Document:

EnerJex
Resources, Inc.

    27
Corporate Woods, Suite 350

    10975
Grandview Drive

    Overland
Park, Kansas 66210

    

    June 5,
2009

    

    The
Buyers of Senior Secured Debentures

    of
EnerJex Kansas, Inc. and Common Stock

    of
EnerJex Resources, Inc.

    

    
      	
               
      

            	
              RE:

            	
              Amendment to
      Debentures and Transaction Documents (this “Letter
      Agreement”)

            

    

    

    Dear
Buyers:

    

    Reference
is made to the June 21, 2007 Senior Secured Debentures (the “Debentures”), the
Securities Purchase Agreement (the “Purchase Agreement”),
and the Pledge and Security Agreement (the “Security Agreement”)
and other agreements and documents associated therewith (collectively, the
“Transaction
Documents”), all dated as of April 11, 2007, by and among EnerJex Kansas,
Inc. (the “Company”), EnerJex
Resources, Inc. (“Parent”) and each of
the Debenture Holders set forth on the signature pages hereto (each individually
a “Buyer” and,
collectively, the “Buyers”).  Capitalized
terms used but not otherwise defined herein have the meanings ascribed to such
terms in the Debentures, Purchase Agreement, the Security Agreement and/or the
Transaction Documents.

    

    WHEREAS:

     

    A.           The
Company wishes to extend the Maturity Date of the Debentures to September 30,
2010.

     

    B.           The
Buyers wish to amend the Debentures to allow for the conversion of the
Debentures into shares of Parent’s common stock.

     

    C.           On
or about July 3, 2008, the Company entered into a three-year $50 million senior
secured credit facility with Texas Capital Bank, N. A. (the “Credit Facility”) and
the Company and the Buyers entered into the Subordination
Agreement.

     

    D.           The
Company, the Parent and the Buyers agree that all of the proceeds received by
the Company or the Parent from any equity offering (an “Offering”) of their
respective equity securities shall, subject to compliance with the Credit
Facility, first be applied to redeem the Debentures.

     

    E.           The
Company and the Buyers wish to amend certain Sections of the Debentures and the
Transaction Documents as set forth herein.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    F.           Certain
of the Transaction Documents provide that amendments may be made by written
consent of the Company and holders of at least sixty-five percent of the
aggregate number of Registrable Securities issued under the Securities Purchase
Agreement, and the undersigned Buyers constitute such requisite
holders.

     

    NOW THEREFORE, in
consideration of the premises and mutual promises herein contained, the Company
and the Buyers hereby agree as follows:

     

    1.           Defined Terms.
Capitalized terms used in this Letter Agreement which are not defined herein
shall have the meaning ascribed to them in the Transaction
Documents.

     

    2.           Offering.  The
Company and Parent covenant and agree that any net proceeds from any Offering
shall, subject to the terms and conditions of the Credit Facility and the
Subordination Agreement, first be applied to fully redeem the obligations of
Principal and accrued but unpaid Interest outstanding under the
Debentures.  If the net proceeds from any such Offering are not
sufficient to fully redeem all obligations of Principal and accrued but unpaid
Interest outstanding under the Debentures, then the Company shall apply all of
the net proceeds of the Offering to redeem a pro rata amount of the Debentures
from each holder based on the principal amount of the Debentures at that time
outstanding.

     

    3.           Amendments to
Debentures.  The Company and the Buyers hereby agree
that:

     

    
      	
               
      

            	
              a.

            	
              Section (1)
      of each of the Debentures are modified to state the “Maturity Date” shall
      be September 30, 2010.

            

    

     

    
      	
               
      

            	
              b.

            	
              Section (2)
      of each of the Debentures is modified in its entirety to read as
      follows:

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      “INTEREST; INTEREST
RATE.”

