Document:

Exhibit
4.2

 

EXECUTION
VERSION

 

WARRANT
A

 

THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL IN GENERALLY ACCEPTABLE FORM THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

KRAIG
BIOCRAFT LABORATORIES, INC.

 

Warrant
To Purchase Common Stock

 

	Warrant
    No.: KBLB 3 1-2	Number
    of Shares: 	12,500,000
	 	 	 
	 	Warrant
    Exercise Price:	$0.12
	 	 	 
	 	Expiration
    Date: 	January
    18, 2027

 

Date
of Issuance: January 18, 2022

 

Kraig
Biocraft Laboratories, Inc., a Wyoming corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, YAII PN, LTD. (the “Holder”), the registered
holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender
of this Warrant, at any time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined
herein) up to 12,500,000 fully paid and nonassessable shares of Common Stock (as defined herein) of the Company (the “Warrant
Shares”) at the exercise price per share provided in Section 1(b) below or as subsequently adjusted; provided, however, that
in no event shall the holder be entitled to exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant
Shares which, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the
holder and its affiliates to exceed 4.99% of the outstanding shares of the Common Stock following such exercise, except within 60 days
of the Expiration Date (however, such restriction may be waived by Holder (but only as to itself and not to any other holder) upon not
less than 65 days prior notice to the Company). For purposes of the foregoing proviso, the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such proviso is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised Warrants beneficially owned by the holder and its affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the holder and its
affiliates (including, without limitation, any convertible notes or preferred stock) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, 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 (1) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written request of any holder, the Company shall promptly, but in no event later than 1 Business Day following the receipt of
such notice, confirm in writing to any such 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 exercise of Warrants (as defined below) by such holder
and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.

 

    	 

     

    

 

Section
1.

 

(a)
This Warrant is issued pursuant to the Securities Purchase Agreement (“Securities Purchase Agreement”) dated the date
hereof between the Company and the Holder or issued in exchange or substitution thereafter or replacement thereof. Each Capitalized term
used, and not otherwise defined herein, shall have the meaning ascribed thereto in the Securities Purchase Agreement.

 

(b)
Definitions. The following words and terms as used in this Warrant shall have the following meanings:

 

(i)
“Approved Stock Plan” means a stock plan that has been approved by the Board of Directors of the Company prior to
the date of the Securities Purchase Agreement, pursuant to which the Company’s securities may be issued only to any employee, officer
or director for services provided to the Company.

 

(ii)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New
York are authorized or required by law to remain closed.

 

(iii)
“Closing Bid Price” means the closing bid price (or closing trade if there is no closing bid price) of Common Stock
as quoted on the Principal Market (as reported by Bloomberg, LP (“Bloomberg”) through its “Volume at Price”
function).

 

(iv)
“Common Stock” means (i) the Company’s Class A common stock, no par value per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

 

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(v)
“Event of Default” means an event of default under the Securities Purchase Agreement or the Convertible Debenture
issued in connection therewith.

 

(vi)
“Excluded Securities” means, (a) shares issued or deemed to have been issued by the Company pursuant to an Approved
Stock Plan, (b) the shares of Common Stock issued or deemed to be issued by the Company upon conversion of the Convertible Debenture
or exercise of the Warrants, (c) the shares of Common Stock issued or deemed to be issued by the Company upon conversion of the convertible
debentures or exercise of the warrants previously issued to and held by the Investor (d) shares of Common Stock or other securities issued
in connection with a strategic acquisition, intellectual property licensing agreement or other similar transaction not initiated for
the purpose of capital raising, (e) warrants and options existing and issued as of the Issuance Date and shares issued pursuant to the
exercise of said warrants and options, and (f) any securities of the Company registered in registration statement No. 333-238883 currently
on file with the SEC.

 

(vii)
“Expiration Date” means the date set forth on the first page of this Warrant.

 

(viii)
“Issuance Date” means the date hereof.

 

(ix)
“Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

(x)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization and a government or any department or agency thereof.

 

(xi)
“Primary Market” means the OTC Markets’ OTCQB® Market.

 

(xii)
“Securities Act” means the Securities Act of 1933, as amended.

 

(xiii)
“Warrant” means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.

 

(xiv)
“Warrant Exercise Price” shall be $0.12 or as subsequently adjusted as provided in Section 8 hereof.

 

(c)
Other Definitional Provisions.

 

(i)
Except as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s successors
and (B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the same may have been
or may be amended or supplemented from time to time.

 

(ii)
When used in this Warrant, the words “herein”, “hereof”, and “hereunder”
and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “Section”,
“Schedule”, and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to, this Warrant
unless otherwise specified.

 

    	3

     

    

 

(iii)
Whenever the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural,
and vice versa.

 

Section
2. Exercise of Warrant.

 

(a)
Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company,
pro rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business Day, commencing
with the first day after the date hereof, and prior to 5:00 P.M. Eastern Time on the Expiration Date (i) by delivery of a written notice,
in the form of the subscription notice attached as Exhibit A hereto (the “Exercise Notice”), of such holder’s
election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, payment to the Company of
an amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being purchased, multiplied by the number of Warrant
Shares (at the applicable Warrant Exercise Price) as to which this Warrant is being exercised (plus any applicable issue or transfer
taxes) (the “Aggregate Exercise Price”) in cash or wire transfer of immediately available funds and the surrender
of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) to a common
carrier for overnight delivery to the Company or (ii) if at the time of exercise, the Warrant Shares are not subject to an effective
registration statement or if an Event of Default has occurred and is continuing, by delivering an Exercise Notice and in lieu of making
payment of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):

 

Net
Number = (A x B) – (A x C)

B

 

For
purposes of the foregoing formula:

 

A
= the total number of Warrant Shares with respect to which this Warrant is then being exercised.

 

B
= the Closing Bid Price of the Common Stock on the date of exercise of the Warrant.

 

C
= the Warrant Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

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In
the event of any exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or before
the 3rd Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or
an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) and the receipt of the representations
of the holder specified in Section 6 hereof, if requested by the Company (the “Exercise Delivery Documents”), and
if the Warrant Shares are subject to an effective and current Registration Statement and the Common Stock is DTC eligible, credit such
aggregate number of shares of Common Stock to which the holder shall be entitled to the holder’s or its designee’s balance
account with The Depository Trust Company; provided, however, if the holder who submitted the Exercise Notice requested physical delivery
of any or all of the Warrant Shares, or, if the Warrant Shares are not subject to an effective and current Registration Statement and
the Common Stock is not DTC eligible then the Company shall, on or before the 3rd Business Day following receipt of the Exercise
Delivery Documents, issue and surrender to a common carrier for overnight delivery to the address specified in the Exercise Notice, a
certificate, registered in the name of the holder, for the number of shares of Common Stock to which the holder shall be entitled pursuant
to such request. The Warrant Shares shall be issued with a legend unless they are subject to an effective and current Registration Statement
or they are being transferred pursuant to an exemption from such registration requirements, the availability of which is confirmed in
an opinion of counsel acceptable to the Company’s Transfer Agent. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (i) or (ii) above the holder of this Warrant shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised. In the case of a dispute as to the determination
of the Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the holder the number of Warrant Shares that is not disputed and shall submit the disputed determinations or arithmetic calculations
to the holder via facsimile within 1 Business Day of receipt of the holder’s Exercise Notice.

 

(b)
If the holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation of the
Warrant Shares within 1 day of such disputed determination or arithmetic calculation being submitted to the holder, then the Company
shall immediately submit via electronic mail (i) the disputed determination of the Warrant Exercise Price or the Closing Bid Price to
an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its independent,
outside accountant. The Company shall cause the investment banking firm or the accountant, as the case may be, to perform the determinations
or calculations and notify the Company and the holder of the results no later than 72 hours from the time it receives the disputed determinations
or calculations. Such investment banking firm’s or accountant’s determination or calculation, as the case may be, shall be
deemed conclusive absent manifest error.

 

(c)
Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable
and in no event later than 5 Business Days after any exercise and at its own expense, issue a new Warrant identical in all respects to
this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised.

 

(d)
No fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather the number of Warrant Shares issued
upon such exercise of this Warrant shall be rounded up or down to the nearest whole number.

 

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(e)
If the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the holder within 5 days of receipt of the
Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the holder is entitled or to credit the holder’s
balance account with The Depository Trust Company for such number of Warrant Shares to which the holder is entitled upon the holder’s
exercise of this Warrant, unless such failure results from a failure of the Company’s Transfer Agent to issue such shares as a
result of an act of terrorism, war, natural disaster, act of god or other force majure event, the Company shall, in addition to any other
remedies under this Warrant or otherwise available to such holder, pay as additional damages in cash to such holder on each day the issuance
of such certificate for Warrant Shares is not timely effected an amount equal to 0.025% of the product of (A) the sum of the number of
Warrant Shares not issued to the holder on a timely basis and to which the holder is entitled, and (B) the Closing Bid Price of the Common
Stock for the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the holder
without violating this Section 2.

 

(f)
If within 5 days after the Company’s receipt of the Exercise Delivery Documents and the written request of the Holder that a new
Warrant be issued, the Company fails to deliver a new Warrant to the holder for the number of Warrant Shares to which such holder is
entitled pursuant to Section 2 hereof, then, in addition to any other available remedies under this Warrant, or otherwise available to
such holder, the holder shall be entitled to exercise or transfer its rights under such new warrant as if it had received such new Warrant
and the Company shall be obligated to honor such exercises or transfers as if the holder had submitted the new Warrant without violating
this Section 2.

 

Section
3. Covenants as to Common Stock. The Company hereby covenants and agrees as follows:

 

(a)
This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and
validly issued.

 

(b)
All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.

 

(c)
During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized
and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented
by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price. If
at any time the Company does not have a sufficient number of shares of Common Stock authorized and available, then the Company shall
call and hold a special meeting of its stockholders within 60 days of that time for the sole purpose of increasing the number of authorized
shares of Common Stock.

 

(d)
If at any time after the date hereof the Company shall file a Registration Statement, the Company shall include the Warrant Shares issuable
to the holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all Warrant Shares from time to time issuable upon the exercise of this Warrant on the Primary Market or such national
securities exchange or automated quotation system on which the Common Stock of the Company is listed; and the Company shall so list on
the Primary Market or such national securities exchange or automated quotation system on which the Common Stock of the Company is listed,
as the case may be, and shall maintain such listing of, any other shares of capital stock of the Company issuable upon the exercise of
this Warrant Shares if and so long as any shares of the same class shall be listed on the Primary Market or such national securities
exchange or automated quotation system on which the Common Stock of the Company is listed. Provided, however, that the foregoing requirement
shall not apply with regard to any registration statement which is currently on file with the SEC (including any related registration
statement, prospectus or supplement required by Rule 462 or 424 of the Securities Act).

 

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(e)
The Company will not, by amendment of its Articles 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 to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order
to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose
of this Warrant. The Company will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

(f)
This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially
all of the Company’s assets.

 

Section
4. Taxes. The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

Section
5. Warrant Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant
shall be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted
by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with
copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving
thereof to the stockholders.

 

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Section
6. Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant
and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public
sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act;
provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares
for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance
with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further represents,
by acceptance hereof, that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501(a)(1)
of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an “Accredited Investor”).
Upon exercise of this Warrant the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company,
that the Warrant Shares so purchased are being acquired solely for the holder’s own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder
cannot make such representations because they would be factually incorrect, it shall be a condition to such holder’s exercise of
this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company
that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities laws.

 

Section
7. Ownership and Transfer.

