Document:

fsb20907ex10i_kraig.htm

    KRAIG
      BIOCRAFT LABORATORIES, INC.

     

    ADDENDUM
      TO THE

     

    EMPLOYMENT
      CONTRACT: KIM K. THOMPSON

     

    THIS
      ADDENDUM to the EMPLOYMENT CONTRACT ("Agreement") dated the April

    26,
      2006, between Kraig Biocraft
      Laboratories, inc.,
      a Wyoming corporation
      (the

    "Company")
      and Km Thompson, an individual ("Executive", "Employee" or "Mr.

    Thompson")
      is dated November 6, 2006,

     

    The
      Board
      of Directors of the Company (the "Board") and Executive each desires that the
      EMPLOYMENT CONTRACT be modified and amended by this ADDENDUM as described below.
      \

     

    NOW,
      THEREFORE, in consideration of the mutual promises and undertakings contained
      in
      this ADDENDUM , and for other good and valuable consideration, the receipt
      and
      adequacy of which are hereby acknowledged, and intending to be legally bound
      hereby, the parties hereto agree as follows:

     

    Section
      4, subsection C of the EMPLOYMENT CONTRACT, titled Stock and Warrants, shall
      be
      deleted, and no stock warrants or stock options shall be issued or
      owing
to Mr. 'Thompson pursuant to former section 4(c). Pursuant to the deletion
      of said
      paragraph 4 (c), all references to the granting or vesting of stock warrants
      in
      section 4 (g), or otherwise in
      the Employment Contract, are rendered meaningless and void, and such is
      the intention of the parties entering into this addendum.

     

    Section
      8. titled Termination by Company, shall be amended to increase the referenced
      severance allowance to
      $600,000, or seventy five percent (75%) of the total salary compensation
      Executive would have been
entitled to for the
remainder
of
      his Term of employment, whichever is greater,

     

    Section
      9. titled Notice of Termination shall be amended to require that any notice
      of
      termination must, in order to be effective, be accompanied by
      a
tendering of the severance allowance specified in Section
      8.

     

    Section
      12. titled Death Benefit shall be amended to increase the referenced death
      benefit to three hundred thousand dollars ($300,000) or thirty percent (35%)
      of
      the total salary compensation Executive would have been entitled to for the
      remainder of his Term of employment, whichever is greater.

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Addendum under seal
      the
      dayand year above first written.

     

    
      	
              Executive

            	
              Company

            
	 	 
	 	 
	
              /s/  Kim
                Thompson

            	
              /s/  Kim
                Thompson

            
	
              Kim
                Kraig Thompson

            	
              Kim
                Kraig Thompson

            
	 	C.E.O.
	 	On
              behalf of Kraig Biocraft Laboratories,
              Inc.

    

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

     

     

    KRAIG
      BIOCRAFT LABORATORIES, INC.

     

    EMPLOYMENT
      CONTRACT: KIM K. THOMPSON

     

    THIS
      EMPLOYMENT CONTRACT ("Agreement") is dated as of the 26th day of April, 2006,
      by
      and between Kraig Biocraft Laboratories, Inc., a Wyoming corporation (the
      "Company') and Kim Thompson, an individual ("Executive'', "Employee" or “Mr. Thompson").

     

    The
      Board
      of Directors of the Company (the "Board") and Executive each desires that
      Executive furnish services to the Company on the terms and conditions
      hereinafter set forth. The parties enter into this agreement setting forth
      the
      terms and conditions of the employment of the Executive with the
      Company,

     

    NOW,
      THEREFORE, in consideration of the foregoing and of the mutual promises and
      undertakings contained in this Employment Contract, and for other good and
      valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, and intending to be legally bound hereby, the parties hereto
      agree
      as follows:

     

    1.  Employment.
      The Company hereby agrees to employ the Executive, and the Executive
      hereby accepts such employment, on the terms and conditions hereinafter set
      forth.

     

    2.  Term. The
      term
      of Executive's employment under this Agreement shall be for a period of five
      (5)
      years, commencing on May 1, 2006 and ending on April 30, 2011, unless further
      extended or sooner terminated as hereinafter provided.

     

    On
      April
      30, 2007 and on the last day of April of each year thereafter, the Term shall
      be
      automatically extended for five (5) years, so that at all times, the Term on
      each April 30 during the duration of this Agreement shall be an unexpired period
      of five (5) years. The last day of the Term, as from time to time extended,
      is
      hereinafter referred to as the "Expiration Date." The Company or Executive
      may
      elect to terminate the automatic extension of the Term set forth
      in this section by giving written notice of such election
      on or before April 30 of any calendar year Upon the giving of such notice,
      Executive's employment under this Agreement shall terminate on the Expiration
      Date (as last extended).

     

    3.  Position
      and Duties. During the Term of this Agreement, Executive shall be
      employed as Chief Executive Officer of the Company. Inthis capacity
      Executive shall have overall authority for the management of the business of
      the
      Company and the subsidiaries and affiliates of the Company of which he serves
      as
      Chief Executive Officer, Executive hereby accepts such employment and agrees
      to
      perform the customary duties of a Chief Executive Officer and accepts such
      other
      duties as may be set forth herein,

     

    4.  Compensation
      and Related Matters.

     

    a.
      Base Salary. As compensation for the performance by the Executive of
      his duties hereunder, the Company shall pay the Executive a annual base salary
      of $185,000 for the period commencing May 1, 2006 through and including December
      31, 2006, which base pay shall be increased each January 1st for the
      subsequent
      twelve (12) month periods by six percent (6%). Company acknowledges that the
      base salary is less than Mr. Thompson's customary remuneration and that Mr.
      Thompson is entering into this agreement in part due his perception of the
      future value of warrants and deferred, delayed and bonus compensation. Mr.
      Thompson informs the Company, and the company hereby acknowledges that Mr.
      Thompson is entering into this agreement and will be performing the services
      to
      the Company as contemplated herein, in reliance on the promises and
      representations of the Company as described in this Agreement. Company further
      acknowledges that it is the Company's intention that Mr. Thompson so rely upon
      these promises and that this Agreement is offered by the Company as an
      inducement for Mr. Thompson to take on the role of Chief Executive
      Officer.

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    b.  Annual
      Bonus/Incentive Compensation. In addition to the compensation described
      in subparagraph a. above, Executive may receive such additional compensation,
      if
      any, in the form of an annual incentive bonus, as may be approved by the
      Company's Board of Directors.

     

    c.  Stock
      and Warrants. Executive will receive additional compensation in the
      form of warrants
      on the Company stock as a performance incentive. Executive will receive:
      1) a five year warrant On
      700,000 shares of the Company's common stock at an
      aggregate exercise price of $150,000; 2) a eight year warrant on $1,500,000
      shares of the Company's common stock at an aggregate exercise price of $500,000:
      3) a nine year warrant On
      2.000,000 shares of the Company's common stock at an aggregate exercise
      price of $800,000 Those warrants are fully vested as of the date of this
      agreement.

     

    d.  Life
      andDisability Insurance Premium. COMPANY shall pay
      Executive's premium on his personal life insurance policy for the period [he
      or
      she] performs the duties of EXECUTIVE. EXECUTIVE shall receive disability
      insurance in an amount which is reasonable and commercially
      customary.

     

    e.  Vacation
      and sick leave. Paid vacation of four (4) weeks per year, which
      vacation shall be taken at such times as are mutually convenient to Executive
      and the Company. Paid sick leave for up to 21 days per year.

     

    f.  Medical
      and Dental Insurance. COMPANY shall either provide to EXECUTIVE and pay
      the full premium for a comprehensive family health medical and dental insurance
      policy or
      if EXECUTIVE elects to provide [his or her] own
      hearth insurance, pay to EXECUTIVE an amount equal to the cost of
      providing said comprehensive family health insurance policy.

     

    g.  Performance
      Bonus Compensation. In addition to any other compensation paid to
      EXECUTIVE, COMPANY shall pay EXECUTIVE the following compensation and bonuses
      in
      accordance with the criteria set Forth below;

     

    
      	
               

            	
              1. Upon
                the Company's successful laboratory development of a new
                silk fiber composed of one or more proteins
                that are exogenous to a host and one or more proteins that are
                endogenous to a host, the company will: 1) Release Executive
                from the condition subsequent on a eight year warrant on 500,000
                shares of
                the company stock at an aggregate exercise price of $100,000 and,
                2) raise
                Executive's base pay by 14%.

            

    

     

    
      
        	
                 

              	
                2. Upon
                  the Company's successful laboratory development of a new silk fiber
                  composed of two ormore
                  proteins that are exogenous to a host, whether or not combined
                  with one or
                  more proteins that are endogenous to a host, the company will:
                  1) Release
                  Executive from the condition subsequent on a eight year warrant
                  on 600.000
                  shares of the company
                  stock at an aggregate exercise price of $110,000, and: 2)
                  raise
                  Executive's base pay by 15%.

              

      

       

    

    
      
        
          	
                   

                	
                  3. Upon
                    the Company's successful laboratory development of a new silk
                    fiber
                    composed, at least in part, of one or more
                    synthetic proteins, the company will 1) Release Executive
                    from the
                    condition subsequent on a eight year warrant on 900,000 shares
                    of the
                    company stock at an aggregate exercise price of $160,000, and;
                    2) raise
                    Executive's base pay by 18%.

                

        

         

      

    

    
      
        
          
            	
                     

                  	
                    4. Upon
                      the Company's successful laboratory development of a new silk
                      fiber
                      composed, at [east in part, of one or more proteins that are
                      genetic
                      modifications or induced mutations of a host silk proteins, the
                      company will raise Executive's base pay by
                      8%.

                  

          

           

          
            
              
                
                  
                    	
                             

                          	
                            5.
                              Upon the Company's successful laboratory development
                              of two out of three
                              of the silk fibers referenced in subsections 1, 2 and
                              3 above, rite Board
                              of Directors meet (within 60 days of said event) and
                              consider what bonus
                              compensation would be appropriate and suitably rewarding
                              to Executive
                              under the totality of the
                              circumstances.