       

    

    
      	
               
      

            	
              (a)

            	
              Interest Rate and
      Payment. Interest on this Debenture shall commence accruing on the
      Issuance Date and shall be computed on the basis of a 365-day year and
      actual days elapsed and shall be payable in arrears for each Payment
      Quarter on the first day of the succeeding Payment Quarter during the
      period beginning on the Issuance Date and ending on, and including, the
      Maturity Date (each, an “Interest Date”).
      Interest shall be payable on each Interest Date, to the record holder of
      this Debenture on the applicable Interest Date, (i) in cash (“Cash Interest”), (ii) in
      payment in kind with an increase in the Principal amount of this Debenture
      (“PIK Interest”),
      or (iii), at the option of the Company with the prior written consent of
      the Required Holders, in shares of Common Stock (“Interest Shares”) or a
      combination thereof, provided that
      the Interest which accrued during any period may be payable in Interest
      Shares if, and only if, the Company delivers written notice (each, an
      “Interest Election
      Notice”) of such election to each holder of the Debentures on or
      prior to the tenth (10th) Trading Day prior to the Interest Date (each, an
      “Interest Notice Due
      Date”).  Each Interest Election Notice must specify the
      amount of Interest that shall be paid as Cash Interest, if any, the amount
      of Interest that shall be paid as PIK Interest, and the amount of Interest
      that shall be paid in Interest Shares.  Interest to be paid on
      an Interest Date in PIK Interest shall be paid through the increase in the
      Principal amount of this Debenture. Interest to be paid on an Interest
      Date in Interest Shares shall be paid in a number of fully paid and
      nonassessable shares (provided, that if the issuance would result in the
      issuance of a fraction of a share of Common Stock, the Company shall round
      such fraction of a share of Common Stock up to the nearest whole share) of
      Common Stock equal to the quotient of (a) the amount of Interest payable
      on such Interest Date less any Cash Interest paid (b) less any PIK
      Interest paid and (c) the Interest Conversion Price in effect on the
      applicable Interest Date.  If any Interest Shares are to be paid
      on an Interest Date, then the Company shall (X) provided that
      the Company’s transfer agent (the “Transfer Agent”) is
      participating in The Depository Trust Company (“DTC”) Fast Automated
      Securities Transfer Program and such action is not prohibited by
      applicable law or regulation or any applicable policy of DTC, credit such
      aggregate number of Interest Shares to which the Holder shall be entitled
      to the Holder’s or its designee’s balance account with DTC through its
      Deposit Withdrawal Agent Commission system, or (Y) if the foregoing shall
      not apply, issue and deliver within three Trading Days after the
      applicable Interest Date, to the address set forth in the register
      maintained by the Company for such purpose pursuant to the Securities
      Purchase Agreement or to such address as specified by the Holder in
      writing to the Company at least two Business Days prior to the applicable
      Interest Date, a certificate, registered in the name of the Holder or its
      designee, for the number of Interest Shares to which the Holder shall be
      entitled.  Notwithstanding the foregoing, the Company shall not
      be entitled to pay Interest in Interest Shares and shall be required to
      pay such Interest (i) in cash as Cash Interest, or (ii) in payment in kind
      as PIK Interest, on each Interest Date if, unless consented to in writing
      by the Holder, during the period commencing on the applicable Interest
      Notice Due Date through the applicable Interest Date, the Equity
      Conditions have not been satisfied. Interest accrues at the Interest Rate
      on all outstanding unpaid Principal owed under this Debenture and all
      accrued Interest is payable on each Interest Date.  Upon the
      occurrence and during the continuance of an Event of Default, the Interest
      Rate shall be increased to fifteen percent (15.00%) (the “Default
      Rate”).  In the event that such Event of Default is
      subsequently cured, the adjustment referred to in the preceding sentence
      shall cease to be effective as of the date of such cure; provided that
      the Interest as calculated and unpaid at such increased rate during the
      continuance of such Event of Default shall continue to apply to the extent
      relating to the days after the occurrence of such Event of Default through
      and including the date of cure of such Event of Default.  The
      Company shall pay any and all taxes that may be payable with respect to
      the issuance and delivery of Interest Shares; provided that
      the Company shall not be required to pay any tax that may be payable in
      respect of any issuance of Interest Shares to any Person other than the
      Holder or with respect to any income tax due by the Holder with respect to
      such Interest Shares.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              PIK Interest.
      The Interest Rate for Interest Payments to be made by PIK Interest shall
      be paid at a rate equal to 12.50% per annum. In addition, if the Company
      chooses to pay an Interest Payment in PIK Interest, the Parent shall issue
      the Holder shares of its Common Stock equal to an additional 2.50% of the
      Quarterly Interest Payment due (the “PIK Interest Shares”).
      The number of shares of Common Stock to be issued on an Interest Date in
      PIK Interest Shares shall be paid in a number of fully paid and
      nonassessable restricted shares (provided, that if the issuance would
      result in the issuance of a fraction of a share of Common Stock, the
      Parent shall round such fraction of a share of Common Stock up to the
      nearest whole share) of Common Stock equal to the quotient of (a) the
      amount of Interest payable on such Interest Date and (c) the Interest
      Conversion Price in effect on the applicable Interest
  Date.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Interest Rate
      Adjustment. In the event this Debenture is not redeemed in
      accordance with Section 5 hereof on or before April 1, 2010, the Interest
      Rate of this Debenture shall increase to a rate equal to 14.00% per annum
      through the Maturity Date. In addition, the PIK Interest shall increase to
      16.5%.

