Document:

Unassociated Document

    Term
Sheet

    Secured
Convertible Note

    March
29, 2009

    

    This
Term Sheet is by and between the Investor (as defined below) and the Company (as
defined below) and no other person or entity and is meant to be a party hereto
or a third party beneficiary thereof. The purpose of this Term Sheet is to set
forth the indicative terms pursuant to which the Investor would purchase the
securities of the Company described herein. The terms and conditions set forth
herein are not a complete statement of the terms and conditions for any such
investment and are subject to change, and this Term Sheet does not constitute an
offer or solicitation or commitment to purchase or sell any securities of the
Company. The issuance and sale of such securities is subject to completion of
the Investor’s due diligence to the Investor’s satisfaction, the preparation of
definitive legal documentation to effect the transaction that is mutually
satisfactory to the Company and the Investor and, in the case of the Investor,
that the Investor shall have determined that subsequent to the date hereof and
prior to the closing of the transaction contemplated hereby, there shall have
been no material adverse developments relating to the business, assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Company or any of its subsidiaries, either individually or
taken as a whole. Nothing contained herein constitutes an agreement or
obligation on the part of any person to purchase or sell securities of the
Company or enter into any agreement to purchase or sell securities of the
Company.

    
      

      
        
          	
                  Issuer:

                	
                  NutraCea
      (the “Company”)

                
	 
      	 
      
	
                  Investors:

                	
                  Cranshire
      Capital, L.P. (“Investor”)

                
	 
      	 
      
	
                  Securities:

                	
                  Convertible
      Note

                
	 
      	 
      
	
                  Amount:

                	
                  $1,000,000

                
	 
      	 
      
	
                  Maturity
      Date:

                	
                  7
      months from original issuance date

                
	 
      	 
      
	
                  Interest
      Rate:

                	
                  8%
      per annum, calculated and payable quarterly in arrears. At the Company’s
      option, interest may be paid in cash or in shares of the Company’s common
      stock that have been registered for resale under an effective registration
      statement. If the Company elects to pay in common stock, such shares will
      be valued at a 10% discount to the average of the daily volume weighted
      average price of the Company’s common stock for the 20 trading days
      immediately preceding the interest payment date.

                
	 
      	 
      
	
                  Fixed
      Conversion

                	 
      
	
                  Price:

                	
                  20% premium to the
      closing price of the Company’s common stock on the closing
      date

                
	 
      	 
      
	
                  Redemption/

                	 
      
	
                  Conversion:

                	
                  The
      Convertible Note will be redeemed in cash by the Company over 4 months in
      4 equal monthly installments (each a “Redemption Date”) commencing with
      the four month anniversary of the initial issuance date
      thereof.

                

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          	 
      	
                  At
      the Company’s option after a resale registration statement registering the
      common stock underlying the Convertible Note and the warrants described
      below is declared effective by the SEC, the Company may elect to have the
      portion of the Convertible Note to be redeemed automatically convert into
      common stock on the applicable Redemption Date in lieu of paying the
      applicable redemption price in cash, provided that if the Company elects
      such automatic conversion in lieu of paying cash, the conversion will
      occur at the lower of the fixed conversion price or a 10% discount to the
      average of the daily volume weighted average price of the Company’s common
      stock for the 20 trading days immediately preceding the applicable
      Redemption Date, and, among other customary conditions, the common stock
      to be received is then registered for resale pursuant to an effective
      registration statement.

                
	 
      	 
      
	 
      	
                  The
      Company may prepay the Convertible Note in full beginning on the 4 month
      anniversary of the initial issuance date thereof at a 115% premium on
      terms substantially similar to the redemption terms contained in the
      Series D Convertible Preferred Stock issued by the Company in October
      2008.

                
	 
      	 
      
	
                  Anti-Dilution

                	 
      
	
                  Protection:

                	
                  Full
      ratchet for issuances or deemed issuances below the fixed conversion
      price.

                
	 
      	 
      
	
                  Security:

                	
                  The
      Convertible Note will be secured by all of
      the assets of the Company, and the Convertible Note will be guaranteed by
      each of the Company’s wholly-owned subsidiaries. The Investor’s security
      interest will be subordinated to the security interest granted in
      connection with the Company’s Wells Fargo facility (or to a replacement
      lender thereof).

