Document:

ZIPREALTY. INC.

 

CONSULTING AGREEMENT

 

This Consulting Agreement ("Agreement")
is made and entered into as of the 21st day of January 2013 by and between ZipRealty. Inc. (the "Company"),
and Genni Combes ("Consultant").

 

Whereas Consultant is currently employed
with Company as Senior Vice President, Corporate Development; and

 

Whereas Consultant shall continue to perform
her current job duties through the duration of her employment with the Company; and

 

Whereas Consultant shall remain employed
with the Company until April 1, 2013 or an earlier date mutually agreed upon by Consultant and ZipRealty’s President and
Chief Executive Officer (“CEO”); and

 

Whereas Consultant and Company entered into
stock option agreements during Consultant’s employment with Company (the “Stock Option Agreements”), granting
Consultant the option to purchase shares of the Company’s common stock (collectively, the “Stock Options”) subject
to the terms and conditions of the Company’s 1999 Stock Plan (the “1999 Plan”) and 2004 Equity Incentive Plan
(the “2004 Plan” and together with the 1999 Plan, the “Plans”), as applicable, and the Stock Option Agreements;
and.

 

Whereas the Company desires to retain Consultant
as an independent contractor to perform consulting services for the Company and Consultant is willing to perform such services,
on terms set forth more fully below commencing on the first date following Consultant’s final date of employment with the
Company (“Commencement Date”). In consideration of the mutual promises contained herein, the parties agree as follows:

 

1.     
SERVICES AND COMPENSATION

 

(a)   
Services: Consultant shall provide consulting services for projects related to Powered by Zip, the Company’s national
expansion, product development and other projects related to the Company’s strategic partnerships and growth to be mutually
agreed upon by Consultant and the CEO.

 

(b)  
Compensation:

The Company agrees to pay at a rate
of $6000 a month for services of up to forty (40) hours per month.

 

The Company shall also pay the amount
equal to Consultant’s monthly premium under COBRA for Consultant and, if applicable, Consultant’s spouse and any dependents,
from the first date on which Consultant loses health coverage as an employee of the Company (with any payments commencing after
such date being made retroactively to such date) until the final date of the term of this Agreement

 

    	

    	 

    
 

 

2.     
EQUITY

 

All of Consultant’s Stock Options
shall continue to vest for the duration of the term of this Agreement due to Consultant’s continued and continuous service
relationship with the Company through each applicable vesting date and the Stock Options will otherwise be subject to all of the
terms and conditions set forth in the relevant Plan and Stock Option Agreement.

 

3.     
CONFIDENTIALITY

 

(a)   
"Confidential Information" means any Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services, customers, customer lists, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances
or other business information either (i) disclosed by the Company either directly or indirectly in writing, orally or by drawings
or inspection of parts or equipment or (ii) conceived, made, developed or discovered by Consultant.

 

                                                                            
(i)           
Consultant will not, during or subsequent to the term of this Agreement, use the Company's Confidential Information for
any purpose whatsoever other than the performance of the Services on behalf of the Company or disclose the Company's Confidential
Information to any third party, and it is understood that said Confidential Information shall remain the sole property of the Company.
Consultant further agrees to take all reasonable precautions to prevent any unauthorized disclosure of such Confidential Information.
Confidential Information does not include information which (i) is known to Consultant at the time of disclosure to Consultant
by the Company as evidenced by written records of Consultant, (ii) has become publicly known and made generally available
through no wrongful act of Consultant or (iii) has been rightfully received by Consultant from a third party who is authorized
to make such disclosure. Without the Company's prior written approval, Consultant will not directly or indirectly disclose to anyone
the existence of this Agreement or the fact that Consultant has this arrangement with the Company.

 

(b)  
Consultant recognizes that the Company has received and in the future will receive from third parties their confidential
or proprietary information subject to a duty on the Company's part to maintain the confidentiality of such information and to use
it only for certain limited purposes. Consultant agrees that Consultant owes the Company and such third parties, during the term
of this Agreement and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and
not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out the Services for the Company
consistent with the Company's agreement with such third party.

