Document:

Appendix (C) to Private Placement Memorandum dated March 1, 2010

 EXHIBIT 10.7.1 

THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT HERETO OR THERETO UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO DIAMONDHEAD CASINO CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. 
 DIAMONDHEAD CASINO CORPORATION 
 PROMISSORY NOTE 

 

			
	Principle Amount $            	  	Issue Date:             , 2010

FOR VALUE RECEIVED, Diamondhead Casino Corporation, a Delaware corporation, located at 1301 Seminole Boulevard, Suite
142, Largo, Florida 33770 (hereinafter called “the Company” or “the Borrower”), hereby promises to pay to
                                         
   , (the “Holder”) located at
                                         
                   , without demand, the principal amount of
                             Dollars
($            ), plus all accrued and unpaid interest thereon, on the Maturity Date,” as defined below, to the extent the principal has not previously been paid or
converted into Common Stock of the Company as set forth below. 
 This Note is one of a duly authorized issue of
twelve percent (12%) unsecured, convertible Promissory Notes of the Borrower, in aggregate maximum principal amount of up to Seven Hundred and Fifty Thousand Dollars ($750,000) (the “Promissory Notes”) issued pursuant to a
Subscription Agreement (the “Subscription Agreement”). The Promissory Notes rank equally and ratably without priority over one another. No payment, including any prepayment, shall be made hereunder unless payment, including any prepayment,
is offered with respect to the other Promissory Notes, in an amount which bears the same ratio to the then unpaid principal amount of such Promissory Notes as the payment made hereon bears to the then unpaid principal amount under this Note. Unless
otherwise separately defined herein, all capitalized terms used in this Note shall have the same meaning as is set forth in the Subscription Agreement. The following terms shall apply to this Note. 

  
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 ARTICLE I 
 GENERAL PROVISIONS 
 1.1 Interest Rate. 

Interest on the outstanding principal balance of this unsecured, convertible Promissory Note (hereafter “this Note”) shall
accrue, beginning from the Issue Date stated above, at a rate of twelve percent (12%) per annum. Interest on this Note shall be paid in cash or Common Stock of the Company at the sole option of the Borrower. Interest shall be payable
semi-annually and, if paid in Common Stock, computed based upon the average bid closing price of the Common Stock for the thirty consecutive business days prior to June 30 and December 31 of each year. Interest on the outstanding principal
balance of the Note shall be computed on the basis of the actual number of days elapsed and a 365 day year. 
 1.2 Maturity Date.

 The maturity date (“Maturity Date”) of this Note shall be two years from the above-stated Issue Date of this Note. 

1.3 Prepayment in Cash. 

This Note shall not be subject to any prepayment in cash by the Borrower without the consent of the Holder. 

ARTICLE II 

CONVERSION RIGHTS 
 2.1.
Conversion into the Borrower’s Common Stock.  
 Holder’s Right to Convert 

The Holder shall have the right to convert the unpaid principal due under this Note into Common Stock of the Borrower at any time.

 The Holder shall exercise its right of conversion by forwarding the original of the Note, together with a Notice of
Conversion, signed by the Holder, notifying the Borrower that the Holder is exercising its right to convert the unpaid principal due under the Note to Common Shares of the Borrower. For each Unit purchased for $25,000, the Note shall be convertible
into a maximum of 50,000 shares of Common Stock of the Borrower. As soon as is practicable after receipt of the Notice of Conversion and subject to the receipt of the original Note (or if the original Note has been lost or destroyed, an affidavit of
Holder certifying to such loss or destruction), the Company shall issue and deliver, or cause to be issued and delivered to the Holder, a certificate or certificates for the number of shares due the Holder. Any unpaid interest due on the Note shall,
at the option of the Borrower, be payable in cash or in Common Stock of the Borrower. If paid in Common Stock, the number of shares of Common Stock payable in interest shall be computed by dividing the unpaid interest due by the average closing bid
price of the Common Stock for the thirty (30) consecutive business days prior to the date of the Notice of Conversion. 

In the event, the Borrower has made payment of a portion of the principal due under this Note, the number of shares due the Holder upon
exercise of the right to convert shall be proportionally adjusted to an amount computed by multiplying the original number of shares available for conversion pursuant to this Note by a fraction, where the numerator is the remaining unpaid principal
balance of the note and the denominator is $25,000 multiplied by the number of units purchased. 

