Document:

ISORAY, INC.

 

Second
Amended and Restated Series C Warrant To Purchase Common

Stock

 

Warrant No.: C-1/A2

Number of Shares of Common Stock: up to
2,812,500

Date of Issuance: November 24, 2010 ("Issuance
Date")

Date of Amendment and Restatement: December
27, 2010

Date of Second Amendment and Restatement:
March 31, 2011

 

IsoRay, Inc., a Minnesota
a corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, __________________, 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 the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the "Warrant"),
at any time or times on or after the date hereof (the “Initial Exercisability Date”), but not after 11:59 p.m.,
New York time, on the Expiration Date (as defined below), TWO MILLION EIGHT HUNDRED TWELVE THOUSAND FIVE HUNDRED (2,812,500) 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 Section 17. This Warrant (the "SPA
Warrant") amends, supplements, modifies and completely restates and supersedes the Warrant dated as of the Issuance Date
and the Amended and Restated Series C Warrant to Purchase Common Stock dated as of December 27, 2010 (as amended and restated,
the "Existing Warrant"), issued by the Company to the Holder for the exercise of TWO MILLION EIGHT HUNDRED TWELVE
THOUSAND FIVE HUNDRED (2,812,500) shares of Common Stock but shall not, except as specifically amended hereby, constitute a release,
satisfaction or novation of any of the obligations under the Existing Warrants or any other Transaction Document (as defined in
the Securities Purchase Agreement, dated as of November 22, 2010 (the "Subscription Date"), 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 date hereof, in whole or in part, by (i) delivery
to the Company of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), of
the Holder's election to exercise this Warrant and (ii) either (A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise
Price") in cash or by wire transfer of immediately available funds or (B) by notifying the Company that this Warrant is
being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before the first (1st) Trading Day following the
date on which the Company has received the Exercise Notice (such date, the "Exercise Date"), the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer
agent (the "Transfer Agent"). On or before the third (3rd) Trading Day following the date on which
the Company has received the Exercise Notice (the "Share Delivery Date"), so long as the Holder delivers the Aggregate
Exercise Price (or notice of Cashless Exercise) on or prior to the Share Delivery Date, the Company shall (X) provided that the
Transfer Agent is participating 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 entitled pursuant to such
exercise to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal At Custodian system, or (Y)
if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a certificate, registered in the Company's share register in the name
of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
For the avoidance of doubt, the Company's failure to comply with its obligations in the immediately preceding sentence shall constitute
a breach of this Warrant and the Holder shall be entitled to all damages incurred as a result of such breach, including, without
limitation, any buy-in damages. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and
expenses with respect to the issuance of Warrant Shares via DTC, if any. Upon delivery of the Exercise Notice, so long as the Holder
delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the Share Delivery Date, the Holder shall
be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery
of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later
than three (3) Trading Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 8(d)) representing
the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number
of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole
number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant.

 

(b)   Exercise
Price. For purposes of this Warrant, "Exercise Price" means the lower of (i) $1.50 (subject to adjustment
for stock splits, stock dividends, recapitalizations, reorganizations, reclassification, combinations, reverse stock splits or
other similar events), subject to adjustment as provided herein and (ii) ninety percent (90%) of the arithmetic average of the
lowest three (3) Weighted Average Prices of the Common Stock during the fifteen (15) consecutive Trading Days immediately preceding
the applicable Exercise Date.

 

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(c)   [Intentionally
Omitted]

 

(d)   Cashless
Exercise.  Notwithstanding anything contained herein to the contrary, if the Registration Statement (as defined in the
Securities Purchase Agreement) covering the Warrant Shares that are the subject of the Exercise Notice (the "Unavailable
Warrant Shares") is not available for the issuance and resale of such Unavailable Warrant Shares, the Holder may, in its
sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise
the "Net Number" of shares of Common 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 which this Warrant is then being exercised.

 

B= the
Weighted Average Price of the Common Stock (as reported by Bloomberg) for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise Notice.

 

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

 

(e)   Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 13.

 

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(f)   Limitations
on Exercises; 

 

(1)   Beneficial
Ownership. The Company shall not effect the exercise of this 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 (together with such Person's affiliates) would beneficially
own in excess of 9.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after
giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by such Person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned
by such Person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"). For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company's
most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission,
as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request
of the Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including the SPA Warrants, by the Holder and its affiliates since the
date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may
from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such
notice; provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice
is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of
SPA Warrants. The provisions of this paragraph shall be construed and implemented in a manner other than in strict conformity with
the terms of this Section 1(f) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation.

