Exhibit 10.143

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (the “Agreement”), dated as of March ___], 2017, is made
by and between PROTEA BIOSCIENCES GROUP, INC., a Delaware corporation
(“Company”), and the undersigned signatory hereto (“Holder”), as a holder of the
Units of Common Stock and Warrants (as defined below) in the Company’s 2016-17
Offering (as defined below).

 

INTRODUCTION:

 

This Agreement is being entered into with reference to the following:

 

A.           Pursuant to an amended and restated private placement memorandum
dated as of October 31, 2016 (the “Memorandum”), commencing in October 2016 the
Company initiated and continues to conduct a private placement offering though
March 31, 2017 (the “2016-17 Offering”) of units of securities (the “Units”)
consisting of (i) shares of common stock, $0.0001 par value per share (the
“Common Stock”) offered at a per share price of $0.075 per share, (ii) Class A
Warrants to purchase additional shares of Common Stock at an exercise price of
$0.09 per share (the “2016-7 A Warrants”) and (iii) Class B Warrants to purchase
additional shares of Common Stock at an exercise price of $0.1125 per share (the
“2016-7 B Warrants”). Each Unit, offered for a total of $10,000, consist of (i)
133,333.33 shares of Common Stock, (ii) 133,333.33 2016-7 A Warrants, and (iii)
133,333.33 2016-7 B Warrants. In addition to the Units, the Company also issued
2016-7 A Warrants to purchase approximately 900,000 shares of Common Stock) and
2016-7 B Warrants to purchase approximately 900,000 shares of Common Stock) as
compensation to employees. In connection with the 2016-7 Offering, to date, the
Company has issued to the placement agent a three year warrant to purchase
_______shares of Common Stock at an exercise price of $0.075 per share. The
placement agent warrant has the same full-rachet anti-dilution protection as the
2016-7 A Warrants and 2016-7 B Warrants (described below) issued and issuable to
investors in the 2016-7 Offering (the “Investors”).

 

B.            Pursuant to the terms of the 2016-7 A Warrants and 2016-7 B
Warrants issued and issuable to investors in the 2016-7 Offering, if the Company
issues or sells common stock for per share consideration of less than the
exercise price then in effect, such exercise prices will be reduced to equal the
per share price of the dilutive issuance, and the number of warrant shares
issuable shall be increased so that the aggregate exercise price payable, after
considering the per share price of the dilutive issuance, shall equal the
aggregate exercise price prior to the adjustment to the exercise price. As a
result of the sale of Common Stock in the Units at a price of $0.075 per share,
the exercise prices of both the 2016-7 A Warrants and 2016-7 B Warrants would be
reduced to $0.075 per share.

 

C.           Pursuant to that certain Securities Purchase Agreement (the
“Purchase Agreement”), dated as of the date set forth on Schedule A hereto,
entered into by and between the Company and the Holder, the Holder purchased
Units of securities in the 2016-17 Offering, consisting of the shares of Common
Stock, 2016-17 Class A Warrants and 2016-17 Class B Warrants as set forth on
Column 1 of Schedule A hereto.

 

D.           The anti-dilution provisions contained in the Unit Purchase
Agreement with respect to the Common Stock and 2016-17 Class A Warrants and
2016-17 Class B Warrants included in the Purchase Agreement entered into with
the Holder and other Investors in the 2016-17 Offering has created significant
derivative liabilities for the Company of December 31, 2016 of as much as
$__________ that directly reduces the Company’s net worth and could materially
and adversely affect the Company’s ability to qualify to list its Common Stock
for trading on the Nasdaq Capital Market or other comparable national securities
exchange.

 

   

 

 

E.           Subject to the terms and conditions set forth in this Agreement and
pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to exchange both the 2016-17 Class A
Warrants and 2016-17 Class B Warrants included in the Units purchased by the
Holder for additional shares of Common Stock, all upon the terms and subject to
the conditions set forth in this Agreement.

