Document:

Exhibit 10.5

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY IS EXERCISABLE HAVE 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 (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

PROTEA
BIOSCIENCES GROUP, INC.

 

	Warrant No. [___]	Issue Date: _______ __, 2015

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the
three year anniversary of the Final Closing Date under the Subscription Agreement (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Protea Biosciences Group, Inc., a Delaware corporation (the “Company”),
up to [             ] shares (the “Warrant Shares”) of Common Stock. The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.            Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Warrant, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

“Business
Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United
States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental
action to close.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive Common Stock.

 

“Fair
Market Value” of one share of Common Stock as of a particular date shall mean: (i) if traded on a national securities
exchange, the VWAP (as defined below) of the Common Stock of the Company on such exchange over the five (5) Trading Days ending
immediately prior to the applicable date of valuation; (ii) if quoted on the OTC Bulletin Board or an over the counter market operated
by OTC Markets Group, Inc or its successor, the average VWAP over the thirty (30) Trading Days ending immediately prior to the
applicable date of valuation; and (iii) if neither (i) nor (ii) applies, the Fair Market Value shall be the value thereof, as agreed
upon by the Company and the Holder; provided, however, that if the Company and the Holder cannot agree on such value, such value
shall be determined by an independent valuation firm experienced in valuing businesses such as the Company and jointly selected
in good faith by the Company and the Holder. Fees and expenses of the valuation firm shall be paid for by the Company.

 

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“National
Securities Exchange” means the following markets or exchanges on which the Common Stock may be listed or quoted for
trading on the date in question: the NYSE MKT, LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Purchase
Agreement” means, collectively, the Unit Purchase Agreement, dated as of ___________, 2015 and Subscription Agreement,
dated as of __________, 2015, between the Company and the original Holder, as amended, modified or supplemented from time to time
in accordance with its terms.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Trading
Day” means a day on which the New York Stock Exchange is open for business.

 

“Trading
Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the NYSE AMEX LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange or the OTC Bulletin Board.

 

“Transaction
Documents” shall have the meaning set forth in the Purchase Agreement.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a National Securities Exchange, the daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the trading market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P.
(based on a Trading Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time); (b) if the Common Stock is quoted on
any one or more of the OTC Bulletin Board, or the other OTC markets, including the OTCQX, OTCQB and OTC Pink markets, the volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported
on the OTC markets, including the OTCQX, OTCQB and OTC Pink markets, or in the “Pink Sheets” published by Pink Sheets,
LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share
of the Common Stock so reported; or (d) in all other cases, the Fair Market Value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Subscribers of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company; provided that in each case where
Bloomberg L.P. data is being relied upon, Holder shall provide to the Company a copy of such information for the Company's records.

 

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		Section 2.	Exercise.

 

		a)	Exercise of Warrant.

 

i. Exercise of
the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as
it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company)
of a duly executed notice of exercise (“Notice of Exercise”) form attached hereto as Exhibit A; and,
within 3 Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment
of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States
bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in
full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within 3 Trading Days of the date
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion
of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. In the event of any dispute or
discrepancy, the records of the Company shall be controlling and determinative in the absence of manifest error.

 

ii. In lieu of
the payment methods set forth in Section 2(a)(i) above, the Holder may elect to exchange all or some of this Warrant for
shares of Common Stock equal to the value of the amount of the Warrant being exchanged on the date of exchange.  If Holder
elects to exchange this Warrant as provided in this Section 2(a)(ii), Holder shall tender to the Company the Warrant for
the amount being exchanged, along with written notice of Holder’s election to exchange some or all of the Warrant, and the
Company shall issue to Holder the number of shares of the Common Stock computed using the following formula:

 

	X =	Y (A-B)	 
	 	A	 

 

	 	Where:   X =	the number of shares of Common Stock to be issued to Holder.
	 	 	 
	 	              Y =	the number of shares of Common Stock purchasable under the amount of the Warrant being exchanged (as adjusted to the date of such calculation).
	 	 	 
	 	              A =	the Fair Market Value of one share of the Common Stock on the date that the notice of exercise is received by the Company.
	 	 	 
	 	               B =	Exercise Price (as adjusted to the date of such calculation).

 

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b)           Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $0.375, subject to adjustment hereunder
(the “Exercise Price”).

 

c)           Exercise
Limitations. Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to
the extent that after giving effect to such issuance after exercise, the Holder (together with the Holder’s affiliates, and
any other person or entity acting as a group together with the Holder or any of the Holder’s affiliates), would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of this Section, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Holder
is solely responsible for any schedules required to be filed in accordance therewith. The Company shall have no obligation to verify
or confirm the accuracy of such filings. In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice
to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(c), provided that the
Beneficial Ownership Limitation may not exceed 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section
2(c) shall continue to apply, unless the Holder upon not less than 61 days’ prior notice to the Company determines to waive
the Beneficial Ownerhship Limitation requirements described in this Section 2(c) in its entirety. Any such increase or decrease
will not be effective until the 61st day after such notice is delivered to the Company. The limitations contained in
this paragraph shall apply to a successor holder of this Warrant.

 

d)      Mechanics
of Exercise.

 

i.            Delivery
of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Company’s transfer
agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s prime broker
with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if
the Company is then a participant in such system and either (A) there is an effective registration statement permitting the resale
of the Warrant Shares by the Holder or (B) the shares are eligible for resale without volume or manner-of-sale limitations pursuant
to Rule 144, and otherwise by physical delivery of certificates to the address specified by the Holder in the Notice of Exercise
within four (4) Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required)
and payment of the aggregate Exercise Price as set forth above (the “Warrant Share Delivery Date”). This
Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares shall
be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become
a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of
the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance
of such shares, have been paid.

 

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ii.            Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.            Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise.

 

iv.            No
Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise
Price or round up to the next whole share.

