Document:

f8k062411ex10ii_feelgolf.htm

 

Exhibit 10.2

 

 

MODIFICATION AND SETTLEMENT AGREEMENT

This Settlement and Modification Agreement is made and entered into effective the 24th day of June, 2011, by and among  I GOTCHA HOLDINGS, LLC (“I GOTCHA” or "IGH"); FEEL GOLF COMPANY, INC. (“FEEL GOLF: or “FGCI”), and PROLINE SPORTS, INC., (“PROLINE SPORTS” or “PLS”).

 

W I T N E S S E T H:

 

WHEREAS, PROLINE SPORTS, INC. and FEEL GOLF COMPANY, INC. entered into an Asset Purchase Agreement on or about December 4, 2010, whereby FEEL GOLF agreed to purchase all of the assets of PROLINE SPORTS, and on the same date and as a condition of the Asset Purchase Agreement, I GOTCHA HOLDINGS, LLC and FEEL GOLF COMPANY, INC. entered into a Consulting Agreement, (hereinafter referred to as the “IGH Consulting Agreement”), and;

 

WHEREAS, the IGH Consulting Agreement is a material part of the Asset Purchase Agreement and any breach of the IGH Consulting Agreement shall be treated as a breach of the Asset Purchase Agreement and the IGH Consulting Agreement.  (A copy of the Asset Purchase Agreement and IGH Consulting Agreement are attached hereto as Exhibit “A”), and;

 

WHEREAS, I GOTCHA HOLDINGS, LLC, filed suit against FEEL GOLF COMPANY, INC. in the Circuit Court of the 18th Judicial Circuit in and for Seminole County, Case Number: 11-CA-2152-15-L, for monies past due and for an injunction against selling or disposing of IGH inventory in the possession of FGCI, and;

 

WHEREAS, the Parties are desirous of resolving the disputes that may exist between the parties, and;

 

  

  

  

 

WHEREAS, in an effort to resolve the disputes between the Parties, IGH has filed a Voluntary Dismissal of the above referenced lawsuit in order to give the Parties time to resolve the dispute and to reduce any agreement to writing;

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein, the parties agree as follows:

 

1.           At the time the IGH Consulting Agreement was entered into on December 4, 2010, the Plaintiff, IGH owned inventory related to golf products believed to be valued between $300,000 and $400,000 (the “IGH Inventory”).  See Exhibit “A” at ¶2.04.  Said inventory was and partially still is located at 107 Commerce Way, Sanford, Florida, a building leased by the Defendant from a third party.

 

2.           FGCI agreed to purchase said inventory on an as needed basis to fulfill orders.  See Exhibit “A” at ¶2.04.  It was further agreed that “FGCI shall treat IGH as a vendor for the purpose of purchase of the salable inventory” and that IGH was to be paid “net 30 days.”  Id.

 

3.           On March 8, 2010 IGH and FGCI entered into a subsequent agreement providing for payment “no later than 65 days from the date of shipment of respective inventory.”  A copy thereof is attached hereto and incorporated herein as Exhibit “B”.

 

4.           From February 14, 2011 thru June 10, 2011, FGCI has sold inventory owned by IGH for which FGCI owes IGH $128,415.31.  Of that amount $57,018.38 is over 65 days past due.  FGCI is entitled to a credit of $8,826.34 as a result of deposits made to IGH’s account.

 

5.           It is agreed that FGCI owes IGH a total of $119,588.97 for inventory sold as of June 10, 2011.

 

  

  

  

 

6.           It is further agreed that inventory owned by IGH valued at $185,252.39 remains in the possession of FGCI at 107 Commerce Way, Sanford, Florida as of June 10, 2011.

 

7.           It is further agreed that FGCI is in default of the provisions of the IGH Consulting Agreement providing for the escrow of FGCI stock with the law firm of Anslow & Jaclin, LLP and that FGCI is in default relative to payment of consulting fees pursuant to the IGH Consulting Agreement.

 

8.           It is agreed that FGCI shall pay IGH $3,500 towards cost of litigation identified in the above Whereas clauses.  Said amount is to be added to the $119,588.97 past due amount and paid pursuant to paragraph 9(f) of this agreement.

 

9.           In consideration of IGH having filed a Voluntary Dismissal without Prejudice of the above referenced lawsuit, and in consideration of the promises and mutual covenants and agreements contained herein, the Parties further agree as follows:

 

a.           That upon failure to comply with any provision of this agreement, IGH and/or PSI is entitled to seek an injunction with the legally prescribed notice and without bond prohibiting FGCI from selling or otherwise disposing of any further IGH inventory in its possession.  FFCI specifically waives all requirements as to notices and arbitration as contained in the Agreement as it relates to the enforcement of this settlement agreement.  The Parties agree that any Party in default of this agreement is entitled to three (3) business days notice of default.

 

c.           That upon failure to make payments as set for the herein, IGH is entitled to commence an action seeking the entry of a Judgment of $119,588.97 plus $3,500.00 agreed to attorney fees less any sums paid toward that arrearage and attorney fees after the date of this agreement.

