**EXHIBIT 10.65**

**NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTEDBY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES AREEXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR APPLICABLE STATE SECURITIES LAWS.  THESECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) INTHE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDERTHE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORMREASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDERSAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAIDACT.  NOTWITHSTANDING THE FOREGOING, THESECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OROTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.  ANY TRANSFEREE OF THIS WARRANT SHOULDCAREFULLY REVIEW THE TERMS OF THIS WARRANT, INCLUDING SECTION 7(d) HEREOF.**

**EARTHBIOFUELS, INC.**

**WARRANT TO PURCHASE COMMON STOCK**

Warrant No.: **3**

Number of Shares of Common Stock: **1,357,759**

Dateof Issuance: July 24, 2006 (“**Issuance Date**”)

Earth Biofuels,Inc., a Delaware corporation (the “**Company**”),hereby certifies that, for good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, **COWEN ANDCOMPANY, LLC**, the registered holder hereof or its permitted assigns(the “**Holder**”), is entitled,subject to the terms set forth below, to purchase from the Company, at theExercise Price (as defined below) then in effect, upon surrender of thisWarrant to Purchase Common Stock (including any Warrants to Purchase CommonStock issued in exchange, transfer or replacement hereof, the “**Warrant**”), at any time or times on or afterthe date hereof, but not after 11:59 p.m., New York time, on the ExpirationDate (as defined below), ONE MILLION, THREE HUNDRED FIFTY-SEVEN THOUSAND, SEVENHUNDRED FIFTY-NINE (1,357,759) fully paid nonassessable shares of Common Stock(as defined below)****(the “**Warrant Shares**”).  Except as otherwise defined herein,capitalized terms in this Warrant shall have the meanings set forth in Section15.  This Warrant is one of the Warrantsto purchase Common Stock (the “**SPA Warrants**”)issued pursuant to Section 1 of that certain Securities Purchase Agreement,dated as of July 24, 2006 (the “**SubscriptionDate**”), by and among the Company and the investors (the “**Buyers**”) referred to therein (the “**Securities Purchase Agreement**”).

# 1.     EXERCISE OF WARRANT.

### (a)   Mechanics of Exercise.  Subject to the terms and conditions hereof(including, without limitation, the limitations set forth in Section 1(f)),this Warrant may be exercised by the Holder on any day on or after the datehereof, in whole or in part, by (i) delivery

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### of a writtennotice, in the form attached hereto as Exhibit A (the “**Exercise Notice**”), of the Holder’s election to exercise thisWarrant (accompanied by the attached Warrant Shares Exercise Log) to theCompany (with a copy to its legal counsel) and (ii) (A) payment to theCompany of an amount equal to the applicable Exercise Price multiplied by thenumber of Warrant Shares as to which this Warrant is being exercised (the “**Aggregate Exercise Price**”) in cash or by wire transfer ofimmediately available funds or (B) by notifying the Company that this Warrantis being exercised pursuant to a Cashless Exercise (as defined in Section1(d)).  The Holder shall not be requiredto deliver the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Noticewith respect to less than all of the Warrant Shares shall have the same effectas cancellation of the original Warrant and issuance of a new Warrantevidencing the right to purchase the remaining number of Warrant Shares.  On or before the first (1st) Business Day following the date on whichthe Company has received each of the Exercise Notice and the Aggregate ExercisePrice (or notice of a Cashless Exercise) (the “**ExerciseDelivery Documents**”), the Company shall transmit by facsimile anacknowledgment of confirmation of receipt of the Exercise Delivery Documents tothe Holder and the Company’s transfer agent (the “**TransferAgent**”).  For purposes hereof,any Exercise Delivery Documents delivered on or after 5:00 p.m., New York Citytime shall be deemed to have been delivered on the next Business Day.  On or before the third (3rd) Business Day following the date onwhich the Company has received all of the Exercise Delivery Documents (the “**Share Delivery Date**”), the Company shall (X) if legends arenot required to be placed on certificates of Common Stock pursuant to theSecurities Purchase Agreement and provided that the Transfer Agent isparticipating in The Depository Trust Company (“**DTC**”)Fast Automated Securities Transfer Program, upon the request of the Holder,credit such aggregate number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the Holder’s or its designee’s balance accountwith DTC through its Deposit Withdrawal Agent Commission system, or (Y) if theTransfer Agent is not participating in the DTC Fast Automated SecuritiesTransfer Program, issue and dispatch by overnight courier to the address asspecified in the Exercise Notice, a certificate, registered in the Company’sshare register in the name of the Holder or its designee, for the number ofshares of Common Stock to which the Holder is entitled pursuant to suchexercise which certificates shall not bear any restrictive legends unlessrequired pursuant to Section 2(g) of the Securities Purchase Agreement.  Upon delivery of the Exercise DeliveryDocuments, the Holder shall be deemed for all corporate purposes to have becomethe holder of record of the Warrant Shares with respect to which this Warranthas been exercised, irrespective of the date such Warrant Shares are creditedto the Holder’s DTC account or the date of delivery of the certificatesevidencing such Warrant Shares as the case may be.  If this Warrant is submitted in connectionwith any exercise pursuant to this Section 1(a) and the number of WarrantShares represented by this Warrant submitted for exercise is greater than thenumber of Warrant Shares being acquired upon an exercise, then the Companyshall as soon as practicable and in no event later than three Business Daysafter any exercise and at its own expense, issue subject to such prior exercisea new Warrant (in accordance with Section 7(d)) representing the right topurchase the number of Warrant Shares purchasable immediately prior to suchexercise under this Warrant, less the number of Warrant Shares with respect towhich this Warrant is exercised.  Nofractional shares of Common Stock are to be issued upon the exercise of thisWarrant, but rather the number of shares of Common Stock to be issued shall berounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable withrespect to the issuance and delivery of Warrant Shares upon exercise of thisWarrant.

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### (b)   Exercise Price.  For purposes of this Warrant, “**Exercise Price**” means $2.90, subject to adjustment asprovided herein.

