Document:

[FORM
      OF SERIES A WARRANT]

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
      TO
      THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
      THE
      COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
      OR
      ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
      NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
      WITH
      A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE
      SECURITIES.

     

    GENEREX
      BIOTECHNOLOGY CORPORATION

     

    Warrant
      To Purchase Common Stock

     

    Warrant
      No.: ___________

    Number
      of
      Shares of Common Stock: _____________

    Date
      of
      Issuance: March 31, 2008 (“Issuance
      Date”)

     

    Generex
      Biotechnology Corporation, a Delaware corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, [CRANSHIRE CAPITAL, L.P.], [OTHER
      BUYERS], 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 exercise 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 Issuance Date, but not after 11:59 p.m.,
      New
      York time, on the Expiration Date (as defined below), ______________1
      fully
      paid and 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 16.
      This
      Warrant is one of the Warrants to purchase Common Stock (the “SPA
      Warrants”)
      issued
      pursuant to Section 1 of that certain Securities Purchase Agreement, dated
      as of
      March 31, 2008, by and among the Company and the investors (the “Buyers”)
      referred to therein (the “Securities
      Purchase Agreement”).

     

      
        

      

    

    1
      Insert
      number of shares equal to 30.808% of the number of shares of common stock
      issuable to the Holder pursuant to the Holder’s Note acquired under 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 Issuance
      Date,
      in whole or in part, by (i) delivery 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) (A) payment to the
      Company of an amount equal to the then-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 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 of this 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 of this Warrant and issuance of a new Warrant
      evidencing the right to purchase the remaining number of Warrant Shares.
      Execution and delivery of the Exercise Notice for all of the Warrant Shares
      shall have the same effect as cancellation of the original of this Warrant
      after
      delivery of the Warrant Shares in accordance with the terms hereof. On or before
      the first (1st)
      Trading
      Day following the date on which the Company has received each of the Exercise
      Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise)
      (the
“Exercise
      Delivery Documents”),
      the
      Company shall transmit by facsimile an acknowledgment of confirmation of receipt
      of the Exercise Delivery Documents 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 all of the Exercise
      Delivery Documents (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 shares of Common Stock 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 Agent Commission system, or (Y) if the
      Transfer Agent is not participating in the DTC Fast Automated Securities
      Transfer Program, issue and deliver to the Holder or, at Holder’s instruction
      pursuant to the Exercise Notice, Holder’s agent or designee, in each case, sent
      by reputable 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 (as indicated in the Exercise Notice), for the number
      of shares of Common Stock to which the Holder is entitled pursuant to such
      exercise. Upon delivery of the Exercise Delivery Documents, 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)
      Business Days after any exercise and at its own expense, issue and deliver
      to
      the Holder (or its designee) a new Warrant (in accordance with Section
7(d))
      representing the right to purchase the number of Warrant Shares purchasable
      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. 

     

    
      
        
        

      

      
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    (b) Exercise
      Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      $1.21, subject to adjustment as provided herein.

     

    (c) Company’s
      Failure to Timely Deliver Securities.
      If the
      Company shall fail, for any reason or for no reason, to issue to the Holder
      within three (3) Trading Days of receipt of the Exercise Delivery Documents,
      a
      certificate for the number of shares of Common Stock to which the Holder is
      entitled and register such shares of Common Stock on the Company’s share
      register or to credit the Holder’s balance account with DTC for such number of
      shares of Common Stock to which the Holder is entitled upon the Holder’s
      exercise of this Warrant (as the case may be), then, in addition to all other
      remedies available to the Holder, the Company shall pay in cash to the Holder
      on
      each day after such third (3rd)
      Trading
      Day that the issuance of such shares of Common Stock is not timely effected
      an
      amount equal to 2% of the product of (A) the sum of the number of shares of
      Common Stock not issued to the Holder on a timely basis and to which the Holder
      is entitled and (B) the Closing Sale Price of the Common Stock on the Trading
      Day immediately preceding the last possible date which the Company could have
      issued such shares of Common Stock to the Holder without violating Section
      1(a).
      In
      addition to the foregoing, if within three (3) Trading Days after the Company’s
      receipt of the facsimile copy of an Exercise Notice, the Company shall fail
      to
      issue and deliver a certificate to the Holder and register such shares of Common
      Stock on the Company’s share register or credit the Holder’s balance account
      with DTC for the number of shares of Common Stock to which the Holder is
      entitled upon such Holder’s exercise hereunder (as the case may be), and if on
      or after such third (3rd)
      Trading
      Day the Holder purchases (in an open market transaction or otherwise) shares
      of
      Common Stock to deliver in satisfaction of a sale by the Holder of shares of
      Common Stock issuable upon such exercise that the Holder anticipated receiving
      from the Company (a “Buy-In”),
      then
      the Company shall, within three (3) Business Days after the Holder’s request and
      in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
      to the Holder’s total purchase price (including brokerage commissions, if any)
      for the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such shares of Common Stock) shall terminate, or (ii) promptly honor its
      obligation to deliver to the Holder a certificate or certificates representing
      such shares of Common Stock or credit the Holder’s balance account with DTC for
      the number of shares of Common Stock to which the Holder is entitled upon such
      Holder’s exercise hereunder (as the case may be) 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 of Common Stock times (B) the Closing Sale Price
      of
      the Common Stock on the Trading Day immediately preceding the date of the
      Exercise Notice.

     

    (d) Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary (other than Section
      1(f)
      below),
      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”):

     

    
      
        
        

      

      
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    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
      Closing Sale Price of the Common Stock on the Trading Day 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 number of Warrant Shares to be issued pursuant
      to
      the terms hereof, 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.

     

    (f) Limitations
      on Exercises. 

     

    (i) Beneficial
      Ownership.
      Notwithstanding anything to the contrary contained in this Warrant, this Warrant
      shall not be exercisable by the Holder hereof to the extent (but only to the
      extent) that, if exercisable by the Holder, the Holder or any of its affiliates
      would beneficially own in excess of [4.90%][9.90%][4.99%][9.99%] (the
“Maximum
      Percentage”)
      of the
      outstanding shares of Common Stock. To the extent the above limitation
      applies, the determination of whether this Warrant shall be exercisable
      (vis-à-vis other convertible, exercisable or exchangeable securities owned by
      the Holder) and of which warrants shall be exercisable (as among all warrants
      owned by the Holder) shall, subject to such Maximum Percentage limitation,
      be
      determined on the basis of the first submission to the Company for conversion,
      exercise or exchange (as the case may be). No prior inability to exercise this
      Warrant pursuant to this paragraph shall have any effect on the applicability
      of
      the provisions of this paragraph with respect to any subsequent
      determination of exercisability. For the purposes of this paragraph, beneficial
      ownership and all determinations and calculations (including, without
      limitation, with respect to calculations of percentage ownership) shall be
      determined by the Holder in accordance with Section 13(d) of the 1934 Act (as
      defined in the Securities Purchase Agreement) and the rules and regulations
      promulgated thereunder. The provisions of this paragraph shall be implemented
      in
      a manner otherwise than in strict conformity with the terms of this paragraph
      to
      correct this paragraph (or any portion hereof) which may be defective or
      inconsistent with the intended Maximum Percentage beneficial ownership
      limitation herein contained or to make changes or supplements necessary or
      desirable to properly give effect to such Maximum Percentage limitation. The
      limitations contained in this paragraph shall apply to a successor Holder of
      this Warrant. For any reason at any time, upon the written or oral request
      of
      the Holder, the Company shall within one (1) Business Day confirm orally and
      in
      writing to the Holder the number of shares of Common Stock then outstanding,
      including by virtue of any prior conversion or exercise of convertible or
      exercisable securities into Common Stock, including, without limitation,
      pursuant to this Warrant or securities issued pursuant to the Securities
      Purchase Agreement. [By
      written notice to the Company, the Holder may 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.][HOLDER MAY ELECT WHICH BRACKETED PROVISIONS APPLY PRIOR TO ISSUANCE]
      Each delivery of an Exercise Notice by the Holder will constitute a
      representation by the Holder that it has evaluated the limitation set forth
      in
      this paragraph and determined that issuance of the full number of Warrant Shares
      requested by the Holder in such Exercise Notice is permitted under this
      paragraph.