 

(c)   
Upon the termination of this Agreement, or upon Company's earlier request, Consultant will deliver to the Company all of
the Company's property or Confidential Information in tangible form that Consultant may have in Consultant's possession or control.

 

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4.     
OWNERSHIP

 

(a)   
Consultant agrees that all notes, records, drawings, designs, inventions, copyrightable material, improvements, developments,
discoveries and trade secrets (collectively, "Inventions") conceived, made or discovered by Consultant, solely or in
collaboration with others, during the period of this Agreement which relate in any manner to the business of the Company that Consultant
may be directed to undertake, investigate or experiment with or which Consultant may become associated with in work, investigation
or experimentation in the line of business of Company in performing the Services hereunder, are the sole property of the Company.
Consultant further agrees to assign (or cause to be assigned) and does hereby assign fully to the Company all such Inventions and
any copyrights, patents, mask work rights or other intellectual property rights relating thereto.

 

(b)  
Consultant agrees to assist Company, or its designee, at the Company's expense, in every proper way to secure the Company's
rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in
any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the
execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary
in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns and nominees
the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto. Consultant further agrees that Consultant's obligation to execute or cause to be
executed, when it is in Consultant's power to do so, any such instrument or papers shall continue after the termination of this
Agreement.

 

(c)   
Consultant agrees that if, in the course of performing the Services, Consultant incorporates into any Invention developed
hereunder any invention, improvement, development, concept, discovery or other proprietary information owned by Consultant or in
which Consultant has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, perpetual, irrevocable,
worldwide license to make, have made, modify, use and sell such item as part of or in connection with such Invention.

 

(d)  
Consultant agrees that if the Company is unable because of Consultant's unavailability, dissolution, mental or physical
incapacity, or for any other reason, to secure Consultant's signature to apply for or to pursue any application for any United
States or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company above, then Consultant
hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Consultant's agent and attorney
in fact, to act for and in Consultant's behalf and stead to execute and file any such applications and to do all other lawfully
permitted acts to further the prosecution and issuance of patents, copyright and mask work registrations thereon with the same
legal force and effect as if executed by Consultant.

 

5.     
CONFLICTING OBLIGATIONS; NO INSIDER TRADING

 

(a)   
Consultant certifies that Consultant has no outstanding agreement or obligation that would preclude Consultant from complying
with the provisions hereof, and further certifies that Consultant will not enter into any such conflicting Agreement during the
term of this Agreement.

 

(b)  
In view of Consultant's access to the Company's trade secrets and proprietary know-how, Consultant further agrees that Consultant
will not, without Company's prior written consent, design identical or substantially similar designs as those developed under this
Agreement for any third party during the term of this Agreement and for a period of twelve (12) months after the termination of
this Agreement.

 

(c)   
Consultant is aware of the restrictions imposed by federal securities laws on the purchase or sale of the Company’s
securities by any person who has received material non-public information from or on behalf of the Company and on the communication
of such information to any other person when it is reasonably foreseeable that such other person may purchase or sell the Company’s
securities while in possession of such information. Consultant agrees to comply with these restrictions.

 

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6.     
TERM AND TERMINATION

 

(a)   
This Agreement will begin on the Commencement Date and will continue until twelve (12) months thereafter, at which time
this Agreement will terminate, unless this Agreement is terminated earlier pursuant to Section 6(b) or (c), or unless the term
of this Agreement is extended in writing executed by the CEO and Consultant prior to termination.

 

(b)  
The Company may terminate this Agreement immediately and without prior notice for Cause as defined in this Section. For
purposes of this Agreement, “Cause” shall mean any of the following: (1) an intentional unauthorized use or disclosure
of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company,
(2) a material breach of any agreement between Consultant and the Company, (3) conviction of, or plea of “guilty” or
“no contest” to, a felony under the laws of the United States or any state thereof, (5) gross negligence or willful
misconduct.

