquez:

 

This Placement Agency
Agreement (this “Agreement”) sets forth the terms upon which Gottbetter Capital Markets, LLC, a registered broker-dealer
and member of the Financial Industry Regulatory Authority (“FINRA”), (hereinafter referred to as the “Placement
Agent” or “Markets”), shall be engaged by Rackwise, Inc., a publicly traded Nevada corporation, (hereinafter
referred to as the “Company”), to act as a non-exclusive Placement Agent in connection with the private placement
(the “Offering”) of the units (the “Units”) of securities of the Company.

 

The Offering of the
Units will be made by the Placement Agent and certain selected dealers, with each Unit consisting of one (1) share of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”), and a redeemable warrant to purchase one share (1)
share of Common Stock at an exercise price of $0.30 per full share for five (5) years (the “Investor Warrants”). The
Offering Price per Unit will be equal to the lesser of (i) Twenty Cents ($0.20) and (ii) 5-day VWAP immediately prior to the applicable
closing date. The Offering will consist of a maximum of Twenty Five Million (25,000,000) Units (the “Maximum Amount”).
In the event the Offering is oversubscribed, the Company may sell up to an additional Five Million (5,000,000) Units (the “Over-allotment
Option”). The Investor Warrants shall have “weighted average” anti-dilution protection, subject to customary
exceptions, as per the terms set forth therein.

 

If the investor elects
to participate in the Proposed Offering for at least 50% of the funds such investor has invested in the Company since September
21, 2011, the Company, at its sole discretion, will agree to reduce the exercise price of such investor’s warrants previously
issued by the Company as part of such investment to $0.30 (the “New Warrant Exercise Price”).

 

The Placement Agent
shall accept subscriptions only from (i) persons or entities who qualify as “accredited investors,” as such term is
defined in Rule 501 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission
(the “SEC”) under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and (ii) persons or
entities who are offered and purchase the Units in an Offshore Transaction (as such term is defined in Regulation S (“Regulation
S”) as promulgated by the SEC under the Act) and who are not U.S. Persons (as such term is defined in Regulation S) and are
not acting for the account or benefit of a person in the United States or a U.S. Person. The Units will be offered until the earlier
of the time that all Units offered in the Offering are sold or until December 30, 2012 (the “Initial Offering Period”),
which date may be extended by the Company in writing (this additional period and the Initial Offering Period shall be referred
to as the “Offering Period”). The date on which the Offering is terminated shall be referred to as the “Termination
Date.”

 

With respect to the
Offering, the Company shall provide the Placement Agent, on terms set forth herein, the right to offer and sell all of the available
Units being offered during the Offering Period (subject to prior sale of some of the Units). It is understood that no sale shall
be regarded as effective unless and until accepted by the Company. The Company may, in its sole discretion, accept or reject, in
whole or in part, any prospective investment in the Units or allot to any prospective subscriber less than the number of Units
that such subscriber desires to purchase. Purchases of Units may be made by the Placement Agent and its officers, directors, employees
and affiliates and by the officers, directors, employees and affiliates of the Company for the Offering.

 

    	 

    	 

    

 

The Offering will be
made by the Company pursuant to the Subscription Agreement and the Exhibits attached thereto (the “Subscription Agreement”),
including, but not limited to, the form of the Investor Warrants, and any documents, agreements, supplements and additions thereto
(collectively, the “Subscription Documents”), which at all times will be in form and substance reasonably acceptable
to the Company and the Placement Agent and their respective counsel and contain such legends and other information as the Company
and the Placement Agent and their respective counsel, may, from time to time, deem necessary and desirable to be set forth therein.

 

1.Appointment
of Placement Agent. On the basis of the written and documented representations and warranties of the Company provided herein,
and subject to the terms and conditions set forth herein, the Placement Agent is appointed as a non-exclusive Placement
Agent of the Company during the Offering Period to assist the Company in finding qualified subscribers for the Offering. The Placement
Agent may sell Units through other broker-dealers who are FINRA members and may reallow all or a portion of the Brokers’
Fees (as defined in Section 3(a) below) it receives to such other broker-dealers or pay a finders or consultant fee as allowed
by applicable law. On the basis of such representations and warranties and subject to such terms and conditions, the Placement
Agent hereby accepts such appointment and agrees to perform its services hereunder diligently and in good faith and in a professional
and businesslike manner and in compliance with applicable law and to use its best efforts to assist the Company in (A) finding
subscribers of Units who either (i) qualify as “accredited investors,” as such term is defined in Rule 501 of Regulation
D, or (ii) are offered and purchase the Units outside the United States in an Offshore Transaction (as such term is defined in
Regulation S) and who are not U.S. Persons (as such term is defined in Regulation S) and are not acting for the account or benefit
of a person in the United States or a U.S. Person and (B) completing the Offering. The Placement Agent has no obligation to purchase
any of the Units. Unless sooner terminated in accordance with this Agreement, the engagement of the Placement Agent hereunder shall
continue until the later of the Termination Date or the Final Closing (as defined below).

 

2.Representations,
Warranties and Covenants.

 

A.Representations,
Warranties and Covenants of the Company. Except as previously disclosed herein or in the Company’s SEC Filings, the representations
and warranties of the Company contained in this Section 2A are true and correct as of the date of execution of this Agreement by
the Company and the Company covenants as follows, as applicable:

 

(a) The Subscription
Documents have been and/or will be prepared by the Company, in conformity with all applicable laws, and in compliance with Regulation
D, Regulation S and/or Section 4(2) of the Act and the requirements of all other rules and regulations (the “Regulations”)
of the SEC relating to offerings of the type contemplated by the Offering, and the applicable securities laws and the rules and
regulations of those jurisdictions wherein the Placement Agent notifies the Company that the Units are to be offered and sold excluding
any foreign jurisdictions. The Units will be offered and sold pursuant to the registration exemption provided by Regulation D,
Regulation S and/or Section 4(2) of the Act as a transaction not involving a public offering and the requirements of any other
applicable state securities laws and the respective rules and regulations thereunder in those United States jurisdictions in which
the Placement Agent notifies the Company that the Units are being offered for sale. None of the Company, its affiliates, or any
person acting on its or their behalf (other than the Placement Agent, its affiliates or any person acting on its behalf, in respect
of which no representation is made) has taken nor will it take any action that conflicts with the conditions and requirements of,
or that would make unavailable with respect to the Offering, the exemption(s) from registration available pursuant to Rule 506
of Regulation D, Rule 903 of Regulation S and/or Section 4(2) of the Act, or knows of any reason why any such exemption would be
otherwise unavailable to it (including, without limitation, any Directed Selling Efforts (as such term is defined in Regulation
S)). None of the Company, its predecessors or affiliates has been subject to any order, judgment or decree of any court of competent
jurisdiction temporarily, preliminarily or permanently enjoining such person for failing to comply with Section 503 of Regulation
D. The Company has not, for a period of six months prior to the commencement of the offering of Units, sold, offered for sale or
solicited any offer to buy any of its securities in a manner that would cause the exemption from registration set forth in Rule
506 of Regulation D to become unavailable with respect to the offer and sale of the Units pursuant to this Agreement in the United
States or to, by or for the benefit or account of, U.S. Persons, or would cause the exclusion from registration provided by Rule
903 of Regulation S to become unavailable for offers and sales of the Units pursuant to this Agreement outside the United States
to non-U.S. Persons.

