Document:

EX-10.3

 Exhibit 10.3 
  

 
 2022 INDUCEMENT EQUITY INCENTIVE PLAN 

FIRST_NAME LAST_NAME 
 ADDRESS_LINE_1 

ADDRESS_LINE_2 
 ADDRESS_LINE_3 

CITY, STATE ZIPCODE 
 Dear FIRST_NAME
LAST_NAME, 
 NOTICE OF RSU GRANT 

Congratulations. We, Intevac, Inc. (the “Company”), pursuant to our 2022 Inducement Equity Incentive Plan (the
“Plan”), hereby grants you an award (the “award”) of restricted stock units (the “RSUs”) to receive the number of Shares as set forth below. Unless otherwise stated, all capitalized terms within this Restricted Stock
Unit Agreement (the “Agreement”), which includes this Notice of RSU Grant (the “Notice of Grant”) and the Terms and Conditions of Restricted Stock Unit Grant, shall be interpreted as defined in the Plan. The following documents
are linked to this notification and are also available on the Intevac Portal under the Stock Plans page: 
  

	•	 Terms and Conditions of Restricted Stock Unit Grant 

 

	•	 2022 Inducement Equity Incentive Plan 

 

	•	 2022 Inducement Equity Incentive Plan Prospectus 

By accepting this Notice of Grant, you are agreeing to the electronic availability of the documents disclosed above. If you need a hard copy of
any of the documents, please contact Janice Smith or myself, and one will be provided to you at no charge. 
  

					
	 Name of Award Grantee:
	 		 	  

	 Grantee Employee ID Number:
	 	         
	 	  

	 Award Number:
	 		 	  

	 Date of Award Grant:
	 		 	  

	 Vesting Commencement Date:
	 		 	  

	 Total Number of Shares:
	 		 	  

 Vesting Schedule: The award will vest in the following increments on the dates shown: 

 

					
	 Vest Date
	  	        	  	 Vesting shares

	 VEST_DATE_PERIOD1
	  		  	SHARES_PERIOD1
	 VEST_DATE_PERIOD2
	  		  	SHARES_PERIOD2
	 VEST_DATE_PERIOD3
	  		  	SHARES_PERIOD3
	 VEST_DATE_PERIOD4%
	  		  	SHARES_PERIOD4

 In the event you cease to be a Service Provider for any or no reason before you vest in the RSUs, the RSUs and
your right to acquire any Shares hereunder will immediately terminate. 
 You acknowledge and agree that by accepting this Notice of Grant,
it will act as your electronic signature to this Agreement and indicate your agreement and understanding that this award of RSUs is subject to all of the terms and conditions contained in the Plan and this Agreement. 

You should retain a copy of your Agreement. You may obtain a paper copy at any time for no charge by contacting Janice Smith or Jeff Calvello.
If you would prefer not to electronically sign this Agreement, you may accept this Agreement by signing a paper copy of the Agreement and delivering it to Janice Smith or Jeff Calvello. 

If you have any questions, please contact me at extension 2570 or stop by my office. 

 

	
	 /s/ JEFFREY CALVELLO

	 Jeffrey Calvello, Corporate Controller

 TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT 

1. Grant. The Company hereby grants to the individual (the “Participant”) named in the Notice
of RSU Grant (the “Notice of Grant”) under the Intevac, Inc. 2022 Inducement Equity Incentive Plan (the “Plan”) an Award of Restricted Stock Units, subject to all of the terms and conditions in this
Agreement and the Plan, which is incorporated herein by reference. Subject to Section 19 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and
conditions of the Plan will prevail. Unless otherwise defined herein, the terms defined in the Plan will have the same defined meanings in this Restricted Stock Unit Agreement (the “Agreement” or “Award
Agreement”), which includes the Notice of Grant and Terms and Conditions of Restricted Stock Unit Grant. 
 2.
Company’s Obligation to Pay. Each Restricted Stock Unit represents the right to receive a Share on the date it vests. Unless and until the Restricted Stock Units will have vested in the manner set forth in Section 3 or
4, Participant will have no right to payment of any such Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company, payable (if at all)
only from the general assets of the Company. Any Restricted Stock Units that vest in accordance with Sections 3 or 4 will be paid to Participant (or in the event of Participant’s death, to his or her properly designated beneficiary or estate)
in whole Shares, subject to Participant satisfying any applicable tax withholding obligations as set forth in Section 7. Subject to the provisions of Section 4, such vested Restricted Stock Units will be paid in whole Shares as soon as
practicable after vesting, but in each such case within sixty (60) days following the vesting date. In no event will Participant be permitted, directly or indirectly, to specify the taxable year of the payment of any Restricted Stock Units
payable under this Agreement. No fractional Shares will be issued under this Agreement. 
 3. Vesting Schedule. Except
as provided in Section 4, and subject to any acceleration provisions contained in the Plan or set forth in this Agreement, and subject to Section 5, the Restricted Stock Units awarded by this Agreement will vest in accordance with the
vesting provisions set forth in the Notice of Grant. Restricted Stock Units scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Agreement,
unless Participant will have been continuously a Service Provider from the Date of Award Grant until the date such vesting occurs. In the event Participant ceases to be a Service Provider for any or no reason before Participant vests in the
Restricted Stock Units, the Restricted Stock Units and Participant’s right to acquire any Shares hereunder will immediately terminate. 

