Document:

WARRANT TO PURCHASE SHARES OF COMMON
STOCK

OF SIGMA LABS, INC.

 

NEITHER THE WARRANT NOR THE SECURITIES
ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “1933 ACT”),
and are being sold in reliance upon an exemption from registration afforded by Regulation S under the 1933 act. pursuant to the
requirements of Regulation S, thE Securities may not be transferred, sold or otherwise exchanged unless pursuant to registration
under the 1933 Act or pursuant to an available exemption thereunder. 

 

THIS CERTIFIES THAT, for good and valuable
consideration Rockville Asset Management Ltd. (“Holder”), or the Holder’s registered assigns, is entitled to
subscribe for and purchase from Sigma Labs, Inc., a Nevada corporation (the “Corporation”), Fourteen Million,
Two Hundred Fifty-Nine Thousand, Two Hundred Fifty-Nine (14,259,259) fully paid and nonassessable shares of the Common Stock of
the Corporation at the price of $0.15 per share (the “Warrant Exercise Price”), subject to the antidilution
provisions of this Warrant. This Warrant may be exercised at any time commencing on January 10, 2014 to and including October 10,
2014.

 

The Warrant is issued pursuant to the Subscription
Agreement, entered into as of the date hereof, between the Corporation and the Holder (the “Agreement”).

 

The shares which may be acquired upon exercise
of this Warrant are referred to herein as the “Warrant Shares.” As used herein, the term “Holder”
means the Holder, any party who acquires all or a part of this Warrant as a registered transferee of the Holder, or any record
holder or holders of the Warrant Shares issued upon exercise, whether in whole or in part, of the Warrant. The term “Common
Stock” means the common stock, $0.001 par value per share, of the Corporation.

 

This Warrant is subject to the following
provisions, terms and conditions:

 

1.                 
EXERCISE; TRANSFERABILITY.

 

(a)               
The rights represented by this Warrant may be exercised by the Holder hereof, in whole or in part (but not as to
a fractional share of Common Stock), by written notice of exercise (in the form attached hereto) delivered to the Corporation at
the principal office of the Corporation prior to the expiration of this Warrant and accompanied or preceded by the surrender of
this Warrant along with a check in payment of the Warrant Exercise Price for such Warrant Shares.

 

(b)              
Except as provided in Section 7 hereof, this Warrant may not be sold, transferred, assigned, hypothecated or divided
into two or more Warrants of smaller denominations, nor may any Warrant Shares issued pursuant to exercise of this Warrant be transferred.

 

    	 

    	 

    

 

 

2.                 
EXCHANGE AND REPLACEMENT. Subject to Sections 1 and 7 hereof, this Warrant is exchangeable upon the surrender
hereof by the Holder to the Corporation at its office for new Warrants of like tenor and date representing in the aggregate the
right to purchase the number of Warrant Shares purchasable hereunder, each of such new Warrants to represent the right to purchase
such number of Warrant Shares (not to exceed the aggregate total number purchasable hereunder) as shall be designated by the Holder
at the time of such surrender. Upon receipt by the Corporation of evidence reasonably satisfactory to it of the loss, theft, destruction,
or mutilation of this Warrant, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to
it, and upon surrender and cancellation of this Warrant, if mutilated, the Corporation will make and deliver a new Warrant of like
tenor, in lieu of this Warrant. This Warrant shall be promptly canceled by the Corporation upon the surrender hereof in connection
with any exchange or replacement. The Corporation shall pay all expenses, taxes (other than stock transfer taxes), and other charges
payable in connection with the preparation, execution, and delivery of Warrants pursuant to this Section 2.

 

3.                 
ISSUANCE OF THE WARRANT SHARES.

 

(a)               
The Corporation agrees that the Warrant Shares shall be and are deemed to be issued to the Holder as of the close
of business on the date on which this Warrant shall have been surrendered and the payment made for such Warrant Shares as aforesaid.
Subject to the provisions of paragraph (b) of this Section 3, certificates for the Warrant Shares so purchased shall be delivered
to the Holder within a reasonable time after the rights represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the right to purchase the number of Warrant Shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be delivered to the Holder.

