CONVERTIBLE NOTE PURCHASE AGREEMENT

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

RECITALS

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

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

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

AGREEMENT

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

1. Purchase and Sale of Notes.

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

b. Closing; Delivery.

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

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

1. the Note executed by the Company;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

h. Intellectual Property.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7. Miscellaneous.

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

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

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

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

If to the Company, addressed to:

Protagenic Therapeutics, Inc.

149 Fifth Avenue, Suite 500

New York, NY 10010

Attention: Alexander K. Arrow

E-mail: alex.arrow@protagenic.com

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

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

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

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

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

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

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

[Remainder of page intentionally blank; signature pages follow]

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

COMPANY:

PROTAGENIC THERAPEUTICS, INC.

[PURCHASER SIGNATURE PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT]

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

Exhibit A

Form of Note

Exhibit B

Guaranty

Exhibit C

Wire Transfer Instructions

Protagenic Therapeutics, Inc.

Wire Instructions

Bank Information & Contacts:

Bank of America

8813 Villa La Jolla Drive

La Jolla, CA 92037

858-812-9837

Customer Service: 800-432-1000

German Carrasco

Vice President, Small Business Officer

San Diego Market

Bank of America

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

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

g.carrasco@BankofAmerica.com

Bank Routing & Account Number:

Account name: XXXXXX

Account Number: XXXXXX

Routing Number: XXXXXX

Routing Number: XXXXXX

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

Officer Authorization:

Alexander K. Arrow, MD, CFA

Chief Financial Officer

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, Protagenic Therapeutics, Inc., a Delaware corporation (the “Company” ), promises to pay to the order of [●], or its registered assigns (“Purchaser” or “Holder”), the principal sum of [●] Dollars ($[●].00) (the “ Principal Amount ” ) with interest on the outstanding Principal Amount accruing as set forth in Section 1. Interest shall commence with the date hereof and shall continue on the outstanding principal of this Convertible Promissory Note (this “Note” ) as set forth in Section 1 until paid in accordance with the provisions hereof.

1. Interest.

a. Interest shall accrue on the outstanding Principal Amount at the rate of six percent (6%) per annum simple interest (computed on the basis of actual days elapsed and a fiscal year of 364 days).

b. Accrued interest shall be payable annually, in arrears, beginning on October 31, 2020, and thereafter on the last calendar day of each successive twelve (12) month period (each, an “Interest Payment Date”). The Company shall pay (a “PIK Payment”) the interest due by adding such interest (including interest at the Default Rate, as defined below, if any) to the then-outstanding Principal Amount on each Interest Payment Date and on the Maturity Date (as defined below). Each PIK Payment shall be preceded by written notice from the Company to Purchaser not less than five (5) business days prior to the date such interest payment is due setting forth in reasonable detail the amount of such PIK Payment and the Principal Amount of the Note following such PIK Payment.

c. Upon any default pursuant to this Note or any other Loan Document, this Note shall bear interest at the rate of the lesser of (i) twelve percent (12%) and (ii) such maximum rate of interest allowable under the laws of the State of New York (the “Default Rate”).

2. Convertible Note Purchase Agreement. This Note is one of a series of Notes of issued pursuant to, and is governed by and subject in all respect to, the terms of Note Purchase Agreements (the “Note Purchase Agreement”) between the Company and each of the Purchasers named therein. Each of the several Note Purchase Agreements is identical in all material respects. The Notes shall rank equally and ratably without priority over one another. Capitalized terms used in this Note and not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

3. Maturity.

a. The entire unpaid principal amount and all unpaid accrued interest (collectively, the “Obligations”) shall become fully due and payable on November 6, 2023 (the “Maturity Date”). On the Maturity Date, the Company shall pay the Obligations either, at its option, entirely in cash or entirely by converting the Obligations to Conversion Shares (as defined below) (the “Maturity PIK Right”) at the Conversion Price (as defined below). Any such conversion of the Obligations into Conversion Shares upon exercise of the Maturity PIK Right shall be in accordance with Section 6(e) below. The Company shall send the Purchaser a Conversion Notice notifying Purchaser of its exercise of the Maturity PIK Right at least ten (10) business days prior to the Maturity Date. The Company may only exercise the Maturity PIK Right ratably as to all the Notes issued in the Offering in proportion to their then-outstanding respective Principal Amounts, plus accrued and unpaid interest thereon. In addition, if applicable stock exchange listing rules so require, the Company may not exercise the Maturity PIK Right to the extent that the aggregate number of Conversion Shares issued upon conversion of this Note and the other Notes issued under the Note Purchase Agreements (together with any other securities issued by the Company that are deemed integrated into the issuance of the Notes under the Note Purchase Agreement pursuant to applicable stock exchange listing rules) would be in excess of 19.99% of the shares of Common Stock outstanding immediately prior to the issuance of this Note.

b. After all Obligations at any time owed on this Note have been paid in full or this Note has been converted in full to Conversion Shares, this Note shall be surrendered to the Company for cancellation and shall not be reissued.