            

    

    

    
      	
               
      

            	
              c.

            	
              Sections
      (3) through (23) shall be renumbered Sections (4) through (24),
      respectively.

            

    

     

    
      	
               
      

            	
              d.

            	
              A
      new Section (3) shall be added to each of the Debentures, as
      follows:

            

    

     

    “CONVERSION”

     

    
      	
               
      

            	
              (a)

            	
              Conversion at Option
      of Holder.

            

    

    
      	
               
      

            	
              i.

            	
              This
      Debenture shall be convertible into shares of Common Stock at the option
      of the Holder, in whole or in part at any time and from time to time. ,
      after the Issuance Date. The number of shares of Common Stock issuable
      upon a conversion hereunder equals the quotient obtained by dividing (x)
      the outstanding amount of this Debenture to be converted by (y) the
      Conversion Price (as defined
below).

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              ii.

            	
              The
      Holder shall effect conversions by delivering to the Company a completed
      notice in the form attached hereto as Exhibit A (a “Conversion Notice”). The
      date on which a Conversion Notice is delivered is the “Conversion Date.” Unless
      the Holder is converting the entire Principal amount outstanding under
      this Debenture, the Holder is not required to physically surrender this
      Debenture to the Company in order to effect conversions. Conversions
      hereunder shall have the effect of lowering the outstanding principal
      amount of this Debenture plus all accrued and unpaid Interest thereon in
      an amount equal to the applicable conversion. The Holder and the Company
      shall maintain records showing the Principal amount converted and the date
      of such conversions. In the event of any dispute or discrepancy, the
      records of the Company shall be controlling and determinative in the
      absence of manifest error.

            

    

    

    
      	
               
      

            	
              iii.

            	
              Conversion on or before May
      31, 2010. The Holder is entitled, at its option, to convert at any
      time through 5:00 PM Central Standard Time on May 31, 2010, all or any
      part of the Principal amount of this Debenture, plus accrued Interest,
      into shares of the Parent’s Common Stock, $0.001 par value per share, at
      the price per share equal to $3.00.

            

    

    

    
      	
               
      

            	
              iv.