                          

                  

                   

                   

                  
                    
                      
                      

                    

                    
                      2

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  
                     

                    
                      
                        
                          
                            
                              	
                                       

                                    	
                                      
                                        6.
                                          Upon the Company's becoming either a registered
                                          company (in the United
                                          States or any foreign jurisdiction) or
                                          upon its stock being traded on the
                                          pink sheets or the OTC Bulletin Board,
                                          and upon the Company's achieving an
                                          average market capitalization over a 120
                                          calendar day period, in excess of
                                          $35,000,000 the company will raise Executive's
                                          base pay to $225,000, It
                                          Executive's base pay is less than that
                                          amount at the
                                          time.

                                      

                                    

                            

                             

                          

                        

                      

                    

                  

                  
                    
                      
                        
                          
                            
                              
                                	
                                         

                                      	
                                        
                                          7.
                                            Upon the Company's becoming either a
                                            registered company (in the United
                                            States or any foreign jurisdiction) or
                                            upon its stock being traded on the
                                            pink sheets or the OTC Bulletin Board,
                                            and upon the Company's achieving en
                                            average market capitalization over a
                                            91 calendar
                                            day period, in excess of 565,000,000
                                            the company will raise Executive's
                                            base pay to $260,000, if Executive's
                                            base pay is less than that amount at
                                            the time.

                                        

                                      

                              

                               

                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	
                                                       

                                                    	
                                                      
                                                        8.
                                                          Upon the Company's becoming
                                                          either a registered company
                                                          (in the United
                                                          States or any foreign jurisdiction)
                                                          or upon its stock being
                                                          traded on the
                                                          pink sheets or the OTC
                                                          Bulletin Board, and upon
                                                          the Company's achieving
                                                          an
                                                          average market capitalization
                                                          over a 91 calendar day
                                                          period, in excess of
                                                          $100,000,000 the company
                                                          will raise Executive's
                                                          base pay to $290,000, if
                                                          Executive's base pay is
                                                          loss than that amount at
                                                          the
                                                          time.

                                                      

                                                    

                                            

                                             

                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	
                                                                       

                                                                    	
                                                                      
                                                                        9. Upon
                                                                          the Company's
                                                                          becoming
                                                                          either
                                                                          a registered
                                                                          company
                                                                          (in the
                                                                          United
                                                                          States
                                                                          or any
                                                                          foreign
                                                                          jurisdiction)
                                                                          or upon
                                                                          its stock
                                                                          being traded
                                                                          on the
                                                                          pink
                                                                          sheets
                                                                          or the
                                                                          OTC Bulletin
                                                                          Board,
                                                                          and upon
                                                                          the Company's
                                                                          achieving
                                                                          an
                                                                          average
                                                                          market
                                                                          capitalization
                                                                          over a
                                                                          120 calendar
                                                                          day period,
                                                                          in excess
                                                                          of
                                                                          $200,000,000
                                                                          the company
                                                                          will raise
                                                                          Executive's
                                                                          base pay
                                                                          to $365,000,
                                                                          if
                                                                          Executive's
                                                                          base pay
                                                                          is less
                                                                          than that
                                                                          amount
                                                                          at the
                                                                          time.

                                                                      

                                                                    

                                                            

                                                             

                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                	
                                                                                         

                                                                                      	
                                                                                        
                                                                                          10.Upon
                                                                                            the
                                                                                            Company's
                                                                                            becoming
                                                                                            either
                                                                                            a
                                                                                            registered
                                                                                            company
                                                                                            (in
                                                                                            the
                                                                                            United
                                                                                            States
                                                                                            or
                                                                                            any
                                                                                            foreign
                                                                                            jurisdiction)
                                                                                            or
                                                                                            upon
                                                                                            its
                                                                                            stock
                                                                                            being
                                                                                            traded
                                                                                            on
                                                                                            the
                                                                                            pink
                                                                                            sheets
or
                                                                                            the
                                                                                            OTC
                                                                                            Bulletin
                                                                                            Board,
                                                                                            and
                                                                                            upon
                                                                                            the
                                                                                            Company's
                                                                                            achieving
                                                                                            an
                                                                                            average
                                                                                            market
                                                                                            capitalization
                                                                                            over
                                                                                            a
                                                                                            150
                                                                                            calendar
                                                                                            day
                                                                                            period,
                                                                                            in
                                                                                            excess
                                                                                            of
                                                                                            $350,000,000
                                                                                            the
                                                                                            company
                                                                                            will
                                                                                            raise
                                                                                            Executive's
                                                                                            base
                                                                                            pay
                                                                                            to
                                                                                            $420,000,
                                                                                            if
                                                                                            Executive's
                                                                                            base
                                                                                            pay
                                                                                            is
                                                                                            less
                                                                                            than
                                                                                            that
                                                                                            amount
                                                                                            at
                                                                                            the
                                                                                            time.

                                                                                        

                                                                                      

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    The
      warrants described in this subsection (9) are in addition to any warrants issued
      outside of this subsection (g) and are fully vested as of the date of this
      agreement, but their exercise, in the absence of satisfying the respective
      criteria set forth above, is subject to the following conditions subsequent:
      11
      Executive exercises the warrants described in this subsection (g) without first
      satisfying the above described criteria, the exercise shall be subject to the
      condition that Executive First provide the Company with a written right to
      redeem any such shares at the exercise price. Such a right of redemption shall
      be for a period of seven years. The criteria will be deemed not to have been
      met, if not met within 120 days of the termination of Executives employment,
      for
      any reason.

     

    The
      events referenced in subsections I, 2 and/or 3 above will be deemed to have
      occurred and the criteria satisfied when verified in an opinion letter from
      any
      one of the following: Dr. Macomb Fraser, Dr, Randolph Lewis, or an independent
      laboratory of Company's choosing.

     

    h.
      Retirement Plan. The Company will make reasonable commercial efforts to
      adopt a retirement benefit plan, which will include
      Executive, which is reasonable and comparable to such plans as are customary
      in
      Company's industry.

     

    5.
      Reimbursement of Expenses. The
      Executive may incur reasonable expenses for furthering the Company's business,
      including expenses for entertainment, travel, meals, and similar items. The
      Company shall reimburse Executive for all business expenses after the Executive
      presents an itemized account of expenditures, pursuant to Company policy. The
      company will cause to be issued a corporate credit card which Executive can
      use
      for company business. Executive agrees that he
      will reimburse the company for an charges he makes on said credit
      account to the extent that such are not reasonably connected to the company's
      business as contemplated herein. The Company will make any request for
      reimbursement from Executive in writing and within fifty (50) days of the
      disputed expenditure. Any request or demand by the Company to Executive for
      reimbursement of expenditures is waved if not made within fifty days of the
      date
      the expenditure was made.
      No
      action will be brought or maintained by the Company against Executive, either
      in
      a court of law
or in
      arbitration, or otherwise, to recover expenses, if the Company has
      not complied with this section 5.

     

     

    
      
        
        

      

      
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    6.  Devotion
      to Company. The Executive will devote substantially his furl
      time, attention, and energies to the business of the Company, its affiliates
      and
      subsidiaries during this employment. The Company understands that Executive
      is
      engaged in other business, and Executive is not prohibited from an active
      involvement in the operation of said business, however the parties do anticipate
      that Executive will devote substantially his full time not less than 70% of
      his
      work time)
to Company.

     

    7.  Termination
      by Executive. Executive may terminate his employment hereunder
      by giving thirty clays written notice to the Company, in which
      event such termination shall become effective at the end of the notice period,
      or earlier as may be specified by the Company after receipt of Executive's
      Notice of Termination.

     

    8.  Termination
      by Company. With or without cause, the Company may terminate
      Executive's employment at any time prior to the expiration of the five year
      term
      upon 60 days' written notice to the Executive. The Executive will be paid
      his/her regular salary up to the date of termination. In addition, the Company
      will pay the Executive on the date of the termination a severance allowance
      of
      $400,000, or sixty five percent (65%) of the total salary compensation Executive
      would have been entitled to for the remainder of his Term of employment,
      whichever is greater. The Company will pay any required withholding tax on
      said
      severance allowance without deducting the same from the amount to be paid to
      Executive, If two out of the three conditions set fourth in section 4 (g) sub
      parts 3, 4 and 5 have been met by
      the time of said
termination,
      or are met within 120 days subsequent to such termination,
      the severance allowance will be increase by $100,000.

     

    9.  Notice
      of Termination. Any purported termination of the Executive's
      employment shall be communicated by written Notice of Termination to the other
      party hereto. If such notice is served by the Company on the Executive, to
      be
      effective, it must include the signatures of the majority of the board of
      directors approving such termination and thanking Executive for his service
      to
      date.

     

    10. 
Termination
      Benefits, Upon the expiration or termination of this Agreement
      or Executives employment, by either party for any reason, Company shall continue
      to provide Executive with life and disability insurance and family health
      insurance described above for a period of thirty six (36) months from said
      termination/expiration. Company will make all reasonable efforts to allow
      Executive to continue such coverage thereafter at Executives own expense, This
      provision is in addition to
the
health
      benefits provided in section 11
      below. This provision shall survive the expiration or termination of
      this
      agreement for any
      reason.

     

    11.  Health
      Benefit. During the life
      of Executive
and also during the life of his spouse, Company shall provide Executive
      and his spouse accident and health insurance policies or programs reasonably
      comparable to those in effect on the date of termination. or Executive and
      his
      spouse shall be entitled to be paid an amount equal to the premiums which would
      be incurred for the purchase of accident
      and
      health insurance coverage comparable to that in effect on the Date of
      Termination. In addition, Company shall provide Executive with life and
      disability insurance policies in an amount not less than that in effect on
      the
      Date of Termination or Executive shall be entitled to be paid an amount equal
      to
      the premiums which would be incurred for the purchase of comparable coverage_ This provision shall
      survive the expiration or termination of this agreement for any
      reason.

     

    12.      
      Death Benefit. Should Executive die during
      the term
of employment, the Company shall pay to Executive's designee, the greater
      of eighty thousand dollars ($80,000) or
      thirty percent (26%) of the total salary compensation Executive
      would have been entitled to for the
remainder
      of his Term of employment,
      whichever is greater, Company will also continue to pay the
medical
      and
      health benefits for Executive's family for a period of eight (B) years, in
      addition to the benefits to Executives spouse, provided in section 11
      above.

