Document:

Exhibit
10.2

 

EXECUTION
VERSION

 

AMENDED
AND RESTATED

 

GLOBAL
GUARANTY AGREEMENT

 

This
GLOBAL GUARANTY AGREEMENT (the “Guaranty”) is made as of January 18, 2022, by and among PRODIGY TEXTILES
(“PT”), a Vietnam LLC, ( PT is referred to as the “Guarantor”), in favor of YAII PN, LTD.
(the “Investor”) with respect to all obligations of KRAIG BIOCRAFT LABORATORIES, INC. (the “Company”),
a Wyoming corporation, owes to the Investor. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them
in the Securities Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS,
the Company and Investor are entered into a Securities Purchase Agreement of even date herewith pursuant to which the Company has agreed,
upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue and sell to the Investor (i) senior secured
convertible debentures (the “Convertible Debenture”) which shall be convertible into shares of the Company’s
Class A common stock, no par value per share (the “Common Stock,” as converted, the “Conversion Shares”)
in accordance with the terms of the Convertible Debentures and (ii) a warrant (the “Warrant”) to purchase upon exercise
shares of Common Stock, (as exercised, the “Warrant Shares”) in accordance with the terms of the Warrant. Capitalized
terms not defined herein shall have the meaning ascribed to them in the Securities Purchase Agreement;

 

WHEREAS,
in connection with a Securities Purchase Agreement by and among the Company and the Secured Party dated December 11, 2020 (the “December
2020 Securities Purchase Agreement”), has issued to the Secured Party an amended and restated convertible debenture in an aggregate
original principal amount of $1,000,000 (the “A&R Convertible Debentures”) of even date herewith, which shall
be convertible into Conversion Shares;

 

WHEREAS,
the Company and Investor are entered into a Securities Purchase Agreement dated March 25, 2021 (the “March 2021 Securities Purchase
Agreement”) pursuant to which the Company, upon the terms and subject to the conditions of the March 2021 Securities Purchase
Agreement, issued and sold to the Investor (i) senior secured convertible debentures (the “March 2021 Convertible Debenture”)
which are convertible into Common Stock, as converted, Conversion Shares and (ii) a warrant (the “2021 Warrant”) to
purchase upon exercise shares of Common Stock, (as exercised, the “Warrant Shares”) in accordance with the terms of
the 2021 Warrant;

 

WHEREAS,
the Guarantor (other than the Company) executed and delivered a Global Guaranty March 25, 2021 (the “March 2021 Guaranty”)
in favor of the Secured Party, with respect to the Company’s obligations under the March 2021 Securities Purchase Agreement, the
March 2021 Convertible Debentures, the Transaction Documents as defined in the March 2021 Securities Purchase Agreement and related documents)
and the December 2020 Securities Purchase Agreement, the December 2021 A&R Convertible Debenture and the Transaction Documents (as
defined in the December 2020 Securities Purchase Agreement and related documents);

 

    	 

     

    

 

WHEREAS,
it is a condition precedent to the Secured Party purchasing the Convertible Debentures and Warrant pursuant to the Securities Purchase
Agreement that the Guarantor (other than the Company) execute and deliver to the Secured Party this amended and restated global guaranty
of the March 2021 Guaranty dated the date hereof (the “Guaranty”) in favor of the Secured Party, with respect to the
Company’s obligations under Securities Purchase Agreement, Convertible Debenture, Transaction Documents (as defined in the Securities
Purchase Agreement and related documents), the March 2021 Securities Purchase Agreement, the March 2021 Convertible Debentures, the Transaction
Documents as defined in the March 2021 Securities Purchase Agreement and related documents), and the December 2020 Securities Purchase
Agreement , the December 2021 A&R Convertible Debenture and the Transaction Documents (as defined in the December 2020 Securities
Purchase Agreement and related documents) (the “Transaction Documents” (as defined in the Securities Purchase Agreement and
herein), the March 2021 Securities Purchase Agreement, the March 2021 Convertible Debentures, the Transaction Documents as defined in
the March 2021 Securities Purchase Agreement and related documents, the December 2020 Securities Purchase Agreement , the 2021 A&R
Convertible Debenture, the Transaction Documents (as defined in the December 2020 Securities Purchase Agreement and related documents)
shall collectively be referred to as the “Transaction Documents”);

 

WHEREAS,
the Guarantor is a wholly-owned subsidiary of the Company. The Guarantor will benefit, directly or indirectly, from the Company entering
into the Securities Purchase Agreement and other Transaction Documents and such investment the Investor will make into the Company;

 

WHEREAS,
it is a condition of the Securities Purchase Agreement and the Investor’s obligation to purchase the Convertible Debentures and
the Warrant from the Company that the Guarantor will guaranty the payment and performance of all of the Company’s obligations under
the Securities Purchase Agreement, the Convertible Debenture, the Security Agreement by and between the Company, the Guarantor and the
Investor dated the date hereof, and all other Transaction Documents. The Investor is only willing to enter into the Securities Purchase
Agreement if the Guarantor agrees to execute and deliver to the Investor this Guaranty; and

 

WHEREAS,
it is the intention of the parties hereunder that the Guarantor will guaranty the payment and performance of all of the Company’s
obligations under the “Transaction Documents” (as defined in the Securities Purchase Agreement and herein), the March 2021
Securities Purchase Agreement, the March 2021 Convertible Debentures, the Transaction Documents as defined in the March 2021 Securities
Purchase Agreement and related documents, the December 2020 Securities Purchase Agreement , the 2021 A&R Convertible Debenture, the
Transaction Documents (as defined in the December 2020 Securities Purchase Agreement and related documents) shall collectively be referred
to as the “Transaction Documents”);

 

    	2

     

    

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor covenants
and agrees as follows:

 

1.
Guaranty of Payment and Performance. The Guarantor hereby guarantees to the Investor the full, prompt and unconditional
payment when due (whether at maturity, by acceleration or otherwise), and the performance, of all liabilities, agreements and other obligations
of the Company to the Investor, whether direct or indirect, absolute or contingent, due or to become due, secured or unsecured, now existing
or hereafter arising or acquired (whether by way of discount, letter of credit, lease, loan, or otherwise), together with all interest
and costs of collection, compromise or enforcement, including without limitation reasonable attorneys’ fees, incurred with respect
to any such obligations or this Guaranty, or with respect to a proceeding under the federal bankruptcy laws or any insolvency, receivership,
arrangement or reorganization law or an assignment for the benefit of the Investor concerning Company or any Guarantor, together with
interest on all such costs of collection, compromise or enforcement from the date arising (including without limitation all amounts due
and owing under the Convertible Debenture and the A&R Convertible Debenture) (all the foregoing, collectively, the “Obligations”).
This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance of the Obligations
and not of their collectability only and is in no way conditioned upon any requirement that the Investor first attempt to collect any
of the Obligations from the Company or resort to any security or other means of obtaining their payment. Should the Company default in
the payment or performance of any of the Obligations, the obligations of any Guarantor hereunder shall become immediately due and payable
to the Investor, without demand or notice of any nature, all of which are expressly waived by the Guarantor.