     

    
      
        
        

      

      
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    (ii) Principal
      Market Regulation.
      The
      Company shall not be obligated to issue any shares of Common Stock upon exercise
      of this Warrant if the issuance of such shares of Common Stock would exceed
      the
      aggregate number of shares of Common Stock which the Company may issue upon
      conversion or exercise (as the case may be) of the Notes and SPA Warrants
      without breaching the Company’s obligations under the rules or regulations of
      the Principal Market (the number of shares which may be issued without violating
      such rules and regulations, the “Exchange
      Cap”),
      except that such limitation shall not apply in the event that the Company (A)
      obtains Shareholder Approval (as defined in the Securities Purchase Agreement)
      as required by the applicable rules of the Principal Market for issuances of
      shares of Common Stock in excess of such amount or (B) obtains a written opinion
      from outside counsel to the Company that such approval is not required, which
      opinion shall be reasonably satisfactory to the Holder. Until Shareholder
      Approval or such written opinion is obtained, no Buyer shall be issued in the
      aggregate, upon exercise or conversion of any SPA Warrants or any of the Notes
      or otherwise, 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
      original principal amount of Notes issued to such Buyer pursuant to the
      Securities Purchase Agreement on the Closing Date and the denominator of which
      is the aggregate original principal amount of all Notes issued to the Buyers
      pursuant to the Securities Purchase Agreement on the Closing 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. In the event that the Company is prohibited from issuing any Warrant
      Shares for which an Exercise Notice has been received as a result of the
      operation of this Section 1(f)(i),
      the
      Company shall pay cash in exchange for cancellation of such Warrant Shares,
      at a
      price per Warrant Share equal to the difference between the Closing Sale Price
      of the Common Stock for the Trading Day immediately preceding the date of the
      attempted exercise and the Exercise Price as of such date of attempted
      exercise.

     

    
      
        
        

      

      
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    (g) Insufficient
      Authorized Shares.
      The
      Company shall at all times keep reserved for issuance under this Warrant a
      number of shares of Common Stock as shall be necessary to satisfy the Company’s
      obligation to issue shares of Common Stock hereunder (without regard to any
      limitation otherwise contained herein with respect to the number of shares
      of
      Common Stock that may be acquirable upon exercise of this Warrant). If,
      notwithstanding the foregoing, and not in limitation thereof, at any time while
      any of the SPA 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 SPA Warrants at
      least a 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 SPA 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 all the SPA 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 AND NUMBER OF WARRANT SHARES.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this Section
      2.

     

    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time on or after the date of the Securities Purchase Agreement,
      (i) pays a stock dividend on one or more classes of its then outstanding shares
      of Common Stock or otherwise makes a distribution on any class of capital stock
      that is payable in shares of Common Stock, (ii) subdivides (by any stock split,
      stock dividend, recapitalization or otherwise) one or more classes of its then
      outstanding shares of Common Stock into a larger number of shares or (iii)
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its then outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination. If any event requiring an
      adjustment under this paragraph occurs during the period that an Exercise Price
      is calculated hereunder, then the calculation of such Exercise Price shall
      be
      adjusted appropriately to reflect such event.

     

    
      
        
        

      

      
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    (b) Adjustment
      Upon Issuance of Shares of Common Stock.
      If and
      whenever on or after the date of the Securities Purchase Agreement, the Company
      issues or sells, 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 Common Stock owned or held by or for the account
      of the Company, but excluding any Excluded Securities (as defined in the
      Securities Purchase Agreement) issued or sold or deemed to have been issued
      or
      sold) for a consideration per share (the “New
      Issuance Price”)
      less
      than a price equal to the Exercise Price in effect immediately prior to such
      issue or sale or deemed issuance or sale (such lesser price being referred
      to as
      the “Applicable
      Price”)
      (the
      foregoing a “Dilutive
      Issuance”),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. For purposes
      of
      determining the adjusted Exercise Price under this Section 2(b),
      the
      following shall be applicable:

     

    (i) Issuance
      of Options.
      If the
      Company in any manner grants or sells 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(b)(i),
      the
“lowest price per share for which one share of Common Stock is issuable upon
      the
      exercise of any such Options or upon conversion, exercise or exchange of any
      Convertible Securities issuable upon exercise of any 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. Except as contemplated below, no further adjustment of the Exercise
      Price shall be made 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.

     

    (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(b)(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. Except as contemplated below, no further adjustment of
      the
      Exercise Price shall be made 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 for which adjustment of this Warrant has been or is to be made
      pursuant to other provisions of this Section 2(b),
      except
      as contemplated below, no further adjustment of the Exercise Price shall be
      made
      by reason of such issue or sale. 

     

    
      
        
        

      

      
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    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase or exercise price provided for in any Options, the additional
      consideration, if any, payable upon the issue, conversion, exercise or exchange
      of any Convertible Securities, or the rate at which any Convertible Securities
      are convertible into or exercisable or exchangeable for shares of Common Stock
      increases or decreases at any time, the Exercise Price in effect at the time
      of
      such increase or decrease shall be adjusted to the Exercise Price which would
      have been in effect at such time had such Options or Convertible Securities
      provided for such increased or decreased purchase price, additional
      consideration or increased or decreased conversion rate, as the case may be,
      at
      the time initially granted, issued or sold. For purposes of this Section
2(b)(iii),
      if the
      terms of any Option or Convertible Security that was outstanding as of the
      date
      of issuance of this Warrant are increased or decreased in the manner described
      in the immediately preceding sentence, 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
      increase or decrease. No adjustment pursuant to this Section 2(b)
      shall be
      made if such adjustment would result in an increase of the Exercise Price then
      in effect.

     

    (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 in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01. 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 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 publicly traded securities, in which case the amount
      of consideration received by the Company for such securities will be the average
      VWAP of such security for the five (5) Trading Day period immediately preceding
      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. The fair value of any consideration other than cash or publicly traded
      securities will be determined jointly by the Company and the Holder. If such
      parties are unable to reach agreement within ten (10) days after 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
      following such Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Holder. 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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (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).