 

(b)              
Notwithstanding the foregoing, however, the Corporation shall not be required to deliver any certificate for Warrant
Shares upon exercise of this Warrant except in accordance with exemptions from the applicable securities registration requirements
or registrations under applicable securities laws. Nothing herein shall obligate the Corporation to effect registrations under
federal or state securities laws. The Holder agrees to execute such documents and make such representations, warranties, and agreements
as may be required solely to comply with the exemptions relied upon by the Corporation, or the registrations made, for the issuance
of the Warrant Shares.

 

4.                 
COVENANTS OF THE CORPORATION. The Corporation covenants and agrees that all Warrant Shares will, upon issuance,
be duly authorized and issued, fully paid, nonassessable and free from all taxes, liens and charges with respect to the issue thereof.
The Corporation further covenants and agrees that during the period within which the rights represented by this Warrant may be
exercised, the Corporation will at all times have authorized and reserved for the purpose of issue or transfer upon exercise of
the subscription rights evidenced by this Warrant a sufficient number of shares of Common Stock to provide for the exercise of
the rights represented by this Warrant. The Corporation will not take any action which would result in any adjustment of the Warrant
Exercise Price if the total number of shares of Common Stock issuable after such action upon exercise of all outstanding warrants,
together with all shares of Common Stock then outstanding and all shares of Common Stock then issuable upon exercise of all options
and upon the conversion of all convertible securities then outstanding, would exceed the total number of shares of Common Stock
then authorized by the Corporation’s Articles of Incorporation, as amended.

 

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5.                 
ANTI-DILUTION ADJUSTMENTS. The provisions of this Warrant are subject to adjustment as provided in this Section
5.

 

(a)               
The Warrant Exercise Price shall be adjusted from time to time such that in case the Corporation shall hereafter:

 

(i)                
pay any dividends on any class of stock of the Corporation payable in Common Stock or securities convertible into
Common Stock;

 

(ii)              
subdivide its then outstanding shares of Common Stock into a greater number of shares; or

 

(iii)            
combine outstanding shares of Common Stock, by reclassification or otherwise;

 

then, in any such event,
the Warrant Exercise Price in effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted immediately
after such event to a price (calculated to the nearest full cent) determined by dividing (A) the number of shares of Common Stock
outstanding immediately prior to such event, multiplied by the then existing Warrant Exercise Price, by (B) the total number of
shares of Common Stock outstanding immediately after such event (including in each case the maximum number of shares of Common
Stock issuable in respect of any securities convertible into Common Stock), and the resulting quotient shall be the adjusted Warrant
Exercise Price per share. An adjustment made pursuant to this Subsection shall become effective immediately after the record date
in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of an adjustment made pursuant to this Subsection, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock
and other capital stock of the Corporation, the Board of Directors (whose determination shall be conclusive) shall determine the
allocation of the adjusted Warrant Exercise Price between or among shares of such classes of capital stock or shares of Common
Stock and other capital stock. All calculations under this Subsection shall be made to the nearest cent or to the nearest 1/100
of a share, as the case may be. In the event that at any time as a result of an adjustment made pursuant to this Subsection, the
holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Corporation other
than shares of Common Stock, thereafter the Warrant Exercise Price of such other shares so receivable upon exercise of any Warrant
shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to Common Stock contained in this Section.

 

(b)              
Upon each adjustment of the Warrant Exercise Price pursuant to Section 5(a) above, the Holder of each Warrant shall
thereafter (until another such adjustment) be entitled to purchase at the adjusted Warrant Exercise Price the number of shares,
calculated to the nearest full share, obtained by multiplying the number of shares specified in such Warrant (as adjusted as a
result of all adjustments in the Warrant Exercise Price in effect prior to such adjustment) by the Warrant Exercise Price in effect
prior to such adjustment and dividing the product so obtained by the adjusted Warrant Exercise Price.

