Document:

exhibit41.htm

    
      

      

    

     

    EXHIBIT
4.1

    
 

    THIS
NOTE HEREOF HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS.  THIS NOTE HAS
BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW FOR DISTRIBUTION
OR RESALE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UNLESS
IT HAS BEEN SO REGISTERED OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.

     

    CONVERTIBLE DEMAND
PROMISSORY NOTE

     

    Principal
Amount:  $156,875.00                                                                                                                                    Issue
Date:   April 7, 2009

     

    FOR VALUE RECEIVED, the
undersigned, Oxis
International, Inc., a Delaware corporation (the “Borrower”
or the “Company”),
hereby promises to pay to the order of Bristol Investment Fund,
Ltd. (together with each of
their said heirs, personal representatives, successors and assigns, and any such
bearer, being hereinafter referred to collectively as  the “Holder”),
on demand (the date on which demand is made is the “Maturity
Date”), the principal sum of Twelve Thousand Five Hundred Fifty
Dollars ($156,875.00) (the “Note”).  For
purposes of this Note, “Borrower” shall mean all successors in interest and
assignees, including, without limitation, pursuant to a merger, consolidation,
reorganization, recapitalization or other similar restructuring event
(collectively, a “Reorganization”),
and all endorsers, sureties and guarantors and any other person liable or to
become liable with respect to the Note.

    

    1.           Original Issue
Discount.   This Note is issued with an original issue
discount of 20.3187% and has been issued to Holder upon funding of $125,000 by
Holder to Borrower.

     

    2.           Payment of
Principal.  The Borrower shall pay the Holder the entire
principal amount due under this Note upon demand by Holder.

     

    3.           Conversion.  At
any time while this Note is outstanding, the Holder may convert any portion of
this Note that is outstanding, whether such portion represents principal or
interest, into shares of common stock of the Company (the “Conversion Shares”)
at a price (the “Conversion Price”) equal to the lesser of (i) $0.01 and (ii)
60% of the average of the three (3) lowest trading prices occurring at any time
during the twenty (20) trading days preceding the date that the Holder notifies
the Company that it elects to effectuate a conversion (the “Conversion
Date”).  The Company must deliver the Conversion Shares to the Holder
no later than the third (3rd)
business day after the Conversion Date (the “Share Delivery Date”).

     

    4.           Prepayment.  Borrower
shall pay the entire outstanding principal balance under this Note, together
with all accrued and unpaid interest thereon (collectively, the “Indebtedness”),
at anytime, in the Borrower’s sole discretion, on or before the date that Holder
makes demand without penalty.  The Borrower shall give at least 5
days’ notice to the Holder prior to such repayment (the fifth (5th) day
following such notice is the “Prepayment Date”).  In the event that
Borrower fails to make complete payment of all amounts due under this Note on
the Prepayment Date, the Holder may immediately demand payment of all amounts
due under this Note at any time following such Prepayment Date.

     

    5.           Warrant.    Simultaneously
with the issuance of this Note, Borrower shall issue to the Holder a warrant
(the “Warrant”) to purchase such number of shares of common stock of the Company
equal to the number of Conversion Shares issuable upon full conversion of the
principal amount of this Note at a price (the “Warrant Issue Price”) equal to
the lesser of (i) $0.01 and (ii) 60% of the average of the three (3) lowest
trading prices occurring at any time during the 20 trading days preceding the
issue date of this Note.  Such Warrant shall be exercisable for common
stock of the Company at an exercise price equal to the Warrant Issue Price,
subject to full-ratchet anti-dilution adjustment as more fully described in the
form of Warrant to be provided by Holder and signed by the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.           Acknowledgement by the
Holder.  The Holder hereby represents and warrants to the
Borrower that the Holder has sufficient knowledge and experience of financial
and business matters so that the Holder is able to evaluate the merits and risks
of purchasing this Note and the Holder has had substantial experience in
previous private and public purchases of securities.  The Holder is an
“accredited investor” as that term is defined in Rule 501 of Regulation D under
the Securities Act.