     

    (c) Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs
      (a) or (b) of this Section 2,
      the
      number of Warrant Shares that may be purchased upon exercise of this Warrant
      shall be increased or decreased proportionately, so that after such adjustment
      the aggregate Exercise Price payable hereunder for the adjusted number of
      Warrant Shares shall be the same as the aggregate Exercise Price in effect
      immediately prior to such adjustment (without regard to any limitations on
      exercise contained herein).

     

    (d) Other
      Events.
      In the
      event that the Company (or any direct or indirect subsidiary thereof) shall
      take any action to which the provisions hereof are not strictly applicable,
      or,
      if applicable, would not operate to protect the Holder from dilution or 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 shall in good faith
      determine and implement an appropriate adjustment in the Exercise Price and
      the
      number of Warrant Shares (if applicable) so as to protect the rights of the
      Holder; provided that no such adjustment pursuant to this Section 2(d)
      will
      increase the Exercise Price or decrease the number of Warrant Shares as
      otherwise determined pursuant to this Section 2,
      provided further that if the Holder does not accept such adjustments as
      appropriately protecting its interests hereunder against such dilution, then
      the
      Company’s Board of Directors and the Holder shall agree, in good faith, upon an
      independent investment bank of nationally recognized standing to make such
      appropriate adjustments, whose determination shall be final and binding and
      whose fees and expenses shall be borne by the Company.

     

    (e) Calculations.
      All
      calculations under this Section 2
      shall be
      made to the nearest cent or the nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    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, the Holder
      shall be entitled to participate in such Distribution to the same extent that
      the Holder would have participated therein 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 exercise hereof, including without
      limitation, the Maximum Percentage) immediately before the date on which a
      record is taken for such Distribution, 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 participation in such Distribution (provided, however, that to the
      extent that the Holder’s right to participate in any such Distributions would
      result in the Holder exceeding the Maximum Percentage, then the Holder shall
      not
      be entitled to participate in such Distribution to such extent (or the
      beneficial ownership of any such shares of Common Stock as a result of such
      Distribution to such extent) and such Distribution to such extent shall be
      held
      in abeyance for the benefit of the Holder until such time, if ever, as its
      right
      thereto would not result in the Holder exceeding the Maximum
      Percentage).

     

    
      
        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 shares 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
      exercise hereof, including without limitation, the Maximum Percentage)
      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 (provided, however, that to the
      extent that the Holder’s right to participate in any such Purchase Right would
      result in the Holder exceeding the Maximum Percentage, then the Holder shall
      not
      be entitled to participate in such Purchase Right to such extent (or beneficial
      ownership of such shares of Common Stock as a result of such Purchase Right
      to
      such extent) and such Purchase Right to such extent shall be held in abeyance
      for the Holder until such time, if ever, as its right thereto would not result
      in the Holder exceeding the Maximum Percentage).

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b) Fundamental
      Transactions.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      (i)  the Successor Entity assumes in writing all of the obligations of the
      Company under this Warrant and the other Transaction Documents (as defined
      in
      the Securities Purchase Agreement) in accordance with the provisions of this
      Section 4(b)
      pursuant
      to written agreements in form and substance satisfactory to the Holder and
      approved by the Holder prior to such Fundamental Transaction, including
      agreements to deliver to the Holder in exchange for this Warrant a security
      of
      the Successor Entity evidenced by a written instrument substantially similar
      in
      form and substance to this Warrant, including, without limitation, which is
      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 with an exercise price which applies
      the exercise price hereunder to such shares of capital stock (but taking into
      account the relative value of the shares of Common Stock pursuant to such
      Fundamental Transaction and the value of such shares of capital stock, such
      adjustments to the number of shares of capital stock and such exercise price
      being for the purpose of protecting the economic value of this Warrant
      immediately prior to the consummation of such Fundamental Transaction), and
      which is satisfactory in form and substance to the Holder and (ii) the
      Successor Entity (including its Parent Entity) is a publicly traded corporation
      whose common stock is quoted on or listed for trading on an Eligible Market.
      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 and the other
      Transaction Documents 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 and the
      other Transaction Documents 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 the Common Stock (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) issuable
      upon the exercise of this Warrant
      prior
      to
      such Fundamental Transaction,
      such
      shares of the publicly traded Common Stock (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
      exercised immediately prior to such Fundamental Transaction (without
      regard to any limitations on the exercise of this Warrant),
      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
      Fundamental Transaction but
      prior
      to the Expiration Date,
      in lieu
      of the shares of the Common Stock (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) 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 Holder
      would have been entitled to receive upon the happening of such Fundamental
      Transaction had the Warrant been exercised immediately prior to such Fundamental
      Transaction (without
      regard to any limitations on the exercise of this Warrant).
      Provision
      made pursuant to the preceding sentence shall be in a form and substance
      reasonably satisfactory to the Holder. The provisions of this Section
4
      shall
      apply similarly and equally to successive Fundamental Transactions and Corporate
      Events and shall be applied as if this Warrant (and any such subsequent
      warrants) were fully exercisable and without regard to any limitations on the
      exercise of this Warrant (provided that the Holder shall continue to be entitled
      to the benefit of the Maximum Percentage, applied however with respect to shares
      of capital stock registered under the 1934 Act and thereafter receivable upon
      exercise of this Warrant (or any such other warrant)).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c) Black
      Scholes Value.
      Notwithstanding the foregoing and the provisions of Section 4(b)
      above,
      in the event of a Fundamental Transaction, if the Holder has not exercised
      this
      Warrant in full prior to the consummation of such 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 (as the case may be) shall purchase
      this Warrant from the Holder by paying to the Holder
      cash in
      an amount equal to the Black Scholes Value of the remaining unexercised portion
      of this Warrant on the date of the consummation of such Fundamental
      Transaction.

     

    5. NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate 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 maximum 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).

     

    6. 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 6,
      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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    7. 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 7(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 7(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 (as to which a written
      certification and the indemnification contemplated below shall suffice as such
      evidence), and, in the case of loss, theft or destruction, of any
      indemnification undertaking by the Holder to the Company in customary and
      reasonable 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 7(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 7(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 7(a)
      or
      Section 7(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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    8. 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 therefore.
      Without limiting the generality of the foregoing, the Company will give written
      notice to the Holder (i) immediately upon each adjustment of the Exercise Price
      and the number of Warrant Shares, setting forth in reasonable detail, and
      certifying, the calculation of such adjustment(s) and (ii) at least fifteen
      (15)
      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 and (iii) at least ten (10) Trading Days prior to the consummation of
      any
      Fundamental Transaction. To the extent that any notice provided hereunder
      constitutes, or contains, material, non-public information regarding the Company
      or any of its subsidiaries, the Company shall simultaneously file such notice
      with the SEC (as defined in the Securities Purchase Agreement) pursuant to
      a
      Current Report on Form 8-K.