     

    13.       
      Consulting Agreement.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    a.               Upon
      the expiration or termination of this agreement for any reason, or by either
      party, Company
      agrees that it will employ Executive as a consultant for a period of six (6)
      years and at a rate of 54,000 per month, with a rate increase on January 1*I. 2009, and
      each
      January thereafter of three percent (3%).Inhis capacity as consultant,
      Executive will make himself available, as may be required by the Company,
      for up
      to 8 hours per month at such times and dates as are mutually convenient.
      Executive may perform these services by telecommunications from such locations
      as are convenient to him. In the event of the death of Executive, Executive's
      designee shall receive a monthly death benefit, from Company, equal to the
      amount of such consultancy, and for the full term or remainder of the term
      of
      the consultancy. Executive may resign from said consultancy position upon
      providing Company with thirty (30) days written notice. This provision shall
      survive the expiration or termination of this agreement for
      any
      reason.

     

    b.               In
      the event that Company achieves gross sales of ten million dollars ($10,000,000)
      or more,
      or
      one million dollars ($1,000,000) or more in net income, in any two years within
      ten (10) years of
      the date of this agreement, or upon the Company's achieving an average
      market capitalization over a 180 calendar day period, in excess of
      $45,000,000 within six (6) years of the date of this agreement, then the
      consulting period will be for ten (10) years
      (with
      payments guaranteed for the full 10 years to designee in the event of
      Executive's death during the term thereof), This provision shall survive the
      expiration or termination of this agreement for any reason.

     

    c               
      In the event that Company achieves gross sales of nineteen million dollars
      ($19,000,000) or
      more,
      or three million dollars ($3,000,000) or more in net income, in any two years
      within twelve (12) years of the date of this agreement, or upon the Company's
      achieving an average market capitalization over a 180 calendar day period,
      in
      excess of $65,000,000 within six (6) years of the date of this agreement, then
      the consulting period will be for the life time of Executive and his spouse
      (joint life with payments guaranteed for 20 years to designee in the event
      both
      predecease the twenty year period), and the consulting rate will be increased
      to
      $0,500 per month, with a three

    percent
      (3%) increase on January 1st 2009, and
      each January 1st  thereafter,
      This provision shall survive
      the expiration or termination of this agreement for any reason.

     

    d.               In
      the event that Company achieves gross sales of thirty eight million dollars
      ($38,000,000)
      ormore, or six million
      dollars ($6,000,000) or more in net income, in any two years within twelve
      (12)
      years of the date of this agreement, or upon the Company's achieving an average
      market capitalization over a 180 calendar day period, in excess of $120,000,000
      within six (6) years of the date of this agreement, then the consulting period
      will be for the life time of Executive and his spouse (joint life with payments
      guaranteed for 20 years to designee in the event both predecease the twenty
      year
      period), and the consulting rate will be increased to 510,000 per month, with
      a
      three percent (3%) increase on January lst 2009, and
      each
      January 1st
thereafter.
      This provision shall survive the expiration or
      termination of this agreement for any reason.

     

    e.               In
      the event that Company achieves gross sales of fifty nine million dollars
      ($59,000,000) or
      more,
      or nine million dollars ($9,000,000) or more in net income, in any year within
      twelve (12) years of the date of this agreement, or upon the Company's achieving
      an average market capitalization over a 180 calendar day period, in excess
      of
      $210,000,000 within six (6) years of The date of this agreement, then the
      consulting period will be for the life time of Executive and his spouse (joint
      life with
payments guaranteed
      for 20 years to designee in the event both
      predecease the twenty year period), and the consulting rate will be increased
      to
      $15,000 per month, with a three percent (3%) increase on January 1st. 2009, and
      each
      January 1st
thereafter,
      This provision shall survive the expiration or
      termination of this agreement for any reason.

     

    f.               In
      the event that
      Company achieves gross sales of seventy eight million dollars
($78,000,000)
      or more, or twelve million dollars ($12,000,000) ormore in net income,
      in any
      year within twelve (12) years of the date of this agreement, or upon the
      Company's achieving an average market capitalization over a 150 calendar day
      period, in excess of $320,000,000 within six (6) years of to date of This
      agreement, then the consulting period will be for
      The life time of Executive and his spouse (joint life with payments guaranteed
      for 20 years to designee in the event both predecease the twenty year period),
      and the consulting rate will be increased to $20,000 per month, with a three
      percent
      (3%) increase on January 1st
2009, and
      each January 1st thereafter.
      This
      provision shall survive the expiration or termination of this agreement for
      any
      reason.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    g.  The
      Company agrees that as it becomes commercially reasonable to do so, Company
      will
      fund this provision through the purchase of annuities, which shaft name
      Executive and his spouse as joint life beneficiaries and his designees as the
      alternative beneficiaries.

     

    h.  Net
      income as used in this section refers to net income as defined by the generally
      accepted accounting practices then in place
      in the United States of America, or cash flow, whichever is
      greater.

     

    i.       
Executive's
      rights to this consulting provision and the benefits thereof are fully vested
      as
      of the date of this Agreement, and any conditional event as described in this
      section, including Company's gross sales or net income events shall be
      interpreted as conditions subsequent to the vesting of the relevant
      benefits.

     

    14.  CHOICE
      OF LAW.  It is the intention of the parties to this
      Agreement that this Agreement and the performance under this Agreement, and
      all suits and special proceedings under this Agreement, be construed in
      accordance with and under the Laws of the State of Michigan.

     

    15.  DISPUTED
      COMPENSATION. In the event that the Company should at any time
      dispute any payment or vesting of compensation as provided herein to executive,
      Company agrees that it will provide Executive with a timely and immediate
      written notice of such dispute detailing the specific compensation that it
      disputes and detailing all of the legal reasons and the detailed factual basis
      for its objection thereto. Such written notice will be provided to Executive
      in
      advance of the payment or vesting of any such disputed payment to Executive.
      Providing such a notice does not eliminate or obviate the Company's
      responsibility to make such a payment of compensation, its dispute or objection
      notwithstanding.

     

    In
      the
      event that the reasons for the dispute or objection arise after the disbursement
      or vesting of such compensation to Executive, then Company agrees that it will
      provide notice to Executive at the earlier of twenty one (21) days from the
      date
      of any such disbursement or vesting if Company knew or reasonably should have
      known of the basis for such an objection within seven (7) days of such
      disbursement or vesting, or if Company did not know or reasonably could not
      be
      expected to known of the basis for such an objection, within one hundred and
      thirty one (131) days of the disbursement, payment or vesting of such benefit.
      Any request or demand by the Company for reimbursement of compensation paid
      to
      Executive pursuant to this agreement is waved if not made within the limitation
      period described in this paragraph. No action will be brought or maintained
      by
      the Company against Executive, either in a court of law or in arbitration,
      or
      otherwise, to recover compensation paid to executive if the Company has not
      complied with this section 15.

     

    Under
      no
      circumstances will any action will be brought or maintained by the company
      against executive, either in a court of law or in arbitration, or otherwise,
      to
      recover compensation already vested or paid to executive, even if prior notice
      of the dispute or objection as described above has been served, if more than
      three hundred and sixty five (365) days have passed since the payment or vesting
      which the company would otherwise seek to recover or overturn.

     

    This
      section 15 shall not apply to any compensation that Executive should receive
      that is over and above the compensation specifically described in this
      Agreement.

     

    16.         NO
      WAIVER. The failure of either party to this Agreement to insist
      upon the performance of any of the terms and conditions of this Agreement,
      or
      the waiver of any breach of any of the terms and conditions of this Agreement,
      shall not be construed as thereafter waiving any such terms and conditions,
      but
      the same shall continue and remain in full force and effect as if no such
      forbearance or waiver had occurred.

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    17.  PARAGRAPH
      HEADINGS. The titles to the paragraphs of this Agreement are solely
for
      the convenience of the parties and shall not be used to explain, modify,
      simplify, or aid in the interpretation of the provisions
      of this Agreement.

     

    18.  COMPLETE
      AGREEMENT, This Agreement contains the complete agreement concerning
      the employment arrangement between the parties. The parties stipulate that
      neither of them has made any representation with respect to the subject matter
      of this Agreement or any representation including the execution and delivery
      of
      this Agreement except such representations as are specifically set forth in
      this
      Agreement and each of the parties acknowledges that [he or she] or it has relied
      on its own judgment in entering into this Agreement. The parties further
      acknowledge that any representations that may have been made by either of them
      to the other prior to the date of executing this Agreement are of no effect
      and
      that neither of them has relied thereon in connection with [his or her] dealings
      with the other.

     

    19.  INDEMNIFICATION.
      Company shall indemnify Executive against any and all expenses,
      including amounts paid upon judgments, counsel fees, environmental penalties
      and
      fines, and amounts paid in settlement (before or after suit is
      commenced),incurred by
      the Executive in connection with [his or her] defense or settlement
      of any claim, action, suit or proceeding in which [he or she] is made a party
      or
      which may be asserted against [him or her} by reason of [his or
      her] employment or the performance of duties in this
      Agreement or as an officer ordirector of the Company or otherwise in
      connection to the Company.  Such indemnification shall be in addition to
      any or rights to which Executive may be entitled under any law, the articles
      of
      incorporation, the bylaws, any agreement, or otherwise. This provision shall
      survive the expiration or termination of this agreement for any
      reason,

     

    20.  Assumption
      of Agreement by Company's Successors and Assignees. The Company's
      rights and obligations under this agreement will inure to the benefit and be
      binding upon the Company's successors and assignees.

     

    21.      
      Legal Fees. Inthe event of any dispute or proceeding arising under this
      Agreement where the Executive is ultimately the substantially prevailing party,
      the Company shall promptly reimburse Executive for all costs, including without
      limitation, the reasonable attorneys' fees of any attorney of the Executive's
      choosing, incurred by the Executive in any such dispute or proceeding arising
      under this Agreement.

