Exhibit 4(b)
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT COVERING SUCH SECURITIES, (ii) THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER THE ACT, OR (iii) THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND IS IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.
THIS WARRANT IS ISSUED PURSUANT TO THAT CERTAIN SUBSCRIPTION AGREEMENT BETWEEN
THE INITIAL HOLDER OF THIS WARRANT (THE "INVESTOR") AND MRU HOLDINGS, INC., A
DELAWARE CORPORATION (THE "COMPANY") DATED APRIL 30, 2004.
Dated: July 8, 2004
MRU HOLDINGS, INC.
WARRANT ("WARRANT") TO PURCHASE SHARES
OF
COMMON STOCK, $0.001 PAR VALUE PER SHARE
_____ SHARES
1. NUMBER OF SHARES SUBJECT TO WARRANT. This is to certify that, FOR VALUE
RECEIVED, ___________________________ (the "Investor"), is entitled to purchase
from the Company, at any time before the termination of this Warrant pursuant to
Section 3 hereof, at an exercise price equal to $____ per share (the exercise
price in effect from time to time hereafter being called the "Warrant Price"),
_____ shares ("Warrant Shares") of the Company's common stock, $0.001 par value
per share ("Common Stock") upon such Investor's exercise of this Warrant
pursuant to Section 7 hereof. The number of Warrant Shares purchaseable upon
exercise of this Warrant and the Warrant Price shall be subject to adjustment
from time to time as described herein.
2. DEFINITIONS. As used in this Warrant, the following terms shall have
definitions ascribed to them below:
(a) "BUSINESS DAY" shall mean any day except Saturday, Sunday and
any day which shall be a legal holiday or a day on which banking
institutions in the state of New York are authorized or required by
law or other government actions to close between the hours of 9:30
a.m. and 5:00 p.m. Eastern Standard Time.
(b) "HOLDER" shall mean the Investor and any permitted transferees.
(c) "TRADING MARKET" means the following markets or exchanges on
which the Warrant Shares are listed or quoted for trading on the
date in question: the American Stock Exchange, the New York Stock
Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or
the Over-The-Counter Bulletin Board (the "OTC Bulletin Board").
(d) "VWAP" shall mean for any date, the price determined by the
first of the following clauses that applies: (a) if the Warrant
Shares are then listed or quoted on a Trading Market, the daily
volume weighted average price of the Warrant Shares for such date
(or the nearest preceding date) on the primary Trading Market on
which the Warrant Shares are then listed or quoted as reported by
Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Standard Time to 4:02 p.m. Eastern Standard Time) using the
AQR function; (b) if the Warrant Shares are not then listed or
quoted on an Trading Market and if prices for the Warrant Shares are
then quoted on the OTC Bulletin Board, the volume weighted average
price of the Warrant Shares for such date (or the nearest preceding
date) on the OTC Bulletin Board; (c) if the Warrant Shares are not
then listed or quoted on a Trading Market or on the OTC Bulletin
Board and if prices for the Warrant Shares are then reported in the
"Pink Sheets" published by the National Quotation Bureau
Incorporated (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Warrant Shares so reported; or (d) in all other cases, the
fair market value of a share of Warrant Shares as determined by a
nationally recognized-independent appraiser selected in good faith
by purchasers holding a majority of shares of the Company then
outstanding.
3. TERMINATION. This Warrant shall terminate and no longer be exercisable
at 5:00 p.m., Eastern Standard Time, on ____________.
4. FRACTIONAL SHARES. No fractional shares shall be issuable upon exercise
of this Warrant and the number of shares to be issued shall be rounded up to the
nearest whole share.
5. NO SHAREHOLDER RIGHTS. This Warrant, by itself, as distinguished from
any shares purchased hereunder, shall not entitle the Holder to any of the
rights of a shareholder of the Company.
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6. RESERVATION OF STOCK. The Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Warrant Shares upon the exercise or conversion of this Warrant. Issuance of
this Warrant shall constitute full authority to the Company's officers who are
charged with the duty of executing stock certificates to execute, issue and
deliver the necessary certificates for shares of Warrant Shares issuable upon
the exercise or conversion of this Warrant.
