Exhibit 10.1

 

[FORM OF] DEBT-FOR-EQUITY EXCHANGE AGREEMENT

 

This DEBT-FOR-EQUITY EXCHANGE AGREEMENT (this “Agreement”), dated as of
         , 2017 (the “Effective Date”) is made by and between Sun BioPharma,
Inc. a Delaware corporation (the “Company”), and the lender named on the
signature page hereto (“Lender”).

 

RECITALS

 

A.     Lender is the record and actual holder of one or more promissory notes
payable by the Company as identified on Exhibit A.

 

B.     The Company desires to issue shares of its common stock, par value $0.001
per share (“Common Stock”) to Lender in exchange for the promissory note(s)
identified on Exhibit A (the “Debt”).

 

C.     Lender desires to transfer the Debt to the Company in exchange for shares
of Common Stock.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and Lender agree as
follows:

 

1.     Exchange.

 

1.1.     Exchange Commitments. On the Closing Date (as hereinafter defined), (a)
the Company will issue to Lender the total number of shares of Common Stock set
forth on Exhibit A (the “Securities”), and, in exchange, (b) Lender will
transfer to the Company the Debt. The actions described in subparts (a) and (b),
collectively, are referred to as the “Exchange”.

 

1.2.     Effect of Exchange. Upon the Closing (as hereinafter defined), the Debt
will thereupon be deemed null and void and the promissory note(s) evidencing the
Debt will represent solely the right to receive the Securities. Except for
obligations created under this Agreement, by accepting this Agreement, Lender
forever releases relieves and discharges the Company and the Company’s past,
present and future affiliates, subsidiaries, predecessors, successors, assigns,
attorneys, employees, directors, officers, stockholders, agents, and
representatives, from any and all claims, demands, actions, cause or causes of
action, suits, debts, sums of money, controversies, damages, obligations,
breaches and liabilities of every kind and nature, whether known or unknown, in
law, equity or otherwise, that have existed or may exist as of the date of this
Agreement relating to the Debt and all matters and agreements in connection
therewith and related thereto.

 

2.     Closing and Other Deliveries.

 

2.1.     Closing. The completion of the Exchange (the “Closing”), will take
place at 9:00 a.m., Central Time, on March 31, 2017 or as soon as practicable
thereafter (the “Closing Date”). The closing will take place remotely via the
delivery and exchange of documents and signatures.

 

2.2.     Lender Deliveries. At or before the Closing, Lender will deliver or
cause to be delivered to the Company the original executed promissory note(s)
evidencing the Debt, as identified on Exhibit A, or if Lender has lost any
original executed promissory note(s) evidencing the Debt and is unable to
deliver such original promissory note(s) at or before the Closing, then Lender
will submit an affidavit of loss and indemnity agreement prior to the Closing so
that the promissory note(s) may be replaced and deemed cancelled in accordance
with the terms of this Agreement (collectively, the “Lender Deliveries”).

 

2.3.     Company Deliveries. At the Closing, or as soon as commercially
practicable after the Company has received all of the Lender Deliveries, the
Company will deliver or cause to be delivered to Lender evidence of the issuance
of the Securities, which may take the form of a physical certificate or an
electronic equivalent thereof.

 

 

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3.     Representations and Warranties of Lender. Lender hereby represents and
warrants to the Company as of the Effective Date and as of the Closing Date as
follows:

 

3.1.     Complete Ownership. Lender is the sole record and beneficial owner of
the Debt, free and clear of any and all liens or restrictions on transfer.

 

3.2.     Organization. To the extent Lender is an entity, Lender is duly
incorporated, validly existing and in good standing under the laws of the state
of organization, with full power and authority (corporate and other) to own,
lease, use and operate its properties, if any, and to carry on its business as
and where now owned, leased, used, operated and conducted.