### (c)   Company’s Failure toTimely Deliver Securities.  If withinthree (3) Trading Days after the Company’s receipt of the facsimile copy of aExercise Notice the Company shall fail to issue and deliver a certificate tothe Holder and register such shares of Common Stock on the Company’s shareregister or credit the Holder’s balance account with DTC for the number ofshares of Common Stock to which the Holder is entitled upon the Holder’sexercise hereunder, and if on or after such Trading Day the Holder purchases (inan open market transaction or otherwise) shares of Common Stock to deliver insatisfaction of a sale by the Holder of shares of Common Stock issuable uponsuch exercise that the Holder anticipated receiving from the Company (a **“Buy-In”**), then the Company shall, within three (3) TradingDays after the Holder’s request and in the Holder’s discretion, either (i) paycash to the Holder in an amount equal to the Holder’s total purchase price(including brokerage commissions, if any) for the shares of Common Stock sopurchased (the **“Buy-In Price”**), at which pointthe Company’s obligation to deliver such certificate (and to issue such WarrantShares) shall terminate, or (ii) promptly honor its obligation to deliver tothe Holder a certificate or certificates or if legends are not required to beplaced on certificates of Common Stock pursuant to the Securities PurchaseAgreement, provided that the Transfer Agent is participating in DTC FastAutomated Securities Transfer Program, upon the request of the Holder, creditsuch aggregate number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the Holder’s or its designee’s balance accountwith DTC through its Deposit Withdrawal Agent Commission system and pay cash tothe Holder in an amount equal to the excess (if any) of the Buy-In Price overthe product of (A) such number of shares of Common Stock, times (B) the ClosingBid Price on the date of exercise.

### (d)   Cashless Exercise. ** **Notwithstandinganything contained herein to the contrary, if a Registration Statement (asdefined in the Registration Rights Agreement) covering the Warrant Shares thatare the subject of the Exercise Notice (the “**UnavailableWarrant Shares**”) is not available for the resale of such UnavailableWarrant Shares at any time during which such Registration Statement is requiredin accordance with the Registration Rights Agreement, the Holder may, in itssole discretion during such time, exercise this Warrant in whole or in partand, in lieu of making the cash payment otherwise contemplated to be made tothe Company upon such exercise in payment of the Aggregate Exercise Price,elect instead to receive upon such exercise the “Net Number” of shares ofCommon Stock determined according to the following formula (a “**Cashless Exercise**”):

### Net Number = (A x B) - (A x C)

### B

For purposes of the foregoing formula:

A= the total number of shares with respect to whichthis Warrant is then being exercised.

B= the Closing Sale Price of the shares of CommonStock (as reported by Bloomberg) on the date immediately preceding the date ofthe Exercise Notice.

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C= the Exercise Price then in effect for theapplicable Warrant Shares at the time of such exercise.

### (e)   Disputes.  In the case of a dispute as to thedetermination of the Exercise Price or the arithmetic calculation of theWarrant Shares, the Company shall promptly issue to the Holder the number ofWarrant Shares that are not disputed and resolve such dispute in accordancewith Section 12.

### (f)    Limitations onExercises. 

#### (1)           Beneficial Ownership.  The Company shall not effect the exercise ofthis Warrant, and the Holder shall not have the right to exercise this Warrant,to the extent that after giving effect to such exercise, such Person (togetherwith such Person’s affiliates) would beneficially own in excess of 4.99% of theshares of Common Stock outstanding immediately after giving effect to suchexercise.  For purposes of the foregoingsentence, the aggregate number of shares of Common Stock beneficially owned bysuch Person and its affiliates shall include the number of shares of CommonStock issuable upon exercise of this Warrant with respect to which thedetermination of such sentence is being made, but shall exclude shares ofCommon Stock which would be issuable upon (i) exercise of the remaining,unexercised portion of this Warrant beneficially owned by such Person and itsaffiliates and (ii) exercise or conversion of the unexercised or unconvertedportion of any other securities of the Company beneficially owned by suchPerson and its affiliates (including, without limitation, any convertible notesor convertible preferred stock or warrants) subject to a limitation onconversion or exercise analogous to the limitation contained herein.  Except as set forth in the precedingsentence, for purposes of this paragraph, beneficial ownership shall becalculated in accordance with Section 13(d) of the Securities Exchange Act of1934, as amended.  For purposes of thisWarrant, in determining the number of outstanding shares of Common Stock, theHolder may rely on the number of outstanding shares of Common Stock asreflected in (1) the Company’s most recent Form 10-KSB, Form 10-QSB, CurrentReport on Form 8-K or other public filing with the Securities and ExchangeCommission, as the case may be, (2) a more recent public announcement by theCompany or (3) any other notice by the Company or the Transfer Agent settingforth the number of shares of Common Stock outstanding.  For any reason at any time, upon the writtenrequest of the Holder, the Company shall within one Business Day confirm inwriting to the Holder the number of shares of Common Stock thenoutstanding.  In any case, the number ofoutstanding shares of Common Stock shall be determined after giving effect tothe conversion or exercise of securities of the Company, including the SPASecurities and the SPA Warrants, by the Holder and its affiliates since thedate as of which such number of outstanding shares of Common Stock wasreported. By written notice to the Company, the Holder may from time to timeincrease or decrease the Maximum Percentage to any other

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#### percentage not in excess of9.99% specified in such notice; provided that (i) any such increase will not beeffective until the sixty-first (61st) day after such notice is delivered tothe Company, and (ii) any such increase or decrease will apply only to theHolder and not to any other holder of SPA Warrants.