            	
              Conversion after May 31, 2010
      through the Maturity Date. From June 1, 2010 through the Maturity
      Date, assuming the Debenture has not been redeemed, the Holder is
      entitled, at its option, to convert at any time all or any part of
      the Principal amount of this Debenture, plus accrued Interest, into shares
      of the Parent’s Common Stock, $0.001 par value per share, at the price per
      share equal to that price which shall be computed as 100.0% of the
      arithmetic average of the Weighted Average Price of the Common Stock on
      each of the thirty (30) consecutive Trading Days immediately preceding the
      Conversion Date.

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              v.

            	
              Subparagraphs (iii)
      and (iv) above are individually referred to as a “Conversion
      Price”.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Adjustments. If
      the Parent, at any time while this Debenture is outstanding, shall
      (a) pay 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, (b) subdivide
      outstanding shares of Common Stock into a larger number of shares, (c)
      combine (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (d) issue by
      reclassification of shares of the Common Stock any shares of capital stock
      of the Parent, then the Conversion 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 before such event and of
      which the denominator shall be the number of shares of Common Stock
      outstanding after such event. Any adjustment made pursuant to this Section
      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.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Rounding. All
      price calculations under this Section 3 shall be rounded to the nearest
      $0.01.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Notice.
      Whenever the Conversion Price is adjusted pursuant to Section 3 hereof,
      the Company shall promptly mail to the Holder a notice setting forth the
      Conversion Price after such adjustment and setting forth a brief statement
      of the facts requiring such
adjustment.

            

    

     

    
      	
               
      

            	
              4.

            	
              Conditional
      Waiver.

            

    

     

    
      	
               
      

            	
              a.

            	
              The
      Buyers hereby waive any existing Event of Default previously made known to
      the Buyers by the Company in writing with respect to any and all
      violations of or defaults now existing under the Transaction Documents,
      and agree not to exercise any rights or remedies available as a result of
      the occurrence thereof, including, but not limited to, the imposition of
      interest at the Default Rate prior to the date
  hereof.

            

    

     

    
      	
               
      

            	
              b.

            	
              In
      addition, the Buyers hereby waive any other existing Event of Default
      under the Transaction Documents that does not, directly or indirectly,
      have a material negative impact on the Buyers’ security interest in the
      collateral or other properties of the Company in which it has a security
      interest or have a material negative impact in the Buyers’ priority of
      payment under the Debentures.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              c.

            	
              The
      Company hereby represents and warrants to the Buyers that it has no
      knowledge of any other material Defaults or Events of Default under the
      Transaction Documents, other than those previously disclosed to the Buyers
      in writing.

            

    

     

    
      	
               
      

            	
              d.

            	
              The
      waivers granted by the Buyers in favor of the Company that are contained
      in this Agreement shall be null and void in the event the Company has
      breached its representation in
  Section 4(c).

            

    

     

    5.           Governing
Law.  This Letter Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Letter Agreement and all disputes arising
hereunder shall be governed by, the laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.

     

    6.           Amendment.  It
is the intention of the parties that this Letter Agreement modifies and amends
the Transaction Documents to the extent set forth herein or as otherwise
necessary to effectuate the intentions of the parties as set forth
herein.

     

    7.           No
Waiver.  The execution of this Letter Agreement is not, and
shall not be deemed to constitute, a waiver, cure, or forbearance of any default
arising prior or subsequent to the date of this Letter Agreement, nor shall it
constitute a reinstatement of the terms described in the Transaction Documents,
except as set forth herein.  The Company agrees that no delay on the
part of any of the Buyers in exercising any power or right shall operate as a
waiver of any such power or right or preclude the further exercise of any other
power or right.  Any remedies contained herein are cumulative and not
exclusive of any remedies provided by law.  Notice to or demand in
circumstances under which the terms of this Letter Agreement do not require such
notice or demand shall not entitle the Company to further notice or demand nor
constitute a waiver of the rights of the Buyers to take any other or further
action without notice or demand.