 

(a)
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice
to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any
Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events recognizing any transfers made in accordance with the terms of this Warrant.

 

Section
8. Adjustment of Warrant Exercise Price. The Warrant Exercise Price of this Warrant shall be adjusted from time to time as follows:

 

(a)
Adjustment of Warrant Exercise Price. If and whenever on or after the Issuance Date of this Warrant, the Company issues or sells,
or is deemed to have issued or sold, any shares of Common Stock (other than Excluded Securities), for a consideration per share (the
“New Issuance Price”) less than the Warrant Exercise Price, in effect immediately prior to such issuance or sale (the
“Applicable Price”), then immediately after such issue or sale the Warrant Exercise Price then in effect shall be
reduced to an amount equal to such New Issuance Price.

  

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(b)
Effect on Warrant Exercise Price of Certain Events. For purposes of determining the adjusted Warrant Exercise Price under Section
8(a) above, the following shall be applicable:

 

(i)
Issuance of Options. If after the date hereof, the Company in any manner grants any Options, other than Excluded Securities, and
the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or
exchange of any convertible securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of
such Option for such price per share. For purposes of this Section 8(b)(i), the lowest price per share for which one share of Common
Stock is issuable upon exercise of such Options shall be equal to the sum of the lowest amounts of consideration receivable by the Company
with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option or upon conversion
or exchange of any convertible security issuable upon exercise of such Option. No further adjustment of the Warrant Exercise Price shall
be made upon the actual issuance of such Common Stock or of such convertible securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of such convertible securities.

 

(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any convertible securities, other than Excluded
Securities, and the lowest price per share for which 1 share of Common Stock is issuable upon the conversion or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such convertible securities for such price per share. For the purposes of this Section
8(b)(ii), the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange shall be equal
to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale of the convertible security and upon conversion or exchange of such convertible security. No further
adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such
convertible securities, and if any such issue or sale of such convertible securities is made upon exercise of any Options for which adjustment
of the Warrant Exercise Price had been or are to be made pursuant to other provisions of this Section 8(b), no further adjustment of
the Warrant Exercise Price shall be made by reason of such issue or sale.

 

(iii)
Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, other than Excluded Securities,
the additional consideration, if any, payable upon the issue, conversion or exchange of any convertible securities, or the rate at which
any convertible securities are convertible into or exchangeable for Common Stock changes at any time, the Warrant Exercise Price in effect
at the time of such change shall be adjusted to the Warrant Exercise Price which would have been in effect at such time had such Options
or convertible securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this Section 8(b)(iii), if the terms of any Option or convertible
security that was outstanding as of the Issuance Date of this Warrant, other than Excluded Securities, are changed in the manner described
in the immediately preceding sentence, then such Option or convertible security and the Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment pursuant to this Section 8(b) shall
be made if such adjustment would result in an increase of the Warrant Exercise Price then in effect.

 

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(iv)
Calculation of Consideration Received. If any Common Stock, Options or convertible securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefore will be deemed to be the gross amount received by the Company
therefore. If any Common Stock, Options or convertible securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists
of marketable securities, in which case the amount of consideration received by the Company will be the market price of such securities
on the date of receipt of such securities. If any Common Stock, Options or convertible securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefore will be deemed
to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock,
Options or convertible securities, as the case may be. The fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise
of the Warrants then outstanding. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5)
Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected
by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
then outstanding. The determination of such appraiser shall be final and binding upon all parties and the fees and expenses of such appraiser
shall be borne jointly by the Company and the holders of Warrants.

 

(v)
Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which any specific consideration or no consideration is allocated to such Options by
the parties thereto (1) the per-share value of the shares of Common Stock included in such integrated transaction shall be the sole determinate
as to whether the Warrant Exercise Price is to be adjusted in accordance with the provisions of Section 8(a), above, (2) if no shares
of Common Stock are included in such integrated transaction, but shares of the Company’s preferred stock are included in such integrated
transaction, then the per-share conversion price of shares of that preferred stock shall be the sole determinate as to whether the Warrant
Exercise Price is to be adjusted in accordance with the provisions of Section 8(a), above, and (3) if no shares of Common Stock and no
shares of the Company’s preferred stock are included in such integrated transaction, but debt convertible into shares of Common
Stock (whether directly or through an intermediate step, e.g., an initial conversion of that debt into shares of the Company’s
preferred stock that, thereafter, could be converted into shares of Common Stock), then the per-share conversion price of shares of such
debt shall be the sole determinate as to whether the Warrant Exercise Price is to be adjusted in accordance with the provisions of Section
8(a), above; provided, however, that, if the exercise price of the Option is less than the Warrant Exercise Price (after
having taken into account any adjustments thereto in accordance with the provisions of (1), (2), or (3), immediately above), then the
Option exercise price shall be utilized in connection with the Warrant Exercise Price adjustment provisions of Section 8(a), above.

 

(vi)
Treasury Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or
for the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of Common Stock.

 

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(vii)
Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (1) to receive a dividend
or other distribution payable in Common Stock, Options or in convertible securities or (2) to subscribe for or purchase Common Stock,
Options or convertible securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.

 

(c)
Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date
of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, any Warrant Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant will
be proportionately decreased. Any adjustment under this Section 8(c) shall become effective at the close of business on the date the
subdivision or combination becomes effective.

 

(d)
Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire
its assets) to holders 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 or other
similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:

 

(i)
any Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to
a price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be the Closing Sale Price
of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good
faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (B) the denominator shall be the Closing
Sale Price of the Common Stock on the trading day immediately preceding such record date; and

 

(ii)
either (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination
of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately
preceding clause (i), or (B) in the event that the Distribution is of common stock of a company whose common stock is traded on a national
securities exchange or a national automated quotation system, then the holder of this Warrant shall receive an additional warrant to
purchase Common Stock, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable
into the amount of the assets that would have been payable to the holder of this Warrant pursuant to the Distribution had the holder
exercised this Warrant immediately prior to such record date and with an exercise price equal to the amount by which the exercise price
of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i).

 

    	11

     

    

 

(e)
Certain Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for
by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features, but excluding Excluded Securities), then the Company’s Board of Directors will make an appropriate adjustment
in the Warrant Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the
rights of the holders of the Warrants; provided, except as set forth in section 8(c),that no such adjustment pursuant to this Section
8(e) will increase the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant
to this Section 8.

 

(f)
Voluntary Adjustments By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

(g)
Notices.

 

(i)
Immediately upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this Warrant,
setting forth in reasonable detail, and certifying, the calculation of such adjustment.

 

(ii)
The Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change (as defined below),
dissolution or liquidation, provided that such information shall be made known to the public prior to or in conjunction with such notice
being provided to such holder.

 

(iii)
The Company will also give written notice to the holder of this Warrant at least 10 days prior to the date on which any Organic Change,
dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or in conjunction
with such notice being provided to such holder.

 

Section
9. Purchase Rights; Reorganization, Reclassification, Consolidation, Merger or Sale.

 

(a)
In addition to any adjustments pursuant to Section 8 above, if at any time the Company grants, issues or sells any Options, convertible
securities or rights to purchase stock, warrants, securities or other property other than Excluded Securities, pro rata to the record
holders of any class of Common Stock (the “Purchase Rights”), then the holder of this Warrant will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant 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 Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

    	12

     

    

 

(b)
Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s
assets to another Person or other transaction in each case which is affected in such a way that holders of Common Stock are entitled
to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock
is referred to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially all
of the Company’s assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving entity,
the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the
“Acquiring Entity”) a written agreement (in form and substance satisfactory to the holders of Warrants representing
at least two-thirds (iii) of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to deliver to each holder of
Warrants in exchange for such Warrants, a security of the Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to this Warrant and satisfactory to the holders of the Warrants (including an adjusted warrant exercise price equal
to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number
of shares of Common Stock acquirable and receivable upon exercise of the Warrants without regard to any limitations on exercise, if the
value so reflected is less than any Applicable Warrant Exercise Price immediately prior to such consolidation, merger or sale). Prior
to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance satisfactory to
the holders of Warrants representing a majority of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to insure
that each of the holders of the Warrants will thereafter have the right to acquire and receive in lieu of or in addition to (as the case
may be) the Warrant Shares immediately theretofore issuable and receivable upon the exercise of such holder’s Warrants (without
regard to any limitations on exercise), such shares of stock, securities or assets that would have been issued or payable in such Organic
Change with respect to or in exchange for the number of Warrant Shares which would have been issuable and receivable upon the exercise
of such holder’s Warrant as of the date of such Organic Change (without taking into account any limitations or restrictions on
the exercisability of this Warrant).

 

Section
10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
on receipt of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination
and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

Section
11. Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business Day after
deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive
the same, or (iii) receipt, when sent by electronic mail (provided that the electronic mail transmission is not returned in error or
the sender is not otherwise notified of any error in transmission. The addresses and e-mail addresses for such communications shall be:

 

    	13

     

    

 

	If
    to Holder:	YAII
    PN, Ltd. 
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Attention:	Mark
    A. Angelo
	 	Telephone:	(201)
    536-5114
	 	Email:	
	 	 	 
	With
    Copy to:	David
    Gonzalez, Esq.
	 	1012
    Springfield Avenue 
	 	Mountainside,
    NJ 07092
	 	Telephone:	(201)
    536-5109
	 	Email:	
	 	 	 
	If
    to the Company, to:	Kraig
    Biocraft Laboratories, Inc.
	 	2723
    South State Street – Suite 150
	 	Ann
    Arbor, MI 48104
	 	Attention:
    Kim Thompson
	 	Telephone:	(734)
    619-8066
	 	Email:	
	 	 	 
	With
    a copy (which shall not constitute notice) to:	Hunter
    Taubman Fischer & Li LLC
	 	48
    Wall Street, Suite 1100
	 	New
    York, NY 10005
	 	 	 
	 	Attention:
    	Louis
    Taubman, Esq.
	 	Telephone:	(917)
    512-0827
	 	Email:	

 

or
at such other address and/or electronic email address and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party 3 Business Days prior to the effectiveness of such change. Written confirmation of receipt
(i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the
sender’s computer containing the time, date, recipient’s electronic mail address and the text of such electronic mail or
(iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by electronic
mail or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

Section
12. Date. The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly void and of no
effect after the close of business on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of
Section 3(d) shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise
of this Warrant.

 

    	14

     

    

 

Section
13. Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrant may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the holders of Warrants representing at least 2/3rds of the Warrant Shares issuable upon exercise of the Warrants
then outstanding; provided that, except for Section 8(c), no such action may increase the Warrant Exercise Price or decrease the number
of shares or class of stock obtainable upon exercise of any Warrant without the written consent of the holder of such Warrant.

 

Section
14. Assignment. This Warrant may be assigned by the Holder only if such assignment is made in compliance with all applicable laws, including
federal and state securities laws. In connection with any permitted transfer, the transferee shall make such representation and warranties
to the Company, consistent with Section 6 hereof, s the Company may reasonably request.

 

Section
15. Descriptive Headings; Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted
for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of New Jersey shall govern all issues
concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of the State of New Jersey, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New Jersey. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Superior Court of the state courts sitting in Union County New Jersey and the Federal District Court for the District
of New Jersey sitting in Newark, New Jersey, for the adjudication of any dispute hereunder or in connection herewith or therewith, or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.

 

Section
16. Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Warrant shall be cumulative and
in addition to all other remedies available under this Warrant, in any other agreement between the Company and the Holder, at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the
Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required.

 

Section
17. Waiver of Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY
WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE TRANSACTION DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.

 

REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

    	15

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed as of the date first set forth above.