 

3.3.     Authorization; Enforcement. To the extent Lender is an entity, (a)
Lender has all requisite corporate power and authority to enter into and to
perform its obligations under this Agreement, to consummate the transactions
contemplated hereby and thereby and to tender the Debt and acquire the
Securities in accordance with the terms hereof; (b) the execution, delivery and
performance of this Agreement by Lender and the consummation by it of the
transactions contemplated hereby have been duly authorized by all required
parties and no further consent or authorization of Lender, its board of
directors or its Stockholders or members is required; (c) this Agreement has
been duly executed and delivered by Lender; and (d) assuming the valid and
binding execution of this Agreement by the Company and compliance with the terms
of this Agreement by the Company, this Agreement constitutes a legal, valid and
binding obligation of Lender enforceable against Lender by the Company in
accordance with their respective terms, except as may be limited by any
applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws
affecting the rights of creditors generally and the application of general
principles of equity. To the extent Lender is a natural person, this Agreement
has been duly and validly authorized, executed and delivered on behalf of Lender
and is a valid and binding agreement of Lender , enforceable in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and the application of general principles of equity.

 

3.4.     Advisors. Lender has been advised to seek financial, legal and tax
counsel concerning the transactions contemplated by this Agreement and Lender
has obtained, to the extent Lender deems necessary, Lender’s own personal
professional advice with respect to the risks inherent in an investment in the
Securities, and the suitability of the investment in the Securities in light of
Lender’s financial condition and investment goals.

 

3.5.     Information and Sophistication. Lender and its advisors, if any, have
been furnished with all materials relating to the Company, that have been
requested by Lender or its advisors, if any, including information regarding the
current financial condition of the Company, as well as any information requested
to verify this information, to the extent reasonably available. Lender and its
advisors, if any, have been afforded the opportunity to ask questions of, and
receive answers from, the Company concerning the business, management and
financial affairs of the Company and the terms and conditions of the Exchange.
Lender acknowledges and understands that an investment in the Securities
involves a significant degree of risk, including the risks reflected in the SEC
Documents. Lender is experienced and knowledgeable in financial and business
matters, is capable of evaluating the merits and risks of investing in the
Securities, and does not need or desire the assistance of a knowledgeable
representative to aid in the evaluation of such risks who Lender intends to use
in connection with a decision as to whether to acquire the Securities.

 

3.6.     Investment Purpose. Lender is acquiring the Securities for investment
for Lender’s own account and without any view to the distribution thereof within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

 

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3.7.     Suitability.

 

3.7.1.     Lender is an “accredited investor” as such term is defined in Rule
501(a) of the rules and regulations promulgated under the Securities Act.

 

3.7.2.     Lender has such income and such assets that Lender is able to bear
the economic risks of acquiring the Securities.

 

3.7.3.     Lender is not subject to any of the “bad actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) (each, a “Disqualification Event”)
promulgated under the Securities Act, except for a Disqualification Event
covered by Rule 506(d)(2) or (d)(3).

 

3.8.     No Registration. Lender understands that the Securities have not been
registered under the Securities Act or applicable state securities laws, and
will be issued in reliance on exemptions from registration under the Securities
Act and applicable state securities laws. Neither the Company nor any other
person is under any obligation to register the Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.

 

3.9.     Restrictions on Transfer. Lender is fully informed and aware of the
circumstances under which the Securities must be held and the restrictions upon
the resale of the Securities under the Securities Act and any applicable state
securities laws. In this connection, Lender understands that the Securities may
not be resold unless they are registered under the Securities Act and any
applicable state securities laws or unless an exemption from such registration
is available, that the availability of an exemption may depend on factors over
which Lender has no control, and that unless so registered or exempt from
registration the Securities may be required to be held for an indefinite period.

 

3.10.     Legends. Lender understands that the certificates (or electronic
equivalent) representing the Securities may contain a legend to the effect of
(3.8) above and neither the Company nor its transfer agent or registrar is
required to recognize any transfer of the Securities (and a stop-transfer order
may be placed against transfer of the Securities) if, in the opinion of counsel
to the Company, such transfer would result in a violation of any federal or
state law regarding the offer and sale of securities.

 

3.11.     Legal Proceedings. There are no legal proceedings pending or, to
Lender’s knowledge, threatened in writing, against or affecting Lender or
Lender’s respective assets, at law or in equity, by or before any governmental
authority, or by or on behalf of any third party, which, if adversely
determined, would impair Lender’s ability to enter into this Agreement or
consummate the transactions contemplated by this Agreement.

 

3.12.     Governmental Review. Lender understands that no United States federal
or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the Securities or an investment
therein.

