Document:

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 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.

 

PROTEA BIOSCIENCES GROUP, INC.

 

WARRANT

 

TO PURCHASE COMMON STOCK OF THE COMPANY

 

	Warrant No. 407	Issue Date:  April 18, 2012

 

FOR VALUE RECEIVED,
PROTEA BIOSCIENCES GROUP, INC., a Delaware corporation (the “Company”), grants the following rights to West Virginia
Jobs Investment Trust Board, its successors, permitted assigns, heirs, executors and administrators (individually and collectively,
the “Holder”), as of the 18th day of April, 2012 (“Issue Date”). This warrant (the “Warrant”)
has been issued by the Company in connection with the issuance by the Company of its Convertible Debenture to West Virginia Jobs
Investment Trust Board and of even date herewith (the “Convertible Debenture”), which by its terms is accompanied by
the delivery to the Holder of one Warrant to purchase the Company’s Common Stock on the terms and conditions set forth herein.

 

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 Common Stock of the Company, par value $0.0001 per share, 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 88,889 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 11 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 11 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 15,000 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 or certified 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 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 the 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.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 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 personal 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.

 

    	 

    	 	

    
 

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.Notices.

 

(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 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, in the following
manner:

 

If to the Holder:

 

West Virginia Jobs
Investment Trust Board

Fifth Floor, 1012 Kanawha
Boulevard, East

Charleston, WV 25301

Attention: Executive
Director

Telephone No. 304-345-6200

Fax: 304-345-6262

 

If to the Company:

 

PROTEA BIOSCIENCES
GROUP, INC.

955 Hartman Run Road

Morgantown, WV 26507

Attention: Stephen
Turner

Telephone: 304-292-2226

Fax: 304-292-7101

 

or to such address or addresses as provided
by Company or by Holder by such a notice. 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 went 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 12.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.

 

    	 

    	 	

    
 

 

IN WITNESS WHEREOF,
the parties have caused this Warrant to be duly executed, under seal and delivered on its behalf as of the 18th day
of April, 2012.

 

 

 

	 	PROTEA BIOSCIENCES
GROUP, INC. (SEAL)
	 	 
	 	By: 	/s/ Stephen Turner
	 	 	Stephen Turner
President

 

 

	 	WEST VIRGINIA JOBS
INVESTMENT TRUST BOARD
	 	 
	 	By: 	/s/ C. Andrew Zulauf
	 	 	C. Andrew Zulauf, Executive
Director

 

    	 

    	 	

    
 

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.

 

(2)In exercising this Warrant,
the undersigned hereby confirms and acknowledges that (a) the shares of the Common Stock to be issued are being acquired solely
for investment and solely for the account of the undersigned and (b) 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. The undersigned further acknowledges that the certificate[s] evidencing the
shares of Common Stock shall bear a legend to the effect of clause (b) above.

 

(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

 

TRANSFER OR ASSIGNMENT FORM

 

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/Assignee	Address	No. 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. 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.

 

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.

 

	Dated: 	 	 	HOLDER:	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	 	 	 	 	 
	Dated:	 	 	ASSIGNEE: 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO
UNDER SUCH ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

PROTEA BIOSCIENCES GROUP, INC.

 

CONVERTIBLE PROMISSORY NOTE

 

	$PRINCIPAL AMOUNT	 	Issue Date: April 16, 2012

 

 

Protea Biosciences
Group, Inc., a Delaware corporation (the “Company”), the principal office of which is located at 955 Hartman Run Road,
Morgantown, WV 26507 for value received hereby promises to pay to ___________________________, or its registered assigns (“Holder”),
the sum of [___________________________], or such other amount as shall then equal the outstanding principal amount hereof and
all accrued unpaid interest, as set forth below, on the earlier to occur of (i) the date that is 90 days from the Issue Date (“Maturity
Date”), or (ii) when declared due and payable by the Holder upon the occurrence of an Event of Default (as defined below).
Payment for all amounts due hereunder shall be made by wire transfer of immediately available funds, in lawful tender of the United
States, to an account designated in writing by the Holder.

 

The following is a
statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof,
by the acceptance of this Note, agrees:

 

1.                 
Definitions. As used in this Note, the following terms, unless the context otherwise requires, have the following
meanings:

 

(i)              
“Company” includes any corporation that, to the extent permitted by this Note, shall succeed to or assume the
obligations of the Company under this Note.

