Document:

Execution
Copy

 

 

 

 

 

WARRANT

to
Purchase Shares of Common Stock of

 

MRU
HOLDINGS, INC.

 

 

 

 

            Warrant No.
1

 

            Original
Issue

            Date: February 4,
2005

 

 

 

 

 

NEITHER
THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE OR FOREIGN SECURITIES LAW. 

 

Warrant
No. 1

 

WARRANT

 

 

MRU
Holdings, Inc.

 

THIS IS
TO CERTIFY THAT Nomura Credit & Capital, Inc. (“Nomura”), or registered
assigns, is entitled, at any time prior to the Expiration Date (such term, and
certain other capitalized terms used herein being hereinafter defined), to
purchase from MRU Holdings, Inc., 6,545,004 shares of Common Stock (subject to
adjustment as provided herein), at a purchase price of $3.50 per share (the
initial “Exercise Price”, subject to adjustment as provided herein), all on the
terms and conditions and pursuant to the provisions hereinafter set forth.

 

 

- 1
-

 

	
      1.
	
      DEFINITIONS

 

As used
in this Warrant, the following terms have the respective meanings set forth
below:

 

“Additional
Warrant” means the Warrant, also issued as of the Original Issue Date,
exercisable for the purchase of 1,454,445 shares
of Common Stock.

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, (i) “control” when used with
respect to any specified Person means the power to direct the management and
policies of such specified Person, directly or indirectly, whether through the
ownership of equity or voting securities, by contract or otherwise, and (ii) the
terms “controlling” and “controlled” have meanings correlative to the foregoing
clause (i). 

 

“After-Tax
Basis” when referring to a payment that is required hereunder (the “target
amount”), shall mean a total payment (the “total amount”) that, after deduction
of all federal, state and local taxes that are required to be paid by the
recipient in respect of the receipt or accrual of such total amount, is equal to
the target amount.

 

The
“Appraisal Bank” shall be an investment bank of nationally recognized standing
selected by the Majority Holders and reasonably acceptable to the Company. If
the investment bank selected by the Majority Holders is not reasonably
acceptable to the Company, and the Company and the Majority Holders cannot agree
on a mutually acceptable investment bank, then the Company and the Majority
Holders shall each choose one such investment bank and the respective chosen
firms shall jointly select a third investment bank, which shall be the Appraisal
Bank. The Company, on the one hand, and the Majority Holders, as a group, on the
other, shall each be responsible for 50% of the costs and fees of the Appraisal
Bank.

 

“Appraised
Value” per share of Common Stock as of a date specified herein shall mean the
value of such a share as of such date as determined by the Appraisal Bank.
Appraised Value shall be determined on a fully-diluted basis, as a pro rata
portion of the value of the Company, based on the higher of (A) the value
derived from a hypothetical sale of the entire Company as a going concern by a
willing seller to a willing buyer (neither acting under any compulsion) and (B)
the liquidation value of the entire Company. No discount shall be applied on
account of (i) any Warrants or Warrant Stock representing a minority interest,
(ii) any lack of liquidity of the Common Stock or the Warrants, (iii) the fact
that the Warrants or Warrant Stock may constitute “restricted securities” for
United States securities law purposes, or (iv) any other grounds. The Appraised
Value of the Company as a whole shall be the Appraised Value of a share of
Common Stock multiplied by the number of Fully Diluted Outstanding shares of
Common Stock. As regards any property other than a share of Common Stock, the
Appraised Value shall be the value determined by the Appraisal Bank. If the
Appraisal Bank has determined Appraised Value of any item as of any date within
the 365 days preceding the date as of which Appraised Value of such item would
otherwise again be required to be determined, the Company may, in its
discretion, choose to rely on such previously determined Appraised Value. If the
Company chooses to rely on such previously determined Appraised Value, the
Holder who has requested such appraisal may request that the Appraisal Bank
again determine Appraised Value and such newly determined Appraised Value shall
be the Appraised Value, provided however, that
the costs and fees associated with any such new determination of Appraised Value
shall be born in their entirety by such requesting Holder. The decision of the
Appraisal Bank as to Appraised Value shall be final and binding on the Company
and all affected holders of Warrants or Warrant Stock.

 

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-

“Board”
means the Board of Directors of the Company.

 

“Business
Day” shall mean any day that is not a Saturday or Sunday or a day on which banks
are required or permitted to be closed in the State of New York.

 

“Commission”
shall mean the Securities and Exchange Commission or any other federal agency
then administering the Securities Act and other federal securities
laws.

 

“Common
Stock” shall mean (except where the context otherwise indicates) the common
stock of the Company, par value $0.001 per share, as constituted on the Original
Issue Date, and any capital stock into which such Common Stock may thereafter be
changed, and shall also include (i) capital stock of the Company of any other
class (regardless of how denominated) issued to the holders of Common Stock upon
any reclassification thereof which is also not preferred as to dividends or
liquidation over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of capital stock of any successor or
acquiring corporation (as defined in Section 4.5 hereof) received by or
distributed to the holders of Common Stock in the circumstances contemplated by
Section 4.5 hereof. 

 

“Company”
means MRU Holdings, Inc., and any successor entity.

 

“Continuously
Effective”, with respect to the Registration Statement, shall mean that it shall
not, except as contemplated by Section 8.2(b), cease to be effective and
available for Transfers of Warrant Stock thereunder for longer than either (i)
any ten consecutive Business Days, or (ii) an aggregate of thirty Business Days
during the period specified in Section 8.2(a)(2).

 

“Convertible
Securities” shall mean evidences of indebtedness, shares of stock or other
securities that are convertible into or exchangeable for, with or without
payment of additional consideration in cash or property, shares of Common Stock,
either immediately or upon the occurrence of a specified date or a specified
event.

 

“Credit
Agreement” means that certain Credit Agreement by and between MRU Lending, Inc.,
the institutions from time to time parties thereto as lenders, and Nomura Credit
& Capital, Inc. dated as of the Original Issue Date.

 

“Current
Market Price” shall mean as of any specified date the average of the daily
market prices of the Common Stock for the twenty (20) consecutive Trading
Days immediately preceding such date. The “daily market price” for each such
Trading Day shall be: (i) if the Common Stock is then listed on a national
securities exchange or is listed on NASDAQ and is designated as a National
Market System security, the dollar-volume weighted average sales price, as
reported by Bloomberg L.P., or any successor or comparable organization, on such
day on the principal stock exchange or market system on which such Common Stock
is then listed or admitted to trading, or, if no such sale takes place on such
day, the average of the closing bid and asked prices for the Common Stock on
such day as reported on such stock exchange or market system or (ii) if the
Common Stock is not then listed or admitted to trading on any national
securities exchange or designated as a National Market System security on NASDAQ
but is traded over-the-counter, the average of the closing bid and asked prices
for the Common Stock as reported on NASDAQ or the NASD OTC Bulletin Board or in
the National
Daily Quotation Sheets, as
applicable. 

 

- 3
-

“Designated
Exchange” means the New York Stock Exchange, the American Stock Exchange or the
Nasdaq Stock Market (including the Nasdaq SmallCap Market). 

 

“Designated
Office” shall have the meaning set forth in Section 10 hereof.

 

“Dilution
Protection Expiration Date” means the earlier of (i) the Scheduled Termination
Date and (ii) thirty (30) days after any Lender Default. 

 

“Effective
Period” shall have the meaning set forth in Section 8.2(a)
hereof.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.

 

The
Company shall be considered an “Exchange-Traded Issuer” if, at the time of
determination, (i) the Common Stock is listed or traded on a Designated Exchange
and (ii) at least a majority of its directors are Independent
Directors.

 

“Exercise
Date” shall have the meaning set forth in Section 2.1 hereof.

 

“Exercise
Notice” shall have the meaning set forth in Section 2.1
hereof.

 

“Exercise
Price” shall mean, in respect of a share of Common Stock at any date herein
specified, the initial Exercise Price set forth in the preamble of this Warrant
as adjusted from time to time pursuant to Section 4 hereof.

 

“Expiration
Date” shall mean the earlier of (i) the tenth anniversary of the Original Issue
Date and (ii) thirty (30) days after any Lender Default.

 

“Fair
Value” per share of Common Stock as of any specified date shall mean: (i) if the
Common Stock is publicly traded as of such date, the Current Market Price per
share; or (ii) if the Common Stock is not publicly traded on such date, (1) the
fair market value per share of Common Stock as determined in good faith by the
Board and set forth in a written notice to each Holder or (2) if any such Holder
objects in writing to such price as determined by the Board within thirty days
after receiving notice of same, the Appraised Value per share as of such date.
As regards any other property, Fair Value as of any specified date shall mean
(1) the value as determined in good faith by the Board and set forth in a
written notice to each Holder or (2) if any such Holder objects in writing to
the value determined by the Board within thirty days after receiving notice of
the same, the Appraised Value of such property.

 

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-

“Fully
Diluted Outstanding” shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
shares of Common Stock Outstanding on such date and all shares of Common Stock
issuable in respect of (x) the Warrants outstanding on such date, (y) any
Convertible Securities outstanding on such date and (z) any other Stock Purchase
Rights outstanding on such date, in each case regardless of whether or not the
conversion, exchange, subscription or purchase rights associated with such
Warrants, Convertible Securities or Stock Purchase Rights are presently
exercisable.

 

“GAAP”
shall mean generally accepted accounting principles in the United States of
America as from time to time in effect.

 

“Holder”
shall mean (a) with respect to this Warrant, the Person in whose name the
Warrant set forth herein is registered on the books of the Company maintained
for such purpose and (b) with respect to any other Warrant or shares of Warrant
Stock, the Person in whose name such Warrant or Warrant Stock (or the Warrant
which may be exercised to purchase such Warrant Stock) is registered on the
books of the Company maintained for such purpose.

 

“Independent
Director” shall mean a director who is independent, as independence for
directors is defined by the Designated Exchange on which the Common Stock is
then listed or traded. 

 

“Issuance
or Delivery Tax” shall have the meaning set forth in Section 2.2.

 

“Lender
Default” shall have the meaning ascribed to such term in the Supplemental
Agreement.

 

“Lien”
shall mean any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
lease or title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Uniform
Commercial Code or comparable law of any jurisdiction).

 

“Majority
Holder” or “Majority Holders” with respect to a given determination, shall mean
the Holder or Holders of Warrants and/or Warrant Stock representing more than
fifty percent of all Warrant Stock (with any such Warrants being deemed to
represent, for the purposes of such calculation, the shares of Warrant Stock
then issuable upon exercise thereof) directly affected by such determination.

 

“Material
Adverse Effect” shall have the meaning ascribed to such term in the Credit
Agreement.

 

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-

“NASD”
shall mean the National Association of Securities Dealers, Inc., or any
successor corporation thereto.

 

“Nomura”
shall have the meaning set forth in the preamble to this Warrant. 

 

“Original
Issue Date” shall mean the date on which the Original Warrants were issued, as
set forth on the cover page of this Warrant.

 

“Original
Warrants” shall mean this Warrant and the Additional Warrant.

 

“Other
Property” shall have the meaning set forth in Section 4.5
hereof.

 

“Outstanding”
shall mean, when used with reference to Common Stock, at any date as of which
the number of shares thereof is to be determined, all issued shares of Common
Stock, except shares then owned or held by or for the account of the Company or
any Subsidiary thereof, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in
shares of Common Stock. “Outstanding”, when used with respect to Warrant Stock
for the purposes of Section 8 hereof shall have the meaning set forth in Section
8.1(c) hereof.

 

“Person”
shall mean any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).

 

“Registration
Expenses” shall have the meaning set forth in Section 8.5(a)
hereof.

 

“Registration
Statement” shall have the meaning set forth in Section 8.2(a) hereof.

 

“Scheduled
Termination Date” shall have the meaning ascribed to such term in the Credit
Agreement, as such date may be extended from time to time pursuant to the Credit
Agreement. 

 

“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

 

“Selling
Holders” shall mean, with respect to the Registration Statement, the Holders who
are selling at any given time.

 

“Shelf
Registration” shall have the meaning set forth in Section 8.2(a)
hereof.

 

“Small
Business Form” shall mean, in relation to any form prescribed by the Commission
for the registration under the Securities Act of securities of issuers that are
not small business issuers, as such term is defined by the Commission, the
comparable form prescribed by the Commission for the registration under the
Securities Act of securities of small business issuers. 

 

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-

“Stock
Purchase Rights” shall mean any options, warrants or other securities or rights
to subscribe to or exercisable for the purchase of shares of Common Stock or
Convertible Securities, whether or not immediately exercisable.