     

    8.           Continuing Validity of
Transaction Documents.  Except as expressly provided for in
this Letter Agreement, the other Transaction Documents and all other documents
executed in connection therewith shall continue unchanged in full force and
effect, in accordance with their respective terms, and the parties hereby
expressly confirm and reaffirm all of their respective liabilities, obligations,
duties and responsibilities under and pursuant to the other Transaction
Documents.

     

    9.           Transaction Document.
This Letter Agreement shall be deemed and constitute a “Transaction Document”
under the Securities Purchase Agreement.

     

    10.           Recitals. The
recitals set forth above are true and correct and are hereby incorporated into
this Letter Agreement as if set forth at length herein.

     

    11.           Counterparts.  This
Letter Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to each other
party; provided that a facsimile signature shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    12.           Headings.  The
headings of this Letter Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Letter
Agreement.

     

    13.           Severability.  If
any provision of this Letter Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Letter Agreement in that jurisdiction
or the validity or enforceability of any provision of this Letter Agreement in
any other jurisdiction.

     

    14.           Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the terms of this
Letter Agreement and the consummation of the transactions contemplated
hereby.

     

    15.           Notices.  Copies
of notices to the Company pursuant to each Transaction Document shall be sent
to, Law Offices of Anthony N. DeMint, 8350 West Sahara Avenue, Suite 270, Las
Vegas, Nevada  89117, Telephone: 702-586-4690, Facsimile:
702-586-6449, E-mail: demintlaw@cox.net, Attention: Anthony N. DeMint, rather
than Husch Blackwell Sanders LLP.

     

    Kindly
confirm your agreement with the foregoing by signing the copy of this letter
where indicated below.

     

     [Signature Pages
Follow]

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed or caused this Letter
Agreement to be duly executed by an authorized officer as of the date first
above written.

     

    
      
        
          
            
              	 	
                      Very
      Truly Yours,

                    
	 	 
      
	 	
                      Company:

                    
	 	
                      ENERJEX
      KANSAS, INC.

                    
	 	 
      	 
      
	 	
                      By:

                    	 
      
	 	 
      	
                      Name:
      Steve Cochennet

                    
	 	 
      	
                      Title:
      Chief Executive Officer

                    
	 	 
      	 
      
	 	
                      Parent:

                    
	 	
                      ENERJEX
      RESOURCES, INC.

                    
	 	 
      	 
      
	 	
                      By:

                    	
                       
      

                    
	 	 
      	
                      Name:
      Steve Cochennet

                    
	 	 
      	
                      Title:
      Chief Executive
Officer

                    

            

          

        

      

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  	
                          Agreed
      to and accepted:

                        	 
	 
      	 
      	 
	
                          MORMEG,
      LLC

                        	 
	 
      	 
      	 
	 
      	 
      	 
	
                          By:
      

                        	 
      	 
	 
      	
                          Name:
      Mark Haas

                        	 
	 
      	
                          Title:
      Managing Member

                        	 

                

              

            

          

        

      

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                	
                        WEST
      COAST OPPORTUNITY FUND, LLC

                      	 
	 
      	 
      	 
	 
      	 
      	 
	
                        By:
      

                      	 
      	 
	 
      	
                        Name:
      Atticus Lowe

                      	 
	 
      	
                        Title:
      Chief Investment Officer

                      	 

              

            

          

        

      

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                	
                        ENABLE
      GROWTH PARTNERS LP

                      	 
	 
      	 
      	 
	 
      	 
      	 
	
                        By:
      

                      	 
      	 
	 
      	
                        Name:
      Brendan O’Neil, CFA

                      	 
	 
      	
                        Title:
      Principal and Portfolio Manager

                      	 

              

            

          

        

      

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                	
                        ENABLE
      OPPORTUNITY PARTNERS LP

                      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                        By:

                      	 
      	 
      
	 
      	
                        Name:
      Brendan O’Neil, CFA

                      	 
      
	 
      	
                        Title:
      Principal and Portfolio Manager

                      	 
      

              

            

          

        

      

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                	
                        FREY
      LIVING TRUST

                      	 
	 
      	 
      	 
	 
      	 
      	 
	
                        By:
      

                      	 
      	 
	 
      	
                        Name:
      Philip Frey Jr.

