Exhibit 4.2


 


NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH
THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


FORM OF PREFERRED INVESTMENT OPTION


 


Blue
Water Vaccines Inc.


 


	Preferred Investment Option Shares: [●]	 	Issue Date: April 19, 2022
	 	 	 
	 	 	Initial Exercise Date: April 19, 2022



 


THIS PREFERRED INVESTMENT OPTION
(the “Preferred Investment Option”) certifies that, for value received, [●] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date set forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on April 20,
2026 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Blue Water Vaccines Inc., a Delaware
corporation (the “Company”), up to [●] shares (as subject to adjustment hereunder, the “Preferred Investment
Option Shares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Preferred Investment
Option shall be equal to the Exercise Price, as defined in Section 2(b).


 


Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated April 13, 2022, among the Company and the purchasers signatory thereto.


 


Section 2. Exercise.


 


a)   Exercise
of Preferred Investment Option. Exercise of the purchase rights represented by this Preferred Investment Option may be made, in whole
or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company
of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed
hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days
comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder
shall deliver the aggregate Exercise Price for the Preferred Investment Option Shares specified in the applicable Notice of Exercise by
wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c)
below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Preferred Investment Option to the Company until the Holder has purchased
all of the Preferred Investment Option Shares available hereunder and the Preferred Investment Option has been exercised in full, in which
case, the Holder shall surrender this Preferred Investment Option to the Company for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Preferred Investment Option resulting
in purchases of a portion of the total number of Preferred Investment Option Shares available hereunder shall have the effect of lowering
the outstanding number of Preferred Investment Option Shares purchasable hereunder in an amount equal to the applicable number of Preferred
Investment Option Shares purchased. The Holder and the Company shall maintain records showing the number of Preferred Investment Option
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Preferred Investment Option, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Preferred Investment Option Shares hereunder,
the number of Preferred Investment Option Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.


 






     


     


    

 


b)   Exercise
Price. The exercise price per share of Common Stock under this Preferred Investment Option shall be $6.65, subject to adjustment
hereunder (the “Exercise Price”).


 


c)   Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the resale of the Preferred Investment Option Shares to the Holder, then this Preferred Investment Option
may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Preferred Investment Option Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:


 


		(A) =	 as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section
2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior
to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P.
(“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including
until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)
the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of
Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such
Trading Day;



 


		(B) =	the Exercise Price of this Preferred Investment Option, as adjusted
hereunder; and



 


		(X)=	the number of Preferred Investment Option Shares that would
be issuable upon exercise of this Preferred Investment Option in accordance with the terms of this Preferred Investment Option if such
exercise were by means of a cash exercise rather than a cashless exercise.



 






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“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.


 


If
Preferred Investment Option Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Preferred Investment Option Shares shall take on the characteristics of the Preferred Investment Options
being exercised, and the holding period of the Preferred Investment Option Shares being issued may be tacked on to the holding period
of this Preferred Investment Option . The Company agrees not to take any position contrary to this Section 2(c).


 






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d)   Mechanics
of Exercise.


 


i.   Delivery
of Preferred Investment Option Shares Upon Exercise. The Company shall cause the Preferred Investment Option Shares purchased hereunder
to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account
with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Preferred
Investment Option Shares to or resale of the Preferred Investment Option Shares by the Holder or (B) the Preferred Investment Option Shares
are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of
the Preferred Investment Options), and otherwise by physical delivery of a certificate, registered in the Company’s share register
in the name of the Holder or its designee, for the number of Preferred Investment Option Shares to which the Holder is entitled pursuant
to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading
Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price
to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the
Notice of Exercise (such date, the “Preferred Investment Option Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Preferred Investment Option
Shares with respect to which this Preferred Investment Option has been exercised, irrespective of the date of delivery of the Preferred
Investment Option Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received
by the Preferred Investment Option Share Delivery Date. If the Company fails for any reason to deliver to the Holder the Preferred Investment
Option Shares subject to a Notice of Exercise by the Preferred Investment Option Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Preferred Investment Option Shares subject to such exercise (based
on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the third Trading Day after the Preferred Investment Option Share Delivery Date) for each Trading Day after such Preferred Investment
Option Share Delivery Date until such Preferred Investment Option Shares are delivered or Holder rescinds such exercise. The Company agrees
to maintain a transfer agent that is a participant in the FAST program so long as this Preferred Investment Option remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise.