 

(2)   Principal
Market Regulation. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant and
no Buyer shall be entitled to receive any shares of Common Stock if the issuance of such shares of Common Stock would exceed that
number of shares of Common Stock which the Company may issue pursuant to the Securities Purchase Agreement and upon exercise of
the SPA Warrants or otherwise without breaching the Company's obligations under the rules or regulations of any applicable Eligible
Market (the "Exchange Cap"), except that such limitation shall not apply in the event that the Company obtains
the approval of its shareholders as required by the applicable rules of the Eligible Market for issuances of shares of Common Stock
in excess of such amount. Until such approval is obtained, no Buyer shall be issued in the aggregate, upon exercise or conversion,
as applicable, of any SPA Warrants, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied
by a fraction, the numerator of which is the total number of shares of Common Stock underlying the SPA Warrants issued to such
Buyer pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of which is the aggregate number of
shares of Common Stock underlying the SPA Warrants issued to all of the Buyers pursuant to the Securities Purchase Agreement on
the Issuance Date (with respect to each Buyer, the "Exchange Cap Allocation"). In the event that any Buyer shall
sell or otherwise transfer any of such Buyer's SPA Warrants, the transferee shall be allocated a pro rata portion of such Buyer's
Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion
of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of SPA Warrants shall exercise all of
such holder's SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than such holder's Exchange
Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares of Common Stock actually
issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders of SPA Warrants on
a pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by each such holder.

 

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(g)   Insufficient
Authorized Shares. If at any time while any of the Warrants remain outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the Warrants
at least the maximum number of shares of Common Stock equal to the number of shares of Common Stock as shall from time to time
be necessary to effect the exercise of all of the Warrants then outstanding (the "Required Reserve Amount") (an
"Authorized Share Failure"), then the Company shall immediately take all action necessary to increase the Company's
authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Warrants
then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure,
the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best
efforts to solicit its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors
to recommend to the stockholders that they approve such proposal.

 

2.   ADJUSTMENT
OF EXERCISE PRICE. The Exercise Price shall be adjusted from time to time as follows:

 

(a)   Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

(b)   Adjustment
upon Subdivision or Combination of shares 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 more classes of its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date
combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective
at the close of business on the date the subdivision or combination becomes effective.

 

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(c)   Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c)
will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

 

(d)   No
Dilutive Issuances. The Company shall not, on or after the Subscription Date, effect any Dilutive Issuance without the prior
written consent of the Holder determined in its sole discretion. As used herein, the term "Dilutive Issuance"
shall mean any issuance or sale of any Common Stock (including the issuance or sale of shares of Common Stock owned or held by
or for the account of the Company, but excluding shares of Common Stock deemed to have been issued by the Company in connection
with any Excluded Securities (as defined in the Securities Purchase Agreement)) for a consideration per share less than a price
equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale.

 

(e)   For
purposes of determining what constitutes a Dilutive Issuance, the following shall be applicable:

 

(i)   Issuance
of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For
purposes of this Section 2(e)(i), the "lowest price per share for which one share of Common Stock is issuable upon exercise
of any such Options or upon conversion, exercise or exchange of any such Convertible Securities issuable upon exercise of such
Option" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration paid or payable by
the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option. It shall not be deemed
to be a further Dilutive Issuance upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon
the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of
such Convertible Securities.

 

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(ii)   Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(e)(ii),
the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof"
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such
Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock upon
the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security. It shall
not be deemed to be a further Dilutive Issuance upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options which constituted a Dilutive Issuance pursuant to other provisions of this Section 2(e), no further Dilutive Issuance
shall be deemed to occur by reason of such issue or sale.

 

(iii)   Change
in Option Price or Rate of Conversion. For purposes of this Section 2, if the terms of any Option or Convertible Security that
was outstanding as of the date of issuance of this Warrant are amended or modified in any manner, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such amendment or modification.

 

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(iv)   Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value and (y)
the other securities issued or sold in such integrated transaction shall be deemed to have been issued for the difference of (I)
the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the
net amount received or receivable by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are
issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value
of such consideration, except where such consideration consists of securities, in which case the amount of consideration received
by the Company will be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company
is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. No less than fifteen days prior to the Company proposing to issue or sell any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common
Stock deemed to have been issued by the Company in connection with any Excluded Securities), or taking such action as would be
deemed an issuance or sale in accordance with Section 2, the Company shall notify the Holder, in writing, of: (x) such a proposed
issuance or sale (or deemed issuance or sale), and (y) the Company's arithmetic calculation of the fair value of consideration
to be received in connection with such proposed issuance or sale. The fair value of any consideration other than cash or securities
will be determined jointly by the Company and the Required Holders. If such parties are unable to reach agreement on or prior to
the tenth (10th) day prior to the occurrence of an event requiring valuation (the "Valuation Event"), the fair value
of such consideration will be determined within five (5) Trading Days after the tenth (10th) day preceding the Valuation Event
by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by
the Company.

 

(v)   Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.