 

    	2

    	 

    

 

(b) As to the Company,
the Subscription Documents, as prepared and completed by the Company, will not and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading: provided, however, the foregoing does not apply to any statements
or omissions made solely in reliance on and in conformity with written information furnished to the Company by the Placement Agent
specifically for use in the preparation thereof. To the knowledge of the Company, none of the statements, documents, certificates
or other items made, prepared or supplied by the Company with respect to the transactions contemplated hereby contains an untrue
statement of a material fact or omits to state a material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which they were made. There is no fact which the Company has not disclosed in the Subscription
Documents or which is not disclosed in the filings that the Company has made with the SEC on or after September 27 17, 2011 to
the date hereof (the “SEC Filings”) and of which the Company is aware that materially adversely affects or that could
reasonably be expected to have a material adverse effect on the (i) assets, liabilities, results of operations, condition (financial
or otherwise), business or business prospects of the Company or (ii) ability of the Company to perform its obligations under this
Agreement (“Company Material Adverse Effect”). Notwithstanding anything to the contrary herein, the Company makes no
representation or warranty with respect to any estimates, projections and other forecasts and plans (including the reasonableness
of the assumptions underlying such estimates, projections and other forecasts and plans) that may have been delivered to the Placement
Agent or its representatives, except that such estimates, projections and other forecasts and plans have been prepared in good
faith on the basis of assumptions stated therein, which assumptions were believed to be reasonable at the time of such preparation.

 

(c) The Company is
a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and is qualified and
in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by the Company or
the property owned or leased by the Company requires such qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a Company Material Adverse Effect. The Company has all requisite corporate power and authority
to conduct its business as presently conducted and as proposed to be conducted (as described in the Subscription Documents and/or
the SEC Filings), has all the necessary and requisite documents and approvals from all state authorities, has all requisite corporate
power and authority to enter into and perform its obligations under this Agreement, the Subscription Agreement and the other agreements
contemplated hereby (this Agreement, Subscription Agreement and the other agreements contemplated hereby that the Company is required
to execute and deliver are collectively referred to herein as the “Company Transaction Documents”) and subject
to necessary Board of Directors of the Company and Company stockholder approvals, to issue, sell and deliver the Units, the shares
of Common Stock underlying the Units, and the shares of Common Stock issuable upon exercise of the Investor Warrants (the “Warrant
Shares”) and to make the representations in this Agreement accurate and not misleading. Prior to the First Closing, as defined
herein, each of the Company Transaction Documents will have been duly authorized. This Agreement has been duly authorized, executed
and delivered and constitutes (when executed by all parties hereto), and each of the other Company Transaction Documents, upon
due execution and delivery, will constitute (when executed by all parties thereto), valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms (i) except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect related to laws affecting creditors’
rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers,
and except that no representation is made herein regarding the enforceability of the Company’s obligations to provide indemnification
and contribution remedies under the securities laws and (ii) subject to the limitations imposed by general equitable principles
(regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(d) None of the execution
and delivery of or performance by the Company under this Agreement or any of the other Company Transaction Documents or the consummation
of the transactions herein or therein contemplated conflicts with or violates, or will result in the creation or imposition of,
any lien, charge or other encumbrance upon any of the assets of the Company under any agreement or other instrument to which the
Company is a party or by which the Company or its assets may be bound, or any term of the Articles of Incorporation (the “Articles
of Incorporation”) or By-laws (the “By-laws”) of the Company, or any license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or any of its assets, except in the case of a conflict, violation, lien,
charge or other encumbrance (except with respect to the Articles of Incorporation or By-laws) which would not, or could not reasonably
be expected to, have a Company Material Adverse Effect.

 

    	3

    	 

    

 

(e) The Company’s
financial statements, together with the related notes, if any, included in the Company’s SEC Filings, present fairly, in
all material respects, the financial position of the Company as of the dates specified and the results of operations for the periods
covered thereby. Such financial statements and related notes were prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis throughout the periods indicated, except that the unaudited financial statements
omit full notes, and except for normal year end adjustments. During the period of engagement of the Company’s independent
certified public accountants, there have been no disagreements between the accounting firm and the Company on any matters of accounting
principles or practices, financial statement disclosure or auditing scope or procedures. The Company has made and kept books and
records and accounts which are in reasonable detail and which fairly and accurately reflect the activities of the Company in all
material respects, subject only to year-end adjustments. Except as set forth in such financial statements or otherwise disclosed
in the Subscription Documents, the Company’s senior management has no knowledge of any material liabilities of any kind,
whether accrued, absolute or contingent, or otherwise, and subsequent to the date of the Subscription Documents and prior to the
date of the First Closing it shall not enter into any material transactions or commitments without promptly thereafter notifying
the Placement Agent in writing of any such material transaction or commitment. The other financial and statistical information
with respect to the Company and any pro forma information and related notes included in the SEC Filings present fairly the information
shown therein on a basis consistent with the financial statements of the Company included in the SEC Filings. Except as disclosed
in the Subscription Documents, the Company does not know of any facts, circumstances or conditions which could materially adversely
affect its operations, earnings or prospects that have not been fully disclosed in the financial statements appearing in the SEC
Filings.

 

(f) Immediately prior
to the First Closing, the shares of Common Stock underlying the Units and the Investor Warrants will have been duly authorized
and, when issued and delivered against payment therefor as provided in the Company Transaction Documents, will be validly issued,
fully paid and nonassessable. No holder of any of the shares of Common Stock underlying the Units and the Investor Warrants will
be subject to personal liability solely by reason of being such a holder, and except as described in the Subscription Documents,
none of the shares of Common Stock underlying the Units and the Investor Warrants will be subject to preemptive or similar rights
of any stockholder or security holder of the Company or an adjustment under the antidilution or exercise rights of any holders
of any outstanding shares of capital stock, options, warrants or other rights to acquire any securities of the Company. 
Immediately prior to the First Closing, a sufficient number of authorized but unissued shares of Common Stock will have been reserved
for issuance upon the exercise of the Investor Warrants.

 

(g) Except as described
in the Subscription Documents and/or the Company’s SEC Filings, the Company has no subsidiaries and does not own any equity
interest and has not made any loans or advances to or guarantees of indebtedness to any person, corporation, partnership or other
entity. The conduct of business by the Company as presently and proposed to be conducted is not subject to continuing oversight,
supervision, regulation or examination by any governmental official or body of the United States, or any other jurisdiction wherein
the Company conducts or proposes to conduct such business, except as described in the Company’s SEC Filings and except as
such regulation is applicable to US public companies and commercial enterprises generally. The Company has obtained all material
licenses, permits and other governmental authorizations necessary to conduct its business as presently conducted. The Company has
not received any notice of any violation of, or noncompliance with, any federal, state, local or foreign laws, ordinances, regulations
and orders (including, without limitation, those relating to environmental protection, occupational safety and health, securities
laws, equal employment opportunity, consumer protection, credit reporting, “truth-in-lending”, and warranties and trade
practices) applicable to its business, the violation of, or noncompliance with, would have a Company Material Adverse Effect, and
the Company knows of no facts or set of circumstances which could give rise to such a notice.

 

(h) Except as described
in the Subscription Documents and/or the Company’s SEC Filings, no default by the Company or, to the knowledge of the Company,
any other party, exists in the due performance under any material agreement to which the Company is a party or to which any of
its assets is subject (collectively, the “Company Agreements”). The Company Agreements, if any, disclosed in the Subscription
Documents and/or the Company’s SEC Filings are the only material agreements to which the Company is bound or by which its
assets are subject, are accurately described in the Subscription Documents and/or the Company’s SEC Filings and are in full
force and effect in accordance with their respective terms, subject to any applicable bankruptcy, insolvency or other laws affecting
the rights of creditors generally and to general equitable principles and the availability of specific performance.

 

    	4

    	 

    

 

(i) Subsequent to the
respective dates as of which information is given in the Subscription Documents, the Company has operated its business in the ordinary
course and, except as may otherwise be set forth in the Subscription Documents or the Company’s SEC Filings, there has been
no: (i) Company Material Adverse Effect; (ii) material transaction otherwise than in the ordinary course of business consistent
with past practice; (iii) damage, loss or destruction, whether or not covered by insurance, with respect to any material asset
or property of the Company; or (iv) agreement to permit any of the foregoing.