 


ii.   Delivery
of New Preferred Investment Options Upon Exercise. If this Preferred Investment Option shall have been exercised in part, the Company
shall, at the request of a Holder and upon surrender of this Preferred Investment Option certificate, at the time of delivery of the Preferred
Investment Option Shares, deliver to the Holder a new Preferred Investment Option evidencing the rights of the Holder to purchase the
unpurchased Preferred Investment Option Shares called for by this Preferred Investment Option, which new Preferred Investment Option shall
in all other respects be identical with this Preferred Investment Option.


 


iii.   Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Preferred Investment Option Shares pursuant
to Section 2(d)(i) by the Preferred Investment Option Share Delivery Date, then the Holder will have the right to rescind such exercise.


 






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iv.   Compensation
for Buy-In on Failure to Timely Deliver Preferred Investment Option Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Preferred Investment Option Shares in accordance
with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Preferred Investment Option Share Delivery Date,
and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Preferred Investment
Option Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay
in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Preferred Investment Option
Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the
sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of
the Preferred Investment Option and equivalent number of Preferred Investment Option Shares for which such exercise was not honored (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with
an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Preferred Investment Option as required pursuant to the terms hereof.


 


v.   No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Preferred Investment Option. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.


 


vi.   Charges,
Taxes and Expenses. Issuance of Preferred Investment Option Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Preferred Investment Option Shares, all of which taxes and expenses
shall be paid by the Company, and such Preferred Investment Option Shares shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event that Preferred Investment Option Shares are
to be issued in a name other than the name of the Holder, this Preferred Investment Option when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of
a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing
similar functions) required for same-day electronic delivery of the Preferred Investment Option Shares.


 






    5


     


    

 


vii.   Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Preferred
Investment Option, pursuant to the terms hereof.


 


e)   Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Preferred Investment Option, and a Holder shall not have the
right to exercise any portion of this Preferred Investment Option, pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties
shall include the number of shares of Common Stock issuable upon exercise of this Preferred Investment Option with respect to which such
determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Preferred Investment Option beneficially owned by the Holder or any of its Affiliates or Attribution Parties
and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without
limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that
such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required
to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether
this Preferred Investment Option is exercisable (in relation to other securities owned by the Holder together with any Affiliates and
Attribution Parties) and of which portion of this Preferred Investment Option is exercisable shall be in the sole discretion of the Holder,
and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Preferred Investment
Option is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of
which portion of this Preferred Investment Option is exercisable, in each case subject to the Beneficial Ownership Limitation, and the
Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the
number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company
or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder,
the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. 
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Preferred Investment Option, by the Holder or its Affiliates or Attribution Parties since the
date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Preferred Investment Option. The Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds
9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
upon exercise of this Preferred Investment Option held by the Holder and the provisions of this Section 2(e) shall continue to apply.
Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered
to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a successor holder of this Preferred Investment Option.


 






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Section 3. Certain
Adjustments.


 


a)   Stock
Dividends and Splits. If the Company, at any time while this Preferred Investment Option is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise
of this Preferred Investment Option), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event,
and the number of shares issuable upon exercise of this Preferred Investment Option shall be proportionately adjusted such that the aggregate
Exercise Price of this Preferred Investment Option shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.


 


b)   Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete exercise of this Preferred Investment Option (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


c)   Pro
Rata Distributions. During such time as this Preferred Investment Option is outstanding, if the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Preferred Investment Option, then, in each such case, the Holder shall be entitled to participate
in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Preferred Investment Option (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).


 






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d)   Fundamental
Transaction. If, at any time while this Preferred Investment Option is outstanding, (i) the Company, directly or indirectly, in one
or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all
of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or
other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the
other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or
share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Preferred Investment Option, the Holder shall have the right to receive, for each Preferred Investment Option Share that
would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the
Holder (without regard to any limitation in Section 2(e) on the exercise of this Preferred Investment Option), the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which this Preferred Investment Option is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Preferred Investment Option). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Preferred
Investment Option following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction,
the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable
Fundamental Transaction), purchase this Preferred Investment Option from the Holder by paying to the Holder an amount of cash equal to
the Black Scholes Value (as defined below) of the remaining unexercised portion of this Preferred Investment Option on the date of the
consummation of such Fundamental Transaction; provided, however, that if the Fundamental Transaction is not within the Company’s control,
including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this
Preferred Investment Option, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock
are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such
holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Preferred
Investment Option based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined
as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from
the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day immediately following the public
announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater
of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered
in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the
Trading Day of the Holder’s request pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the
date of the public announcement of the applicable Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The
payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the
later of (i) five (5) Trading Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. 
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Preferred Investment Option and the other Transaction
Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory
to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of
the Holder, deliver to the Holder in exchange for this Preferred Investment Option a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Preferred Investment Option which is exercisable for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Preferred Investment Option (without regard to any limitations on the exercise of this Preferred Investment Option)
prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Preferred Investment Option immediately prior to the consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Preferred
Investment Option and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Preferred Investment
Option and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.