 

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 Holder agree as
follows:

 

1.             Terms of the Exchange. The Company and Holder hereby agree that
at the Closing referred to below, the Holder will exchange all of his or its
2016-17 Class A Warrants and 2016-17 Class B Warrants (hereinafter collectively
referred to as the “Exchange Securities”) in exchange for such number of
additional shares of Common Stock of the Company that are set forth on Column 2
of Schedule A, annexed hereto.

 

2.             Closing. Upon satisfaction of the conditions set forth herein, a
closing shall occur at the principal offices of the Company, or such other
location as the parties shall mutually agree. At closing, Holder shall deliver
the 2016-17 Class A Warrants the 2016-17 Class B Warrants representing the
Exchange Securities to the Company, and the Company shall deliver to such Holder
a certificate evidencing the shares of Common Stock constituting the Securities,
in the name of the Holder and in the amounts as indicated on Column 2 of
Schedule A annexed hereto. Upon closing, any and all obligations of the Company
to Holder under the Exchange Securities shall be fully satisfied, the
certificates evidencing the Exchange Securities shall be cancelled and Holder
will have no remaining rights, powers, privileges, remedies or interests under
the Exchange Securities.

 

3.            Further Assurances.         Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as any other 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.

 

4.            Representations and Warranties of the Holder. The Holder
represents and warrants as of the date hereof and as of the closing to the
Company as follows:

 

a.           Authorization; Enforcement. The Holder has the requisite individual
or corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of this
Agreement by the Holder and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Holder and no further action is required by the
Holder.  This Agreement has been (or upon delivery will have been) duly executed
by the Holder and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Holder enforceable against
the Holder in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

b.           Tax Advisors. The Holder has reviewed with its own tax advisors the
U.S. federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement. With respect to such matters,
the Holder relies solely on such advisors and not on any statements or
representations of the Company or any of its agents, written or oral. The Holder
understands that it (and not the Company) shall be responsible for its own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.

 

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c.           Information Regarding Holder. Holder is an “accredited investor”,
as such term is defined in Rule 501 of Regulation D promulgated by the United
States Securities and Exchange Commission (the “Commission”) under the
Securities Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of companies in
private placements in the past and, with its representatives, has such knowledge
and experience in financial, tax and other business matters as to enable the
Holder to utilize the information made available by the Company to evaluate the
merits and risks of and to make an informed investment decision with respect to
the proposed purchase, which represents a speculative investment. Holder has the
authority and is duly and legally qualified to purchase and own the Securities.
Holder is able to bear the risk of such investment for an indefinite period and
to afford a complete loss thereof.

 

d.           Legend. The Holder understands that the Securities have been issued
pursuant to an exemption from registration or qualification under the Securities
Act and applicable state securities laws, and except as set forth below, the
Securities shall bear any legend as required by the “blue sky” laws of any state
and a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):

 

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

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e.           Removal of Legends. Certificates evidencing Securities shall not be
required to contain the legend set forth in Section 4(d) above or any other
legend (i) while a registration statement covering the resale of such Securities
is effective under the Securities Act, (ii) following any sale of such
Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of
the Company), (iii) if such Securities are eligible to be sold, assigned or
transferred under Rule 144 and the Subscriber is not an affiliate of the Company
(provided that the Holder provides the Company with reasonable assurances that
such Securities are eligible for sale, assignment or transfer under Rule 144
which shall not include an opinion of the Holder’s counsel), (iv) in connection
with a sale, assignment or other transfer (other than under Rule 144), provided
that the Holder provides the Company with an opinion of counsel to the Holder,
in a generally acceptable form, to the effect that such sale, assignment or
transfer of the Securities may be made without registration under the applicable
requirements of the Securities Act or (v) if such legend is not required under
applicable requirements of the Securities Act (including, without limitation,
controlling judicial interpretations and pronouncements issued by the SEC). If a
legend is not required pursuant to the foregoing, the Company shall no later
than three (3) business days following the delivery by the Holder to the Company
or the transfer agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer, if applicable), together with any other deliveries from the Holder as
may be required above in this Section 4(e), as directed by the Holder, either:
(A) provided that the Company’s transfer agent is participating in the DTC Fast
Automated Securities Transfer Program, credit the 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 at Custodian
system or (B) if the Company’s transfer agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver (via reputable
overnight courier) to the Holder, a certificate representing such Securities
that is free from all restrictive and other legends, registered in the name of
the Holder or its designee. The Company shall be responsible for any transfer
agent fees or DTC fees with respect to any issuance of Securities in accordance
herewith.

