Document:

EXHIBIT 4.1

 

THIS WARRANT AND THE SECURITIES UNDERLYING
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OT HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS AND THE RULES AND REGULATIONS THEREUNDER. 

 

PROTEA BIOSCIENCES GROUP, INC.

 

WARRANT

 

TO PURCHASE COMMON STOCK OF THE COMPANY

 

Warrant No. __

Issue Date: _____
__, 20__

 

FOR VALUE RECEIVED,
PROTEA BIOSCIENCES GROUP, INC., a Delaware corporation (the “Company”), grants the following rights to ________________,
and [his] [her] [its] permitted assigns, heirs, executors and administrators (individually and collectively, the “Holder”),
as of the ___ day of ______ 20__ (“Issue Date”). This warrant (the “Warrant”) has been issued by the Company
in connection with a sale of Units of the Company’s securities pursuant to a limited offering (the “Offering”)
to “accredited investors” only (as defined in Rule 501(a) of Regulation D under the Securities Act of 1933)
pursuant to a Confidential Private Placement Memorandum, dated December 13, 2011 (the “Memorandum”). Under the terms
and conditions of the Offering, each Unit consists of 50,000 shares of the Company’s common stock, par value $0.0001 per
share (the "Common Stock") and one warrant to purchase 25,000 shares of the Company’s Common Stock (this "Warrant")
on the terms and conditions set forth herein. This Warrant is subject to the terms and conditions set forth in a subscription agreement,
by and between the Company and the Holder, executed in connection with the Offering (the "Subscription Agreement").

 

Section 1.Grant.

 

The Holder is hereby granted
the right (collectively, the “Purchase Rights”), in accordance with the terms and conditions of this Warrant, from
the date hereof until the expiration of the “Exercise Period” (as defined below), to purchase from the Company that
number of fully paid and non-assessable shares of the Common Stock of the Company, set forth in Section 2 hereof, at the “Exercise
Price” (as defined below), upon delivery of this Warrant to the Company with the Notice of Exercise form attached as Exhibit
1 hereto, duly executed, and upon tender of the Exercise Price for the shares of Common Stock to be purchased.

 

Section 2.Number of Shares
of Common Stock Purchasable.

 

2.1Subject to the other provisions
of this Section 2, this Warrant entitles the Holder to purchase from time to time up to 25,000 shares of the Company’s Common
Stock (the “Warrant Shares”).

 

    	 

    	 

    
 

 

2.2In case prior to the expiration
of these Purchase Rights by exercise or by the terms of this Warrant the Company shall undertake any reclassification, stock split,
reverse stock split, stock dividend or any similar proportionately-applied change (collectively, a “Reclassification”)
of outstanding shares of Common Stock (other than a change in, of, or from par value), the Holder shall thereafter be entitled,
upon exercise of this Warrant, to purchase the kind and amount of shares of stock and other securities and property receivable
upon such Reclassification by a holder of the number of shares of Common Stock which this Warrant entitles the Holder hereof to
purchase immediately prior to such Reclassification. Notice of any such Reclassification shall be given to the Holder pursuant
to Section 12 hereof.

 

2.3In case prior to the expiration
of these Purchase Rights by exercise or by the terms of this Warrant the Company shall determine to consolidate or merge with,
or convey all, or substantially all, of its property or assets to, any other corporation or corporations, or dissolve, liquidate
or wind up, then, as a condition precedent to such consolidation, merger, conveyance, dissolution, liquidation or winding up, notice
shall be given to the Holder pursuant to Section 12 hereof and lawful and adequate provision shall be made whereby the Holder shall
thereafter have the right to receive from the Company or the successor corporation, as the case may be, upon the basis and upon
the terms and conditions specified in this Warrant, in lieu of the shares of Common Stock of the Company theretofore purchasable
upon the exercise of the Purchase Rights, such shares of stock, securities, or assets as may be issued or payable with respect
to, or in exchange for, the number of shares of Common Stock of the Company theretofore purchasable upon the exercise of the Purchase
Rights had such consolidation, merger, conveyance, dissolution, liquidation or winding up not taken place; and in any such event
the rights of the Holder to an adjustment of the number of shares of Common Stock purchasable upon the exercise of the Purchase
Rights as herein provided, shall continue and be preserved in respect of any stock or securities which the Holder becomes entitled
to purchase.