#### (2)           MarketRegulation.  The Company shall not beobligated to issue any shares of Common Stock upon exercise of this Warrant,and the Holder of this Warrant shall not have the right to receive uponexercise of this Warrant any shares of Common Stock, if the issuance of suchshares of Common Stock would exceed that number of shares of Common Stock whichthe Company may issue upon exercise, redemption or conversion, as applicable,of the SPA Warrants and SPA Securities or otherwise without breaching theCompany’s obligations under the rules or regulations of the applicable EligibleMarket (the number of shares which may be issued without violating such rulesand regulations, the “**Exchange Cap**”),except that such limitation shall not apply in the event that the Company (A)obtains the approval of its stockholders as required by the applicable rules ofthe applicable Eligible Market for issuances of shares of Common Stock inexcess of such amount or (B) obtains a written opinion from outside counsel tothe Company that such approval is not required, which opinion shall bereasonably satisfactory to the Required Holders.  Unless and until such approval or writtenopinion is obtained, no Buyer shall be issued in the aggregate, upon exerciseor conversion, as applicable, of any SPA Warrants or SPA Securities, shares ofCommon Stock in an amount greater than the product of the Exchange Cap multipliedby a fraction, the numerator of which is the total number of shares of CommonStock underlying the SPA Warrants issued to such Buyer pursuant to theSecurities Purchase Agreement on the Issuance Date and the denominator of whichis the aggregate number of shares of Common Stock underlying the SPA Warrantsissued to the Buyers pursuant to the Securities Purchase Agreement on theIssuance Date (with respect to each Buyer, the “**Exchange CapAllocation**”).  In the eventthat any Buyer shall sell or otherwise transfer any of such Buyer’s SPAWarrants, the transferee shall be allocated a pro rata portion of such Buyer’sExchange Cap Allocation, and the restrictions of the prior sentence shall applyto such transferee with respect to the portion of the Exchange Cap Allocationallocated to such transferee.  In theevent that any holder of SPA Warrants shall exercise all of such holder’s SPAWarrants into a number of shares of Common Stock which, in the aggregate, isless than such holder’s Exchange Cap Allocation, then the difference betweensuch holder’s Exchange Cap Allocation and the number of shares of Common Stockactually issued to such holder shall be allocated to the respective ExchangeCap Allocations of the remaining holders of SPA Warrants on a pro rata basis inproportion to the shares of Common Stock underlying the SPA Warrants then heldby each such holder.

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### (g)           Insufficient Authorized Shares.  If at any time while any of the Warrantsremain outstanding the Company does not have a sufficient number of authorizedand unreserved shares of Common Stock to satisfy its obligation to reserve forissuance upon exercise of the Warrants at least a number of shares of CommonStock equal to 130% of the number of shares of Common Stock as shall from timeto time be necessary to effect the exercise of all of the Warrants thenoutstanding  (the “**RequiredReserve Amount**”)(an “**Authorized Share Failure**”), then the Company shallimmediately take all action necessary to increase the Company’s authorizedshares of Common Stock to an amount sufficient to allow the Company to reservethe Required Reserve Amount for the Warrants then outstanding.  Without limiting the generality of theforegoing sentence, as soon as practicable after the date of the occurrence ofan Authorized Share Failure, but in no event later than ninety (90) days afterthe occurrence of such Authorized Share Failure, the Company shall hold ameeting of its stockholders for the approval of an increase in the number ofauthorized shares of Common Stock.  In connectionwith such meeting, the Company shall provide each stockholder with a proxystatement and shall use its best efforts to solicit its stockholders’ approvalof such increase in authorized shares of Common Stock and to cause its board ofdirectors to recommend to the stockholders that they approve such proposal.

# 2.     ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of WarrantShares shall be adjusted from time to time as follows:

### (a)   Adjustment upon Issuance ofshares of Common Stock.  If andwhenever on or after the Subscription Date the Company issues or sells, or inaccordance with this Section 2 is deemed to have issued or sold, any shares ofCommon Stock (including the issuance or sale of shares of Common Stock owned orheld by or for the account of the Company, but excluding shares of Common Stockdeemed to have been issued by the Company in connection with any ExcludedSecurities (as defined in the SPA Securities) for a consideration per share(the “**New Issuance Price**”)less than a price equal to the Exercise Price in effect immediately prior tosuch issue or sale or deemed issuance or sale (the “**ApplicablePrice**” and the foregoing a **“Dilutive Issuance”**),then immediately after such Dilutive Issuance, the Exercise Price then ineffect shall be reduced to an amount equal to the New Issuance Price.  Upon each such adjustment of the ExercisePrice hereunder, the number of Warrant Shares shall be adjusted to the number ofshares of Common Stock determined by multiplying the Exercise Price in effectimmediately prior to such adjustment by the number of Warrant Shares acquirableupon exercise of this Warrant immediately prior to such adjustment and dividingthe product thereof by the Exercise Price resulting from such adjustment.  For purposes of determining the adjustedExercise Price under this Section 2(a), the following shall be applicable:

###### (i)            Issuance of Options.  If the Company in any manner grants anyOptions and the lowest price per share for which one share of Common Stock isissuable upon the exercise of any such Option or upon conversion, exercise orexchange of any Convertible Securities issuable upon exercise of any suchOption is less than the Applicable Price, then such share of Common Stock shallbe deemed to be outstanding and to have been issued and sold by the Company atthe time of the granting or sale of such Option for such price per share.  For purposes of this Section 2(a)(i),

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###### the “lowest price per share forwhich one share of Common Stock is issuable upon exercise of any such Optionsor upon conversion, exercise or exchange of any Convertible Securities issuableupon exercise of such Option” shall be equal to the sum of the lowest amountsof consideration (if any) received or receivable by the Company with respect toany one share of Common Stock upon the granting or sale of the Option, uponexercise of the Option and upon conversion, exercise or exchange of anyConvertible Security issuable upon exercise of such Option.  No further adjustment of the Exercise Priceor number of Warrant Shares shall be made upon the actual issuance of suchshares of Common Stock or of such Convertible Securities upon the exercise ofsuch Options or upon the actual issuance of such shares of Common Stock upon conversion,exercise or exchange of such Convertible Securities.

###### (ii)           Issuanceof Convertible Securities.  If theCompany in any manner issues or sells any Convertible Securities and the lowestprice per share for which one share of Common Stock is issuable upon theconversion, exercise or exchange thereof is less than the Applicable Price,then such share of Common Stock shall be deemed to be outstanding and to havebeen issued and sold by the Company at the time of the issuance or sale of suchConvertible Securities for such price per share.  For the purposes of this Section 2(a)(ii),the “lowest price per share for which one share of Common Stock is issuableupon the conversion, exercise or exchange” shall be equal to the sum of thelowest amounts of consideration (if any) received or receivable by the Companywith respect to one share of Common Stock upon the issuance or sale of theConvertible Security and upon conversion, exercise or exchange of suchConvertible Security.  No furtheradjustment of the Exercise Price or number of Warrant Shares shall be made uponthe actual issuance of such shares of Common Stock upon conversion, exercise orexchange of such Convertible Securities, and if any such issue or sale of suchConvertible Securities is made upon exercise of any Options for whichadjustment of this Warrant has been or is to be made pursuant to otherprovisions of this Section 2(a), no further adjustment of the Exercise Price ornumber of Warrant Shares shall be made by reason of such issue or sale.