 

3.13.     Residency. Lender is a resident of the jurisdiction set forth
immediately below such Lender’s name on the signature page to this Agreement.

 

3.14.     No Intent to Effect a Change of Control. Lender has no present intent
to change or influence the control of the Company within the meaning of Rule
13d-1 of the Exchange Act.

 

4.     Representations and Warranties of the Company. The Company hereby
represents and warrants to Lender as of the Effective Date and as of the Closing
Date, except as set forth in the Company SEC Documents (as hereinafter defined),
as follows:

 

4.1.     Organization and Qualification. The Company is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
with full power and authority (corporate and other) to own, lease, use and
operate its properties, if any, and to carry on its business as and where now
owned, leased, used, operated and conducted. The Company is duly qualified to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary, except where
the failure to be so qualified or in good standing would not have a material
adverse effect.

 

 

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4.2.     Authorization; Enforcement.

 

4.2.1.     The Company has all requisite corporate power and authority to enter
into and to perform its obligations under this Agreement, to consummate the
transactions contemplated hereby and to issue the Securities in accordance with
the terms hereof.

 

4.2.2.     The execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby
(including without limitation the issuance of the Securities in accordance with
the Company’s Certificate of Incorporation and this Agreement) have been duly
authorized by the Company’s board of directors and no further consent or
authorization of the Company, its board of directors or its stockholders is
required.

 

4.2.3.     This Agreement has been duly executed and delivered by the Company.

 

4.2.4.     Assuming the valid and binding execution of this Agreement by Lender
and compliance with the terms of this Agreement by Lender, this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company by Lender in accordance with its terms, except as may be
limited by any applicable bankruptcy, insolvency, reorganization, or moratorium
or similar laws affecting the rights of creditors generally and the application
of general principles of equity.

 

4.3.     Issuance of Securities. The Securities have been duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances and charges with respect to the issuance thereof.

 

4.4.     No Conflicts; No Violation.

 

4.4.1.     The execution, delivery and performance of this Agreement by the
Company, and the consummation by the Company of the transactions contemplated
hereby (including, without limitation, the issuance of the Securities) do not
(i) conflict with or result in a violation of any provision of the Company’s
Certificate of Incorporation or Bylaws, (ii) violate or conflict with, or result
in a breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment (including without limitation, the
triggering of any anti-dilution provision), acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including U.S. federal and state securities laws and regulations and
regulations of any self-regulatory organizations to which the Company or its
securities are subject) applicable to the Company or by which any property or
asset of the Company is bound or affected (except, in the case of clauses (ii)
and (iii), for such conflicts, breaches, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a material adverse effect).

 

4.4.2.     The Company is not in violation of its Certificate of Incorporation,
Bylaws or other organizational documents and the Company is not in default (and
no event has occurred which with notice or lapse of time or both could put the
Company in default) under, and the Company has not taken any action or failed to
take any action that (and no event has occurred which, without notice or lapse
of time or both) would give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party or by which any property or assets of the Company is
bound or affected, except for possible defaults as would not, individually or in
the aggregate, have a material adverse effect.

 

 

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4.4.3.     Except as specifically contemplated by this Agreement and as required
under the Securities Act and any applicable state securities laws or any listing
agreement with any securities exchange or automated quotation system, the
Company is not required to obtain any consent, authorization or order of (other
than those obtained on or prior to the date hereof), or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under this Agreement in accordance with the terms hereof, or to
issue the Securities in accordance with the terms hereof.

 

4.5.     SEC Documents. Since January 1, 2016, the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Exchange Act
(all of the foregoing filed prior to the date hereof being referred to herein as
the “SEC Documents”). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, other than SEC
Documents that have been amended as of the date hereof.

 

5.     Conditions.

 

5.1.     The obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment or waiver of the
following conditions:

 

5.1.1.     the representations and warranties of Lender set forth in Section 3
of this Agreement shall be true and correct on and as of the Closing Date; and

 

5.1.2.     Lender shall have delivered to the Company all of the Lender
Deliveries.

 

5.2.     The obligations of Lender to consummate the transactions contemplated
by this Agreement are subject to the fulfillment or waiver of the following
conditions:

 

5.2.1.     the representations and warranties of the Company set forth in
Section 4 of this Agreement shall be true and correct on and as of the Closing
Date; and

 

5.2.2.     the Company shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.

