Document:

Exhibit 10.144

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT
(this “Agreement”) made as of the last date set forth on the signature page hereof between Protea Biosciences Group,
Inc. (the “Company”), and the undersigned (the “Investor”).

 

WITNESSETH:

 

WHEREAS, in 2016, the
Company conducted a private offering (the “Offering”) of 20% original issue discount unsecured convertible debentures
(the “Debentures”), initially convertible into shares of the Company’s common stock par value $0.001 per share
(the “Common Stock”) at a conversion price equal to $0.25, subject to adjustment (the “Conversion Price”),
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 promulgated
thereunder; and

 

WHEREAS, the Investor
purchased a $___________ Face Amount Debenture (the “Original Debenture”); and

 

WHEREAS, the Original
Debenture has either matured or will mature within the next 60 days and the Company is unable to pay the Face Amount of the Original
Debenture on its maturity date; and

 

WHEREAS, the Company
wishes to exchange the Original Debenture for (a) an amended and restated debenture due September 30, 2017 (the “Maturity
Date”) in the principal sum of $[_______________], representing the Face Amount of the Original Debenture set forth above
plus $____________ of accrued interest from the _________ 2016 Original Issue Date to the date hereof (the “Principal
Amount”), and in the form of Exhibit A annexed hereto and made a part hereof (the “Restated Debenture”);
and (b) _________ shares of Common Stock of the Company, representing one share of Common Stock for each one dollar ($1.00) Principal
Amount of the Debenture (the “Additional Common Stock”); and

 

WHEREAS, Investor is
willing to exchange the Original Debenture for the Restated Debenture and the Additional Common Stock, all upon the terms and conditions
set forth herein.

 

NOW, THEREFORE, in
consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby
agree as follows:

 

		I.	EXCHANGE OF SECURITIES AND REPRESENTATIONS BY SUBSCRIBER

 

1.1Subject
to the terms and conditions hereinafter set forth, the Company hereby offers and the Investor hereby agrees to exchange the Original
Debenture for the Restated Debenture and the shares of Additional Common Stock (the “Exchange Offer”).

 

1.2Upon
delivery by the Company of the Restated Debenture and the shares of Additional Common Stock (collectively, the “Securities”),
the Investor will return to the Company the Original Debenture.

 

1.3The Investor
shall be entitled to retain any and all other securities of the Company, including the Warrants, issued in connection with the
Original Debenture.

 

1.4The Investor
recognizes that the purchase of the Securities involves a high degree of risk including, but not limited to, the following: (a)
the Company has a limited operating history and requires substantial funds in addition to the proceeds of this Exchange Offer;
(b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should
consider investing in the Company and the Securities; (c) the Investor may not be able to liquidate its investment; (d) transferability
of the Securities is extremely limited; (e) in the event of a disposition, the Investor could sustain the loss of its entire investment;
(f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the other
risks associated with the Company’s business, financial situation and this Exchange Offer set forth in the Company’s
Annual Report on Form 10-K for its fiscal year ended December 31, 2016; a copy of which has been made available to the Investor
(the “2016 Form 10-K Annual Report”).

 

    	 	 	 

     

    

 

1.5At the
time such Investor received the Original Debenture, the Investor was, and as of the date hereof it is, and on each date on which
it converts the Debenture and/or exercises any Warrants such Investor will be an “accredited investor” as defined in
Rule 501(a) under the Securities Act, as indicated by the Investor’s responses to the questions contained in Article VII
hereof, and that the Investor is able to bear the economic risk of an investment in the Securities.

 

1.6The Investor
hereby acknowledges and represents that (a) the Investor has knowledge and experience in business and financial matters, prior
investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities
exchange or the Investor has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation
D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Investor and
to all other prospective investors in the Securities to evaluate the merits and risks of such an investment on the Investor’s
behalf; (b) the Investor recognizes the highly speculative nature of this investment; and (c) the Investor is able to bear the
economic risk that the Investor hereby assumes.

 

1.7The Investor
hereby acknowledges receipt and careful review of this Agreement, the Debenture and all other exhibits thereto (collectively referred
to as the “Transaction Documents”) and has had access to the Company’s 2016 Form 10-K Annual Report and the exhibits
thereto, and has received any additional information that the Investor has requested from the Company, and has been afforded the
opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning
the Company; provided, however that no investigation performed by or on behalf of the Investor shall limit or otherwise affect
its right to rely on the representations and warranties of the Company contained herein. except to the extent that the Investor
had actual knowledge that any such representation or warranty was untrue.

 

1.8In making
the decision to invest in the Securities, the Investor has relied solely upon the information provided by the Company in the Transaction
Documents and upon the information set forth in the 2016 Form 10-K Annual Report. To the extent necessary, the Investor has retained,
at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences
of this Agreement and the purchase of the Securities hereunder. The Investor disclaims reliance on any statements made or information
provided by any person or entity in the course of Investor’s consideration of an investment in the Securities other than
the Transaction Documents.

 

1.9The Investor
hereby acknowledges that this Exchange Offer has not been reviewed by the SEC nor any state regulatory authority since this Exchange
Offer is intended to be exempt from the registration requirements of Section 5 of the Securities Act, pursuant to Regulation D.
The Investor understands that the Securities have not been registered under the Securities Act or under any state securities or
“blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they
are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption
from such registration is available.

 

1.10The
Investor understands that the Securities have not been registered under the Securities Act by reason of a claimed exemption under
the provisions of the Securities Act that depends, in part, upon the Investor’s investment intention and investment qualification.
In this connection, the Investor hereby represents that the Investor is purchasing the Securities for the Investor’s own
account for investment and not with a view toward the resale or distribution to others; provided, however, that nothing contained
herein shall constitute an agreement by the Investor to hold the Securities for any particular length of time and the Company acknowledges
that the Investor shall at all times retain the right to dispose of its property as it may determine in its sole discretion, subject
to any restrictions imposed by applicable law. The Investor, if an entity, further represents that it was not formed for the purpose
of purchasing the Securities.

 

    	 	 	 

     

    

 

1.11The
Investor consents to the placement of a legend on any certificate or other document evidencing the Securities and, when issued,
the shares of Common Stock issuable upon conversion of the Debentures (the “Conversion Shares”) and the shares
of Additional Common Stock (collectively with the Conversion Shares, the “Shares”) that such securities have
not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring
to the restrictions on transferability and sale thereof contained in this Agreement. The Investor is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities or the Shares.

 

1.12The
Investor hereby represents that the address of the Investor furnished by Investor on the signature page hereof is the Investor’s
principal residence if Investor is an individual or its principal business address if it is a corporation or other entity.

 

1.13Such
Investor understands that the Securities are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view
to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable
state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities in violation of the Securities Act or any applicable state securities law. Furthermore, such
Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

 

1.14The
Investor represents that the Investor has full power and authority (corporate, statutory and otherwise) to execute and deliver
this Agreement and to purchase the Securities. This Agreement constitutes the legal, valid and binding obligation of the Investor,
enforceable against the Investor in accordance with its terms.

 

1.15If the
Investor is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account,
Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement
on behalf of such entity has been duly authorized by such entity to do so.