 

	 	KRAIG
    BIOCRAFT LABORATORIES, INC.
	 	 	 
	 	By:	 
	 	Name:	Kim
    Thompson
	 	Title:	CEO

 

    	16

     

    

 

EXHIBIT
A TO WARRANT

 

EXERCISE
NOTICE

 

TO
BE EXECUTED

BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

 

KRAIG
BIOCRAFT LABORATORIES, INC.

 

The
undersigned holder hereby exercises the right to purchase ______________ of the shares of Common Stock (“Warrant Shares”)
of KRAIG BIOCRAFT LABORATORIES, INC. (the “Company”), evidenced by the attached Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

Specify
Method of exercise by check mark:

 

1.
___Cash Exercise

 

(a)
Payment of Warrant Exercise Price. The holder shall pay the Aggregate Exercise Price of $______________ to the Company in accordance
with the terms of the Warrant.

 

(b)
Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms
of the Warrant.

 

2.
___Cashless Exercise

 

(a)
Payment of Warrant Exercise Price. In lieu of making payment of the Aggregate Exercise Price, if permitted by the terms of the
Warrant, the holder elects to receive upon such exercise the Net Number of shares of Common Stock determined in accordance with the terms
of the Warrant.

 

(b)
Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms
of the Warrant.

 

Date:
_______________ __, ______

 

Name
of Registered Holder

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

Address:

 

Taxpayer
ID No.:

 

    	 

     

    

 

EXHIBIT
B TO WARRANT

 

FORM
OF WARRANT POWER

 

FOR
VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant
to purchase ____________ shares of the capital stock of KRAIG BIOCRAFT LABORATORIES, INC. represented by warrant certificate no. _____,
standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint
______________, attorney to transfer the warrant of said corporation, with full power of substitution in the premises.

 

	Dated:	 	 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 

 

    	B-1

     

    

 

EXECUTION
VERSION

 

WARRANT
B

 

THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL IN GENERALLY ACCEPTABLE FORM THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

KRAIG
BIOCRAFT LABORATORIES, INC.

 

Warrant
To Purchase Common Stock

 

	Warrant No.: KBLB 3 2-2	Number of Shares:	4,285,714
	 
	 	Warrant Exercise Price:	$0.14
	 
	 	Expiration Date:	January 18, 2027

 

Date
of Issuance: January 18, 2022

 

Kraig
Biocraft Laboratories, Inc., a Wyoming corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, YAII PN, LTD. (the “Holder”), the registered
holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender
of this Warrant, at any time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined
herein) up to 4,285,714 fully paid and nonassessable shares of Common Stock (as defined herein) of the Company (the “Warrant
Shares”) at the exercise price per share provided in Section 1(b) below or as subsequently adjusted; provided, however, that
in no event shall the holder be entitled to exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant
Shares which, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the
holder and its affiliates to exceed 4.99% of the outstanding shares of the Common Stock following such exercise, except within 60 days
of the Expiration Date (however, such restriction may be waived by Holder (but only as to itself and not to any other holder) upon not
less than 65 days prior notice to the Company). For purposes of the foregoing proviso, the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such proviso is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised Warrants beneficially owned by the holder and its affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the holder and its
affiliates (including, without limitation, any convertible notes or preferred stock) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, 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 (1) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written request of any holder, the Company shall promptly, but in no event later than 1 Business Day following the receipt of
such notice, confirm in writing to any such 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 exercise of Warrants (as defined below) by such holder
and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.

 

    	 

     

    

 

Section
1.

 

(a)
This Warrant is issued pursuant to the Securities Purchase Agreement (“Securities Purchase Agreement”) dated the date
hereof between the Company and the Holder or issued in exchange or substitution thereafter or replacement thereof. Each Capitalized term
used, and not otherwise defined herein, shall have the meaning ascribed thereto in the Securities Purchase Agreement.

 

(b)
Definitions. The following words and terms as used in this Warrant shall have the following meanings:

 

(i)
“Approved Stock Plan” means a stock plan that has been approved by the Board of Directors of the Company prior to
the date of the Securities Purchase Agreement, pursuant to which the Company’s securities may be issued only to any employee, officer
or director for services provided to the Company.

 

(ii)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New
York are authorized or required by law to remain closed.

 

(iii)
“Closing Bid Price” means the closing bid price (or closing trade if there is no closing bid price) of Common Stock
as quoted on the Principal Market (as reported by Bloomberg, LP (“Bloomberg”) through its “Volume at Price”
function).

 

    	2

     

    

 

(iv)
“Common Stock” means (i) the Company’s Class A common stock, no par value per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

 

(v)
“Event of Default” means an event of default under the Securities Purchase Agreement or the Convertible Debenture
issued in connection therewith.

 

(vi)
“Excluded Securities” means, (a) shares issued or deemed to have been issued by the Company pursuant to an Approved
Stock Plan, (b) the shares of Common Stock issued or deemed to be issued by the Company upon conversion of the Convertible Debenture
or exercise of the Warrants, (c) the shares of Common Stock issued or deemed to be issued by the Company upon conversion of the convertible
debentures or exercise of the warrants previously issued to and held by the Investor, (d) shares of Common Stock or other securities
issued in connection with a strategic acquisition, intellectual property licensing agreement or other similar transaction not initiated
for the purpose of capital raising, (e) warrants and options existing and issued as of the Issuance Date and shares issued pursuant to
the exercise of said warrants and options, and (e) any securities of the Company registered in registration statement No. 333-238883
currently on file with the SEC.

 

(vii)
“Expiration Date” means the date set forth on the first page of this Warrant.

 

(viii)
“Issuance Date” means the date hereof.

 

(ix)
“Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

(x)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization and a government or any department or agency thereof.

 

(xi)
“Primary Market” means the OTC Markets’ OTCQB® Market.

 

(xii)
“Securities Act” means the Securities Act of 1933, as amended.

 

(xiii)
“Warrant” means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.

 

(xiv)
“Warrant Exercise Price” shall be $0.14 or as subsequently adjusted as provided in Section 8 hereof.

 

(c)
Other Definitional Provisions.

 

(i)
Except as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s successors
and (B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the same may have been
or may be amended or supplemented from time to time.

 

    	3

     

    

 

(ii)
When used in this Warrant, the words “herein”, “hereof”, and “hereunder”
and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “Section”,
“Schedule”, and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to, this Warrant
unless otherwise specified.

 

(iii)
Whenever the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural,
and vice versa.

 

Section
2. Exercise of Warrant.

 

(a)
Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company,
pro rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business Day, commencing
with the first day after the date hereof, and prior to 5:00 P.M. Eastern Time on the Expiration Date (i) by delivery of a written notice,
in the form of the subscription notice attached as Exhibit A hereto (the “Exercise Notice”), of such holder’s
election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, payment to the Company of
an amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being purchased, multiplied by the number of Warrant
Shares (at the applicable Warrant Exercise Price) as to which this Warrant is being exercised (plus any applicable issue or transfer
taxes) (the “Aggregate Exercise Price”) in cash or wire transfer of immediately available funds and the surrender
of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) to a common
carrier for overnight delivery to the Company or (ii) if at the time of exercise, the Warrant Shares are not subject to an effective
registration statement or if an Event of Default has occurred and is continuing, by delivering an Exercise Notice and in lieu of making
payment of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):

 

	 	Net Number =	(A
    x B) – (A x C)	 
	 	 	B	 

 

For
purposes of the foregoing formula:

 

A
= the total number of Warrant Shares with respect to which this Warrant is then being exercised.

 

B
= the Closing Bid Price of the Common Stock on the date of exercise of the Warrant.

 

C
= the Warrant Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

    	4

     

    

 

In
the event of any exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or before
the 3rd Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or
an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) and the receipt of the representations
of the holder specified in Section 6 hereof, if requested by the Company (the “Exercise Delivery Documents”), and
if the Warrant Shares are subject to an effective and current Registration Statement and the Common Stock is DTC eligible, credit such
aggregate number of shares of Common Stock to which the holder shall be entitled to the holder’s or its designee’s balance
account with The Depository Trust Company; provided, however, if the holder who submitted the Exercise Notice requested physical delivery
of any or all of the Warrant Shares, or, if the Warrant Shares are not subject to an effective and current Registration Statement and
the Common Stock is not DTC eligible then the Company shall, on or before the 3rd Business Day following receipt of the Exercise
Delivery Documents, issue and surrender to a common carrier for overnight delivery to the address specified in the Exercise Notice, a
certificate, registered in the name of the holder, for the number of shares of Common Stock to which the holder shall be entitled pursuant
to such request. The Warrant Shares shall be issued with a legend unless they are subject to an effective and current Registration Statement
or they are being transferred pursuant to an exemption from such registration requirements, the availability of which is confirmed in
an opinion of counsel acceptable to the Company’s Transfer Agent. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (i) or (ii) above the holder of this Warrant shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised. In the case of a dispute as to the determination
of the Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the holder the number of Warrant Shares that is not disputed and shall submit the disputed determinations or arithmetic calculations
to the holder via facsimile within 1 Business Day of receipt of the holder’s Exercise Notice.

 

(b)
If the holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation of the
Warrant Shares within 1 day of such disputed determination or arithmetic calculation being submitted to the holder, then the Company
shall immediately submit via electronic mail (i) the disputed determination of the Warrant Exercise Price or the Closing Bid Price to
an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its independent,
outside accountant. The Company shall cause the investment banking firm or the accountant, as the case may be, to perform the determinations
or calculations and notify the Company and the holder of the results no later than 72 hours from the time it receives the disputed determinations
or calculations. Such investment banking firm’s or accountant’s determination or calculation, as the case may be, shall be
deemed conclusive absent manifest error.

 

(c)
Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable
and in no event later than 5 Business Days after any exercise and at its own expense, issue a new Warrant identical in all respects to
this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised.

 

    	5

     

    

 

(d)
No fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather the number of Warrant Shares issued
upon such exercise of this Warrant shall be rounded up or down to the nearest whole number.

 

(e)
If the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the holder within 5 days of receipt of the
Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the holder is entitled or to credit the holder’s
balance account with The Depository Trust Company for such number of Warrant Shares to which the holder is entitled upon the holder’s
exercise of this Warrant, unless such failure results from a failure of the Company’s Transfer Agent to issue such shares as a
result of an act of terrorism, war, natural disaster, act of god or other force majure event, the Company shall, in addition to any other
remedies under this Warrant or otherwise available to such holder, pay as additional damages in cash to such holder on each day the issuance
of such certificate for Warrant Shares is not timely effected an amount equal to 0.025% of the product of (A) the sum of the number of
Warrant Shares not issued to the holder on a timely basis and to which the holder is entitled, and (B) the Closing Bid Price of the Common
Stock for the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the holder
without violating this Section 2.

 

(f)
If within 5 days after the Company’s receipt of the Exercise Delivery Documents and the written request of the Holder that a new
Warrant be issued, the Company fails to deliver a new Warrant to the holder for the number of Warrant Shares to which such holder is
entitled pursuant to Section 2 hereof, then, in addition to any other available remedies under this Warrant, or otherwise available to
such holder, the holder shall be entitled to exercise or transfer its rights under such new warrant as if it had received such new Warrant
and the Company shall be obligated to honor such exercises or transfers as if the holder had submitted the new Warrant without violating
this Section 2.

 

Section
3. Covenants as to Common Stock. The Company hereby covenants and agrees as follows:

 

(a)
This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and
validly issued.

 

(b)
All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.

