**Exhibit 10.85**

**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.: A-01a

Number of Shares of Common Stock: 86,207

Dateof Issuance: August 11, 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, GUNDYCO ITF EXCALIBUR LIMITEDPARTNERSHIP, the registered holder hereof or its permitted assigns (the “**Holder**”), is entitled, subject to the termsset forth below, to purchase from the Company, at the Exercise Price (asdefined below) then in effect, upon surrender of this Warrant to PurchaseCommon Stock (including any Warrants to Purchase Common Stock issued inexchange, transfer or replacement hereof, the “**Warrant**”), at any time or times on or the date hereof, but notafter 11:59 p.m., New York time, on the Expiration Date (as defined below),EIGHTY-SIX THOUSAND, TWO HUNDRED SEVEN (86,207) fully paid nonassessable sharesof 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 August 11, 2006 (the “**SubscriptionDate**”), by and among the Company and the investors (the “**Buyers**”) referred to therein (the “**Securities Purchase Agreement**”).

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# 1.     EXERCISE OF WARRANT.

### (a)   Mechanicsof Exercise.  Subject to the termsand conditions hereof (including, without limitation, the limitations set forthin Section 1(f)), this Warrant may be exercised by the Holder on any day on orafter the date hereof, in whole or in part, by (i) delivery 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 onwhich the Company has received each of the Exercise Notice and the AggregateExercise Price (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, 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.  Upon delivery of the ExerciseDelivery Documents, the Holder shall be deemed for all corporate purposes tohave become the holder of record of the Warrant Shares with respect to whichthis Warrant has been exercised, irrespective of the date such Warrant Sharesare credited to the Holder’s DTC account or the date of delivery of thecertificates evidencing 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 

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### up to thenearest whole number.  The Company shallpay any and all taxes which may be payable with respect to the issuance anddelivery of Warrant Shares upon exercise of this Warrant [**Insert in Additional Warrant**: Notwithstandingany provision of this Warrant to the contrary, no more than the MaximumEligibility Number of Warrant Shares shall be exercisable hereunder.]

### (b)   ExercisePrice.  For purposes of this Warrant,“**Exercise Price**” means $2.90, subject toadjustment as provided herein.

### (c)   Company’sFailure to Timely Deliver Securities. If within three (3) Trading Days after the Company’s receipt of thefacsimile copy of a Exercise Notice the Company shall fail to issue and delivera certificate to the Holder and register such shares of Common Stock on theCompany’s share register or credit the Holder’s balance account with DTC forthe number of shares of Common Stock to which the Holder is entitled upon theHolder’s exercise hereunder, and if on or after such Trading Day the Holderpurchases (in an open market transaction or otherwise) shares of Common Stockto deliver in satisfaction of a sale by the Holder of shares of Common Stockissuable upon such exercise that the Holder anticipated receiving from theCompany (a **“Buy-In”**), then the Company shall,within three (3) Trading Days after the Holder’s request and in the Holder’sdiscretion, either (i) pay cash to the Holder in an amount equal to theHolder’s total purchase price (including brokerage commissions, if any) for theshares of Common Stock so purchased (the **“Buy-In Price”**),at which point the Company’s obligation to deliver such certificate (and toissue such Warrant Shares) shall terminate, or (ii) promptly honor itsobligation to deliver to the Holder a certificate or certificates or if legendsare not required to be placed on certificates of Common Stock pursuant to theSecurities Purchase Agreement, provided that the Transfer Agent isparticipating in DTC Fast Automated Securities Transfer Program, upon therequest of the Holder, credit such aggregate number of Warrant Shares to whichthe Holder is entitled pursuant to such exercise to the Holder’s or itsdesignee’s balance account with DTC through its Deposit Withdrawal AgentCommission system and pay cash to the Holder in an amount equal to the excess(if any) of the Buy-In Price over the product of (A) such number of shares ofCommon Stock, times (B) the Closing Bid Price on the date of exercise.

### (d)   CashlessExercise. ** **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)

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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.

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)    Limitationson Exercises. 