 

(c)   
Consultant shall notify Company immediately upon accepting employment or engagement as an independent contractor with a
Direct Competitor of Company, and in the event of such engagement or employment Company may terminate this Agreement immediately.
For purposes of this Section, a “Direct Competitor” shall mean any company offering residential real estate brokerage
services, including but not limited to the sale of real estate brokerage franchises, any company involved in the development, production,
license and/or sale of software, SAAS or other technology related products including but not limited to Customer Relationship Management
(“CRM”) products for use in the residential real estate industry and any company operating a website(s) and/or mobile
application(s) which consists primarily of content related to residential real estate including but not limited to real property
search.

 

(d)  
Consultant may terminate this Agreement upon sixty (60) days’ Notice to Company.

 

(e)   
Upon termination pursuant to this Section all rights and duties of the parties toward each other shall cease except:

 

                                                                            
(i)           
that the Company shall be obliged to pay, within thirty (30) days of the effective date of termination, all amounts owing
to Consultant for unpaid Services and related expenses, if any, in accordance with the provisions of Section 1 (Services and
Compensation) hereof; and

 

                                                                          
(ii)           
Sections 3 (Confidentiality), 4 (Ownership), 5 (Conflicting Obligations; No Insider Trading) and 8 (Independent
Contractor) shall survive termination of this Agreement.

 

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7.     
SUCCESSORS and ASSIGNMENT

 

(a)   
The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

(b)  
This Agreement and all rights under this Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees,
legatees, successors and assigns. This Agreement is personal in nature, and neither of the parties to this Agreement shall, without
the written consent of the other, assign or transfer this Agreement or any right or obligation under this Agreement to any other
person or entity; except that the Company may assign this Agreement to any of its affiliates, successors or wholly-owned subsidiaries,
provided, that such assignment will not relieve the Company of its obligations hereunder.

 

8.     
INDEPENDENT CONTRACTOR

 

Nothing in this Agreement shall in any way
be construed to constitute Consultant as an agent, employee or representative of the Company, but Consultant shall perform the
Services hereunder as an independent contractor. Consultant agrees to furnish (or reimburse the Company for) all tools and materials
necessary to accomplish this contract, and shall incur all expenses associated with performance. Consultant acknowledges and agrees
that Consultant is obligated to report as income all compensation received by Consultant pursuant to this Agreement, and Consultant
agrees to and acknowledges the obligation to pay all self-employment and other taxes thereon. Consultant further agrees to indemnify
the Company and hold it harmless to the extent of any obligation imposed on Company (i) to pay in withholding taxes or similar
items or (ii) resulting from Consultant's being determined not to be an independent contractor.

 

9.     
BENEFITS

 

Consultant acknowledges and agrees, and
it is the intent of the parties hereto, that Consultant receives no benefits from the Company, either as an independent contractor
or employee. If Consultant is reclassified by a state or federal agency or court as an employee for tax or other purposes, Consultant
will become a non-benefit employee and will receive no benefits from the Company, except those mandated by state or federal law,
even if by the terms of the benefit plans or programs of the Company in effect at the time of such reclassification Consultant
would otherwise be eligible for such benefits.

 

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10. 
ARBITRATION AND EQUITABLE RELIEF

 

(a)   
Except as provided in Section 10(d) below, the Company and Consultant agree that any dispute or controversy arising
out of, relating to or in connection with the interpretation, validity, construction, performance, breach or termination of this
Agreement shall be settled by binding arbitration to be held in San Francisco, California, in accordance with the Commercial Arbitration
Rules, supplemented by the Supplemental Procedures for Large Complex Disputes, of the American Arbitration Association as then
in effect (the "Rules"). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision
of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's
decision in any court of competent jurisdiction.

 

(b)  
The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law
rules. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration
law. Consultant hereby consents to the personal jurisdiction of the state and federal courts located in California for any action
or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants.

 

(c)   
The Company and Consultant shall each pay one-half of the costs and expenses of such arbitration, and each shall separately
pay its counsel fees and expenses.