 

6.     Indemnification.

 

6.1.     Indemnification by Company. In consideration of Lender’s execution and
delivery of this Agreement and its acquisition of the Securities hereunder, and
in addition to all of the Company’s other obligations under this Agreement, the
Company will defend, protect, indemnify and hold harmless Lender and any person
who controls Lender within the meaning of Section 15 of the Exchange Act,
(collectively, the “Lender Indemnitees”) from and against any and all
Liabilities incurred or suffered by a Lender Indemnitee solely as a result of,
or arising solely out of, or relating solely to (a) any breach of any
representation or warranty made by the Company herein or in any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained herein
or in any other certificate, instrument or document contemplated hereby or
thereby, (c) any cause of action, suit or claim brought or made against such
Lender Indemnitee and arising out of or resulting from the execution, delivery,
performance, breach or enforcement of this Agreement by the Company or (d) the
status of such Lender or holder of the Securities as an investor in the Company
to the extent such status arises from actions or inaction by the Company in
violation of law.

 

 

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6.2.     Indemnification by Lender. Lender will defend, protect, indemnify and
hold harmless the Company all of its stockholders , officers, directors,
employees and any other person who controls the Company within the meaning of
Section 15 of the Securities Act (collectively, the “Company Indemnitees”) from
and against any and all Liabilities incurred by a Company Indemnitee solely as a
result of, or arising solely out of, or relating solely to (a) any breach of any
representation or warranty made by Lender herein or in any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of Lender contained herein or in any other
certificate, instrument or document contemplated hereby or thereby, or (c) the
failure of Lender to comply with the requirements of the Securities Act or any
state securities laws, which failure is not caused by the gross negligence or
willful misconduct of the Company.

 

6.3.     “Liabilities” means, for any and all actions, all claims, losses,
costs, penalties, fees, liabilities and damages and reasonable expenses
necessarily incurred in connection therewith, including reasonable attorneys’
fees and disbursements.

 

7.     Miscellaneous.

 

7.1.     Governing Law; Jurisdiction. This Agreement will be governed by and
interpreted in accordance with the laws of the State of Minnesota without regard
to the principles of conflict of laws. The parties hereto hereby submit to the
exclusive jurisdiction of the United States federal and state courts located in
the State of Minnesota with respect to any dispute arising under this Agreement,
the agreements entered into in connection herewith or the transactions
contemplated hereby or thereby. The parties also agree that any disputes arising
under this Agreement, to the extent not resolved pursuant to Section 7.2, will
be exclusively venued in the United States federal and state courts located in
the State of Minnesota, except for actions or proceedings regarding the
enforcement of awards or judgments.

 

7.2.     Dispute Resolution. The parties will, to the greatest extent possible,
endeavor to resolve any disputes relating to the Agreement through amicable
negotiations. Failing an amicable settlement any unresolved controversy or claim
arising out of or relating to this Agreement (including the existence, validity,
interpretation, performance, termination or breach of this Agreement) except as
(i) otherwise provided in this Agreement, or (ii) any such controversies or
claims arising out of either party’s rights for which a provisional remedy or
equitable relief is sought, may be submitted to arbitration by one arbitrator
mutually agreed upon by the parties, and if no agreement can be reached within
30 days after names of potential arbitrators have been proposed by the American
Arbitration Association (the “AAA”), then by one arbitrator having reasonable
experience in corporate finance transactions of the type provided for in this
Agreement and who is chosen by the AAA. The arbitration will take place in
Minneapolis, Minnesota, in accordance with the AAA rules then in effect, and
judgment upon any award rendered in such arbitration will be binding and may be
entered in any court having jurisdiction thereof. There shall be limited
discovery prior to the arbitration hearing as follows: (a) exchange of witness
lists and copies of documentary evidence and documents relating to or arising
out of the issues to be arbitrated, (b) depositions of all party witnesses and
(c) such other depositions as may be allowed by the arbitrators upon a showing
of good cause. Depositions shall be conducted in accordance with the Federal
Rules of Civil Procedure, the arbitrator shall be required to provide in writing
to the parties the basis for the award or order of such arbitrator, and a court
reporter shall record all hearings, with such record constituting the official
transcript of such proceedings. The prevailing party shall be entitled to
reasonable attorney’s fees, costs, and necessary disbursements in addition to
any other relief to which such party may be entitled. This Agreement will be
enforceable, and any arbitration award will be final and non-appealable, and
judgment thereon may be entered in any court of competent jurisdiction. Each of
the parties to this Agreement consents to personal jurisdiction for any
equitable action sought in a state or federal court located in the State of
Minnesota.