7. EXERCISE OF WARRANT. This Warrant may be exercised at any time prior to
its termination by the surrender of this Warrant, together with the Notice of
Exercise and the Investment Representation Statement in the forms attached
hereto as Attachments 1 and 2, respectively, duly completed and executed, at the
principal office of the Company, specifying the portion of this Warrant to be
exercised and accompanied by payment in full of the Warrant Price in cash or by
check with respect to the shares of Warrant Shares being purchased. This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the shares of Warrant Shares issuable upon exercise
shall be treated for all purposes as the holder of such shares of record as of
the close of business on such date. As promptly as practicable after such date,
the Company shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates for the number of full shares of Warrant
Shares issuable upon such exercise. If the Warrant shall be exercised for less
than the total number of shares of Warrant Shares then issuable upon exercise,
promptly after surrender of the Warrant upon such exercise, the Company will
execute and deliver a new Warrant, dated the date hereof, evidencing the right
of the Holder to the balance of the Warrant Shares purchasable hereunder upon
the same terms and conditions set forth herein.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number of shares
issuable upon exercise of this Warrant (or any shares of stock or other
securities or property at the time receivable or issuable upon exercise of this
Warrant) and the Warrant Price therefor are subject to adjustment upon the
occurrence of the following events:
(a) ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS, RECAPITALIZATIONS,
ETC. The Warrant Price and the number of shares issuable upon exercise of this
Warrant shall each be proportionally adjusted to reflect any stock dividend,
stock split, reverse stock split, combination of shares, reclassification,
recapitalization or other similar event altering the number of outstanding
shares of the Company's capital stock.
(b) ADJUSTMENT FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In case the
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the shares payable in securities of the Company then, and in each
such case, the Holder, on exercise of this Warrant at any time after the
consummation, effective date or record date of such event, shall receive, in
addition to the Warrant Shares (or such other stock or securities) issuable on
such exercise prior to such date, the securities of the Company to which such
Holder would have been entitled upon such date if such Holder had exercised this
Warrant immediately prior thereto (all subject to further adjustment as provided
in this Warrant).
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9. ADJUSTMENT FOR CAPITAL REORGANIZATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with or into another corporation, or the
sale of all or substantially all of the Company's assets to another corporation
shall be effected in such a way that holders of the Company's capital stock will
be entitled to receive stock, securities or assets with respect to or in
exchange for the Company's capital stock, then in each such case the Holder,
upon the exercise of this Warrant, at any time after the consummation of such
capital reorganization, consolidation, merger, or sale, shall be entitled to
receive, in lieu of the stock or other securities and property receivable upon
the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior to the
consummation of such capital reorganization, consolidation, merger, or sale, all
subject to further adjustment as provided in this Section 9; and in each such
case, the terms of this Warrant shall be applicable to the shares of stock or
other securities or property receivable upon the exercise of this Warrant after
such consummation.
10. CALL OF WARRANT. At any time after the Closing Date as defined in the
Subscription Agreement and from time to time thereafter (the "Effective Date"),
the Company shall have the right, upon 15 Business Days' prior written notice to
the Holder (the "Call Notice"), to call all or any portion of this Warrant at a
price equal to $.001 per Warrant Share at any time, provided that (i) the
Warrant Shares are registered for resale pursuant to the Act and shall have been
for at least the 20-trading day period preceding the Call Notice, (ii) the
prospectus under which such Warrant Shares have been registered has not been
suspended at any time during the 20-trading day period preceding the Call
Notice, (iii) the Warrant Shares are currently listed (and have not been
suspended from trading) on a Trading Market as of the date the Call Notice is
delivered to the Holder through the effective date of such call, (iv) the
Company is not in default (or taken any action or failure to act which through
the passage of time would result in a default) under the registration rights
agreement that the Warrant Shares have been registered pursuant to, (v) the VWAP
of the Common Stock on a Trading Market is equal to or greater than 150% of the
Warrant Price (subject to adjustment to reflect forward or reverse stock splits,
stock dividends, recapitalizations and the like) (the "Threshold Price") for at
least 20 consecutive trading days following the Effective Date, (vi) the Call
Notice is delivered within 3 Business Days' of the most recent day in the
previous clause, and (vii) the Warrant Shares reached the Threshold Price. At
any time prior to the Effective Date of such call, the Holder shall have the
right to exercise this Warrant in accordance with its terms.
11. TRANSFER OF WARRANT. This Warrant may be transferred or assigned by
the Holder hereof in whole or in part, provided that the transferor provides, at
the Company's request, an opinion of counsel satisfactory to the Company that
such transfer does not require registration under the Act and any other
applicable federal or state securities laws.