 

(d)  
Consultant agrees that it would be impossible or inadequate to measure and calculate the Company's damages from any breach
of the covenants set forth in Sections 3, 4 or 5 herein. Accordingly, Consultant agrees that if Consultant breaches Sections 3,
4 or 5, the Company will have available, in addition to any other right or remedy available, the right to obtain from any court
of competent jurisdiction an injunction restraining such breach or threatened breach and specific performance of any such provision.
Consultant further agrees that no bond or other security shall be required in obtaining such equitable relief and Consultant hereby
consents to the issuances of such injunction and to the ordering of such specific performance.

 

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(e)   
CONSULTANT HAS READ AND UNDERSTANDS THIS SECTION 10, WHICH DISCUSSES ARBITRATION. CONSULTANT UNDERSTANDS THAT BY SIGNING
THIS AGREEMENT, CONSULTANT AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, EXCEPT AS PROVIDED IN SECTION 10 (d),
TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF CONSULTANT'S RIGHT TO A JURY TRIAL AND RELATES
TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP BETWEEN THE PARTIES.

 

 11. 
GOVERNING LAW

 

This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of California.

 

12. 
ENTIRE AGREEMENT

 

This Agreement is the entire agreement of
the parties and supersedes any prior agreements between them except the Stock Options Agreements whether written or oral, with
respect to the subject matter hereof. No waiver, alteration, or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the parties hereto.

 

13. 
SEVERABILITY

 

The invalidity or unenforceability of any
provision of this Agreement, or any terms thereof, shall not affect the validity of this Agreement as a whole, which shall at all
times remain in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.

  

	 	CONSULTANT	 	ZIPREALTY. INC.	 
	 	 	 	 	 
	 	By:	/s/ Genni Combes	 	By:	/s/ Charles C. Baker	 
	 	 	 	 	 	 	 
	 	Title:	SVP, Corporate Development	 	Title: 	President & CEO	 
	 	 	 	 	 	 	 
	 	Address:	 	 	 	 	 
	 	 	 	 	 	 	 
	 	            		 	 	 	 
	 	Social Security #: 	 	 	 	 	 

 

    	7THIS WARRANT AND THE SECURITIES UNDERLYING
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS AND THE RULES AND REGULATIONS THEREUNDER. 

 

PROTEA BIOSCIENCES GROUP, INC.

 

WARRANT

 

TO PURCHASE COMMON STOCK OF THE COMPANY

 

	Warrant No. __	Issue Date: _____ __, 2012

  

FOR VALUE RECEIVED,
PROTEA BIOSCIENCES GROUP, INC., a Delaware corporation (the “Company”), grants the following rights to El Coronodano
Holdings, LLC, and [his] [her] [its] permitted assigns, heirs, executors and administrators (individually and collectively, the
“Holder”), as of the ___ day of ______, 2012 (the “Issue Date”). This warrant (the “Warrant”)
has been issued by the Company in connection with a sale of up to 6,000,000 shares (the "Maximum Purchase") of the Company's
common stock, par value $0.0001 per share (the “Common Stock”) (the "Shares"), at a purchase price of $0.50
per share, pursuant to the terms and conditions set forth in that certain Securities Purchase Agreement by and between the Company
and the Holder dated as of the Issue Date (the “SPA”). This Warrant is one of a series of warrants that may be issued
at each closing of the purchase and sale of Shares up to the Maximum Purchase pursuant to the SPA.

 

Section 1.Grant.

 

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

 

Section 2.Number of Shares
of Common Stock Purchasable.

 

2.1Subject to the
other provisions of this Section 2, this Warrant entitles the Holder to purchase from time to time up to ______________1
shares of the Company’s Common Stock (the “Warrant Shares”).

 

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

 

 

__________________________

1
The number of Warrant Shares shall equal 75% of the number of Shares purchased by Holder at the applicable closing, pursuant
to the terms and conditions set forth in the SPA.