     

    9. AMENDMENT
      AND WAIVER.
      Except
      as otherwise provided herein, the provisions of this Warrant (other than Section
      1(f)(i))
      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 Holder. The Holder shall be entitled, at
      its
      option, to the benefit of any amendment of any other similar warrant issued
      either under the Securities Purchase Agreement or any other similar warrant.
      No
      waiver shall be effective unless it is in writing and signed by an authorized
      representative of the waiving party.

     

    10. SEVERABILITY.
      If any
      provision of this Warrant or the application thereof becomes or is declared
      by a
      court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of the terms of this Warrant will continue in full force and
      effect.

     

    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 the Holder
      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. Terms used in this Warrant but
      defined in the other Transaction Documents shall have the meanings ascribed
      to
      such terms on the Closing Date in such other Transaction Documents unless
      otherwise consented to in writing by the Holder.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    13. DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Exercise Price or fair market
      value or the arithmetic calculation of the Warrant Shares, the Company or the
      Holder (as the case may be) shall submit the disputed determinations or
      arithmetic calculations (as the case may be) via facsimile within two (2)
      Business Days of receipt of the applicable notice giving rise to such dispute
      to
      the Company or the Holder (as the case may be). If the Holder and the Company
      are unable to agree upon such determination or calculation of the Exercise
      Price
      or fair market value or the number of Warrant Shares (as the case may be) within
      three (3) Business Days of such disputed determination or arithmetic calculation
      being submitted to the Company or the Holder (as the case may be), then the
      Company shall, within two (2) Business Days submit via facsimile (a) the
      disputed determination of the Exercise Price or fair market value 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 (as the case may be) and notify the Company
      and the Holder of the results no later than ten (10) Business Days from the
      time
      it receives such disputed determinations or calculations (as the case may be).
      Such investment bank’s or accountant’s determination or calculation (as the case
      may be) shall be binding upon all parties absent demonstrable
      error.

     

    14. REMEDIES,
      CHARACTERIZATION, 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. The issuance of shares and
      certificates for shares as contemplated hereby upon the exercise of this Warrant
      shall be made without charge to the Holder or such shares for any issuance
      tax
      or other costs in respect thereof, provided that the Company shall not be
      required to pay any tax which may be payable in respect of any transfer involved
      in the issuance and delivery of any certificate in a name other than the Holder
      or its agent on its behalf. The Company covenants to the Holder that there
      shall
      be no characterization concerning this instrument other than as expressly
      provided herein.

     

    15. TRANSFER. This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by Section 2(g)
      of
      the Securities Purchase Agreement.

     

    16. 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 of closing
      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 the greater of 75% and the 100 day
      volatility obtained from the HVT function on Bloomberg as of the trading
      day immediately following the public announcement of the applicable Fundamental
      Transaction and (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 such Fundamental
      Transaction.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (d) “Closing
      Sale Price”
means,
      for any security as of any date, the last closing trade price 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
      trade price, then the last trade price 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
      trade price 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 does not apply, the last trade price of such security in the
      over-the-counter market on the electronic bulletin board for such security
      as
      reported by Bloomberg, or, if no last trade price is reported for such security
      by Bloomberg, the average of the ask prices 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 Sale Price cannot be calculated
      for a security on a particular date on any of the foregoing bases, the Closing
      Sale 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 in accordance with the procedures in
      Section 13.
      All
      such determinations shall appropriately adjusted for any share dividend, share
      split, share combination or other similar transaction during such
      period.

     

    (e) “Common
      Stock”
means
      (i) the Company’s shares of common stock, $0.001 par value per share, and
      (ii) any capital stock 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 The New York Stock Exchange, Inc., the Nasdaq Global Select Market, the
      Nasdaq Global Market or the Principal Market.

     

    (h) “Expiration
      Date”
means
      the date that is the seventh (7th)
      anniversary of the Issuance 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. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (i) “Fundamental
      Transaction”
means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person, or (ii) sell, assign, transfer,
      convey or otherwise dispose of all or substantially all of the properties or
      assets of the Company to another Person, or (iii) 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 (iv) 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 the 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
      (v)
      reorganize, recapitalize or reclassify its Common Stock, or (vi) any “person” or
“group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
      Exchange Act) is or shall become the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
      ordinary voting power represented by issued and outstanding Common
      Stock.

     

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

     

    (k) “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.

     

    (l) “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.

     

    (m) “Principal
      Market”
means
      The Nasdaq Capital Market.

     

    (n) “Successor
      Entity”
means
      the Person (or, if so elected by the Holder, the Parent Entity) formed by,
      resulting from or surviving any Fundamental Transaction or the Person (or,
      if so
      elected by the Holder, the Parent Entity) with which such Fundamental
      Transaction shall have been entered into.

     

    (o) “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

        
          

        

      

      
        
        

      

    

     

    (p) “VWAP”
means,
      for any security as of any date, the dollar volume-weighted average price for
      such security on the Principal Market (or, if the Principal Market is not the
      principal trading market for such security, then on the principal securities
      exchange or securities market on which such security is then traded) during
      the
      period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m.,
      New
      York time, as reported by Bloomberg through its “Volume at Price” function 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,
      and ending at 4:00:00 p.m., New York time, 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 VWAP cannot be calculated for such security on such date on any of
      the
      foregoing bases, the VWAP 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 in accordance with the procedures in Section
      13.
      All
      such determinations shall be appropriately adjusted for any share dividend,
      share split or other similar transaction during such 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.

     

    
      
        	 	GENEREX
                BIOTECHNOLOGY CORPORATION
	 	 	 
	 	
                By: 

              	 
	 	Name:
	 	Title:

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    EXERCISE
      NOTICE

     

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON STOCK

     

    GENEREX
      BIOTECHNOLOGY CORPORATION

     

    The
      undersigned holder hereby exercises the right to purchase _________________
      of
      the shares of Common Stock (“Warrant
      Shares”)
      of
      Generex Biotechnology Corporation, a Delaware corporation (the “Company”),
      evidenced by Warrant to Purchase Common Stock No. _______ (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 Holder, or its designee or agent as specified below,
      __________ Warrant Shares in accordance with the terms of the Warrant. Delivery
      shall be made to Holder, or for its benefit, to the following
      address:

     

    _______________________

    _______________________

    _______________________

    _______________________

     

    Date:
      _______________ __, ______

    

    
      	 	 
	
              Name
                of Registered Holder

            

    

    

    
      	
              By: 

            	 	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGMENT

     

    The
      Company hereby acknowledges this Exercise Notice and hereby directs
      ______________ to issue the above indicated number of shares of Common Stock
      in
      accordance with the Transfer Agent Instructions dated _____________, 2008 from
      the Company and acknowledged and agreed to by _______________.

     

    
      	 	
              GENEREX
                BIOTECHNOLOGY CORPORATION

            
	 	 
	 	
              By: 

            	 
	 	Name:
	 	Title:[FORM
      OF SERIES A-1 WARRANT]

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
      TO
      THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
      THE
      COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
      OR
      ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
      NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
      WITH
      A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE
      SECURITIES.