4. Administrator Discretion; Section 409A. 

(a) Administrator Discretion; Acceleration.  

(i) The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of
the unvested Restricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Administrator. The payment of Shares vesting
pursuant to this Section 4 shall in all cases be paid at a time or in a manner that is exempt from or complies with Section 409A. 

(ii) Notwithstanding anything in the Plan or this Agreement to the contrary, if the vesting of the balance, or some lesser
portion of the balance, of the Restricted Stock Units is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of
Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the meaning of Section 409A at the time of such separation from service and (y) the
payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s separation from service, then
the payment of such accelerated Restricted Stock Units will not be made until the date six (6) months and one (1) day following the date of Participant’s separation from service, unless the Participant dies following his or her
termination as a Service Provider, in which case, the Restricted Stock Units will be paid in Shares to the Participant’s estate as soon as practicable following his or her death. It is the intent of this Agreement that it and all payments and
benefits hereunder be exempt from or comply with the requirements of Section 409A so that none of the Restricted Stock Units provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation
Section 1.409A-2(b)(2). For purposes of this Agreement, “Section 409A” means Section 409A of the Code, and any final Treasury Regulations and
Internal Revenue Service guidance thereunder, as each may be amended from time to time. 

 (b) Section 409A. It is the intent of this Award
Agreement that it and all issuances and benefits to U.S. taxpayers hereunder be exempt or excepted from the requirements of Section 409A pursuant to the “short-term deferral” exception under Section 409A, or otherwise be exempted
or excepted from, or comply with, Section 409A, so that none of this Award Agreement, the Restricted Stock Units provided under this Award Agreement, or Shares issuable thereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be so exempt or excepted, or to so comply. Each issuance upon settlement of the Award under this Award Agreement is intended to constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b)(2). In no event will the Company or any Service Recipient (as defined below) have any obligation or liability to reimburse, indemnify, or hold harmless
Participant or any other person for any taxes, interest or penalties that may be imposed on Participant (or any other person), or other costs incurred by Participant (or any other person) as a result of Section 409A. 

5. Forfeiture upon Termination of Status as a Service Provider. Notwithstanding any contrary provision of this
Agreement, the balance of the Restricted Stock Units that have not vested as of the time of Participant’s termination as a Service Provider for any or no reason and Participant’s right to acquire any Shares hereunder will immediately
terminate. 
 6. Death of Participant. Any distribution or delivery to be made to Participant under this Agreement
will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with
(a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer. 

7. Withholding of Taxes. Participant acknowledges that, regardless of any action taken by the Company or, if different,
Participant’s employer (the “Employer”) or any Parent or Subsidiary to which Participant is providing services (together, the “Service Recipients”), the ultimate liability for any tax and/or
social insurance liability obligations and requirements in connection with the Restricted Stock Units, including, without limitation, (i) all federal, state, and local taxes (including Participant’s Federal Insurance Contributions Act
(FICA) obligations) that are required to be withheld by any Service Recipient or other payment of tax-related items related to Participant’s participation in the Plan and legally applicable to
Participant; (ii) Participant’s and, to the extent required by any Service Recipient, the Service Recipient’s fringe benefit tax liability, if any, associated with the grant, vesting, or settlement of the Restricted Stock Units or
sale of Shares; and (iii) any other Service Recipient taxes the responsibility for which Participant has, or has agreed to bear, with respect to the Restricted Stock Units (or settlement thereof or issuance of Shares thereunder) (collectively,
the “Tax Obligations”), is and remains Participant’s sole responsibility and may exceed the amount actually withheld by the applicable Service Recipient(s). Participant further acknowledges that no Service Recipient
(A) makes any representations or undertakings regarding the treatment of any Tax Obligations in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant, vesting or settlement of the Restricted Stock
Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends or other distributions, and (B) makes any commitment to and is under any obligation to structure the terms of the grant or any aspect of
the Restricted Stock Units to reduce or eliminate Participant’s liability for Tax Obligations or achieve any particular tax result. Further, if Participant is subject to Tax Obligations in more than one jurisdiction between the Date of Award
Grant and the date of any relevant taxable or tax withholding event, as applicable, Participant acknowledges that the applicable Service Recipient(s) (or former employer, as applicable) may be required to withhold or account for Tax Obligations in
more than one jurisdiction. If Participant fails to make satisfactory arrangements for the payment of any required Tax Obligations hereunder at the time of the applicable taxable event, Participant acknowledges and agrees that the Company may refuse
to issue or deliver the Shares and may deem such Shares forfeited to the Company for no consideration. 