 

    	 

    	 	

    
  

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

 

2.4(a) For purposes of this Section
2.4, the capitalized terms in this Section shall have the following meanings:

 

(i) “Additional
Shares of Common Stock” shall mean all shares of Common Stock issued or sold by the Corporation after the Issue Date, other
than Exempted Securities;

 

(ii) “Convertible
Securities” shall mean shares of Common Stock issued or deemed issued upon the conversion or exercise, as appropriate, of
any debt or equity securities of the Company which are convertible into or exercisable for shares of Common Stock of the Company;

 

(iii) “Exempted
Securities” shall mean:

 

(v) 
Convertible Securities issued prior to the Issue Date, provided, however, that the agreements or instruments evidencing the Convertible
Securities have not been amended after the Issue Date so as to increase the number of shares of Common Stock issuable under the
Convertible Securities or to lower the conversion or exercise price, as appropriate, of the Convertible Securities;

 

(w)shares
of Common Stock issued or deemed issued as a dividend or distribution on the Common Stock;

 

(x)shares
of Common Stock issued or issuable upon the exercise of this Warrant;

 

(y)shares
of Common Stock issued or issuable by reason of a stock split, split-up, or other distribution on shares of Common Stock; or

 

(z)shares
of Common Stock issued or issuable to employees, consultants, directors or officers pursuant to an equity incentive plan, employment
agreement or other agreement as compensation for services provided to the Company.

 

    	 

    	 	

    
  

(b) At any time after
the Issue Date through the expiration of the Purchase Rights set forth in this Warrant by exercise or the terms of this Warrant,
the Company issues or sells Additional Shares of Common Stock, for a consideration per Additional Share of Common Stock that is
less than $0.50 (as such amount may be adjusted proportionately for any Reclassification) (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 2(b) shall not operate to increase the Exercise Price.

 

Section 3.Exercise Period;
Registration Statement Notice.

 

3.1The Purchase Rights represented
hereby shall be exercisable in whole or in part from time to time after the date of issuance of this Warrant until the earlier
of (i) a Qualified Public Offering or (ii) 5:00 p.m. Eastern time on the fifth anniversary of the Issue Date hereof (the “Exercise
Period”). For purposes of this Warrant, the term “Qualified Public Offering” shall mean the closing of a firm
commitment underwritten offering pursuant to an effective registration statement under the Securities Act covering the offer and
sale of Common Stock for the account of the Company in which the net cash proceeds to the Company (after deduction of underwriting
discounts and commissions) are at least $10,000,000.

 

3.2The Company shall give the Holder
written notice, at the address of the Holder set forth on the Company’s books, not less than twenty days prior to the closing
of a Qualified Public Offering.

 

Section 4.Exercise.

 

4.1The Purchase Rights represented
by this Warrant are exercisable upon the terms and conditions set forth herein at the option of the Holder in whole at any time
and in part, but not for less than 100 shares at a time, at any time and from time to time during the Exercise Period upon the
delivery of the Notice of Exercise form attached hereto as Exhibit 1 to the Company with such notice duly executed and upon
payment in cash, wire transfer or bank cashier’s check of the Exercise Price. The Purchase Rights shall be deemed to have
been exercised, and the Holder shall be deemed to have become a stockholder of record of the Company for the purposes of receiving
dividends and for all other purposes whatsoever with respect to the shares of Common Stock so purchased, as of the date of delivery
of such properly executed notice accompanied by proper tender of the Exercise Price at the office of the Company. As promptly as
practicable on or after such date, and in any event within three (3) business days thereafter, the Company at its expense shall
issue and deliver, or cause to be issued and delivered, to the person or persons entitled to receive the same, a certificate or
certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company
at its expense shall execute and deliver a new Warrant of like tenor exercisable for the number of shares for which this Warrant
may then be exercised.

 

    	 

    	 	

    
  

4.2In lieu of the payment methods
set forth in Section 4.1 above, in the event the Warrant Shares have not been registered under an effective registration
statement filed pursuant to the Securities Act prior to the earlier of: (i) one (1) year from the Issue Date of this Warrant; or
(ii) the closing of the Qualified Public Offering, 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 4.2, 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).

 

“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 average volume weighted
average price reported by Bloomberg LP (“VWAP”) 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; (iii) if determined in connection with a Qualified Public Offering, the
offering price of the Common Stock in the Qualified Public Offering; and (iv) except as set forth in (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.