 

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(c)               
In case of any consolidation or merger to which the Corporation is a party other than a merger or consolidation in
which the Corporation is the continuing corporation, or in case of any sale or conveyance to another corporation of the property
of the Corporation as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with
another corporation (including any exchange effected in connection with a merger of a third corporation into the Corporation),
there shall be no adjustment under Subsection (a) of this Section 5 but the Holder of this Warrant shall have the right thereafter
to receive upon exercise of this Warrant the kind and amount of shares of stock and other securities and property which he would
have owned or have been entitled to receive immediately after such consolidation, merger, statutory exchange, sale, or conveyance
had such Warrant been exercised immediately prior to the effective date of such consolidation, merger, statutory exchange, sale,
or conveyance and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set
forth in this Section with respect to the rights and interests thereafter of any Holders of the Warrant, to the end that the provisions
set forth in this Section shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any
shares of stock and other securities and property thereafter deliverable on the exercise of the Warrant. The provisions of this
Subsection shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances. The Corporation
will not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the successor entity (if other
than the Corporation) resulting from such consolidation or the entity purchasing such assets shall assume the obligation to deliver
to such Holder such shares of stock, securities or property as, in accordance with the foregoing provisions, such Holder may be
entitled to purchase.

 

(d)              
Upon any adjustment of the Warrant Exercise Price, then and in each such case, the Corporation shall give written
notice thereof, by first-class mail, postage prepaid, addressed to the Holder as shown on the books of the Corporation, which notice
shall state the Warrant Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares
of Common Stock purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.

 

(e)               
The Corporation shall give notice to the Holder if at any time prior to the expiration or exercise in full of this
Warrant, any of the following events shall occur:

 

(i)                
The Corporation shall authorize the payment of any dividend payable in any securities upon shares of Common Stock
or authorize the making of any distribution to the holders of shares of Common Stock;

 

(ii)              
The Corporation shall authorize the issuance to all holders of Common Stock of any additional shares of Common Stock
or of rights, options or warrants to subscribe for or purchase Common Stock or any of any other subscription rights, options or
warrants;

 

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(iii)            
A dissolution, liquidation or winding up of the Corporation (other than in connection with a consolidation, merger,
or sale or conveyance of the property of the Corporation as an entirety or substantially as an entirety); or

 

(iv)            
A capital reorganization or reclassification of the Common Stock (other than a subdivision or combination of the
outstanding Common Stock and other than a change in the par value of the Common Stock) or any consolidation or merger of the Corporation
with or into another corporation (other than a consolidation or merger in which the Corporation is the continuing corporation and
that does not result in any reclassification or change of Common Stock outstanding) or any sale or conveyance to another corporation
of the property of the Corporation as an entirety or substantially an entirety.

 

Such notice shall be
given at least 10 business days prior to the date fixed as a record date or effective date or the date of closing of the Corporation’s
stock transfer books for the determination of the stockholders entitled to such dividend, distribution, or subscription rights,
or for the determination of the stockholders entitled to vote on such proposed merger, consolidation, sale, conveyance, dissolution,
liquidation or winding up. Such notice shall specify such record date or the date of the closing of the stock transfer books, as
the case may be.

 

6.                 
NO VOTING RIGHTS. This Warrant shall not entitle the Holder to any voting rights or other rights as a shareholder
of the Corporation.

 

7.                 
NOTICE OF TRANSFER OF WARRANT OR RESALE OF THE WARRANT SHARES.

 

(a)               
Subject to the sale, assignment, hypothecation, or other transfer restrictions set forth in Section 1 hereof, the
Holder, by acceptance hereof, agrees to give written notice to the Corporation before transferring this Warrant or transferring
any Warrant Shares of such Holder’s intention to do so, describing briefly the manner of any proposed transfer. Promptly
upon receiving such written notice, the Corporation shall present copies thereof to the Corporation’s counsel. If in the
opinion of such counsel the proposed transfer may be effected without registration or qualification (under any federal or state
securities laws), the Corporation, as promptly as practicable, shall notify the Holder of such opinion, whereupon the Holder shall
be entitled to transfer this Warrant or to dispose of Warrant Shares received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by the Holder to the Corporation; provided that an appropriate legend may be
endorsed on this Warrant or the certificates for such Warrant Shares respecting restrictions upon transfer thereof necessary or
advisable in the opinion of counsel and satisfactory to the Corporation to prevent further transfers which would be in violation
of Section 5 of the 1933 Act and applicable state securities laws; and provided further that the prospective transferee or purchaser
shall execute such documents and make such representations, warranties, and agreements as may be required solely to comply with
the exemptions relied upon by the Corporation for the transfer or disposition of the Warrant or Warrant Shares.

