This exercise is from the Core Skills section on developing Speed Techniques.

Let's start with a moderate tempo exercise. This is not as simple as it first appears, but is easy once you get the hang of it. Just cycle between these 4 notes, 2 of which are hammer ons. Don't forget to listen to the normal speed audio (under 'Tools') first!

On the surface it may seem like a standard hammer on exercise, but there's actually more going on here than just that. Notice that the instant a hammer is applied, the previous (first) finger is removed. Don't keep that first finger down on the string. Instead, move it instantly (whilst the hammer is being done) to play the next string. By the time you have hammered, your first finger should be in the right place at the right time for the next note on the adjacent string.

With hammers it isn't vital that your supporting finger keeps the string down. When first practicing them it's normal to do it that way, but after a while you should be able to hammer without relying on the supporting finger behind it. In fact, this becomes an important factor in maintaining speed with advanced solos. So, learn to free up that first finger as soon as possible!

Also notice the picking - start with your pick tip between the D and G strings. Pick upwards for the first note, and downwards for the third note. Repeat. This is a handy speed technique. Whenever you are playing between 2 adjacent strings with a repetitive lick like this (and there are many such guitar licks) you can actually play faster this way because the pick is in a central position, just flicking up or down to hit a string. When playing very fast, the pick should be constantly moving. Just remember to start with an upstroke.

When practicing try to keep the lick in your head, repeating. Each note should be played 'on the beat' to give it that regular timing. Go as slow as you need, and get it right, then start working on getting faster. Aim to play the lick over and over without any mistakes for as long as possible. After a while your fingers will work like a well oiled machine, churning out the lick. Once you reach that point move on to the next exercise!