     

    22.      
      Assignment. This Agreement shall not be assignable by either party
      without the prior written consent or the other party, However:

     

    (1)  It
      may be
      assigned by the Company to any person or entity acquiring all or substantially
      all of the assets thereof, however Company will remain as a guarantor of
      obligations hereunder: and

     

    (2)  It
      may be
      assigned by Executive as to his right to payment, but not as to any of his
      obligations hereunder; and

     

    23,  Severability
      of Provisions. If any of the provisions of this Agreement or the
      application of any such provision shall for any reason be held invalid by a
      court of competent jurisdiction, such
      invalidity shall not affect or impair any other provision, it being
      the
      intention of the parties that such other provisions shall be and remain
      in full force and effect.

     

    24,  Notices.
      Ali notices, requests, demands and other communications provided for
      by
      this Agreement shall be in writing and shall deemed to have been given at the
      time when mailed at any office of the United States Postal Service
      enclosed in a certified postage-paid envelope addressed to the respective party
      at the addresses set forth below (together with an electronic copy
      to the designated e-mail addresses listed below if notice is being served on
      Executive) or to such changed address as such party may have fixed by notice
      to
      the other party, provided, however, that any notice
      or
      change of address shall be affected only upon receipt and further provided
      that
      any notice may be personally delivered to the respective party by the party
      giving notice in lieu of being mailed.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    
      	
              If
                to Company:

               

            	
              Kraig
                Biocraft Laboratories, inc. Attention: CORP 95

              109
                E 17th
                Street, Suite 7

              Cheyenne,
                WY 82001

               

            
	
              If
                to Executive:

            	
            

    

     

    Either
      party may waive this notice provision by providing a written acknowledgement
      to
      the other party that the first party has received effective notice.

     

    25.       
      Binding Effect. This Agreement shall
      inure to the benefit of and shall be binding upon the Company,
      its
      successors and assigns, and any corporation which may acquire all or
      substantially all of the Company's assets or into which the Company may be
      consolidated or merged, and shall inure to the benefit of Executive's personal
      or legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees. Upon the Executive's death, all amounts,
      warrants, and other compensation, to which he is entitled hereunder, unless
      otherwise provided herein, shall be paid in accordance with the terms of this
      Agreement to the Executive's designee, or, if there be no such designee, to
      the
      Executive's estate.

     

    26.  
Exercise
      of Warrants.
      Ail warrants described herein shall contain customary cashless
      exercise and net issue features allowing the exercise price to be paid by a
      deduction of the number of shares, which is equivalent in value to the aggregate
      exercise price, from the equity to be received on exchange, The Company will
      also authorize Executive the alternative or tendering a six year promissory
      note
      as payment for such exercise price. Such note shall be secured entirely by
      a
      security interest in the stock which is received in exchange, and Company's
      recourse shall be limited to said security interest. Said note will allow
      interest to accrue, until maturation, at the annual rate of 6.1%. All such
      stock
      issued shall have the same registration rights, if any, of the Company's
      founder's stock.

     

    27.  Effect
      of Prior Agreements, This agreement does not supersede, nor
      shall it be interpreted as conflicting with, the Stock Purchase and intellectual
      Property Agreement entered into between the parties and dated April 26,
      2006.

     

    28.  Settlement
      by Binding Arbitration. Any claim or controversy that arises out
      of or relates to this agreement, or the breach of it, shall be settled by
      binding arbitration in
      accordance with
      the rules of JAMS. Said arbitration shall be before a single
      arbitrator whose decision shall be binding and final. Unless the parties agree
      otherwise, the arbitration shall be held in the JAMS offices in Chicago,
      Illinois. Judgment upon the award rendered may be entered in any
      court with jurisdiction. In the event that the dispute involves
      the
      withholding by the Company or the refusal to pay by the Company of any
      compensation due under the provisions of this agreement to Executive, his
      spouse, family or designee, and such Executive, his spouse, family ordesignee are the prevailing
      or
      substantially prevailing parties, the Arbitrator shall award pm judgment
      interest on any such compensation atthe
      annual rate of 14% or the maximum amount allowable under the law if less than
      /4%.

     

    29.
      Vesting of compensation and benefits.
Executive's (and where applicable Executive’s Spouse's and Designee's)
      right(s) to the compensation and benefits described in this Agreement are fully
      vested as of the date of
      this Agreement. The conditional events described in numbered
      paragraphs 4 (g) and 13 shall be interpreted as conditions subsequent, and
      shall
      not be interpreted as
      providing any conditionality and the immediate vesting of the benefit as of
      the
      date of this Agreement.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    30.  Bankruptcy,
      Security and Liens. It is the intention of the parties that to the
      greatest extent allowable under the law, the rights and obligations of this
      employment agreement shall not be waved or subordinated by any bankruptcy.
      The
      parties further agree that the obligations of Company hereunder are secured
      by
      the Company's assets including its intellectual property. In furtherance of
      this
      provision, the Company will, upon request from Employee, file or cause to be
      filed such liens and notices of Employees security interests in said
      assets.

     

    31.      
      No
      Attorney—Client Relationship. No Attorney—Client
Confidentiality. Company's Waiver Of Conflicts.It is not
      the intention of the parties to create by this Agreement or through the
      employment relationship between them any attorney–client relationship, and
      Company specially disavows and rejects any such relationship. Executive will
      be
      employed in the capacity of Chief Executive Officer of the Company, and will
      use
      his skills and talents on the Company's behalf in his capacity as C.E.O. Nothing
      in this Agreement, in the employment relationship or in Executive's performance
      of his duties shall be deemed to create an attorney-client relationship with
      the
      Company, its shareholders, or its Board of Directors. Company specifically
      waves
      any such attorney client relationship. Company has no expectation of attorney
      client confidentiality in regard to this relationship and specifically waves
      any
      such attorney–client confidentiality with Executive. Executive is not an
      attorney for the Company, and his actions as an officer or director or
      shareholder shall not be interpreted as the actions of the Company's
      attorney.

     

    Similarly,
      Company has no expectation that the rules pertaining to conflicts of interests
      of attorneys, or any other rules relating to the engagement of attorneys apply
      to this employment relationship. The Company specifically waves any and all
      such
      conflicts. Neither will Executives performance of his duties, including without
      limitation, his role in advising, negotiating, drafting of documents and
      contracts, preparing and filing governmental notices, documents or fillings,
      recommending or taking action on behalf of the Company, appearing in pro say
      on
      behalf of the company, or any other service which is
      performed in his capacity as an officer or director of the company bedeemed
      to constitute the giving of legal advice. Company acknowledges that if it is
      at
      any time in need of, or desires, legal advice or legal services it must retain
      outside attorneys to render such advice or service. This provision may only
      be
      waved in a writing signed by
      both parties which explicitly and conspicuously states both the
      party's intention to waive this numbered paragraph 31.

     

    32.  Execution
      in Counterparts. This Agreement may be executed by the parties
      hereto signing the same instrument, or by each party hereto signing a separate
      counterpart or counterparts, each of which shall be deemed to be an original,
      but all of which together shall constitute one and the same instrument The
      parties agree that documents executed by facsimile or electronic transmission
      shall be acceptable in this transaction, and the
      signatures thereof shall have the same force and effect as original
      signatures.

     

    33.  Waiver.
      The failure of any party to insist in any one or more Instances
      upon performance of any terms or conditions of this Agreement shall not be
      construed as a waiver of future performance of any such term, covenant or
      conditions, but the obligations of either party with respect thereto shall
      continue in full force and effect.

     

        IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
      the
      day and year above first written.

     

     

    
       

      
        	
                Executive

              	
                Company

              
	 	 
	 	 
	
                /s/  Kim
                  Thompson

              	
                /s/  Kim
                  Thompson

              
	
                Kim
                  Kraig Thompson

              	
                Kim
                  Kraig Thompson

              
	 	C.E.O.
	 	On
                behalf of Kraig Biocraft Laboratories,
                Inc.

      

      
9fsb20907ex10ii_kraig.htm

    STOCK
      PURCHASE AND INVESTOR RIGHTS AGREEMENT

    

    This
      Stock Purchase and Investor Rights Agreement (this "Agreement") is made and
      entered into as of December 29, 2006 by and among Worth Equity Fund, L.P.,
      a
      Delaware Limited Partnership with offices at Wachovia Financial Center, 51st
      Floor, Suite 5120, 200 South Biscayne Blvd., Miami, FL 33131-2310 ("Worth"
      or
      "Purchaser") and Kraig Biocraft Laboratories, Inc., a Wyoming corporation with
      offices at 120 North Washington Square, Suite 805, 'Lansing, Michigan 48933
      (the
      "Company' or “Kraig") (Worth and the Company are collectively referenced herein
      as, the "Parties").

    

    PRELIMINARY
      STATEMENTS

    

     

    
      A.   The
        Company is in the business of developing recombinant fiber (the
        "Business").

    

     

    B.   The
      Company desires to issue and sell to the Purchaser, and the Purchaser desires
      to
      subscribe for and acquire from the Company, an equity interest in the Company
      upon the terms and conditions herein attar set forth, and conditioned upon
      the
      rights granted to it hereunder. hereunder.

    

    NOW,
      THERFFORE, in the Parties agree as follows:

    

    1.           Agreement
      to Purchase and Sell the Stock. The Company will sell to Purchaser, and
      Purchaser  Agrees to purchase no par value common stock (the "Stock")
      of the Company as set forth below:

    

    
      	
               

            	
              1.1

            	
              175,000
                shares of Stock for S15,000 within five (5) business days of execution
                of
                this Agreement;

            

    

    

    
      	
               

            	
              1.2

            	
              1,750,000
                shares of Stock for $150,000 within thirty (30) business days
                of

            

    

    
      	
               

            	
              execution
                of this Agreement;

            

    

    

    
      	
               

            	
              1.3

            	
              1,166,650
                shares of Steele for $100„000 within one hundred and eighty (130) days of
                execution of this Ageement and

            

    

    

    
      	
               

            	
              1.4

            	
              At
                Purchaser's option, up to 10;908,350 additional shares of Stock for
                $0.085714 per share on or before a date that is one year from the
                execution of this Agreement (the "Additional
                Purchase").

            

    

    

    
      	
              2.