                
	 
      	 
      
	
                  Other
      Terms of

                	 
      
	
                  Convertible
      Note:

                	
                  All
      other terms of the Convertible Note will be substantially
      similar to those of the Series D Convertible Preferred Stock issued by the
      Company in October 2008.

                
	 
      	 
      
	
                  Warrants:

                	
                  The
      Company will issue five (5) year warrants to the Investor in an amount
      equal to 50% of the number of shares that the Investor would own if the
      Investor converted its Convertible Note in full on the closing date
      (without regard to any limitations on conversion). The warrants (i) will
      have an exercise price equal to the fixed conversion price; (ii) may be
      exercised via cashless exercise if the underlying shares are not
      registered for resale; (iii) will include standard Black-Scholes language
      upon the occurrence of a fundamental transaction involving the Company;
      and (iv) contain full ratchet anti-dilution protection. All other terms of
      the warrants will be substantially similar to those terms contained in the
      warrants issued by the Company in connection with the issuance of its
      Series D Convertible Preferred Stock in October 2008.

                
	 
      	 
      
	
                  Registration
      Rights:

                	
                  The Investor will have
      customary registration rights, which shall include, without limitation,
      the requirement for the Company to file a resale registration statement on
      Form S-1 within 45 days of the closing date and to have such registration
      statement declared effective by the SEC within 90 days of the closing
      date. The Company will be subject to customary monetary damages if such
      obligations are not met.

                

        

      

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      
        
          	
                  Other
      Terms:

                	
                  The
      other definitive legal documentation shall be, and contain terms and
      conditions, substantially similar to the legal documentation executed by
      the Company in connection with its issuance of Series D Convertible
      Preferred Stock in October 2008, including, without limitation, with
      respect to rights of first refusal and participation
    rights.

                
	 
      	 
      
	
                  Closing
      Date:

                	
                  As
      soon as practicable upon the execution of written definitive legal
      documentation acceptable to the Investor in its sole
      discretion.

                
	 
      	 
      
	
                  Expenses:

                	
                  The
      Company shall reimburse the Investor for all costs and expenses associated
      with the transaction contemplated hereby (including, without limitation,
      all legal fees) regardless of whether such transaction is consummated so
      long as the Investor proceeds in good faith. Simultaneously with the
      execution of this Term Sheet, the Company will wire to the Investor
      $30,000 as a deposit towards such expense
reimbursement.

                
	 
      	 
      
	
                  Counterparts:

                	
                  This
      Term Sheet may be executed in multiple counterparts and by facsimile
      signature, each of which shall be deemed to be an original, and all such
      counterparts shall constitute but one instrument.

                
	 
      	 
      
	
                  Disclosure:

                	
                  The
      Company shall, on or before 8:30 a.m., New York time, on the first (1st)
      business day after the date of this Term Sheet file a Current Report on
      Form 8-K describing all the material terms of the proposed transaction
      contemplated by this Term Sheet in the form required by the Securities
      Exchange Act of 1934, as amended, and attach this Term Sheet as an exhibit
      thereto.

                
	 
      	 
      
	
                  Nature of Term
      Sheet:

                	
                  Except
      for “Expenses,” “Counterparts,” “Disclosure” above and this provision
      (collectively, the “Binding Provisions”), this Term Sheet represents an
      expression of intent only. Accordingly, none of the parties hereto will be
      bound by any terms of this Term Sheet other than the Binding Provisions.
      This Term Sheet and all rights and remedies hereunder or with respect
      hereto (including, without limitation, specific performance, injunctions
      or temporary restraining orders or other similar equitable relief, all of
      which may be sought and obtained without the necessity of posting any bond
      or other security) are personal to the parties and neither this Term Sheet
      nor any such rights or remedies (all of which are cumulative and may be
      pursued individually, with one or more other, or collectively, in whole or
      in part and from time to time) may be assigned without the consent of the
      other party hereto. Nothing contained in this Term Sheet shall limit or
      reduce any rights or remedies that any party may have hereunder at law or
      in equity. Should the Investor determine not to proceed with the
      contemplated transaction, the Investor shall have no obligation or
      liability related thereto to the Company or any other person or
      entity.

                

        

         

      

      [signature page
follows]

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    If the
foregoing is acceptable, please so indicate by executing and delivering a copy
of this Term Sheet in the space provided below.