###### (iii)          Changein Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additionalconsideration, if any, payable upon the issue, conversion, exercise or exchangeof any Convertible Securities, or the rate at which any Convertible Securitiesare convertible into or exercisable or exchangeable for shares of Common Stockincreases or decreases at any time, the Exercise Price and the number ofWarrant Shares in effect at the time of such increase or decrease shall beadjusted to the Exercise Price and the number of Warrant Shares which wouldhave been in effect at such time had such Options or Convertible Securitiesprovided for such increased or decreased purchase

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###### price, additional consideration or increasedor decreased conversion rate, as the case may be, at the time initiallygranted, issued or sold.  For purposes ofthis Section 2(a)(iii), if the terms of any Option or Convertible Security thatwas outstanding as of the date of issuance of this Warrant are increased or decreasedin the manner described in the immediately preceding sentence, then such Optionor Convertible Security and the shares of Common Stock deemed issuable uponexercise, conversion or exchange thereof shall be deemed to have been issued asof the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if suchadjustment would result in an increase of the Exercise Price then in effect ora decrease in the number of Warrant Shares.

###### (iv)          Calculationof Consideration Received.  In caseany Option is issued in connection with the issue or sale of other securitiesof the Company, together comprising one integrated transaction in which nospecific consideration is allocated to such Options by the parties thereto, theOptions will be deemed to have been issued the difference of (x) the aggregatefair market value of such Options and other securities issued or sold in suchintegrated transaction, less (y) the fair market value of the securities otherthan such Option, issued or sold in such transaction and the other securitiesissued or sold in such integrated transaction will be deemed to have beenissued or sold for the balance of the consideration received by theCompany.  If any Common Stock, Options orConvertible Securities are issued or sold or deemed to have been issued or soldfor cash, the consideration received therefor will be deemed to be the grossamount raised by the Company; provided, however, that such gross amount is notgreater than 110% of the net amount received by the Company therefor.  If any shares of Common Stock, Options orConvertible Securities are issued or sold for a consideration other than cash,the amount of such consideration received by the Company will be the fair valueof such consideration, except where such consideration consists of securities,in which case the amount of consideration received by the Company will be theClosing Sale Price of such security on the date of receipt.  If any shares of Common Stock, Options orConvertible Securities are issued to the owners of the non-surviving entity inconnection with any merger in which the Company is the surviving entity, theamount of consideration therefor will be deemed to be the fair value of suchportion of the net assets and business of the non-surviving entity as isattributable to such shares of Common Stock, Options or Convertible Securities,as the case may be.  The fair value ofany consideration other than cash or securities will be determined jointly bythe Company and the Required Holders.  Ifsuch parties are unable to reach agreement within ten (10) days after theoccurrence of an event requiring valuation (the “**Valuation Event**”), the fair value of such consideration willbe determined within five (5) Business Days after the tenth day following theValuation Event by an independent, reputable appraiser jointly selected by

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###### the Company and the Required Holders.  The determination of such appraiser shall befinal and binding upon all parties absent manifest error and the fees and expensesof such appraiser shall be borne by the Company.

###### (v)           RecordDate.  If the Company takes a recordof the holders of shares of Common Stock for the purpose of entitling them(A) to receive a dividend or other distribution payable in shares ofCommon Stock, Options or in Convertible Securities or (B) to subscribe foror purchase shares of Common Stock, Options or Convertible Securities, thensuch record date will be deemed to be the date of the issue or sale of theshares of Common Stock deemed to have been issued or sold upon the declarationof such dividend or the making of such other distribution or the date of thegranting of such right of subscription or purchase, as the case may be.

### (b)   Adjustment uponSubdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides(by any stock split, stock dividend, recapitalization or otherwise) one or moreclasses of its outstanding shares of Common Stock into a greater number ofshares, the Exercise Price in effect immediately prior to such subdivision willbe proportionately reduced and the number of Warrant Shares will beproportionately increased.  If theCompany at any time on or after the Subscription Date  combines (by combination, reverse stock splitor otherwise) one or more classes of its outstanding shares of Common Stockinto a smaller number of shares, the Exercise Price in effect immediately priorto such combination will be proportionately increased and the number of WarrantShares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at theclose of business on the date the subdivision or combination becomes effective.

### (c)   Other Events.  If any event occurs of the type contemplatedby the provisions of this Section 2 but not expressly provided for by suchprovisions (including, without limitation, the granting of stock appreciationrights, phantom stock rights or other rights with equity features), then theCompany’s Board of Directors will make an appropriate adjustment in theExercise Price and the number of Warrant Shares so as to protect the rights ofthe Holder; provided that no such adjustment pursuant to this Section 2(c) willincrease the Exercise Price or decrease the number of Warrant Shares as otherwisedetermined pursuant to this Section 2.

# 3.     RIGHTS UPON DISTRIBUTION OF ASSETS.  If the Company shall declare or make anydividend or other distribution of its assets (or rights to acquire its assets)to holders of shares of Common Stock, by way of return of capital or otherwise(including, without limitation, any distribution of cash, stock or othersecurities, property or options by way of a dividend, spin off,reclassification, corporate rearrangement, scheme of arrangement or othersimilar transaction) (a “**Distribution**”),at any time after the issuance of this Warrant, then, in each such case:

### (a)   any Exercise Price in effectimmediately prior to the close of business on the record date fixed for thedetermination of holders of shares of Common Stock entitled to

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### receive theDistribution shall be reduced, effective as of the close of business on suchrecord date, to a price determined by multiplying such Exercise Price by afraction of which (i) the numerator shall be the Closing Bid Price of the sharesof Common Stock on the trading day immediately preceding such record date minusthe value of the Distribution (as determined in good faith by the Company’sBoard of Directors) applicable to one share of shares of Common Stock, and (ii)the denominator shall be the Closing Bid Price of the shares of Common Stock onthe trading day immediately preceding such record date; and

### (b)   the number of Warrant Sharesshall be increased to a number of shares equal to the number of shares ofCommon Stock obtainable immediately prior to the close of business on therecord date fixed for the determination of holders of shares of Common Stockentitled to receive the Distribution multiplied by the reciprocal of thefraction set forth in the immediately preceding paragraph (a); provided that inthe event that the Distribution is of shares of Common Stock (or common stock)(“**Other Shares of CommonStock**”) of a company whose common shares are traded on a nationalsecurities exchange or a national automated quotation system, then the Holdermay elect to receive a warrant to purchase Other Shares of Common Stock in lieuof an increase in the number of Warrant Shares, the terms of which shall beidentical to those of this Warrant, except that such warrant shall beexercisable into the number of shares of Other Shares of Common Stock thatwould have been payable to the Holder pursuant to the Distribution had theHolder exercised this Warrant immediately prior to such record date and with anaggregate exercise price equal to the product of the amount by which theexercise price of this Warrant was decreased with respect to the Distributionpursuant to the terms of the immediately preceding paragraph (a) and the numberof Warrant Shares calculated in accordance with the first part of thisparagraph (b).