 

 

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7.3.     Counterparts; Signatures by Facsimile. This Agreement may be executed
in two or more counterparts, all of which are considered one and the same
agreement and will become effective when counterparts have been signed by each
party and delivered to the other parties. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the party so delivering this
Agreement.

 

7.4.     Headings. The headings of this Agreement are for convenience of
reference only, are not part of this Agreement and do not affect its
interpretation.

 

7.5.     Severability. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
will be deemed modified in order to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law will
not affect the validity or enforceability of any other provision hereof.

 

7.6.     Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein or therein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.

 

7.7.     Consents; Waivers and Amendments. The provisions of this Agreement may
only be amended, modified, supplemented or waived upon the prior written consent
of the Company and Lender.

 

7.8.     Notices. Any notices required or permitted to be given under the terms
of this Agreement must be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and will be effective five days
after being placed in the mail, if mailed by regular U.S. mail, or upon receipt,
if delivered personally, by courier (including a recognized overnight delivery
service) or by facsimile, in each case addressed to a party. The addresses for
such communications are:

 

If to the Company, then to:

 

Sun BioPharma, Inc.
712 Vista Blvd #305
Waconia, Minnesota 55387
Attn: Chief Financial Officer

 

with a copy (which shall not constitute notice) to:

 

Faegre Baker Daniels LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attn: W. Morgan Burns and Joshua L. Colburn

 

If to Lender: To the address set forth immediately below Lender’s name on the
signature pages hereto.

 

Each party will provide written notice to the other parties of any change in its
address.

 

7.9.     Successors and Assigns. This Agreement is binding upon and will inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. The Company may assign this Agreement at any time in
connection with a sale or acquisition of the Company, whether by merger,
consolidation, sale of all or substantially all of the Company’s assets, or
similar transaction, without the consent of Lender; provided, that the successor
or acquirer agrees in writing to assume all of the Company’s rights and
obligations under this Agreement.

 

 

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7.10.     No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

7.11.     Survival. Unless otherwise set forth in this Agreement, the
representations and warranties of Lender and the Company contained in or made
pursuant to this Agreement will survive the execution and delivery of this
Agreement and the closings under this Agreement and will in no way be affected
by any investigation or knowledge of the subject matter thereof made by or on
behalf of Lender or the Company.

 

7.12.     Further Assurances. Each party will do and perform, or cause to be
done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

7.13.     No Strict Construction. The language used in this Agreement is deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

7.14.     Equitable Relief. Each party recognizes that, if it fails to perform
or discharge any of its obligations under this Agreement, any remedy at law may
prove to be inadequate relief to the other parties. Each of the parties
therefore agrees that the other parties are entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.

 

7.15.     Trusts and Other Entities. To the extent Lender is a trust or other
entity, the trustee or officers, directors, employees, partners, members or
other control persons of such trust or entity will be bound by the terms of this
Agreement as it relates to the Securities held by such trust or other entity.
Lender agrees that it will cause such persons to execute and deliver to the
Company an acknowledgement of the obligations set forth in this Agreement to the
extent reasonably requested by the Company.

 

[Signature Pages Follow]

 

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed as
of the date first above written.

 

 

  Company:        

 

SUN BIOPHARMA, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed as
of the date first above written.

 

 

  Lender (Natural Person(s)):  

 

 

 

 

Signature(s):

 

 

 

 

 

 

 

Name(s):

 

 

 

 

 

 

 

Address:

 

 

          Email:       Fax:               U.S. Taxpayer ID(s):    

 

 

Lender Preference for Delivery of Securities (pursuant to Section 2.3):

☐Physical Certificate: Please have a physical stock certificate evidencing the
Securities delivered to the address set forth above.