 

f.            Restricted Securities. The Holder understands that: (i) the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) the Holder shall
have delivered to the Company (if requested by the Company) an opinion of
counsel to the Holder, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such registration, or (C)
the Holder provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144, and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the Person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC promulgated thereunder; and (iii) 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.

 

5.            Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Holder:

 

a.           Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other agreements entered into by
the parties hereto in connection with the transactions contemplated by this
Agreement (collectively, the “Exchange Documents”) and otherwise to carry out
its obligations hereunder and thereunder.  The execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, the Board of Directors of the Company or the Company’s stockholders in
connection therewith, including, without limitation, the issuance of the
Securities have been duly authorized by the Company's Board of Directors and no
further filing, consent, or authorization is required by the Company, its Board
of Directors or its stockholders.  This Agreement and any Other Agreement (as
defined herein) have been (or upon delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

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b.           Organization and Qualification. Each of the Company and its
subsidiaries (the “Subsidiaries”) are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in which they
are formed, and have the requisite power and authorization to own their
properties and to carry on their business as now being conducted and as
presently proposed to be conducted. Each of the Company and each of its
Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition
(financial or otherwise) or prospects of the Company or any Subsidiary,
individually or taken as a whole, (ii) the transactions contemplated hereby or
in any of the other Exchange Documents or (iii) the authority or ability of the
Company to perform any of its obligations under any of the Exchange Documents.
Other than its Subsidiaries, there is no Person (as defined below) in which the
Company, directly or indirectly, owns capital stock or holds an equity or
similar interest. “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and any governmental entity or any department or
agency thereof.

 

c.           No Conflict. The execution, delivery and performance of the
Exchange Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Securities will not (i) (i) result in a violation of the
Certificate of Incorporation (as defined below) or other organizational
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or Bylaws (as defined below) of the Company
or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal and
state securities laws and regulations and the rules and regulations of The
NASDAQ Capital Market (the “Principal Market”) applicable to the Company or any
of its Subsidiaries or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected except, in the case of clause (ii) or
(iii) above, to the extent such violations that could not reasonably be expected
to have a Material Adverse Effect.

 

d.           No Consents. Neither the Company nor any Subsidiary is required to
obtain any consent from, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its respective obligations under or contemplated by the
Exchange Documents, in each case, in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and registrations which
the Company or any Subsidiary is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date of this
Agreement, and neither the Company nor any of its Subsidiaries is aware of any
facts or circumstances which might prevent the Company or any of its
Subsidiaries from obtaining or effecting any of the registration, application or
filings contemplated by the Exchange Documents. The Company is not in violation
of the requirements of the Principal Market and has no knowledge of any facts or
circumstances which could reasonably lead to delisting or suspension of the
Common Stock in the foreseeable future. The Company has obtained all necessary
consents and approvals from the Principal Market, including, if required, a
Listing of Additional Shares application (the “LAS”) covering the listing of the
Securities with the Principal Market.

 

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e.           Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Holder contained herein, the offer and
issuance by the Company of the Securities is exempt from registration under the
Securities Act. The offer and issuance of the Securities is exempt from
registration under the Securities Act pursuant to the exemption provided by
Section 3(a)(9) thereof. The Company covenants and represents to the Holder that
neither the Company nor any of its Subsidiaries has received, anticipates
receiving, has any agreement to receive or has been given any promise to receive
any consideration from the Holder or any other Person in connection with the
transactions contemplated by the Exchange Documents.