# 4.     PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

### (a)   Purchase Rights.  In addition to any adjustments pursuant toSection 2 above, if at any time the Company grants, issues or sells anyOptions, Convertible Securities or rights to purchase stock, warrants,securities or other property pro rata to the record holders of any class ofshares of Common Stock (the “**PurchaseRights**”), then the Holder will be entitled to acquire, upon theterms applicable to such Purchase Rights, the aggregate Purchase Rights whichthe Holder could have acquired if the Holder had held the number of shares ofCommon Stock acquirable upon complete exercise of this Warrant (without regardto any limitations on the exercise of this Warrant) immediately before the dateon which a record is taken for the grant, issuance or sale of such PurchaseRights, or, if no such record is taken, the date as of which the record holdersof shares of Common Stock are to be determined for the grant, issue or sale ofsuch Purchase Rights.

### (b)   Fundamental Transactions.  The Company shall not enter into or be party to a FundamentalTransaction unless (i)  the Successor Entity assumes in writing all of theobligations of the Company under this Warrant and the other TransactionDocuments in accordance with the provisions of this Section (4)(b) pursuant towritten agreements in form and substance reasonably satisfactory to theRequired Holders and approved by the Required Holders prior to such FundamentalTransaction, including agreements to deliver to each holder of Warrants in exchange forsuch Warrants asecurity of the SuccessorEntity evidenced by a written instrument substantially similar in formand substance to this Warrant,including, without

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### limitation, anadjusted exercise price equal to the value for the shares of Common Stockreflected by the terms of such Fundamental Transaction, and exercisable for acorresponding number of shares of capital stock equivalent to the shares ofCommon Stock acquirable and receivable upon exercise of this Warrant (withoutregard to any limitations on the exercise of this Warrant) prior to suchFundamental Transaction, and reasonably satisfactory to the Required Holders and (ii) the Successor Entity(including its Parent Entity) is a publicly traded corporation whosecommon stock is quoted on or listed for trading on an Eligible Market.  Uponthe occurrence of any Fundamental Transaction, the Successor Entity shallsucceed to, and be substituted for (so that from and after the date of suchFundamental Transaction, the provisions of this Warrant referring to the “Company”shall refer instead to the Successor Entity), and may exercise every right andpower of the Company and shall assume all of the obligations of the Companyunder this Warrant with the same effect as if such Successor Entity had beennamed as the Company herein.  Uponconsummation of the Fundamental Transaction, the Successor Entity shall deliverto the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the FundamentalTransaction, in lieu of the shares of the Common Stock (or othersecurities, cash, assets or other property) issuableupon the exercise of the Warrantprior to such Fundamental Transaction, such shares of the publicly traded common stock (orits equivalent) of the Successor Entity (including its Parent Entity) which theHolder would have been entitled to receive upon the happening of suchFundamental Transaction had this Warrant been converted immediately prior tosuch Fundamental Transaction, as adjusted in accordance with the provisions ofthis Warrant.  In addition to and not insubstitution for any other rights hereunder, prior to the consummation of anyFundamental Transaction pursuant to which holders of shares of Common Stock areentitled to receive securities or other assets with respect to or in exchangefor shares of Common Stock (a “**CorporateEvent**”), the Company shall make appropriate provision to insure thatthe Holder will thereafter have the right to receive upon an exercise of thisWarrant at any time after the consummation of the Fundamental Transaction butprior to the Expiration Date, in lieu of the shares of the Common Stock (orother securities, cash, assets or other property) issuable upon the exercise ofthe Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets orany other property whatsoever (including warrants or other purchase orsubscription rights) which the Holder would have been entitled to receive uponthe happening of such Fundamental Transaction had the Warrant been exercisedimmediately prior to such Fundamental Transaction.  The provisions of this Section shallapply similarly and equally to successive Fundamental Transactions andCorporate Events and shall be applied without regard to any limitations on theexercise of this Warrant.

(c)           Notwithstanding the foregoing and theprovisions of Section 4(b) above, in the event of a Change of Control, if theHolder has not exercised the Warrant in full prior to the consummation of theChange of Control, then the Holder shall have the right to require suchSuccessor Entity to purchase this Warrant from the Holder by paying to theHolder, simultaneously with the consummation of the Change of Control and inlieu of the warrant referred to in Section 4(b) cash in the amount equal to thevalue of the remaining unexercised portion of this Warrant on the date of suchconsummation, which value shall be determined by use of the Black-ScholesOption Pricing Model reflecting (i) a risk-free interest rate corresponding tothe U.S. Treasury rate for a period equal to the remaining term of this Warrantas of such date of request and (ii) an expected volatility equal to the 100 dayvolatility obtained from the HVT function on Bloomberg; provided that if suchfunction yields a volatility (x) less

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### than 50%, theexpected volatility shall be equal to 50% and (y) greater than 80%, theexpected volatility shall be equal to 80%.