    

    
      
        
          
            	
                    NUTRACEA

                  	
                    CRANSHIRE
      CAPITAL, L.P.

                  
	 
      	 
      
	
                    By:
      /s/
      Olga Hernandez Longan

                  	
                    By:  Downsview
      Capital, Inc.

                  
	 
      	
                    Its:  General
      Partner

                  
	 
      	 
      
	
                    Title:
      Chief
      Financial Officer

                  	
                    By:
      /s/
      Keith A. Goodman

                  
	 
      	 
      
	 
      	
                    Title:
      Chief
      Operating
Officer

                  

          

        

      

    

     

    
      
         

      

      
        4WARRANT
NO. D-_

     

    NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

    

    COMMON
STOCK PURCHASE WARRANT

    

     CLEVELAND
BIOLABS, INC.

     

    
      	
              Warrant
      Shares: ________

            	
              Initial
      Exercise Date: __________, 2009

            

    

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, _________ ( “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the seven year
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Cleveland BioLabs, Inc.,
a Delaware corporation (the “Company”), up to
______ shares (the “Warrant Shares”) of
Common Stock.  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section 1.      Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated ________, 2009, among the Company and the purchasers signatory
thereto.

     

    Section 2.      
Exercise.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    a)         
  Exercise
of Warrant.  Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date by delivery to
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the registered Holder at the address of Holder appearing
on the books of the Company) of a duly executed facsimile copy of the Notice of
Exercise Form annexed hereto; and, within three (3) Trading Days of the date
said Notice of Exercise is delivered to the Company, the Company shall have
received  payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary (but subject to
Sections 4(a) and 4(b), Holder shall not be required to physically surrender
this Warrant to the Company until Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case,
Holder shall surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such
purchases.  The Company shall deliver any objection to any Notice of
Exercise Form within two (2) Business Days of receipt of such
notice.  In the event of any dispute or discrepancy, the records of
the Company shall be controlling and determinative in the absence of manifest
error. Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face
hereof.

     

    b)        
   Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $2.60,
subject to adjustment hereunder (the “Exercise
Price”).

     

    c)         
  Cashless
Exercise.  If at any time after the earlier of (i) the one year
anniversary of the date of the Purchase Agreement and (ii) the completion of the
then-applicable holding period required by Rule 144, or any successor provision
then in effect, there is no effective Registration Statement registering, or no
current prospectus available for, the resale of the Warrant Shares by Holder,
then this Warrant may also be exercised at such time by means of a “cashless
exercise” in which Holder shall be entitled to receive a certificate for the
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where:

     

    
      
        	
                
                

              	
                (A)
      =

              	
                the
      VWAP on the Trading Day immediately preceding the date on which Holder
      elects to exercise this Warrant by means of a “cashless exercise,” as set
      forth in the applicable Notice of
Exercise;

              

      

    

    

    
      
        	
                
                

              	
                (B)
      =

              	
                the
      Exercise Price of this Warrant, as adjusted hereunder;
  and

              

      

    

    

    
      
        	
                
                

              	
                (X)
      =

              	
                the
      number of Warrant Shares that would be issuable upon exercise of this
      Warrant in accordance with the terms of this Warrant if such exercise were
      by means of a cash exercise rather than a cashless
    exercise.

              

      

    

    

    d)        
   Exercise
Limitations.

    
      
         

      

      
        2

      

      
         

      

    

    
      	
               
      

            	
              i.