 

“Subsequent
Issuance” shall mean any sale or issuance by the Company of Common Stock,
Convertible Securities or Stock Purchase Rights after the Original Issue Date
other than:

 

(i) Any
issuance of Warrant Stock upon exercise of the Warrants and any issuance of
Common Stock, Convertible Securities or Stock Purchase Rights (and any issuance
of Common Stock pursuant to the conversion, exchange or exercise of any such
Convertible Securities or Stock Purchase Rights) deemed to have been issued as
of the Original Issue Date pursuant to the definition of Fully Diluted
Outstanding.

 

(ii) At a
time when the Company is not an Exchange-Traded Issuer, the issuance of Common
Stock to the Company’s employees, consultants or directors pursuant to stock
option and bonus plans duly adopted in good faith by the Company, provided
that this
exception to the definition of Subsequent Issuance shall apply only with respect
to issuances of an aggregate number of shares of Common Stock that (i) in any
given 12-month period is not to exceed 3% of the average number of shares of
Common Stock Outstanding over such 12-month period and (ii) in any given
36-month period is not to exceed 6% of the average number of shares of Common
Stock Outstanding over such 36-month period and provided
further that the
Company may also issue Convertible Securities and Stock Purchase Rights (and
shares of Common Stock pursuant to the conversion, exchange or exercise of any
such Convertible Securities or Stock Purchase Rights) pursuant to this exception
to the definition of Subsequent Issuance with such issuances of Convertible
Securities or Stock Purchase Rights deemed to be, for purposes of this
paragraph, issuances of a number of shares of Common Stock equal to the number
of shares of Common Stock that they represent the right to purchase or
acquire;

 

(iii) At
a time when the Company is an Exchange-Traded Issuer, the issuance of Common
Stock, Convertible Securities or Stock Purchase Rights to the Company’s
employees, consultants or directors pursuant to stock option and bonus plans
duly adopted in good faith by the Company, provided
that this
exception to the definition of Subsequent Issuance shall apply only with respect
to any such issuances that are approved by the Board or a committee of the Board
comprised entirely of Independent Directors. 

 

(iv) Any
other issuance of Common Stock, Convertible Securities or Stock Purchase Rights
with respect to which the Majority Warrant Holders shall have waived application
of the provisions of Section 4 below.

 

“Subsidiary”
means any corporation or association (a) more than 50% (by number of votes) of
the voting stock of which is at the time owned by the Company or by one or more
Subsidiaries or by the Company and one or more Subsidiaries, or any other
business entity in which the Company or one or more Subsidiaries or the Company
and one or more Subsidiaries own more than a 50% interest either in the profits
or capital of such business entity or (b) whose net earnings, or portions
thereof, are consolidated with the net earnings of the Company and are recorded
on the books of the Company for financial reporting purposes in accordance with
GAAP.

 

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“Supplemental
Agreement” means that certain Supplemental Agreement by and between the Company,
MRU Lending Holdco, LLC, MRU Lending, Inc. and Nomura, dated as of the Original
Issue Date. 

 

“Trading
Day” means a day on which the principal securities market (e.g., national
securities exchange, NASDAQ or OTC Bulletin Board) for the Common Stock is open
for general trading.

 

“Transfer”
shall mean any disposition of any Warrant or Warrant Stock or of any interest in
either thereof, which would constitute a “sale” thereof within the meaning of
the Securities Act.

 

“Violation”
has the meaning set forth in Section 8.6(a) hereof.

 

“Warrant
Price” shall mean an amount equal to (i) the number of shares of Common Stock
being purchased upon exercise of this Warrant pursuant to Section 2.1
hereof, multiplied by (ii) the Exercise Price as of the date of such exercise.

 

“Warrants”
shall mean the Original Warrants and all warrants issued upon transfer, division
or combination of, or in substitution for, such Original Warrants or any other
such Warrant. All Warrants shall at all times be identical as to terms and
conditions and date, except as to the number of shares of Common Stock for which
they may be exercised.

 

“Warrant
Stock” shall be deemed to include not only shares of Common Stock issued,
issuable or both upon exercise of the Original Warrants, but also (i) any other
securities issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange by the Company generally for, or in
replacement by the Company generally of, any shares of Warrant Stock and (ii)
any securities issued in exchange for any such Warrant Stock in any merger or
reorganization of the Company, but in either such case only so long as such
securities have not been registered and Transferred pursuant to the Securities
Act or Transferred in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under Section 4(1) thereof so that
all transfer restrictions with respect to such securities are removed in
connection with such Transfer.

 

“WS
Holder” shall have the meaning set forth in Section 8.1(a) hereof.

 

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      2.
	
      EXERCISE
      OF WARRANT

 

2.1.
Manner of Exercise.

 

(a) The
Holder of this Warrant may at any time and from time to time on and after the
Original Issue Date until the Expiration Date exercise this Warrant, on any
Business Day, for the number of shares of Common Stock purchasable hereunder. In
order to exercise this Warrant the Holder shall (i) deliver to the Company at
the Designated Office a written notice of the Holder’s election to exercise this
Warrant (an “Exercise Notice”), which Exercise Notice shall specify the number
of shares of Common Stock to be purchased based on the then-current total number
of shares of Common Stock as to which this Warrant relates, together with this
Warrant and (ii) pay to the Company the Warrant Price (the date on which both
such delivery and payment shall have first taken place being hereinafter
sometimes referred to as the “Exercise Date”). Such Exercise Notice shall be in
the form of the subscription form appearing at the end of this Warrant as
Annex A, duly executed by the Holder or its duly authorized agent or
attorney. 

 

(b) Upon
receipt of such Exercise Notice, Warrant and payment, the Company shall, as
promptly as practicable, and in any event within five (5) Business Days
thereafter properly record (or cause to be recorded) in the Company’s record
books the Holder’s ownership of the aggregate number of full shares of Common
Stock issuable upon such exercise and provide the Holder with evidence of such
ownership and recordation in form and substance acceptable to such Holder. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the 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 Exercise Date.

 

(c)
Payment of the Warrant Price shall be made at the option of the Holder by one or
more of the following methods: (i) by delivery of a certified check or wire
transfer in the amount of such Warrant Price, (ii) by instructing the Company to
withhold a number of shares of Warrant Stock then issuable upon exercise of this
Warrant with an aggregate Fair Value equal to such Warrant Price or (iii) by
surrendering to the Company shares of Common Stock previously acquired by the
Holder with an aggregate Fair Value equal to such Warrant Price; provided,
however, that a Holder may elect the methods described in (ii) and (iii) above
only if the registration statement that the Company is required to file pursuant
to Section 8.2 has not been declared effective by the Commission as of the date
that is one year from the Original Issue Date. In the event of any withholding
of Warrant Stock or surrender of Common Stock pursuant to clause (ii) or (iii)
above where the number of shares whose Fair Value is equal to the Warrant Price
is not a whole number, the number of shares withheld by or surrendered to the
Company shall be rounded up to the nearest whole share and the Company shall
make a cash payment to the Holder based on the incremental fraction of a share
being so withheld by or surrendered to the Company in an amount determined in
accordance with Section 2.3 hereof. 

 

(d) If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing the shares of Common
Stock being issued, deliver to the Holder a new Warrant evidencing the rights of
the Holder to purchase the unpurchased shares of Common Stock called for by this
Warrant. Such new Warrant shall in all other respects be identical with this
Warrant.

 

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2.2.
Payment
of Taxes. All
shares of Common Stock issuable upon the exercise of this Warrant pursuant to
the terms hereof shall be validly issued, fully paid and nonassessable, issued
without violation of any preemptive rights and free and clear of all Liens
(other than any created by actions of the Holder). The Company shall pay all
expenses in connection with, and all taxes and other governmental charges that
may be imposed with respect to, the issue or delivery of any shares of Common
Stock issued upon the exercise of this Warrant to a Holder (each, an “Issuance
or Delivery Tax”), but not with respect to any actual or deemed disposition of
Common Stock acquired or deemed acquired pursuant to the exercise of this
Warrant. Any such Issuance or Delivery Tax that is imposed by law upon the
Holder shall be paid by the Holder and the Company shall reimburse the Holder
therefor on an After-Tax Basis; provided,
however, that in
the event certificates for Warrant Stock 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.

 

2.3.
Fractional
Shares. The
Company shall not be required to issue or record a fractional share of Common
Stock upon exercise of any Warrant. As to any fraction of a share that the
Holder of one or more Warrants, the rights under which are exercised in the same
transaction, would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final fraction in an
amount equal to the same fraction of the Fair Value of one share of Common
Stock.  

 

2.4.
Continued
Validity and Application. (a) A
Holder of shares of Warrant Stock issued upon the exercise of this Warrant,
including any transferee of such shares (other than a transferee in whose hands
such shares no longer constitute Warrant Stock as defined herein), shall
continue, with respect to such shares, to be entitled to all rights granted to
Holders of Warrant Stock, including the rights granted under Sections 4, 5, 7,
8, 11, 12 and 13 of this Warrant, as well as any other rights ancillary thereto
or necessary for enforcement of such rights, and to be subject to all
obligations that are applicable to such Holder by the terms of this Warrant.

 

	
      3.
	
      TRANSFER,
      DIVISION AND COMBINATION

 

3.1.
Transfer. Subject
to compliance with the Securities Act and the provisions of this Warrant, this
Warrant is transferable to any Affiliate of Nomura. Each transfer of this
Warrant and all rights hereunder, in whole or in part, shall be registered on
the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the Designated Office, together with a written assignment of
this Warrant in the form of Annex
B hereto
duly executed by the Holder or its agent or attorney. Upon such surrender and
delivery, 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 shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by the
new Holder for the purchase of shares of Common Stock, on the same terms and
conditions set forth herein with respect to the Original Warrants, without
having a new Warrant issued. 

 

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3.2.
Division
and Combination. Subject
to compliance with the applicable provisions of this Warrant, this Warrant may
be divided or combined with other Warrants upon presentation hereof at the
Designated Office, 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 the applicable provisions of
this Warrant 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.

 

3.3.
Expenses. The
Company shall prepare, issue and deliver at its own expense any new Warrant or
Warrants required to be issued under this Section 3.

 

3.4.
Maintenance
of Books. The
Company agrees to maintain, at the Designated Office, or at the office of its
legal counsel, books for the registration and transfer of the
Warrants.

 

	
      4.
	
      ANTIDILUTION&NBSP;PROVISIONS

 

The
number of shares of Common Stock for which this Warrant is exercisable and the
Exercise Price shall be subject to adjustment from time to time as set forth in
this Section 4.

 

4.1.
Stock
Dividends, Subdivisions and Combinations. If at
any time the Company shall:

 

(i) take
a record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, additional shares of
Common Stock,

 

(ii)
subdivide its outstanding shares of Common Stock into a larger number of shares
of such Common Stock, or

 

(iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of such Common Stock,

 

then the
Exercise Price shall be adjusted to equal the product of the Exercise Price in
effect immediately prior to such event multiplied by a fraction the numerator of
which is equal to the number of shares of Common Stock Outstanding immediately
prior to the adjustment and the denominator of which is equal to the number of
shares of Common Stock Outstanding immediately after such adjustment.

 

4.2.
Issuance
of Additional Shares of Common Stock.

 

(a) If at
any time prior to the Dilution Protection Expiration Date, the Company shall
issue or sell any shares of Common Stock in a Subsequent Issuance without
consideration or for a consideration per share that is less than the Exercise
Price in effect immediately prior to such issuance or sale, then, forthwith upon
such issuance or sale, the Exercise Price shall be reduced to the price
calculated by dividing (A) an amount equal to the sum of (x) the number of
shares of Common Stock Outstanding immediately prior to such Subsequent Issuance
multiplied by the then existing Exercise Price, plus (y) the aggregate
consideration (determined in accordance with the provisions of Section 4.6
hereof), if any, received by the Company in connection with such Subsequent
Issuance, by (B) the total number of shares of Common Stock Outstanding
immediately after such Subsequent Issuance.

 

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(b) The
provisions of this Section 4.2 shall not apply to (i) any issuance of Common
Stock for which an adjustment is provided for under Section 4.1 or (ii) any
issuance or sale of Common Stock pursuant to the exercise of any Stock Purchase
Rights or Convertible Securities to the extent that an adjustment shall have
been previously made hereunder in connection with the issuance of such Stock
Purchase Rights or Convertible Securities pursuant to the provisions of Section
4.3 hereof.