 






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e)   Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.


 


f)   Notice
to Holder.


 


i.   Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Preferred Investment Option Shares and setting forth a brief statement of the facts requiring such adjustment.


 


ii.   Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of
the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property,
or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company,
then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email
address as it shall appear upon the Preferred Investment Option Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Preferred Investment Option constitutes,
or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Preferred
Investment Option during the period commencing on the date of such notice to the effective date of the event triggering such notice except
as may otherwise be expressly set forth herein.


 






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Section 4. Transfer
of Preferred Investment Option.


 


a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Preferred Investment Option and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon surrender of this Preferred Investment Option at the principal office
of the Company or its designated agent, together with a written assignment of this Preferred Investment Option substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Preferred Investment
Option or Preferred Investment Options in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Preferred Investment Option evidencing the portion
of this Preferred Investment Option not so assigned, and this Preferred Investment Option shall promptly be cancelled. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Preferred Investment Option to the Company
unless the Holder has assigned this Preferred Investment Option in full, in which case, the Holder shall surrender this Preferred Investment
Option to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning
this Preferred Investment Option in full. The Preferred Investment Option, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Preferred Investment Option Shares without having a new Preferred Investment Option issued.


 


b)   New
Preferred Investment Options. This Preferred Investment Option may be divided or combined with other Preferred Investment Options
upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Preferred Investment Options are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Preferred
Investment Option or Preferred Investment Options in exchange for the Preferred Investment Option or Preferred Investment Options to be
divided or combined in accordance with such notice. All Preferred Investment Options issued on transfers or exchanges shall be dated the
Issue Date of this Preferred Investment Option and shall be identical with this Preferred Investment Option except as to the number of
Preferred Investment Option Shares issuable pursuant thereto.


 


c)   Preferred
Investment Option Register. The Company shall register this Preferred Investment Option, upon records to be maintained by the Company
for that purpose (the “Preferred Investment Option Register”), in the name of the record Holder hereof from time to
time. The Company may deem and treat the registered Holder of this Preferred Investment Option as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.


 


d)   Transfer
Restrictions. If, at the time of the surrender of this Preferred Investment Option in connection with any transfer of this Preferred
Investment Option, the transfer of this Preferred Investment Option shall not be either (i) registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or
manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of
allowing such transfer, that the Holder or transferee of this Preferred Investment Option, as the case may be, comply with the provisions
of Section 5.7 of the Purchase Agreement.


 






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e)   Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Preferred Investment Option
and, upon any exercise hereof, will acquire the Preferred Investment Option Shares issuable upon such exercise, for its own account and
not with a view to or for distributing or reselling such Preferred Investment Option Shares or any part thereof in violation of the Securities
Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.


 


Section 5. Miscellaneous.


 


a)   No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Preferred Investment Option does not entitle the Holder to any voting
rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except
as expressly set forth in Section 3. Without limiting the rights of a Holder to receive Preferred Investment Option Shares on a “cashless
exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company
be required to net cash settle an exercise of this Preferred Investment Option.


 


b)   Loss,
Theft, Destruction or Mutilation of Preferred Investment Option. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Preferred Investment Option or any stock certificate
relating to the Preferred Investment Option Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which, in the case of the Preferred Investment Option, shall not include the posting of any bond), and upon surrender and cancellation
of such Preferred Investment Option or stock certificate, if mutilated, the Company will make and deliver a new Preferred Investment Option
or stock certificate of like tenor and dated as of such cancellation, in lieu of such Preferred Investment Option or stock certificate.


 


c)   Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.


 


d)   Authorized
Shares.


 


The Company covenants
that, during the period the Preferred Investment Option is outstanding, it will reserve from its authorized and unissued Common Stock
a sufficient number of shares to provide for the issuance of the Preferred Investment Option Shares upon the exercise of any purchase
rights under this Preferred Investment Option. The Company further covenants that its issuance of this Preferred Investment Option shall
constitute full authority to its officers who are charged with the duty of issuing the necessary Preferred Investment Option Shares upon
the exercise of the purchase rights under this Preferred Investment Option. The Company will take all such reasonable action as may be
necessary to assure that such Preferred Investment Option Shares may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that
all Preferred Investment Option Shares which may be issued upon the exercise of the purchase rights represented by this Preferred Investment
Option will, upon exercise of the purchase rights represented by this Preferred Investment Option and payment for such Preferred Investment
Option Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens
and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).