 Notwithstanding any contrary provision of this Agreement, no certificate
representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of the Tax Obligations. Prior to vesting and/or
settlement of the Restricted Stock Units, Participant will pay or make adequate arrangements satisfactory to the Service Recipient to satisfy all obligations of the Service Recipient for the Tax Obligations. In this regard, Participant authorizes
the Service Recipient to withhold all applicable Tax Obligations legally payable by Participant from his or her wages or other cash compensation paid to Participant by the Service Recipient or from proceeds of the sale of Shares. Alternatively, or
in addition, if permissible under applicable local law, the Company may, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require Participant to satisfy such Tax Obligations, in whole or in
part (without limitation) by (a) paying cash (or cash equivalent), (b) electing to have the Company withhold otherwise deliverable cash or Shares having a fair market value equal to the minimum statutory amount required to be withheld or
such greater amount as the Administrator may determine if such amount would not have adverse accounting consequences, as the Administrator determines in its sole discretion, (c) delivering to the Company already-owned Shares having a fair
market value equal to the minimum statutory amount required to be withheld or such greater amount as the Administrator may determine if such amount would not have adverse accounting consequences, as the Administrator determines in its sole
discretion, or (d) selling a sufficient number of such Shares otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be
withheld for Tax Obligations. The Company, in its sole discretion, will have the right (but not the obligation) to satisfy any Tax Obligations by reducing the number of Shares otherwise deliverable to Participant and, until determined otherwise by
the Company, this will be the method by which such obligations for Tax Obligations are satisfied. If Participant fails to make satisfactory arrangements for the payment of any required Tax Obligations hereunder at the time any applicable Restricted
Stock Units otherwise are scheduled to vest pursuant to Sections 3 or 4 or Tax Obligations related to the Restricted Stock Units otherwise are due, Participant will permanently forfeit such Restricted Stock Units and any right to receive Shares
thereunder and the Restricted Stock Units will be returned to the Company at no cost to the Company. 
 Participant has
reviewed with his or her own tax advisers the U.S. federal, state, local and non-U.S. tax consequences of this investment and the transactions contemplated by this Award Agreement. With respect to such
matters, Participant relies solely on such advisers and not on any statements or representations of the Company or any of its agents, written or oral. Participant understands that Participant (and not the Company) shall be responsible for
Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Award Agreement. 

8. Acknowledgements. In accepting this Award of Restricted Stock Units, Participant acknowledges, understands and agrees
that: 
 (a) Participant acknowledges receipt of a copy of the Plan (including any applicable appendixes or sub-plans thereunder) and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award of Restricted Stock Units subject to all of the terms and provisions thereof.
Participant has reviewed the Plan (including any applicable appendixes or sub-plans thereunder) and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing
this Agreement and fully understands all provisions of the Award. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Agreement.
Participant further agrees to notify the Company upon any change in the residence address indicated in the Notice of Grant; 

(b) the grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to
receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past; 

 (c) all decisions with respect to future Restricted Stock Units or other
grants, if any, will be at the sole discretion of the Administrator; 
 (d) Participant is voluntarily participating in the
Plan; 
 (e) the Restricted Stock Units and the Shares subject to the Restricted Stock Units are not intended to replace any
pension rights or compensation; 
 (f) the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and
the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal,
end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; 

(g) the future value of the Shares underlying the Restricted Stock Units is unknown, indeterminable and cannot be predicted;

 (h) for purposes of the Restricted Stock Units, Participant’s status as a Service Provider will be considered
terminated as of the date Participant is no longer actively providing services to the Company or any Parent or Subsidiary (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in
the jurisdiction where Participant is a Service Provider or the terms of Participant’s employment or service agreement, if any), and unless otherwise expressly provided in this Award Agreement (including by reference in the Notice of Grant to
other arrangements or contracts) or determined by the Administrator, Participant’s right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g.,
Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is a Service Provider or the terms
of Participant’s employment or service agreement, if any, unless Participant is providing bona fide services during such time); the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing
services for purposes of the Restricted Stock Units grant (including whether Participant may still be considered to be providing services while on a leave of absence and consistent with local law); 

(i) unless otherwise provided in the Plan or by the Administrator in its discretion, the Restricted Stock Units and the
benefits evidenced by this Award Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company nor be exchanged, cashed out or substituted for, in connection with any
corporate transaction affecting the Shares; and 
 (j) the following provisions apply only if Participant is providing
services outside the United States: 
 (i) the Restricted Stock Units and the Shares subject to the Restricted Stock Units
are not part of normal or expected compensation or salary for any purpose; 
 (ii) Participant acknowledges and agrees that
no Service Recipient shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Restricted Stock Units or of any amounts due to Participant
pursuant to the settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement; and 

(iii) no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting
from the termination of Participant’s status as a Service Provider (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is a Service Provider or the terms of
Participant’s employment or service agreement, if any), and in consideration of the grant of the Restricted Stock Units to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against any
Service Recipient, waives his or her ability, if any, to bring any such claim, and releases each Service Recipient from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by
participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim 

 9. Data Privacy. Participant hereby explicitly and
unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the
Service Recipients for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan. 