 

(j) Except as set forth
in the Subscription Documents and/or the Company’s SEC Filings, there are no actions, suits, claims, hearings or proceedings
pending before any court or governmental authority or, to the knowledge of the Company, threatened, against the Company, or involving
its assets or any of its officers or directors (in their capacity as such) which, if determined adversely to the Company or such
officer or director, could reasonably be expected to have a Company Material Adverse Effect or adversely affect the transactions
contemplated by this Agreement or the enforceability hereof.

 

(k) The Company is
not: (i) in violation of its Articles of Incorporation or By-laws; (ii) in default of any contract, indenture, mortgage, deed of
trust, note, loan agreement, security agreement, lease, alliance agreement, joint venture agreement or other agreement, license,
permit, consent, approval or instrument to which the Company is a party or by which it is or may be bound or to which any of its
assets may be subject, the default of which could reasonably be expected to have a Company Material Adverse Effect; (iii) in violation
of any statute, rule or regulation applicable to the Company, the violation of which would have a Company Material Adverse Effect;
or (iv) in violation of any judgment, decree or order of any court or governmental body having jurisdiction over the Company and
specifically naming the Company, which violation or violations individually, or in the aggregate, could reasonably be expected
to have a Company Material Adverse Effect.

 

(l) Except as disclosed
in the Subscription Documents, Schedule 2(l) attached hereto and/or the Company’s SEC Filings, as of the date of this Agreement,
no current or former stockholder, director, officer or employee of the Company, nor, to the knowledge of the Company, any affiliate
of any such person is presently, directly or indirectly through his/her affiliation with any other person or entity, a party to
any loan from the Company or any other transaction (other than as an employee) with the Company providing for the furnishing of
services by, or rental of any personal property from, or otherwise requiring cash payments to any such person.

 

(m) The Company is
not obligated to pay, and has not obligated the Placement Agent to pay, a finder’s or origination fee in connection with
the Offering (other than to the Placement Agent), and hereby agrees to indemnify the Placement Agent from any such claim made by
any other person as more fully set forth in Section 8 hereof. The Company has not offered for sale or solicited offers to purchase
the Units except for negotiations with the designated Placement Agent(s). Except as set forth in the Subscription Documents and
the Company’s SEC Filings, no other person has any right to participate in any offer, sale or distribution of the Company’s
securities to which the Placement Agent’s rights, described herein, shall apply.

 

(n) Until the earlier
of (i) the Termination Date or (ii) the Final Closing (as hereinafter defined), the Company will not issue any press release, grant
any interview, or otherwise communicate with the media in any manner whatsoever with respect to the Offering without the Placement
Agent’s prior written consent, which consent will not unreasonably be withheld or delayed.

 

(o) No representation
or warranty contained in Section 2A of this Agreement contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements herein not misleading in the context of such representations and warranties. The Placement
Agent shall be entitled to rely on such representations and warranties.

 

(p) No consent, authorization
or filing of or with any court or governmental authority is required in connection with the issuance or the consummation of the
transactions contemplated herein or in the other Company Transaction Documents, except for required filings with the SEC and the
applicable state securities commissions relating specifically to the Offering (all of which filings will be duly made by, or on
behalf of, the Company), and those which are required to be made after the First Closing (all of which will be duly made on a timely
basis).

 

    	5

    	 

    

 

(q) The Company acknowledges
that Adam S. Gottbetter is the owner of Gottbetter Capital Group, Inc., Gottbetter & Partners,
LLP and Gottbetter Capital Markets, LLC.  Gottbetter Capital Group owns shares of the Company.  Gottbetter
& Partners, LLP is counsel to the company and has represented the company in the proposed transaction for which it will
receive legal fees in accordance with an executed retainer agreement.  Gottbetter Capital Markets, LLC is a placement
agent for the private placement offering in the proposed transaction for which it may receive placement agent fees in accordance
with an executed placement agent agreement.

 

(r)
Neither the sale of the Units by the Company nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, nor do any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter
V, as amended) or any enabling legislation or executive order relating thereto. Without limiting the foregoing, the Company is
not (a) a person whose property or interests in property are blocked pursuant to Section 1 of Executive Order 13224 of September
23, 2001 Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
Reg. 49079 (2001)) or (b) a person who engages in any dealings or transactions, or be otherwise associated, with any such person.
The Company and its subsidiaries, if any, are in compliance, in all material respects, with the USA Patriot Act of 2001 (signed
into law October 26, 2001).

 

2B.Representations, Warranties
and Covenants of Placement Agent. The Placement Agent hereby represents and warrants to the Company that the following representations
and warranties are true and correct as of the date of this Agreement:

 

(a) The Placement Agent
is a limited liability company duly organized, validly existing and in good standing under the laws of the State of New York and
has all requisite corporate power and authority to enter into this Agreement and to carry out and perform its obligations under
the terms of this Agreement.

 

(b) This Agreement
has been duly authorized, executed and delivered by the Placement Agent, and upon due execution and delivery by the Company, this
Agreement will be a valid and binding agreement of the Placement Agent enforceable against it in accordance with its terms, except
as may be limited by principles of public policy and, as to enforceability, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditor’s rights from time to time in effect and subject to general
equity principles.

 

(c) The Placement Agent
is a member of FINRA and is registered as a broker-dealer under the Exchange Act (as defined below), and under the securities acts
of each state into which it is making offers or sales of the Units. None of the Placement Agent or its affiliates, or any person
acting on behalf of the foregoing (other than the Company, its or their affiliates or any person acting on its or their behalf,
in respect of which no representation is made) has taken nor will it take any action that conflicts with the conditions and requirements
of, or that would make unavailable with respect to the Offering, the exemption(s) from registration available pursuant to Rule
506 of Regulation D, Rule 903 of Regulation S or Section 4(2) of the Act, or knows of any reason why any such exemption would be
otherwise unavailable to it. The Placement Agent will conduct the Offering in compliance with all applicable securities laws.

 

(d) None of the Placement
Agent or its affiliates, or any person acting on behalf of the foregoing, has engaged or will engage in any Directed Selling Efforts
(as such term is defined in Regulation S).

 

(e) Any offer or solicitation
of an offer to buy Units made by the Placement Agent or its affiliates, or any person acting on behalf of the foregoing, in reliance
on Rule 903 of Regulation S and in reliance upon similar exemptions from registration available under applicable state securities
laws, will be made outside of the United States exclusively to persons or entities that are, and will be at the time of the delivery
of the Units, not a U.S. Person (as such term is defined in Regulation S) and were, and are at the time of the delivery of the
Units, not acting for the account or benefit of a person in the United States or a U.S. Person.

 

(f) Adam S. Gottbetter
is the owner of Gottbetter Capital Group, Inc., Gottbetter & Partners, LLP and Gottbetter Capital Markets, LLC. 
Gottbetter Capital Group owns shares of the Company.  Gottbetter & Partners, LLP is counsel to the company
and has represented the company in the proposed transaction for which it will receive legal fees in accordance with an executed retainer
agreement.  Gottbetter Capital Markets, LLC is a placement agent for the private placement offering in the proposed transaction
for which it may receive placement agent fees in accordance with an executed placement agent agreement.

 

    	6

    	 

    

 

3.Placement
Agent Compensation.