 

4.3.
Issuances
of Stock Purchase Rights and Convertible Securities.

 

(a) If
the Company shall at any time prior to the Dilution Protection Expiration Date,
sell or grant any Stock Purchase Rights to any Person in a Subsequent Issuance,
then, for the purpose of Section 4.2 above, the Company shall be deemed to have
issued at that time a number of shares of Common Stock equal to the maximum
number of shares of Common Stock that are or may become issuable upon exercise
of such Stock Purchase Rights (or upon exercise of any Convertible Securities
issuable upon exercise of such Stock Purchase Rights) for a consideration per
share equal to (i) the aggregate consideration per share (determined in
accordance with the provisions of Section 4.6 hereof) received by the Company in
connection with the issuance, sale or grant of such Stock Purchase Rights plus
(ii) the minimum amount of such consideration per share receivable by the
Company in connection with the exercise of such Stock Purchase Rights (and the
exercise of any Convertible Securities issuable upon exercise of such Stock
Purchase Rights).

 

(b) If
the Company shall at any time prior to the Dilution Protection Expiration Date,
sell or grant any Convertible Securities to any Person in a Subsequent Issuance,
then, for the purposes of Section 4.2 above, the Company shall be deemed to have
issued at that time a number of shares of Common Stock equal to the maximum
number of shares of Common Stock that are or may become issuable upon the
exercise of the conversion or exchange rights associated with such Convertible
Securities for a consideration per share equal to (i) the aggregate
consideration per share (determined in accordance with the provisions of Section
4.6 hereof) received by the Company in connection with the issuance or sale of
such Convertible Securities plus (ii) the minimum amount of such consideration
per share receivable by the Company in connection with the exercise of such
conversion or exchange rights.

 

(c) If,
at any time after any adjustment of the Exercise Price shall have been made
hereunder as the result of any issuance, sale or grant of any Stock Purchase
Rights or Convertible Securities, the maximum number of shares issuable upon
exercise of such Stock Purchase Rights or of the rights of conversion or
exchange associated with such Convertible Securities shall increase, or the
minimum amount of consideration per share receivable in connection with such
exercise shall decrease, whether by operation of any antidilution rights
pertaining to such Stock Purchase Rights or Convertible Securities, by agreement
of the parties or otherwise, the Exercise Price then in effect shall first be
readjusted to eliminate the effects of the original issuance, sale or grant of
such Stock Purchase Rights or Convertible Securities on such Exercise Price and
then readjusted as if such Stock Purchase Rights or Convertible Securities had
been issued on the effective date of such increase in number of shares or
decrease in consideration, but only if the effect of such two-step readjustment
is to reduce the Exercise Price below the Exercise Price in effect immediately
prior to such increase or decrease.

 

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(d) If,
at any time after any adjustment of the Exercise Price shall have been made
hereunder as the result of any issuance, sale or grant of any Stock Purchase
Rights or Convertible Securities, any of such Stock Purchase Rights or the
rights of conversion or exchange associated with such Convertible Securities
shall expire by their terms or any of such Stock Purchase Rights or Convertible
Securities shall be repurchased by the Company or a Subsidiary thereof for a
consideration per underlying share of Common Stock not exceeding the amount of
such consideration received by the Company in connection with the issuance, sale
or grant of such Stock Purchase Rights or Convertible Securities, the Exercise
Price then in effect shall forthwith be increased to the Exercise Price that
would have been in effect if such expiring Stock Purchase Rights or rights of
conversion or exchange or such repurchased Stock Purchase Rights or Convertible
Securities had never been issued. Similarly, if at any time after any such
adjustment of the Exercise Price shall have been made pursuant to Section 4.2
(i) any additional consideration is received or becomes receivable by the
Company in connection with the issuance or exercise of such Stock Purchase
Rights or Convertible Securities or (ii) there is a reduction in the conversion
ratio applicable to such Convertible Securities so that fewer shares of Common
Stock will be issuable upon the conversion or exchange thereof or there is a
decrease in the number of shares of Common Stock issuable upon exercise of such
Stock Purchase Rights, the Exercise Price then in effect shall be forthwith
readjusted to the Exercise Price that would have been in effect had such changes
taken place at the time that such Stock Purchase Rights or Convertible
Securities were initially issued, granted or sold. In no event shall any
readjustment under this Section 4.3(d) affect the validity of any shares of
Warrant Stock issued upon any exercise of this Warrant prior to such
readjustment, nor shall any such readjustment have the effect of increasing the
Exercise Price above the Exercise Price that would have been in effect if the
related Stock Purchase Rights or Convertible Securities had never been
issued.

 

4.4.
Adjustment
of Number of Shares Purchasable. Upon
any adjustment of the Exercise Price as provided in Section 4.1, 4.2 or 4.3
hereof, the Holder hereof shall thereafter be entitled to purchase upon the
exercise of this Warrant, at the Exercise Price resulting from such adjustment,
the number of shares of Common Stock (calculated to the nearest 1/100th of a
share) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable on the exercise
hereof immediately prior to such adjustment and dividing the product thereof by
the Exercise Price resulting from such adjustment.

 

4.5.
Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. In case
the Company shall reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another corporation (where the Company is not
the surviving corporation or where there is any change whatsoever in, or
distribution with respect to, the Outstanding Common Stock of the Company), or
sell, transfer or otherwise dispose of all or substantially all of its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, (i) shares of common stock of the successor or acquiring corporation or
of the Company (if it is the surviving corporation) or (ii) any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation (“Other Property”) are to
be received by or distributed to the holders of Common Stock of the Company who
are holders immediately prior to such transaction, then the Holder of this
Warrant shall have the right thereafter to receive, upon exercise of this
Warrant, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable
upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In such event, the aggregate Exercise Price otherwise payable for the
shares of Common Stock issuable upon exercise of this Warrant shall be allocated
among the shares of common stock and Other Property receivable as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets in proportion to the respective fair market values of such shares of
common stock and Other Property as determined in good faith by the Board. In
case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be reasonably deemed appropriate (as
determined by resolution of the Board) in order to provide for adjustments of
any shares of the common stock of such successor or acquiring corporation for
which this Warrant thus becomes exercisable, which modifications shall be as
equivalent as practicable to the adjustments provided for in this
Section 4. For purposes of this Section 4.5, “common stock of the
successor or acquiring corporation” shall include stock of such corporation of
any class that is not preferred as to dividends or assets over any other class
of stock of such corporation and that is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
that are convertible into or exchangeable for any such stock, either immediately
or upon the arrival of a specified date or the happening of a specified event
and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 4.5 shall similarly apply to successive reorganizations,
reclassification, mergers, consolidations or disposition of assets.

 

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4.6.
Determination
of Consideration. For
purposes of Sections 4.2, 4.3 and 4.4 hereof, the consideration received and/or
receivable by the Company in connection with the issuance, sale, grant or
exercise of additional shares of Common Stock, Stock Purchase Rights or
Convertible Securities, irrespective of the accounting treatment of such
consideration, shall be valued as follows:

 

(1)
Cash
Payment. In the
case of cash, the net amount received by the Company after deduction of any
accrued interest or dividends.

 

(2)
Securities
or Other Property. In the
case of securities or other property, the fair market value thereof as of the
date immediately preceding such issuance, sale, grant or exercise as reasonably
determined in good faith by the Board.

 

(3)
Allocation
Related to Common Stock. In the
event shares of Common Stock are issued or sold together with other securities
or other assets of the Company for a consideration which covers both, the
consideration received (computed as provided in (1) and (2) above) shall be
allocable to such shares of Common Stock as reasonably determined in good faith
by the Board.

 

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(4)
Allocation
Related to Stock Purchase Rights and
Convertible Securities. In case
any Stock Purchase Rights or Convertible Securities shall be issued or sold
together with other securities or other assets of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to the Stock Purchase Rights or Convertible Securities, the
consideration allocable to such Stock Purchase Rights or Convertible Securities
shall be reasonably determined in good faith by the Board.

 

(5)
Dividends
in Securities. In case
the Company shall declare a dividend or make any other distribution upon any
stock of the Company payable in either case in Common Stock or Convertible
Securities, such Common Stock or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be deemed to have
been issued or sold without new or additional consideration.

 

(6)
Merger,
Consolidation or Sale of Assets. In case
any shares of Common Stock, Stock Purchase Rights or Convertible Securities
shall be issued in connection with any merger or consolidation in which the
Company is the surviving corporation, the amount of consideration therefor shall
be deemed to be the fair value of such portion of the assets and business of the
non-surviving corporation attributable to such Common Stock, Stock Purchase
Rights or Convertible Securities, as is reasonably determined in good faith by
the Board.

 

(7)
Challenge
to Good Faith Determination.
Whenever the Board shall be required to make a determination in good faith of
the fair value of any item under this Section 4, such determination may be
challenged in good faith by the Majority Holders, and any dispute shall be
resolved by the Appraisal Bank. 

 

4.7.
Other
Dilutive Events. In case
any event shall occur as to which the other provisions of this Section 4 are not
strictly applicable but as to which the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in accordance
with the essential intent and principles hereof (including, without limitation,
the issuance of securities other than Common Stock which have the right to
participate in distributions to the holders of Common Stock, the granting of
“phantom stock” rights or “stock appreciation rights” or the repurchase of
outstanding shares of Common Stock, Convertible Securities or Stock Purchase
Rights for a purchase price exceeding the fair market value thereof), then, in
each such case, either the Warrant Holder, Warrant Stock Holder or the Company
may request that the Appraisal Bank make a determination as to the adjustment,
if any, required to be made on a basis consistent with the essential intent and
principles established herein as a result of such event in order to preserve the
purchase rights represented by the Warrants. The
decision of the Appraisal Bank shall be final and binding on the Company and all
affected holders of Warrants or Warrant Stock. Promptly after receipt of the
opinion of the Appraisal Bank, the Company shall take any actions necessary to
implement same.

 

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4.8.
Other
Provisions Applicable to Adjustments Under this Section. The
following provisions shall be applicable to the adjustments provided for
pursuant to this Section 4:

 

(a)
When
Adjustments To Be Made. The
adjustments required by this Section 4 shall be made whenever and as often
as any specified event requiring such an adjustment shall occur. For the purpose
of any such adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence.

 

(b)
Record
Date. In case
the Company shall take a record of the holders of the Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Convertible Securities or Stock Purchase Rights or
(ii) to subscribe for or purchase Common Stock, Convertible Securities or
Stock Purchase Rights, then all references in this Section 4 to the date of the
issuance or sale of such shares of Common Stock, Convertible Securities or Stock
Purchase Rights shall be deemed to be references to such record
date.

 

(c)
Fractional
Interests. In
computing adjustments under this Section 4, fractional interests in Common
Stock shall be taken into account to the nearest 1/100th of a
share.

 

(d)
When
Adjustment Not Required. If the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or distribution to which the provisions
of Section 4.1 would apply, but shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment shall be required
by reason of the taking of such record and any such adjustment previously made
in respect thereof shall be rescinded and annulled.

 

(e)
Maximum
Exercise Price. Except
as provided in Section 4.1 above, at no time shall the Exercise Price per share
of Common Stock exceed the amount set forth in the preamble of this
Warrant.

 

(f)
Certain
Limitations.
Notwithstanding anything herein to the contrary, the Company agrees not to enter
into any transaction that, by reason of any adjustment under Section 4.1, 4.2 or
4.3 above, would cause the Exercise Price to be less than the par value of the
Common Stock, if any, unless the Company first reduces the par value of the
Common Stock to be less than the Exercise Price that would result from such
transaction.

 

(g)
Notice
of Adjustments.
Whenever the number of shares of Common Stock for which this Warrant is
exercisable or the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall forthwith prepare a certificate to be executed
by the chief financial officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated, specifying the number of shares of Common Stock for
which this Warrant is exercisable and (if such adjustment was made pursuant to
Section 4.5) describing the number and kind of any other shares of stock or
Other Property for which this Warrant is exercisable, and any related change in
the Exercise Price, after giving effect to such adjustment or change. The
Company shall promptly cause a signed copy of such certificate to be delivered
to each Holder in accordance with Section 13.2. The Company shall keep at
its principal office or at the Designated Office, if different, copies of all
such certificates and cause the same to be available for inspection at said
office during normal business hours by any Holder or any prospective transferee
of a Warrant designated by a Holder thereof.