 

2.
Unlimited Guaranty. The liability of the Guarantor hereunder shall be unlimited.

 

3.
Waivers by the Guarantor; the Investor’s Freedom to Act. The Guarantor hereby agrees that the Obligations will be
paid and performed strictly in accordance with their terms regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Investor with respect thereto. The Guarantor waives presentment, demand,
protest, notice of acceptance, notice of Obligations incurred and all other notices of any kind, all defenses that may be available by
virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of
assets of the Company, and all suretyship defenses generally. Without limiting the generality of the foregoing, the Guarantor agrees
to the provisions of any instrument evidencing, securing or otherwise executed in connection with any Obligation and agrees that the
obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (i) the failure
of the Investor to assert any claim or demand or to enforce any right or remedy against the Company; (ii) any extensions or renewals
of, or alteration of the terms of, any Obligation or any portion thereof; (iii) any rescissions, waivers, amendments or modifications
of any of the terms or provisions of any agreement evidencing, securing or otherwise executed in connection with any Obligation; (iv)
the substitution or release of any entity primarily or secondarily liable for any Obligation; (v) the adequacy of any rights the Investor
may have against any collateral or other means of obtaining repayment of the Obligations; (vi) the impairment of any collateral securing
the Obligations, including without limitation the failure to perfect or preserve any rights the Investor might have in such collateral
or the substitution, exchange, surrender, release, loss or destruction of any such collateral; (vii) failure to obtain or maintain a
right of contribution for the benefit of the Guarantor; (viii) errors or omissions in connection with the Investor’s administration
of the Obligations (except behavior constituting bad faith); or (ix) any other act or omission that might in any manner or to any extent
vary the risk of any Guarantor or otherwise operate as a release or discharge of any Guarantor, all of which may be done without notice
to any Guarantor.

 

    	3

     

    

 

4.
Unenforceability of Obligations Against Company. If for any reason the Company is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable from the Company by operation of law or for any other
reason, this Guaranty shall nevertheless be binding on the Guarantor to the same extent as if the Guarantor at all times had been the
principal obligor on all such Obligations. In the event that acceleration of the time for payment of the Obligations is stayed upon the
insolvency, bankruptcy or reorganization of the Company, or for any other reason, all such amounts otherwise subject to acceleration
under the terms of any agreement evidencing, securing or otherwise executed in connection with any Obligation shall be immediately due
and payable by the Guarantor.

 

5.
Subrogation; Subordination. Until the payment and performance in full of all Obligations and any and all obligations of
the Company to the Investor, no Guarantor shall exercise any rights against the Company arising as a result of payment by the Guarantor
hereunder, by way of subrogation or otherwise, and will not prove any claim in competition with the Investor in respect of any payment
hereunder in bankruptcy or insolvency proceedings of any nature; the Guarantor will not claim any set-off or counterclaim against the
Company in respect of any liability of the Guarantor to the Company; and the Guarantor waives any benefit of and any right to participate
in any collateral that may be held by the Investor. The payment of any amounts due with respect to any indebtedness of the Company now
or hereafter held by the Guarantor is hereby subordinated to the prior payment in full of the Obligations. The Guarantor agrees that
after the occurrence of any default in the payment or performance of the Obligations, the Guarantor will not demand, sue for or otherwise
attempt to collect any such indebtedness of the Company to any Guarantor until the Obligations shall have been paid in full. If, notwithstanding
the foregoing sentence, any Guarantor shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall
be collected, enforced and received by any Guarantor as trustee for the Investor and be paid over to the Investor on account of the Obligations
without affecting in any manner the liability of any Guarantor under the other provisions of this Guaranty.

 

6.
Termination; Reinstatement. This Guaranty is irrevocable and shall continue without limit of time. This Guaranty shall
be reinstated if at any time any payment made or value received with respect to an Obligation is rescinded or must otherwise be returned
by the Investor upon the insolvency, bankruptcy or reorganization of the Company, or otherwise, all as though such payment had not been
made or value received.

 

7.
Successors and Assigns. This Guaranty shall be binding upon the Guarantor, its successors and assigns, and shall inure
to the benefit of and be enforceable by the Investor and the Investor’s shareholders, officers, directors, agents, successors and
assigns.

 

8.
Amendments and Waivers. No amendment or waiver of any provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall be effective unless the same shall be in writing and signed by the Investor. No failure on the part of the Investor to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

 

    	4

     

    

 

9.
Notices. All notices and other communications called for hereunder shall be made in writing and, unless otherwise specifically
provided herein, shall be deemed to have been duly made or given in accordance with the notice provisions set forth in the Securities
Purchase Agreement.

 

10.
Governing Law; Consent to Jurisdiction. TO INDUCE THE INVESTOR TO PURCHASE THE CONVERTIBLE DEBENTURE, THE GUARANTOR IRREVOCABLY
AGREE THAT ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR RELATED TO ANY MATTER
WHICH IS THE SUBJECT OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH
OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE SUPERIOR COURT OF THE STATE OF NEW JERSEY SITTING
IN UNION COUNTY NEW JERSEY AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY SITTING IN NEWARK NEW JERSEY; PROVIDED, HOWEVER,
INVESTOR MAY, AT ITS SOLE OPTION, ELECT TO BRING ANY ACTION IN ANY OTHER JURISDICTION. THIS PROVISION IS INTENDED TO BE A “MANDATORY”
FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW JERSEY LAW. THE GUARANTOR HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.
THE GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE GUARANTOR AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE
OF COURT OR OTHERWISE.

 

    	5

     

    

 

IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and delivered as a sealed instrument as of the date appearing
on page one.

 

	 	PRODIGY
    TEXTILES, a Vietnam LLC
	 	 
	 	By:	 
	 	Name:
    	Kenneth
    Le
	 	Title:
    	President
	 	 	 
	 	 	 
	 	Address:	W4CC+H3
    Dai Loc Quang Nam Province, Vietnam

 

    	6Exhibit
10.3

 

EXECUTION
VERSION

 

AMENDED
AND RESTATED

 

SECURITY
AGREEMENT

 

THIS
SECURITY AGREEMENT (the “Agreement”) is entered into as of January 18, 2022, by and among KRAIG BIOCRAFT LABORATORIES,
INC., (the “Company”), a Wyoming corporation, PRODIGY TEXTILES (“Prodigy”), organized
under the laws of Vietnam, (referred to as the “Guarantor,” and together with the Company, the “Grantors”)
in favor of YA II PN, LTD. (the “Secured Party”), a Cayman Island exempted company.

 

WHEREAS,
in connection with the Securities Purchase Agreement by and among the Company and the Secured Party dated the date hereof (“Securities
Purchase Agreement”), the Company agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement,
to issue to the Secured Party (i) an aggregate original principal amount of $3,000,000 of senior secured convertible debentures (the
“Convertible Debentures”), 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”) in accordance with the terms of the
Convertible Debentures and (ii) (ii) a warrant (the “Warrant”) to purchase upon exercise shares of Common Stock, (as
exercised, the “Warrant Shares”) in accordance with the terms of the Warrant;

 

WHEREAS,
in connection with a Securities Purchase Agreement by and among the Company and the Secured Party dated December 11, 2020 (the “December
2020 Securities Purchase Agreement”), issued to the Secured Party an amended and restated convertible debenture in an aggregate
original principal amount of $1,000,000 (the “2021 A&R Convertible Debenture”) of even date herewith, which shall
be convertible into Conversion Shares;

 

WHEREAS,
in connection with the Securities Purchase Agreement by and among the Company and the Secured Party dated March 25, 2021 (the “March
2021 Securities Purchase Agreement”), the Company agreed, upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue to the Secured Party an aggregate original principal amount of $4,000,000 of senior secured convertible debentures
(the “March 2025 Convertible Debentures”), which shall be convertible into shares of the Company’s Common Stock
(the “Conversion Shares”);

 

WHEREAS,
the Guarantors executed and delivered a Security Agreement dated March 25, 2021 (the “March 2021 Security Agreement”),
providing for the grant to the Secured Party of a security interest in all personal property of the Grantor to secure all of the Company’s
obligations under the with respect to the Company’s obligations under the March 2021 Securities Purchase Agreement, the March 2021
Convertible Debentures, the Transaction Documents as defined in the March 2021 Securities Purchase Agreement and related documents),
the December 2020 Securities Purchase Agreement and the Transaction Documents (as defined in the December 2020 Securities Purchase Agreement
and related documents);

 

    	 

     

    

 