 

(a) In connection with
the Offering, the Company will pay a cash fee (the “Agent Cash Fee”) to the Placement Agent at each Closing equal to
up to Ten Percent (10%) of the gross sales price of the Units purchased by those investor(s) introduced to the Company at such
Closing.. Additionally, the Company will deliver to the Placement Agent redeemable warrants exercisable for a period of five (5)
years from the Closing Date, to purchase a number of shares of Common Stock equaling up to Ten Percent (10%) of the number of Units
sold to the investor(s) at such Closing (the “Broker Warrants), as applicable (“Agent Cash Fee” and the “Broker
Warrants” are referred to collectively as “Brokers’ Fees”). The Broker Warrants shall be identical to the
Investor Warrants in all material respects, except that (i) the resale of the Common Stock underlying Broker Warrants will not
be covered by a registration statement and (ii) the Broker Warrants will have an exercise price of $0.20 per share.

 

(b)The Company
shall also pay to the Placement Agent a broker’s fee if any person or entity contacted by the Placement Agent in connection
with the Offering, which person had not been introduced to the Company prior to or during the Offering by someone other than the
Placement Agent, invests in the Company at any time prior to the date that is twelve (12) months after the earlier of the Termination
Date or the final Closing Date, regardless of whether such person purchased Units in the Offering. Any such broker’s fee
payable pursuant to this Section 3(b) will be based on the fee structure in place for broker-dealers participating in the applicable
offering. In the event there are no participating broker-dealers, the broker’s fee payable pursuant to this Section 3(b)
will be based on a fee arrangement negotiated between Placement Agent and the Company.

 

(c) To the extent there
is more than one Closing, payment of the proportional amount of the Brokers’ Fees will be made out of the proceeds of subscriptions
for the Units sold at each Closing.

 

4.Subscription
and Closing Procedures.

 

(a) The Company shall
cause to be delivered to the Placement Agent copies of the Subscription Documents and has consented, and hereby consents, to the
use of such copies for the purposes permitted by the Act and applicable securities laws and in accordance with the terms and conditions
of this Agreement, and hereby authorizes the Placement Agent and its agents and employees to use the Subscription Documents in
connection with the sale of the Units until the earlier of (i) the Termination Date or (ii) the Final Closing, and no person or
entity is or will be authorized to give any information or make any representations other than those contained in the Subscription
Documents or to use any offering materials other than those contained in the Subscription Documents in connection with the sale
of the Units, unless the Company first provides the Placement Agent with notification of such information, representations or offering
materials.

 

(b) The Company shall
make available to the Placement Agent and its representatives such information, including, but not limited to, financial information,
and other information regarding the Company (the “Information”), as may be reasonably requested in making a reasonable
investigation of the Company and its affairs. The Company shall provide access to the officers, directors, employees, independent
accountants, legal counsel and other advisors and consultants of the Company as shall be reasonably requested by the Placement
Agent. The Company recognizes and agrees that the Placement Agent (i) will use and rely primarily on the Information and generally
available information from recognized public sources in performing the services contemplated by this Agreement without independently
verifying the Information or such other information, (ii) does not assume responsibility for the accuracy of the Information or
such other information, and (iii) will not make an appraisal of any assets or liabilities owned or controlled by the Company or
its market competitors.

 

(c) Each prospective
purchaser will be required to complete and execute the Subscription Documents, Anti-Money Laundering Form and other documents (the
“Subscription Documents”) which will be forwarded or delivered to the Placement Agent at the Placement Agent’s
offices at the address set forth in Section 12 hereof.

 

    	7

    	 

    

 

(d) Simultaneously
with the delivery to the Placement Agent of the Subscription Documents, the subscriber’s check or other good funds will be
forwarded directly by the subscriber to the escrow agent and deposited into a non interest bearing escrow account (the “Escrow
Account”) established for such purpose (the “Escrow Agent”). All such funds for subscriptions will be held in
the Escrow Account pursuant to the terms of an escrow agreement among the Company, the Placement Agent and the Escrow Agent.
The Company will pay all fees related to the establishment and maintenance of the Escrow Account. Subject to the receipt of
subscriptions for the amount for Closing, the Company will either accept or reject, for any or no reason, the Subscription Documents
in a timely fashion and at each Closing will countersign the Subscription Documents and provide duplicate copies of such documents
to the Placement Agent for distribution to the subscribers. The acceptance of any Subscription Documents will be subject to the
reasonable approval of the Company. The Company will give notice to the Placement Agent of its acceptance of each subscription.
The Company, or the Placement Agent on the Company’s behalf, will promptly return to subscribers incomplete, improperly completed,
improperly executed and rejected subscriptions and give written notice thereof to the Placement Agent upon such return.

 

(e) If subscriptions
for a Closing have been accepted prior to the Termination Date, the funds therefor have been collected by the Escrow Agent and
all of the conditions set forth elsewhere in this Agreement are fulfilled, a closing shall be held promptly with respect to Units
sold (the “First Closing”). Thereafter, the remaining Units will continue to be offered and sold until the Termination
Date. Additional closings (“Closings”) may from time to time be conducted at times mutually agreed to between the Placement
Agent and the Company with respect to additional Units sold, with the final closing (“Final Closing”) to occur within
10 days after the earlier of the Termination Date and the date on which the Maximum Amount has been subscribed for. Delivery of
payment for the accepted subscriptions for Units from the funds held in the Escrow Account will be made at each Closing at the
Placement Agent’s offices against delivery of the Units by the Company at the address set forth in Section 12 hereof
(or at such other place as may be mutually agreed upon between the Company and the Placement Agent), net of amounts due to the
Placement Agent and its Blue Sky counsel as of such Closing. Executed certificates for the shares of Common Stock comprising the
Units and the Investor Warrants and the Brokers’ Warrants will be in such authorized denominations and registered in such
names as the Placement Agent may request on or before the date of each Closing (“Closing Date”). The certificates will
be forwarded to the subscriber directly by the transfer agent or the Company’s designated agent at each Closing. The Company
will issue the certificates for the Common Stock comprising the Units and the Investor Warrants and Brokers’ Warrants within
twenty (20) days of the applicable Closing Date.

 

(f) If Subscription
Documents have not been received and accepted by the Company on or before the Termination Date for any reason, the Offering will
be terminated, no Units will be sold, and the Escrow Agent will, at the request of the Placement Agent, cause all monies received
from subscribers for the Units to be promptly returned to such subscribers without interest, penalty, expense or deduction.

 

5.Further
Covenants.

 

The Company hereby
covenants and agrees that:

 

(a) Except upon prior
written notice to the Placement Agent, the Company shall not, at any time prior to the Final Closing, knowingly take any action
which would cause any of the representations and warranties made by it in this Agreement not to be complete and correct in all
material respects on and as of each Closing Date with the same force and effect as if such representations and warranties had been
made on and as of each such date (except to the extent any representation or warranty relates to an earlier date).

 

(b) If, at any time
prior to the Final Closing, any event shall occur that causes a Company Material Adverse Effect which as a result it becomes necessary
to amend or supplement the Subscription Documents so that the representations and warranties herein remain true and correct in
all material respects, or in case it shall be necessary to amend or supplement the Subscription Documents to comply with Regulation
D or any other applicable securities laws or regulations, the Company will promptly notify the Placement Agent and shall, at its
sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as
the Placement Agent may reasonably request. The Company will not at any time before the Final Closing prepare or use any amendment
or supplement to the Subscription Documents of which the Placement Agent will not previously have been advised and furnished with
a copy, or which is not in compliance in all material respects with the Act and other applicable securities laws. As soon as the
Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of
any order preventing or suspending the use of the Subscription Documents, or the suspension of any exemption for such qualification
or registration thereof for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for
any of such purposes, and the Company will use their best efforts to prevent the issuance of any such order and, if issued, to
obtain as soon as reasonably possible the lifting thereof.