 

v.             Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the assignment form (“Assignment
Form”) attached hereto as Exhibit B duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto.

 

vi.            Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

Section 3.             Intentionally
Omitted.

 

Section 4.             Certain
Adjustments.

 

a)           Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise
of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 4(a) shall become
effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

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b)            Pro
Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common
Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock, then in each such case the Exercise Price shall be adjusted
by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled
to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned
above, and of which the numerator shall be such VWAP on such record date less than the per share Fair Market Value at such record
date of the portion of such assets or evidence of indebtedness or rights or warrants so distributed applicable to one outstanding
share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described
in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

 

c)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation of the
Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series
of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property or (iv)
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 (each “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would
have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental
Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock
in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given
the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction
is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section
4(d) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.

 

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d)           Dilutive
Issuances. In the event that the Company issues or sells any additional shares of Common Stock (“Additional
Shares of Common Stock”), excluding any shares of Common Stock sold in connection with an Exempt Issuance, for consideration
per share of Common Stock that is less than $0.375 (as such amount may be adjusted for any stock dividend, stock
split, stock combination, reclassification or similar transaction after the date hereof) (a "Dilutive Issuance"),
on the date of and immediately prior to the Dilutive Issuance, the Exercise Price, then in effect, will be reduced concurrently
with the Dilutive Issuance to a price (rounded to the nearest cent) calculated by multiplying such Exercise Price by a fraction,
of which (i) the numerator shall be the number of shares of Common Stock outstanding on a fully diluted basis immediately prior
to such Dilutive Issuance plus the number of shares of Common Stock which the aggregate consideration received or to be received
by the Company for the total number of Additional Shares of Common Stock issued pursuant to the Dilutive Issuance would purchase
at the Exercise Price; and (ii) the denominator shall be the number of shares of Common Stock outstanding on a fully diluted basis
immediately prior to such Dilutive Issuance plus the number of such Additional Shares of Common Stock so issued. The provisions
of this Section 4(d) shall not operate to increase the Exercise Price.

 

e)           Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 4, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)           Notice
to Holder.

 

i.            Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

 

ii.           Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale,
transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall
not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.

 

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Section 5.             Transfer
of Warrant.

 

a)     Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 5(d) herein and to the provisions
of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with
a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly
assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)     New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 5(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial
Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)     Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

d)     Transfer
Restrictions. If, at the time of the
surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i)
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue
sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions pursuant to Rule 144, the Company may require,
as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions
of the Purchase Agreement.

 

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Section 6.             Miscellaneous.

 

a)    No
Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof.

 

b)    Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

c)    Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

d)    Authorized
Shares.

 

The Company
covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock one
hundred (100%) of the number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. In case such amount of Common Stock is insufficient at any time, the Company shall call and hold a special
meeting to increase the number of authorized shares of common stock. Management of the Company shall recommend to shareholders
to vote in favor of increasing the number of authorized shares of common stock.

 

The Company
further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty
of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the
purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the National
Securities Exchange upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued
upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by
this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created
by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its amended and restated certificate of incorporation, as amended, 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 Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in
this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value
of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii)
take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this Warrant.

 

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Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e)    Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

f)    Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions
upon resale imposed by state and federal securities laws.

 

g)    Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

h)    Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.

 

i)    Limitation
of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for
the purchase price of any Common Stock or as a shareholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

 

j)    Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

k)    Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by
the Holder or holder of Warrant Shares.

 

    10 

     

    

 

l)    Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m)    Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

n)    Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

[Signature
Page Follows.] 

 

    11 

     

    

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	PROTEA BIOSCIENCES GROUP, INC.	 
	 	 	 
	By:	 	 
	 	Name: Stephen Turner	 
	 	Title:   Chief Executive Officer	 

 

     

     

    

 

EXHIBIT
A

 

NOTICE OF EXERCISE

 

TO:PROTEA BIOSCIENCES GROUP, INC.

 

(1)    The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant and
tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)    Please
issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is
specified below:

 

	 	 	 

 

The Warrant Shares shall be delivered to the following DWAC
Account Number or by physical delivery of a certificate to:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

(3)    Accredited Investor. The undersigned
is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

 

[SIGNATURE OF HOLDER]

  

	Name of Investing Entity: 
	 

 

	Signature of Authorized Signatory of Investing Entity: 
	 

 

	Name of Authorized Signatory: 
	 

 

	Title of Authorized Signatory: 
	 

 

	Date: 
	 

 

     

     

    

 

EXHIBIT
B

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______]
shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address
is

 

_______________________________________________________________.

 

_______________________________________________________________

 

	 	Dated: ______________, _______

 

	 	Holder’s Signature:	 	 
	 	 	 	 
	 	Holder’s Address:	 	 
	 	 	 	 
	 	 	 	 

 

	Signature Guaranteed: 	 	 

 

NOTE: The signature to this Assignment Form must correspond
with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.Exhibit 10.1

 

 

 

Employment Agreement

 

This Agreement is made as of the 28th
day of September 2015 (the “Effective Date”), by and between ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC., a
Delaware corporation located at 135 Fifth Avenue, 10th Floor, New York, New York 10010 (the “Company”),
and SCOTT L. MATHIS, an individual residing at 8 Union Square South, Apt. 2A, New York, New York 10003 (“Executive”).
The Company and Executive are hereinafter referred to collectively as the “Parties” or individually as a “Party.”

 

Recitals

 

1.The Parties previously entered into
an Employment Agreement, dated as of January 1, 2003 (hereinafter the “Initial Employment Agreement”). The term of
employment set forth in the Initial Employment Agreement was extended numerous times and, prior to the effective date of this Agreement,
has remained in force. Due to the changes at the Company in the intervening years, both in terms of the nature and scope of its
operations and changes in Executive’s responsibilities, the Company and the Executive mutually agree that they should enter
into a new and updated agreement that will in its entirety supersede and replace the Initial Employment Agreement.