  
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 Borrower’s Right to Convert 

The Borrower shall have the right to convert the principal and any interest due under this Note into Common Stock of the Borrower as set
forth below. 
 Upon written notice to the Holder, the Borrower may, after a minimum of one hundred and eighty
(180) calendar days from the Issue Date or, alternatively, after the price of the Common Stock of the Borrower is at or above One Dollar ($1.00) per share for thirty (30) consecutive business days prior to the date of written notice to the
Holder, convert the outstanding principal due under this Note into shares of fully-paid and nonassessable shares of Common Stock of the Borrower. For each Unit purchased for $25,000, the Note shall be convertible into a maximum of 50,000 shares of
Common Stock of the Borrower. Any unpaid interest due on the Note shall, at the option of the Borrower, be payable in cash or in Common Stock of the Borrower. If paid in Common Stock, the number of shares of Common Stock payable in interest shall be
computed by dividing the unpaid interest due by the average closing bid price of the Common Stock for the thirty (30) consecutive business days prior to the Conversion Date. The Holder agrees that it has no right to prevent the Borrower from
effecting such conversion without the Holder’s consent. 
 In the event, the Borrower has made payment of a portion of the
principal due under this Note, the number of shares due the Holder upon exercise of the right to convert shall be proportionally adjusted to an amount computed by multiplying the original number of shares available for conversion pursuant to this
Note by a fraction, where the numerator is the remaining unpaid principal balance of the note and the denominator is $25,000 multiplied by the number of units purchased. 
 2.2 Notice of Conversion.  
 The Borrower shall exercise its right of
conversion by forwarding a Notice of Conversion, signed by the President of the Borrower, to the Holder, a) notifying the Holder that the Borrower is exercising its right to convert the Note to Common Shares of the Borrower and the effective date of
conversion (“the Conversion Date”), which date shall be at least ten (10) calendar days from the date of the Notice of Conversion, but no later than thirty (30) calendar days from the date of the Notice of Conversion; and b)
notifying the Holder of the amount of interest to be paid and whether the interest will be paid in cash or in Common Stock of the Borrower. The Holder agrees to surrender the original Note not later than seven (7) business days following
receipt of the Notice of Conversion (or if the original Note has been lost or destroyed, to provide an affidavit certifying to such loss or destruction). As soon as is practicable after the Conversion Date and subject to the receipt of the original
Note (or if the original Note has been lost or destroyed, an affidavit of Holder certifying to such loss or destruction), the Company shall issue and deliver, or cause to be issued and delivered to the Holder, a certificate or certificates for the
number of shares due the Holder with interest computed as of the Conversion Date. 
 2.3 Fractional Shares. 

No fractional shares shall be issued. The number of shares due the Holder will be rounded up or down to the nearest share. 

  
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 ARTICLE III 
 EVENT OF DEFAULT 
 3.1 Event of Default. 

The occurrence of any of the following events of default (“Event of Default”) shall, at the option of the Holder hereof, make
all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth
below: 
 (a) Failure to Pay Principal or Interest. The Borrower fails to pay principal, interest or other sum due under
this Note when due and such failure continues for a period of sixty (60) business days after the due date. 
 (b) Breach
of Covenant. The Borrower breaches any material covenant or other term or condition of the Subscription Agreement or this Note in any material respect and such breach, if capable of cure, continues for a period of sixty (60) business days
after written notice to the Borrower from the Holder. 
 (c) Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Subscription Agreement, or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith shall be false or misleading in any material respect as
of the date made and the Closing Date, and would otherwise have a material adverse effect on the Borrower. 
 (d) Receiver or
Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall
otherwise be appointed. 
 (e) Judgments. Any money judgment, writ or similar final process shall be entered or filed
against Borrower or any of its property or other assets for more than $1,500,000, and shall remain unvacated, unbonded or unstayed for a period of ninety (90) business days. 

(f) Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any
bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower and if instituted against Borrower are not dismissed within ninety (90) business days
of initiation. 
 3.2 Remedies Upon An Event of Default. 
 If an Event of Default shall have occurred and shall be continuing, the Holder of this Note may at any time at its option, (a) declare the entire unpaid principal balance of this Note, together with
all interest accrued hereon, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the occurrence of an Event of Default described in (i) Sections 3.1(f), without presentment, demand,
protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Borrower, the outstanding principal balance and accrued interest hereunder shall be automatically due and payable, and (ii) Sections 3.1(a)
through (e), the Holder may exercise or otherwise enforce any one or more of the Holder’s rights, powers, privileges, remedies and interests under this Note or applicable law. No course of delay on the part of the Holder shall operate as a
waiver thereof or otherwise prejudice the right of the Holder. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. 

  
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 ARTICLE IV 
 MISCELLANEOUS 
 4.1 Failure or Indulgence Not Waiver. 

No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise available. 
 4.2 Notices. 

All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail by registered or certified mail, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery or facsimile. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such communication shall be the addresses set forth in the Subscription Agreement or such other address as such party shall have specified most recently by written notice.

