CONVERTIBLE
NOTE PURCHASE AGREEMENT


 


This
Convertible Note Purchase Agreement (the “Agreement”) is made as of _______ _____, 2019 by and among
Protagenic Therapeutics, Inc., a Delaware corporation (the “Company”) and the undersigned person or
entity set forth on the signature page to this Agreement (the “Purchaser”).


 


RECITALS


 


A.
The Company desires to issue and sell (the “Offering”) up to an aggregate of $2,000,000 principal amount
of convertible promissory notes in substantially the form attached to this Agreement as Exhibit A (each a “Note”
and, collectively, the “Notes”).


 


B.
The Offering is being conducted pursuant to the exemptions from the registration provisions of the Securities Act of 1933, as
amended (the “Securities Act”) provided by Section 4(a)(2) of the Securities Act and Rule 506(b) (“Rule
506”) of Regulation D thereunder.


 


C.
The Purchaser (the Purchaser, together with the other purchasers of the Notes, are sometimes referred to collectively as the “Purchasers”)
desires to purchase a Note.


 


AGREEMENT


 


In
consideration of the mutual promises contained herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties to this Agreement agree as follows:


 


1.
Purchase and Sale of Notes.


 


a.
Sale and Issuance of Notes. Subject to the terms and conditions of this Agreement, the Purchaser agrees to
purchase at the Closing (as defined below) and the Company agrees to sell and issue to the Purchaser at the Closing, Notes in
the aggregate principal amount set forth opposite the Purchaser’s name on the Purchaser signature page to this Agreement.


 


b.
Closing; Delivery.


 


i.
The purchase and sale of the Notes (the “Closing”) shall take place at the offices of Meister Seelig
& Fein LLP, 125 Park Avenue, 7th Floor, New York, NY 10017, as soon as practicable after such date that each of
the conditions set forth in Sections 4 and 5 hereof is satisfied or waived, or on such other date and at such other place as the
Company and the Placement Agent (as defined below) may agree upon in writing (the date on which the Closing occurs is referred
to herein as the “Closing Date”). The parties acknowledge that there may be more than one Closing during
the course of the Offering.


 




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ii.
At the Closing, the Company shall deliver or caused to be delivered to the Purchaser (which delivery shall be deemed accomplished
by delivery to Katalyst Securities LLC, as placement agent (the “Placement Agent”) for the Offering):


 


1.
the Note executed by the Company;


 


2.
a guaranty (the “Guaranty”), substantially in the form of Exhibit B hereto, executed by Protagenic
Therapeutics Canada (2006) Inc., a corporation formed in 2006 under the laws of the Province of Ontario, Canada (“Protagenic
Canada”);


 


3.
a certificate of the Executive Chairman of the Company certifying the accuracy of the Company’s representations and warranties
as of the Closing; and


 


4.
a certificate of the Chief Financial Officer of the Company certifying the authority of the officer executing this Agreement and
all agreements and other documents ancillary hereto and contemplated hereby, including the Note (collectively, the “Loan
Documents”).


 


iii.
At the Closing, the Purchaser shall pay the Purchase Price for the Notes by wire transfer in immediately available funds in accordance
with the wire transfer instructions attached hereto as Exhibit C.


 


2.
Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that,
except as set forth in either the schedules delivered herewith (collectively, the “Disclosure Schedules”)
or the SEC Reports (as such term is defined below):


 


a.
Organization, Good Standing and Qualification. Each of the Company and its Subsidiary (as defined below) is a corporation
duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted and to own or lease its properties. Each of the Company
and its Subsidiary is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure
to be in good standing or so qualify has not had and could not reasonably be expected to have a Material Adverse Effect. The Company’s
only Subsidiary is Protagenic Canada.


 


For
purposes of this Agreement, the following terms have the meanings set forth below:


 


“Material
Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, condition
(financial or otherwise), business, or prospects of the Company and its Subsidiary taken as a whole, or (ii) the ability of the
Company to perform its obligations under the Loan Documents.


 


“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.


 


“Subsidiary”
of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.


 




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b.
Authorization. The Company has all corporate power and authority and has taken all requisite action on the part
of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Loan
Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the Notes and the shares of common stock, $0.0001 par value
per share (the “Common Stock”) of the Company issuable upon conversion thereof (the “Conversion
Shares” and, together with the Notes, the “Securities”). The Loan Documents, upon execution
and delivery thereof by the Company, will constitute the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable
principles.