 

2.As with the Initial Employment Agreement,
the Company continues to desire to secure for itself the expertise, knowledge and experience of Executive with respect to the Company’s
business, in an executive capacity as set forth herein. Except where expressly provided otherwise, references herein to the “Company”
shall be deemed to include the Company’s operating subsidiaries.

 

3.As with the Initial Employment Agreement,
Executive is willing to work for the Company in such an executive capacity on the terms and conditions set forth in this new and
updated agreement (referred to hereinafter as the “Agreement”).

 

NOW, THEREFORE, in consideration of the
terms, covenants, conditions and agreements set forth hereinbelow, Executive and the Company agree to the following:

 

Agreement

 

		1.	Employment.

 

The Company hereby employs Executive, and
Executive hereby accepts employment from the Company, upon the terms and conditions provided herein.

 

		2.	Executive’s Duties.

 

 

    	 

     

    

 

a)Executive hereby agrees to serve
the Company faithfully and honestly and to use his reasonable best efforts and abilities as Chief Executive Officer and Chairman
of the Board of Directors of the Company and its principal operating subsidiaries. Executive shall be based in the Company’s
principal executive offices which are currently located at 135 Fifth Avenue, 10th Floor, New York, New York 10010. Executive
shall report to the Board of Directors of the Company (hereinafter the “Board”) and his responsibilities shall include
the performance of the duties customarily associated with the positions of Chief Executive Officer and Chairman and such other
duties of a nature commensurate with such positions as may be assigned to him from time to time by the Board. Executive agrees
to relocate to Buenos Aires, Argentina to the extent the Company’s Board of Directors determines that it would be in the
best interests of the Company to relocate its principal executive offices to that city.

 

b)With the approval of the Board, Executive
may work on matters or for companies unrelated to the Company. However, in the event Executive pursues such other endeavors with
the requisite approval, a pro rata adjustment in Executive’s base salary shall be required. This would mean that should Executive
spend 10% of his working time on matters unrelated to the Company, his base salary will be reduced by 10%.

 

c)Except where otherwise expressly
indicated or where evident from the context, any reference in this Agreement to the “Board” shall be understood to
include any duly constituted committee or sub-committee of the Board, and that where matters addressed herein require Board approval,
such approval requires a majority vote of the members of the Board excluding Executive.

 

		3.	Term.

 

The Company shall continue the employment
of Executive, and Executive shall continue performing services for the Company, for a term of three years commencing on the Effective
Date and ending on the third anniversary of the Effective Date (the “Initial Term”). Any extension of this agreement
beyond the Initial Term shall only be made in a signed written amendment to this Agreement following negotiations between Executive
and the Board. For purposes of this Agreement, the terms “Employment Period” or “Term” shall
mean the Initial Term and all extensions thereof, if any, and the term “Expiration Date” shall refer to any
date that this Agreement, whether or not extended, is set to expire.

 

		4.	Salary; Expenses; Benefits; Limits on Sale of Company Stock. 

 

Subject to the provisions of this Agreement,
the Company shall pay and provide the following compensation and other benefits to Executive during the Employment Period as compensation
for all services rendered hereunder.

 

a)Base Salary. In consideration
for all services rendered by Executive to the Company (including serving as a member of the Board of Directors or any committee
thereof), commencing as of the Effective Date, the Company hereby agrees to pay compensation to Executive an annual base salary
(“Base Salary”) at the rate of $401,700 for the first year, to be paid in accordance with the Company’s prevailing
payroll practices for its executive officers as are in effect from time to time (but in no event less frequently than monthly).
Executive’s Base Salary shall increase each year by 3%, as a cost-of-living adjustment.

 

    	 	- 2 -	 

     

    

 

b)No Commissions or Override.
In recognition of the Base Salary and the other consideration provided for herein, commencing with the Effective Date, Executive
shall not be paid any additional compensation that, but for this Agreement, he might receive, such as stock brokerage commissions
(including placement agency fees) or commissions earned from the sale of lots at the AWE project. Executive shall also not be paid
any overrides based on the productivity or success of other employees of the Company or one of its affiliates, except with express
written approval from the Board.

 

c)Director’s Fees. To
the extent Executive remains employed as Chief Executive Officer, he shall not during such time be entitled to receive additional
cash compensation in the form of director’s fees paid to other members of the Board, if any. However, subject to Board approval,
Executive is entitled to receive equal grants of stock options, or other non-cash equity awards, that are granted generally to
members of the Board.

 

d)Stock Options and Other Awards.
Any awards of restricted stock or stock options pursuant to the Company’s 2008 Equity Incentive Plan (or any similar plan
established after the Effective Date) shall be made in the discretion of the Company’s Board of Directors, with Executive
agreeing to abstain from any vote relating thereto.

 

e)Reimbursement of Expenses.
The Company shall reimburse Executive in accordance with the Company’s policies in effect from time to time for travel, entertainment
and other expenses incurred by Executive in the performance of his duties and responsibilities hereunder. In addition, the Company
shall reimburse Executive for the following expenses: (i) legal expenses incurred in connection with his employment with the Company;
(ii) use of home office; (iii) up to 25% of telephone cost relating to his home office; (iv) internet connection at his home office;
(v) mobile phone; and (vi) up to $1,000.00 per month for automobile-related expenses, including insurance and parking. Within fifteen
days following the end of every month, Executive shall direct the Company’s Chief Financial Officer to submit to the Board
a schedule setting forth in appropriate detail all expenses for which Executive has requested reimbursement during the preceding
quarter. The Board shall have authority to disapprove any expenses found not to be incurred substantially for business-related
purposes.

