Exhibit 10.6





 


LOAN MODIFICATION AND WARRANT ISSUANCE
AGREEMENT


 


THIS LOAN MODIFICATION
AND WARRANT ISSUANCE AGREEMENT (this “Agreement”) made and entered on this 31st day of March, 2016, 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 March 31, 2016 is $22,500, 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 March 31, 2016 is $13,050, 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 March 31, 2016
to September 30, 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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