 

f.            Issuance of Securities. The issuance of the Securities are duly
authorized and upon issuance in accordance with the terms of the Exchange
Documents shall be validly issued, fully paid and non-assessable and free from
all taxes, liens, charges and other encumbrances with respect to the issue
thereof.

 

g.           Transfer Taxes. As of the date of this Agreement, all share
transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance of the Securities to be exchanged
with the Holder hereunder will be, or will have been, fully paid or provided for
by the Company, and all laws imposing such taxes will be or will have been
complied with.

 

h.           Equity Capitalization. Except as disclosed in the SEC Documents (as
defined below): (i) none of the Company’s or any Subsidiary’s capital stock is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company or any Subsidiary; (ii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries; (iii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound; (iv) there are no financing statements securing obligations in any
amounts filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the Securities Act; (vi) there are no outstanding securities or instruments of
the Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii)
neither the Company nor any Subsidiary has any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement; and (ix)
neither the Company nor any of its Subsidiaries have any liabilities or
obligations required to be disclosed in the in the Company’s filings with the
SEC (the “SEC Documents”) which are not so disclosed in the SEC Documents, other
than those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or
could not have a Material Adverse Effect. The Company has furnished to the
Holder true, correct and complete copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof (the “Certificate
of Incorporation”), and the Company’s bylaws, as amended and as in effect on the
date hereof (the “Bylaws”), and the terms of all securities convertible into, or
exercisable or exchangeable for, shares of Common Stock and the material rights
of the holders thereof in respect thereto that have not been disclosed in the
SEC Documents.

 

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(i)          Shell Company Status. The Company is not and has not been for a
period of at least one (1) year prior to the date of this Agreement an issuer
identified in Rule 144(i)(1) of the Securities Act. The Company is, and has been
for a period of at least 90 days, subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act.

 

(j)          Exchange Offer to Other Investors. In addition to the Holder, the
Company shall offer to all other Investors in the 2016-17 Offering who have
heretofore purchased Units (the “Existing Investors”) an opportunity to exchange
their Exchange Securities for the Securities on the same terms and conditions as
are set forth in this Agreement.

 

(k)          Amendment to Memorandum. To the extent that the Company elects to
offer additional securities in the 2016-17 Offering, it will amend the terms of
the Memorandum to offer only shares of Common stock on terms that are consistent
with this Agreement and its exchange agreements with other Existing Investors in
the 2016-17 Offering.

 

6.           Additional Acknowledgments. The Holder and the Company confirm that
the Company has not received any consideration for the transactions contemplated
by this Agreement. Pursuant to Rule 144 promulgated by the Commission pursuant
to the Securities Act and the rules and regulations promulgated thereunder as
such Rule 144 may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule 144, the holding period of the Securities tacks back to
April 19, 2016, the issue date of the Exchange Securities. The Company agrees
not to take a position contrary to this paragraph.

 

7.          Release by the Holder.

 

In consideration of the foregoing, Holder releases and discharges Company,
Company’s officers, directors, principals, control persons, past and present
employees, insurers, successors, and assigns (“Company Parties”) from all
actions, cause of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever, in law, admiralty or equity, which
against Company Parties ever had, now have or hereafter can, shall or may, have
for, upon, or by reason of any matter, cause or thing whatsoever, whether or not
known or unknown, arising under the Exchange Securities.  It being understood
that this Section shall be limited in all respects to only matters arising under
or related to the Exchange Securities and shall under no circumstances
constitute a release, waiver or discharge with respect to the Securities or any
Exchange Documents or limit the Holder from taking action for matters with
respect to the Securities or any Exchange Document or events that may arise in
the future.

 

8.           Miscellaneous.

 

a.           Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.