 

f)Disability Insurance. Executive
may obtain at Company expense a disability insurance policy. The Company’s obligation hereunder shall be limited to payment
of a premium not to exceed $10,000.00 per calendar year. The Company shall be obligated to keep this policy in force during the
Term of this Agreement. Proceeds under such policy shall be payable to the Company for any period in which the Company continues
paying Base Salary to Executive as provided herein.

 

g)Life insurance. Should the
Company elect to obtain at its expense key man life insurance on Executive’s life, such that the Company would be the policy’s
designated beneficiary, Executive shall in good faith cooperate to provide the information necessary to obtain any such insurance
policy, including any required medical examination. Additionally, Executive shall have the right to use up to $5,000 of the funds
authorized in the previous sub-section to pay for a disability insurance policy to pay the premium of a life insurance policy whose
beneficiary is selected by Executive.

 

 

    	 	- 3 -	 

     

    

 

		5.	Annual Bonus. 

 

Executive shall be eligible to receive
an annual bonus (the “Annual Bonus”) for 2015, 2016 and 2017 to be determined by the Board (or any duly constituted
committee thereof), in the exercise of its discretion, to be based on corporate profitability (using EBITDA as one possible measure
of profitability), stock price, AWE lot sales, cash flow, or such other criteria as may be determined by the Board. The amount
of any Annual Bonus, if any is granted, shall be limited to 100% of Executive’s Base Salary, and shall be paid, if at all,
within 30 days of the date that the annual audit of the Company’s financial condition is completed. The Annual Bonus shall
be prorated for any period of service less than a full calendar year during the calendar year in which this Agreement expires;
provided, however, that if Executive’s employment is terminated by the Company (or any successor thereto) for Cause (as defined
below) or Executive resigns from his employment other than with Good Reason (as defined below) before the date on which the relevant
Annual Bonus is to be paid, Executive shall not receive any portion of such Annual Bonus.

 

		6.	Restrictions on Sale of Company Stock.

 

a)Public company. Subject at
all times to the limits set forth in SEC Rule 144 and to any lock-up arrangements imposed by the underwriters on a public offering
or pursuant to any other legal or regulatory restrictions or requirements relating thereto, commencing on the one year anniversary
of the date that the Company’s common stock becomes transferable on any exchange or over-the-counter market (hereinafter
a “Triggering Event”), Executive shall be entitled to sell up to 33.33% of the shares of Company common stock (and
preferred stock if converted to common) which he owns in each 12-month period commencing on the first anniversary of the Triggering
Event. The amount which can be sold in each twelve-month period shall be determined as of the first business day of such period.

 

b)Private company. To the extent
the Company is not a publicly-held company, for the duration of this Agreement, including any extensions thereof, Executive shall
not in any calendar year sell or convey actual or beneficial ownership of more than 25% of the Company common and preferred stock
which he owns, subject to any legal or regulatory restrictions or requirements relating thereto.

 

c)Calculation of shares. For
purposes of calculating the maximum number of shares that Executive can sell pursuant to this section, the number of shares owned
shall not include any unexercised stock options or warrants then beneficially owned by Executive (but shall include all shares
acquired from the exercise of such options or warrants).

 

    	 	- 4 -	 

     

    

  

d)Board approval. Any proposed
sale of shares by Executive, as authorized by this section, shall be submitted in writing to the Board for review and approval,
which approval shall not be unreasonably withheld. Such approval shall be deemed to have been approved if not rejected in writing
by a majority of the Board within fifteen (15) days after Executive requests such approval.

 

e)Effect of Change of Control.
Upon the occurrence of a Change of Control (as defined herein), all restrictions on Executive’s ability to sell shares beneficially
owned by him set forth in this section (other than those imposed pursuant to law or regulation) shall terminate.

 

		7.	Executive and other Employee Benefits. 

 

a)Executive Benefits. During
the Employment Period, Executive shall be included, to the extent eligible thereunder, in all employee benefit plans, programs
and arrangements (including, without limitation, any plans, programs or arrangements providing for retirement benefits, profit
sharing, disability benefits, health and life insurance or vacation and paid holidays) that shall be established by the Company
for, or made available to, its senior executives.

 

b)AWE Property. During such
time that Executive owns a home at AWE, and such home is used by or available to the Company as a model home or for other marketing
and sales purposes, the Company shall pay the regular, recurring expenses associated with such home, including but not limited
to: (i) monthly maintenance fees charged by a homeowners’ association or other entity charged with general property maintenance;
and (ii) membership fees associated with AWE amenities (golf, tennis, etc.). The amount paid or reimbursed by the Company pursuant
to this section shall be reduced on a pro rata basis to the extent Executive uses such home for personal purposes, such as for
personal vacation or making the home available for non-business purposes.

 

c)Vacation. Executive shall
be entitled to annual paid vacation during the Employment Period consistent with standard Company practices applicable to senior
executives.

 

		8.	[INTENTIONALLY OMITTED] 

 

    	 	- 5 -	 

     

    

 

 

		9.	Termination of Employment.

 

Subject to the notice and other provisions
of this Section 9, the Company shall have the right to terminate Executive’s employment hereunder, and Executive shall have
the right to resign, at any time for any reason or for no stated reason.

 

a)Termination for Cause or Resignation
Without Good Reason. If, prior to the expiration of the Term, Executive’s employment is terminated by the Company for
Cause (as defined below) or Executive resigns for any reason other than with Good Reason (as defined below), Executive shall be
entitled to payment of (i) any unpaid pro rata portion of the Base Salary through and including the date of termination or resignation,
(ii) payment in lieu of accrued unused vacation days as described in Section 7 above, (iii) any unreimbursed expenses under Sections
4 and 7 above, and (iv) any other benefits accrued, but unpaid, under programs described under Section 7 above. Except to the extent
required by applicable law, Executive shall have no right under this Agreement or otherwise to receive any other compensation or
to participate in any other plan, program or arrangement after the date of such termination or resignation.