            	
              Holder’s
      Restrictions.  The Company shall not effect any exercise
      of this Warrant, and a Holder shall not have the right to exercise any
      portion of this Warrant, pursuant to Section 2 or otherwise, to the extent
      that after giving effect to such issuance after exercise as set forth on
      the applicable Notice of Exercise, Holder (together with Holder’s
      Affiliates, and any other Persons acting as a group together with Holder
      or any of Holder’s Affiliates), would beneficially own in excess of the
      Beneficial Ownership Limitation (as defined below).  For
      purposes of the foregoing sentence, the number of shares of Common Stock
      beneficially owned by Holder and its Affiliates shall include the number
      of shares of Common Stock issuable upon exercise of this Warrant with
      respect to which such determination is being made, but shall exclude the
      number of shares of Common Stock which would be issuable upon (A) exercise
      of the remaining, nonexercised portion of this Warrant beneficially owned
      by Holder or any of its Affiliates and (B) exercise or conversion of the
      unexercised or nonconverted portion of any other securities of the Company
      (including, without limitation, any other  Common Stock
      Equivalents) subject to a limitation on conversion or exercise analogous
      to the limitation contained herein beneficially owned by Holder or any of
      its Affiliates.  Except as set forth in the preceding sentence, for
      purposes of this Section 2(d)(i), beneficial ownership shall be calculated
      in accordance with Section 13(d) of the Exchange Act and the rules and
      regulations promulgated thereunder, it being acknowledged by Holder that
      the Company is not representing to Holder that such calculation is in
      compliance with Section 13(d) of the Exchange Act and Holder is solely
      responsible for any schedules required to be filed in accordance
      therewith.   To the extent that the limitation contained in
      this Section 2(d)(i) applies, the determination of whether this Warrant is
      exercisable (in relation to other securities owned by Holder together with
      any Affiliates) and of which portion of this Warrant is exercisable shall
      be in the sole discretion of Holder, and the submission of a Notice of
      Exercise shall be deemed to be Holder’s determination of whether this
      Warrant is exercisable (in relation to other securities owned by Holder
      together with any Affiliates) and of which portion of this Warrant is
      exercisable, in each case subject to the Beneficial Ownership Limitation,
      and the Company shall have no obligation to verify or confirm the accuracy
      of such determination.   In addition, a determination as to
      any group status as contemplated above shall be determined in accordance
      with Section 13(d) of the Exchange Act and the rules and regulations
      promulgated thereunder.  For purposes of this Section 2(d)(i),
      in determining the number of outstanding shares of Common Stock, a Holder
      may rely on the number of outstanding shares of Common Stock as reflected
      in (A) the Company’s most recent periodic or annual report filed with the
      Commission, as the case may be, (B) a more recent public announcement by
      the Company or (C) a more recent written notice by the Company or the
      Transfer Agent setting forth the number of shares of Common Stock
      outstanding.  Upon the written or oral request of a Holder, the
      Company shall within two Trading Days confirm orally and in writing to
      Holder the number of shares of Common Stock then outstanding.  In any
      case, the number of outstanding shares of Common Stock shall be determined
      after giving effect to the conversion or exercise of securities of the
      Company, including this Warrant, by Holder or its Affiliates since the
      date as of which such number of outstanding shares of Common Stock was
      reported.  The “Beneficial Ownership
      Limitation” shall be 9.99% of the number of shares of the Common
      Stock outstanding immediately after giving effect to the issuance of
      shares of Common Stock issuable upon exercise of this
      Warrant.  Holder, upon not less than 61 days’ prior notice to
      the Company, may decrease the Beneficial Ownership Limitation provisions
      of this Section 2(d)(i), provided that the provisions of this Section
      2(d)(i) shall continue to apply.  Any such decrease will not be
      effective until the 61st day after such notice is delivered to the
      Company.  The provisions of this paragraph shall be construed
      and implemented in a manner otherwise than in strict conformity with the
      terms of this Section 2(d)(i) to correct this paragraph (or any portion
      hereof) which may be defective or inconsistent with the intended
      Beneficial Ownership Limitation herein contained or to make changes or
      supplements necessary or desirable to properly give effect to such
      limitation. The limitations contained in this paragraph shall apply to a
      successor holder of this Warrant.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              ii.