 

1.16The
Investor acknowledges that if he or she is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”)
member firm, he or she must give such firm the notice required by the FINRA’s Rules of Fair Practice, receipt of which must
be acknowledged by such firm in Section 7.4 below.

 

1.17The
Investor agrees not to issue any public statement with respect to the Investor’s investment or proposed investment in the
Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent,
except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 

    	 	 	 

     

    

 

1.18The
Investor will indemnify and hold harmless the Company and Laidlaw & Company (UK) Ltd, as placement agent in connection with
the offering of the Original Debenture (the “Placement Agent”) and, where applicable, their respective directors,
officers, employees, agents, advisors, affiliates and shareholders, and each other person, if any, who controls any of the foregoing
(collectively, the “Issuer Indemnified Parties”) from and against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating,
preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened)
(a “Loss”) arising out of or based upon any representation or warranty of the Investor contained herein or in any document
furnished by the Investor to the Company and/or the Placement Agent in connection herewith being untrue in any material respect
or any breach or failure by the Investor to comply with any covenant or agreement made by the Investor herein or therein; and if
for any reason (other than a final non-appealable judgment finding any Issuer Indemnified Party liable for losses, claims, damages,
liabilities or expenses for its gross negligence or willful misconduct) the foregoing indemnity is unavailable to an Issuer Indemnified
Party or insufficient to hold an Issuer Indemnified Party harmless, then the Investor shall contribute to the amount paid or payable
by an Issuer Indemnified Party as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate
to reflect not only the relative benefits received by the Company or the Placement agent, as applicable, on the one hand and the
Investor on the other, but also the relative fault of the Issuer or the Placement Agent, as applicable, on the one hand and the
Investor on the other, as well as any relevant equitable considerations; provided, however, that the Investor shall
not be liable to indemnify any Issuer Indemnified Parties under this Section or to contribute to the amount paid or payable by
all Issuer Indemnified Parties under this Section in an amount under both such provisions that in the aggregate exceeds the Investor’s
aggregate purchase price tendered hereunder.

 

		II.	REPRESENTATIONS OF THE COMPANY

 

The Company hereby represents
and warrants to the Investor that:

 

2.1Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to own and use its properties and its assets and conduct
its business as currently conducted. Each of the Company’s subsidiaries is an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation with the requisite corporate power and authority to own
and use its properties and assets and to conduct its business as currently conducted. Neither the Company, nor any of its Subsidiaries
is in violation of any of the provisions of their respective articles of incorporation, by-laws or other organizational or charter
documents, including, but not limited to the Charter Documents (as defined below). Each of the Company and its Subsidiaries is
duly qualified to conduct business and is in good standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, would not result in a direct and/or indirect (i) material adverse effect on the legality,
validity or enforceability of any of the Securities and/or this Agreement, (ii) material adverse effect on the results of
operations, assets, business, condition (financial and other) or prospects of the Company and its Subsidiaries, taken as a whole,
or (iii) material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations
under the Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

    	 	 	 

     

    

 

2.2Capitalization
and Voting Rights. The authorized, issued and outstanding capital stock of the Company is as set forth in the 2016 Form 10-K
Annual Report and all issued and outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable.
Except as set forth in the 2016 Form 10-K Annual Report hereto, (i) there are no outstanding securities of the Company or
any of its Subsidiaries which contain any preemptive, redemption or similar provisions, nor is any holder of securities of the
Company or any Subsidiary entitled to preemptive or similar rights arising out of any agreement or understanding with the Company
or any Subsidiary by virtue of any of the Transaction Documents, 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;
(ii) neither the Company nor any Subsidiary has any stock appreciation rights or "phantom stock" plans or agreements
or any similar plan or agreement; and (iii) except as set forth in the 2016 Form 10-K Annual Report there are no outstanding options,
warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase or acquire, any
shares of capital stock of the Company or any Subsidiary or contracts, commitments, understandings, or arrangements by which the
Company or any Subsidiary is or may become bound to issue any shares of capital stock of the Company or any Subsidiary, or securities
or rights convertible or exchangeable into shares of capital stock of the Company or any Subsidiary. Except as set forth in the
2016 Form 10-K Annual Report and as otherwise required by law, there are no restrictions upon the voting or transfer of any of
the shares of capital stock of the Company pursuant to the Company’s Charter Documents (as defined below) or other governing
documents or any agreement or other instruments to which the Company is a party or by which the Company is bound. All of the issued
and outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable and the shares of capital
stock of the Subsidiaries are owned by the Company, free and clear of any mortgages, pledges, liens, claims, charges, encumbrances
or other restrictions (collectively, “Encumbrances”). All of such outstanding capital stock has been issued in compliance
with applicable federal and state securities laws. The issuance and sale of the Securities and, upon issuance, the Shares, as contemplated
hereby will not obligate the Company to issue shares of Common Stock or other securities to any other person (other than the Investor)
and except as set forth in the 2016 Form 10-K Annual Report will not result in the adjustment of the exercise, conversion, exchange
or reset price of any outstanding security. The Company does not have outstanding stockholder purchase rights or “poison
pill” or any similar arrangement in effect giving any person the right to purchase any equity interest in the Company upon
the occurrence of certain events.

 

2.3Authorization;
Enforceability. The Company has all corporate right, power and authority to enter into, execute and deliver this Agreement
and each other agreement, document, instrument and certificate to be executed by the Company in connection with the consummation
of the transactions contemplated hereby, including, but not limited to Transaction Documents and to perform fully its obligations
hereunder and thereunder. All corporate action on the part of the Company, its directors and stockholders necessary for the (a)
authorization execution, delivery and performance of this Agreement and the Transaction Documents by the Company; and (b) authorization,
sale, issuance and delivery of the Securities and upon issuance, the Shares contemplated hereby and the performance of the Company’s
obligations under this Agreement and the Transaction Documents has been taken. This Agreement and the Transaction Documents have
been duly executed and delivered by the Company and each constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to
limitations of public policy. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances other
than restrictions on transfer provided for in the Transaction Documents. The Shares, when issued and paid for in accordance with
the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Encumbrances
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company intends to reserve
a sufficient number of Shares for issuance upon the conversion of the Debentures, free and clear of all Encumbrances, except for
restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.

 

2.4Representations
and Warranties in the Subscription Agreement. Except as otherwise disclosed in the 2016 Form 10-K Annual Report or limited
as to time, all of the other representations and warranties of the Company set forth in the subscription agreement dated _________
2016 between the Company and the Investor in connection with the offering of the Original Debenture and Warrants (the “Subscription
Agreement”) are true and correct as of the date of this Exchange Agreement and are hereby deemed to be incorporated herein
by this reference.

 

    	 	 	 

     

    

 

		III.	COVENANTS OF THE COMPANY

 

3.1Transfer
Restrictions.

 

(a)          The Securities
may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144 promulgated under the Securities Act, to the Company or to an
affiliate of a Investor or in connection with, the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this
Agreement, and shall have the rights of a Investor under this Agreement.