 

    	8

    	 

    

 

(c) The Company shall
comply with the Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations
thereunder, all applicable state securities laws and the rules and regulations thereunder in the states in which Placement Agent’s
Blue Sky counsel has advised the Placement Agent and/or the Company that the Units are qualified or registered for sale or exempt
from such qualification or registration, so as to permit the continuance of the sales of the Units, and will file or cause to be
filed with the SEC, and shall promptly thereafter forward or cause to be forwarded to the Placement Agent, any and all reports
on Form D as are required. The Company will pay the attorney’s fee and out of pocket expenses related to the filings for
registrations of sale or exemption from such qualifications with any state securities commissions and any other regulatory agencies.
Such fees will be paid at the time of invoicing, or at the time of Closing, if known, and if not yet invoiced, funds will remain
in escrow to cover the estimated invoice.

 

(d) The Company shall
use best efforts to qualify the Units for sale under the securities laws of such jurisdictions in the United States as may be mutually
agreed to by the Company and the Placement Agent, and the Company will make or cause to be made such applications and furnish information
as may be required for such purposes, provided that the Company will not be required to qualify as a foreign corporation in any
jurisdiction or execute a general consent to service of process. The Company will, from time to time, prepare and file such statements
and reports as are or may be required to continue such qualifications in effect for so long a period as the Placement Agent may
reasonably request with respect to the Offering.

 

(e) The Company shall
place a legend on the certificates representing the shares of Common Stock comprising the Units and the Investor Warrants and the
Brokers’ Warrants that the securities evidenced thereby have not been registered under the Act or applicable state securities
laws, setting forth or referring to the applicable restrictions on transferability and sale of such securities under the Act and
applicable state laws.

 

(f) The Company shall
apply the net proceeds from the sale of the Units for the purposes substantially as described in the Subscription Documents. Except
as set forth in the Subscription Documents, the Company shall not use any of the net proceeds of the Offering to repay indebtedness
to officers (other than accrued salaries incurred in the ordinary course of business), directors or stockholders of the Company
without the prior written consent of the Placement Agent.

 

(g) During the Offering
Period, the Company shall afford each prospective purchaser of Units the opportunity to ask questions of and receive answers from
an officer of the Company concerning the terms and conditions of the Offering and the opportunity to obtain such other additional
information necessary to verify the accuracy of the Subscription Documents to the extent the Company possesses such information
or can acquire it without unreasonable expense.

 

(h) Except with the
prior written consent of the Placement Agent, the Company shall not, at any time prior to the earlier of the Final Closing or the
Termination Date, except as contemplated by the Subscription Documents (i) engage in or commit to engage in any transaction outside
the ordinary course of business as described in the Subscription Documents, (ii) issue, agree to issue or set aside for issuance
any securities (debt or equity) or any rights to acquire any such securities, (iii) incur, outside the ordinary course of business,
any material indebtedness, (iv) dispose of any material assets, (v) make any material acquisition or (vi) change its business or
operations in any material respect.

 

(i) The Company shall
pay all reasonable expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments
related to the Offering and the issuance of the shares comprising the Units and the Investor Warrants and will also pay for the
Company’s expenses for accounting fees, legal fees, printing costs, and other costs involved with the Offering. The Company
will provide at its own expense such quantities of the Subscription Documents and other documents and instruments relating to the
Offering as the Placement Agent may reasonably request. The Company will pay at its own expense in connection with the creation,
authorization, issuance, transfer and delivery of the Units, including, without limitation, fees and expenses of any transfer agent
or registrar; the fees and expenses of the Escrow Agent; all fees and expenses of legal, accounting and other advisers to the Company;
the registration or qualification of the Units for offer and sale under the securities or Blue Sky laws of such jurisdictions,
payable within five (5) days of being invoiced; and at the First Closing, or, if there is no Closing, within ten (10) days after
written request therefore following the Termination Date, legal fees and expenses of the Placement Agent’s counsel, which
legal fees shall not exceed $15,000 plus expenses provided that such limitation shall in no way affect the obligations of the Company
with respect to indemnification and contribution as set forth in Sections 8 and 9 herein.

 

    	9

    	 

    

 

6.Conditions
of Placement Agent’s Obligations.

 

The obligations of
the Placement Agent hereunder to affect a Closing are subject to the fulfillment, at or before each Closing, of the following additional
conditions:

 

(a) Each of the representations
and warranties made by the Company (when read without regard to any qualification as to materiality or Material Adverse Effect
contained therein) shall be true and correct as of the date of this Agreement and as of each Closing Date, except to the extent
any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall
be true and correct as of such earlier date (except for representations and warranties that speak as of a specific date), except
for any untrue or incorrect representation and warranty that, individually or in the aggregate, does not have a Company Material
Adverse Effect.

 

(b) The Company shall
have performed and complied in all material respects with all agreements, covenants and conditions required to be performed and
complied with by this Agreement at or before the Closing.

 

(c) The Subscription
Documents do not, and as of the date of any amendment or supplement thereto will not, include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

(d) No order suspending
the use of the Subscription Documents or enjoining the Offering or sale of the Units shall have been issued, and no proceedings
for that purpose or a similar purpose shall have been initiated or pending, or, to the best of the Company’s knowledge, be
contemplated or threatened.

 

(e) The Placement Agent
shall have received a certificate of the Chief Executive Officer of the Company, dated as of the Closing Date, certifying, as to
the fulfillment of the conditions set forth in subparagraphs (a), (b), (c) and (d) above. The foregoing certificate shall only
be required to be delivered on the first Closing Date, unless any information contained in the certificate has changed.

 

(f) The Company shall
have delivered to the Placement Agent: (i) a good standing certificate dated as of a date within 10 days prior to the Closing Date
from the secretary of state of its jurisdiction of incorporation and (ii) resolutions of the Company’s Board of Directors
approving this Agreement and the transactions and agreements contemplated by this Agreement, and the Subscription Documents, all
as certified by the Chief Executive Officer of the Company.

 

(g) At each Closing,
the Company shall pay and/or issue to the Placement Agent the Brokers’ Fees earned in such Closing.

 

(h) All proceedings
taken at or prior to the Closing in connection with the authorization, issuance and sale of the shares comprising the Units and
the Investor Warrants will be reasonably satisfactory in form and substance to the Placement Agent and its counsel, and such counsel
shall have been furnished with all such documents, certificates and opinions as it may reasonably request upon reasonable prior
notice in connection with the transactions contemplated hereby.

 

    	10

    	 

    

 

7.
Conditions of the Company’s Obligations.

 

The obligations of
the Company hereunder are subject to the satisfaction of each of the following conditions:

 

(a)The satisfaction
or waiver of all conditions to closing as set forth herein.

 

(b)As of each Closing,
each of the representations and warranties made by Placement Agent herein being true and correct as of the Closing Date for such
Closing.

 

(c)At each Closing,
the Company shall have received the proceeds from the sale of the Units that are part of such Closing less applicable Broker Fees.

 

7A. Mutual Condition.
The obligations of the Placement Agent and the Company hereunder are subject to the execution by each investor of Subscription
Documents in form and substance acceptable to the Placement Agent and the Company and deposit by such investor with the escrow
agent of all funds required to be so deposited by such investor.

 

8.Indemnification.