 


c.
Capitalization. The Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (the
“June 10-Q”) sets forth as of its date: (i) the authorized and outstanding capital stock of the Company;
(ii) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (iii) the number of shares
of capital stock issuable and reserved for issuance pursuant to securities (other than the Notes) exercisable for, or convertible
into or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding shares of the Company’s
capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights and
were issued in full compliance with applicable state and federal securities law and any rights of third parties. All of the issued
and outstanding shares of capital stock of the Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable
and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights
of third parties and are owned by the Company, beneficially and of record, subject to no Lien (as defined below). No Person is
entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company. Except as contemplated
by the Loan Documents and except as disclosed in the SEC Reports, there are no outstanding warrants, options, convertible securities
or other rights, agreements or arrangements of any character under which the Company or its Subsidiary is or may be obligated
to issue any equity securities of any kind. Except as disclosed in the SEC Reports and except for the Loan Documents, there are
no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among
the Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as disclosed
in the SEC Reports, no Person has the right to require the Company to register any securities of the Company under the Securities
Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or for
the account of any other Person.


 


For
purposes of this Agreement, “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect
to such securities.


 




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d.
Governmental Approval. No action, consent or approval of, registration or filing with or any other action by any
federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body (collectively, “Governmental
Authority”) is or will be required in connection with the transactions contemplated hereby, except for such as have
been made or obtained and are in full force and effect and post-sale filings pursuant to applicable state and federal securities
laws which the Company undertakes to file within the applicable time periods.


 


e.
Accuracy of Filings. Neither the Company’s most recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2018 (the “10-K”) nor any of the Company’ s reports, schedules, forms, statements
and other documents filed with the Securities and Exchange Commission (the “SEC”) since the filing of
the 10-K (collectively, the “SEC Reports”), including, without limitation, the Company’s Quarterly
Reports on Forms 10-Q, at the time of filing contained any untrue statement of a material fact or omitted to state a material
fact required to make the statements contained therein, in light of the circumstances in which they were made, not misleading,
except to the extent that such statements have been modified or superseded by later SEC Reports filed on a non-confidential basis
filed prior to the date hereof.


 


f.
No Material Adverse Effect. Since December 31, 2018, except as identified and described in the SEC Reports or as
described in Section 2(f) of the Disclosure Schedules, no Material Adverse Effect has occurred with respect to the business,
assets, liabilities, operations, condition (financial or otherwise), or operating results of the Company or the Subsidiary, taken
as a whole.


 


g.
Title to Properties. The Company and each Subsidiary has good and marketable title to all real properties and all
other properties and assets owned by it, in each case free from Liens that would materially affect the value thereof or materially
interfere with the use made or currently planned to be made thereof by them; the Company and the Subsidiary holds any leased real
or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or
currently planned to be made thereof by them.


 


h.
Intellectual Property.


 


i.
All Intellectual Property (as defined below) of the Company and its Subsidiary necessary for the operation of the business as
currently conducted or as presently proposed to be conducted is currently in material compliance with all legal requirements (including
timely filings, proofs and payments of fees) and is valid and enforceable. No Intellectual Property of the Company or its Subsidiary
which is necessary for the conduct of Company’s and the Subsidiary’s respective businesses as currently conducted
or as currently proposed to be conducted has been or is now involved in any cancellation, dispute or litigation, and, to the Company’s
knowledge, no such action is threatened. No patent of the Company or its Subsidiary has been or is now involved in any interference,
reissue, re-examination or opposition proceeding.


 


For
purposes of this Agreement, “Intellectual Property” means all of the following: (A) patents, patent
applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (B) trademarks,
service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill
associated with each of the foregoing; (C) copyrights and copyrightable works; (D) registrations, applications and renewals for
any of the foregoing; and (E) proprietary computer software (including but not limited to data, data bases and documentation).


 




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ii.
All of the licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property which are necessary
for the conduct of the Company’s and the Subsidiary’s respective businesses as currently conducted or as currently
proposed to be conducted to which the Company or the Subsidiary is a party or by which any of their assets are bound (other than
generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of
less than $10,000 per license) (collectively, “License Agreements”) are valid and binding obligations
of the Company or its Subsidiary and, to the Company’s knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and, to the Company’s
knowledge, there exists no event or condition which will result in a material violation or breach of or constitute (with or without
due notice or lapse of time or both) a default by the Company or its Subsidiary under any such License Agreement.