WHEREAS,
the Guarantor (other than the Company) executed and delivered a Global Guaranty March 25, 2021 (the “March 2021 Guaranty”)
in favor of the Secured Party, with respect to the Company’s obligations under the March 2021 Securities Purchase Agreement, the
March 2021 Convertible Debentures, the Transaction Documents as defined in the March 2021 Securities Purchase Agreement and related documents)
and the December 2020 Securities Purchase Agreement, the December 2021 A&R Convertible Debenture and the Transaction Documents (as
defined in the December 2020 Securities Purchase Agreement and related documents);

 

WHEREAS,
it is a condition precedent to the Secured Party purchasing the Convertible Debentures and Warrant pursuant to the Securities Purchase
Agreement that the Guarantors execute and deliver to the Secured Party this amended and restated security agreement of the March 2021
Security Agreement dated the date hereof (the “Agreement”) for the grant to the Secured Party of a security interest in all
personal property of the Grantor to secure all of the Company’s obligations under the “Transaction Documents” (as defined
in the Securities Purchase Agreement and herein), the March 2021 Securities Purchase Agreement, the March 2021 Convertible Debentures,
the Transaction Documents as defined in the March 2021 Securities Purchase Agreement and related documents), the December 2020 Securities
Purchase Agreement and the Transaction Documents (as defined in the December 2020 Securities Purchase Agreement and related documents);

 

WHEREAS,
each of the Guarantors shall receive a direct benefit from the Secured Party entering into the Securities Purchase Agreement, the Convertible
Debentures, and the “Transaction Documents” (as defined in the Securities Purchase Agreement and herein); and

 

WHEREAS,
it is the intention of the parties hereunder to provide for the grant to the Secured Party of a security interest in all personal property
of the Grantor to secure all of the Company’s obligations under the “Transaction Documents” (as defined in the Securities
Purchase Agreement and herein), the March 2021 Securities Purchase Agreement, the March 2021 Convertible Debentures, the Transaction
Documents as defined in the March 2021 Securities Purchase Agreement and related documents, the December 2020 Securities Purchase Agreement
, the 2021 A&R Convertible Debenture, the Transaction Documents (as defined in the December 2020 Securities Purchase Agreement and
related documents) shall collectively be referred to as the “Transaction Documents”);

 

NOW,
THEREFORE, in consideration of the promises and the mutual covenants herein contained, and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

    	 

     

    

 

ARTICLE
1.

 

DEFINITIONS
AND INTERPRETATIONS

 

1.1
Recitals.

 

The
above recitals are true and correct and are incorporated herein, in their entirety, by this reference.

 

1.2
Interpretations.

 

Nothing
herein expressed or implied is intended or shall be construed to confer upon any person other than the Secured Party any right, remedy
or claim under or by reason hereof.

 

1.3
Definitions.

 

(a)
To the extent used in this Agreement and not defined herein, terms defined in the UCC shall have the meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined) ascribed to such terms in the UCC. To the extent the definition
of any category or type of Collateral is expanded by any amendment, modification or revision to the UCC, such expanded definition will
apply automatically as of the date of such amendment, modification or revision.

 

(b)
As used in this Agreement, the following terms shall have the meanings indicated below (such meanings to be equally applicable to both
the singular and plural forms of such terms):

 

“Collateral”
has the meaning set forth in Section 2.1.

 

“Event
of Default” shall mean (i) any Grantor defaulting in any of its obligations under this Agreement; or (ii) the occurrence
of a default or event of default under the Securities Purchase Agreement, the Convertible Debenture, the Global Guaranty Agreement or
any other Transaction Document.

 

“GAAP”
shall mean generally accepted accounting principles in the United States of America.

 

“Indemnified
Person” shall have the meaning given in Section 8.8.

 

“Intellectual
Property” shall mean all present and future trade secrets, know-how and other proprietary information; trademarks, trademark
applications, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations,
adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations
or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights and
copyright applications; (including copyrights for computer programs) and all tangible and intangible property embodying the copyrights,
unpatented inventions (whether or not patentable); patents and patent applications; industrial design applications and registered industrial
designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks,
flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; all other intellectual property; and all common law and other
rights throughout the world in and to all of the foregoing. Schedule 4 attached hereto sets forth all Intellectual Property of
any Grantor (as such Schedule may be amended, modified or supplemented from time to time, hereinafter the “Intellectual Property
Collateral”).

 

    	 

     

    

 

“Lien”
has the meaning set forth in Section 4.2.

 

“Material
Adverse Effect” shall mean any material and adverse effect as determined by the Secured Party in its reasonable discretion
upon (a) any Grantor’s assets, business, operations, properties or condition, financial or otherwise; (b) any Grantor’s ability
to make payment as and when due of all or any part of the Obligations; or (c) the Collateral.

 

“Obligations”
shall mean and include any and all debts, liabilities, obligations, covenants and duties owing by any Grantor to the Secured Party, now
existing or hereafter arising of every nature, type, and description, whether liquidated, unliquidated, primary, secondary, secured,
unsecured, direct, indirect, absolute, or contingent, and whether or not evidenced by a note, guaranty or other instrument, and any amendments,
extensions, renewals or increases thereof, including, without limitation, all those under (i) the Securities Purchase Agreement, (ii)
the Convertible Debenture; (iii) the Global Guaranty Agreement, (iv) any agreement or document related to the Securities Purchase Agreement,
the Convertible Debenture, the Global Guaranty Agreement, or any other Transaction Document, (v) the A&R Convertible Debenture, (vi)
(the December 2020 Securities Purchase Agreement, (vii) the Transaction Documents as defined in the December 2020 Securities Purchase
Agreement; or (viii) any other or related documents, and including any interest accruing thereon after insolvency, reorganization or
like proceeding relating to any Grantor, whether or not a claim for post-petition interest is allowed in such proceeding, and all costs
and expenses of the Secured Party incurred in the enforcement, collection or otherwise in connection with any of the foregoing, including,
but not limited to, reasonable attorneys’ fees and expenses and all obligations of any Grantor to the Secured Party to perform
acts or refrain from taking any action.

 

“Real
Estate” means all leases and all land, together with the buildings, structures, parking areas, and other improvements thereon,
now or hereafter owned by any Grantor, including all easements, rights-of-way, and similar rights relating thereto and all leases, tenancies,
and occupancies thereof.

 

“UCC”
or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State
of Michigan; provided, however, that if a term is defined in Article 9 of the Uniform Commercial Code differently than
in another Article thereof, the term shall have the meaning set forth in Article 9 of the UCC; provided further that, if by reason
of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral or
the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than State of
Michigan, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the
case may be.

 

    	 

     

    

 

ARTICLE
2.

 

SECURITY
INTEREST

 

2.1
Grant of Security Interest.

 

(a)
As security for the payment or performance in full of the Obligations, each Grantor hereby pledges to the Secured Party, its successors
and assigns, and hereby grants to the Secured Party, its successors and assigns, a security interest in and to all assets and personal
property of each Grantor, wherever located and whether now or hereinafter existing and whether now owned or hereafter acquired, of every
kind and description, tangible or intangible, including without limitation, all Goods, Inventory, Equipment, Fixtures, Instruments, Documents,
Accounts, Contracts and Contract Rights, Chattel Paper, Money, Letters of Credit and Letter-of-Credit Rights, Commercial Tort Claims,
Securities and all other Investment Property, General Intangibles, Farm Products, all books and records and information relating to any
of the foregoing, all Supporting obligations, and any and all Proceeds and products of any and all of the foregoing, and as more particularly
described on Exhibit A attached hereto, excluding any “intent-to-use” trademark application filed pursuant to Section
1(b) of the Lanham Act, 15 U.S.C. §1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the
Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto (“ITU
Applications”), to the extent that, and during the period, if any, in which, the grant of a security interest therein would
impair the validity or enforceability of any registration that issues from such ITU Applications under applicable federal law (it being
understood that after such period such ITU Applications shall be automatically subject to the security interest granted herein and deemed
to be included in the Collateral) (collectively, the “Collateral”)

 

(b)
Simultaneously with the execution and delivery of this Agreement, each Grantor shall make, execute, acknowledge, file, record and deliver
to the Secured Party such documents, instruments, and agreements, including, without limitation, financing statements, mortgages, certificates,
affidavits and forms as may, in the Secured Party’s reasonable judgment, be necessary to effectuate, complete or perfect, or to
continue and preserve, the security interest of the Secured Party in the Collateral.