 

(a) The Company will:
(i) indemnify and hold harmless the Placement Agent, its agents and their respective officers, directors, employees, selected dealers
and each person, if any, who controls the Placement Agent within the meaning of the Act and such agents (each an “Indemnitee”
or a “Placement Agent Party”) against, and pay or reimburse each Indemnitee for, any and all losses, claims, damages,
liabilities or expenses whatsoever (or actions or proceedings or investigations in respect thereof), severally (which will, for
all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable
attorneys’ fees, including appeals), to which any Indemnitee may become subject (a) under the Act or otherwise, in connection
with the offer and sale of the Units and (b) as a result of the breach of any representation, warranty or covenant made by the
Company herein, regardless of whether such losses, claims, damages, liabilities or expenses shall result from any claim by any
Indemnitee or by any third party; and (ii) reimburse each Indemnitee for any legal or other expenses reasonably incurred in connection
with investigating or defending against any such loss, claim, action, proceeding or investigation; provided, however, the Company
will not be liable in any such case to the extent that any such claim, damage or liability is finally judicially determined to
have resulted from (A) an untrue statement or alleged untrue statement of a material fact made in the Subscription Documents, or
an omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, made solely in reliance upon and in conformity with written information furnished to the Company by the
Placement Agent specifically for use in the Subscription Documents or (B) any violations by the Placement Agent of the Act or state
securities laws which does not result from a violation thereof by the Company or any of their respective affiliates or (C) due
to the intentional or negligent misrepresentation and/or malfeasance of the Placement Agent. In addition to the foregoing agreement
to indemnify and reimburse, the Company will indemnify and hold harmless each Indemnitee against any and all losses, claims, damages,
liabilities or expenses whatsoever (or actions or proceedings or investigations in respect thereof), joint or several (which shall,
for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable
attorneys’ fees, including appeals) to which any Indemnitee may become subject insofar as such costs, expenses, losses, claims,
damages or liabilities arise out of or are based upon the claim of any person or entity that he or it is entitled to broker’s
or finder’s fees from any Indemnitee in connection with the Offering as a result of the Company obligating itself or any
Indemnitee to pay such a fee, other than fees due to the Placement Agent, its dealers, sub-agents or finders. The foregoing indemnity
agreements will be in addition to any liability the Company may otherwise have.

 

(b) The Placement Agent
will indemnify and hold harmless the Company, its subsidiaries, and their respective officers, directors, and each person, if any,
who controls such entity within the meaning of the Act (collectively, the “Company Indemnitees”) against, and pay or
reimburse any such person for, any and all losses, claims, damages, liabilities or expenses whatsoever (or actions, proceedings
or investigations in respect thereof) to which the Company or any such person may become subject under the Act or otherwise, whether
such losses, claims, damages, liabilities or expenses shall result from any claim of the Company or any such person who controls
the Company within the meaning of the Act or by any third party, but only to the extent that such losses, claims, damages or liabilities
are based upon any violations by the Placement Agent of the Act or state securities laws which does not result from a violation
thereof by the Company or any of their respective affiliates, any untrue statement or alleged untrue statement of any material
fact contained in the Subscription Documents made in reliance upon and in conformity with information contained in the Subscription
Documents relating to the Placement Agent, or an omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in either case, if made or omitted in reliance upon and in
conformity with written information furnished to the Company by the Placement Agent, specifically for use in the preparation thereof
or due to the intentional or negligent misrepresentation and / or malfeasance of the Placement Agent. The Placement Agent will
reimburse the Company or any such person for any legal or other expenses reasonably incurred in connection with investigating or
defending against any such loss, claim, damage, liability or action, proceeding or investigation to which such indemnity obligation
applies. In addition to the foregoing agreement to indemnify and reimburse, the Placement Agent will indemnify and hold harmless
each Company Indemnitee against any and all losses, claims, damages, liabilities or expenses whatsoever (or actions or proceedings
or investigations in respect thereof), joint or several (which shall, for all purposes of this Agreement, include, but not be limited
to, all reasonable costs of defense and investigation and all reasonable attorneys’ fees, including appeals) to which any
Company Indemnitee may become subject insofar as such costs, expenses, losses, claims, damages or liabilities arise out of or are
based upon the claim of any person or entity that he or it is entitled to broker’s or finder’s fees from any Company
Indemnitee in connection with the Offering as a result of the Placement Agent obligating itself or any Company Indemnitee to pay
such a fee. The foregoing indemnity agreements are in addition to any liability which the Placement Agent may otherwise have.

 

    	11

    	 

    

 

(c) Promptly after
receipt by an indemnified party under this Section 8 of notice of the commencement of any action, claim, proceeding or investigation
(the “Action”), such indemnified party, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, will notify the indemnifying party of the commencement thereof, but the omission to so notify the indemnifying
party will not relieve it from any liability that it may have to any indemnified party under this Section 8 unless the indemnifying
party has been substantially prejudiced by such omission. The indemnifying party will be entitled to participate in and, to the
extent that it may wish, jointly with any other indemnifying party, to assume the defense thereof subject to the provisions herein
stated, with counsel reasonably satisfactory to such indemnified party. The indemnified party will have the right to employ separate
counsel in any such Action and to participate in the defense thereof, but the fees and expenses of such counsel will not be at
the expense of the indemnifying party if the indemnifying party has assumed the defense of the Action with counsel reasonably satisfactory
to the indemnified party, provided, however, that if the indemnified party shall be requested by the indemnifying party to participate
in the defense thereof or shall have concluded in good faith and specifically notified the indemnifying party either that there
may be specific defenses available to it that are different from or additional to those available to the indemnifying party or
that such Action involves or could have a material adverse effect upon it with respect to matters beyond the scope of the indemnity
agreements contained in this Agreement, then the counsel representing it, to the extent made necessary by such defenses, shall
have the right to direct such defenses of such Action on its behalf and in such case the reasonable fees and expenses of such counsel
in connection with any such participation or defenses shall be paid by the indemnifying party. No settlement of any Action against
an indemnified party will be made without the consent of the indemnifying party and the indemnified party, which consent shall
not be unreasonably withheld or delayed in light of all factors of importance to such party, and no indemnifying party shall be
liable to indemnify any person for any settlement of any such claim effected without such indemnifying party’s consent.

 

9.Contribution.

 

To provide for just
and equitable contribution, if: (i) an indemnified party makes a claim for indemnification pursuant to Section 8 hereof and it
is finally determined, by a judgment, order or decree not subject to further appeal that such claims for indemnification may not
be enforced, even though this Agreement expressly provides for indemnification in such case; or (ii) any indemnified or indemnifying
party seeks contribution under the Act, the Exchange Act, or otherwise, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Placement Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the one hand and the Placement Agent on the other shall
be deemed to be in the same proportion as the total net proceeds from the Offering (before deducting expenses) received by the
Company bear to the total Brokers’ Fees received by the Placement Agent. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission will be determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information supplied by the Company or by the Placement Agent, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement, alleged statement, omission
or alleged omission. The Company and the Placement Agent agree that it would be unjust and inequitable if the respective obligations
of the Company and the Placement Agent for contribution were determined by pro rata allocation of the aggregate losses, liabilities,
claims, damages and expenses or by any other method or allocation that does not reflect the equitable considerations referred to
in this Section 9. No person guilty of a fraudulent misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this Section 9,
each person, if any, who controls the Placement Agent within the meaning of the Act will have the same rights to contribution as
the Placement Agent, and each person, if any, who controls the Company within the meaning of the Act will have the same rights
to contribution as the Company, subject in each case to the provisions of this Section 9. Anything in this Section 9 to the contrary
notwithstanding, no party will be liable for contribution with respect to the settlement of any claim or action effected without
its written consent. This Section 9 is intended to supersede, to the extent permitted by law, any right to contribution under the
Act, the Exchange Act or otherwise available.

 

    	12

    	 

    

 

10.Termination.

 

(a) The Offering may
be terminated by the Placement Agent at any time prior to the expiration of the Offering Period in the event that: (i) any of the
representations, warranties or covenants of the Company contained herein or in the Subscription Documents shall prove to have been
false or misleading in any material respect when actually made; (ii) the Company shall have failed to perform any of its material
obligations hereunder or under any other Company Transaction Document or any other transaction document; (iii) there shall occur
any event, within the control of the Company that is reasonably likely to materially and adversely affect the transactions contemplated
hereunder or the ability of the Company to perform hereunder; or (iv) the Placement Agent determines that it is reasonably likely
that any of the conditions to Closing to be fulfilled by the Company set forth herein will not, or cannot, be satisfied.