 

  

  

  

 

d.           That within ten (10) days of the execution of the Escrow Agreement annexed hereto as Exhibit “C,” FGCI will see to it that the law firm of Anslow & Jaclin, LLP will place in escrow 833,000 shares of FGCI’s Series A Preferred Stock pursuant to  paragraphs 2.00(b) and 6(e) of the IGH Consulting Agreement. FGCI will provide proof of said escrow to IGH.

 

e.           The parties agree that Albert J. Light, or his agents, shall have access to necessary records relating to the sale of IGH’s inventory sold and receipts for same. Albert J. Light will also have current access to accounting records, including general ledgers and President’s weekly reports.

 

f.           That from the date of this agreement until such time as the sum of $123,088.97 (representing $119,588.97 inventory sold as of June 10, 2011, plus $3,500.00 contribution toward attorney fees)  FGCI will pay to IGH 30% of all sales income received by FGCI.  Said payments are to be made immediately upon receipt of the income by FGCI by depositing to an account designated by IGH and notifying IGH by email as to the amount of each deposit on the day of the deposit.  So that there is no misunderstanding, the 30% is from all sales, and not limited to the sale of IGH inventory.  Additionally, once the sum of $123,088.97 is paid by FGCI to IGH, FGCI will then pay IGH 25% of all sales income received by FGCI until the sum of $185,252.39 (representing value of inventory on hand as of June 10, 2010) is paid in full. Pursuant to the March 8, 2011 amendment, five (5) percent interest per annum will be paid on the unpaid balance.

 

g.           That FGCI is in default of paragraph 2.01 (a) of the IGH Consulting Agreement and that as of the date of this agreement is indebted to IGH in the sum of $25,878.00.  Said default to be corrected by FGCI with the filing of a Registration Statement on Form S-8 (the “S-8) with the Securities and Exchange Commission within twenty (20) days of this agreement. FGCI will issue the required stock within ten (10) days from the effective date of the S-8.

 

  

  

  

 

h.           That FGCI is in default of paragraph 2.01 (b) of the IGH Consulting Agreement and that as of the date of this agreement is indebted to IGH in the sum of $14,393.31.  Said default is to be corrected within ten (10) days of this agreement by the payment in cash.

 

i.           That the parties hereto re-affirm the provisions of the IGH Consulting Agreement dated December 4, 2010, and further agree that Albert J. Light shall have access to all of the facilities of Feel Golf, to the employees of Feel Golf and to all suppliers, contractors and consultants of Feel Golf for the purpose of performance of the duties set forth in the IGH Consulting Agreement.

 

IN WITNESS WHEREOF, the Parties hereto have affixed or caused to be affixed, their respective signatures effective on the day and year first written above.

 

FEEL GOLF COMPANY, INC.

 

/s/ Lee Miller                                                   

By: Lee Miller, President

Date:     June 24, 2011                                           

PROLINE SPORTS, INC.

 

/s/ Albert J. Light                                           

By:        Albert J. Light, President

Date:     June 24, 2011                                           

 

I GOTCHA HOLDINGS, LLC

 

/s/ Albert J. Light                                                                       

By:        Albert J. Light, President

 

Date:     June 24, 2011f8k062811ex10i_kraigbio.htm

Exhibit 10.1

 

CALM SEAS CAPITAL, LLC

377 S. NEVADA ST.

CARSON CITY, NEVADA 89703

 

June 28, 2011

 

Kim Thompson, CEO

 

Kraig Biocraft Laboratories, Inc.

120 N. Washington Square, Suite 805 

Lansing, MI 48933

 

In Re: Proposed Equity Line Transaction - 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 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, 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 Letter MOU.

 

Yours truly,

CALM SEAS CAPITAL, LLC

 

By:                                                      

 

 

AGREEMENT and ACCEPTANCE

 

The foregoing Letter MOU together with the attached and incorporated Term Sheet is approved as of this 28th day of June, 2011:

 

KRAIG BIOCRAFT LABORATORIES, INC.

 

By:                                                                           

Kim Thompson, CEO

 

  

  

  

 

TERM SHEET

(June 28, 2011)

 

	 Issuer:	Kraig Biocraft Laboratories, Inc. (KBLB)
	 Offering:	Up to $1,500,000 in shares of Common Stock.
	 Investor:	Calm Seas Capital, LLC.
	 	 

 

 

 

 

	Execution Date	The Execution Date is the date on which the acceptance of this Term Sheet for the Equity Line of Credit is signed by both the Company and the Investor.
	 	 
	Structure	Equity Line of Credit, with monthly puts (one per month) against the Commitment Amount (as defined below), during the “Term”.
	 	 
	Use of Proceeds	Working capital, as agreed by the parties.
	 	 
	Term	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 (as defined below) (the “Term”).
	 	 
	Commitment Amount 	The Investor shall commit to purchase up to $1,500,000 of the Company’s Common Stock over the course of no more than 24 months (the “Commitment Period”) after the date a registration statement for the resale of the Common Stock has been declared effective (the “Effective Date”) by the U.S. Securities and Exchange Commission (“SEC”)
	 	 
	First Put 	The Company may issue its first “Put Notice” during the first 5 business days of the month succeeding the month in which the Effective Date occurs.
	 	 