 

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(h)
Independent
Application. Except
as otherwise provided herein, all subsections of this Section 4 are intended to
operate independently of one another (but without duplication). If an event
occurs that requires the application of more than one subsection, all applicable
subsections shall be given independent effect without duplication.

 

4.9.
Pre-emptive
Rights. In the
event that the Company at any time grants any pre-emptive rights to any holder
of equity securities of the Company to purchase any shares of Common
Stock, Convertible Securities or Stock Purchase Rights, the Company shall grant
similar pre-emptive rights to each holder of Warrant Stock then outstanding or
thereafter issued. 

 

	
      5.
	
      NO
      IMPAIRMENT

 

The
Company shall not by any action, including, without limitation, amending its
charter documents or through any reorganization, reclassification, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other similar 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 the Holder
against impairment. Without limiting the generality of the foregoing, the
Company shall take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, free and clear of all
Liens, and shall use its best 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.

	
      6.
	
      RESERVATION
      AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY
      GOVERNMENTAL AUTHORITY

 

From and
after the Original Issue Date, the Company shall at all times reserve and keep
available for issuance upon the exercise of the Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
issuable pursuant to the terms hereof, when issued upon exercise of this Warrant
with payment therefor in accordance with the terms hereof, shall be duly and
validly issued and fully paid and nonassessable, not subject to preemptive
rights and shall be free and clear of all Liens. Before taking any action that
would result in an adjustment in the number of shares of Common Stock 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 over
such action. If any shares of Common Stock required to be reserved for issuance
upon exercise of Warrants require registration or qualification with any
governmental authority under any federal or state law before such shares may be
so issued, the Company will in good faith and as expeditiously as possible and
at its expense endeavor to cause such shares to be duly registered.

 

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      7.
	
      NOTICE
      OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER
BOOKS

 

7.1.
Notices
of Corporate Actions. In the
event of: (a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of capital stock of any class or any
other securities, (b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person or any
transfer or other disposition of all or substantially all the assets of the
Company to another Person, (c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, (d) any amendment of the Certificate
of Incorporation of the Company or (e) any registration or public offering of
Common Stock, the Company shall mail to each Holder of a Warrant in accordance
with the provisions of Section 13.2 hereof a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, disposition, dissolution, liquidation, winding-up, amendment or
offering is to take place or become effective, the time, if any such time is to
be fixed, as of which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for the securities or Other Property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, disposition, dissolution, liquidation or
winding-up and a description in reasonable detail of the transaction. Such
notice shall be mailed to the extent practicable at least thirty (30), but not
more than ninety (90) days prior to the date therein specified. In the event
that the Company at any time sends any other notice to the holders of its Common
Stock, it shall concurrently send a copy of such notice to each Holder of a
Warrant.

 

7.2.
Taking
of Record. In the
case of all dividends or other distributions by the Company to the holders of
its Common Stock with respect to which any provision of any Section hereof
refers to the taking of a record of such holders, the Company will in each such
case take such a record and will take such record as of the close of business on
a Business Day.

 

7.3.
Closing
of Transfer Books. The
Company shall not at any time, except upon dissolution, liquidation or winding
up of the Company, close its stock transfer books or Warrant transfer books so
as to result in preventing or delaying the exercise or transfer of any
Warrant. 

 

	
      8.
	
      REGISTRATION
      RIGHTS

 

8.1.
Certain Definitions. For the purposes of this Section 8:

 

(a) The
Holders of Warrants and Warrant Stock are collectively referred to as “WS
Holders”.

 

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(b) Each
WS Holder shall be deemed to “hold”, as of any specified date, the aggregate of
(i) the number of shares of Warrant Stock held by such WS Holder as of such date
plus (ii) the
number of shares of Warrant Stock issuable upon exercise of any Warrants held by
such WS Holder as of such date.

 

(c) The
total number of shares of Warrant Stock deemed “outstanding” as of a specified
date will be equal to (i) the total number of shares of Warrant Stock
Outstanding as of such date plus (ii) the
number of shares of Warrant Stock issuable upon exercise of all outstanding
Warrants as of such date.

 

8.2.
Registration
of Warrant Stock.

 

(a) The
Company shall:

 

(1)
Within 45 days of the Original Issue Date, file a registration statement for the
sale or other disposition of all of the Warrant Stock (which registration
statement shall specify that the registered offering is being made on a delayed
or continued basis pursuant to Rule 415 under the Securities Act) (the
“Registration Statement”) and use the Company’s best efforts to have the
Registration Statement declared effective under the Securities Act within 120
days of the Original Issue Date; and

 

(2) Use
the Company’s best efforts to keep such Registration Statement Continuously
Effective until the Expiration Date or such earlier date as of which all Warrant
Stock covered by the Registration Statement shall have been disposed of in the
manner described therein (such period, the “Effective Period”).

 

(b) The
Company shall be entitled to suspend for up to 90 days the ability of WS Holders
to sell under the Registration Statement if the Board determines, in its good
faith reasonable judgment (with the concurrence of the managing underwriter, if
any), that the Transfer of Warrant Stock at such time would materially interfere
with, or require premature disclosure of, any financing, acquisition,
reorganization or other material transaction involving the Company or any of its
Subsidiaries and the Company promptly gives notice to Nomura and each WS Holder
of such determination; provided,
however, that
the Company shall have the ability to suspend the effectiveness of the
Registration Statement pursuant to this Section 8.2(b) only once during any
given 12-month period.

 

(c) The
Registration Statement shall be on Form SB-2 or such appropriate registration
form of the Commission as shall be selected by the Company and be reasonably
acceptable to Nomura. If any offering to be made pursuant to the Registration
Statement involves an underwritten offering (whether on a “firm”, “best efforts”
or “all reasonable efforts” basis or otherwise), or an agented offering, the
Majority Holders shall have the right to select the underwriter or underwriters
and manager or managers to administer such underwritten offering or the
placement agent or agents for such agented offering; provided,
however, that
each Person so selected shall be reasonably acceptable to the
Company.

 

8.3.
Registration
Procedures. In
connection with the filing of the Registration Statement, the Company shall, as
expeditiously as practicable:

 

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(a)
Before filing the Registration Statement or related prospectus or any amendments
or supplements thereto, including documents incorporated by reference after the
initial filing of the Registration Statement and prior to effectiveness thereof,
the Company shall furnish to counsel for Nomura, copies of all such documents in
the form substantially as proposed to be filed with the Commission at least four
(4) Business Days prior to filing for review and comment by such
counsel.

 

(b)
Prepare and file with the Commission such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act and rules thereunder with respect to the disposition of all
securities covered by the Registration Statement. If a WS Holder wishes to make
any sales under the Registration Statement through the means of an underwritten
offering, the Company shall amend the Registration Statement or supplement the
related prospectus whenever required by the terms of the underwriting agreement
entered into pursuant to Section 8.4(e). Subject to Rule 415 under the
Securities Act, the Company shall amend the Registration Statement or supplement
the related prospectus so that it will remain current and in compliance with the
requirements of the Securities Act throughout the Effective Period, and if
during such period any event or development occurs as a result of which the
Registration Statement or related prospectus contains a misstatement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Company shall promptly notify each WS
Holder, amend the Registration Statement or supplement the related prospectus so
that each will thereafter comply with the Securities Act and furnish to each WS
Holder such amended or supplemented prospectus, which each such WS Holder shall
thereafter use in the Transfer of Warrant Stock covered by the Registration
Statement. Pending such amendment or supplement each such Selling Holder shall
cease making offers or Transfers of Warrant Stock pursuant to the prior
prospectus. In the event that any Warrant Stock included in the Registration
Statement remains unsold at the end of the Effective Period, the Company may
file a post-effective amendment to the Registration Statement for the purpose of
removing such Warrant Stock from registered status.

 

(c)
Furnish to each WS Holder, without charge, such numbers of copies of the
Registration Statement, any pre-effective or post-effective amendment thereto,
the prospectus, including each preliminary prospectus and any amendments or
supplements thereto, in each case in conformity with the requirements of the
Securities Act and the rules thereunder, and such other related documents as
each WS Holder may reasonably request in order to facilitate the disposition of
Registrable Securities owned by it.

 

(d) Use
the Company’s best efforts (i) to register and qualify the securities covered by
the Registration Statement under such other securities or blue sky laws of such
states or jurisdictions (including foreign jurisdictions) as shall be reasonably
requested by the Majority Holders, and (ii) to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of the
offer and transfer of the Warrant Stock in any jurisdiction, at the earliest
possible moment; provided,
however, that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.

 

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(e) In
the event that any WS Holder shall choose to enter into an underwriting
agreement or agency agreement with respect to any portion of the offering to be
made pursuant to the Registration Statement, enter into and perform the
Company’s obligations under an underwriting or agency agreement (including
indemnification and contribution obligations of underwriters or agents), in
usual and customary form, with the managing underwriter or underwriters of or
agents for such offering. The Company shall also cooperate with the Selling
Holders and the managing underwriter for such offering in the marketing of the
Warrant Stock, including making available the Company’s officers, accountants,
counsel, premises, books and records for such purpose, provided that the Company
shall not be required to incur any out-of-pocket expense (other than
out-of-pocket expenses that the relevant WS Holder has agreed to reimburse)
pursuant to this Section 8.3(e). 

 

(f)
Promptly notify Nomura and each other WS Holder of any stop order issued or
threatened to be issued by the Commission in connection with the Registration
Statement (and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered).

 

(g) Make
generally available to the Company’s security holders copies of all periodic
reports, proxy statements, and other information referred to in Section 8.8(a)
and an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 90 days following the end of the 12-month period
beginning with the first month of the Company’s first fiscal quarter commencing
after the effective date of the Registration Statement.

 

(h) Make
available for inspection by Nomura or any other Majority Holder, any underwriter
participating in any offering pursuant to the Registration Statement and the
representatives of Nomura or any other Majority Holder and such underwriter, all
financial and other information as shall be reasonably requested by them, and
provide Nomura or any other Majority Holder, any underwriter participating in
such offering and any of their representatives the opportunity to discuss the
business affairs of the Company with its principal executives and independent
public accountants who have certified the audited financial statements included
in the Registration Statement, in each case all as necessary to enable them to
exercise their due diligence responsibility under the Securities Act;
provided,
however, that
information that the Company determines, in good faith, to be confidential and
which the Company advises such Person in writing is confidential shall not be
disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company or the related Selling Holder agrees to be
responsible for such Person’s breach of confidentiality on terms reasonably
satisfactory to the Company.

 

(i) Use
the Company’s best efforts to obtain a so-called “comfort letter” from its
independent public accountants, and legal opinions of counsel to the Company
addressed to the Selling Holders, in customary form and covering such matters of
the type customarily covered by such letters, and in a form that shall be
reasonably satisfactory to the Selling Holders. The Company shall furnish to
each Selling Holder a signed counterpart of any such comfort letter or legal
opinion. Delivery of any such opinion or comfort letter shall be subject to the
recipient furnishing such written representations or acknowledgements as are
customarily provided by selling shareholders who receive such comfort letters or
opinions.

 

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-

(j)
Provide and cause to be maintained a transfer agent and registrar for all
Warrant Stock from and after a date not later than the effective date of the
Registration Statement.

 

(k) Use
all reasonable efforts to cause the Warrant Stock covered by the Registration
Statement (i) if the Common Stock is then listed on a securities exchange or
included for quotation in a recognized trading market, to continue to be so
listed or included for a reasonable period of time after the offering, and (ii)
to be registered with or approved by such other United States, state or foreign
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the WS Holders to consummate
the disposition of such Registrable Securities.

 

(l) Use
the Company’s reasonable efforts to provide a CUSIP number for the Common Stock
prior to the effective date of the Registration Statement and to maintain such
CUSIP number for so long as the Registration Statement shall be
effective.

 

(m) Take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of Warrant Stock.

 

8.4.
Selling
Holders’ Obligations. It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section 8 with respect to the Registration Statement
that the Holder of such Warrant Stock shall furnish
to the Company such information regarding such Holder, the number of Shares of
Warrant Stock owned by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder’s
Warrant Stock, and to cooperate with the Company in preparing such
registration;

 

8.5.
Expenses
of Registration.
Expenses incurred in connection with the Registration Statement shall be
allocated and paid as follows:

 

(a) The
Company shall bear and pay all expenses incurred in connection with the
Registration Statement, including all registration, filing and NASD fees, all
fees and expenses of complying with securities or blue sky laws or similar
non-U.S. laws, all word processing, duplicating and printing expenses, messenger
and delivery expenses, the fees and disbursements of counsel for the Company,
and of the Company’s independent public accountants, including the expenses of
“comfort” letters required by or incident to such performance and compliance,
and, with respect to the initial filing of the Registration Statement and each
amendment to the Registration Statement or supplement to the related prospectus,
the reasonable fees and disbursements of one firm of counsel for the Holders of
Warrant Stock (the “Registration Expenses”), but excluding underwriting
discounts and commissions relating to Registrable Securities (which shall be
paid on a pro rata basis by the Selling Holders). 