4. Payments. All payments of the Obligations shall be made in lawful money of the United States of America to Purchaser (unless this Note otherwise provides for such payment by a PIK Payment or by the issuance of Conversion Shares pursuant to the Maturity PIK Right or Section 6(b) hereof), at the address specified in the Note Agreement, or at such other address as may be specified from time to time by Purchaser in a written notice delivered to the Company. All payments shall be applied first to accrued interest, expenses or fees due to Purchaser pursuant to this Note or any other Loan Document, and thereafter to principal.

5. Use of Proceeds. The Company shall use the proceeds from this Note for the following purposes:

a. To facilitate the Company’s preparation of its IND filing, fund Phase 1 clinical trials, and to begin Phase 2 trials;

b. Payment of transaction fees and expenses; and

c. working capital and general corporate purposes.

6. Conversion.

a. Subject to applicable stock exchange listing rule limitations (including, if applicable, approval by the Company’s stockholders), at any time following the date of this Note and up to the Maturity Date, the then-outstanding Obligations under this Note (or any portion thereof) may be converted into fully paid and nonassessable shares of the Company’s Common Stock, $0.0001 par value per share (the “Conversion Shares”), at the sole election of Purchaser upon written notice to the Company (the “Conversion Notice”), which Conversion Notice shall state the proposed effective date of such conversion (which date shall be no fewer than ten (10) business days following the date of delivery of the Conversion Notice) (the “Conversion Date”). The Obligations hereunder shall convert at a conversion price (the “Conversion Price”) equal to $1.25 per share, subject to adjustment for any stock dividend, stock split, combination or other similar recapitalization event with respect to the Company’s Common Stock (each a “Recapitalization Event”). Interest on the Note shall cease to accrue on the date prior to the Conversion Date.

b. Notwithstanding the conversion rights set forth in Section 6(a) above, subject to applicable stock exchange listing rule limitations (including, if applicable, approval by the Company’s stockholders), in the event, any time after the November 5, 2021, that the closing bid price per share of the Common Stock as traded on the principal securities exchange or securities market on which the Common Stock are then traded equals or exceeds $1.50 (subject to adjustment for any Recapitalization Event) for at least twenty (20) Trading Days (as defined below), whether or not consecutive, in any thirty (30) consecutive Trading Day period, the then-outstanding Obligations under this Note (or any portion thereof) may be redeemed or converted, in whole or in part, into cash or Conversion Shares, at the sole election of the Company following delivery of written notice (the “Redemption Notice”) to Purchaser. The Redemption Notice shall set forth the proposed redemption date (the “Redemption Date”) (which Redemption Date, for the sake of clarity, shall be no fewer than ten (10) business days following the date of delivery of the Redemption Notice), the aggregate dollar amount of Obligations being redeemed and whether the redemption shall be in cash or Conversion Shares. Any redemption effected by the delivery of Conversion Shares shall be at a conversion price equal to the then-current Conversion Price. Interest on the Note shall cease to accrue on the day prior to the Redemption Date. The Company may only exercise the redemption right set forth herein ratably as to all the Notes issued in the Offering in proportion to their then-outstanding Principal Amounts, plus accrued and unpaid interest thereon.