#### (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 

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#### number of shares of CommonStock outstanding.  For any reason at anytime, upon the written request of the Holder, the Company shall within oneBusiness Day confirm in writing to the Holder the number of shares of CommonStock then outstanding.  In any case, thenumber of outstanding shares of Common Stock shall be determined after givingeffect to the conversion or exercise of securities of the Company, includingthe SPA Securities and the SPA Warrants, by the Holder and its affiliates sincethe date as of which such number of outstanding shares of Common Stock wasreported.  By written notice to the Company,the Holder may from time to time increase or decrease the Maximum Percentage toany other percentage not in excess of 9.99% specified in such notice; providedthat (i) any such increase will not be effective until the sixty-first (61st) day after such notice isdelivered to the Company, and (ii) any such increase or decrease will applyonly to the Holder and not to any other holder of SPA Warrants.

#### (2)           Market Regulation.  The Company shall not be obligated to issueany shares of Common Stock upon exercise of this Warrant, and the Holder ofthis Warrant shall not have the right to receive upon exercise of this Warrantany shares of Common Stock, if the issuance of such shares of Common Stockwould exceed that number of shares of Common Stock which the Company may issueupon exercise, redemption or conversion, as applicable, of the SPA Warrants andSPA Securities or otherwise without breaching the Company’s obligations underthe rules or regulations of the applicable Eligible Market (the number of shareswhich may be issued without violating such rules and regulations, the “**Exchange Cap**”), except that such limitation shall not applyin the event that the Company (A) obtains the approval of its stockholders asrequired by the applicable rules of the applicable Eligible Market forissuances of shares of Common Stock in excess of such amount or (B) obtains awritten opinion from outside counsel to the Company that such approval is notrequired, which opinion shall be reasonably 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 Capmultiplied by a fraction, the numerator of which is the total number of sharesof Common Stock underlying the SPA Warrants issued to such Buyer pursuant tothe Securities Purchase Agreement on the Issuance Date and the denominator ofwhich is the aggregate number of shares of Common Stock underlying the SPAWarrants issued to the Buyers pursuant to the Securities Purchase Agreement onthe Issuance 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 

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#### Exchange Cap Allocation allocated to suchtransferee.  In the event that any holderof SPA Warrants shall exercise all of such holder’s SPA Warrants into a numberof shares of Common Stock which, in the aggregate, is less than such holder’sExchange Cap Allocation, then the difference between such holder’s Exchange CapAllocation and the number of shares of Common Stock actually issued to suchholder shall be allocated to the respective Exchange Cap Allocations of theremaining holders of SPA Warrants on a pro rata basis in proportion to theshares of Common Stock underlying the SPA Warrants then held by each suchholder.

### (g)           InsufficientAuthorized Shares.  If at any timewhile any of the Warrants remain outstanding the Company does not have asufficient number of authorized and unreserved shares of Common Stock tosatisfy its obligation to reserve for issuance upon exercise of the Warrants atleast a number of shares of Common Stock equal to 130% of the number of sharesof Common Stock as shall from time to time be necessary to effect the exerciseof all of the Warrants then outstanding (the “**Required Reserve 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.  Inconnection with such meeting, the Company shall provide each stockholder with aproxy statement and shall use its best efforts to solicit its stockholders’approval of such increase in authorized shares of Common Stock and to cause itsboard of directors to recommend to the stockholders that they approve suchproposal.

# 2.     ADJUSTMENT OF EXERCISEPRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjustedfrom time to time as follows:

### (a)   Adjustmentupon Issuance of shares of Common Stock. If and whenever on or after the Subscription Date the Company issues orsells, or in accordance with this Section 2 is deemed to have issued or sold,any shares of Common Stock (including the issuance or sale of shares of CommonStock owned or held by or for the account of the Company, but excluding sharesof Common Stock deemed to have been issued by the Company in connection withany Excluded Securities (as defined in the SPA Securities) for a considerationper share (the “**New Issuance Price**”) less than aprice equal to the Exercise Price in effect immediately prior to such issue orsale or deemed issuance or sale (the “**Applicable Price**”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 numberof shares of Common Stock determined by multiplying the Exercise Price ineffect immediately prior to such adjustment by the number of Warrant Sharesacquirable upon exercise of this Warrant immediately prior to such adjustmentand dividing the product 