 

3.   RIGHTS
UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend 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 other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance
of this Warrant, then, in each such case, upon an exercise of this Warrant, in whole or in part, the Holder will be entitled to
receive the amount of any such Distribution that the Holder would have received if the Holder had held, immediately before the
date on which a record is taken for the declaration or payment of the Distribution, or, if no such record date is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the declaration or payment of the Distribution,
the number of shares of Common Stock that the Holder is entitled to receive upon such exercise (without taking into account any
limitations or restrictions on the convertibility of this Warrant).

 

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4.   PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

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

 

(b)   Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section (4)(b) pursuant to written agreements in form and substance satisfactory to the Required Holders and
approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of Warrants
in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for the shares of Common
Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock
equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations
on the exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders. Upon the occurrence
of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant referring to the "Company" shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of
the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise
of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of the publicly traded common stock or common shares (or its equivalent) of the Successor Entity (including its Parent Entity)
which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been converted
immediately prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. In addition to
and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares
of Common Stock (a "Corporate Event"), the Company shall make appropriate provision to insure that the Holder
will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Corporate
Event but prior to the Expiration Date, in lieu of shares of Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Corporate Event, such shares of stock, securities, cash, assets or
any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled
to receive upon the happening of such Corporate Event had this Warrant been exercised immediately prior to such Corporate Event.
Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Required Holders.
The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and
shall be applied without regard to any limitations on the exercise of this Warrant.

 

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(c)   Notwithstanding
the foregoing and the provisions of Section 4(b) above, in the event of a Fundamental Transaction, at the request of the Holder
delivered before the ninetieth (90th) day after the consummation of such Fundamental Transaction, the
Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business
Days after a request therefor (or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal
to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such Fundamental Transaction.

 

5.   FORCED
EXERCISE. At any time twenty (20) Trading Days prior to the six (6) month anniversary of the Issuance Date (the "Eligibility
Date"), the Company may, by delivering a notice to the Holder at least twenty (20) Trading Days prior to any proposed
Forced Exercise Date (as defined below) (a "Forced Exercise Notice" and the date such notice is received by the
Holder, the "Forced Exercise Notice Date"), of its irrevocable election to require the exercise of up to 562,250
Warrant Shares. The Company shall set forth the number of Warrant Shares to which the forced exercise relates in the Forced Exercise
Notice (the "Forced Exercise Share Number"). The date of such forced exercise shall be the twentieth (20th) Trading
Day following the Forced Exercise Notice Date (the "Forced Exercise Date"). The Company may only deliver a Forced
Exercise Notice if each of the following shall be true: (i) there is no Equity Conditions Failure (unless the Holder has waived
such Equity Conditions Failure) and (ii) prior to the Forced Exercise Notice Date (A) the arithmetic average of the Weighted Average
Price of the Common Stock for twenty (20) consecutive Trading Days occurring after the Issuance Date (the "Forced Exercise
Measuring Period") shall exceed $2.55 (subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations,
reclassification, combinations, reverse stock splits or other similar events) and (B) the number of shares traded on each Trading
Day during the Forced Exercise Measuring Period is greater than 30% of the Forced Exercise Share Number (clauses (i) and (ii),
the "Forced Exercise Conditions"). A Forced Exercise Notice may not be given more than two (2) Trading Days after
satisfaction of Forced Exercise Conditions and each Forced Exercise Notice shall certify that the Forced Exercise Conditions have
been satisfied. The forced exercise thereunder may only occur on the Forced Exercise Date if each of the following shall be true:
(i) there is no Equity Conditions Failure (unless the Holder has waived such Equity Conditions Failure) and (ii) (A) the arithmetic
average of the Weighted Average Price of the Common Stock shall exceed $2.55 (subject to adjustment for stock splits, stock dividends,
recapitalizations, reorganizations, reclassification, combinations, reverse stock splits or other similar events) for twenty (20)
consecutive Trading Days immediately prior to the Forced Exercise Date (the "Forced Exercise Bring Down Measuring Period")
and (B) the number of shares traded on each Trading Day during the Forced Exercise Bring Down Measuring Period is greater than
30% of the Forced Exercise Share Number (clauses (i) and (ii), the "Forced Exercise Bring Down Conditions"). The
Company shall deliver to the Holder a notice no later than 10:00 a.m., New York time, on the Forced Exercise Date (the "Bring-Down
Notice"), which notice shall certify whether or not the Forced Exercise Bring Down Conditions have been satisfied. If
the Forced Exercise Bring Down Conditions have not been satisfied at such time (and are not waived by the Holder), the Forced Exercise
Notice will be null and void, ab initio. Notwithstanding the foregoing, nothing in this subsection shall prevent the Holder from
exercising this Warrant, in whole or part, on or prior to the Forced Exercise Date. The Company covenants and agrees that it will
honor all Exercise Notices tendered from the time of delivery of the Forced Exercise Notice through the Forced Exercise Date. Upon
an Equity Conditions Failure, the Holder may revoke any Exercise Notice delivered after the Forced Exercise Notice is received
by the Holder and the Company, within one (1) Business Day of such revocation, shall return the Aggregate Exercise Price applicable
to any such Exercise Notice(s) to the Holder by wire transfer of immediately available funds and any Warrants so exercised shall
be deemed reinstated and returned to the Holders, if applicable.