 

Section 3.Exercise Period;
Registration Statement Notice.

 

3.1The Purchase Rights represented
hereby shall be exercisable in whole or in part from time to time after the date of issuance of this Warrant until the earlier
of (i) a Qualified Public Offering, or (ii) 5:00 p.m. Eastern time on the fifth anniversary of the Issue Date hereof (the “Exercise
Period”). For purposes of this Warrant, the term “Qualified Public Offering” shall mean the closing of a firm
commitment underwritten offering pursuant to an effective registration statement under the Securities Act covering the offer and
sale of Common Stock for the account of the Company in which the net cash proceeds to the Company (after deduction of underwriting
discounts, commissions and fees) are at least $15,000,000.

 

3.2The Company shall give the Holder
written notice, at the address of the Holder set forth on the Company’s books, not less than ten days prior to the filing
of any registration statement with respect to a Qualified Public Offering.

 

Section 4.Exercise.

 

4.1The Purchase Rights represented
by this Warrant are exercisable upon the terms and conditions set forth herein at the option of the Holder in whole at any time
and in part, but not for less than 100 shares at a time, at any time and from time to time during the Exercise Period, upon the
delivery of the Notice of Exercise form attached hereto as Exhibit 1, to the Company with such notice duly executed and
upon payment in cash, wire transfer or bank cashier’s check of the Exercise Price. The Purchase Rights shall be deemed to
have been exercised, and the Holder shall be deemed to have become a stockholder of record of the Company for the purposes of receiving
dividends and for all other purposes whatsoever with respect to the shares of Common Stock so purchased, as of the date of delivery
of such properly executed notice accompanied by proper tender of the Exercise Price at the office of the Company. As promptly as
practicable on or after such date, and in any event within 20 business days thereafter, the Company at its expense shall issue
and deliver, or cause to be issued and delivered, to the person or persons entitled to receive the same, a certificate or certificates
for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense
will execute and deliver a new Warrant of like tenor exercisable for the number of shares for which this Warrant may then be exercised.

 

    	 

    	 

    
 

 

Section 5.Exercise Price.The
exercise Price for each share of Common Stock issuable to the Holder hereunder shall be $2.25 per share.

 

Section 6.Company’s
Warranties and Covenants as to Capital Stock.

The Company has taken all
action necessary and appropriate to properly authorize, reserve and issue those shares of Common Stock issuable to the Holder pursuant
to this Warrant including an authorization of issuance and setting of exercise price. The Common Stock deliverable on the exercise
of the Purchase Rights represented hereby shall, when issued, be duly and validly issued, fully paid and nonassessable. The Company
shall at all times reserve and hold available sufficient shares of Common Stock to satisfy all conversion and purchase rights of
all outstanding convertible securities and warrants.

 

Section 7.Transfer; Compliance
With Securities Laws; Right of Company to Request Opinion of Counsel Confirming Such Compliance; Holder Responsible for Costs of
Transfer Including Reasonable Counsel Fees.The Purchase Rights shall be registered on the books of the Company,
which shall be kept by it at its principal office for that purpose. This Warrant and the Common Stock issuable upon exercise of
the Purchase Rights, may not be transferred or assigned in whole or in part without compliance with all applicable federal and
state securities laws by the transferor and the transferee, including, if requested by the Company, an opinion of counsel satisfactory
to the Company to the effect that the transfer or assignment is in compliance with applicable securities laws. Subject to such
compliance, the Purchase Rights shall be transferable on said books, in whole or in part, by the Holder in person or by duly authorized
attorney upon surrender of this Warranty properly endorsed by the Holder executing the Permitted Transfer or Assignment Form attached
hereto and made a part hereof as Exhibit 2. All costs associated with any transfer or assignment, including, without limitation,
the reasonable fees of counsel to the Company shall be borne by the transferor or assignor. The Company agrees that, while the
Purchase Rights remain valid and outstanding, its stock transfer books shall not be closed for any purpose whatsoever except under
arrangements which shall insure to persons exercising warrants or applying for transfer of stock all rights and privileges which
they might have had or received if the stock transfer books had not been closed and they had exercised their Purchase Rights at
any time during which such transfer book shall have been closed.