 

(ii)            
“Holder,” when the context refers to a holder of this Note, shall mean any person who shall at the time be the
registered holder of this Note.

 

2.                 
Interest. Simple Interest on the unpaid principal balance of this Note shall accrue from the date hereof at
the rate of ten percent (10%) per annum. All accrued unpaid interest shall be due and payable to the Holder on the Maturity Date.

 

    	 

    	 	

    
 

3.                 
Events of Default. If any of the events specified in this Section 3 shall occur (herein individually referred
to as an “Event of Default”), the Holder of the Note may, so long as such condition exists, declare the entire principal
and unpaid accrued interest hereon immediately due and payable, by notice in writing to the Company:

 

(i)              
Any failure to pay the principal balance of or accrued interest on this Note when due hereunder.

 

(ii)            
The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution
of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization
or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of
any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or
of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the taking of corporate
action by the Company in furtherance of any such action; or

 

(iii)          
If, within sixty (60) days after the commencement of an action against the Company seeking any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been
resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company
stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within sixty (60) days after the appointment
without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial
part of the properties of the Company, such appointment shall not have been vacated; or

 

4.                 
Prepayment. This Note may be prepaid at any time without penalty or premium with the express written
consent of the Holder.

 

5.                 
Conversion.

 

5.1             
Voluntary Conversion. The Holder of this Note has the right, at the Holder’s option, at any time prior to payment
in full of the principal balance and all accrued interest of this Note, to convert this Note, in accordance with the provisions
of Section 5.2 hereof, in whole or in part, into fully paid and nonassessable shares of common stock, par value $0.0001 per share
of the Company (“Common Stock”). The number of shares of Common Stock into which this Note may be converted (“Conversion
Shares”) pursuant to this Section 5.1 shall be equal to one (1) share of Common Stock for each $2.00 of outstanding
principal and accrued unpaid interest due under the Note on the date of conversion (the “Conversion Rate”).

 

5.2             
Notice of Conversion. Before the Holder shall be entitled to convert this Note into shares of Common Stock pursuant
to Section 5.1, it shall surrender this Note at the office of the Company and shall give written notice by mail, postage prepaid,
to the Company at its principal corporate office, of the election to convert the same pursuant to Section 5.1, and shall state
therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Company shall,
as soon as practicable thereafter, issue and deliver at such office to the Holder of this Note a certificate or certificates for
the number of shares of Common Stock to which the Holder of this Note shall be entitled as aforesaid. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date of such surrender of this Note, and the person
or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of such date.

 

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5.3             
Mechanics and Effect of Conversion. No fractional shares of Common Stock shall be issued upon conversion of this
Note. In lieu of the Company issuing any fractional shares to the Holder, upon the conversion of this Note, the number of shares
issued upon the conversion of this Note shall be rounded up to the nearest whole share. At its expense, the Company shall, as soon
as practicable after conversion, issue and deliver to the Holder at its principal office a certificate or certificates for the
number of shares of Common Stock to which the Holder shall be entitled upon such conversion, together with any other securities
and property to which the Holder is entitled upon such conversion under the terms of this Note.

 

6.                 
Conversion Rate Adjustments.

 

6.1             
Adjustments for Stock Splits and Subdivisions. In the event the Company should at any time or from time to time after
the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common
Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split
or subdivision if no record date is fixed), the Conversion Rate of this Note shall be appropriately decreased so that the number
of shares of Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding
shares, unless such adjustment has already been made to the Conversion Rate.

 

6.2             
Adjustments for Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination,
the Conversion Rate for this Note shall be appropriately increased so that the number of shares of Common Stock issuable on conversion
hereof shall be decreased in proportion to such decrease in outstanding shares, unless such adjustment has already been made to
the Conversion Rate.

 

6.3             
Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of this Note such number of its
shares of Common Stock as shall from time to time be sufficient to effect the conversion of the Note; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire outstanding principal
amount and accrued interest of this Note, in addition to such other remedies as shall be available to the holder of this Note,
the Company will use its best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

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7.                 
Assignment. Subject to the restrictions on transfer described in Section 9 below, the rights and obligations
of the Company and the Holder of this Note shall be binding upon and benefit the successors and assigns of the parties.

