Form of Warrant BROADCAST INTERNATIONAL, INC. WARRANT FOR COMMON STOCK

Purchase Rights; Fundamental Transactions.  

(i)        Purchase Rights.  In addition to any adjustments pursuant to this Section 4, if at any time the Company grants, issues or sells (x) any rights, warrants or options to subscribe for or purchase shares of Stock or Convertible Securities (as defined below) (“Options”), (y) any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Stock (“Convertible Securities”) or (z) any rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Stock (collectively, the “Purchase Rights ”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(ii)       Fundamental Transactions.  The Company shall not enter into or be party to a Fundamental Transaction (as defined below) (other than with respect to a Change of Control (as defined below) wit h a Successor Entity (as defined below) that is not a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market (as defined below) (a “Public Successor”) or with respect to a Change of Control with a Public Successor where the sole consideration in such Change of Control transaction is cash (each, an “Excluded Change of Control Transaction”)) unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant pursuant to a written agreement in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including an agreement to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for the shares of Stock reflected by the terms of such Fundamen tal Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares of Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Holder. Upon the occurrence of any Fundamental Transaction (other than an Excluded Change of Control Transaction), the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.  Upon consummation of the Fundamental Transaction (other than an

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Excluded Change of Control Transaction), the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of the Stock (or other securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Fundamental Transaction, such shares of the publicly traded common stoc k (or its equivalent) of the Successor Entity (including its Parent Entity (as defined below)) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been converted immediately prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant.  In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Stock arc entitled to receive securities or other assets with respect to or in exchange for shares of Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Fundamental Transaction but prior to the ninetieth (90th) day after the consummation of the Fundamental Transaction, in lieu of the shares of the Stock (or other securit ies, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been exercised immediately prior to such Fundamental Transaction.  Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant.

  (iii)     In the event of a proposed Change of Control, the Company shall give th e Holder thirty (30) days prior notice of the proposed closing date of the Change of Control.  Notwithstanding the foregoing and the provisions of Section 4(C)(ii) above, in the event of a Change of Control, at the request of the Holder delivered before the ninetieth (90th) day after the consummation of such Change of Control, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days of such request (or, if later, on the effective date of the Change of Control), cash in an amount equal to the Black-Scholes Value of the remaining unexercised portion of this Warrant on the date of such Change of Control.

         (iv)        As used in herein, the following terms have the following meanings:

“Change of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification of the Stock, in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if

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other than a corporation) of such entity or entities, or (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company, or (iii) any Fundamental Transaction in which the Holder is the Person or part of the group of Persons described in clauses (i)(A) – (D) or clause (ii) of the definition thereof.

“Eligible Market” means the Principal Market, the American Stock Exchange, The New York Stock Exchange, Inc., The NASDAQ Global Market, The NASDAQ Capital Market or The NASDAQ Global Select Market.

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

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

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

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“Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any cont ingency).

(D)

Subdivision or Combination of Stock.  If the Company at any time on or after the date hereof subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Stock into a greater number of shares, the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the date hereof combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Stock into a smaller number of shares, the number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 4(D) shall become effective at the close of business on the date the subdivision or combinati on becomes effective

(E)

Reorganizations, Consolidations, Mergers.  Except as otherwise set forth herein, in the event that the outstanding shares of Stock of the Company shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another Person, whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation, then upon exercise of this Warrant there shall be substituted for the shares of Stock covered by this Warrant, the number and kind of shares of stock or other securities that would have been substituted therefor if such shares of Stock had been outstanding on the date fixed for determining the stoc kholders entitled to receive such changed or substituted stock or other securities.

(F)

Other Changes .  In the event there shall be any change, other than specified above, in the number or kind of outstanding shares of Stock of the Company or of any stock or other securities into which such Stock shall be changed or for which it shall have been exchanged, then if the Board of Directors shall determine, in good faith, that such change equitably requires an adjustment in the number or kind of shares covered by this Warrant, such adjustment shall be made by the Board of Directors and shall be effective and binding for all purposes of this Warrant.

(G)

Notice of Adjustments.  In the event of any adjustment pursuant to this Section 4, the Company will provide the Holder with notice of such adjustment reasonably promptly after the effective date of such adjustment.

5.

LOST, STOLEN, DESTROYED OR MUTILATED WARRANT.

            Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, t heft or destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon the surrender and cancellation thereof, the Company will issue and deliver, in lieu thereof, a new Warrant of like tenor.

6.

TRANSFER.

(A)

Owner of Warrant      The Company may deem and treat the Person in whose name this Warrant is registered as the Holder and owner hereof (notwithstanding any no tations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall

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not be affected by any notice to the contrary until presentation of this Warrant for registration of transfer as provided below.