 

    	- 10 -

    	 

    

 

 

6.   NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all
such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of the SPA Warrants, the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

 

7.   WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything 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 the rights of a stockholder of the Company or any right to vote, give or withhold
consent 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, or otherwise, prior to the issuance
to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

    	- 11 -

    	 

    

 

8.   REISSUANCE
OF WARRANTS.

 

(a)   Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 8(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
8(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)   Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)   Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 8(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional
shares of Common Stock shall be given.

 

(d)   Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, 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 to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a)
or Section 8(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

9.   NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Exercise Price, setting forth in reasonable 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 or takes a record (A) with respect to any dividend or distribution
upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to
vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall
be made known to the public prior to or in conjunction with such notice being provided to the Holder.

 

    	- 12 -

    	 

    

 

 

10.   AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Required Holders; provided that no such action may increase the exercise price of any SPA Warrant or decrease
the number of shares or class of stock obtainable upon exercise of any SPA Warrant without the written consent of the Holder. No
such amendment shall be effective to the extent that it applies to less than all of the holders of the SPA Warrants then outstanding.

 

11.   GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York.

 

12.   CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.

 

13.   DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days
of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two Business
Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected
by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent,
outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the
time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation,
as the case may be, shall be binding upon all parties absent demonstrable error.

 

    	- 13 -

    	 

    

14.   REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

15.   TRANSFER.   This
Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

 

16.   SEVERABILITY.   If
any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

17.   CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)   "Black
Scholes Value" means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the "OV"
function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction
for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to 100%, (iii) the underlying
price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value
of any non -cash consideration, if any, being offered in the Fundamental Transaction and (iv) a 360 day annualization factor.

 

(b)   "Bloomberg"
means Bloomberg Financial Markets.

 

(c)   "Business
Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

    	- 14 -

    	 

    

(d)   "Closing
Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 13. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during the applicable calculation period.

 

(e)   "Common
Stock" means (i) the Company's shares of Common Stock, par value $0.001 per share, and (ii) any share capital
into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

 

(f)   "Convertible
Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(g)   "Eligible
Market" means the Principal Market, The New York Stock Exchange, Inc., The NASDAQ Global Select Market, The NASDAQ Global
Market or The NASDAQ Capital Market.

 

    	- 15 -

    	 

    

(h)   "Equity
Conditions" means (i) the period beginning on the date of thirty (30) Trading Days prior to the applicable date of determination
and ending on and including the applicable date of determination (the "Equity Conditions Measuring Period"), all
of the shares of Common Stock issuable hereunder and pursuant to the other SPA Warrants shall be able to be issued and resold
without restriction or limitation either (x) pursuant to the Registration Statement or (y)
without the need for registration under any applicable federal or state securities laws, including
without the requirement to be subject to Rule 144(c)(1), (ii) on each day during the Equity Conditions Measuring Period,
the Common Stock is designated for quotation on the Principal Market or any other Eligible Market
and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or
market been threatened or pending either (A) in writing by such exchange or market or (B) by falling below the then effective minimum
listing maintenance requirements of such exchange or market; (iii) during the Equity Conditions Measuring Period, the Company shall
have delivered shares of Common Stock upon exercise of the SPA Warrants to the holders on a timely basis as set forth in Section
1(a) of the SPA Warrants; (iv) any applicable shares of Common Stock to be issued in connection
with the event requiring determination may be issued in full without violating the rules or regulations of the Principal Market
or any applicable Eligible Market or Section 1(f) hereof; (v) during the Equity Conditions Measuring Period, the Company shall
not have failed to timely make any payments within five (5) Business Days of when such payment is due pursuant to any Transaction
Document (as defined in the Securities Purchase Agreement); (vi) during the Equity Conditions Measuring Period, there shall not
have occurred the public announcement of a pending, proposed or intended Fundamental Transaction which has not been abandoned,
terminated or consummated, (vii) the Company shall have no knowledge that of any fact that would cause
either (x) the Registration Statement not to be effective and available for the issuance and resale of all shares of Common Stock
issuable hereunder and pursuant to the other SPA Warrants or (y) any Warrant Shares not to be eligible for issuance and sale pursuant
to Rule 144 without restriction or limitation, including without the requirement to be subject to Rule 144(c)(1), and without the
need for registration under any applicable federal or state securities laws, as applicable; and (viii) the Company otherwise
shall have been in compliance with and shall not have breached any provision, covenant, representation or warranty of any Transaction
Document.

 

(i)   "Equity
Conditions Failure" means that during the period commencing on the first (1st) Trading Day
of the Forced Exercise Measuring Period through the Forced Exercise Date, the Equity Conditions have not been satisfied (or waived
in writing by the Holder).