 

(c)
During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized
and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented
by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price. If
at any time the Company does not have a sufficient number of shares of Common Stock authorized and available, then the Company shall
call and hold a special meeting of its stockholders within 60 days of that time for the sole purpose of increasing the number of authorized
shares of Common Stock.

 

    	6

     

    

 

(d)
If at any time after the date hereof the Company shall file a Registration Statement, the Company shall include the Warrant Shares issuable
to the holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all Warrant Shares from time to time issuable upon the exercise of this Warrant on the Primary Market or such national
securities exchange or automated quotation system on which the Common Stock of the Company is listed; and the Company shall so list on
the Primary Market or such national securities exchange or automated quotation system on which the Common Stock of the Company is listed,
as the case may be, and shall maintain such listing of, any other shares of capital stock of the Company issuable upon the exercise of
this Warrant Shares if and so long as any shares of the same class shall be listed on the Primary Market or such national securities
exchange or automated quotation system on which the Common Stock of the Company is listed. Provided, however, that such requirement shall
not apply with regard to any registration statement which is currently on file with the SEC (including any related registration statement,
prospectus or supplement required by Rule 462 or 424 of the Securities Act).

 

(e)
The Company will not, by amendment of its Articles 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 to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order
to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose
of this Warrant. The Company will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

(f)
This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially
all of the Company’s assets.

 

Section
4. Taxes. The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

Section
5. Warrant Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant
shall be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted
by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with
copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving
thereof to the stockholders.

 

    	7

     

    

 

Section
6. Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant
and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public
sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act;
provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares
for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance
with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further represents,
by acceptance hereof, that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501(a)(1)
of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an “Accredited Investor”).
Upon exercise of this Warrant the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company,
that the Warrant Shares so purchased are being acquired solely for the holder’s own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder
cannot make such representations because they would be factually incorrect, it shall be a condition to such holder’s exercise of
this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company
that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities laws.

 

Section
7. Ownership and Transfer.

 

(a)
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice
to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any
Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events recognizing any transfers made in accordance with the terms of this Warrant.

 

Section
8. Adjustment of Warrant Exercise Price. The Warrant Exercise Price of this Warrant shall be adjusted from time to time as follows:

 

(a)
Adjustment of Warrant Exercise Price. If and whenever on or after the Issuance Date of this Warrant, the Company issues or sells,
or is deemed to have issued or sold, any shares of Common Stock (other than Excluded Securities), for a consideration per share (the
“New Issuance Price”) less than the Warrant Exercise Price, in effect immediately prior to such issuance or sale (the
“Applicable Price”), then immediately after such issue or sale the Warrant Exercise Price then in effect shall be
reduced to an amount equal to such New Issuance Price.

 

    	8

     

    

 

(b)
Effect on Warrant Exercise Price of Certain Events. For purposes of determining the adjusted Warrant Exercise Price under Section
8(a) above, the following shall be applicable:

 

(i)
Issuance of Options. If after the date hereof, the Company in any manner grants any Options, other than Excluded Securities, and
the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or
exchange of any convertible securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of
such Option for such price per share. For purposes of this Section 8(b)(i), the lowest price per share for which one share of Common
Stock is issuable upon exercise of such Options shall be equal to the sum of the lowest amounts of consideration receivable by the Company
with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option or upon conversion
or exchange of any convertible security issuable upon exercise of such Option. No further adjustment of the Warrant Exercise Price shall
be made upon the actual issuance of such Common Stock or of such convertible securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of such convertible securities.

 

(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any convertible securities, other than Excluded
Securities, and the lowest price per share for which 1 share of Common Stock is issuable upon the conversion or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such convertible securities for such price per share. For the purposes of this Section
8(b)(ii), the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange shall be equal
to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale of the convertible security and upon conversion or exchange of such convertible security. No further
adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such
convertible securities, and if any such issue or sale of such convertible securities is made upon exercise of any Options for which adjustment
of the Warrant Exercise Price had been or are to be made pursuant to other provisions of this Section 8(b), no further adjustment of
the Warrant Exercise Price shall be made by reason of such issue or sale.

 

(iii)
Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, other than Excluded Securities,
the additional consideration, if any, payable upon the issue, conversion or exchange of any convertible securities, or the rate at which
any convertible securities are convertible into or exchangeable for Common Stock changes at any time, the Warrant Exercise Price in effect
at the time of such change shall be adjusted to the Warrant Exercise Price which would have been in effect at such time had such Options
or convertible securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this Section 8(b)(iii), if the terms of any Option or convertible
security that was outstanding as of the Issuance Date of this Warrant, other than Excluded Securities, are changed in the manner described
in the immediately preceding sentence, then such Option or convertible security and the Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment pursuant to this Section 8(b) shall
be made if such adjustment would result in an increase of the Warrant Exercise Price then in effect.

 

    	9

     

    

 

(iv)
Calculation of Consideration Received. If any Common Stock, Options or convertible securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefore will be deemed to be the gross amount received by the Company
therefore. If any Common Stock, Options or convertible securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists
of marketable securities, in which case the amount of consideration received by the Company will be the market price of such securities
on the date of receipt of such securities. If any Common Stock, Options or convertible securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefore will be deemed
to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock,
Options or convertible securities, as the case may be. The fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise
of the Warrants then outstanding. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5)
Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected
by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
then outstanding. The determination of such appraiser shall be final and binding upon all parties and the fees and expenses of such appraiser
shall be borne jointly by the Company and the holders of Warrants.

 

(v)
Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which any specific consideration or no consideration is allocated to such Options by
the parties thereto (1) the per-share value of the shares of Common Stock included in such integrated transaction shall be the sole determinate
as to whether the Warrant Exercise Price is to be adjusted in accordance with the provisions of Section 8(a), above, (2) if no shares
of Common Stock are included in such integrated transaction, but shares of the Company’s preferred stock are included in such integrated
transaction, then the per-share conversion price of shares of that preferred stock shall be the sole determinate as to whether the Warrant
Exercise Price is to be adjusted in accordance with the provisions of Section 8(a), above, and (3) if no shares of Common Stock and no
shares of the Company’s preferred stock are included in such integrated transaction, but debt convertible into shares of Common
Stock (whether directly or through an intermediate step, e.g., an initial conversion of that debt into shares of the Company’s
preferred stock that, thereafter, could be converted into shares of Common Stock), then the per-share conversion price of shares of such
debt shall be the sole determinate as to whether the Warrant Exercise Price is to be adjusted in accordance with the provisions of Section
8(a), above; provided, however, that, if the exercise price of the Option is less than the Warrant Exercise Price (after
having taken into account any adjustments thereto in accordance with the provisions of (1), (2), or (3), immediately above), then the
Option exercise price shall be utilized in connection with the Warrant Exercise Price adjustment provisions of Section 8(a), above.

 

    	10

     

    

 

(vi)
Treasury Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or
for the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of Common Stock.

 

(vii)
Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (1) to receive a dividend
or other distribution payable in Common Stock, Options or in convertible securities or (2) to subscribe for or purchase Common Stock,
Options or convertible securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.

 

(c)
Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date
of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, any Warrant Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant will
be proportionately decreased. Any adjustment under this Section 8(c) shall become effective at the close of business on the date the
subdivision or combination becomes effective.

 

(d)
Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire
its assets) to holders 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 or other
similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:

 

(i)
any Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to
a price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be the Closing Sale Price
of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good
faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (B) the denominator shall be the Closing
Sale Price of the Common Stock on the trading day immediately preceding such record date; and

 

    	11

     

    

 

(ii)
either (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination
of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately
preceding clause (i), or (B) in the event that the Distribution is of common stock of a company whose common stock is traded on a national
securities exchange or a national automated quotation system, then the holder of this Warrant shall receive an additional warrant to
purchase Common Stock, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable
into the amount of the assets that would have been payable to the holder of this Warrant pursuant to the Distribution had the holder
exercised this Warrant immediately prior to such record date and with an exercise price equal to the amount by which the exercise price
of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i).

 

(e)
Certain Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for
by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features, but excluding Excluded Securities), then the Company’s Board of Directors will make an appropriate adjustment
in the Warrant Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the
rights of the holders of the Warrants; provided, except as set forth in section 8(c),that no such adjustment pursuant to this Section
8(e) will increase the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant
to this Section 8.

 

(f)
Voluntary Adjustments By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

(g)
Notices.

 

(i)
Immediately upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this Warrant,
setting forth in reasonable detail, and certifying, the calculation of such adjustment.

 

(ii)
The Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change (as defined below),
dissolution or liquidation, provided that such information shall be made known to the public prior to or in conjunction with such notice
being provided to such holder.

 

(iii)
The Company will also give written notice to the holder of this Warrant at least 10 days prior to the date on which any Organic Change,
dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or in conjunction
with such notice being provided to such holder.

 

    	12

     

    

 

Section
9. Purchase Rights; Reorganization, Reclassification, Consolidation, Merger or Sale.

 

(a)
In addition to any adjustments pursuant to Section 8 above, if at any time the Company grants, issues or sells any Options, convertible
securities or rights to purchase stock, warrants, securities or other property other than Excluded Securities, pro rata to the record
holders of any class of Common Stock (the “Purchase Rights”), then the holder of this Warrant will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant 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 Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(b)
Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s
assets to another Person or other transaction in each case which is affected in such a way that holders of Common Stock are entitled
to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock
is referred to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially all
of the Company’s assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving entity,
the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the
“Acquiring Entity”) a written agreement (in form and substance satisfactory to the holders of Warrants representing
at least two-thirds (iii) of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to deliver to each holder of
Warrants in exchange for such Warrants, a security of the Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to this Warrant and satisfactory to the holders of the Warrants (including an adjusted warrant exercise price equal
to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number
of shares of Common Stock acquirable and receivable upon exercise of the Warrants without regard to any limitations on exercise, if the
value so reflected is less than any Applicable Warrant Exercise Price immediately prior to such consolidation, merger or sale). Prior
to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance satisfactory to
the holders of Warrants representing a majority of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to insure
that each of the holders of the Warrants will thereafter have the right to acquire and receive in lieu of or in addition to (as the case
may be) the Warrant Shares immediately theretofore issuable and receivable upon the exercise of such holder’s Warrants (without
regard to any limitations on exercise), such shares of stock, securities or assets that would have been issued or payable in such Organic
Change with respect to or in exchange for the number of Warrant Shares which would have been issuable and receivable upon the exercise
of such holder’s Warrant as of the date of such Organic Change (without taking into account any limitations or restrictions on
the exercisability of this Warrant).

 

Section
10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
on receipt of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination
and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

    	13

     

    

 

Section
11. Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business Day after
deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive
the same, or (iii) receipt, when sent by electronic mail (provided that the electronic mail transmission is not returned in error or
the sender is not otherwise notified of any error in transmission. The addresses and e-mail addresses for such communications shall be:

 

	If
    to Holder:	YAII
    PN, Ltd. 
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Attention:   Mark
    A. Angelo
	 	Telephone:
    (201) 536-5114
	 	Email:
    
	 	 
	With
    Copy to:	David
    Gonzalez, Esq.
	 	1012
    Springfield Avenue 
	 	Mountainside,
    NJ 07092
	 	Telephone:
    (201) 536-5109
	 	Email:
    
	 	 
	 	 
	If
    to the Company, to:	Kraig
    Biocraft Laboratories, Inc.
	 	2723
    South State Street – Suite 150
	 	Ann
    Arbor, MI 48104
	 	Attention:
                                            Kim Thompson

    Telephone:
    (734) 619-8066

    Email:
          

    

	 	 
	With
                                            a copy (which shall 

                                            not constitute notice) to:
	Hunter
                                            Taubman Fischer & Li LLC

    48
    Wall Street, Suite 1100

    New
    York, NY 10005

	 	 
	 	Attention:
                                            Louis Taubman, Esq.