# 5.     NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, byamendment of its Certificate of Incorporation, Bylaws or through anyreorganization, transfer of assets, consolidation, merger, scheme of arrangement,dissolution, issue or sale of securities, or any other voluntary action, avoidor seek to avoid the observance or performance of any of the terms of thisWarrant, and will at all times in good faith carry out all the provisions ofthis Warrant and take all action as may be required to protect the rights ofthe Holder.  Without limiting thegenerality of the foregoing, the Company (i) shall not increase the parvalue of any shares of Common Stock receivable upon the exercise of thisWarrant above the Exercise Price then in effect, (ii) shall take all suchactions as may be necessary or appropriate in order that the Company mayvalidly and legally issue fully paid and nonassessable shares of Common Stockupon the exercise of this Warrant, and (iii) shall, so long as any of the SPAWarrants are outstanding, take all action necessary to reserve and keepavailable out of its authorized and unissued shares of Common Stock, solely forthe purpose of effecting the exercise of the SPA Warrants, 130% of the numberof shares of Common Stock as shall from time to time be necessary to effect theexercise of the SPA Warrants then outstanding (without regard to anylimitations on exercise).

# 6.     WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  Except as otherwise specifically providedherein, the Holder, solely in such Person’s capacity as a holder of thisWarrant, shall not be entitled to vote or receive dividends or be deemed theholder of share capital of the Company for any purpose, nor shall anythingcontained in this Warrant be construed to confer upon the Holder, solely insuch Person’s capacity as the Holder of this Warrant, any of the rights of ashareholder of the Company or any right to vote, give or withhold consent toany corporate action (whether any reorganization, issue of stock, reclassificationof stock, consolidation, merger, conveyance or otherwise), receive notice ofmeetings, receive dividends or subscription rights, or otherwise, prior to theissuance to the Holder of the Warrant Shares which such Person is then entitledto receive upon the due exercise of this Warrant.  In addition, nothing contained in thisWarrant shall be construed as imposing any liabilities on the Holder topurchase any securities (upon exercise of this Warrant or otherwise) or as ashareholder of the Company, whether such liabilities are asserted by theCompany or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holderwith copies of the same notices and other information given to the shareholdersof the Company generally, contemporaneously with the giving thereof to theshareholders.

# 7.     REISSUANCE OF WARRANTS.

### (a)   Transfer of Warrant.  If this Warrant is to be transferred, theHolder shall surrender this Warrant to the Company, whereupon the Company willsubject to the satisfaction of the transfer provisions of the SecuritiesPurchase Agreement forthwith issue and deliver upon the order of the Holder anew Warrant (in accordance with Section 7(d)), registered in the name of theregistered transferee or assignee, representing the right to purchase thenumber of Warrant Shares being transferred by the Holder and, if less then thetotal number of Warrant Shares then underlying this Warrant is beingtransferred, a new Warrant (in accordance with

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### Section 7(d))to the Holder representing the right to purchase the number of Warrant Sharesnot being transferred.

### (b)   Lost, Stolen or MutilatedWarrant.  Upon receipt by the Companyof evidence reasonably satisfactory to the Company of the loss, theft,destruction or mutilation of this Warrant, and, in the case of loss, theft ordestruction, of any indemnification undertaking by the Holder to the Company incustomary form and, in the case of mutilation, upon surrender and cancellationof this Warrant, the Company shall execute and deliver to the Holder a newWarrant (in accordance with Section 7(d)) representing the right to purchasethe Warrant Shares then underlying this Warrant.

### (c)   Exchangeable for MultipleWarrants.  This Warrant isexchangeable, upon the surrender hereof by the Holder at the principal officeof the Company, for a new Warrant or Warrants (in accordance with Section 7(d))representing in the aggregate the right to purchase the number of WarrantShares then underlying this Warrant, and each such new Warrant will representthe right to purchase such portion of such Warrant Shares as is designated bythe Holder at the time of such surrender; provided, however, that no Warrantsfor fractional shares of Common Stock shall be given.

### (d)   Issuance of New Warrants.  Whenever the Company is required to issue anew Warrant pursuant to the terms of this Warrant, such new Warrant (i) shallbe of like tenor with this Warrant, (ii) shall represent, as indicated on theface of such new Warrant, the right to purchase the Warrant Shares thenunderlying this Warrant (or in the case of a new Warrant being issued pursuantto Section 7(a) or Section 7(c), the Warrant Shares designated by the Holderwhich, when added to the number of shares of Common Stock underlying the othernew Warrants issued in connection with such issuance, does not exceed thenumber of Warrant Shares then underlying this Warrant), (iii) shall have anissuance date, as indicated on the face of such new Warrant which is the sameas the Issuance Date, and (iv) shall have the same rights and conditions asthis Warrant.

# 8.     NOTICES.  Whenevernotice is required to be given under this Warrant, unless otherwise providedherein, such notice shall be given in accordance with Section 9(f) of theSecurities Purchase Agreement.  TheCompany shall provide the Holder with prompt written notice of all actionstaken pursuant to this Warrant, including in reasonable detail a description ofsuch action and the reason therefore. Without limiting the generality of the foregoing, the Company will givewritten notice to the Holder (i) immediately upon any adjustment of theExercise Price, setting forth in reasonable detail, and certifying, thecalculation of such adjustment and (ii) at least fifteen days prior to the dateon which the Company closes its books or takes a record (A) with respect to anydividend or distribution upon the shares of Common Stock, (B) with respect toany grants, issuances or sales of any Options, Convertible Securities or rightsto purchase stock, warrants, securities or other property to holders of sharesof Common Stock or (C) for determining rights to vote with respect to anyFundamental Transaction, dissolution or liquidation, provided in each case thatsuch information shall be made known to the public prior to or in conjunctionwith such notice being provided to the Holder.

# 9.     AMENDMENT AND WAIVER. No term of this Warrant may be amended, modified or waived unlesspursuant to a writing signed by the Company and the Required

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# Holders; provided that no such action may increase theexercise price of any SPA Warrant or decrease the number of shares or class ofstock obtainable upon exercise of any SPA Warrant without the written consentof the Holder.  No such amendment shallbe effective to the extent that it applies to less than all of the holders ofthe SPA Warrants then outstanding.

# 10.   GOVERNING LAW.  This Warrant shall be governed by andconstrued and enforced in accor­dance with, and all questions concerning theconstruction, validity, interpretation and performance of this Warrant shall begoverned by, the internal laws of the State of New York, without giving effectto any choice of law or conflict of law provision or rule (whether of the Stateof New York or any other jurisdictions) that would cause the application of thelaws of any jurisdictions other than the State of New York.