 

(b)              
If, in the opinion of the Corporation’s counsel, the proposed transfer or disposition of the Warrant or such
Warrant Shares described in the written notice given pursuant to this Section 7 may not be effected without registration or qualification
of this Warrant or such Warrant Shares, the Corporation shall promptly give written notice thereof to the Holder, and the Holder
will limit its activities in respect to such transfer or disposition as, in the opinion of such counsel, are permitted by law.

 

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8.                 
FRACTIONAL SHARES. Fractional shares shall not be issued upon the exercise of this Warrant, but in any case
where the Holder would, except for the provisions of this Section, be entitled under the terms hereof to receive a fractional share,
the Corporation shall, upon the exercise of this Warrant for the largest number of whole shares then called for, pay a sum in cash
equal to such fraction multiplied by the Market Price on the day prior to the date of exercise of this Warrant in lieu of such
fractional share. For purposes of this Section, the term “Market Price” with respect to shares of Common Stock of any
class or series means the last reported sale price or, if none, the average of the last reported closing bid and asked prices on
any national or regional securities exchange or quoted in the Nasdaq Stock Market (“Nasdaq”), or if not listed
on a national or regional securities exchange or quoted in Nasdaq, the average of the last reported closing bid and asked prices
as reported by the Electronic Bulletin Board of the National Association of Securities Dealers, Inc. from quotations by market
makers in such Common Stock on the over-the-counter market, or if no quotations in such Common Stock are available, the fair market
value of the shares as determined in good faith by the Board of Directors of the Corporation.

 

9.                 
SECURITIES REPRESENTATIONS.

 

(a)               
The Holder acknowledges that neither the Warrant nor the Warrant Shares (collectively, the “Securities”)
have been registered under the 1933 Act, and the Securities are being sold in reliance upon an exemption from registration afforded
by Regulation S promulgated under the 1933 Act. Pursuant to the requirements of Regulation S, the Securities may not be transferred,
sold or otherwise exchanged unless in compliance with the provisions of Regulation S and/or pursuant to registration under the
1933 Act, or pursuant to an available exemption thereunder.

 

(b)              
The Holder is not a U.S. Person and is not acquiring the Securities for the account of any U.S. Person. If the Holder
is an entity, none of the Holder’s directors, executive officers, partners or managers is a national or citizen of the United
States, and such entity was not formed specifically for the purpose of acquiring the Securities acquired hereunder.

 

(c)               
The Holder is acquiring the Securities for its own account and not for the account or benefit of a U.S. Person and
no other Person has any interest in or participation in the Securities or any right, option, security interest, pledge or other
interest in or to the Securities. The Holder acknowledges and agrees that it must bear the economic risk of its investment in the
Securities for an indefinite period of time and that prior to any such offer or sale, the Corporation may require, as a condition
to effecting a transfer of the Securities, an opinion of counsel, acceptable to the Corporation, as to the registration or exemption
therefrom under the 1933 Act.

 

(d)              
The Holder, will, after the expiration of the “restricted period,” as set forth under Regulation S Rule
903(b)(3)(iii)(A), offer, sell, pledge or otherwise transfer the Securities only in accordance with Regulation S, or pursuant
to an available exemption under the Act. The transactions contemplated hereunder have neither been pre-arranged with a purchaser
who is in the United States or who is a U.S. Person, nor are they part of a plan or scheme to evade the registration provisions
of the United States federal securities laws.

 

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(e)               
The offer leading to the sale evidenced hereby was made in an “offshore transaction.” For purposes of
Regulation S, the Holder understands that an “offshore transaction” as defined under Regulation S is any offer or sale
not made to a Person in the United States and either (A) at the time the buy order is originated, the purchaser is outside the
United States, or the seller or any Person acting on his behalf reasonably believes that the purchaser is outside the United States;
or (B) for purposes of (1) Rule 903 of Regulation S, the transaction is executed in, or on or through a physical trading floor
of an established foreign exchange that is located outside the United States, or (2) Rule 904 of Regulation S, the transaction
is executed in, on or through the facilities of a designated offshore securities market, and neither the seller nor any Person
acting on its behalf knows that the transaction has been prearranged with a buyer in the U.S.

