Document:

THIS CONVERTIBLE PROMISSORY NOTE (THIS
“NOTE”) AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION. THIS NOTE AND SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND
MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND SUCH FOREIGN
JURISDICTION LAWS HAVE BEEN SATISFIED.

 

PROTEA
BIOSCIENCES GROUP, Inc.

 

CONVERTIBLE PROMISSORY NOTE

 

[Morgantown,
West Virginia]

	$[ ]	 	Issue Date: , 2013

 

1.Principal
and Interest. PROTEA BIOSCIENCES GROUP, INC. (the “Company”), a Delaware corporation, for value received,
hereby promises to pay to the order of [ ] or his, her or its assigns (“Holder”), in lawful money of the United
States of America at the address for notices to Holder set forth in the Note and Warrant Purchase Agreement (as defined below)
(or such other address as Holder shall provide to the Company in writing pursuant hereto), the principal amount of $[ ] (the “Principal
Amount”), together with interest as set forth below.

 

This Note is being
issued pursuant to that certain Note and Warrant Purchase Agreement (the “Purchase Agreement”)
by and among the Company and the Purchasers thereunder (each a "Holder" and, collectively, the “Holders”)
dated as of , 2013, setting forth the terms of the offering and sale (the “Offering”) by the Company of up to
$1,000,000 (the “Maximum Offering”) of 10% convertible promissory notes (each a “Note” and
collectively the “Notes”).

 

This Note shall become
due and payable on the one-year anniversary of the Issue Date set forth above (the “Due Date”). Interest on
the unpaid Principal Amount shall accrue from the Issue Date until the earlier of the Due Date, or such date when the entire Principal
Amount is paid in full, at the rate of ten percent (10%) per annum or such lesser rate as shall be the maximum rate allowable under
applicable law. Simple interest shall be computed on the basis of a 360-day year of twelve 30-day months, and shall be accrued
and added to principal on an annual basis. The Company shall not be obligated to make any interest payments until the Due Date,
or, if earlier, the date when the Principal Amount is paid in full and may be paid, at the Company’s election, either in
cash or shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) valued
at $0.50 per share (subject to proportionate adjustment for forward or reverse stock splits, combinations, stock dividends and
other recapitalization events), or any combination of cash and shares.

 

Capitalized terms used
herein but not otherwise defined shall have the respective meanings ascribed to such terms in the Purchase Agreement.

 

2.Automatic
Conversion.

 

    	 

    	 

    

2.1Financing. The entire
Principal Amount and all accrued unpaid interest thereon will be automatically converted into the Financing. The Financing is planned
to include the sale of two shares of the Company’s Common Stock (the “ Shares”) and a warrant (the “
Warrant”) to purchase one share of Common Stock, exercisable at $0.75 per share for each $1.00 invested in the Financing
(the “ Conversion Price”). The Financing is also planned to include certain registration and anti-dilution rights
and a right to participate in certain future securities offerings of the Company. All terms of the Financing remain subject to
change in the discretion of the Company and .

 

2.2Effect of Automatic
Conversion. Upon an automatic conversion pursuant to Section 2.1 above, all indebtedness evidenced by this Note shall be automatically
satisfied in full and no interest shall continue to accrue on this Note thereafter and all rights of Holder hereunder shall terminate.
The Company shall not be obligated to issue certificates evidencing the securities issuable upon such conversion unless this Note
is either delivered to the Company or its transfer agent, or Holder notifies the Company or its transfer agent that this Note has
been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred
by it in connection with this Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification,
issue and deliver to such Holder of this Note, a certificate or certificates for the securities to which Holder shall be entitled.
The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such securities on such date. The Company shall not issue fractional Shares or Warrants but shall round up
the number of Shares and/or Warrants issued to the nearest whole number.

 

3.Optional
Conversion.