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### thereof by theExercise Price resulting from such adjustment. For purposes of determining the adjusted Exercise Price under thisSection 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), the“lowest price per share for which one share of Common Stock is issuable uponexercise of any such Options or upon conversion, exercise or exchange of anyConvertible Securities issuable upon exercise of such Option” shall be equal tothe sum of the lowest amounts of consideration (if any) received or receivableby the Company with respect to any one share of Common Stock upon the grantingor sale of the Option, upon exercise of the Option and upon conversion,exercise or exchange of any Convertible Security issuable upon exercise of suchOption.  No further adjustment of theExercise Price or number of Warrant Shares shall be made upon the actualissuance of such shares of Common Stock or of such Convertible Securities uponthe exercise of such Options or upon the actual issuance of such shares ofCommon Stock upon conversion, exercise or exchange of such ConvertibleSecurities.

###### (ii)           Issuance of Convertible Securities.  If the Company in any manner issues or sellsany Convertible Securities and the lowest price per share for which one shareof Common Stock is issuable upon the conversion, exercise or exchange thereofis less than the Applicable Price, then such share of Common Stock shall bedeemed to be outstanding and to have been issued and sold by the Company at thetime of the issuance or sale of such Convertible Securities for such price pershare.  For the purposes of this Section2(a)(ii), the “lowest price per share for which one share of Common Stock isissuable upon the conversion, exercise or exchange” shall be equal to the sumof the lowest amounts of consideration (if any) received or receivable by theCompany with respect to one share of Common Stock upon the issuance or sale ofthe Convertible 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.

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###### (iii)          Change in Option Price or Rate ofConversion.  If the purchase priceprovided for in any Options, the additional consideration, if any, payable uponthe issue, conversion, exercise or exchange of any Convertible Securities, orthe rate at which any Convertible Securities are convertible into orexercisable or exchangeable for shares of Common Stock increases or decreasesat any time, the Exercise Price and the number of Warrant Shares in effect atthe time of such increase or decrease shall be adjusted to the Exercise Priceand the number of Warrant Shares which would have been in effect at such timehad such Options or Convertible Securities provided for such increased ordecreased purchase price, additional consideration or increased or decreasedconversion rate, as the case may be, at the time initially granted, issued orsold.  For purposes of this Section2(a)(iii), if the terms of any Option or Convertible Security that was outstandingas of the date of issuance of this Warrant are increased or decreased in themanner described in the immediately preceding sentence, then such Option orConvertible 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)          Calculation of Consideration Received.  In case any Option is issued in connectionwith the issue or sale of other securities of the Company, together comprisingone integrated transaction in which no specific consideration is allocated tosuch Options by the parties thereto, the Options will be deemed to have beenissued the difference of (x) the aggregate fair market value of such Optionsand other securities issued or sold in such integrated transaction, less (y)the fair market value of the securities other than such Option, issued or soldin such transaction and the other securities issued or sold in such integratedtransaction will be deemed to have been issued or sold for the balance of theconsideration received by the Company. If any Common Stock, Options or Convertible Securities are issued orsold or deemed to have been issued or sold for cash, the consideration receivedtherefor will be deemed to be the gross amount raised by the Company; provided,however, that such gross amount is not greater than 110% of the net amountreceived by the Company therefor.  If anyshares of Common Stock, Options or Convertible Securities are issued or soldfor a consideration other than cash, the amount of such consideration receivedby the Company will be the fair value of such consideration, except where suchconsideration consists of securities, in which case the amount of considerationreceived by the Company will be the Closing Sale Price of such security on thedate of receipt.  If any shares of CommonStock, Options or Convertible Securities are issued to the owners of thenon-surviving entity in connection with any merger in which the Company is thesurviving entity, 

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###### the amount of consideration therefor will bedeemed to be the fair value of such portion of the net assets and business ofthe non-surviving entity as is attributable to such shares of Common Stock,Options or Convertible Securities, as the case may be.  The fair value of any consideration otherthan cash or securities will be determined jointly by the Company and theRequired Holders.  If such parties areunable to reach agreement within ten (10) days after the occurrence of an eventrequiring valuation (the “**ValuationEvent**”), the fair value of such consideration will be determinedwithin five (5) Business Days after the tenth day following the Valuation Eventby an independent, reputable appraiser jointly selected by the Company and theRequired Holders.  The determination ofsuch appraiser shall be final and binding upon all parties absent manifesterror and the fees and expenses of such appraiser shall be borne by theCompany.