 4.3 Assignability. 
 This Note shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of the Holder and its successors in interest. This Note may not be assigned by the Holder without
the prior written consent of the Company, except to an Affiliate of Holder that is an “accredited investor” as such term is defined in Regulation D under the Securities Act of 1933. 
 4.4 Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. 
 The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance
and/or other injunctive relief). No remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Holder’s right to pursue actual damages for any failure by the
Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Holder. The Borrower acknowledges that a breach
by it of its obligations hereunder will cause irreparable and material harm to the Holder and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the
Holder shall be entitled, in addition to all other available rights and remedies, at law or in equity, to such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of
showing economic loss and without any bond or other security being required. 

  
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 4.5 WAIVER OF TRIAL BY JURY. 

THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND DELIEVERED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE PAYEE OR THE COMPANY. THIS PROVISION IS A MATERIAL INDUCEMNT FOR THE PAYEE’S PURCHASING THIS NOTE. 
 4.6
Payment Not Subject to Set-Off. 
 The Borrower acknowledges that it has not and will not be permitted to assert any right
of set-off or counterclaim with respect to its obligation to pay the principal and interest as of the Maturity Date as set forth herein and hereby waives any and all defenses it may have in the future with respect to such payment, except to the
extent that (a) this Note has been converted into Common Stock in accordance with Article II prior to the Maturity Date, (b) the Borrower’s defense is that Borrower has paid part or all of the principal and interest due hereon in
accordance with the terms hereof or (c) the Holder has expressly waived its right to such payment in a writing signed by Holder. 
 4.7
Governing Law and Jurisdiction. 
 The parties expressly agree that all the terms and provisions hereof shall be construed
in accordance with and governed by the laws of the State of Delaware. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court of competent
jurisdiction in the State of Delaware and they hereby submit to the exclusive jurisdiction of the courts of the State of Delaware with respect to any action or legal proceeding commenced by any party and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum. 
 4.8 Construction. 
 This Agreement shall not be construed against the party
preparing it, but shall be construed as if all parties prepared it. 
 4.9 Maximum Payments. 

Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the
Borrower to the Holder and thus refunded to the Borrower. 
 5.0 Shareholder Status. 

The Holder shall not have any rights as a shareholder of the Borrower with respect to shares underlying unconverted portions of this Note.
However, the Holder will have all rights of a shareholder of the Borrower with respect to Common Stock, if any, issued upon conversion of this Note and with respect to Common Stock, if any, issued in payment of interest due on this Note. 

  
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 5.1 Incorporation by Reference. 

The Private Placement Memorandum of Diamondhead Casino Corporation dated March 1, 2010, the Accredited Investor Questionnaire, the
Subscription Agreement, and the Warrant to Purchase Common Stock of Diamondhead Casino Corporation are incorporated herein by reference, together with all exhibits and appendices thereto and documents incorporated by reference therein. 

IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its name by an authorized officer as of the
         day of                     , 2010 

 

	
	DIAMONDHEAD CASINO CORPORATION
	By: Deborah A. Vitale
	Title: President

  
 7Appendix (D) to Private Placement Memorandum dated March 1, 2010

 EXHIBIT 10.7.2 
 WARRANT TO PURCHASE COMMON STOCK 
 OF 

DIAMONDHEAD CASINO CORPORATION 
 THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR THIS WARRANT OR ANY SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT. 
 DATE:
                    , 2010 
 This is to certify that FOR VALUE RECEIVED,
                                         
                   , (“Holder”), is entitled to purchase from Diamondhead Casino Corporation, a Delaware corporation (the
“Company”), subject to the provisions of this Warrant, up to 50,000 shares of fully paid, validly issued and nonassessable shares of Common Stock of the Company (“Common Stock”), par value $.001 per share, at a price per share
equal to $1.00 (the “Exercise Price”), which exercise may take place at any time or from time to time on or before 5:00 p.m., eastern standard time, on the date that is five (5) years from the date hereof or, if such date falls on a
Saturday, Sunday, or bank holiday, the next date that is not a Saturday, Sunday, or bank holiday (the “Expiration Date”). 
 This Warrant comprises a portion of a Unit being sold by the Company pursuant to the Private Placement Memorandum dated March 1, 2010 (the “Memorandum”). Unless otherwise defined herein,
terms defined in this Warrant shall have the meaning as set forth in the Memorandum. The Exercise Price is $1.00 per share. The number of shares of Common Stock to be received upon the exercise of this Warrant may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such exercise, and as adjusted from time to time, are hereinafter sometimes referred to as “Warrant Shares.” 

  
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	A	 EXERCISE OF WARRANT. 