Participant understands that the Company and the Service Recipient may hold certain personal information about
Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the
Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering
and managing the Plan. 
 Participant understands that Data may be transferred to a stock plan service
provider, as may be selected by the Company in the future, assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or
elsewhere, and that the recipients’ country of operation (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United
States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Participant authorizes the Company, the Service Recipients, any stock plan
service provider selected by the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage
Participant’s participation in the Plan. Participant understands if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any
necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents
herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her status as a Service Provider and career with the Service Recipient will not be adversely affected. The only
adverse consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant
understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant
understands that he or she may contact his or her local human resources representative. 
 10. English
Language. Participant has received the terms and conditions of this Agreement and any other related communications, and Participant consents to having received these documents in English. If Participant has received this Agreement or any other
document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control. 

11. Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the
rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such
Shares and receipt of dividends and distributions on such Shares. 
 12. No Guarantee of Continued Service.
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER, WHICH UNLESS PROVIDED OTHERWISE UNDER APPLICABLE LAW IS AT THE WILL OF THE
APPLICABLE SERVICE RECIPIENT AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF RESTRICTED STOCK UNITS OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH
PARTICIPANT’S RIGHT OR THE RIGHT OF ANY SERVICE RECIPIENT TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER, SUBJECT TO APPLICABLE LAW, WHICH TERMINATION, UNLESS PROVIDED OTHERWISE UNDER APPLICABLE LAW, MAY BE AT ANY TIME, WITH
OR WITHOUT CAUSE. 

 13. Address for Notices. Any notice to be given to the Company under
the terms of this Agreement will be addressed to the Company, in care of its Secretary at Intevac, Inc., 3560 Bassett Street, Santa Clara CA 95054, or at such other address as the Company may hereafter designate in writing. 

14. Grant is Not Transferable. Except to the limited extent provided in Section 6, this grant and the rights and
privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred
hereby immediately will become null and void. 
 15. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon
Participant and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Participant under this Agreement may be assigned only with the prior written consent of the Company. 

16. Additional Conditions to Issuance of Stock. If at any time the Company determines, in its discretion, that the
listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any state, federal or non-U.S. law, the tax code and related regulations or under the rulings or
regulations of the United States Securities and Exchange Commission or any other governmental regulatory body or the clearance, consent or approval of the United States Securities and Exchange Commission or any other governmental regulatory
authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate or beneficiaries) hereunder, such issuance will not occur unless and until such listing, registration, qualification, rule compliance,
clearance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. If any such listing, registration, qualification, rule compliance, clearance, consent or approval has not been
completed by the applicable deadline to remain exempt from Section 409A under the “short-term deferral” exemption with respect to a Restricted Stock Unit in a manner that would allow it to be settled by such deadline, such Restricted
Stock Unit will be forfeited as of immediately following such deadline for no consideration and at no cost to the Company. Subject to the prior sentence, where the Company determines that the delivery of the payment of any Shares will violate
federal securities laws or other applicable laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Shares will no longer cause such violation. The Company will make all
reasonable efforts to meet the requirements of any such state, federal or foreign law or securities exchange and to obtain any such consent or approval of any such governmental authority or securities exchange. Subject to the terms of this Award
Agreement and the Plan, the Company shall not be required to issue any certificate or certificates for Shares hereunder prior to the lapse of such reasonable period of time following the date of vesting of a Restricted Stock Unit as the
Administrator may establish from time to time for reasons of administrative convenience and any such certificate may be in book entry form. 

17. Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between
one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan. 

18. Administrator Authority. The Administrator will have the power to interpret the Plan and this Agreement and to adopt
such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have
vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally
liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement. 
 19.
Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock Units that may be awarded under the Plan by
electronic means or require Participant to participate in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any
on-line or electronic system established and maintained by the Company or a third party designated by the Company. 

20. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or
construction of this Agreement. 

 21. Agreement Severable. In the event that any provision in this
Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement. 

22. Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects
covered. Participant expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its
sole discretion and without the consent of Participant, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this Award of Restricted Stock Units. 

23. Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or
she has received an Award of Restricted Stock Units under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the
Company at any time. 
 24. Governing Law. This Agreement will be governed by the laws of the State of California,
without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Award of Restricted Stock Units or this Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of California, and agree that such litigation will be conducted in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Award of
Restricted Stock Units is made and/or to be performed. 
 25. No Waiver. Either party’s failure to enforce any
provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party from thereafter enforcing each and every other provision of this Agreement. The rights granted both
parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances. 