 

b)“Cause” shall mean: (i)
any act or omission that constitutes a breach by Executive of any of his material obligations under the Agreement, which is not
cured within 30 days of written notice thereof from the Company; (ii) the continued failure or refusal of Executive to perform
the duties required of him as an Executive of the Company after notice of such failure or refusal has been provided to Executive
and not cured within 30 days thereafter ; (iii) any material misuse or misappropriation by Executive of property or assets of the
Company, or any breach of a confidentiality agreement relating to information concerning the Company; (iv) Executive’s conviction
of a felony (other than minor vehicular or traffic offenses which may be considered felonies in some jurisdictions); (v) any other
misconduct by Executive which is materially injurious to the financial condition or business reputation of the Company; or (vi)
any legal or regulatory sanction that materially limits Executive’s ability to perform hereunder. Notwithstanding the foregoing,
in the event Executive’s duties hereunder have been materially changed without his consent, it shall not be a breach of this
Agreement by Executive or otherwise constitute Cause for Executive to fail to perform such materially changed duties. Any termination
of Executive by the Company for any reason or in any manner other than for “Cause” as defined above, shall be deemed
to be a termination without Cause.

 

c)“Good Reason” shall mean:
(i) any breach of this Agreement by the Company, which is not cured within 30 days of written notice from Executive; (ii) the assignment
of Executive, without Executive’s consent, to a position, responsibilities or duties of a lesser title, position or status,
or lesser degree of responsibility than Executive’s title, position, status or responsibilities specified herein, including,
without limitation, a change in reporting structure; (iii) the relocation of the Company’s principal executive offices outside
the metropolitan New York area or Buenos Aires, Argentina; (iv) any requirement by the Company that Executive be based anywhere
other than the Company’s principal executive offices, without Executive’s consent; or (v) the assignment of Executive,
without his consent, to undertake responsibilities or perform functions or activities, inconsistent with his obligations to the
Company, or any request to perform, act or undertake responsibilities which do or could result in the violation, breach or non-compliance
with any law or regulation, ethical or professional licensing standard or requirement, or this Agreement.

 

    	 	- 6 -	 

     

    

 

d)Notice and Date of Termination
for Cause or with Good Reason.

 

(i) Termination of Executive’s employment
by the Company for Cause shall be communicated by delivery to Executive of a written notice from the Company, stating that Executive
has been terminated for Cause, specifying the particulars thereof and the effective date of such termination.

 

(ii) Termination by Executive of his employment
for Good Reason shall be communicated by delivery to the Company of a written notice from Executive, specifying the particulars
thereof and the effective date of such termination.

 

(iii) The date of any other resignation by
Executive or termination by the Company shall be the date specified in a written notice of resignation from Executive to the Company,
or in a written notice of termination from the Company to Executive, as applicable, at least thirty (30) days prior to the effective
date of such termination.

 

(iv) All notices required by this section
shall be made in accordance with the notice provisions set forth in Section 17(e) hereof.

 

e)Termination Without Cause or for
Good Reason. If, prior to the expiration of the Term, the Company terminates Executive’s employment without Cause or
Executive terminates his employment with Good Reason, Executive shall be entitled to all payments and benefits referred to in Section
9(a) hereof. In addition, the Company shall pay to Executive a severance payment consisting of (i) an amount equal to his current
Base Salary for a period of twelve (12) months (such 12-month period hereinafter referred to as the “Severance Period”),
plus (ii) all of the benefits or payments in respect of such benefits as set forth in Section 7(a) above for the Severance Period
(collectively, the (the “Severance Amount”). The Severance Amount shall be payable, other than for benefits which continue
but for which no actual payment to Executive is required, to Executive at such times as they would ordinarily be paid had Executive
remained employed by the Company, or in a lump sum payment, at the discretion of the Company.

 

f)Death Prior to the Expiration
of Severance Period. In the event of Executive’s death after a termination without Cause or for Good Reason, but prior
to the expiration of the Severance Period, the Severance Amount shall be paid or continue to be provided, as applicable, to Executive’s
estate.

 

    	 	- 7 -	 

     

    

  

g)Termination Due to Disability.
In the event of Executive’s Disability (as hereinafter defined), the Company shall continue to provide his compensation and
other benefits as described in Section 7 and its subsections for a period measured from the date, after using any available sick
leave, that the Disability commences, and continuing until (i) the Disability ceases or (ii) until Executive’s employment
hereunder is terminated, whichever is less; provided, however, that during any period of Disability the Company shall only have
the right to terminate Executive’s employment, upon ten days’ written notice, if, after expending any available sick
leave, such Disability continues for a period of six months. Notwithstanding anything contained in this Agreement to the contrary,
if Executive’s employment should terminate due to Disability that continues for more than six months, Executive shall be
entitled to (A) payment of his Base Salary and benefits under Section 7(a) above, for a period equal to an additional six months
thereafter, and (B) any unreimbursed expenses under Section 4(e) above. As used in this Agreement, the term “Disability”
shall mean a physical or mental incapacity that substantially prevents Executive from performing his duties hereunder.

 

h)Death. Other than severance
benefits payable to Executive under Section 9(g) above, no salary or benefits shall be provided or continued under this Agreement
following the date of Executive’s death except as provided in this paragraph. In the event of Executive’s death, any
unpaid Base Salary earned by Executive up to the date of death, and payment in lieu of accrued unused vacation days, shall be paid
to Executive’s estate within 30 days of Executive’s death. Unreimbursed expenses due Executive under Section 4(e) above
shall be paid at the same time. Notwithstanding the foregoing, should Executive’s death occur during the Employment Period,
the Company shall within ninety days of Executive’s death make a payment equal to six months of Executive’s then-current
Base Salary to Executive’s estate, less the amount of any proceeds paid to Executive’s estate from any Company-paid
life insurance policy on Executive’s life in effect at the time of death.