# 11.   CONSTRUCTION; HEADINGS.  This Warrant shall be deemed to be jointlydrafted by the Company and all the Buyers and shall not be construed againstany person as the drafter hereof.  Theheadings of this Warrant are for convenience of reference and shall not formpart of, or affect the interpretation of, this Warrant.

# 12.   DISPUTE RESOLUTION.  In the case of a dispute as to thedetermination of the Exercise Price or the arithmetic calculation of theWarrant Shares, the Company shall submit the disputed determinations orarithmetic calculations via facsimile within two Business Days of receipt ofthe Exercise Notice giving rise to such dispute, as the case may be, to theHolder.  If the Holder and the Companyare unable to agree upon such determination or calculation of the ExercisePrice or the Warrant Shares within three Business Days of such disputeddetermination or arithmetic calculation being submitted to the Holder, then theCompany shall, within two Business Days submit via facsimile (a) the disputeddetermination of the Exercise Price to an independent, reputable investmentbank selected by the Company and approved by the Holder  or (b) the disputed arithmetic calculation ofthe Warrant Shares to the Company’s independent, outside accountant.  The Company shall cause at its expense theinvestment bank or the accountant, as the case may be, to perform thedeterminations or calculations and notify the Company and the Holder of the resultsno later than ten Business Days from the time it receives the disputeddeterminations or calculations.  Suchinvestment bank’s or accountant’s determination or calculation, as the case maybe, shall be binding upon all parties absent demonstrable error.

# 13.   REMEDIES, OTHER OBLIGATIONS, BREACHES ANDINJUNCTIVE RELIEF.  The remediesprovided in this Warrant shall be cumulative and in addition to all otherremedies available under this Warrant and the other Transaction Documents, atlaw or in equity (including a decree of specific performance and/or otherinjunctive relief), and nothing herein shall limit the right of the Holderright to pursue actual damages for any failure by the Company to comply withthe terms of this Warrant.  The Companyacknowledges that a breach by it of its obligations hereunder will causeirreparable harm to the Holder and that the remedy at law for any such breachmay be inadequate.  The Company thereforeagrees that, in the event of any such breach or threatened breach, the holderof this Warrant shall be entitled, in addition to all other available remedies,to an injunction restraining any breach, without the necessity of showingeconomic loss and without any bond or other security being required.

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# 14.   TRANSFER.  This Warrant may be offered for sale, sold, transferred or assignedwithout the consent of the Company, except as may otherwise be required bySection 2(f) of the Securities Purchase Agreement.

# 15.   CERTAIN DEFINITIONS.  For purposes of this Warrant, the followingterms shall have the following meanings:

### (a)   “**Bloomberg**” means Bloomberg Financial Markets.

### (b)   “**Business Day**” means any day other than Saturday, Sunday orother day on which commercial banks in The City of New York are authorized orrequired by law to remain closed.

### (c)   “**Change of Control**” means any Fundamental Transaction otherthan (i) anyreorganization, recapitalization or reclassification of the Common Stock orbusiness combination in which the Company is the publicly traded survivingentity in which the holders of the Company’s voting power immediately prior tosuch reorganization, recapitalization or reclassification or businesscombination continue after such reorganization, recapitalization orreclassification or business combination to hold publicly traded securitiesand, directly or indirectly, the voting power of the surviving entity orentities necessary to elect a majority of the members of the board of directors(or their equivalent if other than a corporation) of such entity or entities(except where Apollo Resources International or its affiliates becomesthe “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),directly or indirectly, of 70% or greater of the aggregate Voting Stock of theCompany),or (ii) pursuant to a migratory merger effected solely for the purpose ofchanging the jurisdiction of incorporation of the Company.

### (d)   “**Closing Bid Price**” and “**Closing Sale Price**”means, for any security as of any date, the last closing bid price and lastclosing trade price, respectively, for such security on the Principal Market,as reported by Bloomberg, or, if the Principal Market begins to operate on anextended hours basis and does not designate the closing bid price or theclosing trade price, as the case may be, then the last bid price or last tradeprice, respectively, of such security prior to 4:00:00 p.m., New York time, asreported by Bloomberg, or, if the Principal Market is not the principalsecurities exchange or trading market for such security, the last closing bidprice or last trade price, respectively, of such security on the principalsecurities exchange or trading market where such security is listed or tradedas reported by Bloomberg, or if the foregoing do not apply, the last closingbid price or last trade price, respectively, of such security in theover-the-counter market on the electronic bulletin board for such security asreported by Bloomberg, or, if no closing bid price or last trade price,respectively, is reported for such security by Bloomberg, the average of thebid prices, or the ask prices, respectively, of any market makers for suchsecurity as reported in the “pink sheets” by Pink Sheets LLC (formerly theNational Quotation Bureau, Inc.).  If theClosing Bid Price or the Closing Sale Price cannot be calculated for a securityon a particular date on any of the foregoing bases, the Closing Bid Price orthe Closing Sale Price, as the case may be, of such security on such date shallbe the fair market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable toagree upon the fair market value of such security, then such dispute shall beresolved pursuant to Section 12.  Allsuch determinations to be appropriately adjusted for any

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### stockdividend, stock split, stock combination or other similar transaction duringthe applicable calculation period.

### (e)   “**Common Stock**” means (i) the Company’s shares of CommonStock, par value $0.001 per share, and (ii) any share capital into whichsuch Common Stock shall have been changed or any share capital resulting from areclassification of such Common Stock.

### (f)    “**Convertible Securities**” means any stock or securities (otherthan Options) directly or indirectly convertible into or exercisable orexchangeable for shares of Common Stock.

### (g)   “**Eligible Market**” means the Principal Market, the AmericanStock Exchange, The New York Stock Exchange, Inc., the Nasdaq National Market.

### (h)   “**Expiration Date**” means the date sixty months after theIssuance Date or, if such date falls on a day other than a Business Day or onwhich trading does not take place on the Principal Market (a “**Holiday**”), the next date that is not a Holiday.