 

(j)   "Expiration
Date" means the date sixty (60) months after the Initial Exercisability Date, or, if such date falls on a day other than
a Business Day or on which trading does not take place on the Principal Market (a "Holiday"), the next date that
is not a Holiday.

 

(k)   "Fundamental
Transaction" means that (i) the Company shall, directly or indirectly, in one or more related transactions, (A) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person, or (B) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (C) allow
another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated
or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (D) consummate a stock purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock purchase agreement or other business combination), or (E) reorganize, recapitalize
or reclassify its Common Stock, or (ii) any "person" or "group" (as these terms are used for purposes of Sections
13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock.

 

    	- 16 -

    	 

    

 

 

(l)   "Options"
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(m)   "Option
Value" means the value of an Option based on the Black and Scholes Option Pricing model obtained from the "OV"
function on Bloomberg determined as of the day prior to the public announcement of the applicable Option for pricing purposes and
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the
applicable Option as of the applicable date of determination, (ii) an expected volatility equal to 100%, (iii) the underlying price
per share used in such calculation shall be the highest Weighted Average Price during the period beginning on the day prior to
the execution of definitive documentation relating to the issuance of the applicable Option and the public announcement of such
issuance and (iv) a 360 day annualization factor.

 

(n)   "Parent
Entity" of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(o)   "Person"
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

(p)   "Principal
Market" means the NYSE Amex Equities.

 

(q)   "Required
Holders" means the holders of the SPA Warrants representing at least a majority of shares of Common Stock underlying the
SPA Warrants then outstanding.

 

(r)   "Successor
Entity" means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.

 

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

 

    	- 17 -

    	 

    

(t)   "Weighted
Average Price" means, for any security as of any date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading) as reported by Bloomberg through its "Volume at Price" functions,
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading) as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on
any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 13 with the term "Weighted Average Price" being substituted
for the term "Exercise Price." All such determinations are to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation period.

 

[Signature Page Follows]

 

    	- 18 -

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	ISORAY, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT A

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

ISORAY, INC.

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of IsoRay,
Inc., a Minnesota corporation (the "Company"), evidenced by the attached Warrant to Purchase Common Stock (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth
in the Warrant.

 

1. Form of Exercise
Price. The Holder intends that 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. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.

 

3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.

 

	Date: _______________ __, ______	 
	 	 
	 	 
	Name of Registered Holder	 
	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

    	 

    	 

    

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice and hereby directs Computershare Trust Company, N.A.
to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated November
22, 2010 from the Company and acknowledged and agreed to by Computershare Trust Company, N.A..

 

	 	ISORAY, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:EXHIBIT 10.1

 

THIRD SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

 

This THIRD SUPPLEMENT
TO THE MASTER LOAN AGREEMENT (this “Third Supplement”), is entered into as of August 2, 2012, by and between
COBANK, ACB (“CoBank”) and WARWICK VALLEY TELEPHONE COMPANY (the “Borrower”),
and supplements the Master Loan Agreement, dated as of February 18, 2003, by and between CoBank and the Borrower (as the same has
been amended on the date hereof and as the same may be amended, modified, supplemented, extended or restated from time to time,
the (“MLA”)). Capitalized terms used and not otherwise defined in this Third Supplement shall have the meanings
assigned to them in the MLA.

 

SECTION 1.
The Revolving Loan. On the terms and conditions set forth in the MLA and this Third Supplement, CoBank agrees to make
one or more advances (collectively, the “Loan”) to the Borrower during the Availability Period (as hereinafter
defined in Section 3 hereof) in an aggregate principal amount outstanding at any one time not to exceed $10,000,000 (the “Commitment”).
The Commitment shall expire at 11:00 am Mountain time on August 2, 2013 (the “Maturity Date”). 
Under the Commitment, amounts borrowed and later prepaid may be reborrowed during the Availability Period.

 

SECTION 2.
Purpose. The proceeds of the Loan shall be used by the Borrower to (A) finance capital expenditures, working capital and
general corporate expenditures of the Borrower, including acquisitions expressly permitted by CoBank in writing, and (B) pay the
expenses and fees incurred by the Borrower in connection with the closing of the Loan. The Borrower agrees that the proceeds of
the Loan shall be used only for the purposes set forth in this Section 2.

 

SECTION 3.
Availability. Subject to Sections 2 and 5 of the MLA and Section 9 hereof, during the period commencing on the date on which
all conditions precedent to the initial advance under the Loan were satisfied (the “Closing Date”) and
ending on the Business Day immediately preceding the Maturity Date (the “Availability Period”), advances
under the Loan shall be made as provided in the MLA.

 

SECTION 4.
Interest.

 

(A)         Rate
Options; Etc. The unpaid principal balance of the Loan shall accrue interest at the rate or rates determined or selected by
the Borrower in accordance with this Section 4(A).