     

    GENEREX
      BIOTECHNOLOGY CORPORATION

     

    Warrant
      To Purchase Common Stock

     

    Warrant
      No.:                           
  

    Number
      of
      Shares of Common Stock: _____________

    Date
      of
      Issuance: March 31, 2008 (“Issuance
      Date”)

     

    Generex
      Biotechnology Corporation, a Delaware corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, [CRANSHIRE CAPITAL, L.P.], [OTHER
      BUYERS], 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 exercise 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 six (6) month and one (1) day anniversary
      of
      the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration
      Date (as defined below), ______________ fully paid and 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 16.
      This
      Warrant is one of the Warrants to purchase Common Stock (the “SPA
      Warrants”)
      issued
      pursuant to Section 1 of that certain Securities Purchase Agreement, dated
      as of
      March 31, 2008, 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 Issuance
      Date,
      in whole or in part, by (i) delivery 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) (A) payment to the
      Company of an amount equal to the then-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 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 of this 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 of this Warrant and issuance of a new Warrant
      evidencing the right to purchase the remaining number of Warrant Shares.
      Execution and delivery of the Exercise Notice for all of the Warrant Shares
      shall have the same effect as cancellation of the original of this Warrant
      after
      delivery of the Warrant Shares in accordance with the terms hereof. On or before
      the first (1st)
      Trading
      Day following the date on which the Company has received each of the Exercise
      Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise)
      (the
“Exercise
      Delivery Documents”),
      the
      Company shall transmit by facsimile an acknowledgment of confirmation of receipt
      of the Exercise Delivery Documents 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 all of the Exercise
      Delivery Documents (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 shares of Common Stock 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 Agent Commission system, or (Y) if the
      Transfer Agent is not participating in the DTC Fast Automated Securities
      Transfer Program, issue and deliver to the Holder or, at Holder’s instruction
      pursuant to the Exercise Notice, Holder’s agent or designee, in each case, sent
      by reputable 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 (as indicated in the Exercise Notice), for the number
      of shares of Common Stock to which the Holder is entitled pursuant to such
      exercise. Upon delivery of the Exercise Delivery Documents, 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)
      Business Days after any exercise and at its own expense, issue and deliver
      to
      the Holder (or its designee) a new Warrant (in accordance with Section
7(d))
      representing the right to purchase the number of Warrant Shares purchasable
      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. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b)
      Exercise
      Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      $1.21, subject to adjustment as provided herein.

     

    (c)
      Company’s
      Failure to Timely Deliver Securities.
      If the
      Company shall fail, for any reason or for no reason, to issue to the Holder
      within three (3) Trading Days of receipt of the Exercise Delivery Documents,
      a
      certificate for the number of shares of Common Stock to which the Holder is
      entitled and register such shares of Common Stock on the Company’s share
      register or to credit the Holder’s balance account with DTC for such number of
      shares of Common Stock to which the Holder is entitled upon the Holder’s
      exercise of this Warrant (as the case may be), then, in addition to all other
      remedies available to the Holder, the Company shall pay in cash to the Holder
      on
      each day after such third (3rd)
      Trading
      Day that the issuance of such shares of Common Stock is not timely effected
      an
      amount equal to 2% of the product of (A) the sum of the number of shares of
      Common Stock not issued to the Holder on a timely basis and to which the Holder
      is entitled and (B) the Closing Sale Price of the Common Stock on the Trading
      Day immediately preceding the last possible date which the Company could have
      issued such shares of Common Stock to the Holder without violating Section
      1(a).
      In
      addition to the foregoing, if within three (3) Trading Days after the Company’s
      receipt of the facsimile copy of an Exercise Notice, the Company shall fail
      to
      issue and deliver a certificate to the Holder and register such shares of Common
      Stock on the Company’s share register or credit the Holder’s balance account
      with DTC for the number of shares of Common Stock to which the Holder is
      entitled upon such Holder’s exercise hereunder (as the case may be), and if on
      or after such third (3rd)
      Trading
      Day the Holder purchases (in an open market transaction or otherwise) shares
      of
      Common Stock to deliver in satisfaction of a sale by the Holder of shares of
      Common Stock issuable upon such exercise that the Holder anticipated receiving
      from the Company (a “Buy-In”),
      then
      the Company shall, within three (3) Business Days after the Holder’s request and
      in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
      to the Holder’s total purchase price (including brokerage commissions, if any)
      for the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such shares of Common Stock) shall terminate, or (ii) promptly honor its
      obligation to deliver to the Holder a certificate or certificates representing
      such shares of Common Stock or credit the Holder’s balance account with DTC for
      the number of shares of Common Stock to which the Holder is entitled upon such
      Holder’s exercise hereunder (as the case may be) 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 of Common Stock times (B) the Closing Sale Price
      of
      the Common Stock on the Trading Day immediately preceding the date of the
      Exercise Notice.

     

    (d)
      Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary (other than Section
      1(f)
      below),
      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”):

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              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
      Closing Sale Price of the Common Stock on the Trading Day 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 number of Warrant Shares to be issued pursuant
      to
      the terms hereof, 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.

     

    (f)
      Limitations
      on Exercises. 

     