12. AMENDMENTS AND WAIVERS. This Warrant and any term hereof may only be
amended, waived, discharged or terminated by a written instrument signed by the
Company and the Investor.
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13. MISCELLANEOUS. This Warrant shall be governed by the laws of the State
of New York, as such laws are applied to contracts to be entered into and
performed entirely in New York by New York residents. The headings in this
Warrant are for purposes of convenience and reference only, and shall not be
deemed to constitute a part hereof. All notices and other communications from
the Company to the Holder of this Warrant shall be delivered, personally or
mailed by first class mail, postage prepaid, to the address furnished to the
Company in writing by the last Holder of this Warrant who shall have furnished
an address to the Company in writing, and if mailed shall be deemed given three
days after deposit in the United States mail.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first written above.
MRU HOLDINGS, INC.
By:
----------------------
Name:Raza Khan
Title:President
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ATTACHMENT 1
NOTICE OF EXERCISE
TO: MRU HOLDINGS, INC.
1. The undersigned hereby elects to purchase_____________________Warrant
Shares of MRU Holdings, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price in full, together with all
applicable transfer taxes, if any.
2. Please issue a certificate representing said shares of Warrant Shares
in the name specified below:
------------------------ -------------------------
Name Name
------------------------ --------------------------
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
------------------------ ---------------------------
State, City and Zip Code State, City and Zip Code
HOLDER:
-------------------------------
Signature of Holder of Warrant
-------------------------------
Name of Holder of Warrant (print)
--------------------------
Date
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ATTACHMENT 2
INVESTMENT REPRESENTATION STATEMENT
SHARES OF WARRANT SHARES
(AS DEFINED IN THE ATTACHED WARRANT) OF
MRU HOLDINGS, INC.
In connection with the purchase of the above-listed securities, the undersigned
hereby represents to MRU Holdings, Inc. (the "Company") as follows:
(a) The securities to be received upon the exercise of the Warrant (the
"Warrant Shares" as defined in the attached Warrant) will be acquired for
investment for its own account; not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and the undersigned has no
present intention of selling, granting participation in or otherwise
distributing the same, but subject, nevertheless, to any requirement of law that
the disposition of its property shall at all times be within its control. By
executing this Statement, the undersigned further represents that he does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer, or grant participation to such person or to any third person,
with respect to any Warrant Shares issuable upon exercise of the Warrant.
(b) The undersigned understands that the Warrant Shares issuable upon
exercise of the Warrant at the time of issuance may not be registered under the
Act, and applicable state securities laws, on the ground that the issuance of
such securities is exempt pursuant to Section 4(2) of the Act and state law
exemptions relating to offers and sales not by means of a public offering, and
that the Company's reliance on such exemptions is predicated on the
undersigned's representations set forth herein.
(c) The undersigned agrees that in no event will he make a disposition of
any Warrant Shares acquired upon the exercise of the Warrant unless and until
(i) he shall have notified the Company of the proposed disposition and shall
have furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and (ii) he shall have furnished the Company with an
opinion of counsel satisfactory to the Company and Company's counsel to the
effect that (A) appropriate action necessary for compliance with the Act and any
applicable state securities laws has been taken or an exemption from the
registration requirements of the Act and such laws is available, and (B) the
proposed transfer will not violate any of said laws.
(d) The undersigned acknowledges that an investment in the Company is
highly speculative and represents that he is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of his investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment. The undersigned
represents that he has had the opportunity to ask questions of the Company
concerning the Company's business and assets and to obtain any additional
information which he considered necessary to verify the accuracy of or to
amplify the Company's disclosures, and has had all questions which have been
asked, satisfactorily answered by the Company.
(e) The undersigned acknowledges that the Warrant Shares issuable upon
exercise of the Warrant must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available. The
undersigned is aware of the provisions of Rule 144 promulgated under the Act
which permit limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less than one
year after a party has purchased and paid for the security to be sold, the sale
being through a "broker's transaction" or in transactions directly with a
"market makers" (as provided by Rule 144(f)) and the number of shares being sold
during any three-month period not exceeding specified limitations.
HOLDER:
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Signature of Holder of Warrant
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Name of Holder of Warrant (print)
--------------------------
Date