     

    7.           Anti-dilution
Adjustment.  If at any time this Note is outstanding, the
Company issues common stock or securities convertible into or exercisable for
common stock at a price per share that is lower than the Conversion Price (a
“Dilutive Issuance”), or adjusts the price per share at which any of its
outstanding securities can be converted into or exercised for common stock to a
price that is lower than the Conversion Price (a “Dilutive Adjustment”), the
Conversion Price shall automatically be adjusted to equal the lower price
granted in such Dilutive Issuance or Dilutive Adjustment (the “Adjusted
Conversion Price”).  The Company must provide written notice to the
Holder of a Dilutive Issuance or a Dilutive Adjustment (the “Adjustment Notice”)
within three (3) trading days of such occurrence, provided however that the
Adjusted Conversion Price shall be deemed to be in effect automatically upon any
Dilutive Issuance or Dilutive Adjustment regardless of whether the Company
provides the Adjustment Notice. The Company must honor any conversions requested
by the Holder at the Adjusted Conversion Price following any Dilutive Issuance
or Dilutive Adjustment.

     

    8.           Piggyback Registration
Rights.  If at any time this Note is outstanding, the Company
files a registration statement with the United States Securities and Exchange
Commission (the “Registration Statement”) the Company must include the shares
underlying this Note in such Registration Statement.  The Company
shall notify the Holder of its intent to file such Registration Statement at
least thirty (30) days prior the filing of the Registration Statement and
provide the Holder an opportunity to review and comment on such Registration
Statement.

     

    9.           Event of
Default.  Any of the following shall constitute an “Event of
Default” under this Note, and shall give rise to the remedies provided in
Section 6
herein:

     

    
      	
               
      

            	
              (a)

            	
              The
      failure by the Borrower to pay the Indebtedness or otherwise to satisfy
      when due, as contemplated in Section
      2;

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      failure by the Borrower to deliver the Conversion Shares by the Share
      Delivery Date, as contemplated in Section
      3;

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      failure by the Borrower to provide the Adjustment Notice or honor
      conversions at the Adjusted Conversion Price following a Dilutive Issuance
      or Dilutive Adjustment, as contemplated in Section
      6;

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      failure by the Borrower to comply with the registration obligations as
      contemplated in Section
      7;

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      failure by the Borrower to timely file and keep current periodic reports
      with the SEC;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (f)

            	
              If
      the Borrower:  (i) makes a general assignment for the
      benefit of creditors; (ii) is adjudicated a bankrupt or insolvent;
      (iii) files a voluntary petition in bankruptcy; (iv) takes advantage,
      as against its creditors, of any bankruptcy law or statute of the United
      States of America or any state or subdivision thereof now or hereafter in
      effect; (v) has a petition or proceeding filed against it under any
      provision of any bankruptcy or insolvency law or statute of the United
      States of America or any state or subdivision thereof, which petition or
      proceeding is not dismissed within 30 days after the date of the
      commencement thereof; (vi) has a receiver, liquidator, trustee,
      custodian, conservator, sequestrator or other such person appointed by any
      court to take charge of its affairs or assets or business and such
      appointment is not

            

    

     

    
      	
               
      

            	
              (g)

            	
              vacated
      or discharged within 30 days thereafter; or (vii) takes any action in
      furtherance of any of the
foregoing;

            

    

     

    
      	
               
      

            	
              (h)

            	
              Any
      merger, liquidation, dissolution or winding up of the Borrower or its
      business or any sale of all or substantially all of the Borrower’s capital
      stock or assets; provided,
      however,
      the merger or sale of the Borrower with a successor entity that
      acknowledges and expressly assumes in writing the Borrower’s obligations
      hereunder shall not be considered an “Event of Default” for purposes
      hereof; or

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrower attempts to effectuate or effectuates a reverse stock split of
      its common stock without first obtaining the prior written consent of the
      Holder.