 

(b) Any
failure of the Company to pay any Registration Expenses as required by this
Section 8.5 shall not relieve the Company of its obligations under this Section
8.

 

8.6.
Indemnification;
Contribution. In
connection with the Registration Statement,

 

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-

(a) To
the extent permitted by applicable law, the Company shall indemnify and hold
harmless each Selling Holder, each Person, if any, who controls such Selling
Holder within the meaning of the Securities Act, and each officer, director,
partner, and employee of such Selling Holder and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint or
several), including attorneys’ fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”):

 

(i) Any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including any preliminary prospectus or final prospectus
contained therein, or any amendments or supplements thereto;

 

(ii) The
omission or alleged omission to state therein a material fact required to be
stated in the Registration Statement, or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or

 

(iii) Any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any applicable state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any applicable state
securities law;

 

provided,
however, that
the indemnification required by this Section 8.6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or expense if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or expense to the extent that it is
determined by a court of competent jurisdiction by a final non-appealable order
to have solely arisen out of or be based upon a Violation which occurred in
reliance upon and in conformity with written information furnished to the
Company by the indemnified party expressly for use in connection with such
registration; provided,
further, that
the indemnity agreement contained in this Section 8.6(a) shall not apply to any
underwriter to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an omission
or alleged omission to state a material fact, contained in or omitted from any
preliminary prospectus if the final prospectus shall correct such untrue
statement or alleged untrue statement, or such omission or alleged omission, and
a copy of the final prospectus has not been sent or given to such person at or
prior to the confirmation of sale to such person if such underwriter was under
an obligation to deliver such final prospectus and failed to do so. The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers, directors, agents and employees and each person who controls such
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the extent provided in the underwriting
agreement.

 

(b) To
the extent permitted by applicable law, each Selling Holder shall indemnify and
hold harmless the Company, each of its directors, each of its officers who shall
have signed the Registration Statement, each Person, if any, who controls the
Company within the meaning of the Securities Act, any other Selling Holder, any
controlling Person of any such other Selling Holder and each officer, director,
partner, and employee of such other Selling Holder and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint and
several), including attorneys’ fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may otherwise become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses are determined by a court of competent jurisdiction by
a final non-appealable order to have solely arisen out of or be based upon a
Violation that occurred in reliance upon and in conformity with written
information furnished by such Selling Holder expressly for use in connection
with such Registration Statement; provided,
however, that
(x) the indemnification required by this Section 8.6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or expense
if settlement is effected without the consent of the relevant Selling Holder,
which consent shall not be unreasonably withheld, and (y) in no event shall the
amount of any indemnity under this Section 8.6(b) exceed the net proceeds from
the applicable offering received by such Selling Holder.

 

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-

(c)
Promptly after receipt by an indemnified party under this Section 8.6 of notice
of the commencement of any action, suit, proceeding, investigation or threat
thereof made in writing for which such indemnified party may make a claim under
this Section 8.6, such indemnified party shall deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties;
provided,
however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and disbursements and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time following the commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 8.6 but shall not relieve the indemnifying party of any liability that
it may have to any indemnified party otherwise than pursuant to this Section
8.6. Any fees and expenses incurred by the indemnified party (including any fees
and expenses incurred in connection with investigating or preparing to defend
such action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party
(regardless of whether it is ultimately determined that an indemnified party is
not entitled to indemnification hereunder).  Any such
indemnified party shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and expenses
or (ii) the indemnifying party shall have failed to promptly assume the defense
of such action, claim or proceeding or (iii) the named parties to any such
action, claim or proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party, based on advice of outside
counsel, a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such action, claim or
proceeding, in which event the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels). No indemnifying party
shall be liable to an indemnified party for any settlement of any action,
proceeding or claim without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld.

 

- 24
-

(d) If
the indemnification required by this Section 8.6 from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to in this Section 8.6:

 

(i) The
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such Violation. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8.6(a) and Section
8.6(b), any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.

 

(ii) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8.6(d) were determined by pro rata allocation or
by any other method of allocation which does not take into account the equitable
considerations referred to in Section 8.6(d)(i) above. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

- 25
-

(e) If
indemnification is available under this Section 8.6, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
this Section 8.6 without regard to the relative fault of such indemnifying party
or indemnified party or any other equitable consideration referred to in Section
8.6(d) above.

 

(f) The
indemnification required by this Section 8.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred.

 

(g) The
obligations of the Company and the Selling Holders under this Section 8.6 shall
survive the completion of any offering of Warrant Stock pursuant to the
Registration Statement, and otherwise.

 

8.7.
Holdback. Each WS
Holder, if so requested by the managing underwriter in connection with a
registered offering by the Company of Common Stock, Convertible Securities Stock
Purchase Rights, shall not effect any public sale or distribution of shares of
Common Stock (excluding any sale pursuant to Rule 144 or Rule 144A under the
Securities Act and any sale as part of such underwritten or agented
registration), during the 5-day period prior to, and during the 90-day period
beginning on, the date such registration statement is declared effective under
the Securities Act by the Commission, provided that
such WS Holder is timely notified of such effective date in writing by such
managing underwriter and provided further that such WS Holder is given the right
to participate as a seller in such underwritten or agented offering on the same
terms as the Company or such other Persons on whose behalf Registration
Statement has been filed have agreed to sell their securities.

 

8.8.
Additional
Covenants of the Company. The
Company hereby agrees and covenants as follows:

 

(a) The
Company shall file as and when applicable, on a timely basis, all reports
required to be filed by it under the Exchange Act. If the Company is not
required to file reports pursuant to the Exchange Act or fails to file required
reports, upon the request of any WS Holder, the Company shall make available to
such requesting WS Holder the information specified in subparagraph (c)(2) of
Rule 144 of the Securities Act, and take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable WS Holders to Transfer Warrants or Warrant
Stock without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act or any similar rule or
regulation hereafter adopted by the Commission. In addition, promptly upon the
request of any WS Holder, the Company shall provide such WS Holder with such
financial statements, reports and other information as may be required to permit
such WS Holder to Transfer shares of Warrant Stock to Qualified Institutional
Buyers pursuant to Rule 144A of the Securities Act.

 

(b) The
Company shall not, and shall not permit its Subsidiaries to, effect any public
or private sale or distribution of any shares of Common Stock, Convertible
Securities or Stock Purchase Rights, or file any Registration Statement relating
to such a sale, during the 5 Business Days prior to, and during the 90-day
period beginning following any date specified by Nomura in a notice given to the
Company, provided that Nomura shall not designate more than one such date in any
12-month period.

 

- 26
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      9.
	
      LOSS
      OR MUTILATION

 

Upon
receipt by the Company from any Warrant Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it (it
being understood that the written indemnification agreement of or affidavit of
loss of Nomura shall be a sufficient indemnity) and, in case of mutilation, upon
surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to such Holder; provided,
however, in the
case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.

 

	
      10.
	
      OFFICE
      OF THE COMPANY

 

As long
as any of the Warrants remain outstanding, the Company shall maintain an office
or agency, which may be the principal executive offices of the Company (the
“Designated Office”), where the Warrants may be presented for exercise,
registration of transfer, division or combination as provided in this Warrant.
Such Designated Office shall initially be the office of the Company at 600
Lexington Avenue, 3rd Floor,
New York, New York 10022. The Company may from time to time change the
Designated Office to another office of the Company or its agent within the
United States by notice given to all registered holders of Warrants at least ten
Business Days prior to the effective date of such change.

 

	
      11.
	
      DILUTION
      FEE

 

In the
event that the Company at any time after the Original Issue Date shall pay a
dividend or make any other distribution with respect to its Common Stock (or any
other shares of the capital stock of the Company for which this Warrant becomes
exercisable pursuant to Section 4 above) whether in the form of cash, evidences
of indebtedness, securities or other property (other than a stock dividend
subject to the provisions of Section 4.1 above), then the Holder of this Warrant
shall be entitled to receive a dilution fee (a “Dilution Fee”) payable in cash
on the date of payment of such dividend or other distribution equal to the
number of shares of Common Stock (or such other shares of stock) issuable upon
exercise of this Warrant on such date multiplied by the sum of (x) the amount of
cash and (y) the Fair Value of any evidences of indebtedness, securities or
other property distributed with respect to each share of Common Stock (or such
other stock). 

 

	
      12.
	
      CERTAIN
      COVENANTS OF THE COMPANY

 

From the
date hereof until the Expiration Date, the Company covenants and agrees
that:

12.1.
Compliance
with Laws; Preservation of Corporate Existence. The
Company will comply in all material respects with all applicable laws, rule,
regulations and orders and preserve and maintain its legal existence, and will
preserve and maintain its rights, franchises, qualifications and privileges in
all material respects.

 

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-

12.2.
Taxes. The
Company will pay when due all taxes, assessments, charges and levies imposed
upon it or any of its properties or which it is required to withhold and pay
over, except where such taxes, assessments or charges shall be contested in good
faith by appropriate proceedings and where adequate reserves therefor have been
set aside on its books.

 

12.3.
Litigation. The
Company will give prompt notice to Nomura of all litigation and proceedings
affecting the Company which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect on the Company.

 

12.4.
Additional
Information. The
Company shall notify Nomura if at any time it ceases to be subject to the
reporting requirements of the Exchange Act. During any period that the Company
shall not be subject to such requirements, the Company shall, until the
Expiration Date, (i) provide to Nomura information that is comparable in all
material respects to the information that the Company would have been required
to file with the Commission were it still subject to such requirements, and (ii)
notify Nomura of such information on the same schedule that it would have been
required to file such information with the Commission.

 

12.5.
Rights
Agreements. If the
Company shall adopt a stockholder rights plan or other agreement pursuant to
which holders of any Company security (including “rights” that are issued to
holders of Common Stock) shall have the right to acquire additional shares of
Common Stock, other securities or property upon the acquisition by holders of in
excess of a specified percentage of Common Stock, such plan shall specify that
the acquisition by Nomura of Common Stock, pursuant to the exercise of the
Warrants shall not trigger such right to receive Common Stock, other securities
or property.

 

	
      13.
	
      MISCELLANEOUS

 

13.1.
Nonwaiver. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of the Company or the Holder of this Warrant shall operate as a waiver of
such right or otherwise prejudice the rights, powers or remedies of such
Person.

 

13.2.
Notice
Generally. Any
notice, demand, request, consent, approval, declaration, delivery or
communication hereunder to be made pursuant to the provisions of this Warrant
shall be sufficiently given or made if in writing and either delivered in person
with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

(a) if to
any Holder of this Warrant or of Warrant Stock issued upon the exercise hereof,
at its last known address appearing on the books of the Company maintained for
such purpose;

 

- 28
-

(b) if to
the Company, at its Designated Office, with a copy to:

 

                    McGuireWoods
LLP

                    1345 Avenue of the
Americas, 7th
Floor

                    New York, New York
10105

                    Attention: Louis W.
Zehil, Esq.

                    (212) 548-2138
(direct)

                    (212) 548-2175
(facsimile)

 

or at
such other address as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Every notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, or three Business Days after the same shall have been
deposited in the United States mail, or one Business Day after the same shall
have been delivered to Federal Express or another overnight courier
service.

 

13.3.
Limitation
of Liability. No
provision hereof, in the absence of affirmative action by the Holder of this
Warrant to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
such Holder to pay the Exercise Price for any Warrant Stock other than pursuant
to an exercise of this Warrant or any liability as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

 

13.4.
Remedies. Each
Holder of Warrants and/or Warrant Stock, in addition to being entitled to
exercise its rights granted by law, including recovery of damages, shall be
entitled to specific performance of its rights provided 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, in an action for specific performance, to waive the defense that
a remedy at law would be adequate.

 

13.5.
Successors
and Assigns. This
Warrant and the rights evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the permitted successors and
assigns of the Holder hereof. The provisions of this Warrant are intended to be
for the benefit of all Holders from time to time of this Warrant and to the
extent applicable, all Holders of shares of Warrant Stock issued upon the
exercise hereof (including transferees), and shall be enforceable by any such
Holder.