 

(c)
In the event that any Grantor obtains title to any Real Estate, each Grantor shall promptly execute and deliver an original mortgage,
deed of trust, or other instrument in a form and substance acceptable to the Secured Party in all respects sufficient to provide the
Secured party with a perfected first priority lien on such Real Estate.

 

2.2
No Assumption of Liability.

 

The
security interest in the Collateral is granted as security only and shall not subject the Secured Party to, or in any way alter or modify
any obligation or liability of any Grantor with respect to or arising out of the Collateral.

 

    	 

     

    

 

ARTICLE
3.

 

ATTORNEY-IN-FACT;
PERFORMANCE

 

3.1
Secured Party Appointed Attorney-In-Fact.

 

Each
Grantor hereby appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of such Grantor and in
the name of such Grantor or otherwise, from time to time in the Secured Party’s discretion to take any action and to execute any
instrument which the Secured Party may reasonably deem necessary to accomplish the purposes of this Agreement or for the purpose of perfecting,
confirming, continuing, enforcing or protecting the security interest in the Collateral, including, without limitation, to (a) file one
or more financing statements, continuation statements, filings with the United States Patent and Trademark Office or United States Copyright
Office (or any successor office) or other documents; (b) receive and collect all instruments made payable to any Grantor representing
any payments in respect of the Collateral or any part thereof and to give full discharge for the same; (c) demand, collect, receipt for,
settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as and when the Secured Party may determine, and (d) to
execute and complete in the name of one or more Grantor such documents and forms as may be necessary to transfer any domain names and
related content to the Secured Party or its designee, including without limitation, completing and submitting online forms in the name
of each Grantor and taking all actions necessary in connection therewith. To facilitate collection, the Secured Party may notify account
debtors and obligors on any Collateral to make payments directly to the Secured Party. The foregoing power of attorney is a power coupled
with an interest and shall be irrevocable until all Obligations are paid and performed in full. Each Grantor agrees that the powers conferred
on the Secured Party hereunder are solely to protect the Secured Party’s interests in the Collateral and shall not impose any duty
upon the Secured Party to exercise any such powers.

 

3.2
Secured Party May Perform.

 

If
any Grantor fails to perform any agreement contained herein, the Secured Party, at its option, may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Secured Party incurred in connection therewith shall be included in the Obligations
secured hereby and payable by any Grantor under Section 8.4.

 

ARTICLE
4.

 

REPRESENTATIONS
AND WARRANTIES

 

4.1
Authorization: Enforceability.

 

Each
of the parties hereto represents and warrants that it has taken all action necessary to authorize the execution, delivery and performance
of this Agreement and the transactions contemplated hereby; and upon execution and delivery, this Agreement shall constitute a valid
and binding obligation of the respective party, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors’ rights or by the principles governing the availability of equitable remedies.

 

4.2
Ownership of Collateral; Priority of Security Interest.

 

Each
Grantor represents and warrants that it is the legal and beneficial owner of the Collateral free and clear of any lien, security interest,
option or other charge or encumbrance (each, a “Lien”) except for the Permitted Liens. Except for the Permitted
Liens, (i) the security interest granted to the Secured Party hereunder shall be a first priority security interest subject to no other
Liens, and (ii) no financing statement covering any of the Collateral or any proceeds thereof is on file in any public office.

 

    	 

     

    

 

4.3
Location of Collateral.

 

The
Collateral is or will be kept at the address(es) of each Grantor set forth on Schedule 4.3 attached hereto. Unless otherwise provided
herein, no Grantor will remove any Collateral from such locations without the prior written consent of the Secured Party.

 

4.4
Location, State of Incorporation and Name of Grantor.

 

Each
Grantor’s principal place of business; state of incorporation, organization or formation; organization id; and exact legal name
is set forth on Schedule 4.4 attached hereto.

 

4.5
Solvency.

 

Each
Grantor is able to pay its debts as they mature, has capital sufficient to carry on its business, and the fair present saleable value
of its assets, calculated on a going concern basis, is in excess of the amount of its liabilities.

 

ARTICLE
5.

 

DEFAULT;
REMEDIES; SUBSTITUTE COLLATERAL

 

5.1
Method of Realizing Upon the Collateral: Other Remedies.

 

If
any Event of Default shall have occurred and be continuing:

 

(a)
The Secured Party may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into the Secured
Party’s name or into the name of its nominee or nominees (to the extent the Secured Party has not theretofore done so) and thereafter
receive, for the benefit of the Secured Party, all payments made thereon, give all consents, waivers and ratifications in respect thereof
and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to assemble all or part
of the Collateral as directed by the Secured Party and make it available to the Secured Party at a place or places to be designated by
the Secured Party that is reasonably convenient to both parties, and the Secured Party may enter into and occupy any premises owned or
leased by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate
the Secured Party’s rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation,
and (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell
the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Secured Party’s offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Secured Party may deem commercially
reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Secured Party may deem commercially
reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition of the Collateral shall be required by law,
at least ten (10) days’ notice to each Grantor of the time and place of any public sale or the time after which any private sale
or other disposition of the Collateral is to be made shall constitute reasonable notification. The Secured Party shall not be obligated
to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Secured Party may adjourn
any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the Secured Party arising
by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Secured Party accepts the first
offer received and does not offer such Collateral to more than one offeree, and waives all rights that each Grantor may have to require
that all or any part of such Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that
(i) any such sale of the Collateral by the Secured Party may be made without warranty, (ii) the Secured Party may specifically disclaim
any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall
not adversely affect the commercial reasonableness of any such sale of Collateral. In connection with such exercise of rights, the Secured
Party shall have an irrevocable non-exclusive, royalty free license to use the Intellectual Property, which shall include a right for
the Secured Party to grant one or more non-exclusive sublicenses to use the Intellectual Property. Notwithstanding the foregoing, after
the occurrence of an Event of Default, but before Secured Party shall take any action to pledge, convey, sell, transfer title in, or
otherwise dispose of any of the Intellectual Property Collateral, the Secured Party shall provide thirty (30) days’ notice in writing
to Grantor, and provide Grantor the opportunity to cure such Event of Default. If Grantor does not cure such Event of Default to the
satisfaction of the Secured Party within the 30-day period, then Secured Party, may in its sole discretion, pledge, convey, sell, transfer
title in and/or otherwise dispose of any of the Intellectual Property Collateral.

 

    	 

     

    

 

(b)
Any cash held by the Secured Party as Collateral and all cash proceeds received by the Secured Party in respect of any sale of or collection
from, or other realization upon, all or any part of the Collateral may be applied (after payment of any amounts payable to the Secured
Party pursuant to Section 8.4 hereof) by the Secured Party against, all or any part of the Obligations in such order as the Secured
Party shall elect. Any surplus of such cash or cash proceeds held by the Secured Party and remaining after the indefeasible payment in
full in cash of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court
of competent jurisdiction shall direct.

 

(c)
In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which the Secured Party
is legally entitled, each Grantor shall be liable for the deficiency, together with interest thereon at the rate specified in the Convertible
Debenture for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees, costs, expenses and other client charges of any attorneys employed by the Secured Party to collect
such deficiency.

 

(d)
Each Grantor hereby acknowledges that if the Secured Party complies with any applicable state, provincial, or federal law requirements
in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of any sale
or other disposition of the Collateral.