 

i)Calculation of Base Salary to
be Paid Upon Termination. The calculation of any Base Salary to be paid pursuant to the provisions relating to termination
shall take into account any reduction in Base Salary resulting from Executive’s outside work unrelated to the Company’s
business, as set forth in Sections 2(b) and 14(b) of this Agreement.

 

		10.	Effect of Change of Control.

 

a)New Term of Employment. Notwithstanding
anything to the contrary in this Agreement, upon a Change of Control (as defined herein), the Company (or its successor) shall
continue the employment of Executive, and Executive shall continue performing services for the Company, for a period of two years
commencing on the date of the Change of Control (the “New Employment Period”).

 

 

    	 	- 8 -	 

     

    

 

b)Acceleration of Options, etc.
Notwithstanding anything to the contrary in any applicable option agreement, upon a Change of Control, all outstanding stock options
(or any form of equity-based award) granted by the Company or any of its affiliates to Executive shall become fully vested and
immediately exercisable on the date of the Change of Control, unless the Board of Directors in office prior to the announcement
of the potential Change of Control determines otherwise, in which case such options shall be accorded no less favorable treatment
than is generally accorded to other Company employees. Notwithstanding the foregoing, the vesting date of such options or equity-based
awards shall not accelerate if the Change of Control results in control passing to any person or entity or group of persons or
entities led, managed, organized or directed by Executive.

 

c)Amounts Owed. Upon a change
of control, any accrued and unpaid salary or bonus owed to Executive shall be paid, and any funds loaned by Executive to Company
shall be repaid.

 

		11.	Definition of Change of Control. 

 

“Change
of Control” shall mean:

 

a)Prior to a public offering via registered
sale pursuant to the Securities Act of 1933, as amended, of the Company’s common stock (“Registered Offering”),
unless at such time the Company is a publicly-reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and has a class of securities that trade on a public stock exchange or a recognized over-the counter market,

 

(i)the
merger of the Company with or into another corporation as a result of which Executive shall own less than 15% of the outstanding
common stock (on a fully diluted basis, assuming exercise of all options and warrants, whether or not then exercisable) of the
surviving company (or parent thereof);

 

(ii)the
sale of all or substantially all of the assets of the Company to an entity not controlled by Executive; or

 

(iii)the
sale (in a single transaction or series of related transactions, provided that Executive is not a party directly or indirectly
in any such transaction(s)), of shares of capital stock of the Company to any person or entity as a result of which Executive shall
own (directly or indirectly) less than 15% of the outstanding Common Stock (on a fully diluted basis, assuming exercise of all
options and warrants, whether or not then exercisable); provided, however, that a public offering (initial or otherwise) or other
corporate financing event shall not under any circumstances be deemed to constitute a Change of Control; and 

 

    	 	- 9 -	 

     

    

 

b)Following either the date of a Registered
Offering or the date when the Company becomes a publicly-reporting company under the Exchange Act and has a class of securities
that trade on a public stock exchange or a recognized over-the counter market,

 

(i)when
a “person” (as defined in Section 3(a)(9) of the Exchange Act), including a “group” (as defined in Section
13(d) of the Exchange Act), either directly or indirectly becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) of 20% or more of either (1) the Company’s then outstanding Common Stock or (2) the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided,
however, that the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from
the Company; (2) any acquisition by the Company; or (3) any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company; provided further, however, that there shall not be a
Change of Control under this provision if Executive continues to be the beneficial owner of 20% or more of the class of the Company’s
securities the acquisition of which would have otherwise constituted a Change of Control;

 

(ii)when,
during any period of twelve consecutive months during the Employment Period, the individuals who, at the beginning of such period,
constitute the Board (the “Company Incumbent Directors”), cease for any reason other than death to constitute at least
a majority thereof; provided, however, that a director who was not a director at the beginning of such 12-month period shall be
deemed to be a Company Incumbent Director if such director was elected by, or on the recommendation of or with the approval of
at least two-thirds of the directors of the Company, who then qualified as Company Incumbent Directors;

 

(iii)when
the stockholders of the Company approve a reorganization, merger or consolidation of the Company without the consent or approval
of a majority of the Company Incumbent Directors;

 

(iv)the
consummation of a reorganization, merger or consolidation of the Company with or into another entity or any other corporate reorganization,
if more than 60% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately
after such reorganization, merger or consolidation is owned by persons who were not stockholders of the Company immediately prior
to such reorganization, merger, consolidation; or

 

(v)the
sale or other disposition of all or substantially all of the assets of the Company.

 

    	 	- 10 -	 

     

    

 

		12.	Covenant Not To Compete; Confidential Information.

 

a)During the Employment Period, Executive
shall not work for, provide services to, or receive compensation in any form from any firm (excluding all subsidiaries and affiliates
of the Company) that is engaged in business that competes with one or more of the Company’s principal businesses, including
but not limited to, on the one hand, real estate, hotel, or resort development firms, and on the other hand, financial services
firms including any broker-dealer, investment bank, or financial advisor, in any way.

 

b)In the event Executive’s employment
with the Company is terminated for any reason, Executive shall not upon leaving the Company make any effort to exploit, pursue,
develop or proceed (or cause any other person or entity to do so) with any transaction or project that was being analyzed, considered,
developed or negotiated by or on behalf of the Company for a period of not less than twelve months following such termination.