 

    	 

    	 

    
 

 

Section 8.Charges, Taxes and
Expenses.Issuance of certificates for shares of Common Stock issuable upon the exercise of this Warrant or any
portion thereof (and issuance of a replacement Warrant certificate in the event of partial exercise) shall be made without charge
to the Holder hereof for any issue taxes or any other incidental expenses in respect of the issuance of such certificates to and
in the name of the registered Holder of this Warrant, all of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder of this Warrant. Certificates will be issued in a name other than that of the Holder
upon the request of a Holder and payment by the Holder of any applicable transfer taxes and compliance with all applicable securities
laws and with all applicable provisions of this Warrant including but not limited to Section 7 hereof.

 

Section 9.Exchange for Other
Denominations.This Warrant is exchangeable for new certificates of like tenor and date representing in the
aggregate the right to purchase the number of shares purchasable hereunder in denominations designated by the Holder at the time
of surrender. In the event of the purchase, at any time prior to the expiration of the Exercise Period, of less than all of the
shares of Common Stock purchasable hereunder, the Company will cancel this Warrant upon surrender thereof, and will forthwith execute
and deliver to the Holder hereof a new warrant of like tenor and date for the balance of the shares purchasable hereunder.

 

Section 10.Loss, Theft, Destruction
or Mutilation of Warrant.Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation
of this Warrant, if mutilated, the Company will make and deliver a new warrant of like tenor and date, in lieu of this Warrant.

 

Section 11.Registration Rights.
The Warrant Shares are subject to the "piggy-back" registration rights set forth in Section 4 of the Subscription Agreement.

 

Section 12.Notices Including
Certificate of Company In Event of Adjustment.

 

(a)Whenever the number of shares
purchasable hereunder shall be adjusted pursuant to Section 2 hereof, the Company shall issue a certificate signed by its Chief
Financial Officer or its President or such other appropriate officer, setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the number of shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail,
postage prepaid) to the Holder of this Warrant.

 

(b)In case:

 

(i)the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive any dividend or other distribution, or any right
to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

 

    	 

    	 

    
 

 

(ii)of any capital reorganization of
the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into
another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or

 

(iii)of any voluntary dissolution,
liquidation or winding-up of the Company,

 

then, and in each such case, the Company will
mail or deliver or cause to be mailed or delivered to the Holder or Holders a notice specifying, as the case may be, (A) the date
on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (B) the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders
of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such notice
shall be mailed or delivered at least 15 business days prior to the date therein specified.

 

(c)All notices, requests, consents
and demands required by this Warrant shall be in writing and shall be personally delivered or mailed, postage prepaid, to the Company
at:

 

PROTEA BIOSCIENCES GROUP,
INC.

955 Hartman Run Road

Morgantown, WV 26507

Attn: President

Fax: 304-292-7101

 

with a copy (which shall not constitute notice)
to:

 

Richardson & Patel
LLP

750 Third Avenue, 9th
Floor

New York, New York 10017

Attn: David Feldman, Esq.

Fax: (917) 677-8165

 

and to the Holder at the address of such Holder
set forth in the Subscription Agreement executed by the original holder of this Warrant in connection with the purchase of one
or more Units of the Company’s securities. All notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed facsimile if sent during
normal business hours of the recipient, if not, then on the next business day, (iii) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery with written verification of receipt.

 

    	 

    	 

    
 

 

Section 13.Miscellaneous.This
Warrant shall not entitle the Holder to any of the rights of a stockholder of the Company. This Warrant shall be binding upon the
Company’s successors. This Warrant shall be governed, construed and enforced in accordance with the laws of the State of
Delaware. In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal or unenforceable,
the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby. This Warrant shall any term hereof may be changed,
waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof.

 

[signatures appear on following page]

 

    	 

    	 

    

IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed, under seal and delivered on its behalf as of the ____ day of __________, 20__.

 

 

PROTEA BIOSCIENCES GROUP,
INC. (SEAL)

 

 

 

By:____________________________________

Stephen Turner

President

 

    	 

    	 

    
  

 

 EXHIBIT 1

 

 

NOTICE OF EXERCISE PURSUANT TO

ATTACHED WARRANT

 

 

, 20___

 

 

To: PROTEA BIOSCIENCES GROUP, INC.