 

    	 

    	 

    

 

(1)         Weekly
Quoted Rate Option (Variable Rate Option). As to any portion of the unpaid principal balance of the Loan selected by
the Borrower (any such portion, and any portion selected pursuant to Section 4(A)(2) hereof, is hereinafter referred to as a “Portion”
of the Loan), interest shall accrue pursuant to this variable rate option at a variable annual
interest rate (the “Variable Rate”) equal at all times to the rate of interest established for the Borrower
by CoBank in CoBank’s sole and absolute discretion on the first Business Day of each week. The rate of interest so established
by CoBank will be effective from and including the first Business Day of each week to and excluding the first Business Day of the
next week. Each change in the Variable Rate shall be applicable to the Portion of the Loan subject to this option and information
about the then current Variable Rate shall be made available upon telephonic request.

 

(2)         LIBOR
Option. As to any Portion or Portions of the Loan selected by the Borrower, interest shall accrue pursuant to this LIBOR option
at a fixed rate per annum equal to LIBOR (as hereinafter defined in this Section 4(A)(2)) plus 4.50%. Under this option: (i) rates
may be fixed for Interest Periods (as hereinafter defined in this Section 4(A)(2)) of one, two, three, or six months, as selected
by the Borrower; (ii) amounts fixed shall be in increments of $100,000 or multiples thereof; and (iii) rates may only be fixed
on a Banking Day (as hereinafter defined in this Section 4(A)(2)) on three Banking Days’ prior written notice.  “LIBOR”
means the rate (rounded upward to the nearest thousandth and adjusted for reserves required on
Eurocurrency Liabilities (as hereinafter defined in this Section 4(A)(2)) for banks subject to FRB Regulation D (as hereinafter
defined in this Section 4(A)(2)) or required by any other federal law or regulation)), as quoted by the BBA at 11:00 a.m. London
time and published by Bloomberg, on the date the Borrower elects to fix a rate under this option for the offering of U.S. dollar
deposits in the London interbank market for the Interest Period designated by the Borrower, as published by Bloomberg or another
major information vendor listed on BBA’s official website. “Banking Day” shall mean a day on which
CoBank is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England. “Interest Period” shall mean the time period
chosen by the Borrower during which the chosen fixed rate is to apply to a Portion of the Loan, which period commences on the day
a rate fixed under Section 4(A)(4) hereof becomes effective. The Interest Period for Portions accruing interest at the LIBOR
option shall end on the day in the next calendar month or in the month that is two, three or six months thereafter which corresponds
numerically with the day the Interest Period commences; provided, however, that: (a) in the event such ending day
is not a Banking Day, such period shall be extended to the next Banking Day unless such next Banking Day falls in the next calendar
month, in which case it shall end on the preceding Banking Day; and (b) if there is no numerically corresponding day in the month,
then such period shall end on the last Banking Day in the relevant month. No Interest Period shall extend beyond the Maturity Date.
“Eurocurrency Liabilities” has the meaning as set forth in FRB Regulation D. “FRB Regulation
D” means Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended from time to time.

 

Upon the occurrence and during
the continuance of a Potential Default or an Event of Default, as the Interest Periods for Portions of the Loan accruing interest
at a LIBOR option expire, at CoBank’s option in its sole and absolute discretion and upon notice to the Borrower, such Portions
of the Loan shall be converted to the Variable Rate option and the LIBOR option will not be available to the Borrower until all
Potential Defaults or Events of Default are no longer continuing.

 

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(3)         Rate
Combinations. Notwithstanding the foregoing, at any one time there may be no more than a total of five Portions of the
Loan accruing interest pursuant to any fixed rate option.

 

(4)         Selection
and Changes of Rates. The Borrower shall select the rate option or options applicable to any Portion of the Loan at the time
it requests such Portion of the Loan. Thereafter, with respect to Portions of the Loan accruing interest at the Variable Rate,
the Borrower may, on any Business Day, subject to Section 4(A)(2) hereof, elect to have the LIBOR option apply to such Portion.
In addition, with respect to any Portion of the Loan accruing interest pursuant to the LIBOR option, the Borrower may, subject
to Section 4(A)(2) hereof, on the last day of the Interest Period for such Portion, elect to fix the interest rate accruing on
such Portion for another Interest Period pursuant to the LIBOR option. From time to time the Borrower may elect, on a Business
Day prior to the expiration of the Interest Period for any Portion of the Loan accruing interest pursuant to the LIBOR option,
and upon payment of the applicable Surcharge (as defined in, and calculated pursuant to, Section 6 hereof) to convert all, but
not part, of such Portion of the Loan so that it accrues interest at the Variable Rate or a combination of the Variable Rate and
the LIBOR option, for a new Interest Period or Interest Periods selected in accordance with Section 4(A)(2) hereof. Except for
the initial selection, all interest rate selections provided for herein shall be made by telephonic or written request of an authorized
employee of the Borrower by 12:00 noon, Eastern time, on the relevant day; in the case of Loans under the LIBOR option, all such
elections must be made in writing. In taking actions upon telephonic requests, CoBank shall be entitled to rely on (and shall incur
no liability to the Borrower in acting upon) any request made by a person identifying himself or herself as one of the persons
authorized by the Borrower to request the Loan or select interest rates hereunder so long as any funds advanced are wired to an
account previously designated by the Borrower.