            	
              Issuance
      Restrictions.  If the Company has not obtained
      Stockholder Approval, then the Company may not issue upon exercise of this
      Warrant a number of shares of Common Stock, which, when aggregated with
      any shares of Common Stock issued (A) pursuant to the conversion of any
      Preferred Stock issued pursuant to any of the Purchase Agreements, (B)
      upon prior exercise of this or any other Warrant issued pursuant to any of
      the Purchase Agreements and (C) pursuant to any warrants issued to any
      registered broker-dealer as a fee in connection with the issuance of
      Securities pursuant to the Purchase Agreements, would exceed
      2,770,160  shares of Common Stock, subject to adjustment for
      reverse and forward stock splits, stock dividends, stock combinations and
      other similar transactions of the Common Stock that occur after the date
      of the Purchase Agreement (such number of shares, the “Issuable
      Maximum”).  Holder and the holders of the other Warrants
      issued pursuant to the Purchase Agreement shall be entitled to a portion
      of the Issuable Maximum equal to the quotient obtained by dividing (x)
      Holder’s original Subscription Amount by (y) the aggregate original
      Subscription Amount of all holders pursuant to the Purchase Agreements. In
      addition, Holder may allocate its pro-rata portion of the Issuable Maximum
      among Warrants held by it in its sole discretion. Such portion shall be
      adjusted upward ratably in the event a Purchaser no longer holds any
      Warrants and the amount of shares issued to such Purchaser pursuant to its
      Warrants was less than such Purchaser’s pro-rata share of the Issuable
      Maximum.  In the event that any Holder shall sell or otherwise
      transfer any of such Holder’s Warrants, the transferee shall be allocated
      a pro rata portion of such Holder’s portion of the Issuable Maximum. For
      avoidance of doubt, unless and until any required Stockholder Approval is
      obtained and effective, warrants issued to any registered broker-dealer as
      a fee in connection with the Securities issued pursuant to the Purchase
      Agreements as described in clause (C) above shall provide that such
      warrants shall not be allocated any portion of the Issuable Maximum and
      shall be unexercisable unless and until such Stockholder Approval is
      obtained and effective.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    e)        
   Mechanics of
Exercise.

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to Holder by crediting the account of
Holder’s prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“DWAC”) system if the
Company is then a participant in such system and either (A) there is an
effective Registration Statement permitting the resale of the Warrant Shares by
Holder or (B) the shares are eligible for resale by Holder without volume or
manner-of-sale limitations pursuant to Rule 144, and otherwise by physical
delivery to the address specified by Holder in the Notice of Exercise by the
date that is three (3) Trading Days after the latest of (A) the delivery to the
Company of the Notice of Exercise Form, (B) surrender of this Warrant (if
required), and (C) payment of the aggregate Exercise Price as set forth above
(such date, the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the first date on which all of the foregoing have been delivered to the
Company.  The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid
by Holder, if any, pursuant to Section 2(e)(vi) prior to the issuance of such
shares, having been paid. If the Company fails for any reason to deliver to
Holder certificates evidencing the Warrant Shares subject to a Notice of
Exercise by the Warrant Share Delivery Date, the Company shall pay to Holder, in
cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the
date of the applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated damages begin
to accrue) for each Trading Day after such second Trading Day following the
Warrant Share Delivery Date until such certificates are delivered or Holder
rescinds such exercise.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    ii.           Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    iii.           Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to Holder a certificate or the certificates representing the Warrant
Shares pursuant to Section 2(e)(i) by the Warrant Share Delivery Date, then,
Holder will have the right to rescind such exercise.

     

    iv.           Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise.  In
addition to any other rights available to Holder, if the Company fails to cause
the Transfer Agent to transmit to Holder a certificate or the certificates
representing the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date Holder is required by its broker to
purchase (in an open market transaction or otherwise) or Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale
by Holder of the Warrant Shares which Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to Holder the amount by which (x) Holder’s total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver to Holder in
connection with the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (B) at the
option of Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case
such exercise shall be deemed rescinded) or deliver to Holder the number of
shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder.  For
example, if Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (A) of the immediately preceding sentence
the Company shall be required to pay Holder $1,000. Holder shall provide the
Company written notice indicating the amounts payable to Holder in respect of
the Buy-In and, upon request of the Company, written evidence of the Buy-In and
the amount of such loss.  Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    v.       
    No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall, at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

     

    vi.           Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of Holder or in such name or names as may be directed by Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by Holder and the Company
may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

     

    vii.          Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     

    Section 3.      Certain
Adjustments.