 

(f)               
The Holder has not made and is not aware of any “directed selling efforts” in the United States, which
is defined in Regulation S to be any activity undertaken for the purpose of, or that could reasonably be expected to have the effect
of, conditioning the market in the United States for any of the Securities.

 

(g)              
The Holder understands that the Corporation is the seller of the Securities, and that, for purpose of Regulation S,
a “distributor” is any underwriter, dealer or other person who participates, pursuant to a contractual arrangement,
in the distribution of securities offered or sold in reliance on Regulation S and that an “affiliate” is any partner,
officer, director or any person directly or indirectly controlling, controlled by or under common control with any person in question.
The Holder agrees that it will not, during the “restricted period,” as set forth under Rule 903 (b)(iii)(A), act as
a distributor, either directly or through any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the Securities
other than to a non-U.S. Person.

 

10.             
MISCELLANEOUS.

 

(a)               
NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours
of the recipient, if not, then on the next business day, or (c) two (2) business days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the
Corporation at the address as set forth on the signature page hereof, to the Holder at the Holder’s address as appearing
on the Corporation’s records, or at such other address as the Corporation or Holder may designate by ten (10) days advance
written notice to the other party hereto.

 

(b)              
ATTORNEYS’ FEES. If any action at law or in equity is necessary to enforce or interpret the terms of
this Warrant, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in addition to
any other relief to which such party may be entitled.

 

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(c)               
AMENDMENTS AND WAIVERS. This Warrant may be amended or modified only upon the written consent of both Holder
and the Corporation. This Warrant and any provision hereof may be waived only by an instrument in writing signed by the party against
which enforcement of the same is sought.

 

(d)              
SEVERABILITY. If one or more provisions of this Warrant are held to be unenforceable under applicable law,
such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms.

 

(e)               
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of
the State of Nevada, without giving effect to its conflicts of laws principles.

 

(f)               
BINDING EFFECT. This Warrant shall be binding upon any entity succeeding the Corporation by merger, consolidation
or acquisition of all or substantially all of the Corporation’s assets. All of the covenants and agreements of the Corporation
shall inure to the benefit of the successors and assigns of the Holder hereof.

 

IN WITNESS WHEREOF,
Sigma Labs, Inc. has caused this Warrant to be signed by its duly authorized officer and this Warrant to be dated as of January
10, 2014.

 

 

	 	SIGMA LABS, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Mark Cola
	 	 	Name:Mark Cola
	 	 	Title:President
and Chief Executive Officer
	 	 	 
	 	 	Sigma Labs, Inc.
	 	 	100 Cienega Street, Suite C
	 	 	Santa Fe, NM 8750

 

 

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NOTICE OF EXERCISE

(To be signed only upon exercise of the Warrant)

 

To:_____________________:

 

The undersigned hereby
elects to purchase shares of Common Stock (the “Warrant Shares”) of Sigma Labs, Inc. (the “Company”),
pursuant to the terms of the enclosed warrant (the “Warrant”). The undersigned tenders herewith payment of the
exercise price pursuant to the terms of the Warrant.

 

The undersigned hereby
represents and warrants to, and agrees with, the Company as follows:

 

1                   
The Holder is not a U.S. Person and is not acquiring the Warrant Shares for the account of any U.S. Person. If the
Holder is an entity, none of the Holder’s directors, executive officers, partners or managers is a national or citizen of
the United States, and such entity was not formed specifically for the purpose of acquiring the Warrant Shares acquired hereunder.

 

2                   
The Holder is acquiring the Warrant Shares for its own account and not for the account or benefit of a U.S. Person
and no other Person has any interest in or participation in the Warrant Shares or any right, option, security interest, pledge
or other interest in or to the Warrant Shares. The Holder acknowledges and agrees that it has the financial ability to bear the
economic risk of its investment in the Warrant Shares, including a complete loss of such investment. Holder has adequate means
for providing for its current financial needs and has no need for liquidity with respect to this investment.

 

3                   
The Holder, will, after the expiration of the “restricted period,” as set forth under Regulation S Rule
903(b)(3)(iii)(A), offer, sell, pledge or otherwise transfer the Warrant Shares only in accordance with Regulation S, or pursuant
to an available exemption under the Act. The transactions contemplated hereunder have neither been pre-arranged with a purchaser
who is in the United States or who is a U.S. Person, nor are they part of a plan or scheme to evade the registration provisions
of the United States federal securities laws.