                      	 
	 
      	
                        Title:
      Trustee

                      	 

              

            

          

        

      

    

    
      
         

      

      
        14COMMON
STOCK PURCHASE WARRANT

    

    GENEREX
BIOTECHNOLOGY CORPORATION

     

    
      
        	
                Warrant
      Shares:  _____

              	
                Issuance
      Date:  June
      15,
      2009           

              

      

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, ________ (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 the date that is 183 days after
date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the five (5) year
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Generex Biotechnology
Corporation, a Delaware corporation (the “Company”), up to
_________ shares (the “Warrant Shares”) of
Common Stock, par value $0.001 per share; provided, however, that the
five (5) year period set forth above as the Termination Date shall be extended
for the number of days during such period in which (i) trading in the Common
Stock is suspended by any Trading Market, or (ii) the Registration Statement is
not effective but in no event later than December 31, 2014.  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 June 15, 2009, among the Company and the purchasers signatory
thereto.

     

    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 (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 the 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 and,
if this Warrant is exercised in full, the Holder shall have surrendered this
Warrant to the Company or, if available, pursuant to the cashless exercise
procedure specified in Section 2(c) below.  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 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.  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.  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.  For this purpose, the Company’s records shall be
conclusively binding on any transferee or assignee.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.76,
subject to adjustment hereunder (the “Exercise
Price”).

     

    c)           Cashless
Exercise.  If at the time of exercise hereof there is no
effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder
and all of the Warrant Shares are not then registered for resale by the Holder
into the market at market prices from time to time on an effective registration
statement for use on a continuous basis (or the prospectus contained therein is
not available for use), then this Warrant may also be exercised, in whole or in
part, 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 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.

              

            

    

    

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time), (b)  if the Common
Stock then is listed or quoted on the OTC Bulletin Board and the OTC Bulletin
Board is not a Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board,
(c) if the Common Stock is not then listed or quoted for trading on the OTC
Bulletin Board and if prices for the Common Stock are then reported in the “Pink
Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the
Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2(c).

    

    d)           Mechanics of
Exercise.

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent 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 then a participant in such system and either (A) there is an
effective Registration Statement permitting the issuance of the Warrant Shares
to or resale of the Warrant Shares by Holder or (B) this Warrant is being
exercised via cashless exercise, and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise by the date that is
three (3) Trading Days after the latest of (i) the delivery to the Company of
the Notice of Exercise Form, (ii) surrender of this Warrant (if required) and
(iii) payment of the aggregate Exercise Price as set forth above (including by
cashless exercise, if permitted) (such date, the “Warrant Share Delivery
Date”).  If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the issuance or
resale of the Warrant Shares or is exercised using a “cashless exercise” or if
the legend is not required under applicable securities laws, such Warrant Shares
shall be issued free of all legends.  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 the Holder, if any, pursuant to Section 2(d)(vi)
prior to the issuance of such shares, having been paid. If the Company fails for
any reason to deliver to the Holder certificates evidencing the Warrant Shares
subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the 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 Warrant
Share Delivery Date until such certificates are delivered or Holder rescinds
such exercise.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    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 the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then, the 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 the Holder, if the Company fails to
cause the Transfer Agent to transmit to the 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 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 (A) pay in cash to the Holder the amount, if any, 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 (1) the number of Warrant Shares that the Company was required to
deliver to the 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 the 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 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 (A) 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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    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 the 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 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.

     

    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.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    e)           Holder’s 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 or otherwise, to the extent (but only to the
extent) that the Holder or any of the Holder’s Affiliates, would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below). 
For purposes of this Section 2(e), 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 the Holder that the Company is
not representing to the Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and the 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(e) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which
portion of this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by the 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.     Upon the
written or oral request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the 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 Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 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 held by the
Holder and the provisions of this Section 2(e) shall continue to
apply.  Any such increase or 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(e) 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.