 

c)Executive agrees to receive Confidential
Information (as hereinafter defined) of the Company in confidence, and not to disclose to others, assist others in the application
of, or use for his own gain or that of another, such information, or any part thereof, unless and until it has become public knowledge
or has come into the possession of Executive or such others by legal and equitable means or is required to be disclosed by law
or judicial or administrative order. Executive further agrees that, upon termination of his employment with the Company, he will
return to the Company all documents, records and notebooks containing Confidential Information and similar repositories of Confidential
Information, including copies thereof, then in Executive’s possession, whether prepared by him or others. For purposes of
this section, Confidential Information shall mean information disclosed to Executive or known by Executive as a consequence of
or through his employment by the Company, not generally known in the industry(ies) in which the Company is or may become engaged,
about the Company’s business, development rights or projects under development, products, processes and services and, in
each case, which the Company treats as confidential or proprietary. Executive’s obligations under this section shall survive
any termination or expiration of this Agreement and Executive’s employment hereunder, until two years after such termination
or expiration.

 

d)The provisions of this Section 12
are hereby limited by the provisions of Section 14 hereof, relating to Hollywood Burger Holdings, Inc.

 

 

    	 	- 11 -	 

     

    

 

		13.	Non-Solicitation.

 

a)In the event Executive’s employment
with the Company is terminated for any reason, Executive shall not, for a one year period following such termination, be permitted
to solicit, induce, or attempt to persuade any employees or consultants of the Company, who at the time of such termination (or
within ninety days prior thereto) were employed by, or provided consulting services to, the Company, to terminate their relationship
with the Company and work with Executive elsewhere.

 

b)In the event Executive’s employment
with the Company terminates for any reason, Executive will not solicit or cause the solicitation of, for a period of one year from
the date of termination, any of the brokerage or investment banking clients or prospective clients of the Company’s broker-dealer
subsidiary that Executive served or whose names became known to Executive while in the employ of the Company; provided however,
Executive shall be permitted to solicit those brokerage or investment banking clients known to Executive prior to joining the Company.

 

		14.	Ownership and Participation in Hollywood Burger Holdings, Inc. 

 

a)The Company acknowledges that Executive
(through an entity which he owns, Mathis Ventures, LLC) is the principal shareholder of Hollywood Burger Holdings, Inc. (hereinafter
“HBH”), a corporation that is legally separate and distinct from the Company. Executive’s stock and equity holdings
in HBH and in Mathis Ventures, LLC are understood to be owned in their entirety by Executive and the Company shall have no claim
with respect thereto.

 

b)The Company acknowledges that Executive
is the Chief Executive Officer of HBH, and that he spends up to 10% of his working time dealing with HBH business. Executive shall
take all necessary measures to ensure that the business of HBH does not exceed 10% of his working time. However, to further incentivize
Executive to focus his efforts to enhance the Company’s short term profitability and its long term prospects, should the
amount of working time spent by Executive on HBH business exceed 10%, Executive’s Base Salary shall be reduced dollar for
dollar by the amount he is paid by HBH. Notwithstanding the foregoing or anything to the contrary set forth above in Section 2(b),
Executive shall be permitted to continue to serve as Chairman of the HBH Board of Directors, or otherwise to remain on that company’s
Board, without diminution of his Base Salary.

 

c)The Company acknowledges that any
intellectual or other property that Executive develops or acquires which relates to the business of HBH is the property of Executive
even if developed on premises maintained by the Company or by using equipment or other property or facilities belonging to the
Company.

 

    	 	- 12 -	 

     

    

 

d)In conjunction with the foregoing,
to the extent the Company provides or makes available any goods or services to HBH, or permits HBH to use Company facilities or
utilize Company employees in HBH business, the Company and Executive will take all necessary and appropriate measures to ensure
that HBH pays prices and/or rates in connection therewith that reflect arms-length, fair market pricing. The amounts paid by HBH,
if any, shall be evaluated by a senior officer of the Company on a periodic basis and adjusted as necessary to comply with the
provisions of this section. Executive shall ensure that such evaluations are provided to the Company’s Board at least once
every six months, or more frequently if there are any material changes in the amounts paid by HBH.

 

e)To the extent there is any conflict
between the provisions of this Section 14 and the provisions of Sections 12 and 13 hereof, the provisions of Section 14 shall control.
As such, the Company has no right to any information or business developed by Executive for or on behalf of HBH, regardless of
where, how and when developed. With respect to the solicitation of Company employees, upon the termination or expiration of this
Agreement, Executive shall have the right solicit Company employees to work for HBH (or any affiliate thereof related to its core
restaurant business) on a full-time basis as long as such employees provided services to HBH on an ongoing basis during the preceding
twelve months.

 

		15.	Rights and Remedies Upon Breach.

 

a)Executive acknowledges and agrees
that a violation of any of the restrictive covenants contained in this Agreement shall cause irreparable harm to the Company and
the Company shall be entitled to specific performance of this Agreement or an injunction without proof of special damages. If Executive
breaches any of the provisions of Sections 12 and 13 (the “Restrictive Covenants”), the Company shall have the following
rights and remedies, each of which shall be independent of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company at law or equity:

 

(i)
The right and remedy to have the Restrictive Covenants specifically enforced by any court or arbitration panel of competent jurisdiction
including, without limitation, the right to entry against Executive of restraining orders and injunctions, preliminary, mandatory,
temporary and permanent, without proof of special damages, against actual violations, and whether or not then continuing, of such
covenants, it being acknowledged and agreed that any such breach will cause irreparable injury to the Company and that money damages
will not provide an adequate remedy to the Company; and

 

(ii)
The right and remedy to require Executive to account for and pay over to the Company all compensation or profits derived or received
by Executive in connection with any transactions constituting a breach of the Restrictive Covenants.

 

b)Subject to the provisions pertaining
to arbitrability of disputes, nothing contained in this Agreement shall limit the rights and remedies, at law or in equity, of
the Company or Executive in the event of a breach by any Party of any of its or his obligations pursuant to this Agreement.