###### (v)           Record Date.  If the Company takes a record of the holdersof shares of Common Stock for the purpose of entitling them (A) to receivea dividend or other distribution payable in shares of Common Stock, Options orin Convertible Securities or (B) to subscribe for or purchase shares ofCommon Stock, Options or Convertible Securities, then such record date will bedeemed to be the date of the issue or sale of the shares of Common Stock deemedto have been issued or sold upon the declaration of such dividend or the makingof such other distribution or the date of the granting of such right ofsubscription or purchase, as the case may be.

### (b)   Adjustmentupon Subdivision or Combination of Common Stock.  If the Company at any time on or after theSubscription Date subdivides (by any stock split, stock dividend,recapitalization or otherwise) one or more classes of its outstanding shares ofCommon Stock into a greater number of shares, the Exercise Price in effectimmediately prior to such subdivision will be proportionately reduced and thenumber of Warrant Shares will be proportionately increased.  If the Company at any time on or after theSubscription Date combines (by combination, reverse stock split or otherwise)one or more classes of its outstanding shares of Common Stock into a smallernumber of shares, the Exercise Price in effect immediately prior to suchcombination will be proportionately increased and the number of Warrant Shareswill be proportionately decreased.  Anyadjustment under this Section 2(b) shall become effective at the close ofbusiness on the date the subdivision or combination becomes effective.

### (c)   OtherEvents.  If any event occurs of thetype contemplated by the provisions of this Section 2 but not expresslyprovided for by such provisions (including, without limitation, the granting ofstock appreciation rights, phantom stock rights or other rights with equityfeatures), then the Company’s Board of Directors will make an appropriateadjustment in the Exercise Price and the number of Warrant Shares so as toprotect the rights of the Holder; provided that no such adjustment pursuant tothis Section 2(c) will increase the Exercise Price or decrease the number ofWarrant Shares as otherwise determined pursuant to this Section 2.

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# 3.     RIGHTS UPON DISTRIBUTIONOF ASSETS.  If the Company shalldeclare or make any dividend or other distribution of its assets (or rights toacquire its assets) to holders of shares of Common Stock, by way of return ofcapital or otherwise (including, without limitation, any distribution of cash,stock or other securities, 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)   anyExercise Price in effect 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 shall be reduced, effective as of theclose of business on such record date, to a price determined by multiplyingsuch Exercise Price by a fraction of which (i) the numerator shall be theClosing Bid Price of the shares of Common Stock on the trading day immediatelypreceding such record date minus the value of the Distribution (as determinedin good faith by the Company’s Board of Directors) applicable to one share ofshares of Common Stock, and (ii) the denominator shall be the Closing Bid Priceof the shares of Common Stock on the trading day immediately preceding suchrecord date; and

### (b)   thenumber of Warrant Shares shall be increased to a number of shares equal to thenumber of shares of Common Stock obtainable immediately prior to the close ofbusiness on the record date fixed for the determination of holders of shares ofCommon Stock entitled to receive the Distribution multiplied by the reciprocalof the fraction set forth in the immediately preceding paragraph (a); providedthat in the event that the Distribution is of shares of Common Stock (or commonstock) (“**Other Shares of Common Stock**”) of acompany whose common shares are traded on a national securities exchange or anational automated quotation system, then the Holder may elect to receive awarrant to purchase Other Shares of Common Stock in lieu of an increase in thenumber of Warrant Shares, the terms of which shall be identical to those ofthis Warrant, except that such warrant shall be exercisable into the number ofshares of Other Shares of Common Stock that would have been payable to theHolder pursuant to the Distribution had the Holder exercised this Warrantimmediately prior to such record date and with an aggregate exercise priceequal to the product of the amount by which the exercise price of this Warrantwas decreased with respect to the Distribution pursuant to the terms of theimmediately preceding paragraph (a) and the number of Warrant Shares calculatedin accordance with the first part of this paragraph (b).