 


Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, 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 Preferred Investment Option,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Preferred Investment Option against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value of any Preferred Investment Option Shares above the amount
payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable Preferred Investment Option Shares upon
the exercise of this Preferred Investment Option and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations
under this Preferred Investment Option.


 






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Before taking any
action which would result in an adjustment in the number of Preferred Investment Option Shares for which this Preferred Investment Option
is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto,
as may be necessary from any public regulatory body or bodies having jurisdiction thereof.


 


e)   Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Preferred Investment Option shall be determined
in accordance with the provisions of the Purchase Agreement.


 


f)   Restrictions.
The Holder acknowledges that the Preferred Investment Option Shares acquired upon the exercise of this Preferred Investment Option, if
not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities
laws.


 


g)   Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to
exercise this Preferred Investment Option terminates on the Termination Date. Without limiting any other provision of this Preferred Investment
Option, if the Company willfully and knowingly fails to comply with any provision of this Preferred Investment Option, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.


 


h)   Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.


 


i)   Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Preferred Investment Option
to purchase Preferred Investment Option Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.


 






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j)   Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Preferred Investment Option. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Preferred Investment Option and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy at law would be adequate.


 


k)   Successors
and Assigns. Subject to applicable securities laws, this Preferred Investment Option and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Preferred Investment Option are intended to be for the benefit of any Holder from time to time
of this Preferred Investment Option and shall be enforceable by the Holder or holder of Preferred Investment Option Shares.


 


l)   Amendment.
This Preferred Investment Option may be modified or amended or the provisions hereof waived with the written consent of the Company, on
the one hand, and the Holder of this Preferred Investment Option, on the other hand.


 


m)   Severability.
Wherever possible, each provision of this Preferred Investment Option shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Preferred Investment Option shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Preferred Investment Option.


 


n)   Headings.
The headings used in this Preferred Investment Option are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Preferred Investment Option.


 


 


********************


 


(Signature Page Follows)


 






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IN WITNESS WHEREOF, the Company
has caused this Preferred Investment Option to be executed by its officer thereunto duly authorized as of the date first above indicated.


 


	 	Blue Water Vaccines Inc.
	 	 	 
	 	By:	            
	 	Name:	 
	 	Title:	 



 




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NOTICE OF EXERCISE


 


To: Blue
Water Vaccines Inc.


 


(1)   The
undersigned hereby elects to purchase ________ Preferred Investment Option Shares of the Company pursuant to the terms of the attached
Preferred Investment Option (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.


 


(2)   Payment
shall take the form of (check applicable box):


 


 ☐ in
lawful money of the United States; or


 


☐ if permitted the
cancellation of such number of Preferred Investment Option Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Preferred Investment Option with respect to the maximum number of Preferred Investment Option Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).


 


(3)   Please
issue said Preferred Investment Option Shares in the name of the undersigned or in such other name as is specified below:


 


_______________________________


 


 


The Preferred Investment Option Shares shall be
delivered to the following DWAC Account Number:


 


_______________________________


 


_______________________________


 


_______________________________


 


(4)   Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act
of 1933, as amended.


 


[SIGNATURE
OF HOLDER]


 


Name of Investing Entity: ________________________________________________________________________


Signature of Authorized Signatory of Investing
Entity: _________________________________________________


Name of Authorized Signatory: ___________________________________________________________________


Title of Authorized Signatory: ____________________________________________________________________


Date: ________________________________________________________________________________________


 




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 EXHIBIT B


 


ASSIGNMENT FORM


 


(To assign the foregoing
Preferred Investment Option, execute this form and supply required information. Do not use this form to exercise the Preferred Investment
Option to purchase shares.)


 


FOR VALUE RECEIVED, the foregoing
Preferred Investment Option and all rights evidenced thereby are hereby assigned to


 


	Name:	 
	 	(Please Print)
	 	 
	Address:	 
	 	(Please Print)
	 	 
	Phone Number:	 
	 	 
	Email Address:	 
	Dated: _______________ __, ______	 
	Holder’s Signature:	 
	Holder’s Address:	 
	 	 



 


 


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