            	
              Closing
                and Payments. Subject to the terms and conditions hereof, and in
                'reliance: upon The written representations and warranties of the
                Company,
                Purchaser will purchase, at closing on the dates set forth in Section
                1,
                the Stock as set forth in Section 1 (the "Closings"). The Closings
                shall
                be held at the offices of Guzov Ofsink, LLC, 600 Madison Avenue 14th
                floor, New
                York, New York 10022. At the Closings, the Company will deliver to
                TV-chaser original stock certificates evidencing the Stock to be
                purchased
                hereunder and Purchaser will deliver to Sellers the purchase price
                by wire
                transfer, cashier's check, or by such cattier moans as the Parties
                may
                agree upon in writing.

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              3.

            	
              Representations,
                Warranties and Covenants of the Company. The Company hereby
                represents, warrants and covenants to Purchaser that the statements
                in the
                following paragraphs of this Section 3 are an true and complete as
                of the
                date hereof

            

    

    

    
      	
               

            	
              3.1

            	
              Authority;
                Due Authorization. This Agreement has been duly and validly executed
                and delivered by the Company, and upon the execution and delivery
                by
                Purchaser of this Agreement and the performance by Purchaser of its
                obligations herein, will constitute, a legal, valid and binding obligation
                of the Company enforceable against it in accordance with its terms,
                except
                as such enforcement may be limited by bankruptcy or insolvency laws
                or
                other laws affecting enforcement of creditors' rights or by general
                principles of equity.

            

    

    

    
      	
               

            	
              3.2

            	
              No
                Conflicts. The execution and delivery by the Company of this Agreement
                does not and the- performance by the Company of its obligations under
                this
                Agreement and the consummation of the transactions contemplated hereby
                will not, conflict with or result in a violation or breach of any
                of the
                terms, conditions or provisions of any other agreement to which the
                company is a party.

            

    

    

    
      	
               

            	
              3.3

            	
              Valid
                issue. The Stock being purchased by the Purchaser hereunder shall
                be
                at the Closings, duly and validly issued, fully paid, and non-assessable
                and in each instance have been issued in accordance with the registration
                requirements or applicable securities laW:4, including, without
                limitation, the Securities Act of 1933, as amended (the “Act”), or valid
                exemptions there from.

            

    

    

    
      	
               

            	
              3.4

            	
              Corporate
                Documents. The Company's current certificate of incorporation
                and

            

    

    
      	
               

            	
              bylaws,
                as of the date hereof and arc in the form attached hereto as attachment
                A.

            

    

    

    
      	
               

            	
              3.5

            	
              The
                Company. The Company, and its subsidiaries, are corporations duly
                incorporated, validly existing and in good standing under the laws
                of its
                jurisdiction of incorporation.

            

    

    

    
      	
               

            	
              3.6

            	
              Capitalization
                of the Company. Immediately prior to the first Closing, the authorized
                capital stock of the Company shall consist of a total of 60,000,000
                shares
                of Class A Common Stock, no par value, 25,000,000 shares of Class
                B Common
                Stock, no par value, and 10,000,000 shares of Preferred Stock, no
                par
                value. Immediately prior to the Closings there will be no shares
                of
                preferred stock outstanding, no shares of Class B Common Stock outstanding
                and no more than 35,050,000 shares of Common Stock
                outstanding.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    There
      are
      no commitments to issue, and there are no outstanding warrants, options,
      convertible securities or debt, preferred stock, or any other securities. In
      addition, there are no conversion or exchange privileges, preemptive rights,
      or
      other rights or agreements to purchase or otherwise acquire or issue any
      securities of the Company, and there is no agreement or understanding between
      any persons and/or entities, which affects or relates to the voting or giving
      of
      written consents with respect to any security of the Company or any instrument
      or security exercisable or exchangeable for, or convertible into any security
      of
      the Company.

    

    The
      Company has entered into an agreement with its founder whereby the founder
      has
      surrendered rights to royalties and has further  surrendered a curve
      out for certain applications of the Company's intellectual property in exchange
      for the company’s promise to use its best reasonable efforts to issue to the
      founder 200,000 shares of the Company's preferred stock. Said stock shall be
      issued without any right to receive any dividend. The preferred shares will
      however have super voting rights equivalent to 100 votes or Cass A Common shares
      per share of preferred, such that the total issuance of preferred shares to
      the
      founder shall have the voting power of 20,000,000 Class A shares,

    

    
      	
               

            	
              3.7

            	
              Subsidiaries.
                The Company is not own, directly or indirectly, any capital stock
                or other
                equity securities of any other corporation, partnership, limited
                liability
                company, association or other business entity. The Company is not
                a
                participant in any joint venture, partnership or similar
                arrangement.

            

    

    

    
      	
               

            	
              3.8

            	
              Financial
                Statements. The Company's financial statements annexed hereto as
                Attachment 13 (the "Financial Statements") fairly present the financial
                condition and operating results of the Company as of the dates, and
                for
                the periods, indicated therein, subject to normal year-end audit
                adjustments. Except as set forth in the Financial Statements, the
                Company
                has no material liabilities (contingent or otherwise). Except as
                disc1osed
                in the Financial Statements, the Company is not a guarantor or indemnitor
                of any indebtedness of any other person, firm or corporation. The
                Company
                intends to maintain a standard system of accounting established and
                administered in accordance with U.S.
                GAAP.

            

    

    

    
      	
               

            	
              3.9

            	
              No
                Conflicts. Neither the Company, nor any subsidiary, is in violation of
                in conflict with, in breach of or in default under any term or provision
                of, and no right or any party to accelerate, terminate, modify or
                cancel
                has come into existence under. (i) its Certificate of Incorporation
                or
                By-laws (each as may have been amended, supplemented or restated),
                (ii)
                any provision of any judgment, writ, injunction, decree; or order
                to which
                the any of then is a party; or (iii) any law, statute, rule or regulation
                applicable to any or them.

            

    

    

    
      	
               

            	
              3.10

            	
              Litigation.
                There is no action, suit, proceeding; or investigation pending or,
                to the
                best knowledge of the Company, currently threatened against the Company
                or
                any subsidiary that may affect the validity of this Agreement or
                the right
                of the company to enter into this Agreement or to consummate the
                transactions contemplated hereby.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    There
      is
      no action, suit, proceeding or investigation pending or, to the best knowledge
      of the Company currently threatened against the Company or its subsidiaries,
      before any court or by or before any governmental body or any arbitration board
      or tribunal, nor is there any judgment, decree, injunction or order of any
      court, governmental department, commission, agency, instrumental at arbitrator
      against the Company or any of its subsidiaries. The Company and its subsidiaries
      are not a party or subject to the provisions of any order, writ, injunction,
      judgment or decree of any court or government agency or instrumentality. There
      is no action, suit, proceeding or investigation by the Company or any subsidiary
      currently pending or which the Company intends to initiate. When any reference
      to the "knowledge" or "best knowledge" or the Company is made in this Agreement,
      such terms shall mean the knowledge that would he gained from due inquiry into
      the matters referenced.

    

    
      	
               

            	
              3.11

            	
              Brokers’
                Fees and Commissions. Neither the Company nor any of its officers,
                directors, employees, stockholders, agents or representatives, have
                employed any investment banker, broker, or finder in connection with
                the
                transactions contemplated by this Agreement and no such person or
                entity
                is entitled to a fee with respect to the transactions contemplated
                by this
                Agreement.

            

    

    

    
      	
               

            	
              3.12

            	
              Applicable
                Law. The Company has complied in all respects with applicable federal
                and state laws, rules and regulations applicable to it and all shares
                of
                capital stock of the Company have been issued in accordance with
                applicable federal and state securities laws, rules and
                regulations.

            

    

    

    
      	
               

            	
              3.13

            	
              Books
                and Financial Records. All the accounts, books, resisters, ledgers,
                Board minutes and financial and other material records of whatsoever
                kind
                of each of the Company arid its subsidiaries have been fully properly
                and
                accurately kept and completed; there are no material inaccuracies
                or
                discrepancies of any kind contained or reflected therein; and they
                give
                and reflect a true and fair view of the financial, contractual and
                legal
                position of each company.

            

    

    

    
      	
               

            	
              3.14

            	
              Employee
                Benefit Plans. The Company does net have any "Employee Benefit Plan"
                as defined in the U.S. Employee Retirement Income Security Act of
                1974 or
                similar plans under applicable
                laws.

            

    

    

    
      	
               

            	
              3.15

            	
              Tax
                Returns, Payment and Elections. Each of the Company and its
                subsidiaries has timely filed all Tax (as defined below) returns,
                statements, reports, declarations and other forms and documents
                (including, without limitation estimated Tax returns and reports
                and
                material information returns and reports) ("Tax. Returns") required
                pursuant to applicable law to he filed with any Tax Authority (as
                defined
                below), all such Tax Returns are accurate, complete and correct in
                all
                material respects, and each Company has timely paid all Taxes
                due.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Each
      of
      the Company and its subsidiaries has withheld or collected from each payment
      made to each of its employees, the amount of all Taxes (including, but not
      limited to, United States income taxes and other foreign taxes) required to
      be
      withheld or collected therefrom, and has paid the same to the proper Tax
      Authority, For purposes of this Agreement, the following terms have the
      following meanings:  "Tax" (and, with correlative meaning, "Taxes and
      "Taxable") Means any and all taxes including, without limitation, (i) any act
      income, alternative or add-on minimum tax, gross income, gross receipts, sales,
      use, ad valorem, transfer, franchise, profits, value added, net worth, license,
      withholding payroll, employment, excise, severance, stamp, occupation, premium,
      property, environmental or windfall profit tax, custom. duty or other tax,
      governmental fee or other like assessment or charge of any kind whatsoever,
      together with any interest or any penalty, addition to tax or additional amount
      imposed by any United States, local or Foreign governmental authority or
      regulatory body responsible for the imposition of any such tax (domestic or
      foreign) (a "Tax Authority"), (ii) any liability for the payment of any amounts
      of the type described in (I) as a result of being a member of an affiliated
      ,
      consolidated, combined or unitary group for any taxable period or as the result
      of being a transferee or successor thereof and (iii) any liability for the
      payment of any amounts of the type described in (i) or (ii) as a result of
      any
      express or implied obligation to indemnify any other person..