# 4.     PURCHASE RIGHTS; FUNDAMENTALTRANSACTIONS.

### (a)   PurchaseRights.  In addition to anyadjustments pursuant to Section 2 above, if at any time the Company grants,issues or sells any Options, Convertible Securities or rights to purchasestock, warrants, securities or other property pro rata to the record holders ofany class of shares of Common Stock (the “**Purchase Rights**”),then the Holder will be entitled to acquire, upon the terms applicable to suchPurchase Rights, the aggregate Purchase Rights which the Holder could haveacquired if the Holder had held the number of shares of Common Stock acquirableupon complete exercise of this Warrant (without regard to any limitations onthe exercise of this Warrant) immediately before the date on which a record istaken for the grant, issuance or sale of such Purchase Rights, or, if no suchrecord is taken, the date as of 

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### which therecord holders of shares of Common Stock are to be determined for the grant,issue or sale of such Purchase Rights.

### (b)   FundamentalTransactions.  The Company shall not enter into orbe party to a Fundamental Transaction unless (i)  the Successor Entityassumes in writing all of the obligations of the Company under this Warrant andthe other Transaction Documents in accordance with the provisions of this Section(4)(b) pursuant to written agreements in form and substance reasonablysatisfactory to the Required Holders and approved by the Required Holders priorto such Fundamental Transaction, including agreements to deliver to each holderof Warrants inexchange for such Warrants asecurity of the SuccessorEntity evidenced by a written instrument substantially similar in formand substance to this Warrant,including, without limitation, an adjusted exercise price equal to the valuefor the shares of Common Stock reflected by the terms of such FundamentalTransaction, and exercisable for a corresponding number of shares of capitalstock equivalent to the shares of Common Stock acquirable and receivable uponexercise of this Warrant (without regard to any limitations on the exercise ofthis Warrant) prior to such Fundamental Transaction, and reasonablysatisfactory to the Required Holders and(ii) the Successor Entity (including its Parent Entity) is apublicly traded corporation whose common stock is quoted on or listed fortrading on an Eligible Market.  Upon the occurrence of anyFundamental Transaction, the Successor Entity shall succeed to, and besubstituted for (so that from and after the date of such FundamentalTransaction, the provisions of this Warrant referring to the “Company” shallrefer instead to the Successor Entity), and may exercise every right and powerof the Company and shall assume all of the obligations of the Company underthis Warrant with the same effect as if such Successor Entity had been named asthe 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 afterthe consummation of the Fundamental Transaction, in lieu of the shares of theCommon Stock (or other securities, cash, assets or other property) issuableupon the exercise of the Warrantprior to such Fundamental Transaction, such shares of the publiclytraded common stock (or its equivalent) of the Successor Entity (including itsParent Entity) which the Holder would have been entitled to receive upon thehappening of such Fundamental Transaction had this Warrant been convertedimmediately prior to such Fundamental Transaction, as adjusted in accordancewith the provisions of this Warrant.  Inaddition to and not in substitution for any other rights hereunder, prior tothe consummation of any Fundamental Transaction pursuant to which holders ofshares of Common Stock are entitled to receive securities or other assets withrespect to or in exchange for shares of Common Stock (a “**Corporate Event**”), the Company shall makeappropriate provision to insure that the Holder will thereafter have the rightto receive upon an exercise of this Warrant at any time after the consummationof the Fundamental Transaction but prior to the Expiration Date, in lieu of theshares of the Common Stock (or other securities, cash, assets or otherproperty) issuable upon the exercise of the Warrant prior to such Fundamental Transaction,such shares of stock, securities, cash, assets or any other property whatsoever(including warrants or other purchase or subscription rights) which the Holderwould have been entitled to receive upon the happening of such FundamentalTransaction had the Warrant been exercised immediately prior to suchFundamental Transaction.  The provisionsof this Section shall apply similarly and equally to successive FundamentalTransactions and Corporate Events and shall be applied without regard to any limitationson the exercise of this Warrant.