 

(5)         Accrual
of Interest. Interest shall accrue pursuant to the LIBOR option from and including the first day of the applicable Interest
Period to but excluding the last day of the Interest Period. If the Borrower elects to refix the interest rate on any Portion of
the Loan accruing interest pursuant to one of the LIBOR option pursuant to Section 4(A)(4) hereof, the first day of the new Interest
Period shall be the last day of the preceding Interest Period. In the absence of any such election, interest shall accrue on such
Portion at the Variable Rate from and including the last day of such Interest Period. If the Borrower elects to convert from the
LIBOR option to the Variable Rate option pursuant to Section 4(A)(4) hereof upon payment of the applicable Surcharge as provided
in Section 6 hereof, interest at the applicable LIBOR shall accrue through the day before such conversion and either (i) the
first day of any new Interest Period shall be the date of such conversion, or (ii) interest at the Variable Rate shall accrue on
the Portion of the Loan so converted from and including the date of conversion.

 

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(B)         Payment
and Calculation. The Borrower shall pay interest on the Loan quarterly in arrears on the 20th day of each January, April, July
and October, commencing on October 20, 2012, upon any prepayment (whether due to acceleration or otherwise) and on the Maturity
Date; provided, however, in the event that the Borrower elects to fix all or a portion of the Loan under the LIBOR option,
interest shall be payable at the maturity of the applicable Interest Period, or, if such Interest Period exceeds three (3) months,
interest on such Portion shall be payable in arrears on each quarterly anniversary date of the date such Portion was fixed under
the LIBOR option. Interest shall be calculated on the actual number of days the Loan, or any part thereof, is outstanding on the
basis of a year consisting of 360 days. In calculating accrued interest, the date the Loan is made shall be included and the date
any principal amount of the Loan is repaid or prepaid shall be excluded as to such amount.

 

SECTION 5.
 Loan Fees.

 

(A)         Commitment
Fee. During the period commencing on the date hereof and ending on the Maturity Date, the Borrower shall pay to CoBank a commitment
fee on the average daily unused portion of the Commitment at a rate of 0.500% per annum (calculated on a 360-day basis), payable
quarterly in arrears on the 20th day of each January, April, July and October, commencing on October 20, 2012.

 

(B)         Origination
Fee. In consideration of the Commitment, the Borrower shall pay to CoBank a non-refundable origination fee in the amount of
$62,500, which shall be paid in full on the date hereof.

 

SECTION 6.
Prepayment and Surcharge. The Borrower may, (i) on any Business Day prepay in full or in part any Portion of the Loan
accruing interest at the Variable Rate, and (ii) on two (2) Business Day’s prior written notice prepay in full or in part
any Portion of the Loan accruing interest at pursuant to the LIBOR option. Notwithstanding the foregoing, the Borrower’s
right to prepay any amount accruing interest at pursuant to a fixed rate option (whether such payment is made voluntarily, as a
result of an acceleration, or otherwise) shall be conditioned upon the payment of a prepayment Surcharge as defined and calculated
below. For purposes of calculating the Surcharge provided for in this Section 6, early conversion of a Portion of the Loan accruing
interest pursuant to the LIBOR option so that it accrues interest at a different rate pursuant to Section 4(A)(4) hereof shall
be deemed a prepayment in full of that Portion of the Loan. Upon any such early conversion or any prepayment of any Portion of
the Loan accruing interest pursuant to a fixed rate option, and as a condition to any voluntary prepayment, the Borrower shall
pay to CoBank, on the date of such prepayment or early conversion, a surcharge (“Surcharge”) in an amount equal
to the greater of (a) the present value of any funding losses incurred or imputed by CoBank to have been incurred as a result of
such prepayment for the period such amount was scheduled to have been outstanding at such LIBOR and (b) $300. Such Surcharge, including
the amount of any funding losses incurred by CoBank, shall be determined and calculated in accordance with methodology established
by CoBank.

 

    	4

    	 

    

 

SECTION 7.
Mandatory Prepayment; Termination and Reduction of Commitment.

 

(A)         Mandatory
Prepayments.