26. Tax Consequences. Participant has reviewed with his or her own tax advisors the U.S. federal, state, local and non-U.S. tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, Participant relies solely on such advisors and not on any statements or representations
of the Company or any of its agents, written or oral. Participant understands that Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.Exhibit
4.1

 

NEITHER
THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

KRAIG
BIOCRAFT LABORATORIES, INC.

 

Secured
Convertible Debenture

 

Principal
Amount: $1,500,000

Debenture
Issuance Date: January 18, 2022

Debenture
Number: KBLB 3- 1-2

 

FOR
VALUE RECEIVED, KRAIG BIOCRAFT LABORATORIES, INC., a Wyoming corporation (the “Company”), hereby promises to pay
to the order of YA II PN, Ltd., or its registered assigns (the “Holder”) the amount set out above as the Principal
Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the
terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate from the
date set out above as the Debenture Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This
Convertible Debenture (including all debentures issued in exchange, transfer or replacement hereof, this “Debenture”)
was originally issued pursuant to the Securities Purchase Agreement dated January 18, 2022, as amended (the “Securities Purchase
Agreement”) between the Company and the Buyers listed on the Schedule of Buyers attached thereto. Certain capitalized terms
used herein are defined in Section (12).

 

(1)
GENERAL TERMS

 

(a)
Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal,
accrued and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Debenture. The “Maturity Date”
shall be February 18, 2023, as may be extended at the option of the Holder. Other than as specifically permitted by this Debenture, the
Company may not prepay or redeem any portion of the outstanding Principal and accrued and unpaid Interest

 

    	 

     

    

 

(b)
Interest Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal
to 10% (“Interest Rate”), which Interest Rate shall increase to an annual rate of 15% for so long as any Event of
Default remains uncured. Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent
permitted by applicable law.

 

(c)
Security and Guaranty. This Debenture is secured by (i) a security interest in all of the assets of the Company and of each of
the Company’s subsidiaries pursuant to the amended and restated security agreement by and among the Company, its wholly owned subsidiaries
and the Investor dated the date hereof (all such security agreements shall be referred to as the “Security Agreement”)
and (ii) subject to a global guarantee pursuant to the amended and restated global guaranty by and among each of the Company’s
wholly owned subsidiaries and the Investor dated the date hereof (the “Guaranty”) and the amended and restated intellectual
property security agreement by and between the Investor, the Company and the Company’s subsidiaries referenced therein dated the
date hereof (the “IP Security Agreement”) (all such security agreements shall be referred to as the “IP Security
Agreement”) (the “Guaranty” and collectively with the Security Agreement and the IP Security Agreement shall
be referred to as the “Security Documents”).

 

(d)
Early Redemption. The Company shall have the right, but not the obligation, to redeem (“Optional Redemption”)
early a portion or all amounts outstanding under this Debenture as described in this Section; provided that the Company provides
the Holder with at least 10 Business Days’ prior written notice (each, a “Redemption Notice”) of its desire
to exercise an Optional Redemption. Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Convertible
Debentures to be redeemed and the applicable Redemption Premium. The “Redemption Amount” shall be equal to the outstanding
Principal balance being redeemed by the Company, plus the applicable Redemption Premium, plus all accrued and unpaid interest. After
receipt of the Redemption Notice, the Holder shall have 10 Business Days to elect to convert all or any portion of Convertible Debentures.
On the 11th Business Day after the Redemption Notice, the Company shall deliver to the Holder the Redemption Amount with respect to the
Principal amount redeemed after giving effect to conversions effected during the 10 Business Day period.

 

(2)
EVENTS OF DEFAULT.

 

(a)
An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether
it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any
order, rule or regulation of any administrative or governmental body):

 

(i)
the Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this Debenture
or any other Transaction Document within five (5) Business Days after such payment is due;

 

    	2

     

    

 

(ii)
The Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary of the
Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or
any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company
or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company any such bankruptcy, insolvency
or other proceeding which remains undismissed for a period of 61 days; or the Company or any subsidiary of the Company is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company or any
subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or any substantial
part of its property which continues undischarged or unstayed for a period of sixty one (61) days; or the Company or any subsidiary of
the Company makes a general assignment for the benefit of creditors; or the Company or any subsidiary of the Company shall fail to pay,
or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company or any subsidiary
of the Company shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts;
or the Company or any subsidiary of the Company shall by any act or failure to act expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate or other action is taken by the Company or any subsidiary of the Company for the
purpose of effecting any of the foregoing;

 

(iii)
The Company or any subsidiary of the Company shall default in any of its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which
there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement
of the Company or any subsidiary of the Company in an amount exceeding $150,000, whether such indebtedness now exists or shall hereafter
be created and such default is not cured within five (5) Business Days;