 

3.1Optional Conversion.
Notwithstanding anything herein to the contrary, if an initial closing of the sale of securities in the Financing does not take
place within 120 days after the Issue Date, the Notes will be convertible by the holders at their option for the 60 days thereafter.
The rate of conversion will be for each $100,000 of principal and interest converted (or portion thereof), the holder will receive
200,000 shares (the “Optional Conversion Shares” and together with the Shares, the “Shares”)
of common stock of the Company and a warrant (the “Optional Conversion Warrant” and together with the Warrant,
the “Warrants”) to purchase 150,000 shares of common stock, which warrant will be exercisable at $1.10 for a
period of five years (the “Optional Conversion Price” and together with the Conversion Price, the “Conversion
Prices”), subject to proportionate adjustments for stock splits, combinations, stock dividends and other recapitalization
events. Holder’s optional conversion right provided under this Section 3.1 is referred to herein as the “Conversion
Option”. The Conversion Price shall be paid by Holder by forgiveness of such amount of the principal and accrued interest
on this Note being converted as specified in the applicable Conversion Notice (as hereinafter defined).

 

3.2Conversion
Procedure for the Conversion Option. Upon conversion of this Note pursuant to the Conversion Option, Holder shall surrender
this Note, duly endorsed, at the office of the Company and shall provide written notice (the "Conversion Notice")
to the Company at its principal corporate office of the election to convert the same and the amount of unpaid principal and interest
being converted. The date on which the Conversion Notice is received by the Company is referred to herein as the "Conversion
Date". The Company, as soon as practicable thereafter, shall issue and deliver to Holder a certificate or certificates
for the number of Optional Conversion Shares and Optional Conversion Warrants to which Holder shall be entitled (such certificates
bearing such legends as are required by applicable state and federal securities laws).

 

3.3Mechanics and
Effect of Conversion for the Conversion Option. No fractional Optional Conversion Shares or Optional Conversion Warrants shall
be issued upon any conversion hereunder. All fractional Optional Conversion Shares and/or Optional Conversion Warrants shall be
rounded up to the nearest whole share. Any conversion pursuant to the Conversion Option, and the sale and issuance of Optional
Conversion Shares and Optional Conversion Warrants pursuant thereto, shall be deemed to have occurred immediately upon the Company’s
receipt of the Conversion Notice. From and after such time, Holder shall be treated for all purposes as the record holder of the
Optional Conversion Shares and Optional Conversion Warrants. Upon conversion of this Note in full, with no principal or accrued
interest amount thereafter outstanding, the Company shall be released from all its obligations and liabilities hereunder.

 

    	2

    	 

    

4.Fundamental
Transactions. If, at any time while this Note remains outstanding, (A) the Company effects any merger or consolidation of the
Company with or into another entity where the Company is not the surviving corporation (other than in connection with a reverse
merger pursuant to which the owner's of the Company's securities immediately prior to such transaction own a majority of the Company's
securities following such transaction), (B) the Company effects any sale of all or substantially all of its assets in one or a
series of related transactions other than as part of a reorganization, (C) any tender offer or exchange offer (whether by the Company
or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in
any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this Note pursuant to the
provisions herein, Holder shall have the right to receive, for each Conversion Share, Conversion Warrant, Optional Conversion Share
and/or Optional Conversion Warrant (collectively, the “Conversion Securities”) that would have been issuable
upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of one share of Common Stock and a warrant to purchase one share of Common Stock.

 

5.Prepayment.
At any time when there remains unpaid principal or accrued unpaid interest under this Note, if the Financing has not had an initial
closing within 120 days following the Issue Date, the Company shall have the right to prepay, upon
14 days prior written notice to Holder, without premium or penalty, any or all of such unpaid principal
or interest, during which notice period Holder may exercise the conversion rights under this Note to the extent then applicable.

 

6.Events of Default.