 

(1)         In
the event that the Borrower exercises the put option with respect to its ownership interest in O-P Partnership as described in
Section 5 of the Put Option Agreement, the net proceeds received by the Borrower from such exercise (the “Put Option Net
Proceeds”) shall be applied to prepay the Loan in an amount equal to the lesser of (a) 100% of the Put Option Net Proceeds
or (b) the total amount outstanding with respect to the Loan (inclusive of accrued but unpaid interest, fees and expenses related
thereto). Any such prepayment shall be without premium or penalty (subject, in the case of the prepayment of a loan accruing interest
at LIBOR, to payment of a prepayment Surcharge as defined and calculated in Section 6). Such prepayment shall be applied as follows:
first to fees and expenses of CoBank, second to interest, fees, and the Surcharge, and third to principal
amounts outstanding under the Loan (first to outstanding Portions of the Loan accruing interest at the Variable Rate, then to outstanding
Portions of the Loan accruing interest at LIBOR).

 

(2)         If
at any time the aggregate outstanding amount of advances under the Loan exceeds the Commitment, the Borrower shall prepay promptly
the Loan in an amount at least sufficient to reduce the aggregate principal balance of the Loan then outstanding to the amount
of the Commitment and until such repayment is made CoBank shall not be obligated to make any additional advances under the Loan.

 

(B)         Reduction
of the Commitment. The Commitment will be permanently reduced (whether or not any advances are then outstanding thereunder)
to the extent and in the amount of the Put Option Net Proceeds.

 

(C)         Termination.
The Commitment will terminate in full on the Maturity Date, provided that the reduction of the Commitment provided for in Section
7(B) may result in the termination of the Commitment prior to the Maturity Date to the extent that the Put Option Net Proceeds
are equal to or greater than the face principal amount of the Commitment on the date of the receipt by the Borrower of the Put
Option Net Proceeds. If not sooner required to be repaid, all advances under the Loan and all other amounts due and owing hereunder
and under the Loan Documents relating to the Loan shall be due and payable on the Maturity Date.

 

SECTION 8.
 Security. The Loan shall be unsecured, except with respect to the equity of the Borrower in CoBank, as described in
Section 4 of the MLA.

 

    	5

    	 

    

 

SECTION 9.
Additional Conditions Precedent.

 

(A)         In
addition to the conditions precedent set forth in the MLA, CoBank’s obligation to make the initial advance under the Loan
is subject to the satisfaction of the condition precedent on or before the date of such advance that CoBank receive, in form and
content acceptable to CoBank, opinions of counsel (who shall be acceptable to CoBank) for the Borrower; provided, however,
such opinions may take exception for limitations imposed by or resulting from bankruptcy, insolvency, moratorium, reorganization
or other laws affecting creditors’ rights generally and may conform to the generally recognized principles of opinions among
practicing counsel in the States of New York and New Jersey or promulgated by a recognized national association of counsel.

 

(B)         In
addition to the conditions precedent set forth in the MLA, CoBank’s obligation to make an advance under the Loan, including
the initial advance, is subject to the satisfaction of each of the following conditions precedent on or before the date of such
advance:

 

(1)         No
Material Adverse Change. That from December 31, 2011 to the date of such advance there shall not have occurred any event which
has had or could reasonably be expected to have a Material Adverse Effect on the business or prospects of the Borrower;

 

(2)         Representations
and Warranties. That the representations and warranties of the Borrower contained in the MLA, this Third Supplement and any
other Loan Document to which it is a party; be true and correct in all material respects on and as of the date of such advance,
as though made on and as of such date; and

 

(3)         Other
Information. That CoBank receive such other information regarding the condition, financial or otherwise, and operations of
the Borrower as CoBank shall request and such other opinions, certificates or documents as CoBank shall request.

 

(4)         Payment
of the Existing Note. That the Borrower shall have repaid in full all principal, interest, fees and other amounts outstanding
with respect to the revolving credit facility provided pursuant to the terms of that certain Second Supplement to the Master Loan
Agreement, dated as of August 3, 2011, by and between CoBank and the Borrower (the “Second Supplement”).

 

SECTION 10.
 Existing Credit Facility. Upon the Closing Date, (a) each of the Second Supplement and that certain Promissory Note
made by the Borrower in favor of CoBank in the face principal amount of $5,000,000, dated as of August 3, 2011 (the “Existing
Note”) shall automatically terminate and be canceled, (b) all obligations of the Borrower under the Second Supplement
and the and the Existing Note shall be fully satisfied, and (c) the obligation of CoBank to make advances or otherwise extend any
additional credit to or for the benefit of the Borrower under the Second Supplement and the Existing Note shall automatically terminate.

 

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IN WITNESS WHEREOF,
the Borrower has caused this Third Supplement to be executed and delivered, and CoBank has caused this Third Supplement to
be executed and delivered, each by their respective duly authorized officer as of the date first shown above.

 

	 	WARWICK VALLEY TELEPHONE COMPANY
	 	 
	 	By:	/s/ Duane W. Albro	 
	 	 	Duane W. Albro
	 	 	Chief Executive Officer

 

[Signatures Continue on Next Page]

 

    	 

    	 

    

 

[Signatures Continued from Previous Page]

 

	 	COBANK, ACB
	 	 
	 	By: /s/ Gary Franke	 
	 	Gary Franke
	 	Vice President

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