    Telephone:
    (917) 512-0827

    Email:
    

 

or
at such other address and/or electronic email address and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party 3 Business Days prior to the effectiveness of such change. Written confirmation of receipt
(i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the
sender’s computer containing the time, date, recipient’s electronic mail address and the text of such electronic mail or
(iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by electronic
mail or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

    	14

     

    

 

Section
12. Date. The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly void and of no
effect after the close of business on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of
Section 3(d) shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise
of this Warrant.

 

Section
13. Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrant may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the holders of Warrants representing at least 2/3rds of the Warrant Shares issuable upon exercise of the Warrants
then outstanding; provided that, except for Section 8(c), no such action may increase the Warrant Exercise Price or decrease the number
of shares or class of stock obtainable upon exercise of any Warrant without the written consent of the holder of such Warrant.

 

Section
14. Assignment. This Warrant may be assigned by the Holder only if such assignment is made in compliance with all applicable laws, including
federal and state securities laws. In connection with any permitted transfer, the transferee shall make such representation and warranties
to the Company, consistent with Section 6 hereof, s the Company may reasonably request.

 

Section
15. Descriptive Headings; Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted
for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of New Jersey shall govern all issues
concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of the State of New Jersey, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New Jersey. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Superior Court of the state courts sitting in Union County New Jersey and the Federal District Court for the District
of New Jersey sitting in Newark, New Jersey, for the adjudication of any dispute hereunder or in connection herewith or therewith, or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.

 

    	15

     

    

 

Section
16. Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Warrant shall be cumulative and
in addition to all other remedies available under this Warrant, in any other agreement between the Company and the Holder, at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the
Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required.

 

Section
17. Waiver of Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY
WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE TRANSACTION DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.

 

REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

    	16

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed as of the date first set forth above.

 

	 	KRAIG
                                            BIOCRAFT LABORATORIES, INC.

	 	 
	 	By:	 
	 	Name:	Kim
    Thompson
	 	Title:	CEO

 

    	17

     

    

 

EXHIBIT
A TO WARRANT

 

EXERCISE
NOTICE

 

TO
BE EXECUTED

BY
THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

 

KRAIG
BIOCRAFT LABORATORIES, INC.

 

The
undersigned holder hereby exercises the right to purchase ______________ of the shares of Common Stock (“Warrant Shares”)
of KRAIG BIOCRAFT LABORATORIES, INC. (the “Company”), evidenced by the attached Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

Specify
Method of exercise by check mark:

 

1.
___  Cash Exercise

 

(a)
Payment of Warrant Exercise Price. The holder shall pay the Aggregate Exercise Price of $______________ to the Company in accordance
with the terms of the Warrant.

 

(b)
Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms
of the Warrant.

 

2.
___  Cashless Exercise

 

(a)
Payment of Warrant Exercise Price. In lieu of making payment of the Aggregate Exercise Price, if permitted by the terms of the
Warrant, the holder elects to receive upon such exercise the Net Number of shares of Common Stock determined in accordance with the terms
of the Warrant.

 

(b)
Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms
of the Warrant.

 

Date:
_______________ __, ______

 

Name
of Registered Holder

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

Address:

Taxpayer
ID No.:

 

    	 

     

    

 

EXHIBIT
B TO WARRANT

 

FORM
OF WARRANT POWER

 

FOR
VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant
to purchase ____________ shares of the capital stock of KRAIG BIOCRAFT LABORATORIES, INC. represented by warrant certificate no. _____,
standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint
______________, attorney to transfer the warrant of said corporation, with full power of substitution in the premises.

 

	Dated:	 	 	 	 
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:Exhibit
10.1

 

EXECUTION
VERSION

 

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of January 18, 2022, is between KRAIG BIOCRAFT LABORATORIES,
INC., a company incorporated under the laws of the State of Wyoming, with principal executive offices located at 2723 South State
Street – Suite 150, Ann Arbor, MI 48104 (the “Company”), and each of the investors listed on the Schedule of
Buyers attached hereto (individually, a “Buyer” and collectively the “Buyers”).

 

WITNESSETH

 

WHEREAS,
the Company and the Buyer desire to enter into this transaction for the Company to sell and the Buyer to purchase the Convertible Debentures
(as defined below) pursuant to an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D (“Regulation
D”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of
1933, as amended (the “Securities Act”);

 

WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Buyer,
as provided herein, and the Buyer shall purchase convertible debentures in the form attached hereto as “Exhibit A”
(the “Convertible Debentures”) in the principal amount of up to $3,000,000 (the “Subscription Amount”),
which shall be convertible into shares of the Company’s Class A common stock, no par value (the “Common Stock”)
(as converted, the “Conversion Shares”), of which $1,500,000 shall be purchased upon the signing this Agreement (the
“First Closing”) and $1,500,000 shall be purchased on or about the date the Registration Statement has first been
declared effective by the SEC (the “Second Closing”) (individually referred to as a “Closing” collectively
referred to as the “Closings”), at a purchase price equal to the Subscription Amount (the “Purchase Price”)
;

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration
rights under the Securities Act and the rules and regulations promulgated there under, and applicable state securities laws;

 

WHEREAS,
the Convertible Debentures shall be secured by all assets of the Company and its subsidiaries subject to (i) that certain amended and
restated security agreement by and between the Investor, the Company and the Company’s subsidiaries dated the date hereof (all
such security agreements shall be referred to as the “Security Agreement”) pursuant to which the Company and its wholly
owned subsidiaries agree to provide the Investor a security interest in Pledged Property (as this term is defined in the Security Agreement),
(ii) the amended and restated intellectual property security agreement by and between the Investor, the Company and the Company’s
subsidiaries referenced therein dated the date hereof (all such security agreements shall be referred to as the “IP Security
Agreement”) pursuant to which the Company and its wholly owned subsidiaries agree to provide the Investor a security interest
in the intellectual property collateral (as this term is defined in the IP Security Agreement), and (iii) the amended and restated global
guaranty by and between the Investor and the Company’s subsidiaries dated the date hereof (the “Guaranty”) (the
“Guaranty” and collectively with the Security Agreement and the IP Security Agreement the “Security Documents”)
in favor of the Investor;

 

    	 	 	 

     

    

 

WHEREAS,
contemporaneously with the First Closing the Company shall issue to the Investor a warrant to purchase 12,500,000 shares of the Company’s
Common Stock in the form attached hereto as Exhibit B (“Warrant A”) (the “Warrant Shares”) and
a warrant to purchase 4,285,714 shares of the Company’s Common Stock in the form attached hereto as Exhibit B (“Warrant
B”), (collectively Warrant A and Warrant B shall be referred to as the “Warrants”) such shares of Common
Stock to be issued upon exercise of the Warrants shall be referred to as the “Warrant Shares”);

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration
rights under the Securities Act and the rules and regulations promulgated thereunder, and applicable state securities laws;

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Company is delivering Irrevocable Transfer Agent Instructions
(the “Irrevocable Transfer Agent Instructions”) to its transfer agent; and

 

WHEREAS,
the Convertible Debentures and the Conversion Shares, the Warrants and the Warrant Shares]are collectively referred to herein as the
“Securities.”

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

 

1.
PURCHASE AND SALE OF CONVERTIBLE DEBENTURES AND WARRANTS.

 

(a)
Purchase of Convertible Debentures. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the
Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company at each Closing Convertible Debentures with
a principal amount corresponding for such Closing.

 

(b)
Closing Dates. Each Closing of the purchase of Convertible Debentures by the Buyers shall occur at the offices Yorkville Advisors Global,
LP, 1012 Springfield Avenue, Mountainside, NJ 07092. The date and time of each Closing shall be as follows: (i) the First Closing shall
be 10:00 a.m., New York time, on the first Business Day on which the conditions to the Closing set forth in Sections 6 and 7 below are
satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer) (the “First Closing Date”)
and (ii) the Second Closing shall be 10:00 a.m., New York time, by the third Business Day after the Registration Statement is first declared
effective by the SEC, provided the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other
date as is mutually agreed to by the Company and the Buyer) (the “Second Closing Date” and collectively referred to as the
“Closing Dates”). As used herein “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to remain closed.

 

    	 	2	 

     

    

 

(c)
Form of Payment; Deliveries. Subject to the satisfaction of the terms and conditions of this Agreement, on each Closing Date, (i)
the Buyer shall deliver to the Company the Purchase Price for the Convertible Debentures to be issued and sold to the Buyer at such Closing,
minus any fees or expenses to be paid directly from the proceeds of such Closing as set forth herein, and (ii) the Company shall deliver
to the Buyer, Convertible Debentures which the Buyer is purchasing at such Closing with a principal amount corresponding for such Closing
, duly executed on behalf of the Company.

 

2.
BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The
Buyer represents and warrants to the Company with respect to only itself that, as of the date hereof and as of each Closing Date:

 

(a)
Investment Purpose. The Buyer is acquiring the Securities for its own account for investment purposes and not with a view towards, or
for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the
registration requirements of the Securities Act; provided, however, that by making the representations herein, such Buyer does not agree,
or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with, or pursuant to, a registration statement covering such Securities or an available
exemption under the Securities Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities.

 

(b)
Accredited Investor Status. The Buyer is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D.

 

(c)
Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.

 

    	 	3	 

     

    

 

(d)
Information. The Buyer and its advisors (and his or, its counsel), if any, have been furnished with all materials relating to the business,
finances and operations of the Company and information he deemed material to making an informed investment decision regarding his purchase
of the Securities, which have been requested by such Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to
ask questions of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by such
Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a high
degree of risk. The Buyer has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

 

(e)
Transfer or Resale. The Buyer understands that: (i) the Securities have not been registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall
have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned
or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements, or (C) such Buyer provides
the Company with reasonable assurances (in the form of seller and broker representation letters) that such Securities can be sold, assigned
or transferred pursuant to Rule 144 promulgated under the Securities Act, as amended (or a successor rule thereto) (collectively, “Rule
144”), in each case following the applicable holding period set forth therein; and (ii) any sale of the Securities made in reliance
on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations
of the SEC thereunder.

 

(f)
Legends. The Buyer agrees to the imprinting, so long as its required by this Section 2(f), of a restrictive legend on the Securities
in substantially the following form:

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE [AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE] HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES [AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE]
HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR APPLICABLE STATE SECURITIES LAWS

 

    	 	4	 

     

    

 

Certificates
evidencing the Conversion Shares and/or the Warrant Shares shall not contain any legend (including the legend set forth above), (i) while
a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such
Conversion Shares and/or Warrant Shares pursuant to Rule 144, (iii) if such Conversion Shares and/or the Warrant Shares are eligible
for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the SEC). The Buyer agrees that the removal of restrictive legend from certificates
representing Securities as set forth in this Section 3(f) is predicated upon the Company’s reliance that the Buyer will sell any
Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with
the plan of distribution set forth therein.

 

(g)
Organization; Authority. The Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

(h)
Authorization, Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and shall
constitute the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with its terms, except as
such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(i)
No Conflicts. The execution, delivery and performance by the Buyer of this Agreement and the consummation by the Buyer of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of the Buyer, (ii) conflict with, 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 Buyer is a party or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Buyer,
except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations
hereunder.