 

    	 

     

    

 

(e)
The Secured Party shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement
and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or
other assurances of payment in any particular order, and all of the Secured Party’s rights hereunder and in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the
extent permitted by applicable law, each Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral
which might cause delay in or impede the enforcement of the Secured Party’s rights under this Agreement or under any other instrument
creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations
is secured or payment thereof is otherwise assured, and, to the extent permitted by applicable law, each Grantor hereby irrevocably waives
the benefits of all such laws.

 

5.2
Duties Regarding Collateral.

 

The
Secured Party shall have no duty as to the collection or protection of the Collateral or any income thereon or as to the preservation
of any rights pertaining thereto, beyond the safe custody and reasonable care of any of the Collateral actually in the Secured Party’s
possession.

 

ARTICLE
6.

 

AFFIRMATIVE
COVENANTS

 

So
long as any of the Obligations shall remain outstanding, unless the Secured Party shall otherwise consent in writing:

 

6.1
Existence, Properties, Etc.

Each
Grantor (a) shall do, or cause to be done, all things, or proceed with due diligence with any actions or courses of action, that may
be reasonably necessary (i) to maintain each Grantor’s due organization, valid existence and good standing under the laws of its
state of incorporation, and (ii) to preserve and keep in full force and effect all qualifications, licenses and registrations in those
jurisdictions in which the failure to do so could have a Material Adverse Effect; and (b) shall not do, or cause to be done, any act
impairing each Grantor’s corporate power or authority (i) to carry on each Grantor’s business as now conducted, and (ii)
to execute or deliver this Agreement or any other agreement or document delivered in connection herewith, including, without limitation,
the Convertible Debenture to which it is or will be a party, or perform any of its obligations hereunder or thereunder.

 

6.2
Maintenance of Books and Records: Inspection.

 

Each
Grantor shall maintain its books, accounts and records in accordance with GAAP, and permit the Secured Party, its officers and employees
and any professionals designated by the Secured Party in writing, upon reasonable advance notice, during normal business hours and upon
reasonable notice to visit and inspect any of its properties, corporate books and financial records, and to discuss its accounts, affairs
and finances with any employee, officer or director thereof (it being agreed that, unless an Event of Default shall have occurred and
be continuing, there shall be no more than two (2) such visits and inspections in any fiscal year).

 

    	 

     

    

 

6.3
Maintenance and Insurance.

 

(a)
Each Grantor shall maintain or cause to be maintained, at its own expense, all of its material assets and properties in good working
order and condition, ordinary wear and tear excepted, making all necessary repairs thereto and renewals and replacements thereof.

 

(b)
Each Grantor shall maintain or cause to be maintained, at their own expense, insurance in form, substance and amounts (including deductibles),
which each Grantor deems reasonably necessary to each Grantor’s business, (i) adequate to insure all assets and properties of each
Grantor of a character usually insured by persons engaged in the same or similar business against loss or damage resulting from fire
or other risks included in an extended coverage policy; (ii) against public liability and other tort claims that may be incurred by each
Grantor; (iii) as may be required by the Convertible Debenture and/or applicable law and (iv) as may be reasonably requested by Secured
Party, all with financially sound and reputable insurers.

 

6.4
Contracts and Other Collateral.

 

Each
Grantor shall perform all of its obligations under or with respect to each instrument, receivable, contract and other intangible included
in the Collateral to which any Grantor is now or hereafter will be party on a timely basis and in the manner therein required, including,
without limitation, this Agreement, except to the extent the failure to so perform such obligations would not reasonably be expected
to have a Material Adverse Effect.

 

6.5
Defense of Collateral, Etc.

 

Each
Grantor shall defend and enforce (a) its right, title and interest in and to any part of the Collateral; and (b) if not included within
the Collateral, those assets and properties whose loss would reasonably be expected to have a Material Adverse Effect, each against all
manner of claims and demands on a timely basis to the full extent permitted by applicable law (other than any such claims and demands
by holders of Permitted Liens).

 

6.6
Taxes and Assessments.

 

Each
Grantor shall (a) file all material tax returns and appropriate schedules thereto that are required to be filed under applicable law,
prior to the date of delinquency (taking into account any extensions of the original due date), (b) pay and discharge all material taxes,
assessments and governmental charges or levies imposed upon any Grantor, upon its income and profits or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and (c) pay all material taxes, assessments and governmental charges or levies
that, if unpaid, might become a lien or charge upon any of its properties; provided, however, that any Grantor in good
faith may contest any such tax, assessment, governmental charge or levy described in the foregoing clauses (b) and (c) so long as appropriate
reserves are maintained with respect thereto if and to the extent required by GAAP.

 

    	 

     

    

 

6.7
Compliance with Law and Other Agreements.

 

Each
Grantor shall maintain its business operations and property owned or used in connection therewith in compliance with (a) all applicable
federal, state and local laws, regulations and ordinances governing such business operations and the use and ownership of such property,
and (b) all agreements, licenses, franchises, indentures and mortgages to which any Grantor is a party or by which any Grantor or any
of its properties is bound, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect.

 

6.8
Notice of Default.

 

Each
Grantor will immediately notify the Secured Party of any event causing a substantial loss or diminution in the value of all or any material
part of the Collateral and the amount or an estimate of the amount of such loss or diminution. Each Grantor shall promptly notify the
Secured Party of any condition or event which constitutes, or would constitute with the passage of time or giving of notice or both,
an Event of Default, and promptly inform the Secured Party of any events or changes in the financial condition of any Grantor occurring
since the date of the last financial statement of each Grantor delivered to the Secured Party, which individually or cumulatively when
viewed in light of prior financial statements, which might reasonably be expected to have a Material Adverse Effect on the business operations
or financial condition of any Grantor.

 

6.9
Notice of Litigation.

 

Each
Grantor shall give notice, in writing, to the Secured Party of (a) any actions, suits or proceedings wherein the amount at issue is in
excess of $50,000, instituted by any person against any Grantor, or affecting any of the assets of any Grantor, and (b) any dispute,
not resolved within fifteen (15) days of the commencement thereof, between any Grantor on the one hand and any governmental or regulatory
body on the other hand, which might reasonably be expected to have a Material Adverse Effect on the business operations or financial
condition of any Grantor.

 

6.10
Changes to Identity.

 

Each
Grantor will (a) give the Secured Party at least 30 days’ prior written notice of any change in any Grantor’s name, identity
or organizational structure, (b) maintain its jurisdiction of incorporation, organization or formation as set forth on Schedule 4.4
attached hereto, (c) immediately notify the Secured Party upon obtaining an organizational identification number, if on the date
hereof any Grantor did not have such identification number.

 

6.11
Perfection of Security Interests.

 

(a)
Financing Statements. Each Grantor hereby irrevocably authorize the Secured Party, at the sole cost and expense of each Grantor,
at any time and from time to time to file in any filing office in any jurisdiction any initial financing statements and amendments thereto
that (a) indicate the Collateral (i) as all assets of each Grantor or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) contain any other information required by Part 5 of Article 9 of the UCC for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i) whether each Grantor is an organization, the type of
organization and any organization identification number issued to any Grantor, and (ii) in the case of a financing statement filed as
a fixture filing, a sufficient description of real property to which the Collateral relates. Each Grantor agrees to furnish any such
information to the Secured Party promptly upon request. Each Grantor also ratifies its authorization for the Secured Party to have filed
in any jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. Each Grantor acknowledges
that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement
without the prior written consent of the Secured Party and agree that they will not do so without the prior written consent of the Secured
Party. Each Grantor acknowledges and agrees that this Agreement constitutes an authenticated record.

 

    	 

     

    

 

(b)
Possession. Each Grantor (i) shall have possession of the Collateral, except where expressly otherwise provided in this Agreement
or where the Secured Party chooses to perfect its security interest by possession in addition to the filing of a financing statement;
and (ii) will, where the Collateral is in the possession of a third party, join with the Secured Party in notifying the third party of
the Secured Party’s security interest and obtaining an acknowledgment from the third party that it is holding the Collateral for
the benefit of the Secured Party.