 

13.6.
Amendment. This
Warrant and all other Warrants may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Majority Holder or
Holders, provided that no
such Warrant may be modified or amended to reduce the number of shares of Common
Stock for which such Warrant is exercisable or to increase the price at which
such shares may be purchased upon exercise of such Warrant (before giving effect
to any adjustment as provided therein) without the written consent of the Holder
thereof.

 

- 29
-

13.7.
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 provision or the remaining provisions
of this Warrant.

 

13.8.
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.

 

13.9.
GOVERNING
LAW; JURISDICTION. IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
WARRANT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO
THE VALIDITY OF THIS WARRANT, THE ISSUANCE OF WARRANT STOCK UPON EXERCISE HEREOF
AND THE RIGHTS AND DUTIES OF THE COMPANY WITH RESPECT TO REGISTRATION OF
TRANSFER, WHICH SHALL BE GOVERNED BY THE LAWS OF DELAWARE. THE COMPANY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK CITY,
SHALL HAVE, EXCEPT AS SET FORTH BELOW, EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY AND THE HOLDER OF THIS
WARRANT PERTAINING TO THIS WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT, PROVIDED, THAT IT
IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK CITY.

 

 

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-

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and
attested by its Secretary or an Assistant Secretary.

 

 

MRU
HOLDINGS, INC.

 

By:_________________________

     
Name: Louis W. Zehil

     
Title: Secretary

 

- 31
-

 

ANNEX
A

 

SUBSCRIPTION
FORM

 

The
undersigned registered owner of this Warrant exercises this Warrant for the
purchase of ______ shares Common Stock of MRU Holdings, Inc. and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
this Warrant and requests that certificates for the shares of Common Stock
hereby purchased (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to _________________ whose
address is ______________________________________________ and represents that
the Warrant being here delivered is not subject to any lien or encumbrance,
other than any lien or encumbrance created by this Warrant. 

 

 

_________________________________

(Name of
Registered Owner)

 

_________________________________

(Signature
of Registered Owner)

 

_________________________________

(Street
Address)

 

_________________________________

(City)        
   (State)             
(Zip
Code)

 

 

- i
-

 

ANNEX
B

 

ASSIGNMENT
FORM

 

FOR VALUE
RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

 

 

	 Name and Address of
      Assignee	 	Number of Shares
      of
     Common
Stock

 

 

 

 

and does
hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of MRU Holdings, Inc.
maintained for the purpose, with full power of substitution in the
premises.

 

Dated:___________________               Print
Name:___________________

 

 

Signature:_____________________

 

Witness:______________________

 

 

 

- ii
-Execution
Copy

 

 

 

 

 

WARRANT

to
Purchase Shares of Common Stock of

 

MRU
HOLDINGS, INC.

 

 

 

 

        Warrant No.
2

 

        Original
Issue

        Date: February 4,
2005

 

 

 

NEITHER
THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE OR FOREIGN SECURITIES LAW. 

 

Warrant
No. 2

 

WARRANT

 

 

MRU
Holdings, Inc.

 

THIS IS
TO CERTIFY THAT Nomura Credit & Capital, Inc. (“Nomura”), or registered
assigns, is entitled, at any time during the Exercise Period (such term, and
certain other capitalized terms used herein being hereinafter defined), to
purchase from MRU Holdings, Inc., 1,454,445 shares of Common Stock (subject to
adjustment as provided herein), at a purchase price of $3.50 per share (the
initial “Exercise Price”, subject to adjustment as provided herein), all on the
terms and conditions and pursuant to the provisions hereinafter set forth.

 

 

- 1
-

 

	
      1.
	
      DEFINITIONS

 

As used
in this Warrant, the following terms have the respective meanings set forth
below:

 

“Acceleration
Event” shall mean the consummation of, or the entrance by the Company into a
definitive agreement to consummate, any of the following:

 

(i) A
merger or consolidation of the Company with or into any Person in connection
with which the holders of Common Stock receive any consideration or
distributions in respect of their shares of Common Stock;

 

(ii) A
sale by the Company of all or substantially all of its assets; or

 

(iii) The
acquisition by any Person or group of Persons of shares of Common Stock from the
Company or one or more stockholders of the Company (whether pursuant to a tender
offer, exchange offer, negotiated transaction or otherwise) in connection with
the acquisition of the beneficial ownership of voting capital stock of the
Company representing more that 40% of the total voting power of all outstanding
shares of capital stock of the Company entitled to vote generally in elections
of directors.

 

“Additional
Warrant” means the Warrant, also issued as of the Original Issue Date,
exercisable for the purchase of 6,545,004 shares of Common Stock.

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, (i) “control” when used with
respect to any specified Person means the power to direct the management and
policies of such specified Person, directly or indirectly, whether through the
ownership of equity or voting securities, by contract or otherwise, and (ii) the
terms “controlling” and “controlled” have meanings correlative to the foregoing
clause (i). 

 

“After-Tax
Basis” when referring to a payment that is required hereunder (the “target
amount”), shall mean a total payment (the “total amount”) that, after deduction
of all federal, state and local taxes that are required to be paid by the
recipient in respect of the receipt or accrual of such total amount, is equal to
the target amount.

 

The
“Appraisal Bank” shall be an investment bank of nationally recognized standing
selected by the Majority Holders and reasonably acceptable to the Company. If
the investment bank selected by the Majority Holders is not reasonably
acceptable to the Company, and the Company and the Majority Holders cannot agree
on a mutually acceptable investment bank, then the Company and the Majority
Holders shall each choose one such investment bank and the respective chosen
firms shall jointly select a third investment bank, which shall be the Appraisal
Bank. The Company, on the one hand, and the Majority Holders, as a group, on the
other, shall each be responsible for 50% of the costs and fees of the Appraisal
Bank.

 

- 2
-

“Appraised
Value” per share of Common Stock as of a date specified herein shall mean the
value of such a share as of such date as determined by the Appraisal Bank.
Appraised Value shall be determined on a fully-diluted basis, as a pro rata
portion of the value of the Company, based on the higher of (A) the value
derived from a hypothetical sale of the entire Company as a going concern by a
willing seller to a willing buyer (neither acting under any compulsion) and (B)
the liquidation value of the entire Company. No discount shall be applied on
account of (i) any Warrants or Warrant Stock representing a minority interest,
(ii) any lack of liquidity of the Common Stock or the Warrants, (iii) the fact
that the Warrants or Warrant Stock may constitute “restricted securities” for
United States securities law purposes, or (iv) any other grounds. The Appraised
Value of the Company as a whole shall be the Appraised Value of a share of
Common Stock multiplied by the number of Fully Diluted Outstanding shares of
Common Stock. As regards any property other than a share of Common Stock, the
Appraised Value shall be the value determined by the Appraisal Bank. If the
Appraisal Bank has determined Appraised Value of any item as of any date within
the 365 days preceding the date as of which Appraised Value of such item would
otherwise again be required to be determined, the Company may, in its
discretion, choose to rely on such previously determined Appraised Value. If the
Company chooses to rely on such previously determined Appraised Value, the
Holder who has requested such appraisal may request that the Appraisal Bank
again determine Appraised Value and such newly determined Appraised Value shall
be the Appraised Value, provided however, that
the costs and fees associated with any such new determination of Appraised Value
shall be born in their entirety by such requesting Holder. The decision of the
Appraisal Bank as to Appraised Value shall be final and binding on the Company
and all affected holders of Warrants or Warrant Stock.

 

“Board”
means the Board of Directors of the Company.

 

“Business
Day” shall mean any day that is not a Saturday or Sunday or a day on which banks
are required or permitted to be closed in the State of New York.

 

“Commission”
shall mean the Securities and Exchange Commission or any other federal agency
then administering the Securities Act and other federal securities
laws.

 

“Common
Stock” shall mean (except where the context otherwise indicates) the common
stock of the Company, par value $0.001 per share, as constituted on the Original
Issue Date, and any capital stock into which such Common Stock may thereafter be
changed, and shall also include (i) capital stock of the Company of any other
class (regardless of how denominated) issued to the holders of Common Stock upon
any reclassification thereof which is also not preferred as to dividends or
liquidation over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of capital stock of any successor or
acquiring corporation (as defined in Section 4.5 hereof) received by or
distributed to the holders of Common Stock in the circumstances contemplated by
Section 4.5 hereof. 

 

“Company”
means MRU Holdings, Inc., and any successor entity.

 

“Continuously
Effective”, with respect to the Registration Statement, shall mean that it shall
not, except as contemplated by Section 8.2(b), cease to be effective and
available for Transfers of Warrant Stock thereunder for longer than either (i)
any ten consecutive Business Days, or (ii) an aggregate of thirty Business Days
during the period specified in Section 8.2(a)(2).

 

- 3
-

“Convertible
Securities” shall mean evidences of indebtedness, shares of stock or other
securities that are convertible into or exchangeable for, with or without
payment of additional consideration in cash or property, shares of Common Stock,
either immediately or upon the occurrence of a specified date or a specified
event.

 

“Credit
Agreement” means that certain Credit Agreement by and between MRU Lending, Inc.,
the institutions from time to time parties thereto as lenders, and Nomura Credit
& Capital, Inc. dated as of the Original Issue Date.

 

“Current
Market Price” shall mean as of any specified date the average of the daily
market prices of the Common Stock for the twenty (20) consecutive Trading
Days immediately preceding such date. The “daily market price” for each such
Trading Day shall be: (i) if the Common Stock is then listed on a national
securities exchange or is listed on NASDAQ and is designated as a National
Market System security, the dollar-volume weighted average sales price, as
reported by Bloomberg L.P., or any successor or comparable organization, on such
day on the principal stock exchange or market system on which such Common Stock
is then listed or admitted to trading, or, if no such sale takes place on such
day, the average of the closing bid and asked prices for the Common Stock on
such day as reported on such stock exchange or market system or (ii) if the
Common Stock is not then listed or admitted to trading on any national
securities exchange or designated as a National Market System security on NASDAQ
but is traded over-the-counter, the average of the closing bid and asked prices
for the Common Stock as reported on NASDAQ or the NASD OTC Bulletin Board or in
the National
Daily Quotation Sheets, as
applicable. 

 

“Designated
Exchange” means the New York Stock Exchange, the American Stock Exchange or the
Nasdaq Stock Market (including the Nasdaq SmallCap Market). 

 

“Designated
Office” shall have the meaning set forth in Section 10 hereof.

 

“Dilution
Protection Expiration Date” means the earlier of (i) the Scheduled Termination
Date and (ii) thirty (30) days after any Lender Default. 

 

“Effective
Period” shall have the meaning set forth in Section 8.2(a)
hereof.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.

 

The
Company shall be considered an “Exchange-Traded Issuer” if, at the time of
determination, (i) the Common Stock is listed or traded on a Designated Exchange
and (ii) at least a majority of its directors are Independent
Directors.

 

“Exercise
Date” shall have the meaning set forth in Section 2.1 hereof.

 

“Exercise
Notice” shall have the meaning set forth in Section 2.1
hereof.

 

- 4
-

“Exercise
Period” shall mean the period (i) beginning on the earlier of the second
anniversary of the Original Issue Date and the occurrence of an Acceleration
Event and (ii) ending on the Expiration Date.

 

“Exercise
Price” shall mean, in respect of a share of Common Stock at any date herein
specified, the initial Exercise Price set forth in the preamble of this Warrant
as adjusted from time to time pursuant to Section 4 hereof.

 

“Expiration
Date” shall mean the earlier of (i) the tenth anniversary of the Original Issue
Date and (ii) thirty (30) days after any Lender Default.

 

“Fair
Value” per share of Common Stock as of any specified date shall mean: (i) if the
Common Stock is publicly traded as of such date, the Current Market Price per
share; or (ii) if the Common Stock is not publicly traded on such date, (1) the
fair market value per share of Common Stock as determined in good faith by the
Board and set forth in a written notice to each Holder or (2) if any such Holder
objects in writing to such price as determined by the Board within thirty days
after receiving notice of same, the Appraised Value per share as of such date.
As regards any other property, Fair Value as of any specified date shall mean
(1) the value as determined in good faith by the Board and set forth in a
written notice to each Holder or (2) if any such Holder objects in writing to
the value determined by the Board within thirty days after receiving notice of
the same, the Appraised Value of such property.