c. If applicable stock exchange listing rules so require, and notwithstanding anything in this Section 6 to the contrary, the Company shall not effect the conversion of this Note, and Purchaser shall not have the right to convert this Note, to the extent that the aggregate number of Conversion Shares issued upon conversion of this Note and the other Notes issued under the Note Purchase Agreements (together with any other securities issued by the Company that are deemed integrated into the issuance of the Notes under the Note Purchase Agreement pursuant to applicable stock exchange listing rules) would be in excess of 19.99% of the shares of Common Stock outstanding immediately prior to the issuance of this Note. In the event the holders of the Notes issued under the Note Purchase Agreements elect to convert the Notes pursuant to Section 6(a), and such Notes will not be fully convertible due to the limitations set forth in this Section 6(c), the Company shall use its commercially reasonable efforts to obtain stockholder approval of the issuance of the Notes in accordance with applicable stock exchange listing rules as soon as reasonably practicable, including by calling a special meeting of stockholders. For purposes of this Section 6(c), the terms “commercially reasonable efforts” shall include, without limitation, the obligation of the Company take all action necessary to call a meeting of its stockholders (the “Stockholders Meeting”), which shall occur not later than 90 days after Purchaser’s request for the same (the “Stockholders Meeting Deadline”), for the purpose of seeking approval of the Company’s stockholders for, among other things, the issuance and sale of the Conversion Shares to Purchaser (the “Proposal”). In the event the Proposal is not approved by the Company’s stockholders at the Stockholders Meeting, the Company shall take all action necessary to call up to two (2) additional meetings of its stockholders (each a “Subsequent Stockholders Meeting”) for the purpose of seeking approval of the Proposal, to be held promptly following the completion of the Stockholders Meeting and in no event more than one year after Purchaser’s request for the same, to the extent reasonably practicable. In connection with the Stockholders Meeting and, if applicable, each Subsequent Stockholders Meeting, the Company will promptly prepare and file with the SEC proxy materials (including a proxy statement and form of proxy) for use at the Stockholders Meeting and, if applicable, each Subsequent Stockholders Meeting, and, after receiving and promptly responding to any comments of the SEC thereon, shall promptly mail such proxy materials (or, if permitted, notice of the availability of such proxy materials) to the stockholders of the Company. Purchaser shall promptly furnish in writing to the Company such information relating to such Purchaser and its investment in the Company as the Company may reasonably request for inclusion in each Proxy Statement. The Company will comply with Section 14(a) of the Securities Exchange Act of 1934 (the “1934 Act”) and the rules promulgated thereunder in relation to any proxy statement (as amended or supplemented, each a “Proxy Statement”) and any form of proxy to be sent or made available to the stockholders of the Company in connection with the Stockholders Meeting or, if applicable, each Subsequent Stockholders Meeting, and each Proxy Statement shall not, on the date that such Proxy Statement (or any amendment thereof or supplement thereto) is first mailed or made available to stockholders or at the time of the Stockholders Meeting or any Subsequent Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein not false or misleading, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies or the Stockholders Meeting which has become false or misleading. If the Company should discover at any time prior to the Stockholders Meeting or, if applicable, any Subsequent Stockholders Meeting, any event relating to the Company or any of its Subsidiaries or any of their respective Affiliates, officers or directors that is required to be set forth in a supplement or amendment to the applicable Proxy Statement, in addition to the Company’s obligations under the 1934 Act, the Company will promptly inform the Purchaser thereof.

d. Upon the Conversion Date or Redemption Date, as the case may be, with respect to a conversion of this Note pursuant to either Section 6(a), 6(b) or Section 3 above, Purchaser hereby agrees to deliver the original of this Note to the Company for cancellation (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby Purchaser agrees to indemnify the Company from any loss incurred by it in connection with this Note); provided, however, that upon the Conversion Date, this Note (or portion thereof) shall be deemed converted and of no further force and effect, whether or not it is delivered for cancellation as set forth in this sentence.

e. On or before the second Trading Day following the Conversion Date or Redemption Date, as the case may be (the “Share Delivery Date”), the Company shall, (i) provided that the Company’s transfer agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program (the “FAST Program”) and so long as the certificates therefor are not required to bear a legend regarding restriction on transferability, upon the request of Purchaser, credit such aggregate number of shares of Common Stock to which Purchaser is entitled pursuant to such exercise to Purchaser’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (ii), if the Company’s transfer agent is not participating in the FAST Program or if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight courier to the address as specified in the Conversion Notice or as provided by Purchaser to the Company, a certificate, registered in the Company’s share register in the name of Purchaser or its designee, for the number of shares of Common Stock to which Purchaser is entitled pursuant to such exercise. Upon the Conversion Date, Purchaser shall be deemed for all corporate purposes to have become the holder of record of the Conversion Shares with respect to which this Note (or portion thereof) has been converted, irrespective of the date such Conversion Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Conversion Shares, as the case may be.

For purposes of this Note, “Trading Day” means any day on which the Common Stock are traded on The NASDAQ Capital Market or, if such market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

f. No fractional shares shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to Purchaser upon the conversion of this Note, the Company shall pay to Purchaser an amount equal to the product obtained by multiplying the Conversion Price by the fraction of a share not issued pursuant to the previous sentence.