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### (c)   Notwithstandingthe foregoing and the provisions of Section 4(b) above, in the event of aChange of Control, if the Holder has not exercised the Warrant in full prior tothe consummation of the Change of Control, then the Holder shall have the right to require such Successor Entityto purchase this Warrant from the Holder by paying to the Holder,simultaneously with the consummation of the Change of Control and in lieu ofthe warrant referred to in Section 4(b) cash in the amount equal to the valueof the remaining unexercised portion of this Warrant on the date of suchconsummation, which value shall be determined by use of the Black and 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 than 50%, the expected volatility shallbe equal to 50% and (y) greater than 80%, the expected volatility shall beequal to 80%.

# 5.     NONCIRCUMVENTION.  The Company hereby covenants and agrees thatthe Company will not, by amendment of its Certificate of Incorporation, Bylawsor through any reorganization, transfer of assets, consolidation, merger,scheme of arrangement, dissolution, issue or sale of securities, or any othervoluntary action, avoid or seek to avoid the observance or performance of anyof the terms of this Warrant, and will at all times in good faith carry out allthe provisions of this Warrant and take all action as may be required toprotect the rights of the Holder.  Withoutlimiting the generality of the foregoing, the Company (i) shall notincrease the par value of any shares of Common Stock receivable upon theexercise of this Warrant above the Exercise Price then in effect,(ii) shall take all such actions as may be necessary or appropriate inorder that the Company may validly and legally issue fully paid andnonassessable shares of Common Stock upon the exercise of this Warrant, and(iii) shall, so long as any of the SPA Warrants are outstanding, take allaction necessary to reserve and keep available out of its authorized andunissued shares of Common Stock, solely for the purpose of effecting theexercise of the SPA Warrants, 130% of the number of shares of Common Stock asshall from time to time be necessary to effect the exercise of the SPA Warrantsthen outstanding (without regard to any limitations on exercise).

# 6.     WARRANT HOLDER NOT DEEMEDA STOCKHOLDER.  Except as otherwisespecifically provided herein, the Holder, solely in such Person’s capacity as aholder of this Warrant, shall not be entitled to vote or receive dividends orbe deemed the holder of share capital of the Company for any purpose, nor shallanything contained in this Warrant be construed to confer upon the Holder,solely in such Person’s capacity as the Holder of this Warrant, any of therights of a shareholder of the Company or any right to vote, give or withholdconsent to any corporate action (whether any reorganization, issue of stock,reclassification of stock, consolidation, merger, conveyance or otherwise),receive notice of meetings, receive dividends or subscription rights, orotherwise, prior to the issuance to the Holder of the Warrant Shares which suchPerson is then entitled to 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.

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# 7.     REISSUANCE OF WARRANTS.

### (a)   Transferof Warrant.  If this Warrant is to betransferred, the Holder shall surrender this Warrant to the Company, whereuponthe Company will subject to the satisfaction of the transfer provisions of theSecurities Purchase Agreement forthwith issue and deliver upon the order of theHolder a new Warrant (in accordance with Section 7(d)), registered in the nameof the registered transferee or assignee, representing the right to purchasethe number of Warrant Shares being transferred by the Holder and, if less thenthe total number of Warrant Shares then underlying this Warrant is beingtransferred, a new Warrant (in accordance with Section 7(d)) to the Holderrepresenting the right to purchase the number of Warrant Shares not beingtransferred.

### (b)   Lost,Stolen or Mutilated Warrant.  Uponreceipt by the Company of evidence reasonably satisfactory to the Company ofthe loss, theft, destruction or mutilation of this Warrant, and, in the case ofloss, theft or destruction, of any indemnification undertaking by the Holder tothe Company in customary form and, in the case of mutilation, upon surrenderand cancellation of this Warrant, the Company shall execute and deliver to theHolder a new Warrant (in accordance with Section 7(d)) representing the rightto purchase the Warrant Shares then underlying this Warrant.