 

“Fully
Diluted Outstanding” shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
shares of Common Stock Outstanding on such date and all shares of Common Stock
issuable in respect of (x) the Warrants outstanding on such date, (y) any
Convertible Securities outstanding on such date and (z) any other Stock Purchase
Rights outstanding on such date, in each case regardless of whether or not the
conversion, exchange, subscription or purchase rights associated with such
Warrants, Convertible Securities or Stock Purchase Rights are presently
exercisable.

 

“GAAP”
shall mean generally accepted accounting principles in the United States of
America as from time to time in effect.

 

“Holder”
shall mean (a) with respect to this Warrant, the Person in whose name the
Warrant set forth herein is registered on the books of the Company maintained
for such purpose and (b) with respect to any other Warrant or shares of Warrant
Stock, the Person in whose name such Warrant or Warrant Stock (or the Warrant
which may be exercised to purchase such Warrant Stock) is registered on the
books of the Company maintained for such purpose.

 

“Independent
Director” shall mean a director who is independent, as independence for
directors is defined by the Designated Exchange on which the Common Stock is
then listed or traded. 

 

“Issuance
or Delivery Tax” shall have the meaning set forth in Section 2.2.

 

“Lender
Default” shall have the meaning ascribed to such term in the Supplemental
Agreement.

 

- 5
-

“Lien”
shall mean any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
lease or title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Uniform
Commercial Code or comparable law of any jurisdiction).

 

“Majority
Holder” or “Majority Holders” with respect to a given determination, shall mean
the Holder or Holders of Warrants and/or Warrant Stock representing more than
fifty percent of all Warrant Stock (with any such Warrants being deemed to
represent, for the purposes of such calculation, the shares of Warrant Stock
then issuable upon exercise thereof) directly affected by such determination.

 

“Material
Adverse Effect” shall have the meaning ascribed to such term in the Credit
Agreement.

 

“NASD”
shall mean the National Association of Securities Dealers, Inc., or any
successor corporation thereto.

 

“Nomura”
shall have the meaning set forth in the preamble to this Warrant. 

 

“Original
Issue Date” shall mean the date on which the Original Warrants were issued, as
set forth on the cover page of this Warrant.

 

“Original
Warrants” shall mean this Warrant and the Additional Warrant.

 

“Other
Property” shall have the meaning set forth in Section 4.5
hereof.

 

“Outstanding”
shall mean, when used with reference to Common Stock, at any date as of which
the number of shares thereof is to be determined, all issued shares of Common
Stock, except shares then owned or held by or for the account of the Company or
any Subsidiary thereof, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in
shares of Common Stock. “Outstanding”, when used with respect to Warrant Stock
for the purposes of Section 8 hereof shall have the meaning set forth in Section
8.1(c) hereof.

 

“Person”
shall mean any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).

 

“Registration
Expenses” shall have the meaning set forth in Section 8.5(a)
hereof.

 

“Registration
Statement” shall have the meaning set forth in Section 8.2(a) hereof.

 

- 6
-

“Scheduled
Termination Date” shall have the meaning ascribed to such term in the Credit
Agreement, as such date may be extended from time to time pursuant to the Credit
Agreement. 

 

“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

 

“Selling
Holders” shall mean, with respect to the Registration Statement, the Holders who
are selling at any given time.

 

“Shelf
Registration” shall have the meaning set forth in Section 8.2(a)
hereof.

 

“Small
Business Form” shall mean, in relation to any form prescribed by the Commission
for the registration under the Securities Act of securities of issuers that are
not small business issuers, as such term is defined by the Commission, the
comparable form prescribed by the Commission for the registration under the
Securities Act of securities of small business issuers. 

 

“Stock
Purchase Rights” shall mean any options, warrants or other securities or rights
to subscribe to or exercisable for the purchase of shares of Common Stock or
Convertible Securities, whether or not immediately exercisable.

 

“Subsequent
Issuance” shall mean any sale or issuance by the Company of Common Stock,
Convertible Securities or Stock Purchase Rights after the Original Issue Date
other than:

 

(i) Any
issuance of Warrant Stock upon exercise of the Warrants and any issuance of
Common Stock, Convertible Securities or Stock Purchase Rights (and any issuance
of Common Stock pursuant to the conversion, exchange or exercise of any such
Convertible Securities or Stock Purchase Rights) deemed to have been issued as
of the Original Issue Date pursuant to the definition of Fully Diluted
Outstanding.

 

(ii) At a
time when the Company is not an Exchange-Traded Issuer, the issuance of Common
Stock to the Company’s employees, consultants or directors pursuant to stock
option and bonus plans duly adopted in good faith by the Company, provided
that this
exception to the definition of Subsequent Issuance shall apply only with respect
to issuances of an aggregate number of shares of Common Stock that (i) in any
given 12-month period is not to exceed 3% of the average number of shares of
Common Stock Outstanding over such 12-month period and (ii) in any given
36-month period is not to exceed 6% of the average number of shares of Common
Stock Outstanding over such 36-month period and provided
further that the
Company may also issue Convertible Securities and Stock Purchase Rights (and
shares of Common Stock pursuant to the conversion, exchange or exercise of any
such Convertible Securities or Stock Purchase Rights) pursuant to this exception
to the definition of Subsequent Issuance with such issuances of Convertible
Securities or Stock Purchase Rights deemed to be, for purposes of this
paragraph, issuances of a number of shares of Common Stock equal to the number
of shares of Common Stock that they represent the right to purchase or
acquire;

 

- 7
-

(iii) At
a time when the Company is an Exchange-Traded Issuer, the issuance of Common
Stock, Convertible Securities or Stock Purchase Rights to the Company’s
employees, consultants or directors pursuant to stock option and bonus plans
duly adopted in good faith by the Company, provided
that this
exception to the definition of Subsequent Issuance shall apply only with respect
to any such issuances that are approved by the Board or a committee of the Board
comprised entirely of Independent Directors. 

 

(iv) Any
other issuance of Common Stock, Convertible Securities or Stock Purchase Rights
with respect to which the Majority Warrant Holders shall have waived application
of the provisions of Section 4 below.

 

“Subsidiary”
means any corporation or association (a) more than 50% (by number of votes) of
the voting stock of which is at the time owned by the Company or by one or more
Subsidiaries or by the Company and one or more Subsidiaries, or any other
business entity in which the Company or one or more Subsidiaries or the Company
and one or more Subsidiaries own more than a 50% interest either in the profits
or capital of such business entity or (b) whose net earnings, or portions
thereof, are consolidated with the net earnings of the Company and are recorded
on the books of the Company for financial reporting purposes in accordance with
GAAP.

 

“Supplemental
Agreement” means that certain Supplemental Agreement by and between the Company,
MRU Lending Holdco, LLC, MRU Lending, Inc. and Nomura, dated as of the Original
Issue Date. 

 

“Trading
Day” means a day on which the principal securities market (e.g., national
securities exchange, NASDAQ or OTC Bulletin Board) for the Common Stock is open
for general trading.

 

“Transfer”
shall mean any disposition of any Warrant or Warrant Stock or of any interest in
either thereof, which would constitute a “sale” thereof within the meaning of
the Securities Act.

 

“Violation”
has the meaning set forth in Section 8.6(a) hereof.

 

“Warrant
Price” shall mean an amount equal to (i) the number of shares of Common Stock
being purchased upon exercise of this Warrant pursuant to Section 2.1
hereof, multiplied by (ii) the Exercise Price as of the date of such exercise.

 

“Warrants”
shall mean the Original Warrants and all warrants issued upon transfer, division
or combination of, or in substitution for, such Original Warrants or any other
such Warrant. All Warrants shall at all times be identical as to terms and
conditions and date, except as to the number of shares of Common Stock for which
they may be exercised.

 

- 8
-

“Warrant
Stock” shall be deemed to include not only shares of Common Stock issued,
issuable or both upon exercise of the Original Warrants, but also (i) any other
securities issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange by the Company generally for, or in
replacement by the Company generally of, any shares of Warrant Stock and (ii)
any securities issued in exchange for any such Warrant Stock in any merger or
reorganization of the Company, but in either such case only so long as such
securities have not been registered and Transferred pursuant to the Securities
Act or Transferred in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under Section 4(1) thereof so that
all transfer restrictions with respect to such securities are removed in
connection with such Transfer.

 

“WS
Holder” shall have the meaning set forth in Section 8.1(a) hereof.

 

 

- 9
-

 

	
      2.
	
      EXERCISE
      OF WARRANT

 

2.1.
Manner of Exercise.

 

(a) The
Holder of this Warrant may at any time and from time to time during the Exercise
Period exercise this Warrant, on any Business Day, for the number of shares of
Common Stock purchasable hereunder. In order to exercise this Warrant the Holder
shall (i) deliver to the Company at the Designated Office a written notice of
the Holder’s election to exercise this Warrant (an “Exercise Notice”), which
Exercise Notice shall specify the number of shares of Common Stock to be
purchased based on the then-current total number of shares of Common Stock as to
which this Warrant relates, together with this Warrant and (ii) pay to the
Company the Warrant Price (the date on which both such delivery and payment
shall have first taken place being hereinafter sometimes referred to as the
“Exercise Date”). Such Exercise Notice shall be in the form of the subscription
form appearing at the end of this Warrant as Annex A, duly executed by the
Holder or its duly authorized agent or attorney. 

 

(b) Upon
receipt of such Exercise Notice, Warrant and payment, the Company shall, as
promptly as practicable, and in any event within five (5) Business Days
thereafter properly record (or cause to be recorded) in the Company’s record
books the Holder’s ownership of the aggregate number of full shares of Common
Stock issuable upon such exercise and provide the Holder with evidence of such
ownership and recordation in form and substance acceptable to such Holder. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the 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 Exercise Date.

 

(c)
Payment of the Warrant Price shall be made at the option of the Holder by one or
more of the following methods: (i) by delivery of a certified check or wire
transfer in the amount of such Warrant Price, (ii) by instructing the Company to
withhold a number of shares of Warrant Stock then issuable upon exercise of this
Warrant with an aggregate Fair Value equal to such Warrant Price or (iii) by
surrendering to the Company shares of Common Stock previously acquired by the
Holder with an aggregate Fair Value equal to such Warrant Price; provided,
however, that a Holder may elect the methods described in (ii) and (iii) above
only if the registration statement that the Company is required to file pursuant
to Section 8.2 has not been declared effective by the Commission as of the date
that is one year from the Original Issue Date. In the event of any withholding
of Warrant Stock or surrender of Common Stock pursuant to clause (ii) or (iii)
above where the number of shares whose Fair Value is equal to the Warrant Price
is not a whole number, the number of shares withheld by or surrendered to the
Company shall be rounded up to the nearest whole share and the Company shall
make a cash payment to the Holder based on the incremental fraction of a share
being so withheld by or surrendered to the Company in an amount determined in
accordance with Section 2.3 hereof. 

 

(d) If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing the shares of Common
Stock being issued, deliver to the Holder a new Warrant evidencing the rights of
the Holder to purchase the unpurchased shares of Common Stock called for by this
Warrant. Such new Warrant shall in all other respects be identical with this
Warrant.

 

- 10
-

2.2.
Payment
of Taxes. All
shares of Common Stock issuable upon the exercise of this Warrant pursuant to
the terms hereof shall be validly issued, fully paid and nonassessable, issued
without violation of any preemptive rights and free and clear of all Liens
(other than any created by actions of the Holder). The Company shall pay all
expenses in connection with, and all taxes and other governmental charges that
may be imposed with respect to, the issue or delivery of any shares of Common
Stock issued upon the exercise of this Warrant to a Holder (each, an “Issuance
or Delivery Tax”), but not with respect to any actual or deemed disposition of
Common Stock acquired or deemed acquired pursuant to the exercise of this
Warrant. Any such Issuance or Delivery Tax that is imposed by law upon the
Holder shall be paid by the Holder and the Company shall reimburse the Holder
therefor on an After-Tax Basis; provided,
however, that in
the event certificates for Warrant Stock 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.

 

2.3.
Fractional
Shares. The
Company shall not be required to issue or record a fractional share of Common
Stock upon exercise of any Warrant. As to any fraction of a share that the
Holder of one or more Warrants, the rights under which are exercised in the same
transaction, would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final fraction in an
amount equal to the same fraction of the Fair Value of one share of Common
Stock.  

 

2.4.
Continued
Validity and Application. (a) A
Holder of shares of Warrant Stock issued upon the exercise of this Warrant,
including any transferee of such shares (other than a transferee in whose hands
such shares no longer constitute Warrant Stock as defined herein), shall
continue, with respect to such shares, to be entitled to all rights granted to
Holders of Warrant Stock, including the rights granted under Sections 4, 5, 7,
8, 11, 12 and 13 of this Warrant, as well as any other rights ancillary thereto
or necessary for enforcement of such rights, and to be subject to all
obligations that are applicable to such Holder by the terms of this Warrant.

