Exhibit 10.4
CALM SEAS
CAPITAL, LLC
377 S. NEVADA
ST.
CARSON CITY,
NEVADA 89703
September 14, 2009
Kim Thompson, CEO
Kraig Biocraft Laboratories,
Inc.
120 N. Washington Square, Suite
805
Lansing, MI 48933
In Re: Proposed Equity Line
Transaction - Amended Term Sheet
Dear Mr. Thompson:
This Letter is to serve as a binding Memorandum
of Understanding for an Equity Line transaction by Calm Seas
Capital, LLC (“Investor”) and Kraig Biocraft
Laboratories, Inc. (the “Company”) in accordance with
the terms and conditions on the attached Amended Term Sheet, which
is hereby incorporated herein by reference. You will note that the
Term Sheet contains certain covenants by, and limitations upon,
you, as the Company’s primary officer. If this transaction is
acceptable to the Company, on the one hand, and to you,
individually, on the other hand, please so indicate by signing and
dating where indicated below and returning this Letter MOU to
us. In addition, please initial each of the pages of the
attached Term Sheet and return it to us with the accepted Amended
Letter MOU.
Yours truly,
CALM SEAS CAPITAL,
LLC
By: /s/ Michael
McCarthy
AGREEMENT and
ACCEPTANCE
The foregoing Amended Letter MOU
together with the attached and incorporated Amended Term Sheet is
approved as of this 14th day of September,
2009:
KRAIG BIOCRAFT LABORATORIES,
INC.
By:
/s/Kim
Thompson
Kim
Thompson, CEO
KIM THOMPSON
(individually)
/s/Kim
Thompson
KRAIG BIOCRAFT LABORATORIES,
INC.
AMENDED TERM SHEET
(September 14, 2009)
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Kraig Biocraft Laboratories, Inc.
(OTC BB: KBLB)
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Up to $1,000,000 in shares of Common
Stock
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Calm Seas Capital, LLC, as lead
investor, and associated entities
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$120,000, of which $100,000 shall be paid within
five (5) days of the acceptance of this Term Sheet
(“Commitment Date”) and the balance shall be paid prior
to the filing of Form S-1 with the Securities and Exchange
Commission, for the purchase of Units consisting of Convertible
Debentures and cashless Common Stock Purchase Warrants (see below).
Payments of the bridge investment shall be by wire
transfer
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Convertible
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The debentures shall be in the face amount of
$10,000 each, mature on December 31, 2010, bear interest at the
rate of 5% simple interest per annum, payable at maturity or
convertible with the principal, and the principal and interest
shall be convertible at the option of the holder at a fixed price
of $.018 per share; the debentures cannot be repaid from the
proceeds of the Equity Line
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Each debenture shall have a warrant attached
exercisable for the purchase of 500,000 shares; the warrants shall
expire on December 31, 2011, have a cashless exercise provision,
and be exercisable at a fixed price of $.02
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The Execution Date is the date on which the
final documents for the Equity Line of Credit are signed by both
the Company and the Investor(s)
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Equity Line of Credit, with monthly
puts (1 per month) against the Commitment Amount, during the
“Term”
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Working capital, as more specifically described
in the schedule and on the timeline to be attached to the final
documents as the “Schedule of Use of
Proceeds”
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The Term shall be that period commencing with
the Effective Date and ending on the earlier of (a) the drawing
down of the entire Commitment Amount or (b) that date 24 months
after the Effective Date
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Commitment
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The Investor(s) shall commit to purchase up to
$1,000,000 of the Company’s Common Stock over the course of
no m
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