    (i)
      Beneficial
      Ownership.
      Notwithstanding anything to the contrary contained in this Warrant, this Warrant
      shall not be exercisable by the Holder hereof to the extent (but only to the
      extent) that, if exercisable by the Holder, the Holder or any of its affiliates
      would beneficially own in excess of [4.90%][9.90%][4.99%][9.99%] (the
“Maximum
      Percentage”)
      of the
      outstanding shares of Common Stock. To the extent the above limitation
      applies, the determination of whether this Warrant shall be exercisable
      (vis-à-vis other convertible, exercisable or exchangeable securities owned by
      the Holder) and of which warrants shall be exercisable (as among all warrants
      owned by the Holder) shall, subject to such Maximum Percentage limitation,
      be
      determined on the basis of the first submission to the Company for conversion,
      exercise or exchange (as the case may be). No prior inability to exercise this
      Warrant pursuant to this paragraph shall have any effect on the applicability
      of
      the provisions of this paragraph with respect to any subsequent
      determination of exercisability. For the purposes of this paragraph, beneficial
      ownership and all determinations and calculations (including, without
      limitation, with respect to calculations of percentage ownership) shall be
      determined by the Holder in accordance with Section 13(d) of the 1934 Act (as
      defined in the Securities Purchase Agreement) and the rules and regulations
      promulgated thereunder. The provisions of this paragraph shall be implemented
      in
      a manner otherwise than in strict conformity with the terms of this paragraph
      to
      correct this paragraph (or any portion hereof) which may be defective or
      inconsistent with the intended Maximum Percentage beneficial ownership
      limitation herein contained or to make changes or supplements necessary or
      desirable to properly give effect to such Maximum Percentage limitation. The
      limitations contained in this paragraph shall apply to a successor Holder of
      this Warrant. For any reason at any time, upon the written or oral request
      of
      the Holder, the Company shall within one (1) Business Day confirm orally and
      in
      writing to the Holder the number of shares of Common Stock then outstanding,
      including by virtue of any prior conversion or exercise of convertible or
      exercisable securities into Common Stock, including, without limitation,
      pursuant to this Warrant or securities issued pursuant to the Securities
      Purchase Agreement. [By written notice to the Company, the Holder may 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.][HOLDER MAY ELECT WHICH BRACKETED PROVISIONS APPLY PRIOR TO ISSUANCE]
      Each delivery of an Exercise Notice by the Holder will constitute a
      representation by the Holder that it has evaluated the limitation set forth
      in
      this paragraph and determined that issuance of the full number of Warrant Shares
      requested by the Holder in such Exercise Notice is permitted under this
      paragraph.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (ii)
      Principal
      Market Regulation.
      The
      Company shall not be obligated to issue any shares of Common Stock upon exercise
      of this Warrant if the issuance of such shares of Common Stock would exceed
      the
      aggregate number of shares of Common Stock which the Company may issue upon
      conversion or exercise (as the case may be) of the Notes and SPA Warrants
      without breaching the Company’s obligations under the rules or regulations of
      the Principal Market (the number of shares which may be issued without violating
      such rules and regulations, the “Exchange
      Cap”),
      except that such limitation shall not apply in the event that the Company (A)
      obtains Shareholder Approval (as defined in the Securities Purchase Agreement)
      as required by the applicable rules of the Principal Market for issuances of
      shares of Common Stock in excess of such amount or (B) obtains a written opinion
      from outside counsel to the Company that such approval is not required, which
      opinion shall be reasonably satisfactory to the Holder. Until Shareholder
      Approval or such written opinion is obtained, no Buyer shall be issued in the
      aggregate, upon exercise or conversion of any SPA Warrants or any of the Notes
      or otherwise, 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
      original principal amount of Notes issued to such Buyer pursuant to the
      Securities Purchase Agreement on the Closing Date and the denominator of which
      is the aggregate original principal amount of all Notes issued to the Buyers
      pursuant to the Securities Purchase Agreement on the Closing 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. In the event that the Company is prohibited from issuing any Warrant
      Shares for which an Exercise Notice has been received as a result of the
      operation of this Section 1(f)(ii),
      the
      Company shall pay cash in exchange for cancellation of such Warrant Shares,
      at a
      price per Warrant Share equal to the difference between the Closing Sale Price
      of the Common Stock for the Trading Day immediately preceding the date of the
      attempted exercise and the Exercise Price as of such date of attempted
      exercise.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (g)
      Insufficient
      Authorized Shares.
      The
      Company shall at all times keep reserved for issuance under this Warrant a
      number of shares of Common Stock as shall be necessary to satisfy the Company’s
      obligation to issue shares of Common Stock hereunder (without regard to any
      limitation otherwise contained herein with respect to the number of shares
      of
      Common Stock that may be acquirable upon exercise of this Warrant). If,
      notwithstanding the foregoing, and not in limitation thereof, at any time while
      any of the SPA 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 SPA Warrants at
      least a 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 SPA 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 all the SPA 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 AND NUMBER OF WARRANT SHARES.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this Section
      2.

     

    (a)
      Stock
      Dividends and Splits.
      If the
      Company, at any time on or after the date of the Securities Purchase Agreement,
      (i) pays a stock dividend on one or more classes of its then outstanding shares
      of Common Stock or otherwise makes a distribution on any class of capital stock
      that is payable in shares of Common Stock, (ii) subdivides (by any stock split,
      stock dividend, recapitalization or otherwise) one or more classes of its then
      outstanding shares of Common Stock into a larger number of shares or (iii)
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its then outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination. If any event requiring an
      adjustment under this paragraph occurs during the period that an Exercise Price
      is calculated hereunder, then the calculation of such Exercise Price shall
      be
      adjusted appropriately to reflect such event.

     

    
      
        
        

      

      
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    (b)
      Adjustment
      Upon Issuance of Shares of Common Stock.
      If and
      whenever on or after the date of the Securities Purchase Agreement, the Company
      issues or sells, 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 Common Stock owned or held by or for the account
      of the Company, but excluding any Excluded Securities (as defined in the
      Securities Purchase Agreement) issued or sold or deemed to have been issued
      or
      sold) for a consideration per share (the “New
      Issuance Price”)
      less
      than a price equal to the Exercise Price in effect immediately prior to such
      issue or sale or deemed issuance or sale (such lesser price being referred
      to as
      the “Applicable
      Price”)
      (the
      foregoing a “Dilutive
      Issuance”),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. For purposes
      of
      determining the adjusted Exercise Price under this Section 2(b),
      the
      following shall be applicable:

     

    (i)
      Issuance
      of Options.
      If the
      Company in any manner grants or sells 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(b)(i),
      the
“lowest price per share for which one share of Common Stock is issuable upon
      the
      exercise of any such Options or upon conversion, exercise or exchange of any
      Convertible Securities issuable upon exercise of any 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. Except as contemplated below, no further adjustment of the Exercise
      Price shall be made 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.

     

    (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(b)(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. Except as contemplated below, no further adjustment of
      the
      Exercise Price shall be made 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 for which adjustment of this Warrant has been or is to be made
      pursuant to other provisions of this Section 2(b),
      except
      as contemplated below, no further adjustment of the Exercise Price shall be
      made
      by reason of such issue or sale. 

     

    
      
        
        

      

      
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    (iii)
      Change
      in Option Price or Rate of Conversion.
      If the
      purchase or exercise price provided for in any Options, the additional
      consideration, if any, payable upon the issue, conversion, exercise or exchange
      of any Convertible Securities, or the rate at which any Convertible Securities
      are convertible into or exercisable or exchangeable for shares of Common Stock
      increases or decreases at any time, the Exercise Price in effect at the time
      of
      such increase or decrease shall be adjusted to the Exercise Price which would
      have been in effect at such time had such Options or Convertible Securities
      provided for such increased or decreased purchase price, additional
      consideration or increased or decreased conversion rate, as the case may be,
      at
      the time initially granted, issued or sold. For purposes of this Section
2(b)(iii),
      if the
      terms of any Option or Convertible Security that was outstanding as of the
      date
      of issuance of this Warrant are increased or decreased in the manner described
      in the immediately preceding sentence, 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
      increase or decrease. No adjustment pursuant to this Section 2(b)
      shall be
      made if such adjustment would result in an increase of the Exercise Price then
      in effect.

     

    (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 in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01. 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 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 publicly traded securities, in which case the amount
      of consideration received by the Company for such securities will be the average
      VWAP of such security for the five (5) Trading Day period immediately preceding
      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. The fair value of any consideration other than cash or publicly traded
      securities will be determined jointly by the Company and the Holder. If such
      parties are unable to reach agreement within ten (10) days after 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
      following such Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Holder. 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.

     

    
      
        
        

      

      
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    (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).

     

    (vi)
      Floor
      Price.
      No
      adjustment pursuant to Section 2(b)
      shall
      cause the Exercise Price to be less than $1.10 (as adjusted for any stock
      dividend, stock split, stock combination, reclassification or similar
      transaction), provided that the foregoing shall not apply if Shareholder
      Approval (as defined in the Securities Purchase Agreement) is
      obtained.