 

(iv)
The Common Stock shall cease to be quoted or listed for trading, as applicable, on any Primary Market for a period of 10 consecutive
Trading Days;

 

(v)
The Company or any subsidiary of the Company shall be a party to any Change of Control Transaction (as defined in Section (12)) unless
in connection with such Change of Control Transaction this Debenture is retired;

 

(vi)
the Company’s (A) failure to deliver the required number of shares of Common Stock to the Holder within two (2) Trading Days after
the applicable Delivery Date or (B) notice, written or oral, to any holder of the Debentures, including by way of public announcement,
at any time, of its intention not to comply with a request for conversion of any Debentures into shares of Common Stock that is tendered
in accordance with the provisions of the Debentures, other than pursuant to Section 4(e);

 

(vii)
The Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined herein) within five (5) Business
Days after such payment is due;

 

(viii)
The Company shall fail to observe or perform any other material covenant, agreement or warranty contained in, or otherwise commit any
material breach or default of any provision of this Debenture (except as may be covered by Section (2)(a)(i) through (2)(a)(ix) hereof)
or any Transaction Document (as defined in Section (12)) which is not cured within the time prescribed.

 

    	3

     

    

 

(ix)
any Event of Default (as defined in the Other Debentures) occurs with respect to any Other Debentures.

 

(b)
During the time that any portion of this Debenture is outstanding, if any Event of Default has occurred and is continuing, the full unpaid
Principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall
become at the Holder’s election, immediately due and payable in cash. Furthermore, in addition to any other remedies, the Holder
shall have the right (but not the obligation) to convert this Debenture (subject to the beneficial ownership limitations set out in Section
(3)(c)) at any time after (x) an Event of Default (provided that such Event of Default is continuing) or (y) the Maturity Date at the
Conversion Price. The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind,
(other than required notice of conversion) and the Holder may immediately enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior to
payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

(3)
CONVERSION OF DEBENTURE. This Debenture shall be convertible into shares of the Company’s Common Stock, on the terms and
conditions set forth in this Section (3).

 

(a)
Conversion Right. Subject to the limitations of Section (3)(c), at any time or times on or after the Issuance Date, the Holder
shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable
shares of Common Stock in accordance with Section (3)(b), at the Conversion Rate (as defined below). The number of shares of Common Stock
issuable upon conversion of any Conversion Amount pursuant to this Section (3)(a) shall be determined by dividing (x) such Conversion
Amount by (y) the Conversion Price (the “Conversion Rate”). The Company shall not issue any fraction of a share of
Common Stock upon any conversion. All calculations under this Section (3) shall be rounded to the nearest $0.0001. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up
to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the
issuance and delivery of Common Stock upon conversion of any Conversion Amount.

 

(i)
“Conversion Amount” means the portion of the Principal and accrued Interest to be converted, redeemed or otherwise
with respect to which this determination is being made.

 

(ii)
“Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination 85% of the lowest
daily VWAP during the 10 consecutive Trading Days immediately preceding the Conversion Date or other date of determination.

 

    	4

     

    

 

(b)
Mechanics of Conversion.

 

(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall (A) transmit by electronic mail (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such
date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Company and (B) if required by Section (3)(b)(iii), surrender this Debenture to a nationally recognized overnight delivery service
for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture
in the case of its loss, theft or destruction). On or before the third (3rd) Trading Day following the date of receipt of
a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not required to be placed on
certificates of Common Stock and provided that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled
to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y)
if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required pursuant
to rules and regulations of the Commission. If this Debenture is physically surrendered for conversion and the outstanding Principal
of this Debenture is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable
and in no event later than three (3) Business Days after receipt of this Debenture and at its own expense, issue and deliver to the holder
a new Debenture representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common
Stock issuable upon a conversion of this Debenture shall be treated for all purposes as the record holder or holders of such shares of
Common Stock upon the transmission of a Conversion Notice.

 

(ii)
Company’s Failure to Timely Convert. If within three (3) Trading Days after the Company’s receipt of an email copy
of a Conversion Notice the Company shall fail to issue and deliver a certificate to the Holder or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon such holder’s conversion of any Conversion
Amount (a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction
or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that the
Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business Days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other out of pocket expenses, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and
to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the Conversion Date.

 

    	5

     

    

 

(iii)
Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion
Amount represented by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which notice
may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture. The Holder
and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such
other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon conversion.

 

(c)
Limitations on Conversions.