 

(c)
Control. Each Grantor will cooperate with the Secured Party in obtaining control with respect to the Collateral consisting of
(i) Investment Property, (ii) Letters of Credit and Letter-of-Credit Rights and (iii) electronic Chattel Paper.

 

(d)
Marking of Chattel Paper. Each Grantor will not create any Chattel Paper without placing a legend on the Chattel Paper acceptable
to the Secured Party indicating that the Secured Party has a security interest in the Chattel Paper.

 

6.12
Notice of Commercial Tort Claims. If any Grantor shall at any time acquire a Commercial Tort Claim, each Grantor shall immediately
notify the Secured Party in a writing signed by such Grantor which shall (a) provide brief details of said claim and (b) grant to the
Secured Party a security interest in said claim and in the proceeds thereof, all upon the terms of this Agreement, in such form and substance
satisfactory to the Secured Party.

 

6.13
Licenses.

 

(a)
Each Grantor shall (i) promptly and faithfully observe and perform all of the material terms, covenants, conditions and provisions of
the material License Agreements to be observed and performed by it, at the times set forth therein, if any, (ii) not do, permit, suffer
or refrain from doing anything that could reasonably be expected to result in a default under or breach of any of the terms of any material
License Agreement, (iii) not cancel, surrender, modify, amend, waive or release any material License Agreement in any material respect
or any term, provision or right of the licensee thereunder in any material respect, or consent to or permit to occur any of the foregoing;
except, that Grantor may cancel, surrender or release any material License Agreement in the ordinary course of the respective businesses
of Grantor; provided, that, Grantor shall give Secured Party not less than thirty (30) days prior written notice of their intention
to so cancel, surrender and release any such material License Agreement, (iv) give Secured Party prompt written notice of any material
License Agreement entered into by any Grantor after the date hereof, together with a true, correct and complete copy thereof and such
other information with respect thereto as Secured Party may request, (v) give Secured Party prompt written notice of any material breach
of any obligation, or any default, by any party under any material License Agreement, and deliver to Secured Party (promptly upon the
receipt thereof by any Grantor in the case of a notice to any Grantor, and concurrently with the sending thereof in the case of a notice
from each Grantor) a copy of each notice of default and every other notice and other communication received or delivered by each Grantor
in connection with any material License Agreement which relates to the right of any Grantor to continue to use the property subject to
such License Agreement, and (vi) furnish to Secured Party, promptly upon the request of Secured Party, such information and evidence
as Secured Party may require from time to time concerning the observance, performance and compliance by each Grantor or the other party
or parties thereto with the terms, covenants or provisions of any material License Agreement.

 

    	 

     

    

 

(b)
Each Grantor will exercise any option to renew or extend the term of each material License Agreement in such manner as will cause the
term of such material License Agreement to be effectively renewed or extended for the period provided by such option and give prompt
written notice thereof to Secured Party or give Secured Party prior written notice that any Grantor does not intend to renew or extend
the term of any such material License Agreement or that the term thereof shall otherwise be expiring, not less than sixty (60) days prior
to the date of any such non-renewal or expiration. In the event of the failure of any Grantor to extend or renew any material License
Agreement, Secured Party shall have, and is hereby granted, the irrevocable right and authority, at its option, to renew or extend the
term of such material License Agreement, whether in its own name and behalf, or in the name and behalf of a designee or nominee of Secured
Party or in the name and behalf of Grantor, as Secured Party shall determine at any time that an Event of Default shall exist or have
occurred and be continuing. Secured Party may, but shall not be required to, perform any or all of such obligations of any Grantor under
any of the License Agreements, including, but not limited to, the payment of any or all sums due from any Grantor thereunder. Any sums
so paid by Secured Party shall constitute part of the Obligations.

 

ARTICLE
7.

 

NEGATIVE
COVENANTS

 

So
long as any of the Obligations shall remain outstanding, unless the Secured Party shall otherwise consent in writing, each Grantor covenants
and agrees that it shall not:

 

7.1
Transfers; Liens and Encumbrances.

 

(a)
Sell, assign (by operation of law or otherwise), lease, license, exchange or otherwise transfer or dispose of any of the Collateral,
except each Grantor may (i) sell or dispose of Inventory in the ordinary course of business, and (ii) sell or dispose of assets such
Grantor has determined, in good faith, not to be useful in the conduct of its business, and (iii) sell or dispose of accounts in the
course of collection in the ordinary course of business consistent with past practice, and (iv) license or sublicense Collateral consisting
of intellectual property in the ordinary course of business.

 

(b)
Directly or indirectly make, create, incur, assume or permit to exist any Lien in, to or against any part of the Collateral other than
Permitted Liens.

 

    	 

     

    

 

(c)
Each Grantor covenants and agrees that they will not, without the express written consent of the Secured Party, grant any license (whether
exclusive or non-exclusive) to use the Intellectual Property to any party other than another Grantor, except that prior to the occurrence
of an Event of Default, each Grantor may, without consent of the Secured Party, in the ordinary course of business, grant licenses to
use the Intellectual Property to unrelated third parties which are customers of any Grantor in connection with arms-length transactions,
provided that such licenses do not impair the value of the Intellectual Property. To the extent that any Grantor wishes to seek the Secured
Party’s consent to the granting of a license to use Intellectual Property other than as expressly permitted above, then such Grantor
shall provide the Secured Party with a written request for such consent, which request shall be accompanied by a copy of the proposed
license and any documents, instruments, and agreements related thereto or to be entered into in connection with such license, and such
other information regarding the proposed license as the Secured Party may require. The Secured Party shall use its commercially reasonable
best efforts to respond to such request within ten (10) days of its receipt of such request, provided, however, that if the Secured Party
does not reply within such ten (10) day period, then such request shall be deemed to have been denied by the Secured Party. Further,
the Secured Party shall not have been deemed to have consented to any proposed license unless the Secured Party has provided such consent
in a writing executed by a duly authorized representative of the Secured Party and delivered to such Grantor. The decision by the Secured
Party on whether to grant or withhold its consent to a proposed license shall be made by the Secured Party in its sole and exclusive
discretion, which shall not be unreasonably withheld.

 

7.2
Restriction on Redemption and Cash Dividends

 

Directly
or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on its capital stock without the prior express
written consent of the Secured Party.

 

7.3
Places of Business.

 

Change
its state of organization or its principal place of business without the written consent of the Secured Party.

 

ARTICLE
8.

 

MISCELLANEOUS

 

8.1
Notices.

 

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 email addresses for such communications shall be:

 

	If
    to the Company or any Guarantor, to:	Kraig
                                            Biocraft Laboratories, Inc.

	 	2723
    South State Street – Suite 150
	 	Ann
    Arbor, MI 48104
	 	Attention:
                                            Kim Thompson

	 	Telephone:
(734) 619-8066
	 	Email:	
	 	 	 
	 	Prodigy
    Textiles.
	 	W4CC+H3
    Dai Loc
	 	Quang
    Nam Province, Vietnam
	 	Attention:
    Kenneth Le
	 	Telephone:
    +84903308080
	 	Email:	

 

    	 	 	 

     

    

 

	With
    a copy (which shall not constitute  	Hunter
                                            Taubman Fischer & Li LLC 

	notice)
    to:	48
    Wall Street, Suite 1100 
	 	New
    York, NY 10005
	 	Attention:
    Louis Taubman, Esq.
	 	Telephone:
    (917) 512-0827
	 	Email:	
	 	 	 
	If
    to the Secured Party:	YA II PN, Ltd.
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	Attention: Mark Angelo
	 	Telephone: (201) 536-5114

	 	Email:	
	 	 	 
	With
    a copy to:	David Gonzalez, Esq. 
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	Telephone: (201) 536-5109
	 	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.