 (1) This Warrant may be exercised in whole or in part at any time or from time to time during the Exercise Period; provided, however, that if such day is a day on which banking institutions in the State
of Maryland are authorized by law to close, then on the next succeeding day which shall not be such a day. This Warrant may be exercised by presentation and surrender hereof to the Company at its principal office with the Purchase Form annexed
hereto duly executed and accompanied by payment of the Exercise Price for the number of Warrant Shares specified in such form. As soon as practicable after each such exercise of the warrant and contingent on receipt of good and available funds, the
Company shall issue and deliver to the Holder a certificate for the Warrant Shares issuable upon such exercise, registered in the name of the Holder. If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant
for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the balance of the Warrant Shares. Upon issuance of the Warrant Shares, the Holder shall be deemed to be the holder of record of the shares of Common
Stock, notwithstanding that certificates representing such shares of Common Stock shall not then have been physically delivered to the Holder. 
  

	B.	 REDEMPTION OF WARRANT. 

 (1) This Warrant may be redeemed, at the option of the Company, at any time prior to the Expiration Date, upon the notice referred to in Section (B)(2), at the price of $.001 per Warrant Share
(“Redemption Price”), provided that the last sales price of the Common Stock has been at least $ 2.50 per share, on each of ten (10) consecutive trading days ending on the third business day prior to the date on which notice of
redemption is given (“Measurement Period”). Notwithstanding the foregoing, the Company may not exercise its redemption rights unless during the Measurement Period and from the end of the Measurement Period through the redemption date, the
Company has an effective registration statement with a current prospectus on file with the SEC pursuant to which the Warrant Shares may be sold. 
 (2) In the event the Company shall elect to redeem the Warrant, the Company shall fix a date for the redemption. Notice of redemption shall be given by the Company to the Holder of the Warrant not less
than 30 calendar days prior to the date fixed for redemption (“the Redemption Date”). The address for such communication shall be the address set forth in the Subscription Agreement or such other address as the Holder shall have specified
most recently by written notice. 

  
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 (3) The Warrant may be exercised in accordance with Section (A) at any time after
notice of redemption shall have been given by the Company pursuant to Section (B)(2) hereof and prior to the time and date fixed for redemption. On and after the redemption date, the Holder shall have no further rights except to receive, upon
surrender of the Warrant, the Redemption Price. 
  

	C.	 FRACTIONAL SHARES. 

 No fractional shares or script representing fractional shares shall be issued upon the exercise of this Warrant. The number of Warrant Shares due the Holder will be rounded up or down to the nearest
share. 
  

	D.	 EXCHANGE OR LOSS OF WARRANT. 

 This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company for other warrants of different denominations entitling the Holder thereof
to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to the Company at its principal place of business, duly executed, the Company shall, without charge, execute and deliver a
new Warrant in the name of the Holder named in such instrument and this Warrant shall be cancelled. This Warrant may be divided or combined with other warrants which carry the same rights upon presentation hereof at the principal office of the
Company, together with a written notice signed by the Holder hereof specifying the denominations in which new Warrants are to be issued. The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or
exchanged. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in the case of loss, theft or destruction, of reasonably satisfactory indemnification, or upon surrender and
cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date. 

  
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	E.	 RIGHTS OF THE HOLDER. 

 The Holder of this Warrant is not entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in the Warrant and are not
enforceable against the Company except to the extent set forth herein. 
  

	F.	 RESTRICTED STOCK 

 THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
CONVERSION OR EXERCISE HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT HERETO OR THERETO UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
DIAMONDHEAD CASINO CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. 
  

	G.	 OFFICER’S CERTIFICATE. 

 Whenever the number of Warrant Shares shall be adjusted as may be required by the foregoing provisions, the Company shall file at its principal place of business, a certificate, signed by the President of
the Company, setting forth in reasonable detail, the facts requiring an adjustment, the amount of the adjustment made, and the manner of computing the adjustment. Each such certificate shall be made available to a Holder of a Warrant upon request,
during normal business hours. 
  

	I.	 NONCIRCUMVENTION; RESERVATION OF SHARES. 

 The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this
Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Common Stock upon the exercise of this
Warrant, and (iii) shall, so long as any of this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the exercise of this Warrant,
the maximum number of Common Stock as shall from time to time be necessary to effect the exercise of this Warrant then outstanding. 

  
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	DIAMONDHEAD CASINO CORPORATION
	
	  
	By: Deborah A. Vitale
	Title: President

  
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 PURCHASE FORM 

The undersigned hereby irrevocably elects to exercise the within Warrant by purchasing
             Shares of Common Stock of Diamondhead Casino Corporation at One Dollar ($1.00) per share and hereby makes payment in the amount of
$             in payment therefore. 
  

	
	  
	Signature (Individual)
	
	  
	Name Printed or Typed
	
	  
	Signature (Joint) (All Holders must sign)
	
	  
	Name Printed or Typed
	 
	Address to which correspondence should be sent:
	
	  
	Street
                                       Unit/Apt
Number
	
	City                      State
             Zip Code             

  
 6

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