 

(i)
Beneficial Ownership. The Holder shall not have the right to convert any portion of this Debenture or receive shares of Common
Stock hereunder to the extent that after giving effect to such conversion or receipt of such Shares, the Holder, together with any affiliate
thereof, would beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder)
in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt
of shares as payment of interest. Since the Holder will not be obligated to report to the Company the number of shares of Common Stock
it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock
in excess of 4.99% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially owned
by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained
in this Section applies, the determination of which portion of the Principal amount of this Debenture is convertible shall be the responsibility
and obligation of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount of this Debenture that, without
regard to any other shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted
amount hereunder, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum Principal amount permitted
to be converted on such Conversion Date in accordance with Section (3)(a) and, any Principal amount tendered for conversion in excess
of the permitted amount hereunder shall remain outstanding under this Debenture. The provisions of this Section may be waived by a Holder
(but only as to itself and not to any other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected
by any such waiver.

 

(d)
Other Provisions.

 

(i)
The Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock
issuable upon conversion of all outstanding amounts under this Debenture; and within three (3) Business Days following the receipt by
the Company of a Holder’s notice that such minimum number of Underlying Shares is not so reserved, the Company shall promptly reserve
a sufficient number of shares of Common Stock to comply with such requirement.

 

    	6

     

    

 

(ii)
All calculations under this Section (3) shall be rounded to the nearest $0.0001 or whole share.

 

(iii)
The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock
solely for the purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided,
free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than such number
of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions set forth herein) upon the conversion
of the outstanding Principal amount of this Debenture and payment of interest hereunder. The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable and, if the Underlying
Shares Registration Statement has been declared effective under the Securities Act, registered for public sale in accordance with such
Underlying Shares Registration Statement.

 

(iv)
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (2) herein
for the Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The
exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under
applicable law.

 

(4)
REISSUANCE OF THIS DEBENTURE.

 

(a)
Transfer. If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Debenture (in accordance with Section (4)(d)), registered in the
name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any
accrued and unpaid interest thereof) and, if less then the entire outstanding Principal is being transferred, a new Debenture (in accordance
with Section (4)(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance
of this Debenture, acknowledge and agree that, by reason of the provisions of Section (3)(b)(iii) following conversion or redemption
of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal stated on the
face of this Debenture.

 

(b)
Lost, Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Debenture, the
Company shall execute and deliver to the Holder a new Debenture (in accordance with Section (4)(d)) representing the outstanding Principal.

 

    	7

     

    

 

(c)
Debenture Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at
the principal office of the Company, for a new Debenture or Debentures (in accordance with Section (4)(d)) representing in the aggregate
the outstanding Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as
is designated by the Holder at the time of such surrender.

 

(d)
Issuance of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture,
such new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section 5(4)(a) or Section 5(4)(c), the
Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection with
such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance of new Debentures),
(iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the Issuance Date of this Debenture,
(iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued and unpaid Interest from the Issuance
Date.

 

(5)
NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must
be in writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered
personally or (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case,
properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail addresses
for such communications shall be:

 

	If
    to the Company, to:	Kraig
    Biocraft Laboratories, Inc.
	 	2723
                                            South State Street – Suite 150

    Ann
    Arbor, MI 48104

	 	Attn:
    Kim Thompson
	 	Telephone:
    (734) 619-8066
	 	 
	 	Email:	

	 
	 	 
	If
    to the Holder:	YA
    II PN, Ltd
	 	c/o
                                            Yorkville Advisors Global, LLC

    1012
    Springfield Avenue

	 	Mountainside,
    NJ 07092
	 	Attention:
    Mark Angelo
	 	Telephone:
    201-985-8300
	 	Email:	

 

    	8

     

    

 

or
at such other address and/or email and/or to the attention of such other person as the recipient party has specified by written notice
given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given
by the recipient of such notice, consent, waiver or other communication, (ii) electronically generated by the sender’s email service
provider containing the time, date, recipient email address or (iii) provided by a nationally recognized overnight delivery service,
shall be rebuttable evidence of personal service, or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

(6)
Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute
and unconditional, to pay the Principal of, interest and other charges (if any) on, this Debenture at the time, place, and rate, and
in the coin or currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture is outstanding,
the Company shall not and shall cause their subsidiaries not to, without the consent of the Holder, (i) amend its certificate of incorporation,
bylaws or other charter documents so as to adversely affect any rights of the Holder; (ii) repay, repurchase or offer to repay, repurchase
or otherwise acquire shares of its Common Stock or other equity securities; or (iii) enter into any agreement with respect to any of
the foregoing.

 

(7)
This Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other
proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the terms hereof.

 

(8)
This Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts
of laws thereof. Each of the parties consents to the jurisdiction of the Supreme Court of the State of New York located in the City of
New York, Borough of Manhattan, and the U.S. District Court for the Southern District of New York in connection with any dispute arising
under this Debenture and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum
non conveniens to the bringing of any such proceeding in such jurisdictions. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

 

(9)
If the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly for all
fees, costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action in connection
with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection with
the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any sums which become due to
the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation
or enforcement of any rights or remedies of the Holder.

 

    	9

     

    

 

(10)
Any waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon strict adherence
to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this Debenture. Any waiver must be in writing.