 

8.2
Security Interest Absolute. All rights of the Secured Party hereunder, the security interest in the Collateral and all obligations
of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Convertible
Debenture, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing,
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from the Convertible Debenture, or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from
any guarantee, securing or guaranteeing all or any of the Obligations, (d) the existence of any claim, set-off or other right which any
Grantor may have at any time against any other Grantor or the Secured Party, whether in connection herewith or any unrelated transaction.

 

    	 

     

    

 

8.3
Severability.

 

If
any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and
this Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein.

 

8.4
Expenses.

 

In
the event of an Event of Default, each Grantor will jointly and severally pay to the Secured Party the amount of any and all reasonable
out-of-pocket expenses, including the reasonable fees and expenses of its counsel, which the Secured Party may incur in connection with:
(i) the custody or preservation of, or the sale, collection from, or other realization upon, any of the Collateral; (ii) the exercise
or enforcement of any of the rights of the Secured Party hereunder or (iii) the failure by any Grantor to perform or observe any of the
provisions hereof.

 

8.5
Waivers, Amendments, Etc.

 

The
Secured Party’s delay or failure at any time or times hereafter to require strict performance by each Grantor of any undertakings,
agreements or covenants shall not waive, affect, or diminish any right of the Secured Party under this Agreement to demand strict compliance
and performance herewith. Any waiver by the Secured Party of any Event of Default shall not waive or affect any other Event of Default,
whether such Event of Default is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements
and covenants of each Grantor contained in this Agreement, and no Event of Default, shall be deemed to have been waived by the Secured
Party, nor may this Agreement be amended, changed or modified, unless such waiver, amendment, change or modification is evidenced by
an instrument in writing specifying such waiver, amendment, change or modification and signed by the Secured Party in the case of any
such waiver, and signed by the Secured Party and each Grantor in the case of any such amendment, change or modification.

 

8.6
Continuing Security Interest. This Agreement shall create a continuing security interest in the Collateral and shall: (i) remain
in full force and effect so long as any of the Obligations shall remain outstanding; (ii) be binding upon each Grantor and its successors
and assigns; and (iii) inure to the benefit of the Secured Party and its successors and assigns. Upon the payment or satisfaction in
full of the Obligations, this Agreement and the security interest created hereby shall terminate, and, in connection therewith, each
Grantor shall be entitled to the return, at its expense, of such of the Collateral as shall not have been sold in accordance with this
Agreement or otherwise applied pursuant to the terms hereof and the Secured Party shall deliver to each Grantor such documents as such
Grantor shall reasonably request to evidence such termination.

 

    	 

     

    

 

8.7
Independent Representation.

 

Each
party hereto acknowledges and agrees that it has received or has had the opportunity to receive independent legal counsel of its own
choice and that it has been sufficiently apprised of its rights and responsibilities with regard to the substance of this Agreement.

 

8.8
Indemnification.

 

Each
Grantor jointly and severally hereby covenants and agrees to indemnify, defend and hold harmless the Secured Party and its investment
manager, and each of the foregoing parties’ respective agents, servants, attorneys, advisors, officers, directors, employees, affiliates,
partners, members, managers, predecessors, successors, and assigns (each an “Indemnified Person”) of, to, and
from any loss, judgment, liability, claim, cause of action, or demand, and all costs and expenses (including reasonable attorneys’
fees) which may be incurred, suffered, made, brought, threatened, or instituted by or against any person indemnified hereby for any reason
whatsoever on account of, arising out of, or in any way relating to the actions or inactions of any Grantor, including without limitation
(i) any matter, fact, event, or act or omission relating to the Collateral, and/or any Grantor’s maintenance and management of
the Collateral, including any damage to the Collateral or claims threatened or brought against the Secured Party with respect to the
Collateral and/or any of any Grantor’s acts and/or omissions in connection with the same, (ii) claims threatened or brought by
one or more third parties against any Grantor, or any of its affiliates or subsidiaries, (iii) claims threatened or brought by any party
against the Secured Party, or any of its affiliates concerning or arising from the actions or inactions of any of any Grantor, the Collateral,
and the Convertible Debenture, this Agreement, or otherwise; and/or (iv) this Agreement, except to the extent that any of the foregoing
set forth in (i)-(iv) arises from the gross negligence or willful misconduct of the Secured Party. The Secured Party may defend any such
claim, cause of action, or demand at the sole cost and expense of any Grantor, with counsel designated by the Secured Party and to the
exclusion of any Grantor, or the Secured Party may call upon each Grantor to defend such action at each Grantor’s sole cost and
expense. The Secured Party may, in the Secured Party’s sole and exclusive discretion, adjust, settle, or compromise any such claim,
cause of action, or demand made upon the Secured Party, and each Grantor shall jointly and severally indemnify the Secured Party for
any such amount so adjusted, settled, or compromised, as well as all costs and expenses (including attorneys’ fees) incurred in
connection therewith.

 

8.9
Applicable Law: Jurisdiction.

 

This
Agreement shall be governed by and interpreted in accordance with the laws of the State of New Jersey without regard to the principles
of conflict of laws. The parties further agree that any action between them shall be heard in the State of New Jersey, and expressly
consent to the jurisdiction and venue of the Superior Court for the State of New Jersey sitting in Union County New Jersey and federal
courts for the District of New Jersey sitting in Newark New Jersey for the adjudication of any civil action asserted pursuant to this
Paragraph, provided, however, that nothing herein shall prevent the Secured Party from enforcing its rights and remedies
(including, without limitation, by filing a civil action) with respect to the Collateral and/or any Grantor in any other jurisdiction
in which the Collateral and/or any Grantor may be located.

 

    	 

     

    

 

8.10
Non-Interference.

 

From
and after the occurrence of an Event of Default, each Grantor agrees:

 

(a)
Not to interfere with the exercise by the Secured Party of any of its rights and remedies under this Agreement, the Convertible Debenture,
and/or applicable law;

 

(b)
They shall not hinder, delay, or impair the Secured Party’s efforts to realize upon any Collateral or otherwise to enforce its
rights and remedies pursuant to this Agreement, the Convertible Debenture, and/or applicable law, and shall at all times cooperate with
the Secured Party’s exercise of its rights and remedies under this Agreement, the Convertible Debenture, and/or applicable law;
and

 

(c)
The provisions of this Section shall be specifically enforceable by the Secured Party.

 

8.11
Automatic Stay.

 

Each
Grantor agrees that upon the filing of any Petition for Relief by or against any Grantor under the United States Bankruptcy Code, the
Secured Party shall be entitled to immediate and complete relief from the automatic stay with respect to any Grantor, and Secured Party
shall be permitted to proceed to protect and enforce its rights and remedies under applicable law. Each Grantor hereby expressly assents
to, and covenants and agrees not to oppose, any motion filed by the Secured Party seeking relief from the automatic stay. Each Grantor
further hereby expressly WAIVES the protections afforded under Section 362 of the United States Bankruptcy Code with respect to
the Secured Party.

 

8.12
Credit Bidding.

 

Each
Grantor hereby expressly acknowledges and agrees, in further consideration for the Secured Party entering into this Agreement, that the
Secured Party shall be permitted to credit bid the Obligations at any auction and/or sale, including without limitation, at any auction
and/or other sale conducted under or in connection with any of the sections or chapters of the United States Bankruptcy Code. Each Grantor
hereby further acknowledge and agree that this provision is a material inducement to the Secured Party entering into this Agreement,
and each Grantor has been represented by experienced counsel in connection with entering into this Agreement. The Secured Party, in turn,
acknowledges that this paragraph shall not be construed as a restriction or prohibition on Grantor’s respective rights to file
any voluntary petition or make application for or seek relief or protection under the United States Bankruptcy Code.