 

6.1Each of the following events
shall constitute a default under this Note (each an “Event of Default”) if not cured by the Company within thirty
(30) calendar days after receipt of written notice thereof from Holder or such longer period as set forth below:

 

(a)failure
by the Company to pay the principal or interest amount when due hereunder;

 

(b)failure
by the Company or the Company’s transfer agent, or the Company’s successor in a Fundamental Transaction, to issue securities
issuable upon conversion of this Note to Holder within thirty (30) calendar days after the receipt of a Conversion Notice or the
event causing automatic conversion and surrender by Holder to the Company or the Company’s transfer agent (or the Company’s
successor or successor’s transfer agent following a Fundamental Transaction);

    	3

    	 

    

 

(c)the
Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties;
(3) commence a voluntary action for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise submit
to any governmental authority any petition, answer or other document seeking: (A) reorganization, (B) an arrangement with creditors
or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment
of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer or other document admitting or
failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding
under any such applicable law, or (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction;

 

(d)any
case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or
decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 6.1(c)
hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect
to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of
the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of at least
sixty (60) days;

 

6.2If any Event of Default specified
in Sections 6.1(c) or (d) occurs, then following the passage of the applicable cure period the full principal amount of this Note,
together with any other amounts owing in respect thereof, to the date of the Event of Default shall become immediately due and
payable without any action on the part of Holder, and if any other Event of Default occurs, the full principal amount of this Note,
together with any other amounts owing in respect thereof, to the date of acceleration shall become, at Holder’s election,
immediately due and payable in cash. All Notes for which the full amount thereunder shall have been paid in accordance herewith
shall promptly be surrendered to or as directed by the Company. Holder need not provide and the Company hereby waives any presentment,
demand, protest or other notice of any kind, and Holder may immediately and without expiration of any grace period enforce any
and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may
be rescinded and annulled by Holder at any time prior to payment hereunder and Holder shall have all rights as a Note holder until
such time, if any, as the full payment under this Section 6.2 shall have been received by it. No such rescission or annulment shall
affect any subsequent Event of Default or impair any right consequent thereon.

 

7.Notice of Proposed Transfers.
Prior to any proposed transfer of this Note or the Conversion Securities, unless there is in effect a registration statement under
the Securities Act covering the proposed transfer, Holder shall give written notice to the Company of such Holder’s intention
to effect such transfer. Each such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail,
and shall, if the Company so requests, be accompanied by an unqualified written opinion of legal counsel, who shall be reasonably
satisfactory to the Company, addressed to the Company and reasonably satisfactory in form and substance to the Company’s
counsel, to the effect that the proposed transfer of this Note or the Conversion Securities may be effected without registration
under the Securities Act; provided, however, no such opinion of counsel shall be necessary for a transfer without
consideration by a Holder to any affiliate of such Holder, or a transfer by a Holder which is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or
retired partner or the transfer by gift, will or intestate succession of any partner to his spouse or lineal descendants or ancestors,
if the transferee agrees in writing to be subject to the terms hereof and of the Purchase Agreement to the same extent as if such
transferee were the original Holder hereunder. Each certificate evidencing this Note or the Conversion Securities transferred as
above provided shall bear an appropriate restrictive legend, except that this Note or certificate shall not bear such restrictive
legend if in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provisions
of the Securities Act.

 

    	4

    	 

    

8.Reservation of Conversion
Securities. The Company covenants and agrees that all Conversion Securities will, upon issuance on conversion of this Note,
be duly authorized, validly issued, fully paid and nonassessable, and free of all preemptive rights, liens and encumbrances, except
for restrictions on transfer provided for herein and in the Company’s organizational documents, as amended from time to time.
Prior to executing this Note or as soon as reasonably possible thereafter, the Company shall reserve out of its authorized and
unissued Common Stock, solely for the purpose of providing for the exercise of the rights to convert this Note, such number of
Conversion Securities as shall be sufficient therefore at the applicable Conversion Price, and shall use its best efforts and take
such reasonable actions as are necessary to ensure that such securities remain so reserved for issuance in the future.

 

9.No Impairment. The Company
will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Note, but will at all times in good faith assist in the carrying out of all such terms and in the taking
of all such action as may be necessary or appropriate in order to protect the rights of Holder against impairment.

 

10.Waivers. The Company
hereby waives presentment, demand for performance, notice of non-performance, protest, notice of protest and notice of dishonor.
No delay on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or any other right. This
Note is being delivered in and shall be construed in accordance with the laws of the State of Delaware, without regard to the conflicts
of laws provisions thereof.