 

    	 	- 13 -	 

     

    

  

		16.	Indemnification; Insurance.

 

a)In serving as an officer and director
of the Company, and thereafter, Executive shall be entitled to rely upon the rights to indemnification provided in Article X of
the Company’s Amended and Restated Certificate of Incorporation, a copy of which has been provided to Executive. During the
term of this Agreement, and for any subsequent period in which Executive shall continue to be entitled to indemnification as therein
provided, the Company shall not make any change in this Article X that would adversely affect Executive’s rights thereunder.
Notwithstanding the foregoing, the Company shall, in any event, indemnify Executive to the fullest extent permitted by law. Moreover,
Executive shall also be entitled to coverage under the Company’s directors’ and officers’ liability insurance
policy, to the extent the Company maintains such coverage during the Employment Period.

 

b)Should the Company determine to obtain
a life insurance policy for Executive in which the Company would be beneficiary, Executive shall take all steps reasonably required
to obtain such policy.

 

		17.	Miscellaneous Provisions.

 

a)Entire Agreement, etc. This
Agreement contains all of the representations, warranties, and agreements of the Parties hereto with respect to the subject matter
hereof, and all prior understandings, representations, and warranties (whether oral or written) with respect to such matters are
superseded. This Agreement may not be amended, modified, waived, discharged, or terminated except by an instrument in writing signed
by the Party or an executive officer of a corporate Party against whom enforcement of the change, waiver, discharge, or termination
is sought.

 

b)Governing Law; Dispute Resolution
Provision. This Agreement and the legal relations between the Parties hereto will be governed by and construed in accordance
with the laws of the State of New York without reference to the principles of conflict of laws. If a dispute arises out of or relates
to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try
in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation
Procedures.  In the event that any controversy or claim arising out of or relating to this contract, or the breach thereof,
cannot be resolved by mediation, such dispute shall be settled by arbitration administered by the American Arbitration Association
in accordance with its Commercial Arbitration Rules. Such arbitration shall be convened in New York, New York. The arbitrator(s)
shall have the right and power to award to the prevailing party in any dispute, controversy or claim arising under this Agreement,
recovery of any or all costs of the arbitration, interest on any amount awarded, as well as attorneys’ fees and expenses.
Judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, to the
extent any dispute relates to the business of DPEC Capital, Inc., or any other broker-dealer subsidiary of the Company, such dispute
shall be heard before a duly constituted panel of arbitrators before the FINRA Office of Dispute Resolution.

 

 

    	 	- 14 -	 

     

    

 

c)Attorneys’ Fees; Expenses.
In the event of any dispute or litigation arising out of, relating to or in connection with this Agreement, the prevailing Party
shall be entitled to reasonable attorneys’ fees and costs, to be paid by the losing Party. With respect to the execution
and delivery of this Agreement, each Party shall bear its own expenses except that the Company shall reimburse Executive for his
actual out-of-pocket legal expenses in an amount not to exceed $5,000.

 

d)Assignment. This Agreement
shall inure to the benefit of and be binding on the successors, assigns, heirs and legal representatives, as the case may be, of
each of the Parties hereto. Except as expressly provided herein, no assignment of this Agreement or any rights hereunder shall
be effective without the written consent of the other Party.

 

e)Notices. Any notices or other
communications required or permitted hereunder will be deemed given (i) upon receipt if delivered by messenger, (ii) upon receipt
if delivered by overnight courier service; or (iii) five business days after such notice is mailed by certified mail, return receipt
requested, postage prepaid. Such notices shall only be effective if sent to each Party at the address set forth on the first page
of this Agreement, or to such other address as any Party shall designate by notice duly given hereunder.

 

f)Survival of Representations and
Warranties. The representations and warranties of the Parties herein shall survive the execution of this Agreement.

 

g)Further Assurances. Each of
the Parties hereto agrees to execute such instruments and take such further action, if any, as may be reasonably requested by any
other Party hereto in order to assure such requesting Party of the rights and benefits intended by this Agreement, it being understood
that the expense of any such action shall be borne by the Party requesting the same.

 

h)Non-Waiver. The failure or
refusal of either Party to insist upon the strict performance of any provision of this Agreement or to exercise any right in any
one or more instances or circumstances shall not be construed as a waiver or relinquishment of such provision or right, nor shall
such failure or refusal be deemed a custom or practice contrary to such provision or right.

 

i)Severability. The invalidity
or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable provisions were omitted. In lieu of such illegal, invalid,
or unenforceable provision, any court or duly constituted arbitration panel shall be empowered to substitute as a part of this
Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provisions as may be legal, valid and enforceable.

 

j)Construction. The provisions
of this Agreement shall be deemed prepared jointly by the Parties hereto with the intent that no provision hereof is to be strictly
construed against any Party by reason of the preparation or negotiation of this Agreement.

 

    	 	- 15 -	 

     

    

 

k)Headings. The headings of
the various sections and paragraphs of this Agreement are inserted for convenience of reference only and do not constitute a part
of this Agreement.

 

l)Counterparts. This Agreement
may be executed in two or more counterparts and in duplicate originals, each of which will be considered one and the same agreement.
Machine-duplicated and/or facsimile or electronically scanned copies of the Agreement, disclosing affixed signatures to other copies,
may be relied upon as prima facie evidence of the fact of counterpart execution. If executed in duplicate, each duplicate copy
shall be as valid as an original copy. No distinction shall be made between an originally typed document and machine-copies and/or
facsimile or electronically scanned documents, provided that the copies disclose the signatures of the Parties.

 

 

 

[Signatures appear on the following page]

 

IN WITNESS WHEREOF, the Parties hereto have
set their signatures as of the date first above written.

 

	 	ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC.
	 	 	 
	 	 	 
	 	 	By:	
	 	 	 	Name: Julian Beale
	 	 	 	Title: Director
	 	 	 
	 	 	By:	
	 	 	 	Name: Peter Lawrence
	 	 	 	Title: Director
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	 	 
	 	 	SCOTT
    L. MATHIS

 

    	 	- 16 -

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