 

8.13
Waiver of Jury Trial.

 

AS
A FURTHER INDUCEMENT FOR THE SECURED PARTY TO MAKE FINANCIAL ACCOMMODATIONS TO THE COMPANIES OR ANY GRANTOR, EACH GRANTOR HEREBY WAIVES,
TO THE FULLEST PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS
AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

 

    	 

     

    

 

8.14
Right of Set Off.

 

Each
Grantor hereby grants to the Secured Party, a lien, security interest and right of setoff as security for all liabilities and obligations
to the Secured Party, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property, now
or hereafter in the possession, custody, safekeeping or control of the Secured Party or any of its affiliates, or any entity under the
control of the Secured Party, or in transit to any of them. At any time, without demand or notice, the Secured Party may set off the
same or any part thereof and apply the same to any liability or obligation of each Grantor even though unmatured and regardless of the
adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE THE SECURED PARTY TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF EACH GRANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

8.15
Liability of Grantor.

 

Notwithstanding
any provision herein or in any other Loan Instrument, each Grantor is and shall be liable for any and all Obligations (whether any such
Obligation is specified as an obligation of any Grantor).

 

8.16
Waiver of Claims.

 

Each
Grantor acknowledges and agrees that they have no offsets, defenses, claims, or counterclaims against the Secured Party or its officers,
directors, employees, attorneys, representatives, parents, affiliates, predecessors, successors, or assigns with respect to the Collateral,
the Convertible Debenture, the Obligations, or otherwise, and that if any Grantor now has, or ever did have, any offsets, defenses, claims,
or counterclaims against the Secured Party or its officers, directors, employees, attorneys, representatives, affiliates, predecessors,
successors, or assigns, whether known or unknown, at law or in equity, from the beginning of the world through this date and through
the time of execution of this Agreement, all of them are hereby expressly WAIVED, and each Grantor hereby RELEASES the
Secured Party and its officers, directors, employees, attorneys, representatives, affiliates, predecessors, successors, and assigns from
any liability therefor.

 

8.17
Counterparts; Digital Signatures.

 

This
Agreement may be executed and delivered by exchange of digital signatures of the Secured Party and each Grantor, and those signatures
need not be affixed to the same copy. This Agreement may be executed in any number of counterparts.

 

8.18
Entire Agreement.

 

This
Agreement and the other documents or agreements delivered in connection herewith contain the entire understanding among the parties and
supersede any prior agreement or understanding among them with respect to the subject matter hereof.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Security Agreement as of the date first above written.

 

	 	COMPANY:
	 	 
	 	KRAIG
    BIOCRAFT LABORATORIES, INC.
	 	a
    Wyoming corporation
	 	 	 
	 	By:	 
	 	Name:	Kim
    Thompson
	 	Title:	Chief
    Executive Officer 
	 	 	 
	 	GUARANTORS:
	 	 
	 	PRODIGY
    TEXTILES, a Vietnam LLC
	 	 
	 	By:	 
	 	Name:	Kenneth
    Le
	 	Title:	President

 

    	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Security Agreement as of the date first above written.

 

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

 

    	 

     

    

 

exhibit
A

 

(Definition
of Collateral)

 

For
the purpose of securing prompt and complete payment and performance by each Grantor of all of the Obligations, each Grantor unconditionally
and irrevocably hereby grants to the Secured Party a continuing security interest in and to, and lien upon, the following “Collateral”
of each Grantor (all capitalized terms used herein and not defined in the Agreement shall have the respective meanings ascribed thereto
in the UCC):

 

All
personal property of each Grantor, wherever located and whether now or hereinafter existing and whether now owned or hereafter acquired,
of every kind and description, tangible or intangible, including without limitation, all:

 

1.
Goods;

 

2.
Inventory, including, without limitation, all goods, merchandise and other personal property which are held for sale or lease, or are
furnished or to be furnished under any contract of service or are raw materials, work-in-process, supplies or materials used or consumed
in each Grantor’s business, and all products thereof, and all substitutions, replacements, additions or accessions therefor and
thereto; and any cash or non-cash Proceeds of all of the foregoing;

 

3.
Equipment, including, without limitation, all machinery, equipment, furniture, parts, tools and dies, of every kind and description,
of each Grantor (including automotive equipment and motor vehicles), now owned or hereafter acquired by each Grantor, and used or acquired
for use in the business of each Grantor, together with all accessions thereto and all substitutions and replacements thereof and parts
therefor and all cash or non-cash Proceeds of the foregoing;

 

4.
Fixtures, including, without limitation, all goods which are so related to particular real estate that an interest in them arises under
real estate law and all accessions thereto, replacements thereof and substitutions therefor, including, but not limited to, plumbing,
heating and lighting apparatus, mantels, floor coverings, furniture, furnishings, draperies, screens, storm windows and doors, awnings,
shrubbery, plants, boilers, tanks, machinery, stoves, gas and electric ranges, wall cabinets, appliances, furnaces, dynamos, motors,
elevators and elevator machinery, radiators, blinds and all laundry, refrigerating, gas, electric, ventilating, air-refrigerating, air-conditioning,
incinerating and sprinkling and other fire prevention or extinguishing equipment of whatsoever kind and nature and any replacements,
accessions and additions thereto, Proceeds thereof and substitutions therefor;

 

5.
Instruments (including promissory notes);

 

6.
Documents;

 

7.
Accounts, including, without limitation, all Contract Rights and accounts receivable, health-care-insurance receivables, and license
fees; any other obligations or indebtedness owed to each Grantor from whatever source arising; all rights of each Grantor to receive
any payments in money or kind; all guarantees of Accounts and security therefor; all cash or non-cash Proceeds of all of the foregoing;
all of the right, title and interest of each Grantor in and with respect to the goods, services or other property which gave rise to
or which secure any of the accounts and insurance policies and proceeds relating thereto, and all of the rights of each Grantor as an
unpaid seller of goods or services, including, without limitation the rights of stoppage in transit, replevin, reclamation and resale
and all of the foregoing, whether now existing or hereafter created or acquired;

 

    	 

     

    

 

8.
Contracts and Contract Rights, including, to the extent not included in the definition of Accounts, all rights to payment or performance
under a contract not yet earned by performance and not evidenced by an Instrument or Chattel Paper;

 

9.
Chattel Paper (whether tangible or electronic);

 

10.
Money, cash and cash equivalents;

 

11.
Letters of Credit and Letter-of-Credit Rights (whether or not the Letter of Credit is evidenced by a writing);

 

12.
Commercial Tort Claims – None;

 

13.
Securities Accounts, Security Entitlements, Securities, Financial Assets and all other Investment Property, including, without limitation,
all ownership or membership interests in any subsidiaries or affiliates (whether or not controlled by any Grantor);

 

14.
General Intangibles, including, without limitation, all Payment Intangibles and Intellectual Property (excluding ITU Applications), tax
refunds and other claims of any Grantor against any governmental authority, and all choses in action, insurance proceeds, goodwill customer
lists, formulae, permits, research and literary rights, and franchises.

 

15.
Farm Products;

 

16.
All books and records and information (including all ledger sheets, files, computer programs, tapes and related data processing software)
evidencing an interest in or relating to any of the foregoing and/or to the operation of each Grantor’s business, and all rights
of access to such books and records, and information, and all property in which such books and records, and information are stored, recorded
and maintained.

 

17.
To the extent not already included above, all Supporting Obligations, and any and all cash and non-cash Proceeds, products, accessions,
and/or replacements of any of the foregoing, including proceeds of insurance covering any or all of the foregoing.

 

    	 

     

    

 

SCHEDULE
4

 

    	 

     

    

 

SCHEDULE
4.31

(Addresses)

 

 

1
Please update if necessary

 

    	 

     

    

 

SCHEDULE
4.42

(Location,
State of Incorporation, Name)

 

 

 2
Please update if necessary

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