 

(b)          The Investor
agrees to the imprinting, so long as is required by this Section 5.1, of a legend on any of the Securities, including the Shares,
substantially in the following form:

 

[NEITHER] THIS SECURITY [NOR THE SECURITIES
INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE
SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

(c)          The Investor
understands that prior to September 2, 2011, the Company was a “shell company” as defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended, (the “Exchange Act”). Pursuant to Rule 144(i), securities issued by a current or
former shell company (that is, the Securities and the Shares) that otherwise meet the holding period and other requirements of
Rule 144 nevertheless cannot be sold in reliance on Rule 144 unless at the time of a proposed sale pursuant to Rule 144 the Company
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and has filed all reports and other materials
required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports and materials), other than Form 8-K reports. As a result, the restrictive
legends on certificates for the Securities or the Shares cannot be removed except in connection with an actual sale meeting the
foregoing requirements or pursuant to an effective registration statement.

 

(d)          Certificates
evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration
statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Shares
pursuant to Rule 144, or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the SEC). The Company shall cause its counsel, at the Company’s
expense, to issue a legal opinion to the Company’s transfer agent promptly (but in no event later than the requisite share
delivery date set forth in the Debenture and the Warrants) if required by the Company’s transfer to effect the removal of
the legend hereunder.

 

3.2Listing
of Securities. The Company agrees, (i) if the Company applies to have the Common Stock traded on any other trading market,
it will include in such application the Shares, and will take such other action as is necessary or desirable to cause the Shares
to be listed on such other trading market as promptly as possible, and (ii) it will take all action reasonably necessary to continue
the listing and trading of its Common Stock on a trading market and will comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the trading market.

 

    	 	 	 

     

    

 

3.3Reservation
of Shares. The Company shall at all times while the Debenture, the Additional Common Stock and the Warrants issued to the Holder
pursuant to the Subscription Agreement are outstanding maintain a reserve from its duly authorized shares of Common Stock of a
number of shares of Common Stock sufficient to allow for the issuance of the Shares.

 

3.4Replacement
of Securities. If any certificate or instrument evidencing any Securities or the Shares is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement
securities. If a replacement certificate or instrument evidencing any securities is requested due to a mutilation thereof, the
Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

3.5Furnishing
of Information. Until the time that no Investor owns Securities, the Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange
Act. As long as Investor owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to Investor and make publicly available in accordance with Rule 144(c) such information as is required for
the Investors to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any
holder of Securities may reasonably request, to the extent required from time to time to enable such person to sell such Securities
without registration under the Securities Act within the requirements of the exemption provided by Rule 144.

 

3.6Securities
Laws; Publicity. Unless otherwise required by applicable law, the Company shall, by 8:30 a.m. (New York City time) on the fourth
trading day immediately following the first and last Closings hereunder, issue a Current Report on Form 8-K disclosing the material
terms of the transactions contemplated hereby and including the Transaction Documents as exhibits thereto to the extent required
by law. The Company shall not publicly disclose the name of Investor, or include the name of any Investor in any filing with the
SEC or any regulatory agency or trading market, without the prior written consent of Investor, except: (a) as required by federal
securities law in connection with the filing of final Transaction Documents (including signature pages thereto) with the SEC and
(b) to the extent such disclosure is required by law, in which case the Company shall provide the Investor with prior notice of
such disclosure permitted under this clause (b).

 

3.7Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D promulgated under the Securities Act and to provide a copy thereof, promptly upon request of the Investor. The Company shall
take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the
Securities for, sale to the Investor at the Closing under applicable securities or “Blue Sky” laws of the states of
the United States, and shall provide evidence of such actions promptly upon request of any Investor.

 

3.8Equal
Treatment of Investors. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration is also offered to all of the parties to the Transaction Documents.

 

    	 	 	 

     

    

 

3.9Indemnification. 

 

(a)          The
Company agrees to indemnify and hold harmless the Investor, its affiliates and their respective officers, directors, employees,
agents and controlling persons (collectively, the “Investor Indemnified Parties”) from and against any and all loss,
liability, damage or deficiency suffered or incurred by any Indemnified Party by reason of any misrepresentation or breach of
warranty by the Company or, after any applicable notice and/or cure periods, nonfulfillment of any covenant or agreement to be
performed or complied with by the Company, in each case contained in this Agreement or any of the other Transaction Documents;
and will promptly reimburse the Investor Indemnified Parties for all expenses (including reasonable fees and expenses of legal
counsel) as incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim related
to or arising in any manner out of any of the foregoing, or any action or proceeding arising therefrom (collectively, “Proceedings”),
whether or not such Investor Indemnified Party is a formal party to any such Proceeding.

 

(b)          If
for any reason (other than a final non-appealable judgment finding any Investor Indemnified Party liable for losses, claims, damages,
liabilities or expenses for its gross negligence or willful misconduct) the foregoing indemnity is unavailable to an Investor
Indemnified Party or insufficient to hold an Investor Indemnified Party harmless, then the Company shall contribute to the amount
paid or payable by a Investor Indemnified Party as a result of such loss, claim, damage, liability or expense in such proportion
as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Investor on the other,
but also the relative fault of the Company or the Placement Agent, as applicable, on the one hand and the Investor on the other,
as well as any relevant equitable considerations.

 

(c)          Notwithstanding the foregoing, the Company shall not be liable to indemnify
any Investor Indemnified Parties under Section 3.9(a) or to contribute to the amount paid or payable by all Investor Indemnified
Parties under Section 3.9(b) in an amount under both such Sections that in the aggregate exceeds the Investor’s aggregate
purchase price tendered hereunder.

 

3.10Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it, nor any other person acting on its behalf, will provide Investor or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto Investor
shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and
confirms that Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

		IV.	 MISCELLANEOUS

 

4.1Any and
all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via
facsimile or by electronic communication at or prior to 5:30 p.m. (New York City time) on a day in which the New York Stock Exchange
is open for trading (a “Trading Day”), (b) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile or electronic communication on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be addressed as follows:

 

if to the
Company, to it at:

 

Protea Biosciences Group, Inc.

1311 Pineview Drive, Suite 501

Morgantown, WV 26505

Attn: Stephen C. Turner, CEO

 

if to the Investor, to the Investor’s
address indicated on the signature page of this Agreement.

 

    	 	 	 

     

    

 

4.2Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties
to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed
by the party to be charged. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.

 

4.3This
Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of Investor (other than by merger). Investor may assign any or all of its rights under this Agreement to any person to
whom Investor assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to
the transferred Securities, by the provisions of the Transaction Documents

 

4.4The Transaction
Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into such documents, exhibits and schedules.

 

4.5Upon
the execution and delivery of this Agreement by the Investor and the Company, this Agreement shall become a binding obligation
of the Investor with respect to the purchase of Securities as herein provided, subject, however, to the right hereby reserved by
the Company to enter into the same agreements with other Investor and to reject any subscription, in whole or in part, provided
the Company returns to Investor any funds paid by Investor with respect to such rejected subscription or portion thereof, without
interest or deduction.

 

4.6All questions
concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting
in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for
such proceeding.

 

4.7In order
to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds
in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against
one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their
reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.