            

    

     

    10.           Remedies on
Default.  If any Event of Default shall occur and be continuing
for a period of seven (7) calendar days, the Holder shall, in addition to any
and all other available rights and remedies, have the right, at the Holder’s
option unless such Event of Default shall have been cured or waived in writing
by the Holder (which waiver shall not be deemed to be a waiver of a subsequent
default), to:  (a) declare the entire unpaid principal balance of this
Note, together with all interest accrued thereon and all other sums due by the
Borrower hereunder (the “Default Amount”), along with a default premium equal to
10% of the Default Amount, to be immediately due and payable; and (b) pursue any
and all available remedies for the collection of such principal and interest to
enforce its rights as described herein; and in such case the Holder may also
recover all costs of suit and other expenses in connection therewith, including
reasonable attorney’s fees for collection and the right to equitable relief
(including, but not limited to, injunctions) to enforce the Holder’s rights as
set forth herein.

     

    11.           Participation in Future
Financing.  From the date hereof until the date that is the
later of (i) the Maturity Date and (ii) 360 days after the Indebtedness is paid
to Holder, upon any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (a “Subsequent
Financing”), the Holder shall have the right to participate in a
Subsequent Financing for up to an amount  equal to 100% of the
Subsequent Financing (the “Participation
Maximum”) on the same terms and conditions provided for in the Subsequent
Financing at a 25% discount to the price of the securities issued in such
Subsequent Financing or elect to increase by 25% the principal amount of
existing notes then currently held by the Holder.  Notwithstanding the
foregoing, Holder may exchange this Note for securities issued in a Subsequent
Financing (the "Subsequent Securities") at a 25% discount to the price of the
Subsequent Securities.  If the Holder elects to exchange the Note for
the Subsequent Securities, and such exchange is not accompanied by any cash
consideration, Borrower's counsel shall provide a legal opinion stating that the
Subsequent Securities are deemed to have been issued on the issue date of this
Note.

    

    12.           Certain
Waivers.  Except as otherwise expressly provided in this Note,
the Borrower hereby waives diligence, demand, presentment for payment, protest,
dishonor, nonpayment and default with respect to the Indebtedness evidenced
hereby.  The Borrower hereby expressly agrees that this Note, or any
payment hereunder, may be extended, modified or subordinated (by forbearance or
otherwise) from time to time, without in any way affecting the liability of the
Borrower.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13.           Waivers and Amendments;
Cumulative Remedies.  Neither any provision of this Note nor
any performance hereunder may be waived orally, but only by an agreement in
writing and signed by the party against whom enforcement of any waiver or
discharge is sought.  No right or remedy conferred upon the parties
under this Note is intended to be exclusive of any other right or remedy
contained herein or in any instrument or document delivered in connection
herewith, and every such right or remedy shall be cumulative and shall be in
addition to every other such right or remedy contained herein and/or now or
hereafter existing at law or in equity or otherwise.

     

    14.           Governing
Law.  This Note shall be deemed to be a contract made under the
laws of the State of New York and shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflicts of law.  If either party shall commence an
action or proceeding to enforce any provision of this Note, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.

     

    15.           Consent to Jurisdiction and
Service of Process.  The Borrower by execution, and the Holder
by acceptance, hereof each consent to the jurisdiction of any federal district
court in the State of New York having competent jurisdiction.  The
Borrower waives personal service of any summons, complaint or other process in
connection with any such action or proceeding and agrees that service thereof
may be made, as the Holder may elect, by certified mail directed to the Borrower
at the location provided for in Section 13 hereof,
or, in the alternative, in any other form or manner permitted by
law.

     

    16.           Additional
Documents.  From time to time the Holder will execute and
deliver to the Borrower such additional instruments as the Borrower may
reasonably request to effectuate the purposes of this Note.

     

    17.           Notices.  All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by United States first-class mail, postage prepaid,
or delivered personally by hand or by nationally recognized overnight courier or
sent via facsimile addressed to:

     

    If to the
Borrower:

    

    Oxis
International, Inc.

    468 N.
Camden Dr., 2nd Floor

    Beverly
Hills, CA  90210

    Attn:  Maurice
Spitz, CEO

    

    If to the
Holder:

     

    Bristol
Investment Fund Ltd.

    c/o
Bristol Capital Advisors LLC

    Attn: Amy
Wang, Esq.