 


iii.
The Company and its Subsidiary own or have the valid right to use all of the Intellectual Property that is necessary for the conduct
of the Company’s and its Subsidiary’s respective businesses as currently conducted or as currently proposed to be
conducted and for the ownership, maintenance and operation of the Company’s and its Subsidiary’s properties and assets,
free and clear of all Liens, adverse claims or obligations to license all such owned Intellectual Property and trade secrets,
confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques,
research and development information, computer program code, performance specifications, support documentation, drawings, specifications,
designs, business and marketing plans, and customer and supplier lists and related information) (collectively, “Confidential
Information”), other than licenses entered into in the ordinary course of the Company’s and its Subsidiary’s
businesses. The Company and its Subsidiary have a valid and enforceable right to use all third party Intellectual Property and
Confidential Information used or held for use in the respective businesses of the Company and its Subsidiary


 


iv.
To the knowledge of the Company, the conduct of the Company’s and its Subsidiary’s businesses as currently conducted
does not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property
rights of any third party or any confidentiality obligation owed to a third party, and, to the Company’s knowledge, the
Intellectual Property and Confidential Information of the Company and its Subsidiary which are necessary for the conduct of Company’s
and its Subsidiary’s respective businesses as currently conducted or as currently proposed to be conducted are not being
Infringed by any third party. There is no litigation or order pending or outstanding or, to the Company’s knowledge, threatened,
that seeks to limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property
or Confidential Information of the Company and its Subsidiary and the Company’s and its Subsidiary’s use of any Intellectual
Property or Confidential Information owned by a third party, and, to the Company’s knowledge, there is no valid basis for
the same.


 


v.
The consummation of the transactions contemplated hereby and by the other Loan Documents will not result in the alteration, loss,
impairment of or restriction on the Company’s or its Subsidiary’s ownership or right to use any of the Intellectual
Property or Confidential Information which is necessary for the conduct of Company’s and its Subsidiary’s respective
businesses as currently conducted or as currently proposed to be conducted.


 




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vi.
The Company and its Subsidiary have taken reasonable steps to protect the Company’s and its Subsidiary’s rights in
their Intellectual Property and Confidential Information. Each employee, consultant and contractor who has had access to Confidential
Information which is necessary for the conduct of Company’s and its Subsidiary’s respective businesses as currently
conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality of such Confidential
Information and has executed appropriate agreements that are substantially consistent with the Company’s standard forms
thereof. Except under confidentiality obligations, there has been no material disclosure of any of the Company’s or its
Subsidiary’s Confidential Information to any third party.


 


i.
Compliance with Laws. Except as described in the SEC Reports or as set forth on Section 2(i) of the Disclosure
Schedules, there are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending
or, to the knowledge of the Company, threatened against or affecting the Company or its Subsidiary or any business, property or
rights of any of the foregoing (i) that involve this Agreement or any Loan Document or (ii) as to which, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect in the Company or its Subsidiary.
Neither the Company nor its Subsidiary or any of their respective properties or assets is in violation of, nor will the continued
operation of their properties and assets as currently conducted violate, any law, rule or regulation (including any applicable
environmental law, ordinance, code or approval) or any restrictions of record or agreements affecting the properties, or is in
default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or
default could reasonably be expected to result in a Material Adverse Effect in the Company or its Subsidiary. The Company and
its Subsidiary possess adequate certificates, authorities or permits issued by appropriate Governmental Authorities necessary
to conduct the business now operated by it, except where such failure has not had and could not reasonably be expected to have
a Material Adverse Effect, individually or in the aggregate, and neither the Company nor its Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely
to the Company or such Subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.


 


j.
Tax Returns. The Company and its Subsidiary have timely prepared and filed (or timely filed for an extension for)
all tax returns required to have been filed by the Company or such Subsidiary with all appropriate Governmental Authorities and
timely paid all taxes shown thereon or otherwise owed by it, other than taxes being contested in good faith and for which adequate
reserves have been made on the Company’s financial statements included in the SEC Reports. The charges, accruals and reserves
on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no
material unpaid assessments against the Company or its Subsidiary nor, to the Company’s knowledge, any basis for the assessment
of any additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority
except for any assessment which is not material to the Company and its Subsidiary, taken as a whole. All taxes and other assessments
and levies that the Company or its Subsidiary is required to withhold or to collect for payment have been duly withheld and collected
and paid to the proper Governmental Authority or third party when due, other than taxes being contested in good faith and for
which adequate reserves have been made on the Company’s financial statements included in the SEC Reports. There are no tax
Liens or claims pending or, to the Company’s knowledge, threatened against the Company or its Subsidiary or any of their
respective assets or property.