	Calculation of Put Amount	Prior to the end of each calendar month, the Company shall determine its working capital needs and, subject to the Put Ceiling and Put Floor, by the fifth business day of the following month shall deliver to Investor a “Put Notice” for the necessary amount; the date of delivery of the Put Notice shall be the “Put Date”
	 	 
	Put Ceiling	The maximum amount which the Company shall be entitled to request by each Put shall be the lesser of (a) $100,000 or (b) 200% of the average daily volume (“ADV”) multiplied by the average of the daily closing prices for the ten (10) trading days immediately preceding the Put Date. The ADV shall be computed using the 10 trading days prior to the Put Date.
	 	 

 

  

  

  

 

	Put Floor	The Company shall automatically withdraw that portion of the Put Notice amount if the Market Price with respect to that put does not meet the Minimum Acceptable Price, which is defined as 75% of the average closing “bid” price for the Common Stock for the 10 trading days prior to the Put Date.
	 	 
	Put by Mutual Agreement 	Notwithstanding the ceiling for each Put, as described above, at any time either as a part of a monthly Put or as an additional Put(s) during a month, the Company may request permission to request funds in excess of the Put Ceiling for such month and may deliver to Investor a Put or Puts in excess of the Put Ceiling, which Put or Puts Investor may fund, in its/their sole discretion, subject to the terms and conditions herein applicable to the monthly Puts.
	 	 
	Pricing Period 	The five (5) consecutive trading days immediately after the Put Date.
	 	 
	Market Price 	The lowest closing “bid” price of the Common Stock during the Pricing Period.
	 	 
	Purchase Price 	The purchase price shall be eighty percent (80%) of the Market Price.
	 	 
	Put Closing Date	Seven (7) business days after the Put Date; the Investor shall make the investment required by the Put Notice, subject to the Put Ceiling. Payments of the Puts shall be made by wire transfer.
	 	 
	Registration Statement 	The Investor will work with the Company to have a registration statement covering the Common Stock (or a portion thereof if there is a Rule 415 cutback - see below) prepared and filed by the Company’s corporate counsel, at the Company’s expense, within 75 days after the Execution Date. Such Registration Statement shall be prosecuted with all due speed to be declared effective within 120 days after the Effective Date.
	 	 
	Expenses 	The Investor agrees to pay all expenses related to the preparation of the final documents to be signed on the Execution Date and the Company shall pay all expenses related to the filing and prosecution of the Registration Statement. The Company will select counsel of its choice to prepare the Registration Statement.
	 	 
	Commitment Fee 	Waived.
	 	 
	Rule 415 Cutback	In the event that the SEC objects to the number of shares proposed to be registered, the Company shall use its best efforts to register the maximum number of shares permissible by the SEC to retain the status of the offering as a secondary offering under SEC Rule 415.

 

  

  

  

 

	 	 
	Equity Issuance Restriction	The Company agrees not to issue any equity or equity equivalents (exercisable or convertible into equity securities), including those on Form S-8, (other than those hereunder) in an amount which would exceed 5% of the Company’s issued and outstanding shares without the prior written consent of the Investor. This Equity Issuance Restriction will remain in effect until the earlier of (a) thirty (30) days after the issuance to Investor of all registered Common Stock, (b) thirteen (13) months after the effective date of the Registration Statement, or (c) the termination of this Equity Line of Credit.
	 	 
	Right of First Offer 	If the Company has a bona fide proposal to sell, or offers to sell, any New Security (as hereinafter defined) to any third party, the Company shall first offer such New Securities to the Investor (the “Offer Notice”). The Offer Notice shall be in writing and set forth all of the material terms of the offer of New Securities. The Investor shall have 10 business days from the date on which the Company delivers written Offer Notice to elect, in its sole discretion, to purchase some or all of the New Securities. The Company shall not offer or sell any New Securities until after such 10 business day period has expired. For the purposes of this letter agreement, “New Security” shall mean any equity securities of the Company, whether or not such equity securities is currently authorized, as well as any rights, options, or warrants to purchase such equity securities, and any securities of any type whatsoever that is, or may become, convertible or exchangeable into or exercisable for such equity securities.
	 	 
	Covenants	1. During the Term, the Company shall maintain the effectiveness of the Registration Statement.
	 	2. During the Term, the Company shall maintain its status as a FULLY REPORTING SEC Public Company trading on the OTCBB and or the OTCQB and or AMEX and or NASDAQ.
	 	3. During the Term, the Company shall timely file all required SEC reports.
	 	4. The Company shall maintain a contractual relationship for the performance of financial public relations services for a period of 36 months from the effective date, with the extent of the costs of such services to be proportional to the size and growth of the Company.
	 	 
	Exclusivity	From the date of the execution of this Term Sheet until the Effective Date, the Company shall not pursue any other transaction of the nature contemplated herein with any other person unless and until good faith negotiations with the Investor have been terminated.

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