 

4.8The holding
of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared
by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision
shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.

 

    	 	 	 

     

    

 

4.9It is
agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver
of any subsequent breach by that same party.

 

4.10The
Company agrees to execute and deliver all such further documents, agreements and instruments and take such other and further action
as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

4.11This
Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature 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 “.pdf” signature
page were an original thereof.

 

4.12Nothing
in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.

 

4.13In addition
to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor and the
Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees
to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

4.14 Acknowledgment
Regarding Investor’s Trading Activity. The Company further understands and acknowledges that (a) Investor may engage
in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during
the periods that the value of the Shares deliverable with respect to Securities are being determined, and (b) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging
activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

 

    	 	 	 

     

    

 

PROTEA BIOSCIENCES GROUP, INC.

SIGNATURE PAGE TO

EXCHANGE AGREEMENT 

 

AGGREGATE FACE AMOUNT OF THE DEBENTURE
= $_________ 

 

AGGREGATE PURCHASE PRICE OF THE DEBENTURE
= $_________ (the “Purchase Price”, or 80% of the Aggregate Face Amount of the Debenture being purchased) (NOTE: to
be completed by the Purchaser)

 

If the Purchaser is an INDIVIDUAL, and if
purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:

 

	 	____________________________	______________________________
	 	Print Name(s)	Social Security Number(s)
	 	___________________________	______________________________
	 	Print Name(s)	Social Security Number(s)
	 	___________________________	______________________________
	 	Signature of Purchaser	Signature of Co-Purchaser (if applicable):
	 	 	 
	 	Address:	 
	 	____________________________	______________________________
	 	____________________________	Date
	 	____________________________	 

 

_________________________________________________________________________

 

If the Purchaser is a PARTNERSHIP, CORPORATION,
LIMITED LIABILITY COMPANY or TRUST:

 

	 	____________________________	______________________________
	 	____________________________	Federal Taxpayer
	 	Name of Partnership,	Identification Number 
	 	Corporation, Limited	 
	 	Liability Company or Trust	 
	 	 	 
	 	By:_________________________	______________________________
	 	Name:	State of Organization
	 	Title:	 
	 	 	 
	 	Address:	 
	 	 	 
	 	___________________________	______________________________
	 	__________________________	Date
	 	__________________________	 

 

AGREED AND ACCEPTED:

 

PROTEA BIOSCIENCES GROUP, INC.

 

	By:	__________________________	_______________________________
	 	Name:	Date
	 	Title:	 

 

    	 	 	 

     

    

 

FORM OF INVESTOR QUESTIONNAIRE

 

PROTEA BIOSCIENCES GROUP, INC.

 

For Individual Investors Only

 

(All individual investors must INITIAL
where appropriate. Where there are joint investors both parties must INITIAL):

 

		Initial _______	I certify that I have a “net worth”
of at least $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community
property or other similar shared ownership interest with my spouse. For purposes of calculating net worth under this paragraph,
(i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary
residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability,
and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60
days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence,
the amount of such excess shall be included as a liability.

 

		Initial _______	I certify that I have had an annual gross income
for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate)
to reach the same level in the current year.

 

For Non-Individual
Investors

 

(all Non-Individual
Investors must INITIAL where appropriate):

 

		Initial _______	The undersigned certifies that it is a partnership, corporation,
limited liability company or business trust that is 100% owned by persons who meet either of the criteria for Individual Investors,
above.

 

		Initial _______	The undersigned certifies that it is a partnership, corporation,
limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of
investing in Company.

 

		Initial _______	The undersigned certifies that it is an employee benefit
plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan
association, insurance company or registered investment adviser.

 

		Initial _______	The undersigned certifies that it is an employee benefit
plan whose total assets exceed $5,000,000 as of the date of the Subscription Agreement.

 

		Initial _______	The undersigned certifies that it is a self-directed employee
benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors, above.

 

		Initial _______	The undersigned certifies that it is a U.S. bank, U.S.
savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.

 

    	 	A-1	 

     

    

 

		Initial _______	The undersigned certifies that it is a broker-dealer registered
pursuant to §15 of the Securities Exchange Act of 1934.

 

		Initial _______	The undersigned certifies that it is an organization described
in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose
of investing in Company.

 

		Initial _______	The undersigned certifies that it is a trust with total
assets of at least $5,000,000, not formed for the specific purpose of investing in Company, and whose purchase is directed by
a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and
risks of the prospective investment.

 

		Initial _______	The undersigned certifies that it is a plan established
and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees,
and which has total assets in excess of $5,000,000.

 

		Initial _______	The undersigned certifies that it is an insurance company
as defined in §2(a)(13) of the Securities Act of 1933, as amended, or a registered investment company.

 

    	 	A-2	 

     

    

 

PROTEA BIOSCIENCES GROUP, INC.

Investor Questionnaire

(Must be completed by Purchaser)

 

Section A - Individual Purchaser Information

EXACT Purchaser Name(s) in which securities are to be issued:
________________________________________________________________________

 

Individual executing Profile or Trustee:

 _______________________________________________________________________

 

Social Security Numbers / Federal I.D. Number:

 ________________________________________________________________________

 

Date of Birth: _________________ Marital Status: _________________

 

Joint Party Date of Birth:_________________

 

Investment Experience (Years): ___________

 

Annual Income: _________________

 

Net Worth: ________________

 

Home Street Address: 

________________________________________________________________________

 

Home City, State & Zip Code:

 ________________________________________________________________________

 

Home Phone: ________________________ Home Fax: _____________________

 

Home Email: _______________________________

 

Employer: ________________________________________________________________________

 

Employer Street Address:

 ________________________________________________________________________

 

Employer City, State & Zip Code:

 ________________________________________________________________________

 

Bus. Phone: __________________________ Bus. Fax: _______________________

 

Bus. Email: ________________________________

 

Type of Business:

 ________________________________________________________________________

 

LAIDLAW Account Executive / Outside Broker/Dealer:

 _______________________________________________________

 

Please check if you are a FINRA member or affiliate of a FINRA
member firm: _______

 

    	 	A-3	 

     

    

 

Section B – Entity Purchaser Information

 

EXACT Purchaser Name(s) in which securities are to be issued:

________________________________________________________________________

 

Authorized Individual executing Profile or Trustee:

 _______________________________________________________________________

 

Social Security Numbers / Federal I.D. Number:

 ________________________________________________________________________

 

Investment Experience (Years): ___________

 

Net Worth: ________________

 

Was the Trust formed for the specific purpose of purchasing
the Securities?