    10990
Wilshire Blvd., Suite 1410

    Los
Angeles, CA 90024

    Facsimile: (310)
696-0334

     

    or at
such other address as shall have been furnished to the other party in
writing.  All such notices and other written communications shall be
effective:  (a) if mailed, five days after mailing; (b) if delivered,
upon delivery; and (c) if sent via facsimile, upon confirmation of
receipt.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    18.           Wiring
Instructions.  Any amount wired to the Borrower hereunder shall
be wired in accordance with the following wiring instructions:

    
    

     

    
      	 Bank
      Name:	 City National
      Bank
	 Account
      Name:	 Oxis
      International, Inc.
	 Account
      Number:	 0096 32
      174
	 Routing
      number:	 122 016
      066

    

                               

    19.           Severability.  If
any provision of this Note is prohibited or unenforceable in any jurisdiction,
it shall be ineffective in such jurisdiction only to the extent of such
prohibition or unenforceability, and such prohibition or unenforceability shall
not invalidate the balance of such provision to the extent it is not prohibited
or unenforceable nor the remaining provisions hereof, nor render unenforceable
such provision in any other jurisdiction.

     

    20.           Assignment.  This
Note shall inure to the benefit of, and shall be binding upon, the Borrower and
the Holder and their respective successors and permitted
assigns.  Neither party hereto may assign any of its rights or
obligations hereunder without the prior written consent of the other
party.

     

    21.           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument.  A facsimile signature of any party shall be considered to
have the same binding legal effect as an original signature.

     

    22.           No Stockholder
Rights.  Nothing contained in this Note shall be construed as
conferring upon the Holder or any other person the right to vote or to consent
or to receive notice as a stockholder in respect of meeting of stockholders for
the election of directors of the Borrower or any other matters or any rights
whatsoever as a stockholder of the Borrower; and no dividends shall be payable
or accrued in respect of this Note.

     

    23.           JURY
WAIVER.  THE BORROWER BY EXECUTION, AND THE HOLDER BY
ACCEPTANCE, HEREOF EACH CONSENT THAT IN ANY CIVIL ACTION, COUNTERCLAIM, OR
PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR
RELATES TO THIS NOTE, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS NOTE, THE
PERFORMANCE OF THIS NOTE, OR THE RELATIONSHIP CREATED BY THIS NOTE, WHETHER
SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A
COURT OF COMPETENT JURISDICTION AND NOT TO A JURY.  EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY.  ANY
PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS NOTE WITH ANY COURT, AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS NOTE OF THE WAIVER OF
THEIR RIGHT TO A TRIAL BY JURY.

     

    

     

    

     

    

     

    [SIGNATURE
PAGE FOLLOWS]

     

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
undersigned has executed and delivered this Note on and as of the date first set
forth above.

    

    

    

    
      	 
      	
               Oxis International, Inc., a
      Delaware corporation, as Borrower

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Anthony
      Cataldo

            
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:exhibit42.htm

    
      

      

    

    EXHIBIT 4.2

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO 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
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

    

    OXIS
INTERNATIONAL, INC.

     

     

    Warrant
Shares:
_______                                                                                                                 Initial Exercise
Date:  April ___, 2009

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, BRISTOL INVESTMENT FUND, LTD. (the “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 April ___, 2009 (the
“Initial Exercise
Date”) and on or prior to the close of business on the April ___, 2016
(the “Termination
Date”) but not thereafter, to subscribe for and purchase from Oxis
International, Inc., a Delaware corporation (the “Company”), up to
____________ shares (the “Warrant Shares”) of
common stock, par value $.001 per share, of the Company (the “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 Convertible Demand Promissory Note (the “Note”), dated April
___, 2009, issued by the Company to the Holder.

     

    Section
2.                                Exercise.

     

    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 of a duly executed facsimile copy of the Notice of Exercise Form
annexed  hereto (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 such Holder appearing on the books of the Company);
and, within 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, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within 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.  The 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 1 Business Day of receipt of such notice.  In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The 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 $0.01, subject to adjustment
hereunder (the “Exercise
Price”).

     

    c)           Cashless
Exercise.  This Warrant may also be exercised at such time by
means of a “cashless exercise” in which the 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 of such
      election;

            

    

    

    
      	
               
      

            	
              (B)
      = the Exercise Price of this Warrant, as adjusted;
  and

            

    

    

    
      	
               
      

            	
              (X)
      = the number of Warrant Shares issuable upon exercise of this Warrant in
      accordance with the terms of this Warrant by means of a cash exercise
      rather than a cashless exercise.