     

    (c)
      Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs
      (a) or (b) of this Section 2,
      the
      number of Warrant Shares that may be purchased upon exercise of this Warrant
      shall be increased or decreased proportionately, so that after such adjustment
      the aggregate Exercise Price payable hereunder for the adjusted number of
      Warrant Shares shall be the same as the aggregate Exercise Price in effect
      immediately prior to such adjustment (without regard to any limitations on
      exercise contained herein).

     

    (d)
      Other
      Events.
      In the
      event that the Company (or any direct or indirect subsidiary thereof) shall
      take any action to which the provisions hereof are not strictly applicable,
      or,
      if applicable, would not operate to protect the Holder from dilution or 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 shall in good faith
      determine and implement an appropriate adjustment in the Exercise Price and
      the
      number of Warrant Shares (if applicable) so as to protect the rights of the
      Holder; provided that no such adjustment pursuant to this Section 2(d)
      will
      increase the Exercise Price or decrease the number of Warrant Shares as
      otherwise determined pursuant to this Section 2,
      provided further that if the Holder does not accept such adjustments as
      appropriately protecting its interests hereunder against such dilution, then
      the
      Company’s Board of Directors and the Holder shall agree, in good faith, upon an
      independent investment bank of nationally recognized standing to make such
      appropriate adjustments, whose determination shall be final and binding and
      whose fees and expenses shall be borne by the Company.

     

    
      
        
        

      

      
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    (e)
      Calculations.
      All
      calculations under this Section 2
      shall be
      made to the nearest cent or the nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock.

     

    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, the Holder
      shall be entitled to participate in such Distribution to the same extent that
      the Holder would have participated therein 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 exercise hereof, including without
      limitation, the Maximum Percentage) immediately before the date on which a
      record is taken for such Distribution, 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 participation in such Distribution (provided, however, that to the
      extent that the Holder’s right to participate in any such Distributions would
      result in the Holder exceeding the Maximum Percentage, then the Holder shall
      not
      be entitled to participate in such Distribution to such extent (or the
      beneficial ownership of any such shares of Common Stock as a result of such
      Distribution to such extent) and such Distribution to such extent shall be
      held
      in abeyance for the benefit of the Holder until such time, if ever, as its
      right
      thereto would not result in the Holder exceeding the Maximum
      Percentage).

     

    
      
        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 shares 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
      exercise hereof, including without limitation, the Maximum Percentage)
      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 (provided, however, that to the
      extent that the Holder’s right to participate in any such Purchase Right would
      result in the Holder exceeding the Maximum Percentage, then the Holder shall
      not
      be entitled to participate in such Purchase Right to such extent (or beneficial
      ownership of such shares of Common Stock as a result of such Purchase Right
      to
      such extent) and such Purchase Right to such extent shall be held in abeyance
      for the Holder until such time, if ever, as its right thereto would not result
      in the Holder exceeding the Maximum Percentage).

     

    
      
        
        

      

      
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    (b)
      Fundamental
      Transactions.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      (i)  the Successor Entity assumes in writing all of the obligations of the
      Company under this Warrant and the other Transaction Documents (as defined
      in
      the Securities Purchase Agreement) in accordance with the provisions of this
      Section 4(b)
      pursuant
      to written agreements in form and substance satisfactory to the Holder and
      approved by the Holder prior to such Fundamental Transaction, including
      agreements to deliver to the Holder in exchange for this Warrant a security
      of
      the Successor Entity evidenced by a written instrument substantially similar
      in
      form and substance to this Warrant, including, without limitation, which is
      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 with an exercise price which applies
      the exercise price hereunder to such shares of capital stock (but taking into
      account the relative value of the shares of Common Stock pursuant to such
      Fundamental Transaction and the value of such shares of capital stock, such
      adjustments to the number of shares of capital stock and such exercise price
      being for the purpose of protecting the economic value of this Warrant
      immediately prior to the consummation of such Fundamental Transaction), and
      which is satisfactory in form and substance to the Holder and (ii) the
      Successor Entity (including its Parent Entity) is a publicly traded corporation
      whose common stock is quoted on or listed for trading on an Eligible Market.
      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 and the other
      Transaction Documents 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 and the
      other Transaction Documents 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 the Common Stock (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) issuable
      upon the exercise of this Warrant
      prior
      to
      such Fundamental Transaction,
      such
      shares of the publicly traded Common Stock (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
      exercised immediately prior to such Fundamental Transaction (without
      regard to any limitations on the exercise of this Warrant),
      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
      Fundamental Transaction but
      prior
      to the Expiration Date,
      in lieu
      of the shares of the Common Stock (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) 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 Holder
      would have been entitled to receive upon the happening of such Fundamental
      Transaction had the Warrant been exercised immediately prior to such Fundamental
      Transaction (without
      regard to any limitations on the exercise of this Warrant).
      Provision
      made pursuant to the preceding sentence shall be in a form and substance
      reasonably satisfactory to the Holder. The provisions of this Section
4
      shall
      apply similarly and equally to successive Fundamental Transactions and Corporate
      Events and shall be applied as if this Warrant (and any such subsequent
      warrants) were fully exercisable and without regard to any limitations on the
      exercise of this Warrant (provided that the Holder shall continue to be entitled
      to the benefit of the Maximum Percentage, applied however with respect to shares
      of capital stock registered under the 1934 Act and thereafter receivable upon
      exercise of this Warrant (or any such other warrant)).

     

    
      
        
        

      

      
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    (c)
      Black
      Scholes Value.
      Notwithstanding the foregoing and the provisions of Section 4(b)
      above,
      in the event of a Fundamental Transaction, if the Holder has not exercised
      this
      Warrant in full prior to the consummation of such 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 (as the case may be) shall purchase
      this Warrant from the Holder by paying to the Holder
      cash in
      an amount equal to the Black Scholes Value of the remaining unexercised portion
      of this Warrant on the date of the consummation of such Fundamental
      Transaction.

     

    5.
      NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate 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 maximum 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).

     

    6.
      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 6,
      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.

     

    
      
        
        

      

      
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    7.
      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 7(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 7(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 (as to which a written
      certification and the indemnification contemplated below shall suffice as such
      evidence), and, in the case of loss, theft or destruction, of any
      indemnification undertaking by the Holder to the Company in customary and
      reasonable 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 7(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 7(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 7(a)
      or
      Section 7(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.

     

    
      
        
        

      

      
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    8.
      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 therefore.
      Without limiting the generality of the foregoing, the Company will give written
      notice to the Holder (i) immediately upon each adjustment of the Exercise Price
      and the number of Warrant Shares, setting forth in reasonable detail, and
      certifying, the calculation of such adjustment(s) and (ii) at least fifteen
      (15)
      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 and (iii) at least ten (10) Trading Days prior to the consummation of
      any
      Fundamental Transaction. To the extent that any notice provided hereunder
      constitutes, or contains, material, non-public information regarding the Company
      or any of its subsidiaries, the Company shall simultaneously file such notice
      with the SEC (as defined in the Securities Purchase Agreement) pursuant to
      a
      Current Report on Form 8-K.