 

(j)
Certain Trading Activities. The Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding
with the Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined
below) involving the Company’s securities) during the period commencing as of the time that the Buyer first contacted the Company
or the Company’s agents regarding the specific investment in the Company contemplated by this Agreement and ending immediately
prior to the execution of this Agreement by such Buyer. The Buyer hereby agrees that it shall not directly or indirectly, engage in any
Short Sales involving the Company’s securities during the period commencing on the date hereof and ending when no Convertible Debentures
remain outstanding. “Short Sales” means all “short sales” as defined in Rule 200 promulgated under Regulation
SHO under the 1934 Act (as defined below). The Buyer is aware that Short Sales and other hedging activities may be subject to applicable
federal and state securities laws, rules and regulations and the Buyer acknowledges that the responsibility of compliance with any such
federal or state securities laws, rules and regulations is solely the responsibility of the Buyer.

 

    	 	5	 

     

    

 

(k)
Trading Information. Upon the Company’s request, the Buyer agrees to provide the Company with trading reports setting forth
the number and average sales prices of Conversion Shares and Warrant Shares sold the Buyer during the prior trading week.

 

3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

Except
as set forth under the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof and
to qualify any representation or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations
and warranties set forth below to the Buyer:

 

(a)
Organization and Qualification. The Company and each of its Subsidiaries are entities duly formed, validly existing and in good standing
under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties and to
carry on their business as now being conducted and as presently proposed to be conducted. The Company and each of its Subsidiaries is
duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or
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 reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement,
“Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii)
the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered
into by the Company in connection herewith or therewith or (iii) the authority or ability of the Company to perform any of its obligations
under any of the Transaction Documents (as defined below). “Subsidiaries” means any Person in which the Company, directly
or indirectly, owns a majority of the outstanding capital stock having voting power or holds a majority of the equity or similar interest
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary”.

 

    	 	6	 

     

    

 

(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of the Convertible Debentures), have been duly authorized
by the Company’s board of directors and no further filing, consent or authorization is required by the Company, its board of directors
or its stockholders or other governmental body. This Agreement has been, and the other Transaction Documents to which the Company is
a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with its respective 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 applicable creditors’ rights and remedies and except as rights to indemnification
and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively, this
Agreement, the Registration Rights Agreement, the Convertible Debentures, the Warrants, the Security Agreement, the IP Security Agreement,
the Guaranty, the Irrevocable Transfer Agent Instructions, and each of the other agreements and instruments entered into by the Company
or delivered by the Company in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(c)
Issuance of Securities. The issuance of the Securities are duly authorized and, upon issuance and payment in accordance with the terms
of the Transaction Documents the Securities shall be validly issued, fully paid and non-assessable and free from all preemptive or similar
rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other
encumbrances (collectively “Liens”) with respect to the issuance thereof. As of each Closing Date, the Company shall have
reserved from its duly authorized capital stock (i) all Warrant Shares, and not less than (i) 300% of the maximum number of shares of
Common Stock issuable upon conversion of all Convertible Debentures (assuming for purposes hereof that (x) such Convertible Debentures
are convertible at the Conversion Price (as defined therein) as of the date of determination, (y) any such conversion shall not take
into account any limitations on the conversion of the Convertible Debentures set forth therein. Upon issuance or conversion in accordance
with the Convertible Debentures, or exercise in accordance with the Warrants, the Conversion Shares and/or Warrant Shares, when issued,
will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

 

    	 	7	 

     

    

 

(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, the Conversion
Shares, the Warrants, the Warrant Shares and the reservation for issuance of the Conversion Shares and Warrant Shares) will not (i) result
in a violation of the Articles of Incorporation (as defined below), Bylaws (as defined below), certificate of formation, memorandum of
association, articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital
stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute 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 or
any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including,
without limitation, U.S. federal and state securities laws and regulations, the securities laws of the jurisdictions of the Company’s
incorporation or in which it or its subsidiaries operate and the rules and regulations of the OTC Markets’ OTCQB®
Market (the “Principal Market”) and including all applicable laws, rules and regulations of the State of Wyoming) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected,
except in the case of (ii) and (iii) for any conflict, default, right or violation that would not reasonably be expected to result in
a Material Adverse Effect. 

 

(e)
Consents. The Company is not required to obtain any material consent from, authorization or order of, or make any filing or registration
with (other than any filings as may be required by any federal or state securities agencies and any filings as may be required by the
Principal Market), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case, in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to each Closing Date,
and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of
its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents.
The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which
could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. The Company has notified the Principal
Market of the issuance of all of the Securities hereunder, which does not require obtaining the approval of the stockholders of the Company
or any other Person or Governmental Entity, and the Principal Market has completed its review of the related Listing of Additional Share
form, to the extent such form is required. “Governmental Entity” means any nation, state, county, city, town, village, district,
or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal),
multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or any of the foregoing.

 

    	 	8	 

     

    

 

(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and
thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) to its knowledge, an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”)) of the Company
or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock
(as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer (nor any affiliate of any Buyer)
is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives
or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the
Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into
the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company and its representatives.

 

(g)
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on 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 cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any
of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor
any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated
with other offerings of securities of the Company.

 

(h)
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares and Warrant Shares will increase in certain
circumstances. The Company further acknowledges its obligation to issue the Conversion Shares upon conversion of the Convertible Debentures
and the Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the Convertible Debentures and Warrants, as
applicable, is, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of
other stockholders of the Company.

 

(i)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under
the Articles of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities.

 

    	 	9	 

     

    

 

(j)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the
date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered or has made available
to the Buyers or their respective representatives true, correct and complete copies of each of the SEC Documents not available on the
EDGAR system. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act
and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, 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 the light of the circumstances under which they were made,
not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect
as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”),
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
which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss
contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards
Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by or on behalf
of the Company to the Buyers which is not included in the SEC Documents (including, without limitation, information in the disclosure
schedules to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order
to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not
currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of
the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”),
nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial
Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of
the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of
the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.

 

    	 	10	 

     

    

 

(k)
Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
there has been no Material Adverse Effect, nor any event or occurrence specifically affecting the Company or its Subsidiaries that would
be reasonably expected to result in a Material Adverse Effect. Since the date of the Company’s most recent audited financial statements
contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any material
assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any material capital expenditures,
individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken
any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation
or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors
intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do
so.

 

(l)
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists,
or is reasonably expected to exist or occur specific to the Company, any of its Subsidiaries or any of their respective businesses, properties,
liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that has not been publicly disclosed
and would reasonably be expected to have a Material Adverse Effect.

 

(m)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term under its Articles
of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company
or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association, articles of
association, Articles of Incorporation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except
in all cases for violations which would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no
knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market
in the foreseeable future. During the one year prior to the date hereof, (i) the Common Stock has been listed or designated for quotation
on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company
has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common
Stock from the Principal Market, which has not been publicly disclosed. The Company and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment,
injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is
a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of
the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business
by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have
not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.

 

    	 	11	 

     

    

 

(n)
Compliance with Laws.

 

(i)
Definitions.

 

(a)
“Anti-Bribery Laws” shall mean of any provision of any applicable law or regulation implementing the OECD Convention
on Combating Bribery of Foreign Public Officials in International Business Transactions or any applicable provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended (the “FCPA”) or any other similar law of any other jurisdiction in which
the Company operates its business, including, in each case, the rules and regulations thereunder.

 

(b)
“Applicable Laws” shall mean applicable laws, statutes, rules, regulations, orders, executive orders, directives,
policies, guidelines, ordinance or regulation of any governmental entity and codes having the force of law, whether local, national,
or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering,
terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books
and records and internal controls, including the Anti-Bribery Laws, (iii) Sanctions Laws and Anti-Money Laundering Laws.

 

(c)
“Anti-Money Laundering Laws” shall mean applicable financial recordkeeping and reporting requirements and all other
applicable U.S. and non-U.S. anti-money laundering laws, rules and regulations, including, but not limited to, those of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the United States Bank Secrecy Act, as amended by the USA PATRIOT Act of
2001, and the United States Money Laundering Control Act of 1986 (18 U.S.C. §§1956 and 1957), as amended, as well as the implementing
rules and regulations promulgated thereunder, and the applicable money laundering statutes of all applicable jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency or self-regulatory.

 

    	 	12	 

     

    

 

(d)
“Sanctions Laws” shall mean and all applicable U.S. and non-U.S. laws and regulations, including, but not limited
to, the laws, regulations and Executive Orders and sanctions programs (“Sanctions Programs”) enforced or administered by
the U.S. Office of Foreign Assets Control (“OFAC”) or the U.S. Departments of State or Commerce, including, without limitation,
(i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and any regulations contained in 31 CFR, Subtitle B,
Chapter V

 

(o)
Compliance with Applicable Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with and have not previously violated Applicable Laws and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to Applicable Laws is pending or, to
the knowledge of the Company, threatened.

 

(p)
Anti/Bribery/Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee, nor
any other person acting for or on behalf of the Company or any of its Subsidiaries (individually and collectively, a “Company Affiliate”)
have violated the U.S. Foreign Corrupt Practices Act (the “FCPA) or any other applicable anti-bribery or anti corruption laws,
nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to
give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for
any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively,
a “Government Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a high probability
that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government
Official, for the purpose, in violation of applicable law, of: (i) (A) influencing any act or decision of such Government Official in
his/her official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C)
securing any improper advantage, or (D) inducing such Government Official to influence or affect any act or decision of any Governmental
Entity, or (ii) assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the
Company or its Subsidiaries.

 

(q)
Equity Capitalization.

 

(i)
Definitions:

 

(A)
“Common Stock” means (x) the Company’s shares of Class A common stock, no par value per share, the Company’s
shares of Class B common stock, no par value per share and (y) any capital stock into which such common stock shall have been changed
or any share capital resulting from a reclassification of such common stock.

 

    	 	13	 

     

    

 

(B)
“Preferred Stock” means (x) the Company’s blank check Class A preferred stock, no par value per share, the terms of
which may be designated by the board of directors of the Company in a statement of designations and (y) any capital stock into which
such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than
a conversion of such preferred stock into Common Stock in accordance with the terms of such Certificate of Designations).

 

(ii)
Authorized and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) Unlimited
shares of Class A Common Stock, of which, 927,378,166 are issued and outstanding (B) unlimited shares of Class B Common Stock, of which,
0 are issued and outstanding and (C) an Unlimited number of shares of Class A Preferred Stock, of which 2 are issued and outstanding1.

 

(iii)
Valid Issuance; Available Shares. All of such outstanding shares are duly authorized and have been validly issued and are fully
paid and nonassessable. 

 

(iv)
Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the
Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests
or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries;
(C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act (except pursuant to this Agreement); (D) there are no outstanding securities or instruments
of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company
or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will
be triggered by the issuance of the Securities; and (G) neither the Company nor any Subsidiary has any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement.

 

1
Finalize

 

    	 	14	 

     

    

 

(v)
Organizational Documents. The Company has furnished to the Buyers or filed on EDGAR true, correct and complete copies of the Company’s
Articles of Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all convertible securities and the
material rights of the holders thereof in respect thereto.

 

(r)
Litigation. Except as disclosed in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation before
or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s
or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, which
would reasonably be expected to result in a Material Adverse Effect. After reasonable inquiry of its employees, the Company is not aware
of any event which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding.
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the Company or
any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is the subject of any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity that would reasonably be expected to result in a Material Adverse Effect.

 

(s)
Insurance. The Company currently maintains no insurance policies. Neither the Company nor any such Subsidiary has been refused any insurance
coverage sought or applied for.

 

(t)
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on
their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii) sold,
bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries.