7. Default.

a. Events of Default. For purposes of this Note, any of the following events shall constitute an “Event of Default”:

i. The Company shall fail to pay when due any Obligations hereunder;

ii. Any representation or warranty of the Company under the Note Purchase Agreement, the other Loan Documents or any agreement ancillary thereto (collectively, the “Ancillary Agreements” ), as applicable, shall be untrue in any material respect as of the date made;

iii. The Company shall breach any covenant set forth in this Note or the Ancillary Agreements, taking into account applicable periods of notice and cure, if any; provided, however , that, in the event no grace or cure period is so provided, the Company shall have a period of (A) three (3) days after the earlier of the Company’ s actual knowledge thereof and written notice of non-compliance to cure such non-compliance to the extent it relates to any monetary default and (B) twenty (20) days after the earlier of the Company’ s actual knowledge thereof and written notice of non-compliance to cure any other non-compliance; provided that, in the event that any default described in clause (B) cannot reasonably be cured within such twenty (20) day period, then the Company shall have an additional ten (10) days in which to cure such non-compliance, so long as the Company continues to diligently pursue curing such non-compliance;

iv. The Company makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts as they become due, or files a voluntary petition for bankruptcy, or files any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, dissolution or similar relief under any present or future statute, law or regulation, or seeks or consents to or acquiesces in the appointment of any trustee, receiver or liquidator of the Company, or of all or any substantial part of the properties of the Company, or the Company or its respective directors or majority stockholders takes any action looking to the dissolution, liquidation or winding up of the Company;

v. An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Company under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or for a substantial part of the property or assets of the Company or (iii) the winding-up or liquidation of the Company or; and such proceeding or petition shall continue undismissed for thirty (30) days or an order or decree approving or ordering any of the foregoing shall be entered; or

vi. One or more judgments shall be rendered against the Company and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Company or to enforce any such judgment and such judgment either (i) is for the payment of money in an aggregate amount in excess of $250,000 or (ii) is for injunctive relief and could reasonably be expected to result in a Material Adverse Effect.

b. Consequences of Events of Default. If any Event of Default shall occur for any reason, whether voluntary or involuntary, or continue beyond the expiration of any applicable cure period, upon notice or demand, the Holder Majority may declare the outstanding indebtedness under this Note, together with all other amounts due or owing to Purchaser pursuant to any Ancillary Agreements, to be due and payable, whereupon each of the foregoing shall be and become immediately due and payable, and the Company shall immediately pay to Purchaser all such indebtedness, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Company, anything contained herein or in any Ancillary Agreement to the contrary notwithstanding; provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Company under the United States Bankruptcy Code, then all indebtedness under this Note, together with all other amounts due or owing to Purchaser pursuant to any Ancillary Agreements, shall automatically be due immediately without notice of any kind.

8. Lost, Stolen, Destroyed or Mutilated Note. In case this Note shall be mutilated, lost, stolen or destroyed, the Company shall issue a new Note of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of any mutilated Note, or in lieu of any Note lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Note and an agreement from Purchaser to indemnify the Company against any claim that may be made against the Company on account of the mutilation, loss, theft or destruction of this Note.

9. Governing Law. This Note is to be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflict of laws.

10. Amendment and Waiver. Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consents of the Holder Majority and the Company.

11. Notice. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Note shall be made in accordance with Section 7(d) of the Note Purchase Agreement.

12. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

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

14. Remedies Cumulative; Failure or Indulgence Not a Waiver. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, the Note Purchase Agreement and the Ancillary Agreements. No failure or delay on the part of Purchaser in the exercise of any power, right or privilege hereunder or under this Note, the Note Purchase Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

15. Payments. Whenever any payment of cash is to be made by the Company to Purchaser pursuant to this Note, such payment shall be made in lawful money of the United States of America by, at the Company’s option, a check drawn on the account of the Company and sent via overnight courier service to Purchaser at the address previously provided to the Company in writing (which address shall initially be the address for Purchaser as set forth in the Note Purchase Agreement), electronic funds transfer, or wire transfer of immediately available funds, to an account designated in writing by Purchaser. Whenever any payment to be made shall otherwise be due on a day which is not a business day, such payment shall be made on the immediately succeeding business day and such extension of time shall be included in the computation of accrued interest.

16. Excessive Interest. Notwithstanding any other provision herein to the contrary, this Note is hereby expressly limited so that the interest rate charged hereunder shall at no time exceed the maximum rate permitted by applicable law. If, for any circumstance whatsoever, the interest rate charged exceeds the maximum rate permitted by applicable law, the interest rate shall be reduced to the maximum rate permitted, and if Purchaser shall have received an amount that would cause the interest rate charged to be in excess of the maximum rate permitted, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing hereunder (without charge for prepayment) and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal, such excess shall be refunded to the Company.