### (c)   Exchangeablefor Multiple Warrants.  This Warrantis exchangeable, upon the surrender hereof by the Holder at the principaloffice of the Company, for a new Warrant or Warrants (in accordance withSection 7(d)) representing in the aggregate the right to purchase the number ofWarrant Shares then underlying this Warrant, and each such new Warrant willrepresent the right to purchase such portion of such Warrant Shares as isdesignated by the Holder at the time of such surrender; provided, however, thatno Warrants for fractional shares of Common Stock shall be given.

### (d)   Issuanceof New Warrants.  Whenever theCompany is required to issue a new Warrant pursuant to the terms of thisWarrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii)shall represent, as indicated on the face of such new Warrant, the right topurchase the Warrant Shares then underlying this Warrant (or in the case of anew Warrant being issued pursuant to Section 7(a) or Section 7(c), the WarrantShares designated by the Holder which, when added to the number of shares ofCommon Stock underlying the other new Warrants issued in connection with suchissuance, does not exceed the number of Warrant Shares then underlying thisWarrant), (iii) shall have an issuance date, as indicated on the face of suchnew Warrant which is the same as the Issuance Date, and (iv) shall have thesame rights and conditions as this Warrant.

# 8.     NOTICES.  Whenever notice is required to be given underthis Warrant, unless otherwise provided herein, such notice shall be given inaccordance with Section 9(f) of the Securities Purchase Agreement.  The Company shall provide the Holder withprompt written notice of all actions taken pursuant to this Warrant, includingin reasonable detail a description of such action and the reasontherefore.  Without limiting thegenerality of the foregoing, the Company will give written notice to the Holder(i) immediately upon any adjustment of the Exercise Price, setting forth inreasonable detail, and certifying, the calculation of such adjustment and (ii)at least fifteen days prior to the date on which the Company closes its books 

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# or takes a record (A) with respect to any dividend ordistribution upon the shares of Common Stock, (B) with respect to any grants,issuances or sales of any Options, Convertible Securities or rights to purchasestock, warrants, securities or other property to holders of shares of CommonStock or (C) for determining rights to vote with respect to any FundamentalTransaction, dissolution or liquidation, provided in each case that suchinformation shall be made known to the public prior to or in conjunction withsuch notice being provided to the Holder.

# 9.     AMENDMENT AND WAIVER.  No term of this Warrant may be amended,modified or waived unless pursuant to a writing signed by the Company and theRequired Holders; provided that no such action may increase the exercise priceof any SPA Warrant or decrease the number of shares or class of stockobtainable upon exercise of any SPA Warrant without the written consent of theHolder.  No such amendment shall beeffective to the extent that it applies to less than all of the holders of theSPA 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 or arithmeticcalculations via facsimile within two Business Days of receipt of the ExerciseNotice giving rise to such dispute, as the case may be, to the Holder.  If the Holder and the Company are unable toagree upon such determination or calculation of the Exercise Price or theWarrant Shares within three Business Days of such disputed determination orarithmetic calculation being submitted to the Holder, then the Company shall,within two Business Days submit via facsimile (a) the disputed determination ofthe Exercise Price to an independent, reputable investment bank selected by theCompany and approved by the Holder or (b) the disputed arithmetic calculationof the 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 theresults no 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 AND INJUNCTIVE RELIEF.  Theremedies provided in this Warrant shall be cumulative and in addition to allother remedies available under this Warrant and the other TransactionDocuments, at law or in equity (including a decree of specific performanceand/or other injunctive relief), and nothing herein 

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# shall limit the right of the Holder right to pursueactual damages for any failure by the Company to comply with the terms of thisWarrant.  The Company acknowledges that abreach by it of its obligations hereunder will cause irreparable harm to the Holderand that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in theevent of any such breach or threatened breach, the holder of this Warrant shallbe entitled, in addition to all other available remedies, to an injunctionrestraining any breach, without the necessity of showing economic loss andwithout any bond or other security being required.