 

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b.           Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by and construed under the laws of the State of New York
without regard to the choice of law principles thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the State of New York located in The City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in connection
herewith or therewith or with any transaction contemplated hereby or thereby,
and hereby irrevocably waives any objection that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

c.           Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

d.           Counterparts/Execution. This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains an electronic
file of an executed signature page, such signature page shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or electronic file
signature page (as the case may be) were an original thereof.

 

e.           Notices. Any notice or communication permitted or required
hereunder shall be in writing and shall be deemed sufficiently given if
hand-delivered or sent (i) postage prepaid by registered mail, return receipt
requested, or (ii) by facsimile, to the respective parties as set forth below,
or to such other address as either party may notify the other in writing.

 

  If to the Company, to: Protea Biosciences Group, Inc.     1311 Pineview Drive,
Suite 501     Morgantown, West Virginia 26505     Attention:  Chief Executive
Officer

 

If to Holder, to the address set forth on the signature page of the Holder.

 

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f.            Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith.

 

g.           Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties with regard to the subject matter hereof and
thereof, superseding all prior agreements or understandings, whether written or
oral, between or among the parties. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as expressly stated
herein, no delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder preclude any
other or future exercise of any other right, power or privilege hereunder.

 

h.           Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

 

i.            Independent Nature of the Holder’s Obligations and Rights. The
obligations of the Holder under the Exchange Documents are several and not joint
with the obligations of any other Investor as a holder of Units, Common Stock,
2016-17 Class A Warrants or 2016-17 Class B Warrants issued by the Company in
the 2016-17 Offering (each, an “Other Holder”) under any other agreement to
exchange Warrants (each, an “Other Agreement”), and the Holder shall not be
responsible in any way for the performance of the obligations of any Other
Holders under any Other Agreement. Nothing contained herein or in any Other
Agreement, and no action taken by the Holder pursuant hereto or any Other Holder
pursuant to any Other Agreement, shall be deemed to constitute the Holder or any
Other Holder as, and the Company acknowledges that the Holder and the Other
Holders do not so constitute, a partnership, an association, a joint venture or
any other kind of group or entity, or create a presumption that the Holder and
any Other Holder are in any way acting in concert or as a group or entity with
respect to such obligations or the transactions contemplated by the Exchange
Documents, any other agreement or any matters, and the Company acknowledges that
the Holder and the Other Holders are not acting in concert or as a group or
entity, and the Company shall not assert any such claim, with respect to such
obligations or the transactions contemplated by the Exchange Documents and any
Other Agreement. The decision of the Holder to acquire the Securities pursuant
to the Exchange Documents has been made by the Holder independently of any Other
Holder. The Holder acknowledges that no Other Holder has acted as agent for the
Holder in connection with the Holder making its acquisition hereunder and that
no Other Holder will be acting as agent of the Holder in connection with
monitoring the Holder’s Securities or enforcing its rights under the Exchange
Documents. The Company and the Holder confirm that the Holder has independently
participated with the Company in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. The Holder shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any of the Other
Agreements, and it shall not be necessary for any Other Holder to be joined as
an additional party in any proceeding for such purpose. To the extent that any
of the Other Holders and the Company enter into the same or similar documents,
all such matters are solely in the control of the Company, not the action or
decision of the Holder, and would be solely for the convenience of the Company
and not because it was required or requested to do so by the Holder or any Other
Holder. For clarification purposes only and without implication that the
contrary would otherwise be true, the transactions contemplated by the Exchange
Documents include only the transaction between the Company and the Holder and do
not include any other transaction between the Company and any Other Holder.