 

 ̈
Yes  ̈ No

 

Principal Purpose (Trust)______________________________________

 

Type of Business: ________________________________________________________

 

Street Address: ________________________________________________________________________

 

City, State & Zip Code: ________________________________________________________________________

 

Phone: ________________________ Fax: ________________________

 

Email: __________________________

 

Laidlaw Account Executive / Outside Broker/Dealer:

 

_______________________________________________________

 

Please check if you are a FINRA member or affiliate of a FINRA
member firm: _______

 

    	 	A-4	 

     

    

 

Securities Delivery Instructions

 

Please deliver my securities to the below address:

______________________________________

______________________________________

______________________________________

______________________________________

 

	Purchaser Signature(s) _______________________________________	Date_______________ 
	 	 
	Joint Purchaser Signature (if applicable): ________________________	Date_______________

 

    	 	A-5Exhibit 10.65

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

First Amendment to Commercial and Manufacturing License
Agreement

 

This First Amendment to the Commercial
and Manufacturing License Agreement (this “Amendment”) is entered into this April 11, 2017 (the “Amendment
Effective Date”) by and between Dresser-Rand Company, a New York general partnership (“D-R”),
and Ener-Core Power, Inc., a Delaware corporation (“E-C”). D-R and E-C are each a “Party”
and together the “Parties.” Capitalized terms used in this Amendment and not otherwise defined herein
will have the meanings given in the CMLA (as defined below).

 

WHEREAS, the Parties entered
into a Commercial License Agreement on November 14, 2014 (the “CLA”), pursuant to which the Parties worked
to develop the Combined System incorporating D-R’s gas turbine technology and E-C’s power oxidizer technology;

 

WHEREAS, the Parties executed
a Commercial and Manufacturing License Agreement on June 29, 2016 (the “CMLA”);

 

WHEREAS, the CMLA contemplates
its subsequent amendment to terminate the CLA and address related matters upon the satisfaction of certain conditions; and

 

WHEREAS, the Parties desire
to enter to this Amendment in order to formalize the effective date of the CMLA, terminate the CLA, and make the other changes
set forth herein.

 

NOW, THEREFORE, in consideration
of the premises and the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

		1.	EFFECTIVENESS.

 

		1.1.	Section 8.1 of the CMLA (“Effectiveness”) is deleted in its entirety.

 

		1.2.	Section 8.2 of the CMLA (“Term”) is amended by deleting the first sentence and inserting:

 

“This Agreement will become effective
as of the Effective Date.”

 

		1.3.	Section 2.1.1 of the CMLA is amended by replacing “Execution Date” with “Amendment
Effective Date”.

 

		2.	ONGOING DEVELOPMENT.

 

		2.1.	Parties’ Obligations.

 

		2.1.1.	Joint Responsibilities: Each Party will use commercially reasonable efforts to cooperate
with and provide reasonable support to the other Party in connection with the other Party’s performance of its obligations
under the CMLA.

 

		2.1.2.	Press Release. The Parties will issue the mutually agreed-upon joint press release within
four (4) business days of the date of the Amendment Effective Date. Except for discussion of any information provided in the joint
press release or as otherwise required by applicable law, E-C will not release any public statements regarding the subject of the
CLA or the CMLA without D-R’s prior written approval.

 

     

     

    

 

		2.1.3.	The following are added as new definitions in Section 1 of the CMLA:

 

‘Equipment Lease’
means the Lease Agreement dated March 23, 2015 between Dresser-Rand AS and E-C.

 

‘Initial System’
means the first commercial order and installation of a Combined System, to be delivered to Pacific Ethanol.

 

‘Initial System Deliverables’
means the tangible objects, quantifiable characteristics or functions, and services set forth on Annex A hereto.

 

‘Initial System Site’
means the location for the installation of the Initial System.

 

‘Initial System Testing’
means testing of the Initial System in accordance with the process described in Annex B hereto, to confirm compliance with the
specifications set forth in Annex B.”

 

		2.1.4.	The following is added as a new Section 2.1.6 of the CMLA:

 

“Perform all design and development
work for the Fundamental Process and E-C Products necessary for the delivery of the Initial System Deliverables and participate
in any other design and development work necessary for the delivery of the Initial System Deliverables.”

 

		2.1.5.	The following is added as a new Section 2.2.6 of the CMLA:

 

“Provide technical data, applications
guidelines, and general arrangement drawings to E-C for the D-R Gas Turbine to support E-C’s design and commissioning of
the Initial System.”

 

		2.1.6.	The following is added as a new Section 2.2.7 of the CMLA:

 

“Use commercially reasonable efforts
to identify opportunities to sell Combined Systems to third parties, and consult with E-C in the review of such opportunities.”

 

		2.2.	Initial System Completion.

 

		2.2.1.	Generally. E-C will perform the Initial System Testing. Results of the Initial System Testing
will be appended to the FSAT report previously submitted by E-C to D-R. “Initial System Completion” occurs
when the Parties agree (which agreement shall not be unreasonably withheld, conditioned or delayed by either Party) that (i) the
Initial System Deliverables have been completed in accordance with Annex A and (ii) the Initial System has passed Initial System
Testing in accordance with Annex B.

 

		2.2.2.	Preparation and Access. D-R will make arrangements with E-C for Initial System Testing to
be performed as provided in Annex B. D-R will provide E-C no less than 5 business days’ prior notice that arrangements for
Initial System Testing have been made at the Initial System Site. D-R will provide E-C with the opportunity to conduct and perform
Initial System Testing (or re-testing, if necessary) for a period beginning with E-C’s receipt of such notice and ending
no less than 3 days thereafter (the “Test Period”). D-R will use commercially reasonable efforts to provide
E-C with continuous and uninterrupted access to the Initial System Site during the foregoing Test Period.

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

    	 	2	 

     

    

 

		2.2.3.	Costs; Timeline. E-C and D-R shall each bear the cost of their own personnel in connection
with the Initial System Testing, and all other costs of the Initial System Testing shall be paid solely by E-C. E-C will ensure
that Initial System Completion occurs on or before May 15, 2017 provided that (i) E-C obtains continuous and uninterrupted access
to the Initial System Site during the Test Period, (ii) D-R ensures that all necessary conditions for the Initial System Testing
are present while E-C conducts such testing during the Test Period and (iii) the Test Period commences no later than April 27,
2017; all subject to Section 16.1 of the CMLA. If the Parties agree that this deadline is unfeasible or if the conditions in the
foregoing sections (i) through (iii) are not satisfied, the Parties will promptly negotiate in good faith an appropriate extension.

 

		2.3.	Bespoke Developments. The design and development work required to fulfill Initial System
Completion and provide the Initial System Deliverables will not be deemed Bespoke Developments (as defined in Section 3.10 of the
CMLA). Any requested work beyond the scope of Initial System Completion and the System Deliverables will constitute Bespoke Development
governed by Section 3.10 of the CMLA.

 

		3.	GRANT OF LICENSES.

 

		3.1.	Exclusivity Period. The following will be added as new Sections 3.1.1 and 3.1.2 of the CMLA:

 

		3.1.1.	“E-C hereby grants D-R an exclusive option to negotiate and acquire a worldwide exclusive
or a worldwide non-exclusive license under the Licensed IP for D-R to: (i) make, have made, sell, offer for sale and import E-C
Products, and (ii) market and commercialize the E-C Products, in both cases as part of the Combined System with Rated Power that
is greater than 4 MWe and less than or equal to 10 MWe (the ‘Expanded Scope’).