(B)

Transfer of Warrant     The Company agrees to maintain, at its then principal place of business, books for the registration of this Warrant and transfers thereof, and this Warrant and all rights hereunder are transferable, in whole or in part, on said books at said office, upon surrender of this Warrant at said office, together with a written assignment of this Warrant duly executed by the Holder hereof or its duly authorized agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and this Warrant shall promptly be canceled.  This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants representing in the aggregate the right to purchase the number of shares of Stock then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such shares of Stock as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Stock shall be given.  Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the shares of Stock then underlying this Warrant, (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the date hereof, and (iv) shall have the same rights and conditions as this Warrant.

7.

COVENANTS

.  

(A)

Required Reserve Amount.  If at any time while this Warrant remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number of shares of Stock equal to 130% (the “Required Reserve Amount”) of the number of shares of Stock as shall from time to time be necessary to effect the exer cise of this Warrant in full (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.  Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Stock.  In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Stock and to cause its board of directors to recommend to the stockholders that they approve such proposa l.  The Company further covenants that all shares of Stock that shall be deliverable upon exercise of this Warrant shall be duly and validly issued and fully paid and non-assessable.

(B)

Notice Requirements.  The Company will give written notice to the Holder (i) immediately upon any adjustment of the number of shares of Stock issuable upon exercise hereof, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or r ights to purchase stock, warrants, securities or other property to holders of shares of Stock or (C) for determining rights to

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vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

8.

CASHLESS EXERCISE RIGHTS.

(A)

Cashless Exercise Provisions.  Notwithstanding anything to the contrary contained herein, if at any time a Registration Statement (as defined in the Investor Rights Agreement) covering the resale of the Stock issuable upon exercise of this Warrant is not available, then the Holder shall have the right, in its sole discretion, to exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Exercise Price, elect instead to receive upon such exercise the number of shares of Stock determined as follows:

X =  Y [(A-B)/A], where:

X =  the number of shares of Stock to be issued to the Holder upon exercise.

Y =  the number of shares of Stock with respect to which this Warrant is being exercised.

A =  the arithmetic average of the VWAP of the Stock for the thirty (30) Trading Days immediately prior to (but not including) the date on which a Notice of Exercise is delivered to the Company.

B = the Exercise Price.

(B)

Certain Definitions.  For purposes of this Section 8, “VWAP” means on any particular Trading Day or for any particular period the volume weighted average trading price per share of Stock on such date or for such period on the Principal Market as reported by Bloomberg L.P., or any successor performing similar functions.

9.

MISCELLANEOUS.

(A)

No Rights as Shareholder.  This Warrant does not confer upon the Holder any rights of a stockholder of the Company, including, without limitation, any right to vote or to consent to or receive notice as a stockholder of the Company.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.  Notwiths tanding this Section 9(A), the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.

(B)

Noncircumvention.  The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Stock receivable upon the exercise of this Warrant above the Per Share Exercise Price

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then in effect, and (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and no nassessable shares of Stock upon the exercise of this Warrant.

(C)

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

(D)

Notices.  Any notices required or permitted to be given under the terms of this Warrant shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and shall be effective three (3) days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier, or by confirmed telecopy, in each case addressed as follow : If to the Company to: at 7050 Union Park Avenue, Suite 600, Salt Lake City, Utah 84047, Attn: Chief Executive Officer, facsimile number ###-###-#### and if to the Holder to the address shown therefor on the books and records of the Company. Any party may change its address for notice and the address to which copies must be sent by giving notice of the new addresses to the other parties in accordance with this Section 9, except that any such change of address notice shall not be effective unless and until received.

(E)

Governing Law.   All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to principles of conflicts of laws.

(F)

Amendment.   This Warrant and any provision hereof may be amended solely by an instrument in writing signed by the Company and Holder.

(G)

Severability.   In case any one or more of the provisions of this Warrant shall be determined by a court of competent jurisdiction to be invalid or unenforceable in any respect, the validity and enforceability of the rema ining terms and provisions of this Warrant shall not in any way be affected or impaired thereby.  

(H)

Assignment.   This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective permitted successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and Holder any legal or equitable right, remedy or cause of action under this Warrant.

(I)

Headings.  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer, effective as of the date first set forth above.

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NOTICE OF EXERCISE OF WARRANT

To:

BROADCAST INTERNATIONAL, INC.

The under signed Holder hereby exercises the right to purchase _____________ shares of Common Stock, $.05 par value, of Broadcast International, Inc., a Utah corporation (the “Company”), as evidenced by the Warrant, dated as of December ___, 2010, issued by the Company to the Holder (the “Warrant”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.

Form of Exercise Price.  The Holder intends that the payment of the Exercise Price shall be made as:

___

payment of the Exercise Price in cash with respect to ________ shares of Stock; and/or

___

a Cashless Exercise with respect to _______ shares of Stock.

2.

You will kindly forward a certificate or certificates for the shares of Stock purchased hereby and, if such shares shall not include all of the shares provided in this Warrant, a new Warrant of like tenor and date for the balance of the shares issuable thereunder shall be delivered to the undersigned at the address set forth below.

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