    

    
      	
               

            	
              3.16

            	
              Minute
                Books. The minute books of each of the Company and its subsidiaries
                contain at complete summary of all meetings of directors and stockholders
                since the time of incorporation of such company and reflect all
                transactions referred to in such minutes accurately in all material
                respects.

            

    

    

    
      	
               

            	
              3.17

            	
              Labor
                Agreements and Actions: Employee Compensation. Neither the Company,
                nor any of its subsidiaries is bound by or subject to (and none of
                its
                assets or properties is bound by or subject to any written or oral,
                express or implied, contract., commitment or arrangement with any
                labor
                union, and no labor union has requested nor has sought to represent
                any of
                the employees, representatives or agents of any such
                company.

            

    

    

    
      	
               

            	
              3.18

            	
              Investment
                Company.  The Company is not an "investment company" or a
                company "controlled" by an "investment company," within the meaning
                of the
                investment Company Act: of 1940, as
                amended.

            

    

    

    
      	
              4.

            	
              Representations
                and Warranties of Purchaser. Purchaser hereby represents and warrants
                to the Company that the statements in the following paragraphs of
                this
                Section 4 are all true and complete as or the date
                hereof:

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 

              	
                
                  4.1

                

              	
                
                  Exempt
                    Transaction. Purchaser understands that the offering and sale of the
                    Stock is intended to be exempt from registration under the Act
                    and exempt
                    from registration or qualification under any state
                    law.

                

              

      

      

        
          
            	
                     

                  	
                    
                      4.2

                    

                  	
                    
                      
                        Authorization.
                          Purchaser represents that it has full power and authority
                          to enter into
                          this Agreement. This Agreement has been duly and validly
                          executed and
                          delivered by Purchaser, and upon the execution and delivery
                          by Sellers or
                          this Agreement and the performance by Sellers of their
                          obligations herein,
                          will constitute, a legal, valid and binding obligation
                          of Purchaser
                          enforceable against Purchaser in accordance with its terms,
                          except as such
                          enforcement may be limited by bankruptcy or insolvency
                          laws or other laws
                          affecting enforcement of creditors' rights or by general
                          principles of
                          equity.

                      

                    

                  

          

          

            
              
                	
                         

                      	
                        
                          4.3

                        

                      	
                        
                          
                            Purchase
                              for Own Account. The Stock to he purchased by Purchaser hereunder
                              will
                              be acquired for investment for Purchaser's own account,
                              not as a nominee
                              or agent, and not with a view to the public resale
                              or distribution
                              thereof, and Purchaser has no present intention of
                              selling, granting- any
                              participation in, or otherwise distributing the
                              same.

                          

                        

                      

              

              

                
                  
                    	
                             

                          	
                            
                              4.4

                            

                          	
                            
                              
                                
                                  Investment
                                    Experience- The Purchaser understands that the purchase
                                    of the Stock
                                    involves substantial risk and understands the
                                    risk disclosures set forth
                                    in Attachment C. Purchaser understands that the
                                    securities which are
                                    offered hereby are highly speculative and involve
                                    a high degree of risk
                                    and are only suitable for those persons who,
                                    like the Purchaser, can
                                    afford to bear the full risk of losing their
                                    entire investment. The
                                    Purchaser has carefully considered the numerous
                                    risks that face a new
                                    business venture and especially a new enterprise
                                    which is involved in
                                    highly speculative scientific and biological
                                    laboratory
                                    research.

                                

                              

                            

                          

                

              

            

          

        

      

    

    
      	
              5.

            	
              Conditions
                to the Purchaser's Obligations at the
                Closing

            

    

     

    
      
        
          	
                   

                	
                  
                    5.1

                  

                	
                  
                    
                      
                        
                          Conditions
                            to Each Closing. Subject to the terms hereof, the obligation of the
                            Purchaser to purchase Stock at a Closing is subject to
                            the fulfillment,
                            prior to the Closing to the satisfaction of the Purchaser,
                            of the
                            following conditions, the waiver of which shall not be
                            effective against
                            Purchaser without written consent
                            thereto.

                        

                      

                    

                  

                

           

          
            	
                     

                  	
                    5.1.1

                  	Representations and Warranties True and
                    Correct.
                    The representations and warranties made by the Company in Section
                    3 hereof
                    shall be true and correct and complete as of the date hereof
                    and shall be
                    true and correct and complete as of the date of the Closing with
                    the same
                    force and effect as if they had been made on and as of such
                    date.

          

          
            
               

              
                	
                         

                      	
                        5.1.2

                      	Performance of Obligations. The Company shall have
                        performed end complied with all agreements, obligations and
                        conditions
                        contained in this Agreement that are required to be performed
                        or complied
                        with by it on or before a Closing, or after a
                        Closing.

              

              
                 

                 

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                 

                
                  	
                           

                        	
                          5.1.3

                        	
                          Securities Laws. The offer
                            and sale
                            of the Stock to the Purchaser pursuant to this Agreement
                            shall be exempt
                            from the registration trod or qualification requirements
                            or all applicable
                            securities laws.

                        

                

                 

              

            

          

        

      

    

    
      	
              6.

            	
              Conditions
                to the Company's Obligations at the
                Closings.

            

    

     

    
      
        
          
            	
                     

                  	
                    
                      6.1

                    

                  	
                    
                      
                        
                          
                            
                              The
                                obligations of the Purchaser under this Agreement
                                are subject to the
                                fulfillment at or before each Closing of the following
                                conditions:

                            

                          

                        

                      

                    

                  

             

            
              
                	
                         

                      	
                        6.1.1

                      	
                        Representations
                          and Warranties. The
                          representations and warranties of the Purchaser contained
                          in Section 4
                          hereof shall be true and correct as of such
                          Closing.

                      

              

               

            

            
              
                	
                         

                      	
                        6.1.2

                      	
                        Payment of Purchase
                          Price.
                          Purchaser shall have delivered to the Sellers the applicable
                          purchase
                          price.

                      

              

               

            

          

        

      

    

    
      	
              7.

            	
              Additional
                Agreements and Investor Rights.

            

    

     

    
       

      
        
          
            
              	
                       

                    	
                      
                        7.1

                      

                    	
                      
                        
                          
                            
                              
                                Company
                                  Agreements.

                              

                            

                          

                        

                      

                    

               

              
                
                  	
                           

                        	
                          7.1.1

                        	
                          Registration
                            Rights.

                        

                

                 

                
                  
                    
                      	
                               

                            	
                              7.1.1.1

                            	
                              Filing
                                of Registration Statement. The Company shall file a registration
                                statement with the SEC under the Securities Act on
                                an appropriate form for
                                the registration of the resale of the Stock by the
                                Purchaser or its
                                designees within sixty (60) days or a written request
                                by the Purchaser. In
                                the event additional shares of Stock are issuable
                                pursuant to Section
                                7.1.5, the Company shall file registration statement
                                (or a post-effective
                                amendment to the registration required by this Section
                                to register such
                                additional Stock) with the SEC under the Securities
                                Act For the
                                registration of the Stock within sixty (60) days
                                of a written request by
                                Purchaser. This provision 7.1.1 and its subsections
                                are conditioned on the
                                Purchaser having fully or substantially exercised
                                its option under Section
                                1.4 for the Additional
                                Investment.

                            

                    

                  

                   

                  
                    
                      
                        
                          	
                                   

                                	
                                  7.1.1.2

                                	
                                  Effective
                                    Registration Statement. The Company shall use reasonable efforts
                                    to
                                    cause a. registration statement required pursuant
                                    to this Section
                                    7.1.1 to be declared effective by the SEC. A registration
                                    statement
                                    shall not be deemed to have been effected unless
                                    the registration
                                    statement has been declared effective by the
                                    SEC and has remained
                                    effective in compliance with the provisions of
                                    the Securities Act with
                                    respect to the disposition of all of the Stock
                                    covered by such
                                    registration statement until such time as all
                                    of the Stock has been
                                    disposed or in accordance with the intended methods
                                    of disposition by each
                                    selling stockholder set forth in such registration
                                    statement (unless the
                                    failure to so dispose of such Shares shall be
                                    caused solely by reason of a
                                    failure on the part of the selling
                                    stockholders).

                                

                        

                      

                       

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        
                          
                            
                              
                                	
                                         

                                      	
                                        7.1.1.3

                                      	
                                        Expenses.
                                          All expenses (other than fees of counsel
                                          to the Purchaser) incurred in
                                          connection with registration, filings or
                                          qualifications of Shares pursuant
                                          to this Sec(ion 7.1.1, including (without
                                          limitation) all registration,
                                          filing, and qualification fees, printers'
                                          and accounting fees, fees and
                                          disbursement of counsel for the Company,
                                          shall be borne by the
                                          Company.