 

8.                 
Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent
of the Company and the Holder.

 

9.                 
Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other
disposition of this Note or securities into which such Note may be converted, the Holder will give written notice to the Company
prior thereto, describing briefly the manner thereof, together with a written opinion of such Holder’s counsel, to the effect
that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law
then in effect). Promptly upon receiving such written notice and opinion, if so requested, the Company, as promptly as practicable,
shall notify such Holder that such Holder may sell or otherwise dispose of this Note or such securities, all in accordance with
the terms of the notice delivered to the Company. Each Note thus transferred and each certificate representing the securities thus
transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Act,
unless in the opinion of counsel for the Company such legend is not required. The Company may issue stop transfer instructions
to its transfer agent in connection with such restrictions.

 

10.             
Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered or if faxed with confirmation of receipt by telephone or if mailed
by registered or certified mail, postage prepaid, at the respective addresses of the parties set forth below. Any party hereto
may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given when
personally delivered, faxed, or when deposited in the mail in the manner set forth above and shall be deemed to have been received
when delivered.

 

	 	Holder:	_______________________
	 	 	_______________________
	 	 	_______________________
	 	 	_______________________
	 	 	 
	 	Borrower:	Protea Biosciences Group, Inc.
	 	 	955 Hartman Run Road
	 	 	Morgantown, WV 26507
	 	 	Attn: Stephen Turner
	 	 	Fax: 304-292-7101

 

 

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

 

	 	 	Richardson & Patel LLP
	 	 	750 Third Avenue, 9th Floor
	 	 	New York, NY 10017
	 	 	Attn: David N. Feldman
	 	 	Fax: 917-677-8165

 

11.             
No Stockholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or
any other person the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for
the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company; and no
dividends or interest shall be payable or accrued in respect of this Note or the interest represented hereby or the Conversion
Shares obtainable hereunder until, and only to the extent that, this Note shall have been converted pursuant to Section 5.1.

 

12.             
Usury. This Note is hereby expressly limited so that in no event whatsoever, whether by reason of acceleration
of maturity of the loan evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Holder hereunder for the
loan, use, forbearance or detention of money exceed that permissible under applicable law. If at any time the performance of any
provision of this Note or of any other agreement or instrument entered into in connection with this Note involves a payment exceeding
the limit of the interest that may be validly charged for the loan, use, forbearance or detention of money under applicable law,
then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being the specific
intent of the Company and the Holder that all payments under this Note are to be credited first to interest as permitted by law,
but not in excess of (i) the agreed rate of interest set forth herein or therein or (ii) that permitted by law, whichever
is the lesser, and the balance toward the reduction of principal. The provisions of this Section 12 shall never be superseded or
waived and shall control every other provision of this Note and all other agreements and instruments between the Company and the
Holder entered into in connection with this Note.

 

13.             
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware, excluding that body of law relating to conflict of laws.

 

14.             
Heading; References. All headings used herein are used for convenience only and shall not be used to construe
or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

 

15.             
Waiver. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

 

[Signature Page to
Convertible Promissory Note Follows]

 

    	5

    	 	

    
 

 

IN WITNESS WHEREOF, the Company has caused
this Note to be issued this 16th day of April, 2012.

 

 

 

PROTEA BIOSCIENCES GROUP, INC.

a Delaware corporation

 

 

By: /s/ Stephen Turner                       

Name: Stephen Turner

Title: Chief Executive Officer

 

 

 

 

Name of Holder:__________________

 

Address:_______________________

 

                _______________________

 

 

 

    	6

    	 	

    

 

NOTICE OF CONVERSION

 

(To Be Signed Only Upon Conversion of Note)

 

TO PROTEA BIOSCIENCES GROUP, INC.

 

The undersigned, the holder of the foregoing
Note, hereby surrenders such Note for conversion into shares of Common Stock of PROTEA BIOSCIENCES GROUP, INC. to the extent of
$__________________ unpaid principal amount and accrued interest of such Note, and requests that the certificates for such shares
be issued in the name of, and delivered to ____________________, whose address is _________________________________.

 

Dated: _____________________

 

 

_______________________________________

(Signature must conform in all respects to 

name of
holder as specified on the face of the Note)

 

_______________________________________

(Address)

 

    	7

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