 

(b) The Offering may
be terminated by the Company at any time prior to the expiration of the Offering Period (i) in the event that the Placement Agent
or any subagent shall have failed to perform any of its material obligations hereunder, or (ii) on account of the Placement Agent’s
or any subagent’s fraud, illegal or willful misconduct or gross negligence or (iii) a material breach of this Agreement by
the Placement Agent or any subagent. In the event of any such termination by the Company, the Placement Agent shall not be entitled
to any amounts whatsoever except (i) as may be due under any indemnity or contribution obligation provided herein or in any other
Company Transaction Document, at law or otherwise and (ii) it shall retain any Brokers’ Fees received for Closings that occurred
prior to the Termination Date.

 

(c) This Offering may
be terminated upon mutual agreement of the Company and the Placement Agent at any time prior to the expiration of the Offering
Period.

 

(d) Before any termination
by the Placement Agent under Section 10(a) or by the Company under Section 10(b) shall become effective, the terminating party
shall give five (5) days prior written notice to the other party of its intention to terminate the Offering (the “Termination
Notice”). The Termination Notice shall specify the grounds for the proposed termination. If the specified grounds for termination,
or their resulting adverse effect on the transactions contemplated hereby, are curable, then the other party shall have three (3)
days from the Termination Notice within which to remove such grounds or to eliminate all of their material adverse effects on the
transactions contemplated hereby; otherwise, the Offering shall terminate.

 

(e) Upon any termination
pursuant to this Section 10, the Placement Agent and the Company will instruct the Escrow Agent to cause all monies received with
respect to the subscriptions for Units not accepted by the Company to be promptly returned to such subscribers without interest,
penalty or deduction.

 

    	13

    	 

    

 

 

11.Survival.

 

(a) The obligations
of the parties to pay any costs and expenses hereunder and to provide indemnification and contribution as provided herein shall
survive any termination hereunder. In addition, the provisions of Sections 3, and 8 through 17 shall survive the sale of the Units
or any termination of this Agreement.

 

(b) The respective
indemnities, covenants, representations, warranties and other statements of the Company and the Placement Agent set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of,
and regardless of any access to information by the Company or the Placement Agent, or any of their officers or directors or any
controlling person thereof, and will survive the sale of the Units or any termination of the Offering hereunder. Notwithstanding
the foregoing, if either party effects a Closing with knowledge that one or more of the other party’s representations and
warranties has become untrue or inaccurate in any material respect or that such other party has failed to comply or satisfy in
any material respect a covenant, condition or agreement of it or them, the party so effecting the Closing shall be deemed to have
waived any claim based on the breach of such inaccurate representation and warranty or the failure to have complied with the specific
covenant or condition.

 

12.Notices.

 

All communications
hereunder will be in writing and, except as otherwise expressly provided herein or after notice by one party to the other of a
change of address, if sent to the Placement Agent, will be mailed, sent by overnight courier or telefaxed and confirmed to Gottbetter
Capital Markets, LLC 488 Madison Avenue, 12th Floor, New York, New York 10022, Attention: Mr. Julio A. Marquez, President, telefax
number (212) 400-6999, with a copy to: Law Offices of Barbara J. Glenns, Esq. 30 Waterside Plaza, Suite 25G, New York, New York
10010, Attn: Barbara J. Glenns, Esq., telefax number (212) 689-6578, if sent to Rackwise, Inc. will be mailed, sent by overnight
courier, or certified mail, return receipt requested and confirmed to 2365 Iron Point Road, Suite 190, Folsom, CA 95630 Attn: Guy
A. Archbold, President and CEO, telefax number (415) 358-4665 with a copy to: Gottbetter & Partners, LLP 488 Madison Avenue,
12th Floor, New York, NY 10022 telefax: 212-400-6901 Attn: Scott Rapfogel, Esq.

 

13.Governing
Law, Jurisdiction.

 

This Agreement shall
be deemed to have been made and delivered in New York City and shall be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State of New York without regard to principles of conflicts of law
thereof.

 

THE
PARTIES HERETO AGREE TO SUBMIT ALL CONTROVERSIES TO the exclusive jurisdiction of finra ARBITRATION IN ACCORDANCE WITH THE PROVISIONS
SET FORTH BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES, (B) THE PARTIES ARE WAIVING THEIR RIGHTS
TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND DIFFERENT
FROM COURT PROCEEDINGS, (D) THE ARBITRATOR’S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY
PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E) THE PANEL OF FINRA ARBITRATORS
WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL CONTROVERSIES
WHICH MAY ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT SHALL BE DETERMINED BY ARBITRATION PURSUANT TO THE RULES THEN PERTAINING
TO FINRA. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEw york. JUDGMENT ON ANY AWARD OF ANY SUCH ARBITRATION
MAY BE ENTERED IN THE SUPREME COURT OF THE STATE OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION OVER THE PERSON OR PERSONS
AGAINST WHOM SUCH AWARD IS RENDERED. THE PARTIES AGREE THAT THE DETERMINATION OF THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE
UPON THEM. THE PREVAILING PARTY, AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE ENTITLED TO COLLECT ANY COSTS,
DISBURSEMENTS AND REASONABLE ATTORNEY’S FEES FROM THE OTHER PARTY.  PRIOR
TO FILING AN ARBITRATION, THE PARTIES HEREBY AGREE THAT THEY WILL ATTEMPT TO RESOLVE THEIR DIFFERENCES FIRST BY SUBMITTING THE
MATTER FOR RESOLUTION TO A MEDIATOR, ACCEPTABLE TO ALL PARTIES, AND WHOSE EXPENSES WILL BE BORNE EQUALLY BY ALL PARTIES. THE MEDIATION
WILL BE HELD IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, ON AN EXPEDITED BASIS. IF THE PARTIES CANNOT SUCCESSFULLY RESOLVE THEIR
DIFFERENCES THROUGH MEDIATION, THE MATTER WILL BE RESOLVED BY ARBITRATION. THE ARBITRATION SHALL TAKE PLACE IN THE COUNTY OF NEW
YORK, THE STATE OF NEW YORK, ON AN EXPEDITED BASIS. 

 

    	14

    	 

    

 

14.Miscellaneous.

 

A.No provision
of this Agreement may be changed or terminated except by a writing signed by the party or parties to be charged therewith. Unless
expressly so provided, no party to this Agreement will be liable for the performance of any other party’s obligations hereunder.
Either party hereto may waive compliance by the other with any of the terms, provisions and conditions set forth herein; provided,
however, that any such waiver shall be in writing specifically setting forth those provisions waived thereby. No such waiver shall
be deemed to constitute or imply waiver of any other term, provision or condition of this Agreement. Neither party may assign its
rights or obligations under this Agreement to any other person or entity without the prior written consent of the other party.

 

B.Each party shall,
without payment of any additional consideration by any other party, at any time on or after the date of any Closings, take such
further action and execute such other and further documents and instruments as the other party may reasonably request in order
to provide the other party with the benefits of this Agreement.

 

C.The Parties to
this Agreement each hereby confirm that they will cooperate with each other to the extent that it may become necessary to enter
into any revisions or amendments to this Agreement, in the future to conform to any federal or state regulations as long as such
revisions or amendments do not materially alter the obligations or benefits of either party under this Agreement.

 

15.Entire
Agreement; Severability.

 

This Agreement together
with any other agreement referred to herein supersedes all prior understandings and written or oral agreements between the parties
with respect to the Offering and the subject matter hereof. If any portion of this Agreement shall be held invalid or unenforceable,
then so far as is reasonable and possible (i) the remainder of this Agreement shall be considered valid and enforceable and (ii)
effect shall be given to the intent manifested by the portion held invalid or unenforceable.

