Exhibit 10.4


 





LOAN
MODIFICATION AND WARRANT ISSUANCE AGREEMENT


 


THIS
LOAN MODIFICATION AND WARRANT ISSUANCE AGREEMENT (this “Agreement”) made and entered on this 30
day of December, 2015, by and between PROTEA
BIOSCIENCES GROUP, INC. (the “Company”), a corporation existing under the laws of the State of Delaware,
and WEST VIRGINIA JOBS INVESTMENT TRUST BOARD
(“WVJITB”);


 


WHEREAS,
WVJITB loaned $400,000 to the Company pursuant to a Convertible Debenture dated April 18, 2012, subsequently amended, including
extending the maturity date (the “April
2012 Debenture”);


 


WHEREAS,
WVJITB loaned $290,000 to the Company pursuant to a Convertible Debenture dated March 15, 2012, subsequently amended, including
extending the maturity date (the “March
2012 Debenture” and together with the April 2012 Debenture, the “Debentures”);
and


 


WHEREAS,
the parties hereto seek to effect a further extension of the maturity dates of the Debentures, all upon the terms and pursuant
to the provisions of this Agreement.


 


NOW
THEREFORE, in consideration of the foregoing premises and in consideration of the mutual promises and agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:


 


1.           It
is agreed that the principal indebtedness
owing by Company on the April 2012 Debenture is $300,000 and that the interest
due and owing by Company on the April 2012 Debenture as of December 31, 2015 is $15,000, plus per diem interest of $83.33.


 


2.           It
is agreed that the principal indebtedness
owing by Company on the March 2012 Debenture is $290,000 and that the interest
due and owing by Company on the March 2012 Debenture as of December 31, 2015 is $8,700, plus per diem interest of $48.33.


 


3.           The
“Maturity Date” as defined and described in each of the Debentures, as amended, is hereby changed from December 31,
2015 to March 31, 2016.


 


4.           As
interest through October 31, 2014, inclusive, was paid by the Company on November 3, 2014, it is agreed that all interest accruing
after October 31, 2014 on the Debentures shall be paid on or before the Maturity Date.


 


 5.           On the Maturity Date:




 


(a)          Except
as otherwise provided in subsection (b) below, Company shall pay to WVJITB, in cash, $300,000 owing on the principal
of the April 2012 Debenture, plus
an amount equal to all accrued and unpaid interest owing on the April 2012 Debenture;


 




    	 		 



     


    

 


(b)          Pursuant
to its “Holder’s Optional Conversion” rights, on the Maturity Date, WVJITB may convert $200,000 owing on
the principal of the April
2012 Debenture into Common Stock, based on the agreed stock purchase price of fifty cents per share. Upon the exercise by
WVJITB of its option to convert into Common Stock, $200,000 owing on the principal
of the April 2012 Debenture would convert into 400,000 shares of Company Common Stock and the Company shall pay to WVJITB, in
cash, the remaining $100,000 owing on the principal
of the April 2012 Debenture, plus
an amount equal to all accrued and unpaid interest owing on the April 2012 Debenture; and


 


(c)          Company
shall pay to WVJITB, in cash, $290,000 owing on the principal
of the March 2012 Debenture, plus
an amount equal to all accrued and unpaid interest owing on the March 2012 Debenture.


 


6.           WVJITB
shall have earned and Company shall on the Maturity Date issue warrants to WVJITB (Company Warrant No. ___) to purchase
up to five hundred ninety thousand (590,000) shares of Common Stock of Company at a purchase price to be determined (pending
Board approval).


 


7.           Except
as modified or amended by this Agreement, the Debentures and their terms and provisions, as previously amended, remain in full
force and effect.


 


8.           Company
hereby reaffirms all existing indebtedness and obligations to WVJITB pursuant to the Debentures as amended prior hereto and
hereby, and Company agrees that its said indebtedness and obligations are absolute and unconditional irrespective of any
claims or defenses that might be asserted, and shall remain in full force and effect until Company shall have fully and
satisfactorily satisfied and discharged its said indebtedness and obligations.


 


9.           This
Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument. This Agreement may be executed by facsimile or electronic signature(s) which shall be binding on
the party delivering same, to be followed by delivery of originally executed signature pages.


 


WITNESS
the following signatures.


 


	 	West Virginia Jobs Investment Trust Board
	 	 	 
	 	By:	/s/ C. Andrew Zulauf
	 	 	C. Andrew Zulauf, Executive Director
	 	 	 
	 	Protea  Biosciences Group, Inc.
	 	 
	 	By:	/s/ Steven Turner
	 	 	Steven Turner, President


 








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