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

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has executed this Note as of the date first above written.

PROTAGENIC THERAPEUTICS, INC.

Form of Guaranty

THIS GUARANTY (“Guaranty”) is made as of this [__] day of [__], 2019, by Protagenic Therapeutics Canada (2006) Inc., a corporation formed in 2006 under the laws of the Province of Ontario, Canada (the “Guarantor”), in favor of the individuals and entities set forth on Schedule I hereto (each, a “Lender” and collectively, the “ Lenders”), to guarantee all Obligations (as defined below) of Protagenic Therapeutics, Inc., a Delaware corporation and owner of one hundred percent (100%) of the equity of Guarantor (“Debtor”).

To secure the prompt and faithful payment and satisfaction of the Convertible Promissory Notes, dated as of ________, 2019¹, and executed by Debtor in favor of Lenders (the “Notes”), in the aggregate amount of Two Million Dollars ($2,000,000) due and owing to Lenders (the “Obligations”), Guarantor unconditionally, irrevocably and absolutely guarantees the full and prompt payment and satisfaction of the Obligations when due, whether by acceleration or otherwise, and at all times thereafter. Capitalized terms not otherwise defined in this Guaranty shall have the meanings set forth in the Notes.

All actions by Lenders hereunder may only be taken upon the written consent of a Holder Majority.

Lenders may, from time to time, and in accordance with the terms of this Guaranty, the Notes, Note Purchase Agreements and other Loan Documents, and without notice to Guarantor, take any or all of the following actions: (a) retain or obtain a Lien against any property, including the Guarantor Collateral (as defined below), to secure any of the Obligations or this Guaranty; (b) subject to the terms of the Note Agreement, retain or obtain the primary or secondary obligation extend or renew for one or more periods all or any part of the Obligations, whether or not longer than the original periods, or modify or alter any of the terms or provisions (including, by way of example and not limitation, the interest rate, maturity, or installment amount) of any of the Obligations, or accelerate or exchange any of the Obligations, or release Debtor or compromise any of the Obligations of any guarantor or any obligor with respect to any of the Obligations; (c) release its security interest or encumbrance in, or surrender, sell, transfer, exchange, substitute, dispose of, or otherwise deal with all or any part of any collateral, including the Guarantor Collateral; (d) discharge, release, compound or settle with Debtor or any guarantor as to the Obligations; (e) file, or elect not to file, a proof of claim against the estate of any bankrupt, insolvent, incompetent or deceased Debtor, guarantor or other person or entity; or (f) apply any and all amounts received by Lenders from whatever source on account of the Obligations toward the payment of the Obligations in such order as Lenders may from time to time elect.

At any time after a default by Debtor pursuant to the Note or any Loan Document(s), Lenders may sue Debtor or Guarantor or both to enforce the payment of any sum or for the performance of any of the Obligations, or for the recovery of damages, and without regard to the existence of additional causes of action. Guarantor shall pay Lenders for all attorneys’ fees and expenses and costs of collection reasonably incurred by it in collecting any of the Obligations. The rights, remedies, and benefits provided to Lenders shall be cumulative and shall not be exclusive of any other rights, remedies or benefits allowed by law, and may be exercised either successively or concurrently.

¹ May need to be various dates, if more than one closing.

If default is made in the performance or satisfaction of any of the Obligations and such default continues beyond any applicable cure periods, Lenders may, at their option, and without further notice, declare the Obligations due and payable, sell any collateral, including the Guarantor Collateral, or any part of it, or cause it to be sold at public or private sale, and Lenders may become purchaser thereof at their option.

Guarantor waives demand, notice, protest, notice of acceptance of this Guaranty, notice of any loans made, extensions granted, renewals, collateral received or delivered, or other action taken in reliance on this Guaranty, all demands and notices in connection with the delivery, acceptance, performance, default or enforcement of any note, payment of which is guaranteed by this Guaranty, and all other demands and notices of any description.

This Guaranty is to be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflict of laws. Any term of this Guaranty may be amended and the observance of any term of this Guaranty may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the prior written consent of Lenders. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Guaranty shall be made in accordance with Section 7(d) of the Note Purchase Agreement. If one or more provisions of this Guaranty are held to be unenforceable under applicable law, such provision shall be excluded from this Guaranty and the balance of the Guaranty shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. The Guaranty may not be assigned without the prior written consent of Lenders.

[Signature Page Follows]

Guarantor has executed this Guaranty as of the date set forth above.