     

     a)               Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant or upon conversion of, or as payment of a dividend on, the Preferred
Stock or the Series B Preferred in accordance with the terms thereof as in
effect as of the date of the Purchase Agreement), (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged.  Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    b)             
 Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at
any time while this Warrant is outstanding, shall sell or grant any option to
purchase, or sell or grant any right to reprice, or otherwise dispose of or
issue any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at an effective price per share less than the
Exercise Price then in effect (such lower price, the “Base Share Price” and
such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share that is less than the Exercise Price then in effect, such
issuance shall be deemed to have occurred for less than the Exercise Price on
such date of the Dilutive Issuance), then, the Exercise Price shall be reduced
and only reduced to equal the Base Share Price.  Such adjustment shall
be made whenever such Common Stock or Common Stock Equivalents are
issued.  Notwithstanding the foregoing, no adjustments shall be made,
paid or issued under this Section 3(b) in respect of an Exempt
Issuance.  The Company shall notify Holder, in writing, no later than
the Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this Section 3(b), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price and
other pricing terms (such notice, the “Dilutive Issuance
Notice”).  For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon
the occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance Holder is entitled to receive a number of Warrant Shares based upon the
Base Share Price on or after the date of such Dilutive Issuance, regardless of
whether Holder accurately refers to the Base Share Price in the Notice of
Exercise.

     

    c)               
Subsequent Rights
Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holder) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP on the record date
mentioned below, then, the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming receipt by the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP.  Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    d)      
     Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Stock (and not to
Holder) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock (which shall be subject to Section 3(b)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding share of
the Common Stock as determined by the Board of Directors in good
faith.  In either case the adjustments shall be described in a
statement provided to Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share
of Common Stock.  Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

     

    e)       
    Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, Holder
shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate
Consideration”) receivable as a result of such merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. For purposes
of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction.  To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to Holder a new warrant, in exchange for the Warrant,
consistent with the foregoing provisions and evidencing Holder’s right to
exercise such warrant into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this Section 3(e) and ensuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction that is (1) an all cash transaction, (2) a
“Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3)
a Fundamental Transaction involving a person or entity not traded on a national
securities exchange, including, but not limited to, the Nasdaq Global Select
Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or
any successor entity shall pay at Holder’s option, exercisable at any time
concurrently with or within 30 days after the consummation of the Fundamental
Transaction, in exchange for this Warrant, an amount of cash equal to the value
of this Warrant as determined in accordance with the Black Scholes Option
Pricing Model obtained from the “OV” function on Bloomberg L.P. using (A) a
price per share of Common Stock equal to the VWAP of the Common Stock for the
Trading Day immediately preceding the date of consummation of the
applicable  Fundamental Transaction, (B) the risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term
of this Warrant as of the date of consummation of the applicable Fundamental
Transaction, (C) an expected volatility equal to the 100 day volatility obtained
from the “HVT” function on Bloomberg L.P. determined as of the Trading Day
immediately following the public announcement of the applicable Fundamental
Transaction and (D) a remaining option time equal to the time between the date
of the public announcement of such transaction and the Termination Date. Upon
such payment, in full, this Warrant shall be canceled and shall be of no further
force or effect.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    f)         
  Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    g)      
     Notice to
Holder.

     

    i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to Holder a notice setting
forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. If the Company enters into a
Variable Rate Transaction, despite the prohibition thereon in the Purchase
Agreements, the Company shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion or exercise price at which
such securities may be converted or exercised.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    ii.           Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to Holder at
its last address as it shall appear upon the Warrant Register of the Company, at
least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice or (z) the date on which such
dissolution, liquidation or winding up is expected to
commence.  Holder shall remain entitled to exercise this Warrant
during the period commencing on the date of such notice to the effective date of
the event triggering such notice except as otherwise set forth
herein.

     

    Section 4.      Transfer and Exchange of
Warrant.

     

     a)        
     Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    b)         
    New
Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney.  Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall
be dated the original Issue Date and shall be identical with this Warrant except
as to the number of Warrant Shares issuable pursuant thereto.

     

    c)          
   Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    d)       
      Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
either (i) registered pursuant to an effective
registration statement under the Securities
Act and under applicable state securities
or blue sky laws or (ii) eligible for
resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing
such transfer, that Holder or transferee of this Warrant, as the case may
be, comply with the provisions of Section
5.7 of the Purchase Agreement.

     

    e)           
   Representation by
Holder. Holder, by the acceptance hereof, represents and warrants that it
is acquiring this Warrant and, upon any exercise hereof, will acquire the
Warrant Shares issuable upon such exercise, for its own account and not with a
view to or for distributing or reselling such Warrant Shares or any part thereof
in violation of the Securities Act or any applicable state securities law,
except pursuant to sales registered or exempted under the Securities
Act.