     

    9.
      AMENDMENT
      AND WAIVER.
      Except
      as otherwise provided herein, the provisions of this Warrant (other than Section
      1(f)(i))
      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 Holder. The Holder shall be entitled, at
      its
      option, to the benefit of any amendment of any other similar warrant issued
      either under the Securities Purchase Agreement or any other similar warrant.
      No
      waiver shall be effective unless it is in writing and signed by an authorized
      representative of the waiving party.

     

    10.
      SEVERABILITY.
      If any
      provision of this Warrant or the application thereof becomes or is declared
      by a
      court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of the terms of this Warrant will continue in full force and
      effect.

     

    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 the Holder
      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. Terms used in this Warrant but
      defined in the other Transaction Documents shall have the meanings ascribed
      to
      such terms on the Closing Date in such other Transaction Documents unless
      otherwise consented to in writing by the Holder.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    13.
      DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Exercise Price or fair market
      value or the arithmetic calculation of the Warrant Shares, the Company or the
      Holder (as the case may be) shall submit the disputed determinations or
      arithmetic calculations (as the case may be) via facsimile within two (2)
      Business Days of receipt of the applicable notice giving rise to such dispute
      to
      the Company or the Holder (as the case may be). If the Holder and the Company
      are unable to agree upon such determination or calculation of the Exercise
      Price
      or fair market value or the number of Warrant Shares (as the case may be) within
      three (3) Business Days of such disputed determination or arithmetic calculation
      being submitted to the Company or the Holder (as the case may be), then the
      Company shall, within two (2) Business Days submit via facsimile (a) the
      disputed determination of the Exercise Price or fair market value 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 (as the case may be) and notify the Company
      and the Holder of the results no later than ten (10) Business Days from the
      time
      it receives such disputed determinations or calculations (as the case may be).
      Such investment bank’s or accountant’s determination or calculation (as the case
      may be) shall be binding upon all parties absent demonstrable
      error.

     

    14.
      REMEDIES,
      CHARACTERIZATION, 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. The issuance of shares and
      certificates for shares as contemplated hereby upon the exercise of this Warrant
      shall be made without charge to the Holder or such shares for any issuance
      tax
      or other costs in respect thereof, provided that the Company shall not be
      required to pay any tax which may be payable in respect of any transfer involved
      in the issuance and delivery of any certificate in a name other than the Holder
      or its agent on its behalf. The Company covenants to the Holder that there
      shall
      be no characterization concerning this instrument other than as expressly
      provided herein.

     

    15.
      TRANSFER. This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by Section 2(g)
      of
      the Securities Purchase Agreement.

     

    16.
      CERTAIN
      DEFINITIONS.
      For
      purposes of this Warrant, the following terms shall have the following
      meanings:

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (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 of closing
      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 the greater of 75% and the 100 day
      volatility obtained from the HVT function on Bloomberg as of the trading
      day immediately following the public announcement of the applicable Fundamental
      Transaction and (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 such Fundamental
      Transaction.

     

    (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.

     

    (d)
      “Closing
      Sale Price”
means,
      for any security as of any date, the last closing trade price 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
      trade price, then the last trade price 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
      trade price 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 does not apply, the last trade price of such security in the
      over-the-counter market on the electronic bulletin board for such security
      as
      reported by Bloomberg, or, if no last trade price is reported for such security
      by Bloomberg, the average of the ask prices 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 Sale Price cannot be calculated
      for a security on a particular date on any of the foregoing bases, the Closing
      Sale 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 in accordance with the procedures in
      Section 13.
      All
      such determinations shall appropriately adjusted for any share dividend, share
      split, share combination or other similar transaction during such
      period.

     

    (e)
      “Common
      Stock”
means
      (i) the Company’s shares of common stock, $0.001 par value per share, and
      (ii) any capital stock 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 The New York Stock Exchange, Inc., the Nasdaq Global Select Market, the
      Nasdaq Global Market or the Principal Market.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (h)
      “Expiration
      Date”
means
      the date that is the ninety (90) month anniversary of the Issuance 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. 

     

    (i)
      “Fundamental
      Transaction”
means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person, or (ii) sell, assign, transfer,
      convey or otherwise dispose of all or substantially all of the properties or
      assets of the Company to another Person, or (iii) 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 (iv) 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 the 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
      (v)
      reorganize, recapitalize or reclassify its Common Stock, or (vi) any “person” or
“group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
      Exchange Act) is or shall become the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
      ordinary voting power represented by issued and outstanding Common
      Stock.

     

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

     

    (k)
      “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.

     

    (l)
      “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.

     

    (m)
      “Principal
      Market”
means
      The Nasdaq Capital Market.

     

    (n)
      “Successor
      Entity”
means
      the Person (or, if so elected by the Holder, the Parent Entity) formed by,
      resulting from or surviving any Fundamental Transaction or the Person (or,
      if so
      elected by the Holder, the Parent Entity) with which such Fundamental
      Transaction shall have been entered into.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (o)
      “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).

     

    (p)
      “VWAP”
means,
      for any security as of any date, the dollar volume-weighted average price for
      such security on the Principal Market (or, if the Principal Market is not the
      principal trading market for such security, then on the principal securities
      exchange or securities market on which such security is then traded) during
      the
      period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m.,
      New
      York time, as reported by Bloomberg through its “Volume at Price” function 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,
      and ending at 4:00:00 p.m., New York time, 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 VWAP cannot be calculated for such security on such date on any of
      the
      foregoing bases, the VWAP 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 in accordance with the procedures in Section
      13.
      All
      such determinations shall be appropriately adjusted for any share dividend,
      share split or other similar transaction during such 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.

     

    
      	GENEREX
              BIOTECHNOLOGY CORPORATION
	 	 
	
              By:

            	 
	
              Name:

            
	
              Title:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    EXERCISE
      NOTICE

     

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON STOCK

     

    GENEREX
      BIOTECHNOLOGY CORPORATION

     

    The
      undersigned holder hereby exercises the right to purchase _________________
      of
      the shares of Common Stock (“Warrant
      Shares”)
      of
      Generex Biotechnology Corporation, a Delaware corporation (the “Company”),
      evidenced by Warrant to Purchase Common Stock No. _______ (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 Holder, or its designee or agent as specified below,
      __________ Warrant Shares in accordance with the terms of the Warrant. Delivery
      shall be made to Holder, or for its benefit, to the following
      address:

     

    _______________________

    _______________________

    _______________________

    _______________________

     

    Date:
      _______________ __, ______

     

    
      	 
	
              Name
                of Registered Holder

            
	 	 
	
              By:

            	 
	 	
              Name:

            
	 	
              Title:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGMENT

     

    The
      Company hereby acknowledges this Exercise Notice and hereby directs
      ______________ to issue the above indicated number of shares of Common Stock
      in
      accordance with the Transfer Agent Instructions dated _____________, 2008 from
      the Company and acknowledged and agreed to by _______________.

     

    
      	
              GENEREX
                BIOTECHNOLOGY CORPORATION

            
	 	 
	
              By:

            	 
	
              Name:

            
	
              Title:

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