### (i)    “**Fundamental Transaction**” means that the Company shall,directly or indirectly, in one or more related transactions, (i) consolidate ormerge with or into (whether or not the Company is the surviving corporation)another Person or Persons, or (ii) sell, assign, transfer, convey or otherwisedispose of all or substantially all of the properties or assets of the Companyto another Person, or (iii) allow another Person to make a purchase, tender orexchange offer that is accepted by the holders of more than 50% of theoutstanding shares of Voting Stock (not including any shares of Voting Stockheld by the Person or Persons making or party to, or associated or affiliatedwith the Persons making or party to, such purchase, tender or exchange offer),or (iv) consummate a stock purchase agreement or other business combination(including, without limitation, a reorganization, recapitalization, spin-off orscheme of arrangement) with another Person whereby such other Person acquiresmore than the 50% of the outstanding shares of Voting Stock (not including anyshares of Voting Stock held by the other Person or other Persons making orparty to, or associated or affiliated with the other Persons making or partyto, such stock purchase agreement or other business combination), or (v)reorganize, recapitalize or reclassify its Common Stock or (vi) any “person” or“group” (as these terms are used for purposes of Sections 13(d) and 14(d) ofthe Exchange Act) (other than Apollo Resources International) is or shallbecome the “beneficial owner” (as defined in Rule 13d-3 under the ExchangeAct), directly or indirectly, of 50% of the aggregate Voting Stock of theCompany, or (vii) Apollo Resources International ceases to be the “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of at least 50% of the aggregate Voting Stock of the Company, or(viii) Apollo Resources International or its affiliates becomes the “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of 70% or greater of the aggregate Voting Stock of the Company.

### (j)    “**Options**”means any rights, warrants or options to subscribe for or purchase shares ofCommon Stock or Convertible Securities.

### (k)   “**Parent Entity**” of a Person means an entity that, directly or indirectly, controls the applicablePerson and whose common stock or equivalent equity security

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### is quoted orlisted on an Eligible Market, or, if there is more than one such Person or Parent Entity, thePerson or Parent Entity with the largest public market capitalization as of thedate of consummation of the Fundamental Transaction.

### (l)    “**Person**” means an individual, a limited liability company, apartnership, a joint venture, a corporation, a trust, an unincorporatedorganization, any other entity and a government or any department or agencythereof.

### (m)  “**Principal Market**” means OTC Bulletin Board.

### (n)   “**Registration Rights Agreement**” means that certainregistration rights agreement by and among the Company and the Buyers.

### (o)   “**Required Holders**” means the holders of the SPA Warrantsrepresenting at least a majority of shares of Common Stock underlying the SPAWarrants then outstanding.

### (p)   “**SPA Securities**” means the Notes issued pursuant to theSecurities Purchase Agreement.

### (q)   “**Successor Entity**” means the Person (or, if so elected by the Required Holders, the ParentEntity) formed by, resulting from or surviving any Fundamental Transaction orthe Person (or, if so elected by the Required Holders, the Parent Entity) withwhich such Fundamental Transaction shall have been entered into.

**[Signature Page Follows]**

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**IN WITNESS WHEREOF,** the Company has causedthis Warrant to Purchase Common Stock to be duly executed as of the IssuanceDate set out above.

 
|        | **EARTH BIOFUELS, INC.**       |
|--------|--------------------------------|
|   |                           |
|   |                           |
|        | By:                            | /s/ DENNIS G. MCLAUGHLIN, III |   |
|   | Name:                          | Dennis G. McLaughlin, III |
|   | Title: Chief Executive Officer |

 

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**EXHIBIT A**

**EXERCISE NOTICE**

**TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISETHISWARRANT TO PURCHASE COMMON STOCK**

**EARTH BIOFUELS, INC.**

The undersigned holder hereby exercises the right topurchase                         of the shares of Common Stock (“**WarrantShares**”) of Earth Biofuels, Inc., a Delaware corporation (the “**Company**”), evidenced by the attachedWarrant to Purchase Common Stock (the “**Warrant**”).  Capitalized terms used herein and nototherwise defined shall have the respective meanings set forth in the Warrant.

1.             Formof Exercise Price.  The Holder intendsthat payment of the Exercise Price shall be made as:

a “Cash Exercise” with respect to                            Warrant Shares; and/or

a “Cashless Exercise” with respect to                            Warrant Shares.

2.             Paymentof Exercise Price.  In the event that theholder has elected a Cash Exercise with respect to some or all of the WarrantShares to be issued pursuant hereto, the holder shall pay the AggregateExercise Price in the sum of $                           to the Company in accordance with the terms of the Warrant.

3.             Deliveryof Warrant Shares.  The Company shalldeliver to the holder                  Warrant Shares in accordance with the terms of the Warrant.

4.             Byits delivery of this Exercise Notice, the undersigned represents and warrantsto the Company that in giving effect to the exercise evidenced hereby theHolder will not beneficially own in excess of the number of shares of CommonStock (determined in accordance with Section 13(d) of the Securities ExchangeAct of 1934) permitted to be owned under Section 1(f)(1) of this Warrant towhich this notice relates.

Date:                           ,
|                      |   |
|---------------------------|--------|
| Name of Registered Holder |
|                      |
|                      |
| By:                       |   |   |
|                      | Name:  |
|                      | Title: |
|                           |        |  |

 

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**ACKNOWLEDGMENT**

TheCompany hereby acknowledges this Exercise Notice and, if applicable, herebydirects Nevada Agency and Trust Company****toissue the above indicated number of shares of Common Stock in accordance withthe Transfer Agent Instructions dated July    , 2006 from theCompany and acknowledged and agreed to by Nevada Agency and Trust Company.
|        | **EARTH BIOFUELS, INC.** |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | By:                      |   |
|   |                     | Name: |
|   |                     | Title: |

 

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Warrant Shares Exercise Log
| Date                   | ** ** | **Number of Warrant  Shares Available to be  Exercised** | ** ** | **Number of Warrant Shares  Exercised** | ** ** | **Number of  Warrant Shares  Remaining to  be Exercised** | ** ** |
|------------------------|------------|-----------------------------------------------------------------------------------|------------|--------------------------------------------------------|------------|-------------------------------------------------------------------------------|------------|
| **   ** | ** ** | ** **                                                                        | ** ** | ** **                                             | ** ** | ** **                                                                    | ** ** |
| ** **             | ** ** | ** **                                                                        | ** ** | ** **                                             | ** ** | ** **                                                                    | ** ** |
| **   ** | ** ** | ** **                                                                        | ** ** | ** **                                             | ** ** | ** **                                                                    | ** ** |

 

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