# 14.   TRANSFER.  This Warrant may be offered for sale, sold,transferred or assigned without the consent of the Company, except as mayotherwise be required by Section 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) any reorganization,recapitalization or reclassification of the Common Stock or businesscombination in which the Company is the publicly traded surviving entity inwhich the holders of the Company’s voting power immediately prior to suchreorganization, recapitalization or reclassification or business combinationcontinue after such reorganization, recapitalization or reclassification orbusiness combination to hold publicly traded securities and, directly orindirectly, the voting power of the surviving entity or entities necessary toelect a majority of the members of the board of directors (or their equivalentif other than a corporation) of such entity or entities (except whereApollo Resources International or its affiliates becomes the “beneficial owner”(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of70% or greater of the aggregate Voting Stock of the Company), or (ii) pursuant to a migratorymerger effected solely for the purpose of changing the jurisdiction ofincorporation 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 

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### market makersfor such security as reported in the “pink sheets” by Pink Sheets LLC (formerlythe National Quotation Bureau, Inc.).  Ifthe Closing Bid Price or the Closing Sale Price cannot be calculated for asecurity on a particular date on any of the foregoing bases, the Closing BidPrice or the Closing Sale Price, as the case may be, of such security on suchdate shall be the fair market value as mutually determined by the Company andthe Holder.  If the Company and theHolder are unable to agree upon the fair market value of such security, thensuch dispute shall be resolved pursuant to Section 12.  All such determinations to be appropriatelyadjusted for any stock dividend, stock split, stock combination or othersimilar transaction during the 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.

## 15.2.        “**Fundamental Transaction**” means that theCompany shall, directly or indirectly, in one or more related transactions, (i)consolidate or merge with or into (whether or not the Company is the survivingcorporation) another Person or Persons, or (ii) sell, assign, transfer, conveyor otherwise dispose of all or substantially all of the properties or assets ofthe Company to another Person, or (iii) allow another Person to make apurchase, tender or exchange offer that is accepted by the holders of more than50% of the outstanding shares of Voting Stock (not including any shares ofVoting Stock held by the Person or Persons making or party to, or associated oraffiliated with the Persons making or party to, such purchase, tender orexchange offer), or (iv) consummate a stock purchase agreement or otherbusiness combination (including, without limitation, a reorganization,recapitalization, spin-off or scheme of arrangement) with another Personwhereby such other Person acquires more than the 50% of the outstanding sharesof Voting Stock (not including any shares of Voting Stock held by the otherPerson or other Persons making or party to, or associated or affiliated withthe other Persons making or party to, such stock purchase agreement or otherbusiness combination), or (v) reorganize, recapitalize or reclassify its CommonStock or (vi) any “person” or “group” (as these terms are used for purposes ofSections 13(d) and 14(d) of the Exchange Act) (other than Apollo ResourcesInternational) is or shall become the “beneficial owner” (as defined in Rule13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregateVoting Stock of the Company, or (vii) Apollo Resources International ceases to bethe “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),directly or indirectly, of at least 50% of the aggregate Voting Stock of theCompany, or (viii) Apollo Resources International or its affiliates becomes 

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## the“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directlyor indirectly, of 70% or greater of the aggregate Voting Stock of the Company.

### (a)           [**Insert in Additional Warrant**: “**Maximum Eligibility Number**” means initiallyzero and shall be increased each time the Company elects a Mandatory Conversion(as defined in the Notes) pursuant to the Holders’ Notes by an amount equal to50% of the number of Conversion Shares (as defined in the Securities PurchaseAgreement) issued in connection with such Mandatory Conversion.]

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

### (c)   “**Parent Entity**” of a Person means an entity that, directly or indirectly, controls the applicablePerson and whose common stock or equivalent equity security is quoted orlisted on an Eligible Market,or, if there is more than one such Person or Parent Entity, the Person orParent Entity with the largest public market capitalization as of the date ofconsummation of the Fundamental Transaction.

### (d)   “**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.

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

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

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

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

### (i)    “**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 Registrar & Transfer Co.****toissue the above indicated number of shares of Common Stock in accordance withthe Transfer Agent Instructions dated August   , 2006 from theCompany and acknowledged and agreed to by Registrar & Transfer Co.
| ** ** | **EARTH BIOFUELS, INC.** |
|------------|--------------------------|
| ** ** | ** **               |
| ** ** | ** **               |
|       | By:                      |   |   |
|       | Name:                    |
|       | Title:                   |

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Warrant Shares ExerciseLog
| 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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