 




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k.
Solvency. Immediately after the consummation of the transactions to occur on the Closing Date and immediately following
the purchase of the Notes and after giving effect to the application of the proceeds thereof as of the date thereof: (i) the fair
value of the assets of the Company and its Subsidiary, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (ii) the present fair saleable value of the property of the Company and its Subsidiary will be greater
than the amount that will be required to pay the current probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; and (iii) in the reasonable judgment
of the Company, each of the Company and its Subsidiary will be able to pay its debts and liabilities then-outstanding at such
time.


 


l.
Rule 506 Compliance. To the Company’s knowledge, neither the Company nor any director, executive officer,
other officer of the Company participating in the offering, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, and any promoter connected with the Company in any capacity
on the date hereof (each, an “Insider”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2)(i) or (d)(3) of the Securities Act. The Company is not disqualified from
relying on Rule 506 for any of the reasons stated in Rule 506(d) in connection with the issuance and sale of the Securities to
the Purchaser pursuant to this Agreement. The Company has exercised reasonable care, including without limitation, conducting
a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d)
exists. The Company has furnished to the Purchaser, a reasonable time prior to the date hereof, a description in writing of any
matters relating to the Company and the Insiders that would have triggered disqualification under Rule 506(d) but which occurred
before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).


 


3.
Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that:


 


a.
Organization and Existence. Such Purchaser, if such Purchaser is an entity, is a validly existing corporation, limited
partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority,
and if such Purchaser is a natural person, all requisite power and authority, to invest in the Securities pursuant to this Agreement.


 


b.
Authorization. The execution, delivery and performance by such Purchaser of the Loan Documents to which such Purchaser
is a party have been duly authorized and each will constitute the valid and legally binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.


 




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c.
Purchase Entirely for Own Account. The Securities to be received by such Purchaser hereunder will be acquired for
such Purchaser’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof,
and such Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same.


 


d.
Investment Experience. Such Purchaser acknowledges that it can bear the economic risk and complete loss of its investment
in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby.


 


e.
Disclosure of Information. Such Purchaser has had an opportunity to receive all information related to the Company
requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms
and conditions of the offering of the Securities. Such Purchaser acknowledges that Purchaser has had the opportunity to review
the SEC Reports and, without limiting the generality of the foregoing, that Purchaser has received copies of the 10-K, the June
10-Q and the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders.


 


f.
Restricted Securities. Such Purchaser understands that the Securities are characterized as “restricted securities”
under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities
Act only in certain limited circumstances.


 


g.
Legends. It is understood that, except as provided below, certificates evidencing the Securities may bear the following
or any similar legend:


 


i.
“The securities represented hereby have 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, and, accordingly,
may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended,
(ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received an opinion of counsel reasonably satisfactory
to it that such transfer may lawfully be made without registration under the Securities Act of 1933, as amended.”


 


ii.
If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by
such state authority.


 


h.
Accredited Investor. Such Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D under the
Securities Act.


 


i.
Rule 506 Compliance. Neither such Purchaser nor any of its directors, executive officers, other officers that may
serve as a director or officer of any company in which it invests, general partners or managing members is subject to any Disqualification
Event (as defined above), except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) under the Securities Act and
disclosed in writing in reasonable detail to the Company.


 




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4.
Conditions of the Purchaser’s Obligations at Closing. The obligations of the Purchaser to the Company under
this Agreement are subject to the fulfillment of each of the following conditions, unless otherwise waived:


 


a.
Representations and Warranties. The representations and warranties made by the Company in Section 2 hereof
qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be
true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 2 hereof
not qualified as to materiality shall be true and correct in all respects at all times prior to and on the Closing Date, except
to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or
warranty shall be true and correct in all respects as of such earlier date. The Company shall have performed in all respects all
obligations and covenants herein required to be performed by it on or prior to the Closing Date.


 


b.
Qualifications. All authorizations, approvals or permits, if any, of any Governmental Authority that are required
in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as
of the Closing.


 


c.
Deliveries. The Company shall have executed the Note and shall have made all deliveries required pursuant to Section
1(b)(ii).