 

11.No Stockholder Rights.
Nothing contained in this Note shall be construed as conferring upon Holder or any other person the right to vote or to consent
or to receive notice as a stockholder of the Company.

 

12.Amendment. This Note
may only be amended with the written consent of the Holders of a majority of the then outstanding principal amount due under all
Notes issued in the Offering.

 

13.Notices. Any notice,
other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon
delivery to the address provided pursuant to the Purchase Agreement.

 

14.Subordination.
The Notes shall be, to the extent permitted by applicable law, subordinate to all outstanding debt of the Company. 

 

ISSUED as of the date first above written.

 

	 	PROTEA BIOSCIENCES GROUP, INC. 
	 	 	 
	 	By:	 
	 	Name:	Steven Turner
	 	Title:	President

 

    	5THIS 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. __	 	Issue Date: _____ __, 2013

 

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 ______, 2013 (the “Issue Date”). This warrant (the “Warrant”) has been issued by the
Company in connection with the issuance of a convertible promissory note (the “Note”) in the principal amount of [
], pursuant to the terms and conditions set forth in that certain Note and Warrant Purchase Agreement by and between the Company
and the Holder dated as of the Issue Date (the “Purchase 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 ______________1
shares of the Company’s Common Stock (the “Warrant Shares”).

 

2.2In case prior to the expiration
of the 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 solely in, of, or from par value), the Holder shall thereafter be entitled,
upon exercise of this Warrant for the same total consideration as presently required, 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.

 

1 The number of Warrant
Shares shall equal 37.5% of the shares issuable upon conversion of the Note pursuant to the terms and conditions set forth in
the Purchase Agreement.

 

    	 

    	 

    

 

2.3In case prior to the expiration
of the 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 and commissions) are at least $10,000,000.

 

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 twenty days prior to the closing
of a Qualified Public Offering.

 

Section 4.Exercise.

 

The 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 three (3) 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 shall 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 $1.10 per share subject to adjustment hereunder (the “Exercise
Price”).

 

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.

 

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 Warrant properly endorsed by the Holder
executing the Permitted Transfer or Assignment Form attached hereto and made a part hereof as Exhibit 2. All reasonable
and documented 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 shall
cancel this Warrant upon surrender thereof, and shall promptly 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 the Company 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 and documented expenses incidental thereto, and upon surrender of this Warrant, if mutilated, the Company shall
promptly make and deliver a new warrant of like tenor and date, in lieu of this Warrant and cancel this Warrant.

 

Section 11.Registration
Rights.

 

The Warrant Shares are
subject to the piggyback registration rights set forth in Section 9 of the Purchase 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
shall 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 

405 Lexington Avenue,
49th Floor 

New York, New York
10174 

Attn: David Feldman,
Esq. 

Fax: (917) 677-8165

 

and to the Holder at the address of such
Holder set forth in the Purchase Agreement executed by the original holder of this Warrant in connection with the purchase of the
Shares. 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 Issue Date set forth
above.

 

 

	 	PROTEA BIOSCIENCES GROUP, INC. 
	 	 	 
	 	By:	 
	 		Steven 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 [and hereby tenders payment of the Exercise Price as determined by the
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. All capitalized terms used but not defined in this notice 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 Purchase
Agreement as defined in the Warrant, including the requirement that the offer and sale of the Shares 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 Purchase Agreement, 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, if any, 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. (the “Company”), which is dated
___________, hereby sells, assigns and transfers unto the Assignee named below all of the rights, including, without limitation,
the Purchase Rights (as such term is defined in this Warrant) 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, if
and to the extent requested by the Company, 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 reasonable and documented 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 Common 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):

 

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.

 

[Signatures appear on following page.]

 

    	 

    	 

    

 

 

	Dated:  	 	 	HOLDER:	 
	 	 	 	 	 	 
	 	 	 	 	By:	 
	 	 	 	 	Name:	 
	 	 	 	 	Title:	 
	 	 	 	 	 	 
	Dated:	 	 	ASSIGNEE:  	 
	 	 	 	 	 	 
	 	 	 	 	By:	 
	 	 	 	 	Name:	 
	 	 	 	 	Title:

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