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                	
                         

                      	
                        7.1.1.4

                      	
                        Registration
                          Procedures. The Company shall, as expeditiously as
                          possible:

                      

              

            

          

        

      

       

      
        
          	
                   

                	 	
                  7.1.1.4.1

                	
                  use
                    its best efforts to cause, the registration statement filed pursuant
                    to
                    this Section to be declared elective by the SEC within 150 days
                    from the
                    date of the initial filing;

                

        

      

       

    

    
      
        
          	
                   

                	 	
                  7.1.1.4.2

                	
                  with
                    regard to Section 7.1.1.4.1, after the 180th
                    day after
                    the date of the initial filing, and for each 30-calendar day
                    period
                    thereafter in which the registration statement fails to be declared
                    effective:, the Company shall issue to purchaser a number or
                    shares of
                    Stock equal to 2% of Purchaser's Stock covered by such registration
                    statement at that time, up to a maximum of 10%, which Stock shall
                    be
                    included in the registration
                    statement;

                

        

      

       

      
        
          
            	
                     

                  	 	
                    7.1.1.4.3

                  	
                    prepare
                      and file with the SEC such amendments and supplements to such
                      registration
                      statement and the prospectus used in connection therewith as
                      may be
                      necessary to keep such registration statement effective and
                      to comply with
                      the provisions of the Securities Act with respect to the disposition
                      of
                      all the Stock covered by such registration statement until
                      the earlier of
                      the time as all of such Stock have been disposed of in accordance
                      with the
                      intended methods of disposition by the Investors set forth
                      in such
                      registration statement or the date that the Shares are eligible
                      for resale
                      pursuant to the provisions of Rule 144 under the Securities
                      Act;

                  

          

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              	
                       

                    	 	
                      7.1.1.4.4

                    	
                      furnish
                        to the investors' counsel copies of any correspondence between
                        the Company
                        and the SEC with respect to such registration statement or
                        amendments or
                        supplements thereto filed;

                    

            

          

           

          
            
              
                	
                         

                      	 	
                        7.1.1.4.5

                      	
                        use
                          its reasonable best efforts to (A) register or qualify
                          the Shock under
                          such other securities or blue sky laws of such states and
                          jurisdictions
                          where an exemption is not available and as the investors
                          shall reasonably
                          request, (B) keep such registration or qualification in
                          effect. for so
                          long as such registration statement remains in effect,
                          and (C.) take any
                          other action which may be reasonably necessary or advisable
                          to enable the
                          Investors to consummate the disposition in such jurisdictions
                          of the
                          securities to be sold by the Investors, except that the
                          Company shall not
                          for any such purpose be required to qualify generally to
                          do business as a
                          foreign corporation in any jurisdiction wherein it would
                          not but for the
                          requirements of this subdivision (vii) be obligated to
                          be so qualified or
                          to consent to general service of process in any such
                          jurisdiction;

                      

              

            

             

            
              
                
                  
                    	
                             

                          	 	
                            7.1.1.4.6

                          	
                            notify
                              the Purchaser at any time when a prospectus relating
                              thereto, is required
                              to be delivered under the Securities Act, upon discovery
                              that, or upon the
                              happening of any event as a result of which, the prospectus
                              included in
                              such registration statement, as then in effect, includes
                              an untrue
                              statement of a material fact or omits to state any
                              material fact required
                              to be stated therein or necessary to make the statements
                              therein not
                              misleading, in the light of the circumstances under
                              which they were made,
                              and at the request of the Investors promptly prepare
                              and furnish to it a
                              reasonable number of copies of a supplement to or an
                              amendment of such
                              prospectus as may be necessary so that, as thereafter
                              delivered to the
                              purchasers of such securities, vet) prospectus shall
                              not include an untrue
                              statement of a material fact or omit to state a material
                              fact required to
                              he stated therein or necessary to make the statements
                              therein not
                              misleading in light of the circumstances under which
                              they were made;
                              and

                          

                  

                

                 

              

            

          

        

      

    

    
      
        
          
            
              	
                       

                    	 	
                      7.1.1.4.7

                    	
                      otherwise
                        use its reasonable best efforts to comply with all applicable
                        rules and
                        regulations of the SEC.

                    

            

          

           

          
             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

             

            
              
                
                  
                    
                      
                        	
                                 

                              	
                                7.1.1.5

                              	
                                Indemnification
                                  by the Company. With regard to any registration Statement,
                                  the Company
                                  will and hereby does, indemnify and hold harmless
                                  Purchaser and its
                                  directors, officers, partners, agents and affiliates,
                                  against any losses
                                  whatsoever, joint or several, to which Purchaser
                                  or any, such director,
                                  officer, partner, agent, affiliate or controlling
                                  person may become
                                  subject under the Securities Act or otherwise,
                                  including, without
                                  limitation, the Fees and expenses of legal counsel,
                                  insofar as such any
                                  losses arise out of or are based upon any untrue
                                  statement or alleged
                                  untrue statement of any material fact contained
                                  in any registration
                                  statement any preliminary prospectus, final prospectus
                                  or summary
                                  prospectus contained therein, or any amendment
                                  or supplement thereto, or
                                  any omission or alleged emission to state therein
                                  a material fact required
                                  to be stated therein or necessary to make the statements
                                  therein in light
                                  of the circumstances in which they were made not
                                  misleading, and the
                                  Company will reimburse such Purchaser and each
                                  such director, officer,
                                  partner, agent, affiliate and controlling person
                                  for any legal or any
                                  other expenses reasonably incurred by them in connection
                                  with
                                  investigating or defending any such any claims.
                                  Such indemnity shall
                                  remain in full force area effect regardless Of
                                  any investigation made by
                                  or on behalf of such Purchaser or any such director,
                                  officer, partner,
                                  agent, affiliate or controlling person and shall
                                  survive the transfer of
                                  such securities by the Purchaser. The indemnification
                                  and contribution
                                  required by this Section shall be made by periodic
                                  payments of the amount
                                  thereof during the course of the investigation
                                  or defense, as and when
                                  bills are received or losses are
                                  incurred.

                              

                      

                    

                  

                

              

               

              
                
                  
                    	
                             

                          	
                            7.1.2

                          	
                            [Intentionally
                              Omitted]

                          

                  

                   

                  
                    
                      
                        
                          	
                                   

                                	
                                  7.1.3

                                	
                                  
                                    Rule
                                      144. The Company agrees that in the event
                                      Purchaser, or any of its
                                      direct transfers wish to sell their Stock pursuant
                                      to Rule 144 under the
                                      Securities Act, the Company shall use its best
                                      efforts to remove any
                                      restrictive legend from such Stock or otherwise
                                      facilitate such holder's
                                      being able to sell the stock and in no event
                                      shall take more than three
                                      (3) business days to remove a restrictive legend
                                      from stock upon the
                                      presentation of proper representation letters
                                      and a Form 144 (if
                                      necessary). In the event of breach of this
                                      Section 7.1.3, the Company
                                      shall repurchase the Stock, at the holder's
                                      option, at the highest price
                                      during the thirty (30) days following the
                                      breach.

                                  

                                

                        

                         

                         

                        
                          
                            
                            

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          
                            
                              
                                
                                  	
                                           

                                        	
                                          7.1.4

                                        	
                                          
                                            
                                              Access
                                                to Books and Records. For a period of twenty four
                                                (24) month after the
                                                date of this Agreement, the Company
                                                shall grant to Purchaser, upon at
                                                least two (2) business days written
                                                notice, access to all of its corporate
                                                books and records.

                                            

                                          

                                        

                                

                                 

                                
                                  
                                    
                                      
                                        
                                          
                                            	
                                                     

                                                  	
                                                    7.1.5

                                                  	
                                                    
                                                      
                                                        Anti-Dilution.

                                                      

                                                    

                                                  

                                          

                                           

                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	
                                                                 

                                                              	
                                                                
                                                                  7.1.5.1

                                                                

                                                              	
                                                                
                                                                  Subject
                                                                    to Section 7.1.52,
                                                                    in the event
                                                                    that a Closing
                                                                    under Section
                                                                    1.3 shall
                                                                    occur and during
                                                                    the twenty four
                                                                    (24) months after
                                                                    the date of this
                                                                    Agreement, the
                                                                    Company shall
                                                                    sell or issue
                                                                    to any person
                                                                    or entity Stock
                                                                    at a price or
                                                                    valuation of
                                                                    less than $0.085714
                                                                    per share (as
                                                                    may be
                                                                    adjusted for
                                                                    any stock splits
                                                                    or other events)(a
                                                                    "Dilutive Issuance"),
                                                                    then the Company
                                                                    shall as soon
                                                                    as practicable
                                                                    issue to the
                                                                    Purchaser a
                                                                    number of additional
                                                                    shares of Stock
                                                                    yielded by the
                                                                    following
                                                                    formula:

                                                                

                                                              

                                                      

                                                    

                                                  

                                                

                                              

                                               

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    (((B/A)*C)-C)*
      (E-D)/E

    

    Where:

    

    A-
      price
      at which securities are sold

    B-$0.085714

    C-
      the
      number of shares of Stock purchased under this Agreement.

    D-
      the
      number of shares outstanding prior to a Dilutive issuance.

    E-
      the
      number of shares outstanding after a Dilutive Issuance.

     

    
      
        
          
            
              
                
                  
                    	
                             

                          	
                            
                              7.1.5.2

                            

                          	
                            
                              
                                In
                                  the event that a Closing is held for the Additional
                                  Investment and during
                                  the twenty four (24) months after the date of this
                                  Agreement the Company
                                  shall effect a Dilutive Issuance, then the Company
                                  shall, as soon as
                                  practicable issue to the Purchaser a number of
                                  shares of Stock yielded by
                                  the following formula. When and if this Section
                                  becomes effective, Section
                                  7.1.5.1 shall no longer be
                                  effective:

                              

                            

                          

                  

                

              

            

          

           

        

      

    

    ((B/A)*C)-C-D

    

    Where
      A,
      B and C have the definitions contained in Section 7.3.5.1 and where D= the
      number of shares previously issued under Section 7.1.5.1 with respect to a
      Dilutive Issuance.

     

    
      
        
          
            
              
                
                  
                    
                      	
                               

                            	
                              
                                7.1.5.3

                              

                            	
                              
                                
                                  
                                    Excepted
                                      Issuance. Notwithstanding the foregoing provisions
                                      of this Section
                                      7.1.5:

                                  

                                

                              

                            

                    

                  

                

              

            

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                         

                                      	
                                         

                                      	
                                        
                                          
                                            
                                              a)
                                                within sixty (60) days of this Agreement,
                                                the Company may issue to
                                                purchasers of 1,166,650 shares of
                                                Stock who pay at least $0.085714
                                                per
                                                such share, up to 1,166,650 additional
                                                shares of Stock at any price
                                                without the same being subject to
                                                this section 7.1.5, alt the condition
                                                that Kim Thompson shall return to
                                                the Company for cancellation, and
                                                the
                                                Company shall have canceled, 1,166,650
                                                of his shares of
                                                Stock.

                                            

                                          

                                        

                                      

                              

                            

                          

                        

                      

                       

                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                   

                                                	
                                                   

                                                	
                                                  
                                                    
                                                      
                                                        b)
                                                          the Company may issue to
                                                          employees or university'
                                                          research personnel
                                                          shares of Stock as employee
                                                          incentives and bonuses,
                                                          without the same being
                                                          subject to this section
                                                          7.1.5.