 

16.Counterparts.

 

This Agreement may
be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an
original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together
shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission
or in pdf format shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu
of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or in pdf format shall be deemed
to be their original signatures for all purposes.

 

    	15

    	 

    

 

17.
Confidentiality.

 

(a)The Placement
Agent will maintain the confidentiality of the Information and, unless and until such information shall have been made publicly
available by the Company or by others without breach of a confidentiality agreement, shall disclose the Information only as authorized
by the Company or as required by law or by order of a governmental authority or court of competent jurisdiction. In the event the
Placement Agent is legally required to make disclosure of any of the Information, the Placement Agent will give prompt notice to
the Company prior to such disclosure, to the extent the Placement Agent can practically do so.

 

(b)The foregoing
paragraph shall not apply to information that:

 

(i)at the time of
disclosure by the Company, is or thereafter becomes, generally available to the public or within the industries in which the Company
conducts business, other than as a result of a breach by the Placement Agent of its obligations under this Agreement;

 

(ii)prior to or at
the time of disclosure by the Company, was already in the possession of, the Placement Agent or any of its affiliates, or could
have been developed by them from information then lawfully in their possession, by the application of other information or techniques
in their possession, generally available to the public; at the time of disclosure by the Company thereafter, is obtained by the
Placement Agent or any of its affiliates from a third party who the Placement Agent reasonably believes to be in possession of
the information not in violation of any contractual, legal or fiduciary obligation to the Company with respect to that information;
or is independently developed by the Placement Agent or its affiliates.

 

The exclusions set forth
in sub-section (b) above shall not apply to pro forma financial information of the Company, which pro forma Information shall in
all events be subject to sub-section (a) above.

 

(c)Nothing in this
Agreement shall be construed to limit the ability of the Placement Agent or its affiliates to pursue, investigate, analyze, invest
in, or engage in investment banking, financial advisory or any other business relationship with entities other than the Company,
notwithstanding that such entities may be engaged in a business which is similar to or competitive with the business of the Company,
and notwithstanding that such entities may have actual or potential operations, products, services, plans, ideas, customers or
supplies similar or identical to the Company’s, or may have been identified by the Company as potential merger or acquisition
targets or potential candidates for some other business combination, cooperation or relationship. The Company expressly acknowledges
and agrees that they do not claim any proprietary interest in the identity of any other entity in its industry or otherwise, and
that the identity of any such entity is not confidential information.

 

[Signatures on following
page]

 

    	16

    	 

    

 

If the foregoing is
in accordance with your understanding of the agreement between the Company and the Placement Agent, kindly sign and return this
Agreement, whereupon it will become a binding agreement as provided herein, between the Company and the Placement Agent in accordance
with its terms.

 

RACKWISE, INC. 

 

 

By:  /s/ Guy A. Archbold                          

Name: Guy A. Archbold

Title: President and Chief Executive Officer

  2365 Iron Point Road

   Suite 190

   Folsom, CA 95630

 

Accepted and agreed to this

1st day of September 2012:

 

GOTTBETTER CAPITAL MARKETS, LLC 

 

 

By: /s/ Julio A. Marquez                        

Name:Julio A. Marquez

Title: President

 

    	 

    	 

    

 

AMENDMENT NO. 1 TO

PLACEMENT AGENCY AGREEMENT

 

This Amendment No.
1 to the Placement Agency Agreement (this “Amendment”) is entered into as of the 30th day of December
2012, by and between Rackwise, Inc., a Nevada corporation (the “Company”), and Gottbetter Capital Markets, LLC
(“Markets”), and amends that certain Placement Agency Agreement, dated as of September 1, 2012 (as amended,
the “PAA”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such
terms in the PAA.

 

1. The parties
to the PAA hereby amend and restate in its entirety the second paragraph of the PAA to read as follows:

 

The Offering
of the Units will be made by the Placement Agent and certain selected dealers, with each Unit consisting of one (1) share of the
Company’s common stock, par value $0.0001 per share (the “Common Stock”), and a redeemable warrant to purchase
one share (1) share of Common Stock at an exercise price of $0.30 per full share for five (5) years (the “Investor Warrants”).
The Offering Price per Unit will be Fifteen Cents ($0.15). The Offering will consist of a maximum of Twenty Five Million (25,000,000)
Units (the “Maximum Amount”). In the event the Offering is oversubscribed, the Company may sell up to an additional
Five Million (5,000,000) Units (the “Over-allotment Option”). The Investor Warrants shall have “weighted average”
anti-dilution protection, subject to customary exceptions, as per the terms set forth therein.

 

2.The parties to
the PAA hereby amend and restate in its entirety the fourth paragraph of the PAA to read as follows:

The Placement
Agent shall accept subscriptions only from (i) persons or entities who qualify as “accredited investors,” as such term
is defined in Rule 501 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and (ii)
persons or entities who are offered and purchase the Units in an Offshore Transaction (as such term is defined in Regulation S
(“Regulation S”) as promulgated by the SEC under the Act) and who are not U.S. Persons (as such term is defined in
Regulation S) and are not acting for the account or benefit of a person in the United States or a U.S. Person. The Units will be
offered until the earlier of the time that all Units offered in the Offering are sold or until December 30, 2012 (the “Initial
Offering Period”), which date may be mutually extended by the Company and the Placement Agent in writing until February 1,
2013 (this additional period and the Initial Offering Period shall be referred to as the “Offering Period”). The date
on which the Offering is terminated shall be referred to as the “Termination Date.”

 

3.The parties to
the PAA hereby amend and restate in its entirety Paragraph 3(a) Placement Agent Compensation of the PAA to read as follows:

 

	 	 	3. Placement Agent Compensation

 

	 	 	(a) In connection with the Offering, the Company will pay a cash fee (the “Agent Cash Fee”) to the Placement Agent at each Closing equal to up to Ten Percent (10%) of the gross sales price of the Units purchased by those investor(s) introduced to the Company at such Closing. Additionally, the Company will deliver to the Placement Agent redeemable warrants exercisable for a period of five (5) years from the Closing Date, to purchase a number of shares of Common Stock equaling up to Ten Percent (10%) of the number of Units sold to the investor(s) at such Closing (the “Broker Warrants), as applicable (“Agent Cash Fee” and the “Broker Warrants” are referred to collectively as “Brokers’ Fees”). The Broker Warrants shall be identical to the Investor Warrants in all material respects, except that (i) the resale of the Common Stock underlying Broker Warrants will not be covered by a registration statement and (ii) the Broker Warrants will have an exercise price of $0.15 per share.

 

    	 

    	 

    

 

4.This Amendment
is hereby made part of and incorporated into the PAA, with all the terms and conditions of the PAA remaining in full force and
effect, except to the extent modified hereby.

 

5. This Amendment
may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to
be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which
together shall constitute one and the same instrument. The exchange of copies of this Amendment and of signature pages by facsimile
transmission or in pdf format shall constitute effective execution and delivery of this Amendment as to the parties and may be
used in lieu of the original Amendment for all purposes. Signatures of the parties transmitted by facsimile or in pdf format shall
be deemed to be their original signatures for all purposes.

 

[Signature Page Follows]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the undersigned have executed, or caused to be executed on their behalf by an agent thereunto duly authorized, this Amendment No.
1 to Placement Agency Agreement as of the date first above written.

 

 

RACKWISE, INC. 

 

 

By:  /s/ Guy A. Archbold                   

Name: Guy
A. Archbold

Title:
President and Chief Executive Officer

 

 

GOTTBETTER CAPITAL MARKETS, LLC

 

 

By:  /s/ Julio A. Marquez                   

Name: Julio A. Marquez

Title: President

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