 

(u)
Registration. Except as set forth in the SEC Reports, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company. The Company is eligible to register the Securities to be issued hereunder
on the Registration Statement. The Securities issued hereunder are exempt from the qualification provisions of the Trust Indenture Act
of 1939 (the “TIA”) and this Agreement and the transactions contemplated herein comply in all respects with the TIA.

 

(v)
Registration Eligibility. The Company is eligible to register the resale of the Conversion Shares and the Warrant Shares by the Buyers
using Form S-1 promulgated under the 1933 Act.

 

    	 	15	 

     

    

 

(w)
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(x)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided the Buyers or their agents or
counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning
the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction
Documents. The Company understands and confirms that the Buyers will rely on the foregoing representations in effecting transactions
in securities of the Company. All disclosures provided to the Buyers regarding the Company and its Subsidiaries, their businesses and
the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its
Subsidiaries, taken as a whole, are true and correct and does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not
misleading. All of the written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries
to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and
correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. To the Company’s knowledge, no event or circumstance has occurred or information exists
with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including
results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure
at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. All financial projections and
forecasts that have been prepared by or on behalf of the Company or any of its Subsidiaries and made available to the Buyers have been
prepared in good faith based upon reasonable assumptions and represented, at the time each such financial projection or forecast was
delivered to each Buyer, the Company’s best estimate of future financial performance (it being recognized that such financial projections
or forecasts are not to be viewed as facts and that the actual results during the period or periods covered by any such financial projections
or forecasts may differ from the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section
2.

 

(y)
No General Solicitation. 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 under the Securities Act) in connection with
the offer or sale of the Securities.

 

    	 	16	 

     

    

 

(z)
Private Placement. Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Buyers as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Primary Market.

 

(aa)
Certain Trading Activities. The Company acknowledges that, notwithstanding section 2(j), the Buyers’ may engage in the trading
of options with regard to the Company’s Common Stock.

 

4.
COVENANTS.

 

(a)
Reporting Status. For the period beginning on the date hereof, and ending 6 months after the date on which all the Convertible
Debentures and Warrants are no longer outstanding (the “Reporting Period”), the Company shall file on a timely basis
all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise
permit such termination.

 

(b)
Use of Proceeds. The Company shall use the proceeds from the issuance of the Convertible Debenture hereunder as set forth in the
Use of Proceeds schedule attached here to in Schedule 5(g), and for working capital and other general corporate purposes. Neither the
Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated herein to repay any loans
to any executives or employees of the Company or to make any payments in respect of any related party debt all of which related party
obligations shall be subordinated to the obligations owed to the Buyer, provided however, that the Company shall be permitted to pay
customary executive salaries and expenses in line with past practice; provided that only current salaries and expenses and not past due
amounts will be paid. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated
herein, or lend, contribute, facilitate or otherwise make available such proceeds to any Person (i) to fund, either directly or indirectly,
any activities or business of or with any Person that is identified on the list of Specially Designated Nationals and Blocker Persons
maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions
Programs, or (ii) in any other manner that will result in a violation of Sanctions Programs.

 

(c)
Listing. To the extent applicable, the Company shall promptly secure the listing or designation for quotation (as the case may
be) of all of the Underlying Securities (as defined below) upon each national securities exchange and automated quotation system, if
any, upon which the Common Stock is then listed or designated for quotation (as the case may be, each an “Eligible Market”),
subject to official notice of issuance, and shall use reasonable efforts to maintain such listing or designation for quotation (as the
case may be) of all Underlying Securities from time to time issuable under the terms of the Transaction Documents on such Eligible Market
for the Reporting Period. Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to
result in the delisting or suspension of the Common Stock on an Eligible Market during the Reporting Period. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this Section 4(c). “Underlying Securities” means
the (i) the Conversion Shares and the Warrant Shares, and (ii) any common stock of the Company issued or issuable with respect to the
Conversion Shares or the Warrant Shares, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the shares of Common Stock are converted
or exchanged without regard to any limitations on conversion of the Convertible Debentures or the exercise of the Warrants.

 

    	 	17	 

     

    

 

(d)
Fees. The Company shall pay to YA Global II SPV, LLC, an affiliate of the lead Buyer (the “Subsidiary Fund”),
a one-time due diligence and structuring fee of $10,000,. the due diligence and structuring fee shall be deducted from the gross proceeds
of the First Closing. The Company authorizes the Buyer to deduct any fees due hereunder from the gross proceeds of the purchase of any
Convertible Debentures. In addition, Buyer acknowledges and agrees that the Company shall pay a placement agent fee of $230,000 to Maxim
Group, as placement agent.

 

(e)
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees
that, subject to compliance with applicable federal and state securities laws, the Securities may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The Company hereby agrees
to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.

 

(f)
Disclosure of Transactions and Other Material Information. On or before 9:30 a.m., New York time, on the first Business Day after
the date of this Agreement, the Company shall file a current report of on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including,
without limitation, this Agreement (and all schedules to this Agreement) (including all attachments, the “Current Report”).
From and after the filing of the Current Report, the Company shall have disclosed all material, non-public information (if any) provided
to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in
connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the Current Report,
the Company acknowledges and agrees that any and all confidentiality or similar obligations with respect to the transactions contemplated
by the Transaction Documents under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one hand, and the Buyers or any of their affiliates, on the other
hand, shall terminate. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the Company or
any of its Subsidiaries from and after the date hereof without first obtaining the express prior written consent of such Buyer (which
may be granted or withheld in such Buyer’s sole discretion).

 

    	 	18	 

     

    

 

(g)
Reservation of Shares. So long as any of the Convertible Debentures remain outstanding, the Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, no less than 300% of the maximum number of shares of Common
Stock issuable upon conversion of all the Convertible Debentures then outstanding (assuming for purposes hereof that (x) the Convertible
Debentures are convertible at the Conversion Price then in effect, and (y) any such conversion shall not take into account any limitations
on the conversion of the Convertible Debentures (the “Required Reserve Amount”); provided that at no time shall
the number of shares of Common Stock reserved pursuant to this Section 4(g) be reduced other than proportionally in connection with any
conversion and/or redemption, or reverse stock split. If at any time the number of shares of Common Stock authorized and reserved for
issuance is not sufficient to meet the Required Reserved Amount, the Company shall within 30 calendar days take all corporate action
necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders
to authorize an increase the number of authorized shares to meet the Company’s obligations pursuant to the Transaction Documents,
in the case of an insufficient number of authorized shares, recommending that stockholders vote in favor of an increase in such authorized
number of shares sufficient to meet the Required Reserved Amount.

 

(h)
Additional Registration Statements. So long as the Convertible Debentures and/or Warrants are outstanding and/or the Investor
holds Conversion Shares and/or Warrant Shares and such Conversion Shares and/or Warrant Shares are either not registered for resale pursuant
to an effective registration statement or eligible for resale pursuant to an exemption of the registration requirements of the Securities
Act, the Company will not file a registration statement under the Securities Act relating to securities that are not the Securities without
including the Conversion Shares and/or Warrant Shares issuable upon conversion of the Convertible Debentures and/or exercise of the Warrant
and/or such Conversion Shares and/or Warrant Shares issued and held by the Investor; provided, however, that such prohibition shall not
apply to any registration statement which is currently on file with the SEC (including any related registration statement, prospectus
or supplement required by Rule 462 or 424 of the Securities Act.

 

(i)
Registration Rights. As may otherwise be required by section 2(c) of the Registration Rights Agreement and in addition to the
requirement therein, so long as the Convertible Debentures and/or Warrants are outstanding and/or the Investor holds Conversion Shares
and/or Warrant Shares and such Conversion Shares and/or Warrant Shares issuable upon conversion of the Convertible Debentures and/or
exercise of the Warrants and/or are issued and held by the Investor are either not registered for resale pursuant to an effective registration
statement or eligible for resale pursuant to an exemption of the registration requirements of the Securities Act the Company shall file
on the date thereof a registration statement or an amendment to the then existing Registration Statement (as this term is defined in
the Registration Rights Agreement) under the Securities Act relating to the Conversion Shares and/or Warrant Shares issuable upon conversion
of the Convertible Debentures and/or exercise of the Warrants and/or issued and held by the Investor. Notwithstanding the foregoing,
as long as the Company is in compliance with the requirements of the Registration Rights Agreement, the failure to file a registration
statement or an amendment thereto prior to the date on which such filing is required by the Registration Rights Agreement shall not be
considered a breach of this Section 4(i).

 

    	 	19	 

     

    

 

(j)
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of Applicable Laws or
any law, ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result,
either individually or in the aggregate, in a Material Adverse Effect. The covenant set forth above shall be ongoing while the Investor
owns any Securities. The Company shall promptly notify the Investor in writing should it become aware of (a) any changes to this covenant,
or (b) if it cannot comply with the covenant set forth above. The Company shall also promptly notify the Investor in writing should it
become aware of an investigation, litigation or regulatory action relating to an alleged or potential violation of Applicable Laws to
the extent such event or action is material and would be required to be publicly disclosed.

 

(k)
From the date hereof until all the Convertible Debentures have been repaid, unless the holders of at least 75% in principal amount of
the then outstanding Convertible Debentures shall have given prior written consent, the Company shall not, and shall not permit any of
its subsidiaries (whether or not a subsidiary on the date hereof) to, directly or indirectly (i) other than Permitted Indebtedness, enter
into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited
to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income
or profits therefrom, (ii) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any lien, security interest,
option or other charge or encumbrance (each, a “Lien”) of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits therefrom, or (iii) amend its charter documents, including,
without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the
holders of the Convertible Debentures, (iv) make any payments in respect of any related party debt, (v) enter into or agree to enter
into any debenture, note, instrument, contract, financing arrangements, or other transaction that allows the holder of such instrument
or counterparty to such transaction to receive payments in or acquire shares of Common Stock, for no consideration or consideration less
than the volume weighted average price or bid price of the Common Stock, or that varies or may vary with the volume weighted average
price or closing bid price of the Common Stock, as quoted by Bloomberg, LP, immediately prior to its issuance, (vi) enter into any security
instrument granting the holder a security interest in any and all assets of the Company, or (vii) other than for bona-fide employee stock
option plans, file any registration statement on Form S-8

 

“Permitted
Indebtedness” shall mean: (i) indebtedness evidenced by the Convertible Debentures; (ii) indebtedness described on a Disclosure
Schedule attached hereto; (iii) indebtedness incurred solely for the purpose of financing the acquisition or lease of any equipment,
including capital lease obligations with no recourse other than to such equipment; (iv) indebtedness (A) the repayment of which has been
subordinated to the payment of the Convertible Debentures on terms and conditions acceptable to the Buyers, including with regard to
interest payments and repayment of principal, (B) which does not mature or otherwise require or permit redemption or repayment prior
to or on the 91st day after the maturity date of any Convertible Debentures then outstanding; and (C) which is not secured by any assets
of the Company or its subsidiaries; (v) indebtedness associated with acquiring new intellectual property assets and licenses, so long
as the proceeds are going to the party(ies) from which the Company is acquiring the assets, licenses, and other properties and (vi) any
indebtedness (other than the indebtedness set out in (i) – (v) above) incurred after the date hereof, provided that such indebtedness
does not exceed $300,000 at any given time.