 


5.
Conditions of the Company’s Obligations at Closing. The obligations of the Company to the Purchaser under
this Agreement are subject to the fulfillment of each of the following conditions, unless otherwise waived:


 


a. Representations
and Warranties. The representations and warranties made by the Purchasers in Section 3 hereof, other than the
representations and warranties contained in Sections 3(c), (d), (e), (f), (g) and (h) (the
“Investment Representations”), shall be true and correct in all material respects when made, and
shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been
made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be
true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of
said date. The Purchaser shall have performed in all material respects all obligations and covenants herein required to be
performed by them on or prior to the Closing Date.


 


b.
Deliveries. The Purchaser shall delivered the Purchase Price for the Note to the Company, in accordance with Section
1(b)(iii).


 




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6.
Covenants of the Company. The Company covenants and agrees with the Purchaser that, so long as this Agreement shall
remain in effect and until all Liabilities under the Notes (as defined therein) have been satisfied by the Company, unless the
holders of a majority of the principal amount of the Notes then outstanding (a “Holder Majority”) shall
otherwise consent in writing:


 


a.
Existence; Compliance with Laws. The Company and its Subsidiary shall (i) do or cause to be done all things reasonably
necessary to preserve, renew and keep in full force and effect its legal existence; (ii) do or cause to be done all things reasonably
necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations,
patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated other than any change thereof that would not result in
a Material Adverse Effect; comply in all material respects with all applicable laws, rules, regulations and decrees and orders
of any Governmental Authority, whether now in effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good repair, working order and condition; (iii) keep its insurable
properties adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such
extent and against such risks, including fire and other risks insured against by extended coverage, as is customary with competitors
in the same industry operating in similar locations, including public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled
by it; and maintain such other insurance as may be required by law; (iv) pay and discharge promptly when due (or otherwise escrow,
bond or insure) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in
respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials
and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided , however
, that such payment and discharge (or escrow, bonding or insurance) shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and
the Company shall have set aside on its books adequate reserves with respect thereto in accordance with generally accepted accounting
principles and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement
of a Lien and there is no risk of forfeiture of such property; (v) solely in the case of the Company, timely and accurately file,
report and otherwise disclose all matters required by any Governmental Authority, including, without limitation, all reports and
forms required pursuant to rules promulgated by the SEC.


 


b.
Notices. The Company shall furnish to the Purchaser prompt written notice of the following: (i) any Event of Default
or Default (each as defined in the Note), specifying the nature and extent thereof and the corrective action (if any) taken or
proposed to be taken with respect thereto; (ii) the filing or commencement of, or any threat or notice of intention of any person
or entity to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority,
against the Company or its Subsidiary that could reasonably be expected to result in a Material Adverse Effect; (iii) any loss,
damage, or destruction to the real or personal properties (or any other assets) of the Company or the Subsidiary in the amount
of $150,000 or more, whether or not covered by insurance; (iv) any notices received by the Company regarding any (A) alleged material
default, (B) termination of a material lease or eviction from any leased premises or (C) failure to pay rent or any other material
monetary obligation, each with respect to any leased property; and (v) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.


 


c.
Transactions with Affiliates. The Company and the Subsidiary shall not, except for transactions between the Company
and the Subsidiary, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its affiliates, except that the Company or the Subsidiary may engage in any of the
foregoing transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Company
or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties.


 




    	10



     


    

 


7.
Miscellaneous.


 


a.
Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto and the other Purchasers in the Offering or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
Neither party may assign this Agreement without the prior written consent of the other party.


 


b.
Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of
the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York
County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection
with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified
for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES
HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL
HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.


 


c.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one instrument.


 


d.
Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient (i)
upon receipt, when delivered personally or by courier, (ii) the next business day after sent, when sent by overnight delivery
service, (iii) upon delivery if given by electronic mail during normal business hours of the recipient, and if not sent during
normal business hours, then on the recipient’s next business day, or (iv) three (3) business days after being deposited
in the U.S. mail as certified or registered mail, return receipt requested, with postage prepaid, if in each instance such notice
is addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written
notice.


 


If
to the Company, addressed to:


 


Protagenic
Therapeutics, Inc.


149
Fifth Avenue, Suite 500


New
York, NY 10010


Attention:
Alexander K. Arrow


E-mail:
alex.arrow@protagenic.com


 




    	11



     


    

 


If
to Purchaser, addressed to Purchaser at the address set forth on the Purchaser signature page of this Agreement.