     

    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 makes 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), (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.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    b)           [intentionally
omitted]

     

    c)           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 the
Holders) 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, 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.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    d)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization 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, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each 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 (without regard to any
limitation in Section 2(e) on the 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 as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2(e) on the exercise of this Warrant).  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.  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 (as defined below) shall, at the Holder’s option,
exercisable at any time concurrently with, or within 30 days after, the
consummation of the Fundamental Transaction, purchase this Warrant from the
Holder by paying to the Holder an amount of cash equal to the Black Scholes
Value of the remaining unexercised portion of this Warrant on the date of the
consummation of such Fundamental Transaction.  “Black Scholes Value”
means the value of this Warrant based on the Black and Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of
100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of the Trading Day immediately following the public announcement of the
applicable Fundamental Transaction, (C) if applicable, the underlying price per
share used in such calculation shall be the sum of the price per share being
offered in cash, if any, plus the value of any non-cash consideration, if any,
being offered in such Fundamental Transaction and (D) a remaining option time
equal to the time between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date.  The Company shall
cause any successor entity in a Fundamental Transaction in which the Company is
not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this Warrant and
the other Transaction Documents in accordance with the provisions of this
Section 3(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the
holder of this Warrant, deliver to the Holder in exchange for this Warrant a
security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a
corresponding number of shares of capital stock of such Successor Entity (or its
parent entity) equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of
Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this
Warrant immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had
been named as the Company herein.  The provisions of this paragraph
shall apply similarly and equally to successive Fundamental Transactions and
shall be applied as if this Warrant (and any such subsequent warrants) were
fully exercisable and without regard to any limitations on the exercise of this
Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Beneficial Ownership Limitation, applied however, with respect to shares
of capital stock registered under the Exchange Act and thereafter receivable
upon exercise of this Warrant (or any such other warrant)).

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    e)           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.

     

    f)           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.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    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 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.  To the extent that
any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K.  The 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 may otherwise be expressly
set forth herein.

     

    Section
4.             Transfer of
Warrant.

     

    a)           Transferability.  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, 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.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    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. All Warrants issued on transfers or exchanges shall be dated
the initial issuance date set forth on the first page of this Warrant 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 the
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    Section
5.             Miscellaneous.

     

    a)           No Rights as Stockholder
Until Exercise.  This Warrant does not entitle the 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(d)(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), 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.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    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.  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 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 (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 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,
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
Purchase Agreement.

     

    f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered pursuant to an effective registration statement, and
the Holder does not exercise via “cashless exercise”, may have restrictions upon
resale imposed by state and federal securities laws.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    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.  Without limiting any other provision of this Warrant or the
Purchase Agreement, 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 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.  The
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 the 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.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

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

    

    (Signature
Pages Follow)

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    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.

    

    
      
        
          
            	
                    GENEREX BIOTECHNOLOGY
      CORPORATION 

                  
	 
      	 
      
	
                    By:

                  	
                     

                  
	 
      	
                    Name:  Rose
      C. Perri

                  
	 
      	
                    Title:  Chief
      Financial Officer

                  
	 
      	 
      
	
                    By:

                  	
                     

                  
	 
      	
                    Name:  Mark
      A. Fletcher

                  
	 
      	
                    Title:  Executive
      Vice-President, General
Counsel

                  

          

        

      

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    NOTICE
OF EXERCISE

    Warrant
Holder:  ________________

    Warrant
Date:  June 15,
2009

    Exercise
Price:  $0.76

    

    
      	
              TO:

            	
              Generex
      Biotechnology Corporation

            

    

    33 Harbour Square, Suite
202

    Toronto, Ontario, Canada M5J
2G2

    Attention:              Mark
A. Fletcher,

    Executive Vice-President, General
Counsel

    

    (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:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    [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.

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