 

(1)The undersigned, the Holder of record
of the attached Warrant of PROTEA BIOSCIENCES GROUP, INC., hereby exercises the option granted by the Purchase Rights evidenced
by the attached Warrant to purchase upon the terms set forth in such Warrant [________] shares of Common Stock, which constitutes
all [or a portion] of the shares of Common Stock issued pursuant to the Purchase Rights represented by this Warrant, of PROTEA
BIOSCIENCES GROUP, INC., and hereby tenders payment of the Exercise Price as determined by the Warrant. All capitalized terms used
but not defined in this notice shall have the meanings assigned to such terms in the Warrant.

 

(2)In exercising this Warrant, the
undersigned hereby confirms and acknowledges that (a) the undersigned has complied with all terms and conditions of the Offering
as defined in the Warrant, including the requirement that the Offering was limited to “accredited” investors only,
(b) the shares of the Common Stock to be issued are being acquired solely for investment and solely for the account of the undersigned,
(c) the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances that
will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws, and (d) as required
under the terms of the Offering, the certificate or certificates representing said shares of Common Stock shall bear a restrictive
legend prohibiting and restricting transfer of such shares except in compliance with applicable federal and state securities laws.

 

(3)Please issue a certificate or certificates
representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below.

 

(4)Please issue a new Warrant for the
unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

 

ATTEST:

HOLDER:__________________________

By:__________________________

Name:__________________________

Title:__________________________

 

(If certificates for Common Stock or new Warrants
are requested in a name other than the undersigned, be advised that the delivery of the certificates and/or new Warrants will be
delayed until the Company assures itself that such change is permitted under Section 7 of the Warrant that such change does not
violate applicable federal and state securities laws.)

 

    	 

    	 

    
 

 

EXHIBIT 2

 

PERMITTED TRANSFER OR ASSIGNMENT FORM

 

NOTE: THIS ASSIGNMENT BEARS A RESTRICTIVE
LEGEND BELOW

 

FOR VALUE RECEIVED, the
undersigned Holder of record of this Warrant of PROTEA BIOSCIENCES GROUP, INC., hereby sells, assigns and transfers unto the Assignee
named below all of the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock
set forth below:

 

Name of Transferee/AssigneeAddressNo.
of Shares

 

 

and does hereby irrevocably constitute and
appoint the Secretary of PROTEA BIOSCIENCES GROUP, INC. to make such transfer on the books of PROTEA BIOSCIENCES GROUP, INC., maintained
for the purpose, with full power of substitution in the premises.

 

Attached hereto is an opinion
of counsel that the assignment does not violate or is exempt from, any federal and state securities laws. As provided in the Warrant,
including but not limited to Section 7 of the Warrant, the Company may, in its sole discretion, decide whether such opinion is
satisfactory, and Assignee and Holder agree to any reasonable delay in transfer caused by such evaluation and further acknowledge
and agree that they shall bear all costs associated with any transfer or assignment, including, without limitation, the reasonable
fees of counsel to the Company shall be borne by the transferor or assignor.

 

The undersigned also represents
that, by assignment hereof, the Assignee acknowledges that this Warrant and the shares of Common Stock to be issued upon exercise
hereof or conversion thereof are being acquired for investment and that the Assignee will not offer, sell or otherwise dispose
of this Warrant or any shares of stock to be issued upon exercise hereof or conversion thereof except under circumstances which
will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws. Further, the Assignee has
acknowledged that upon exercise of this Warrant, the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of stock so purchased are being acquired for investment and not with a view toward
distribution or resale in violation of applicable securities laws.

 

Accordingly, the following
restrictive legend is made applicable to this assignment (and to this Warrant and securities covered by this Warrant as assigned
hereby to Assignee):

 

 

[INSERT RESTRICTIVE LEGEND]

 

    	 

    	 

    
 

 

 

This Assignment and this Warrant and the
securities underlying this Warrant as assigned hereby, have not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), and may not be offered, sold or otherwise transferred, assigned, pledged or hypothecated in the
absence of such registration or an exemption therefrom under such Securities Act, any applicable state securities laws and the
rules and regulations thereunder.