 

		3.1.2.	The period of such D-R option will commence upon Initial System Completion and will expire on September
15, 2017 (the ‘Exclusivity Period’). During the Exclusivity Period:

 

		1.	E-C will not solicit any third party regarding a potential license for some or all of the power
ranges within the Expanded Scope;

 

		2.	E-C will not negotiate with any third party any terms or conditions of such a potential license;

 

		3.	E-C will not enter into any agreement with any third party regarding such a potential license,
and;

 

		4.	D-R may negotiate with E-C a new expanded license (the ‘Expanded License’)
for some or all of the power ranges within the Expanded Scope, on such terms and subject to such conditions as the Parties may
agree, which agreement may include one or more of the following:

 

		a.	Initial license for the Intellectual Property of E-C which is subject to the Expanded License;

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

    	 	3	 

     

    

 

		b.	The duration of the Expanded License;

 

		c.	Specific technology development goals, which may include agreed costs regarding such development
and the allocation of such costs;

 

		d.	Specific sales and support resources applicable to D-R’s selling the products utilizing the
Intellectual Property of E-C which is the subject of the Expanded License; and

 

		e.	Whether the Expanded License is exclusive to D-R, and the geographic scope of the Expanded License.

 

For the avoidance of doubt, this Section 3.1.2
will not prohibit E-C from responding to third party scientific or technical inquiries regarding its Intellectual Property, provided
that such communications by E-C do not include any solicitation or negotiation of a potential license within the Expanded Scope
or any discussion of the legal or commercial terms thereof.”

 

		3.2.	Sales Thresholds; True-Up Payments. Section 3.2 of the CMLA is deleted in its entirety and
replaced with the following (without affecting Sections 3.2.1 and 3.2.2):

 

“Sales Thresholds; True-Up Payments.
The License will remain an Exclusive License for so long as D-R sells a minimum of [***] units of the Combined System in each twelve-month
period after the Amendment Effective Date (the ‘Sales Threshold’); provided, that the first Sales Threshold
period will begin on the earlier of July 15, 2017 (but only if Initial System Testing has not begun due to causes under D-R’s
reasonable control) and the date of Initial System Completion and will continue for fifteen months, at which point, twelve-month
Sales Threshold periods will run consecutively. In addition, in the event that, in any given twelve-month period, D-R sells at
least [***] units of the Combined System, then the Sales Threshold for the following twelve-month period will be waived (the ‘Sales
Threshold Waiver’).”

 

		4.	CONFIDENTIALITY.

 

Any Confidential Information disclosed by
either Party under the CLA will be deemed such Party’s Confidential Information for all purposes under the CMLA and will
be protected accordingly.

 

		5.	GENERAL RELEASE.

 

		5.1.	Release. Each Party, on behalf of itself and its Affiliates, hereby unconditionally and
irrevocably releases, acquits and forever discharges the other Party and its Affiliates, their respective permitted successors
and assigns, directors, officers, employees, agents, and representatives, from any and all past claims, counterclaims, demands,
liabilities, suits, debts and causes of action, whether known or unknown, which arose prior to the Amendment Effective Date under
(i) the CLA or (ii) the CMLA as it existed prior to this Amendment(collectively, “Claims”). Each Party
and its Affiliates, and any of their respective permitted assigns and successors in interest, covenant and agree that they will
not, directly or indirectly, bring, initiate, request, petition for, maintain or prosecute any Claims in any jurisdiction against
the other Party or its Affiliates.

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

    	 	4	 

     

    

 

		5.2.	Clarification. For avoidance of doubt, Section 5.1 does not release or waive any claim,
counterclaim, demand, liability, suit, debt or causes of action: (i) with respect to any indemnification obligation for claims
by third parties accruing pursuant to the terms of the CLA or CMLA, even if the third party claim accrued prior to the Amendment
Effective Date; or (ii) arising out of a breach of any obligation of either Party under the CMLA, as amended by this Amendment,
even if the breach initiated prior to the Amendment Effective Date.

 

		Equipment	Lease.
                                         E-C and D-R will ensure that E-C and Dresser-Rand AS, respectively, have executed the
                                         release set forth in Annex C regarding claims under the Equipment Lease within 10 business
                                         days from the Amendment Effective Date.6.

 

		6.	PAYMENTS.

 

		6.1.	Prepaid Credits. D-R will pay E-C $1.2 million within 10 business days from the Amendment
Effective Date as a pre-payment against future License Fees under the CMLA. This pre-payment will be credited as [***] (each, a
“Prepaid Credit”) against the License Fees due for each of the first [***] sales of a Combined System
(collectively, the “[***]”), if any, as calculated pursuant to Section 4.1 of the CMLA. No refund for the Prepaid
Credits shall be due to D-R to the extent that fewer than [***] sales of a Combined System are consummated, but the remaining Prepaid
Credits will be credited against any True-Up Payment made by D-R pursuant to Section 3.2.1 of the CMLA.

 

Of the Prepaid Credit, 50% ([***]) will be
credited against the initial payment due under Section 4.2(i) of the CMLA (the “Initial Payment”), and
the remaining 50% ([***]) will be credited against the later payment due under Section 4.2(ii) of the CMLA (the “Backend
Payment”).

 

		6.2.	Example. By way of example only, if the first Combined System sells for $5 million and a
First Tier License Fee is owed:

 

The License Fees calculated pursuant to Section
4.1 of the CMLA would be [***], payable as a [***] Initial Payment and a [***] Backend Payment. The Prepaid Credit of [***] would
be credited as [***] against the Initial Payment and [***] against the Backend Payment, leaving net amounts of [***] for the Initial
Payment and [***] for the Backend Payment.

 

		6.3.	Claims. Settlement of certain cost claims will be separately paid by E-C pursuant to Annex
D.

 

		7.	BACKSTOP SECURITY.

 

		7.1.	Backstop Security. Section 11.1 of the CMLA is amended by replacing the phrase “$2.1
MM until June 17, 2017” with “$500,000 until March 31, 2018”.

 

		7.2.	Clarification. The following is appended to Section 11.1 of the CMLA:

 

“Notwithstanding anything to the contrary
herein, the Parties agree that E-C is only responsible for providing the Backstop Security for E-C Products provided to D-R as
part of any agreed-upon Transition Phase, and that any remaining Backstop Security obligations will expire on the end of the last
applicable warranty period for any such E-C Products.”

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

    	 	5	 

     

    

 

		8.	KEY PERSONNEL; NON-SOLICIT.

 

		8.1.	Non-Solicit. Section 16.18 of the CMLA is deleted in its entirety and replaced with the
following:

 

“Non-Solicitation. During the
term of this Agreement and for twelve (12) months thereafter, neither Party shall directly or indirectly solicit or attempt to
employ any then-current employees or board (including advisory board) members of the other Party (collectively, ‘Restricted
Personnel’), except as mutually agreed by the Parties. Notwithstanding the foregoing, neither Party will be prohibited
from soliciting or employing any former Restricted Personnel who is no longer an employee or board (including advisory board) member
of the other Party; provided that such former Restricted Personnel did not terminate his or her employment or board (including
advisory board) membership with the first Party in response to a targeted solicitation by the second Party. Notwithstanding the
general restrictions in this Section 16.18, if E-C is unwilling or unable to fulfill its obligations under this Amendment or the
CMLA for any reason, D-R may engage Restricted Personnel of E-C to the extent necessary for D-R to fulfill its obligations to a
Customer regarding the Combined System.”