☐Electronic “Book Entry”: Lender has (or will establish prior to the Closing
Date) an account with the Company’s transfer agent, VStock Transfer, LLC. Please
have the transfer agent record the Securities to the benefit of such account
electronically in lieu of delivering a physical stock certificate.

 

Mark all that are applicable:

☐Lender is an individual with a net worth, or a joint net worth together with
his or her spouse, in excess of $1,000,000.

☐Lender is an individual that had an individual income in excess of $200,000 in
each of the prior two years and reasonably expects an income in excess of
$200,000 in the current year or an individual that had with his/her spouse joint
income in excess of $300,000 in each of the prior two years and reasonably
expects joint income in excess of $300,000 in the current year.

☐Lender is a director or executive officer of the Company.

 

UNITED STATES TAXABLE INVESTORS ONLY

 

Under penalty of perjury, by signature above, each Lender signatory certifies
that (a) the Social Security Number(s) or Taxpayer ID Number(s) shown above are
the true, correct and complete Social Security Number(s) or Taxpayer ID
Number(s) for Lender and (b) Lender is not subject to backup withholding
because: (i) Lender is exempt from backup withholding; (ii) Lender has not been
notified by the Internal Revenue Service (the “IRS”) that Lender is subject to
backup withholding; or (iii) the IRS has notified Lender that Lender is no
longer subject to backup withholding.

 

 

Debt-for-Equity Exchange Agreement

Signature Page

 

 
Page 10

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed as
of the date first above written.

 

 

 

Lender (Entity):

 

 

Entity Name:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

  Address:               Email:       Fax:       U.S. Taxpayer ID(s):    

 

Lender Preference for Delivery of Securities (pursuant to Section 2.3):

☐Physical Certificate: Please have a physical stock certificate evidencing the
Securities delivered to the address set forth above.

☐Electronic “Book Entry”: Lender has (or will establish prior to the Closing
Date) an account with the Company’s transfer agent, VStock Transfer, LLC. Please
have the transfer agent record the Securities to the benefit of such account
electronically in lieu of delivering a physical stock certificate.

 

Mark all that are applicable:

☐Lender is an entity all of whose members are either (a) individuals with a net
worth, or a joint net worth together with the individual’s spouse, in excess of
$1,000,000, (b) individuals that had an individual income in excess of $200,000
in each of the prior two years and reasonably expect an income in excess of
$200,000 in the current year or (c) individuals that had with the individual’s
spouse joint income in excess of $300,000 in each of the prior two years and
reasonably expect joint income in excess of $300,000 in the current year.

☐Lender is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, an investment company
registered under the Investment Company Act of 1940, a business development
company as defined in Section 2(a)(48) of the Investment Company Act of 1940 or
a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958.

☐Lender has total assets in excess of $5,000,000, was not formed for the
specific purpose of acquiring the securities and is one or more of the following
(check one or more, as appropriate):

☐an organization described in Section 501(c)(3) of the Internal Revenue Code;

☐a corporation;

☐a Massachusetts or similar business trust; or

☐a partnership.

☐Lender is a trust with total assets exceeding $5,000,000 that was not formed
for the specific purpose of acquiring securities and whose purchase is directed
by a person who has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the investment
in the securities.

 

 

UNITED STATES TAXABLE INVESTORS ONLY

 

Under penalty of perjury, by signature above, each Lender signatory certifies
that (a) the Social Security Number(s) or Taxpayer ID Number(s) shown above are
the true, correct and complete Social Security Number(s) or Taxpayer ID
Number(s) for Lender and (b) Lender is not subject to backup withholding
because: (i) Lender is exempt from backup withholding; (ii) Lender has not been
notified by the Internal Revenue Service (the “IRS”) that Lender is subject to
backup withholding; or (iii) the IRS has notified Lender that Lender is no
longer subject to backup withholding.

    

 

Debt-for-Equity Exchange Agreement

Signature Page

      

 

 
Page 11

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Exhibit A

PROMISSORY NOTES

 

 

Date Issued

   

Maturity Date

   

Principal Amount

   

Accrued Interest (through Closing Date)

   

Balance

     

Shares of Common Stock

                    $       $       $    

÷ $0.75 =

                                               

÷ $0.75 =

                 

Totals:

    $       $       $              

 

 

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Debt-for-Equity Exchange Agreement                              

Page A-1