 

(11)
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the Principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so)
hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though
no such law has been enacted.

 

(12)
CERTAIN DEFINITIONS For purposes of this Debenture, the following terms shall have the following meanings:

 

(a)
“Bloomberg” means Bloomberg Financial Markets.

 

(b)
“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United
States or a day on which banking institutions are authorized or required by law or other government action to close.

 

(c)
“Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether
through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%)
of the voting power of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible
securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement at one time or
over time of more than one-half of the members of the board of directors of the Company (other than as due to the death or disability
of a member of the board of directors) which is not approved by a majority of those individuals who are members of the board of directors
on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the
board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (c) the merger,
consolidation or sale of fifty percent (50%) or more of the assets of the Company or any subsidiary of the Company in one or a series
of related transactions with or into another entity, or (d) the execution by the Company of an agreement to which the Company is a party
or by which it is bound, providing for any of the events set forth above in (a), (b) or (c). No transfer to a wholly-owned subsidiary
shall be deemed a Change of Control Transaction under this provision.

 

    	10

     

    

 

(d)
“Closing Bid Price” means the price per share in the last reported trade of the Common Stock on a Primary Market or
on the exchange which the Common Stock is then listed as quoted by Bloomberg.

 

(e)
“Commission” means the Securities and Exchange Commission.

 

(f)
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into
or exercisable or exchangeable for Common Stock.

 

(g)
“Common Stock” means the Class A common stock, no par value, of the Company and stock of any other class into which
such shares may hereafter be changed or reclassified.

 

(h)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(i)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities

 

(j)
“Other Debentures” means any other debentures issued pursuant to the Securities Purchase Agreement and any other debentures,
notes, or other instruments issued in exchange, replacement, or modification of the foregoing.

 

(k)
“Person” means a corporation, an association, a partnership, organization, a business, an individual, a government
or political subdivision thereof or a governmental agency.

 

(l)
“Primary Market” means any of the New York Stock Exchange, the NYSE MKT, the Nasdaq Global Market, the Nasdaq Global
Select Market, or the OTC Markets’ OTCQB® Market, and any successor to any of the foregoing markets or exchanges.

 

(m)
“Redemption Premium” means, 15% of the Principal amount being redeemed.

 

(n)
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(o)
“Trading Day” means a day on which the shares of Common Stock are quoted or traded on a Primary Market on which the
shares of Common Stock are then quoted or listed; provided, that in the event that the shares of Common Stock are not listed or quoted,
then Trading Day shall mean a Business Day.

 

    	11

     

    

 

(p)
“Transaction Document(s)” shall mean this Debenture, along with the Securities Purchase Agreement, the Security Documents
and any other documents or agreements entered into in connection with the foregoing.

 

(q)
“Underlying Shares” means the shares of Common Stock issuable upon conversion of this Debenture or as payment of interest
in accordance with the terms hereof.

 

(r)
“Underlying Shares Registration Statement” means a registration statement meeting the requirements set forth in the
Registration Rights Agreement, covering among other things the resale of the Underlying Shares and naming the Holder as a “selling
stockholder” thereunder.

 

(s)
“VWAP” means, for any security as of any date, the daily dollar volume-weighted average price for such security on
the Primary Market as reported by Bloomberg through its “Historical Prices – Px Table with Average Daily Volume” functions,
or, if no dollar volume-weighted average price is reported for such security by Bloomberg.

 

[Signature
Page Follows]

 

    	12

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Convertible Debenture to be duly executed by a duly authorized officer as of the date
set forth above.

 

	 	COMPANY:
	 	 
	 	KRAIG
    BIOCRAFT LABORATORIES, INC.
	 	 
	 	By:	                
	 	Name:	 
	 	Title:	 

 

    	 

     

    

 

EXHIBIT
I

 

CONVERSION
NOTICE

 

(To
be executed by the Holder in order to Convert the Debenture)

 

TO:
KRAIG BIOCRAFT LABORATORIES, INC.

 

Via
Email: 

 

The
undersigned hereby irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Debenture No. KBLB 3
1-2 into Shares of Common Stock of KRAIG BIOCRAFT LABORATORIES, INC., according to the conditions stated therein, as of the
Conversion Date written below.

 

	Conversion
    Date:	 
	Principal
    Amount to be Converted:	 
	Accrued
    Interest to be Converted:	 
	Total
    Conversion Amount to be converted:	 
	Fixed
    Conversion Price: 	 
	Variable
    Conversion Price:	 
	Applicable
    Conversion Price:	 
	Number
    of shares of Common Stock to be issued:	 
	 	 
	Please
    issue the shares of Common Stock in the following name and deliver them to the following account:
	Issue
    to:	 
	Broker
    DTC Participant Code:	 
	Account
    Number:	 
	 	 
	Authorized
    Signature:	 
	Name:	 
	Title:

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