 

    	 	20	 

     

    

 

“Permitted
Liens” shall mean (1) any security interest granted to the Buyers to secure the obligations under the Convertible Debentures,
(2) any prior security interest granted to the Buyers, (3) existing Liens disclosed by the Company on a Disclosure Schedule attached
hereto; (4) inchoate Liens for taxes, assessments or governmental charges or levies not yet due, as to which the grace period, if any,
related thereto has not yet expired, or being contested in good faith and by appropriate proceedings for which adequate reserves have
been established in accordance with GAAP; (5) Liens of carriers, materialmen, warehousemen, mechanics and landlords and other similar
Liens which secure amounts which are not yet overdue by more than 60 days or which are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP; (6) licenses, sublicenses, leases or subleases granted to
other persons not materially interfering with the conduct of the business of the Company; (7) Liens securing capitalized lease obligations
and purchase money indebtedness incurred solely for the purpose of financing an acquisition or lease; (8) easements, rights-of-way, restrictions,
encroachments, municipal zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each case not
securing debt and not materially interfering with the conduct of the business of the Company and not materially detracting from the value
of the property subject thereto; (9) Liens arising out of the existence of judgments or awards which judgments or awards do not constitute
an Event of Default; (10) Liens incurred in the ordinary course of business in connection with workers compensation claims, unemployment
insurance, pension liabilities and social security benefits and Liens securing the performance of bids, tenders, leases and contracts
in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature (other
than appeal bonds) incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money);
(11) Liens in favor of a banking institution arising by operation of law encumbering deposits (including the right of set-off) and contractual
set-off rights held by such banking institution and which are within the general parameters customary in the banking industry and only
burdening deposit accounts or other funds maintained with a creditor depository institution; (12) usual and customary set-off rights
in leases and other contracts; (13) escrows in connection with acquisitions and dispositions and (14) royalties and other rights to revenue
derived from the sale of the Company’s products that are granted in the ordinary course of business.

 

5.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a)
Register. The Company shall maintain at its principal executive offices or with the Transfer Agent (or at such other office or
agency of the Company as it may designate by notice to each holder of Securities), a register for the Convertible Debentures in which
the Company shall record the name and address of the Person in whose name the Convertible Debentures have been issued (including the
name and address of each transferee), the amount of Convertible Debentures held by such Person, and the number of Conversion Shares or
Warrant Shares issuable upon conversion of the Convertible Debentures or exercise of the Warrants held by such Person. The Company shall
keep the register open and available at all times during business hours for inspection of the Buyer or its legal representatives.

 

    	 	21	 

     

    

 

(b)
Transfer Restrictions. The Securities may only be disposed of in compliance with state and federal securities laws. In connection
with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate
of a Buyer or in connection with a pledge as contemplated herein, the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall
be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights and obligations of a Buyer under this Agreement.

 

6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

The
obligation of the Company hereunder to issue and sell the Convertible Debentures to the Buyer at each Closing is subject to the satisfaction,
at or before each Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

 

(a)
The Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

 

(b)
The Buyer shall have delivered to the Company the Purchase Price (less, the amounts withheld pursuant to Section 4(d)) for the Convertible
Debentures being purchased by the Buyer at the Closing by wire transfer of immediately available funds in accordance with the Closing
Statement.

 

(c)
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of
each Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and the Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to such Closing Date.

 

7.
CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The
obligation of the Buyer hereunder to purchase its Convertible Debentures at each Closing is subject to the satisfaction, at or before
each Closing Date, of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may
be waived by the Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(a)
The Company shall have duly executed and delivered to the Buyer each of the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to the Buyer a Convertible Debenture with a principal amount corresponding to the Closing.

 

    	 	22	 

     

    

 

(b)
The Buyer shall have received the opinion of counsel to the Company, dated as of the First Closing Date, in the form reasonably acceptable
to such Buyer which shall include but not be limited to whether the Company is an issuer defined as a “Shell Company,” as
defined in paragraph (i)(1)(i) of Rule 144 or has been at any time previously an issuer defined as a “Shell Company.”

 

(c)
The Company shall have provided to the Buyer an executed Officer’s Certificate in a form satisfactory to the Buyer and dated as
of the Closing Date, as to (i) the Company’s Article of Incorporation, (ii) the Bylaws of the Company, (iii) the resolutions as
adopted by the Company’s Board of Directors in a form reasonably acceptable to the Buyer, (iv) the Company’s Certificate
of Good, each as in effect at the Closing.

 

(d)
The Company shall have delivered to each Buyer copies of its and each Subsidiaries certified copies of its charter, as well as any shareholder
or operating agreements by or among the shareholders or members of any of the Company’s Subsidiaries.

 

(e)
The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company as of a date
within ten (10) days of the Closing Date.

 

(f)
Each and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of each Closing
Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall
be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions set forth in each Transaction Document required to be performed, satisfied or complied with by the Company
at or prior to each Closing Date.

 

(g)
The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of each Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the
SEC or the Principal Market have been threatened, as of each Closing Date, either (I) in writing by the SEC or the Principal Market or
(II) by falling below the minimum maintenance requirements of the Principal Market.

 

(h)
The Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of
the Securities, including without limitation, those required by the Principal Market, if any.

 

(i)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

    	 	23	 

     

    

 

(j)
Since the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably
be expected to result in a Material Adverse Effect, or an Event of Default (as defined in the Convertible Debentures). 

 

(k)
The Company shall have obtained, to the extent required, approval of the Principal Market to list or designate for quotation (as the
case may be) the maximum number of Conversion Shares issuable pursuant to the Convertible Debentures to be issued at the Closing.

 

(l)
The Buyer shall have received a letter, duly executed by an officer of the Company, setting forth the wire amounts of the Buyer and the
wire transfer instructions of the Company (the “Closing Statement”). 

 

(m)
From the date hereof to the applicable Closing Date, trading in the Common Stock shall not have been suspended by the SEC or the Principal
Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior
to the Closing) and (ii) at any time from the date hereof to the applicable Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades
are reported by such service, or on the Principal Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable
judgment of each Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

(n)
The Company and its Subsidiaries shall have delivered to the Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

 

(o)
Solely with respect to the Second Closing, the Registration Statement shall be effective in accordance with the provisions set forth
in the Registration Rights Agreement, including the effectiveness deadline set froth therein.

 

8.
TERMINATION.

 

In
the event that the First Closing shall not have occurred with respect to the Buyer within five (5) days of the date hereof, then such
Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close
of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this
Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement
to have been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale
and purchase of the Convertible Debentures shall be applicable only to such Buyer providing such written notice, provided further that
no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described
herein. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance
by any other party of its obligations under this Agreement or the other Transaction Documents.

 

    	 	24	 

     

    

 

9.
MISCELLANEOUS.

 

(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY.

 

(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event
that any signature is delivered by by an e-mail which contains a portable document format (.pdf) file of an executed signature page,
such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such signature page were an original thereof.

 

    	 	25	 

     

    

 

(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the
masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.

 

(d)
Entire Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company,
their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking
with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by
the party to be charged with enforcement.

 

(e)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered
personally or (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case,
properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail addresses
for such communications shall be:

 

	If to the Company, to:	Kraig Biocraft Laboratories, Inc. 
	 	2723 South State Street – Suite 150
	 	Ann Arbor, MI 48104
	 	Telephone:	(734) 619-8066
	 	Attention:	Kim Thompson
	 	E-Mail:	
	 	 	 
	With Copy to:	Hunter Taubman Fischer & Li LLC
	 	48 Wall Street, Suite 1100
	 	New York, NY 10005
	 	Telephone:	(917) 512-0827
	 	Attention:	Louis Taubman, Esq.
	 	E-Mail:	
	 	 	 
	If to the Buyer, to its address and e-mail
    address set forth on the Schedule of Buyers,
	 	 	 
	With copy to:	David Gonzalez, Esq.
	 	c/o Yorkville Advisors Global, LP
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	EMail:	

 

    	 	26	 

     

    

 

or
to such other address, e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) electronically generated by the sender’s e-mail service provider containing
the time, date, recipient e-mail address or (C) provided by an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(f)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Convertible Debentures (but excluding any purchasers of Underlying Securities, unless
pursuant to a written assignment by the Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Buyers. In connection with any transfer of any or all of its Securities, the Buyer may assign all, or
a portion, of its rights and obligations hereunder in connection with such Securities without the consent of the Company, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such transferred Securities.

 

(g)
Indemnification.

 

(i)
In consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and
in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless the Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty
made by the Company in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any
Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary)
or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement
of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with
the proceeds of the issuance of the Securities, or (C) any disclosure properly made by such Buyer pursuant to Section 4(f), or (D) the
status of the Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by the
Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action
or proceeding for injunctive or other equitable relief); provided, however, that the foregoing indemnification shall not be available
to any particular Indemnitee to the extent it is determined by a court of competent jurisdiction in a final judgement not subject to
appeal that the Indemnified Liabilities for which such indemnification is sought arises from the gross negligence or willful misconduct
of such Indemnitee. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall
make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law.

 

    	 	27	 

     

    

 

(ii)
Promptly after receipt by an Indemnitee under this Section 9(g) of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to
be made against the Company under this Section 9(g), deliver to the Company a written notice of the commencement thereof, and the Company
shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel
mutually reasonably satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to
retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing
to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified Liability and
to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any
such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall
have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee and
the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to employ separate counsel at the expense
of the Company, then the Company shall not have the right to assume the defense thereof and such counsel shall be at the expense of the
Company), provided further, that in the case of clause (C) above the Company shall not be responsible for the reasonable fees and expenses
of more than one (1) separate legal counsel for the Indemnitees. The Indemnitee shall reasonably cooperate with the Company in connection
with any negotiation or defense of any such action or Indemnified Liability by the Company and shall furnish to the Company all information
reasonably available to the Indemnitee which relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably
apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable
for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the Company
shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee,
consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or
litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Company within
a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this
Section 9(g), except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.

 

(iii)
The indemnification required by this Section 9(g) shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, within ten (10) days after bills supporting the Indemnified Liabilities are received by the Company.

 

(iv)
The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the
Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.

 

(h)
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

[REMAINDER
PAGE INTENTIONALLY LEFT BLANK]

 

    	 	28	 

     

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement
to be duly executed as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	KRAIG
    BIOCRAFT LABORATORIES, INC.
	 	 	 
	 	By:	                   
	 	Name:	 
	 	Title:	 

 

    	 	29	 

     

    

 

IN
WITNESS WHEREOF, the Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement
to be duly executed as of the date first written above.

 

	 	BUYER:
	 	 	 
	 	YA
    II PN, LTD. 
	 	 	 
	 	By:
    	Yorkville
    Advisors Global, LP
	 	Its:	Investment
    Manager
	 	 	 
	 	By:
    	Yorkville
    Advisors Global II, LLC
	 	Its:
    	General
    Partner
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	30	 

     

    

 

LIST
OF EXHIBITS:

 

    	 	31	 

     

    

 

EXHIBIT
A

 

FORM
OF CONVERTIBLE DEBENTURES

 

    	 	 	 

     

    

 

EXHIBIT
B

 

FORM
OF WARRANTS

 

    	 	 	 

     

    

 

SCHEDULE
OF BUYERS

 

	(a)	 	(b)	 
	Buyer
    	 	Subscription
    Amount of Convertible Debentures	 
	 	 	 	 
	YA
    II PN, Ltd.	 	 	 
	1012
    Springfield Avenue	First
    Closing:	$1,500,000.00	 
	Mountainside,
    NJ 07092	Second
    Closing	$1,500,000.00	 
	Email:
    	 	 	 
	 	 	 
	 	Aggregate:	$3,000,000.00
    	 
	 	 	 
	Legal
    Representative’s Address and E-Mail Address	 
	David
    Gonzalez, Esq.	 	 	 
	1012
    Springfield Avenue	 	 	 
	Mountainside,
    NJ 07092	 	 	 
	Email:
    	 	 

 

    	2

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