     

    Section 5.      Miscellaneous.

     

    a)           
   No
Rights as Stockholder Until Exercise.  This Warrant does not
entitle Holder to any voting rights, dividends or other rights as a stockholder
of the Company prior to the exercise hereof as set forth in Section
2(e)(i).

     

    b)         
     Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond, unless required by the Transfer Agent), and
upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    c)           
    Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    d)         
     Authorized
Shares.

     

    The
Company covenants that, during the period commencing on the Authorized Share
Approval Date and ending on the date on which the Warrant is no longer
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant.  The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this
Warrant.  The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed.  The
Company covenants that all Warrant Shares which may be issued upon the exercise
of the purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant Shares
in accordance herewith, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

     

    Except
and to the extent as waived or consented to by Holder, the Company shall not by
any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, 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, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be reasonably necessary
or appropriate to protect the rights of Holder as set forth in this Warrant
against impairment.  Without limiting the generality of the foregoing,
the Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be reasonably necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Company to perform its obligations under this
Warrant.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be reasonably necessary from any public regulatory body or
bodies having jurisdiction thereof.

     

    e)             Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

     

    f)             Restrictions.  Holder
acknowledges that the Warrant Shares acquired upon the exercise of this Warrant,
if not registered, will have restrictions upon resale imposed by state and
federal securities laws.

     

    g)       
    Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h)         
  Notices.  Any
notice, request or other document required or permitted to be given or delivered
to Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.  

     

    i)            
Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

     

    j)           
 Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

     

    k)            Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of,
and be binding upon, the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder.  The provisions of this
Warrant are intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by such Holder or holder of Warrant
Shares.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    l)            
Amendment.  This
Warrant may be modified or amended, or the provisions hereof waived with the
written consent of the Company and Holders holding Warrants at least equal to
67% of the Warrant Shares issuable upon exercise of all then outstanding
Warrants.

     

    m)         
  Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    n)          
 Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

    

    ********************

    

    (Signature
Pages Follow)

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

     

    
      	 
      	
              CLEVELAND
      BIOLABS, INC.

            
	 
      	 
      
	 
      	
              By:

            	
                /s/
      Michael Fonstein

            
	 
      	 
      	
                

            
	 
      	 
      	
              Name:
      Michael Fonstein

            
	 
      	 
      	
              Title:
      President and Chief Executive
Officer

            

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    NOTICE
OF EXERCISE

    

    TO:           CLEVELAND
BIOLABS, INC.

    

    (1) 
 The undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.

     

    (2) 
Payment shall take the form of (check applicable box):

     

     ̈ in
lawful money of the United States; or

     

     ̈ [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection
2(c).

     

    (3) 
Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned or in such other name as is specified
below:

     

    
      
        	 
      	
                _______________________________

              	 
      

      

    

    

    The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

    

    
      
        	 
      	
                _______________________________

              	 
      
	 
      	 
      	 
      
	 
      	
                _______________________________

              	 
      
	 
      	 
      	 
      
	 
      	
                _______________________________

              	 
      

      

    

    

    (4)  Accredited
Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

    

    [SIGNATURE
OF HOLDER]

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Name of Investing Entity:

                                      	
                                          

                                      

                              

                            

                          

                          
                            
                              
                                	
                                        Signature of Authorized Signatory of Investing Entity:

                                      	
                                          

                                      

                              

                            

                          

                          
                            
                              	
                                      Name of Authorized Signatory:

                                    	
                                        

                                    

                            

                          

                          
                            
                              	
                                      Title of Authorized Signatory:

                                    	
                                        

                                    

                            

                          

                          
                            
                              
                                	
                                        Date:

                                      	
                                          

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
FORM

    

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

    

    FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

    

    
      	
                

            	
               whose
      address is

            
	 
      
	
                

            	. 
	 
      
	
                

            	 
      

    

    

    
      
        
          
            
              
                
                  	 
      	 
      	
                          Dated:

                        	
                            

                        	
                          ,

                        	
                            

                        	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          Holder’s
      Signature:

                        	
                            

                        	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          Holder’s
      Address:

                        	
                            

                        	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                            

                        	 
      

                

              

            

          

        

      

    

    

    
      	
              Signature
      Guaranteed:

            	
                

            	 
      

    

    

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}]]