            

    

    

    Notwithstanding
anything herein to the contrary, (i) on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c)
and (ii) this Warrant may be exercised via a cashless exercise during the 30
Trading Days immediately prior to the Termination Date if there is no effective
Registration Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    d)           Exercise
Limitations  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(c) or otherwise, to the extent
that after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, such Holder (together with such Holder’s
Affiliates, and any other person or entity acting as a group together with such
Holder or any of such Holder’s Affiliates), as set forth on the applicable
Notice of Exercise, 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 such 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 such 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 Debentures or Warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by such 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 a Holder that the Company is not
representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such 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 such Holder together with any Affiliates) and of which a
portion of this Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to such aggregate
percentage 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 (x) the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be,
(y) a more recent public announcement by the Company or (z) any other notice by
the Company or the Company’s 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 such
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 such 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 4.99% 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.  The Beneficial
Ownership Limitation provisions of this Section 2(d)(i) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior notice
to the Company to change the Beneficial Ownership Limitation to 9.99% of the
number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon exercise of this Warrant, and the
provisions of this Section 2(d) shall continue to apply.  Upon such a
change by a Holder of the Beneficial Ownership Limitation from such 4.99%
limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not
be further waived by such Holder.  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.

     

    e)           Mechanics of
Exercise.

     

    i.      Authorization of Warrant
Shares.  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,
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).

     

    ii.           Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant (if required) and payment of the aggregate Exercise Price as set
forth above (“Warrant
Share Delivery Date”).  This Warrant shall be deemed to have
been exercised on the date the Exercise Price is received by 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 by payment to the Company of the Exercise Price
(or by cashless exercise, if permitted) and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such
shares, have been paid.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    iii.           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.

     

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

     

    v.      Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise.  In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the 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 (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the 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 the 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 (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of 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.

     

    vi.           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.

     

    vii.           Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the 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 the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the 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.

     

    viii.           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:
(A) 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), (B) subdivides outstanding shares of Common Stock into a larger number
of shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) 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.  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.

     

    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 its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) 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 then Exercise Price (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 which is less than the Exercise Price, 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 and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price payable hereunder,
after taking into account the decrease in the Exercise Price, shall be equal to
the aggregate Exercise Price prior to such adjustment.  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 the Holder in writing, no later
than the Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, 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 the Holder is entitled to receive a number of Warrant Shares based upon
the Base Share Price regardless of whether the 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 Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP at 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.

     

    d)           Pro Rata
Distributions.  If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) 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 the 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, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) 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 (D) 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 (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
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, at the option of the Holder, (a) upon exercise of this
Warrant, 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 upon or as a result of such reorganization,
reclassification, 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 or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula.  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 the 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 the Holder a new warrant consistent with
the foregoing provisions and evidencing the 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 insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

     

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

     

    h)           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 the 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 issues a
variable rate security, 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 in the case of any
transaction in which securities are issued at a variable price.

     

    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, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (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 the 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 or
(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.  The
Holder is entitled to exercise this Warrant during the 20-day period commencing
on the date of such notice to the effective date of the event triggering such
notice.

     

    

    Section
4.                                Transfer of
Warrant.

     

    a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof, 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 the 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 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.  A Warrant, if properly assigned,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.

     

    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 the 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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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 the
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
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities
Act.

     

    Section
5.                                Miscellaneous.

     

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

     

    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), 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.

     

    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 the Warrant is 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.

     

    Except
and to the extent as waived or consented to by the 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 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 (a) 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, (b) take all such action as may be 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 (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.

     

    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 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
Note.

     

    f)           Restrictions.  The
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 the 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 the Holder by the Company shall be delivered in accordance with the notice
provisions of the Note.

     

    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 of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant
Shares.

     

    l)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    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.

     

    

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

    

    

    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.

     

    

    

      
        	 	OXIS
      INTERNATIONAL, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Anthony
      Cataldo	 
	 	 	Name: 	 
	 	 	Title:	 
	 	 	 	 

      

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE
OF EXERCISE

    

    TO:           OXIS
INTERNATIONAL, 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-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]