                                                      

                                                    

                                                  

                                                

                                        

                                      

                                    

                                  

                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	
               

            	
              7.1.6

            	
              Stock
                Splits. For a period or twenty four (24) months after the execution
                of
                this Agreement, the Company shall not, without the written consent
                of the
                Purchaser, affect any stock split. This provision is conditioned
                on the
                Purchaser having fully or substantially exercised its option under
                provision 1.4 above and having otherwise satisfactorily meet its
                obligations under this agreement.

            

    

    

    
      	
               

            	
              7.1.7

            	
              Provision
                of Shell Company. The Company hereby agrees that within six (6) months
                of the date of' this Agreement it shall purchase from Purchaser a
                majority
                interest in a publicly held "shell" company which it shall use for
                a
                reverse merger transaction for the Company. Worth will consult with
                and
                coordinate with Company concerning the above described purchase of
                a
                publicly held corporate entity. The Company shall have the right
                to
                approve any such purchase and the resulting, reverse merger. This
                provision is subject to the Company's reasonable due diligence on
                the
                proposed shell and upon the parties good faith negotiation ever the
                purchase price of each shell. This provision is conditioned on the
                Purchaser having fully or substantially exercised its option tinder
                provision 1.4 above.

            

    

    

    8.           General
      Provisions.

    

    Successors
      and Assigns. The terms and conditions of this Agreement shall inure to the
      benefit of and be binding upon the respective successors and assigns of the
      parties.

    

    
      	
               

            	
              8.1

            	
              Governing
                Law: Jurisdiction. Any dispute, disagreement, conflict of
                interpretation or claim arising out of or relating to this Agreement,
                or
                its enforcement, shall be governed by the laws of the State of Florida.
                Sellers and Purchaser hereby irrevocably and unconditionally submit,
                for
                themselves and their property, to the nonexclusive
                Jurisdiction  of the State courts of the State of Florida and of
                the United States District Court of the Southern District of Florida,
                and
                any appellate court
                from any thereof, in any action or proceeding arising out of or relating
                to this Agreement, or for recognition or enforcement of any judgment,
                and
                each of the parties hereto hereby irrevocably and unconditionally
                agrees
                that all claims in respect of any Such action or proceeding between
                the
                two of them may be heard and determined in such Florida State or,
                to the
                extent permitted by law, in such Federal
                court.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Each
      of
      the parties hereto, agrees that a final judgment in any such action or
      proceeding shall be conclusive and may be enforced  in other
      jurisdictions by on the judgment or in any other manner provided by law. Each
      party hereby irrevocably and unconditionally waives, to the fullest extent
      it
      may legally and effectively do so, any objection which it may new or hereafter
      have to the laying of venue of any suit, action or proceeding arising, out
      of or
      relating to this Agreement in any court referred above. Each of the parties
      hereto hereby irrevocably waives, to the fullest extent permitted by law, the
      defense of an inconvenient forum to the maintenance of such action or proceeding
      in any such court. Each party to this Agreement irrevocably consents to service
      of process in the manner provided for notices below. Nothing in this Agreement
      will affect the right of any party to this agreement to serve process in any
      other manner permitted by law. EACH  PARTY HERETO HEREBY WAIVES, TO
      THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
      TRIAL
      BY JURY IN ANY LEGAL. PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
      RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
      BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
      THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
      EXPRESSLY OROTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
      LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
      IT
      AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
      BY,
      AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
      SECTION

     

    
      
        	
                 

              	
                8.2

              	
                
                  Counterparts.
                    This Agreement may be executed in two or more counterparts, with
                    facsimile
                    signatures, each of which shall be deemed an original, but all
                    of which
                    together shall constitute one and the same agreement. A telefaxed
                    copy  of this Agreement shall be deemed an
                    original.

                

              

      

      
         

        
          
            	
                     

                  	
                    8.3

                  	
                    
                      
                        Headings.
                          The headings and captions used in this Agreement are used
                          for convenience
                          only and are not to be considered in construing or interpreting
                          this
                          Agreement. All references in this Agreement to sections,
                          paragraphs,
                          exhibits and schedules shall, unless otherwise provided,
                          refer to sections
                          and paragraphs Hereof and exhibits and schedules attached
                          hereto, all of
                          which exhibits and schedules are incorporated herein by
                          this
                          reference.

                      

                    

                  

          

          
             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              
                	
                         

                      	
                        8.4

                      	
                        
                          
                            
                              Cost,
                                Expenses. Each party hereto shall bear its own costs in
                                connection  with the preparation, execution and delivery of this
                                Agreement.

                            

                          

                        

                      

              

              
                 

                
                  
                    	
                             

                          	
                            8.5

                          	
                            
                              
                                
                                  
                                    Amendments
                                      and Waivers. Any term of this Agreement may be amended
                                      and the
                                      observance  of any term of this agreement may he waived
                                      (either
                                      generally or in a particular instance and either
                                      retroactively  or prospectively), only with the written, consent
                                      of the Parties. No delay or omission to exercise
                                      any right, power, or
                                      remedy accruing to Purchaser, upon any breach,
                                      default or noncompliance of
                                      the Company under this Agreement shall impair
                                      any such right, power, or
                                      remedy, nor shall it be construed to be a waiver
                                      of any such breach,
                                      default or noncompliance, or any acquiescence
                                      therein, or of any similar
                                      breach, default or noncompliance thereafter
                                      occurring. All remedies,
                                      either under this Agreement, by law, or otherwise
                                      afforded to Purchaser,
                                      shall be cumulative and not
                                      alternative.

                                  

                                

                              

                            

                          

                  

                  
                     

                    
                      
                        	
                                 

                              	
                                8.6

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

                                        

                                      

                                    

                                  

                                

                              

                      

                      
                         

                        
                          
                            	
                                     

                                  	
                                    8.7

                                  	
                                    
                                      
                                        
                                          
                                            
                                              
                                                Entire
                                                  Agreement. This Agreement, together with
                                                  all attachments and schedules
                                                  hereto, constitutes the entire
                                                  agreement and understanding of
                                                  the parties
                                                  with respect to the subject matter
                                                  hereof and supersedes any and all
                                                  prior
                                                  negotiations, correspondence, agreements,
                                                  understandings duties or
                                                  obligations between the parties
                                                  with respect to the subject matter
                                                  hereof.
                                                  There are no oral agreements representations
                                                  or warranties between the
                                                  parties, neither is any party relying
                                                  upon any prior or contemporaneous
                                                  oral
                                                  representations.

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                          

                          

                             

                            
                              
                                	
                                         

                                      	
                                        8.8

                                      	
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      Further
                                                        Assurances. From and after the date
                                                        of this Agreement, upon the
                                                        request of a Party, the other
                                                        Parties shall execute and
                                                        deliver such
                                                        instruments, documents or
                                                        other writings as may he
                                                        reasonably necessary or
                                                        desirable to confirm and
                                                        carry out and to effectuate
                                                        fully the intent and
                                                        purposes of this
                                                        Agreement.

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                              

                               

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

    WORTH
      EQUITY FUND, L.P.

    By:
      SPIDER INVESTMENTS, LLC, General Partner

    

    

    By:  /s/  Edward
      Defeudis

    Edward
      Defeudis

    

    KRAIG
      BlOCRAFT LABORATORIES, INC.

    

    

    By:  /s/  Kim
      Thompson

    Kim
      Thompson

    CEO

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      MUTUAL
        RELEASE

       

      TO
        ALL TO
        WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT WORTH EQUITY FUND
        LP
        (Worth) and KRAIG BIOCRAFT LABORATORIES, INC., (Kraig),  (collectively
        Worth and Kraig are referred to herein as PARTIES or RELEASORS) for themselves
        and their respective successors and assigns, for good and valuable
        consideration, the receipt and adequacy of which is hereby acknowledged,
        hereby
        releases and discharges each other and their respective heirs, executors,
        administrators, agents, attorneys, successors and assigns, from all actions,
        causes of action, suits, debts, dues, sums of money, accounts, reckonings,
        covenants, contracts, controversies, agreements, promises, or obligations
        stemming from that certain stock purchase agreement entered into between
        the
        PARTIES  and which is dated December 29, 2006.

       

      Pursuant
        to that agreement, Worth purchased 175,000 shares of the common stock of
        Kraig
        Biocraft Laboratories.  Kraig hereby releases Worth from any
        obligation to purchase additional securities pursuant to said agreement and
        releases Worth from all other obligations pursuant to said agreement except
        the
        agreement of Worth to comply with the relevant securities regulations in
        regard
        to said 175,000 shares.  Worth hereby releases Kraig from any
        obligation to sell any securities to Worth over and above the 175,000 shares
        of
        stock that have been transferred to Worth as of this date, and releases Kraig
        from all other obligations pursuant to said agreement including, without
        limitation, the anti-dilution provisions of said agreement.  It is the
        intention of the PARTIES  that as of the execution of this mutual
        release, neither party will have any continuing contractual obligation to
        the
        other.

       

      The
        PARTIES each wave any variances, trespasses, damages, judgments, extents,
        executions, claims and demands, damages and obligations whatsoever, whether
        known or unknown, in law, admiralty or equity against the other PARTY, its
        successors and assigns ever had, now have, or hereafter can, shall or may
        have
        for, upon, or by reason of any matter, cause or thing whatsoever from the
        beginning of the world to the day of the date of this RELEASE.

       

      Both
        Kraig. and Worth represent and warrant that they have not heretofore assigned
        to
        any person or entity any claim against the other party being released
        hereunder.

       

      Both
        Kraig and Worth covenant not to sue one another or bring any action or
        proceeding (or participate in or join in or otherwise act in concert with
        any
        action) against the other party with respect to the matters released
        hereunder.

       

      It
        is
        RELEASORS’ intention that the execution of this Release will forever bar claims
        against RELEASORS, to the extent provided herein.

       

      This
        RELEASE shall be governed by the laws of the State of Michigan.  This
        RELEASE shall inure to the benefit of RELEASORS and RELEASORS successors
        and
        assigns.

       

      This
        RELEASE may not be changed orally.

       

      IN
        WITNESS WHEREOF, RELEASORS have executed this RELEASE by their duly authorized
        officer, as of May 23, 2007.

       

       

      WORTH
        EQUITY FUND LP

       

      By:                                                           

      

      

      KRAIG
        BIOCRAFT LABORATORIES, INC.

      

      

      By:

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