 

4                   
The offer leading to the sale evidenced hereby was made in an “offshore transaction.” For purposes of
Regulation S, the Holder understands that an “offshore transaction” as defined under Regulation S is any offer or sale
not made to a Person in the United States and either (A) at the time the buy order is originated, the purchaser is outside the
United States, or the seller or any Person acting on his behalf reasonably believes that the purchaser is outside the United States;
or (B) for purposes of (1) Rule 903 of Regulation S, the transaction is executed in, or on or through a physical trading floor
of an established foreign exchange that is located outside the United States, or (2) Rule 904 of Regulation S, the transaction
is executed in, on or through the facilities of a designated offshore securities market, and neither the seller nor any Person
acting on its behalf knows that the transaction has been prearranged with a buyer in the U.S.

 

5                   
The Holder has not made and is not aware of any “directed selling efforts” in the United States, which
is defined in Regulation S to be any activity undertaken for the purpose of, or that could reasonably be expected to have the effect
of, conditioning the market in the United States for any of the Warrant Shares.

 

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6                   
The Holder understands that the Company is the seller of the Warrant Shares, and that, for purpose of Regulation
S, a “distributor” is any underwriter, dealer or other person who participates, pursuant to a contractual arrangement,
in the distribution of Warrant Shares offered or sold in reliance on Regulation S and that an “affiliate” is any partner,
officer, director or any person directly or indirectly controlling, controlled by or under common control with any person in question.
The Holder agrees that it will not, during the “restricted period,” as set forth under Rule 903 (b)(iii)(A), act as
a distributor, either directly or through any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the Warrant
Shares other than to a non-U.S. Person

 

7                   
The Holder acknowledges that the issuance of the Warrant Shares to Holder have been registered under the Securities
Act of 1933 (the “Act”), and the Warrant Shares are being sold in reliance upon an exemption from registration
afforded by Regulation S promulgated under the Act. Pursuant to the requirements of Regulation S, the Warrant Shares may not be
transferred, sold or otherwise exchanged unless in compliance with the provisions of Regulation S and/or pursuant to registration
under the Act, or pursuant to an available exemption thereunder.

 

Each certificate evidencing
the Warrant Shares will bear the following legend:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”),
and are being sold in reliance upon an exemption from registration afforded by Regulation S under the act. pursuant to the requirements
of Regulation S, thE Securities may not be transferred, sold or otherwise exchanged unless in compliance with the provisions of
Regulation S and/or pursuant to registration under the Act or pursuant to an available exemption thereunder.”

 

 

 

Number of Warrant Shares Exercised: ______________

 

	Date:	 	, 2014	 	 
	 	 	 	Signature*	 

 

*  The signature on the Notice of Exercise of Warrant must correspond to the name as written upon the face of the Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.

 

    	10SIGMA LABS, INC.

REGULATION S SUBSCRIPTION AGREEMENT
AND

CONFIDENTIAL PURCHASER QUESTIONNAIRE

 

Sigma Labs, Inc.

100 Cienega Street, Suite C

Santa Fe, NM 8750

 

Gentlemen:

 

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

 

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

 

		(a)	Offshore Transaction.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	2

    	 

    

 

(i)The
Purchaser acknowledges that the Securities have not been recommended by any Federal or state securities commission or regulatory
authority. In making an investment decision, investors must rely on their own examination of the Company and the terms of the offering,
including the merits and risks involved. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the
adequacy of this document. Any representation to the contrary is a criminal offense. The Securities are subject to restrictions
on transferability and resale and may not be transferred or resold except as permitted under the Securities Act, and the applicable
state securities laws, pursuant to registration or exemption therefrom;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

    	3

    	 

    

 

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

 

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

 

4.Exemption.

 

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

 

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

 

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

 

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

 

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

 

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

    	4

    	 

    

 

 

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

 

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

        Santa Fe, NM 87501

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

7.Conditions to Closing. 

 

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

 

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

 

    	5

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.Indemnification.

 

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

 

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

 

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

 

    	6

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature
page follows]

 

    	7

    	 

    

 

 

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

 

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

 

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

 

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

 

    	8

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