 

		8.2.	Clarification. For avoidance of doubt, (a) nothing in this Amendment, including without
limitation the provisions of this Section 8, will be construed to alter the ownership and disposition of intellectual property
set forth in the CMLA (including the definition of “Fundamental Process Technology Developments” or Section 3.3 thereof
and (b) all information relating to the Fundamental Process known by former Restricted Personnel at the time they are employed
or otherwise engaged by D-R shall be E-C Background Intellectual Property disclosed to D-R as E-C Confidential Information for
the purposes of the definition of “Fundamental Process Technology Developments”.

 

		9.	TERMINATION.

 

		9.1.	If Initial System Completion does not occur on or before the date set forth in Section 2.2.3 of
this Amendment (subject to any mutually agreed-upon extension), then D-R will be entitled to terminate the CMLA for cause. In the
event of such termination, in addition to any other remedies D-R may be entitled to under the CMLA or at law or equity:

 

		9.1.1.	D-R may pursue Plan B in accordance with Section 9.6 of the CMLA; and

 

		9.1.2.	D-R may immediately redeem the full amount of the Backstop Security.

 

		9.2.	Upon any termination of the CMLA, the License granted to D-R by E-C in Section 3.1 thereof will
survive, and D-R will only be liable to pay License Fees above and beyond the first US$1.5 million of License Fees (net any applicable
Prepaid Credits) that would otherwise come due after the effective date of termination.

 

		9.3.	Subject to Section 16.1 of the CMLA, if by July 15, 2017 (i) D-R has not provided E-C with continuous
and uninterrupted access to the Initial System Site during the Test Period or (ii) D-R has not ensured that all necessary conditions
for the Initial System Testing were present during the Test Period, then E-C will be entitled to terminate the CMLA for cause pursuant
to Section 8.3 of the CMLA. Notwithstanding the foregoing, upon receipt of a notice of termination from E-C pursuant to this Section
9.3, D-R may fully cure the alleged failure to meet the obligations set out in sections (i) and (ii) above by waiving any remaining
obligations of E-C under Annex B (Initial System Testing), at which point the requirements of Annex B will be deemed complete.

 

		10.	GENERAL.

 

		10.1.	CLA. The CLA is hereby terminated and, for avoidance of doubt, those clauses that survive
as set forth in Section 10.5 of the CLA will so survive in accordance with its terms.

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

    	 	6	 

     

    

 

		10.2.	Participation. The Parties acknowledge that D-R or its Affiliates may, from time to time,
offer Customers debt or equity financing for equipment or services related to the Combined System (each, a “System
Financing”). D-R will use commercially reasonable efforts to deliver a notice (a “Participation Notice”)
to E-C of any System Financing no later than 15 business days following an offer of System Financing to a Customer. Provided that
E-C delivers a notice of its interest to participate in the applicable System Financing within thirty (30) days following its receipt
of the Participation Notice, the Parties will use good faith efforts to negotiate a commercially reasonable agreement providing
for purchase by E-C at the par value or stated value thereof not less than a [***] participation interest in such System Financing
at the same price and on all of the same terms (on a pari passu basis) or the economic equivalent thereof. Any failure by D-R to
provide notice of an offer of System Financing shall not give rise to any liability under the CMLA or otherwise.

 

		10.3.	No Transition Phase Election. For the avoidance of doubt, as of the date hereof, the Parties
have not elected to commence any Transition Phase.

 

		10.4.	No Other Amendment. Except as provided for above, this Amendment does not further amend
the terms of the CMLA, which remains in full force and effect as currently written.

 

IN WITNESS WHEREOF, E-C and D-R
hereto have each caused this Amendment to be executed by them or in the name and on behalf of each of them by one of their respective
officers, thereunto duly authorized, as of the Amendment Effective Date. 

 

	 	Ener-Core
    Power, Inc.
	 	 
	 	By:	/s/
    Alain J. Castro
	 	Name:	Alain
    J. Castro
	 	Title:	Chief
    Executive Office
	 	 	 
	 	Dresser-Rand
    Company
	 	 
	 	By:	/s/
    Jesus M. Pacheco
	 	Name:	Jesus
    M. Pacheco
	 	Title:	EVP
    Technology & Innovation

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

    	 	7	 

     

    

 

Annex A

 

Initial System Deliverables

	Deliverable	 	Description
	Power Oxidizer dump valve leakage	 	
        ·Perform
        and report on natural gas sniffer test at dump valve stacks at Initial System Site to verify absence of leakage

         

        

        ·Include
        regular identical test in the inspection / maintenance manual for the Power Oxidizer

	Power Oxidizer filter	 	Perform and report on hot soak calculation to provide an estimate how long the components above the turbine inlet pipe remain above [***] after a hot shut down
	Integrated controls	 	Demonstrate start-up and steady-state sequencings at Initial System Site

 

Test Reviews. D-R will have 5 days following
delivery of the Initial System Deliverables (such 5-day period a “Deliverables Review Period”) to determine
whether the applicable requirements in this Annex A have been met. If D-R does not provide written notice to E-C of its determination
that such requirements have not been fully met, specifying the reason for rejection, within 5 business days following the termination
of the Deliverables Review Period, the requirements of this Annex A will be deemed to have been met at the end of such 5 business
days.

 

Rejections. If D-R provides timely notice that
the requirements in this Annex A have not been met, E-C will have 10 business days from the date of receipt of such notice, unless
otherwise provided for in a Customer contractual commitment, to commence a cure of all material non-conformances described in the
written notice of rejection and to deliver to D-R a plan for prompt delivery of conforming Initial System Deliverables. Upon delivery
of purportedly remedied Initial System Deliverables, these testing and rejection provisions will again apply, the new Deliverables
Review Period running from the date of delivery of the new Initial System Deliverable. If the Initial System Deliverable is again
rejected by D-R or fails to meet Customer contractual commitments, D-R may terminate the CMLA as provided in Section 9.1 of the
Amendment. For avoidance of doubt, for the Initial System Project, D-R will have the right in its sole discretion to make the decision
to replace the E-C Products with Plan B.

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

     

     

    

 

Annex B

 

Initial System Testing

 

		I.	Objective

 

The objective of this test is to meet the following acceptance test requirements
for the Initial System at the Initial System Site.

 

		·	During the emissions testing, the Combined System will be operated at full
rated power. The Turbine Inlet Temperature (TIT) should be nominally >[***]. Turbine Exit Temperature (TET) thermocouples may
be used to calculate this.

 

		·	The emissions will be measured at the Power Oxidizer system exit flange interface
with the Gas Turbine Inlet Flange (hot inlet-designated TP03) while operating on pipeline natural gas only - VOCs from Pacific
Ethanol site will not be introduced.