 

 9 

 

 

j.            Most Favored Nation. The Company hereby represents and warrants as
of the date hereof and covenants and agrees from and after the date hereof that
none of the terms offered to any Other Holder in any Other Agreement, is or will
be more favorable to such Other Holder than those of the Holder and this
Agreement. If, and whenever on or after the date hereof, the Company desires to
enter into an Other Agreement, then (i) the Company shall provide prior written
notice thereof to the Holder and (ii) upon execution by the Company and such
Other Holder of such Other Agreement, the terms and conditions of this
Agreement, the Other Agreement and the Securities shall be, without any further
action by the Holder or the Company, automatically amended and modified in an
economically and legally equivalent manner such that the Holder shall receive
the benefit of the more favorable terms and/or conditions (as the case may be)
set forth in such Other Agreement, provided that upon written notice to the
Company at any time the Holder may elect not to accept the benefit of any such
amended or modified term or condition, in which event the term or condition
contained in this Agreement or the Securities (as the case may be) shall apply
to the Holder as it was in effect immediately prior to such amendment or
modification as if such amendment or modification never occurred with respect to
the Holder.

 

k.          Reporting Status. For a period of two (2) years from the date
hereof, the Company shall timely file all reports required to be filed with the
SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the Company shall continue to timely file reports under the Exchange
Act even if the Exchange Act or the rules and regulations thereunder would
otherwise no longer require or permit such filings.

 

l.            Listing. The Company shall use reasonable best efforts to promptly
secure the listing or designation for quotation (as the case may be) of all of
the Securities upon the Principal Market or any other national securities
exchange or automated quotation system, upon which the Common Stock is then
listed or designated for quotation (as the case may be) (subject to official
notice of issuance) (but in no event later than the date of this Agreement) and
shall use reasonable best efforts to maintain such listing or designation for
quotation (as the case may be) of all Securities from time to time issuable
under the terms of this Agreement on such national securities exchange or
automated quotation system. The Company shall maintain the Common Stock’s
listing or authorization for quotation (as the case may be) on the The New York
Stock Exchange, the NYSE MKT, the Nasdaq Global Market or the Nasdaq Capital
Market, the OTCQB, the OTQQX or the OTCBB (or any successor thereto) (each, an
“Eligible Market”). Neither the Company nor any of its Subsidiaries shall take
any action which could be reasonably expected to result in the delisting or
suspension of the Common Stock on an Eligible Market. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this
Section 8(l).

 

m.           Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by the Holder in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and if the Holder effects a pledge of
Securities it shall not be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any Other Agreement. The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by the Holder.

 

n.           Securities Laws Disclosure. The Company shall, within four (4)
business days after this Agreement has been executed, file a Current Report on
Form 8-K with the SEC (the “8-K Filing”), including this Agreement as an exhibit
thereto. From and after the issuance of the 8-K Filing, the Company shall have
publicly disclosed all material, non-public information delivered to the Holder
by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents, as it relates to the transactions contemplated
hereby.

 

(Signature Pages Follow)

 

 10 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

 

PROTEA BIOSCIENCES GROUP, INC.         By:       Name:  Stephen Turner      
Title:    President and CEO  

 

HOLDER: [_________]

 

By:    

 

Address for Notices:                       Address for delivery of Securities:  
               

 

   

 

 

SCHEDULE A

 

    Column 1   Column 2 Name and Address
of Holder   Exchange Securities
Number of shares of
Common Stock and
Warrants issued in the
Units   Securities to be Issue in
exchange for the Exchange
Securities (1)               ___ Units consisting of _________ shares of Common
Stock,_______ 2016-17 Class A Warrants and ________ 2016-17 Class B Warrants  
________ shares of Common Stock (2)

 

(1)Consists of one and one-half (1.5) shares of Common Stock in exchange for
both a 2016-17 Class A Warrant to purchase one share of Common Stock and a
2016-17 Class B Warrant to purchase one share of Common Stock, or 200,000 shares
of Common Stock in exchange for both of the 133,333.33 2016-17 Class A Warrants
and 133,333.33 2016-17 Class A Warrants included in each full Unit.

 

(2)Determined by multiplying (i) the _______ Units purchased by the Holder by
(ii) 200,000 shares of Common Stock.