 

 

 

 

Dated: __________________________

HOLDER: _____________________

By: __________________________

Name: ________________________

Title: __________________________

 

Dated: __________________________

ASSIGNEE: _____________________

By: ____________________________

Name: __________________________

Title: ____________________________

 

707281EXHIBIT 10.1

 

________________, 20___

 

Protea Biosciences Group, Inc.

955 Hartman Run Road

Morgantown, WV 26507

Re: Lock-Up Agreement

Ladies and Gentlemen:

Reference is made
to the offering (the “Offering”) by Protea Biosciences Group, Inc., a Delaware corporation (the “Company”),
of shares of its common stock, par value $.0001 per share (the “Common Stock”), and warrants to purchase shares
of Common Stock (the “Warrants”, and together with the Common Stock, the “Securities”) pursuant
to that certain Confidential Private Placement Memorandum of the Company, dated December 13, 2011 (the “Offering Memorandum”).

The undersigned
stockholder is an officer or director of the Company, or is an affiliate (as defined below) or family member (as defined below)
of such person, and is entering into this agreement in order to facilitate further investment in the Company pursuant to the Offering
Memorandum and in recognition of the benefit that the sale of Securities will confer upon the undersigned, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged. The undersigned agrees that, during the period
commencing on the date the Securities and Exchange Commission declares effective a registration statement under the Securities
Act of 1933, as amended, of the Company related to a firm commitment underwritten offering covering the offer and sale of Common
Stock for the account of the Company through the date ending one hundred and eighty (180) days following such date (the “Restricted
Period”), the undersigned will not, without the prior written consent of the Placement Agent, directly or indirectly:
offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or sell, or otherwise transfer or dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future), any
securities of the Company beneficially owned by such person or entity.

Notwithstanding
the foregoing, the undersigned may during the Restricted Period: (i) transfer any amount of the Restricted Securities either
during the undersigned’s lifetime or on death by will or intestacy to such person’s family member or affiliate, or
to a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of the undersigned’s family
member; or (ii) make a bona fide gift of any amount of the Restricted Securities to any person; provided, however,
that in the case of any such transfer or gift, it shall be a condition to such transfer or gift that the transferee or donee execute
an agreement (an original copy of which shall be provided to Company) stating that the transferee or donee is receiving and holding
such transferred or donated shares subject to the provisions of this letter agreement, and there shall be no further transfer of
such transferred or donated shares except in accordance with this letter agreement. For purposes of this letter agreement: “affiliate”
means, as to any person, any other person that, directly or indirectly, controls, is controlled by or is under common control with
such person or is a director or officer of such person; “control” (including the terms “controlling”,
“controlled by” and “under common control with”) of a person includes, without limitation,
the possession, direct or indirect, of the power to vote 25% or more of the voting interests of such person or to direct or cause
the direction of the management and policies of such person, whether through the ownership of voting interests, by contract or
otherwise; “family member” means with respect to any individual, such individual’s spouse, any descendants
(whether natural or adopted), any trust all of the beneficial interests of which are owned by any of such individuals or by any
of such individuals together with any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
the estate of any such individual, and any corporation, association, partnership or limited liability company all of the equity
interests of which are owned by those above described individuals, trusts or organizations and with respect to any trust, the owners
of the beneficial interests of such trust; and “person” means an individual, partnership, corporation (including
a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.

 

    	 

    	 

    
 

The undersigned
hereby agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent against the transfer
of the Restricted Securities, except in compliance with this letter agreement.

The undersigned hereby
represents and warrants that the undersigned has full power and authority to enter into this letter agreement. This letter agreement
is irrevocable and all authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned
and any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the
undersigned.

 

Very truly yours,

Signature:_____________________________________

Printed Name:_____________________________________

(Indicate capacity of person signing
if signing as custodian or trustee or on behalf of an entity)

Address:

 _____________________________________

_____________________________________

_____________________________________ 

 

 

 

Accepted as of the date

first set forth above:

PROTEA BIOSCIENCES GROUP, INC.

By:_____________________________________

Name:___________________________________

Title:_____________________________________

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