 

Section 5.Exercise Price.The
exercise price for each share of Common Stock issuable to the Holder hereunder shall be $1.10 per share subject to adjustment hereunder
(the “Exercise Price”).

 

Section 6.Company’s
Warranties and Covenants as to Capital Stock. The Company has taken all action necessary and appropriate to properly
authorize, reserve and issue those shares of Common Stock issuable to the Holder pursuant to this Warrant including an authorization
of issuance and setting of exercise price. The Common Stock deliverable on the exercise of the Purchase Rights represented hereby
shall, when issued, be duly and validly issued, fully paid and nonassessable. The Company shall at all times reserve and hold available
sufficient shares of Common Stock to satisfy all conversion and purchase rights of all outstanding convertible securities and warrants.

 

    	 

    	 	

    
  

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

 

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

 

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

 

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

 

Section 11.Registration
Rights. The Warrant Shares are subject to the “piggy-back” registration rights set forth in Section
8 of the SPA.

 

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

 

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

 

    	 

    	 	

    
  

(b)In case:

 

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

 

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

 

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

 

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

 

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

 

PROTEA
BIOSCIENCES GROUP, INC.

955
Hartman Run Road

Morgantown,
WV 26507

Attn:
President

Fax:
304-292-7101

 

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

 

Richardson
& Patel LLP

750
Third Avenue, 9th Floor

New
York, New York 10017

Attn:
David Feldman, Esq.

Fax:
(917) 677-8165

 

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

 

    	 

    	 	

    
  

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

 

 

 

[Signatures appear on following page.]

 

    	 

    	 

    
   

IN WITNESS WHEREOF,
the Company has caused this Warrant to be duly executed, under seal and delivered on its behalf as of the Issue Date set forth
above.

 

	 	PROTEA BIOSCIENCES GROUP, INC.
	 	 	 
	 	 	 
	 	By: 	 
	 	 	Stephen Turner
	 	 	President

 

    	 

    	 	

    
  

EXHIBIT 1

 

 

NOTICE OF EXERCISE PURSUANT TO

ATTACHED WARRANT

 

 

_______________, 20___

 

 

To: PROTEA BIOSCIENCES GROUP, INC.

 

(1)The undersigned, the Holder
of record of the attached Warrant of PROTEA BIOSCIENCES GROUP, INC., hereby exercises the option granted by the Purchase Rights
evidenced by the attached Warrant [and hereby tenders payment of the Exercise Price as determined by the Warrant] [on a “cashless”
basis as permitted by Section 4.2 of the Warrant] to purchase upon the terms set forth in such Warrant [________] shares of Common
Stock, which constitutes all [or a portion] of the shares of Common Stock issued pursuant to the Purchase Rights represented by
this Warrant of PROTEA BIOSCIENCES GROUP, INC. All capitalized terms used but not defined in this notice have the meanings assigned
to such terms in the Warrant.

 

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

 

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

 

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

 

	ATTEST:	HOLDER:	 
	 	 	 
	 	 	 
	 	By: 	 
	 	 	 
	 	Name: 	 
	 	 	 
	 	Title: 	 

 

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

 

    	 

    	 	

    
 

EXHIBIT 2

 

PERMITTED TRANSFER OR ASSIGNMENT FORM

 

NOTE: THIS ASSIGNMENT BEARS A RESTRICTIVE
LEGEND BELOW

 

FOR VALUE RECEIVED,
the undersigned Holder of record of this Warrant of PROTEA BIOSCIENCES GROUP, INC. (the “Company”), which is dated
___________, hereby sells, assigns and transfers unto the Assignee named below all of the rights, including, without limitation,
the Purchase Rights (as such term is defined in this Warrant) of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock set forth below:

 

	Name of Transferee/Assignee	Address	No.
of Shares

 

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

 

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

 

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

 

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

 

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

 

 

[Signatures appear on following page.]

 

    	 

    	 	

    
 

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

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