 


e.
Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the
Company and a Holder Majority.


 


f.
Confidentiality. Each party hereto agrees that, except with the prior written permission of the other party or otherwise
required by law, it shall at all times keep confidential and not divulge, furnish or make accessible to anyone any confidential
information, knowledge or data concerning or relating to the business or financial affairs of the other party (or its affiliates)
to which such party has been or shall become privy by reason of this Agreement or any other Loan Document, discussions or negotiations
relating to this Agreement or any other Loan Document, or the performance of its obligations hereunder or thereunder. This Section
does not apply to information that is entirely in the public domain, previously known to the recipient of the information (as
evidenced by written, dated business records of such recipient), received lawfully from a third party, or independently developed
without access to such information. Notwithstanding the foregoing, the parties agree that the Company shall file a Current Report
on Form 8-K describing the transactions contemplated under the Loan Documents. In addition, the Company will make such other filings
and notices in the manner and time required by the SEC.


 


g.
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the
parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as
close as possible to that under the provision rendered unenforceable. Any amendments of any such provisions may only be effected
in the manner set forth in Section 7(e) above. In the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement
shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance
with its terms.


 


h.
Expenses. The parties hereto shall pay their own costs and expenses related to the transactions contemplated by
this Agreement.


 


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


 


j.
Entire Agreement. This Agreement and the Loan Documents constitute the entire agreement between the parties hereto
pertaining to the purchase of the Note.


 


[Remainder
of page intentionally blank; signature pages follow]


 




    	12



     


    

 


IN
WITNESS WHEREOF, the parties have executed this Convertible Note Purchase Agreement as of the date first written above.


 


COMPANY:


 


PROTAGENIC
THERAPEUTICS, INC.


 


	By:	 	 
	Name:	Garo
    H. Armen	 
	Title:	Executive
    Chairman	 


 




    	13



     


    

 


[PURCHASER
SIGNATURE PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the parties have executed this Convertible Note Purchase Agreement as of the date first written above.


 


	FOR
    INDIVIDUALS:	 	FOR
    ENTITIES:
	 	 	 
	 	 	 
	Print
    Name	 	Print
    Name of Entity
	 	 	 
	 	 	 
	Signature	 	Signature
    of Authorized Signatory
	 	 	 
	 	 	 
	 
	 	Print
    Name of Authorized Signatory
	 	 	 
	 	 	 
	 
	 	Print
    Title of Authorized Signatory
	 	 	 
	 	 	 
	Home
    Address	 	 
	 	 	 
	 	 	 
	 	 	 
	Email
    Address	 	 
	 	 	 
	 	 	Business
    Address
	Social
    Security No.	 	 
	 	 	 
	 	 	Email
    Address
	 	 	 
	 	 	 
	 	 	Taxpayer
    Identification Number
	 	 	 
	Principal
    amount of Notes subscribed for:	 	$


 




    	14



     


    

 


Exhibit
A


 


Form
of Note


 




    	15



     


    

 


Exhibit
B


 


Guaranty


 




    	16



     


    

 


Exhibit
C


 


Wire
Transfer Instructions


 


Protagenic
Therapeutics, Inc.


 





 


Wire
Instructions


 


	149
    Fifth Ave, Suite 500	 	New
    York, NY 10010
	www.protagenic.com	 	213-260-4342


 


Bank
Information & Contacts:


 


Bank
of America


8813
Villa La Jolla Drive


La
Jolla, CA 92037


858-812-9837


Customer
Service: 800-432-1000


 


German
Carrasco


Vice
President, Small Business Officer


San
Diego Market


Bank
of America


CA0-122-01-01,
7680 Girard Ave, La Jolla, CA 92037


T
619-990-2202 F 972-725-6796


g.carrasco@BankofAmerica.com


 


Bank
Routing & Account Number:


 


Account
name: XXXXXX


Account
Number: XXXXXX


Routing
Number: XXXXXX


Routing
Number: XXXXXX


 


	Swift
    Code: 	XXXXXX
	 	XXXXXX


 


Account
Address: Protagenic Therapeutics, Inc., 149 Fifth Ave, Suite 500, New York, NY 10010


 


Officer
Authorization:


 


Alexander
K. Arrow, MD, CFA


Chief
Financial Officer


 




    	17