 

NOx < [***]

 

CO < [***]

 

VOCs (volatile organic compounds) < [***]

 

		II.	Test set up

 

The Initial System will be used to perform this emissions
test. The system will be set up with an emissions sample port at the Power Oxidizer system exit. Figure 1 presents the location
sampling port for the emissions. The port will include a tube that will be inserted to the depth of the flow to ensure the sample
will be extracted from the main system flow. The emissions will be sampled in one location and will not traverse the flow path
as is the standard with exhaust flow measurement methods. Traversing in this location is not possible due to the pressure boundary.

 

Figure 1: Emissions sampling location in the
oxidizer system exit.

 

 

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

     

     

    

 

A third party emissions tester will be utilized to
measure emissions at this location and reported per SCAQMD methods 100.1 and 25.3.

 

NOx = [***] is attainable by SCAQMD method
100.1. By using a span gas of [***] NOx to calibrate the chemiluminescence NOx analyzer, the third party
emissions tester’s Reporting Limit is NOx = [***], but measured values should be lower.

 

CO < [***] is attainable by SCAQMD method 100.1.
By using a span gas of [***] CO to calibrate the NDIR CO analyzer, the third party emissions tester’s Reporting Limit is
[***].

 

VOC < [***] needs confirmation by third party emissions
tester. SCAQMD method 25.3 is performed to measure the total VOC (NMOC). Reporting limit is [***].

 

Instrumentation

 

Below is a list of instrumentation needed to operate
the Initial System to the right air cycle test conditions and collect data for the emissions test. Full accuracy descriptions will
be provided for item 8. Ener-Core will only provide instrumentation for item #8. The balance of the instrumentation is provided
by Dresser-Rand on the Initial System.

 

1. Power measurement

 

2. Ambient temperature measurement

 

3. Compressor inlet temperature

 

4. Barometer (relative humidity & barometric pressure)

 

5. Differential pressure measurement across inlet filters

 

6. Backpressure measurement (D-R Gas Turbine exhaust pressure)

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

     

     

    

 

7. Pressure measurements (compressor absolute pressure transducers)

 

8. NOx, CO and VOC emissions measurement equipment

 

9. D-R Gas Turbine exit temperature (6 K-type thermocouples)

 

Test Procedure

 

The Initial System will start up utilizing pipeline
natural gas. The Initial System will also use pipeline natural gas as the direct injected fuel for steady state operation. Full
automation of the startup and steady state operation is not required to perform the test. While in steady state the Initial System
will maintain full power by maintaining TP04 temperature that was previously defined by D-R during the FSAT test. Table 1 outlines
the temperature versus ambient temperature.

 

Table 1: Operational adjustment table for ambient
temperature versus TP04

 

[***]

 

This target temperature will be maintained with a tolerance
of +/- 10F for the duration of the test. The TP04 measurements will be recorded with the six K type thermocouples located in the
gas turbine exit (TE1476A-F). These temperatures are averaged providing a single TP04 measurement match. (Note: this is a production
D-R Gas Turbine TP04 measurement set up).

 

Once the Initial System has been in Steady State for
a minimum of 2 hours the emissions sampling per the emissions protocol will start. “Steady State” condition is defined
as 2-3 hours after warmer burner is turned off. The emissions sampling will last for 2-3 hours. Once the emissions sampling is
finished the test will be complete.

 

E-C will provide a written report outlining the data and results (including
any data supplied by D-R that might be requested by E-C), with the 3rd party emissions tester full report document supplied
as an appendix.

 

Test Reviews. D-R will have 10 days following
receipt of the complete report from E-C (such 10-day period a “Testing Review Period”) to determine whether
the applicable requirements in this Annex B have been met. If D-R does not provide written notice to E-C of its determination that
such requirements have not been fully met, specifying the reason for rejection, within 5 business days following the termination
of the Testing Review Period, the requirements of this Annex B will be deemed to have been met at the end of such 5 business days.

 

Rejections. If D-R provides timely notice that
the requirements in this Annex B have not been met, E-C will have 10 business days from the date of receipt of such notice, unless
otherwise provided for in a Customer contractual commitment, to commence a cure of all material non-conformances described in the
written notice of rejection and to deliver to D-R a plan for prompt remediation and re-performance of Initial System Testing. Upon
additional Initial System Testing following purported remediation by E-C, these testing and rejection provisions will again apply,
the new Testing Review Period running from the date of receipt of the subsequent complete report from E-C. If Initial System Testing
is again rejected by D-R or fails to meet Customer contractual commitments, D-R may terminate the CMLA as provided in Section 9.1
of the Amendment.

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

     

     

    

 

Annex C

 

Release of Claims Under the Equipment Lease

 

This Annex C is entered into as of the Amendment Effective
Date by and between E-C and Dresser-Rand AS (the “Lease Parties”). The Lease Parties are parties to the
Equipment Lease, and wish to mutually release claims under such Equipment Lease as further set forth herein.

 

Each Lease Party, on behalf of itself and its Affiliates,
hereby unconditionally and irrevocably releases, acquits and forever discharges the other Lease Party and its Affiliates, their
respective permitted successors and assigns, directors, officers, employees, agents, and representatives, from any and all past
claims, counterclaims, demands, liabilities, suits, debts and causes of action, whether known or unknown, which arose prior to
the Amendment Effective Date under the Equipment Lease (collectively, “Lease Claims”). Each Lease Party
and its Affiliates, and any of their respective permitted assigns and successors in interest, covenant and agree that they will
not, directly or indirectly, bring, initiate, request, petition for, maintain or prosecute any Lease Claims in any jurisdiction
against the other Lease Party or its Affiliates.

 

Notwithstanding the foregoing, the Lease Parties agree
and acknowledge that the Lease Claims do not include E-C’s obligations to return the Equipment pursuant to Section 2.7 of
the Equipment Lease, and that this Annex C does not affect such E-C obligations. 

 

 

	 	Ener-Core
    Power, Inc.
	 	 
	 	By:	              
	 	Name:	 
	 	Title:	 
	 	 	 
	 	Dresser-Rand
    Company
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

   

 

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

 

     

     

    

 

Annex D

 

Cost Claim Settlement

 

		1.	Unit Claim. E-C will pay a total of [***] to D-R for settlement of certain cost claims (the
“Settlement Amount”), which will be paid [***] per sale of the [***] (each, a “Unit Claim”)
prior to the payment of the License Fees due for each of the [***] of a Combined System as calculated pursuant to Section 4.1 of
the CMLA as follows.

 

For each of the [***] of a Combined System,
50% of the Unit Claim ([***]) will be paid by E-C to D-R prior to the Initial Payment, and the remaining 50% of the Unit Claim
([***]) will be paid in advance of the Backend Payment.

 

E-C shall have the right, but not the obligation,
to prepay the outstanding balance of the Settlement Amount at any time.

 

		2.	Example. By way of example only, assume the first Combined System sells for $5 MM:

  

As demonstrated in Section 6.2 of this Amendment,
after crediting the Prepaid Credit, there would be net amounts of [***] payable for the Initial Payment and [***] payable for the
Backend Payment. The Unit Claim of [***] would be paid as follows: [***] would be payable from E-C to D-R before the Initial Payment
and [***] would be payable from E-C to D-R before the Backend Payment.

 

[***] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to this omitted information.

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