 

	
      3.
	
      TRANSFER,
      DIVISION AND COMBINATION

 

3.1.
Transfer. Subject
to compliance with the Securities Act and the provisions of this Warrant, this
Warrant is transferable to any Affiliate of Nomura. Each transfer of this
Warrant and all rights hereunder, in whole or in part, shall be registered on
the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the Designated Office, together with a written assignment of
this Warrant in the form of Annex
B hereto
duly executed by the Holder or its agent or attorney. Upon such surrender and
delivery, 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 shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by the
new Holder for the purchase of shares of Common Stock, on the same terms and
conditions set forth herein with respect to the Original Warrants, without
having a new Warrant issued. 

 

- 11
-

3.2.
Division
and Combination. Subject
to compliance with the applicable provisions of this Warrant, this Warrant may
be divided or combined with other Warrants upon presentation hereof at the
Designated Office, 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 the applicable provisions of
this Warrant 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.

 

3.3.
Expenses. The
Company shall prepare, issue and deliver at its own expense any new Warrant or
Warrants required to be issued under this Section 3.

 

3.4.
Maintenance
of Books. The
Company agrees to maintain, at the Designated Office, or at the office of its
legal counsel, books for the registration and transfer of the
Warrants.

 

	
      4.
	
      ANTIDILUTION&NBSP;PROVISIONS

 

The
number of shares of Common Stock for which this Warrant is exercisable and the
Exercise Price shall be subject to adjustment from time to time as set forth in
this Section 4.

 

4.1.
Stock
Dividends, Subdivisions and Combinations. If at
any time the Company shall:

 

(i) take
a record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, additional shares of
Common Stock,

 

(ii)
subdivide its outstanding shares of Common Stock into a larger number of shares
of such Common Stock, or

 

(iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of such Common Stock,

 

then the
Exercise Price shall be adjusted to equal the product of the Exercise Price in
effect immediately prior to such event multiplied by a fraction the numerator of
which is equal to the number of shares of Common Stock Outstanding immediately
prior to the adjustment and the denominator of which is equal to the number of
shares of Common Stock Outstanding immediately after such adjustment.

 

4.2.
Issuance
of Additional Shares of Common Stock.

 

(a) If at
any time prior to the Dilution Protection Expiration Date, the Company shall
issue or sell any shares of Common Stock in a Subsequent Issuance without
consideration or for a consideration per share that is less than the Exercise
Price in effect immediately prior to such issuance or sale, then, forthwith upon
such issuance or sale, the Exercise Price shall be reduced to the price
calculated by dividing (A) an amount equal to the sum of (x) the number of
shares of Common Stock Outstanding immediately prior to such Subsequent Issuance
multiplied by the then existing Exercise Price, plus (y) the aggregate
consideration (determined in accordance with the provisions of Section 4.6
hereof), if any, received by the Company in connection with such Subsequent
Issuance, by (B) the total number of shares of Common Stock Outstanding
immediately after such Subsequent Issuance.

 

- 12
-

(b) The
provisions of this Section 4.2 shall not apply to (i) any issuance of Common
Stock for which an adjustment is provided for under Section 4.1 or (ii) any
issuance or sale of Common Stock pursuant to the exercise of any Stock Purchase
Rights or Convertible Securities to the extent that an adjustment shall have
been previously made hereunder in connection with the issuance of such Stock
Purchase Rights or Convertible Securities pursuant to the provisions of Section
4.3 hereof.

 

4.3.
Issuances
of Stock Purchase Rights and Convertible Securities.

 

(a) If
the Company shall at any time prior to the Dilution Protection Expiration Date,
sell or grant any Stock Purchase Rights to any Person in a Subsequent Issuance,
then, for the purpose of Section 4.2 above, the Company shall be deemed to have
issued at that time a number of shares of Common Stock equal to the maximum
number of shares of Common Stock that are or may become issuable upon exercise
of such Stock Purchase Rights (or upon exercise of any Convertible Securities
issuable upon exercise of such Stock Purchase Rights) for a consideration per
share equal to (i) the aggregate consideration per share (determined in
accordance with the provisions of Section 4.6 hereof) received by the Company in
connection with the issuance, sale or grant of such Stock Purchase Rights plus
(ii) the minimum amount of such consideration per share receivable by the
Company in connection with the exercise of such Stock Purchase Rights (and the
exercise of any Convertible Securities issuable upon exercise of such Stock
Purchase Rights).

 

(b) If
the Company shall at any time prior to the Dilution Protection Expiration Date,
sell or grant any Convertible Securities to any Person in a Subsequent Issuance,
then, for the purposes of Section 4.2 above, the Company shall be deemed to have
issued at that time a number of shares of Common Stock equal to the maximum
number of shares of Common Stock that are or may become issuable upon the
exercise of the conversion or exchange rights associated with such Convertible
Securities for a consideration per share equal to (i) the aggregate
consideration per share (determined in accordance with the provisions of Section
4.6 hereof) received by the Company in connection with the issuance or sale of
such Convertible Securities plus (ii) the minimum amount of such consideration
per share receivable by the Company in connection with the exercise of such
conversion or exchange rights.

 

(c) If,
at any time after any adjustment of the Exercise Price shall have been made
hereunder as the result of any issuance, sale or grant of any Stock Purchase
Rights or Convertible Securities, the maximum number of shares issuable upon
exercise of such Stock Purchase Rights or of the rights of conversion or
exchange associated with such Convertible Securities shall increase, or the
minimum amount of consideration per share receivable in connection with such
exercise shall decrease, whether by operation of any antidilution rights
pertaining to such Stock Purchase Rights or Convertible Securities, by agreement
of the parties or otherwise, the Exercise Price then in effect shall first be
readjusted to eliminate the effects of the original issuance, sale or grant of
such Stock Purchase Rights or Convertible Securities on such Exercise Price and
then readjusted as if such Stock Purchase Rights or Convertible Securities had
been issued on the effective date of such increase in number of shares or
decrease in consideration, but only if the effect of such two-step readjustment
is to reduce the Exercise Price below the Exercise Price in effect immediately
prior to such increase or decrease.

 

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(d) If,
at any time after any adjustment of the Exercise Price shall have been made
hereunder as the result of any issuance, sale or grant of any Stock Purchase
Rights or Convertible Securities, any of such Stock Purchase Rights or the
rights of conversion or exchange associated with such Convertible Securities
shall expire by their terms or any of such Stock Purchase Rights or Convertible
Securities shall be repurchased by the Company or a Subsidiary thereof for a
consideration per underlying share of Common Stock not exceeding the amount of
such consideration received by the Company in connection with the issuance, sale
or grant of such Stock Purchase Rights or Convertible Securities, the Exercise
Price then in effect shall forthwith be increased to the Exercise Price that
would have been in effect if such expiring Stock Purchase Rights or rights of
conversion or exchange or such repurchased Stock Purchase Rights or Convertible
Securities had never been issued. Similarly, if at any time after any such
adjustment of the Exercise Price shall have been made pursuant to Section 4.2
(i) any additional consideration is received or becomes receivable by the
Company in connection with the issuance or exercise of such Stock Purchase
Rights or Convertible Securities or (ii) there is a reduction in the conversion
ratio applicable to such Convertible Securities so that fewer shares of Common
Stock will be issuable upon the conversion or exchange thereof or there is a
decrease in the number of shares of Common Stock issuable upon exercise of such
Stock Purchase Rights, the Exercise Price then in effect shall be forthwith
readjusted to the Exercise Price that would have been in effect had such changes
taken place at the time that such Stock Purchase Rights or Convertible
Securities were initially issued, granted or sold. In no event shall any
readjustment under this Section 4.3(d) affect the validity of any shares of
Warrant Stock issued upon any exercise of this Warrant prior to such
readjustment, nor shall any such readjustment have the effect of increasing the
Exercise Price above the Exercise Price that would have been in effect if the
related Stock Purchase Rights or Convertible Securities had never been
issued.

 

4.4.
Adjustment
of Number of Shares Purchasable. Upon
any adjustment of the Exercise Price as provided in Section 4.1, 4.2 or 4.3
hereof, the Holder hereof shall thereafter be entitled to purchase upon the
exercise of this Warrant, at the Exercise Price resulting from such adjustment,
the number of shares of Common Stock (calculated to the nearest 1/100th of a
share) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable on the exercise
hereof immediately prior to such adjustment and dividing the product thereof by
the Exercise Price resulting from such adjustment.

 

4.5.
Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. In case
the Company shall reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another corporation (where the Company is not
the surviving corporation or where there is any change whatsoever in, or
distribution with respect to, the Outstanding Common Stock of the Company), or
sell, transfer or otherwise dispose of all or substantially all of its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, (i) shares of common stock of the successor or acquiring corporation or
of the Company (if it is the surviving corporation) or (ii) any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation (“Other Property”) are to
be received by or distributed to the holders of Common Stock of the Company who
are holders immediately prior to such transaction, then the Holder of this
Warrant shall have the right thereafter to receive, upon exercise of this
Warrant, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable
upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In such event, the aggregate Exercise Price otherwise payable for the
shares of Common Stock issuable upon exercise of this Warrant shall be allocated
among the shares of common stock and Other Property receivable as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets in proportion to the respective fair market values of such shares of
common stock and Other Property as determined in good faith by the Board. In
case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be reasonably deemed appropriate (as
determined by resolution of the Board) in order to provide for adjustments of
any shares of the common stock of such successor or acquiring corporation for
which this Warrant thus becomes exercisable, which modifications shall be as
equivalent as practicable to the adjustments provided for in this
Section 4. For purposes of this Section 4.5, “common stock of the
successor or acquiring corporation” shall include stock of such corporation of
any class that is not preferred as to dividends or assets over any other class
of stock of such corporation and that is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
that are convertible into or exchangeable for any such stock, either immediately
or upon the arrival of a specified date or the happening of a specified event
and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 4.5 shall similarly apply to successive reorganizations,
reclassification, mergers, consolidations or disposition of assets.

 

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4.6.
Determination
of Consideration. For
purposes of Sections 4.2, 4.3 and 4.4 hereof, the consideration received and/or
receivable by the Company in connection with the issuance, sale, grant or
exercise of additional shares of Common Stock, Stock Purchase Rights or
Convertible Securities, irrespective of the accounting treatment of such
consideration, shall be valued as follows:

 

(1)
Cash
Payment. In the
case of cash, the net amount received by the Company after deduction of any
accrued interest or dividends.

 

(2)
Securities
or Other Property. In the
case of securities or other property, the fair market value thereof as of the
date immediately preceding such issuance, sale, grant or exercise as reasonably
determined in good faith by the Board.

 

(3)
Allocation
Related to Common Stock. In the
event shares of Common Stock are issued or sold together with other securities
or other assets of the Company for a consideration which covers both, the
consideration received (computed as provided in (1) and (2) above) shall be
allocable to such shares of Common Stock as reasonably determined in good faith
by the Board.

 

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(4)
Allocation
Related to Stock Purchase Rights and
Convertible Securities. In case
any Stock Purchase Rights or Convertible Securities shall be issued or sold
together with other securities or other assets of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to the Stock Purchase Rights or Convertible Securities, the
consideration allocable to such Stock Purchase Rights or Convertible Securities
shall be reasonably determined in good faith by the Board.

 

(5)
Dividends
in Securities. In case
the Company shall declare a dividend or make any other distribution upon any
stock of the Company payable in either case in Common Stock or Convertible
Securities, such Common Stock or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be deemed to have
been issued or sold without new or additional consideration.

 

(6)
Merger,
Consolidation or Sale of Assets. In case
any shares of Common Stock, Stock Purchase Rights or Convertible Securities
shall be issued in connection with any merger or consolidation in which the
Company is the surviving corporation, the amount of consideration therefor shall
be deemed to be the fair value of such portion of the assets and business of the
non-surviving corporation attributable to such Common Stock, Stock Purchase
Rights or Convertible Securities, as is reasonably determined in good faith by
the Board.

 

(7)
Challenge
to Good Faith Determination.
Whenever the Board shall be required to make a determination in good faith of
the fair value of any item under this Section 4, such determination may be
challenged in good faith by the Majority Holders, and any dispute shall be
resolved by the Appraisal Bank. 

 

4.7.
Other
Dilutive Events. In case
any event shall occur as to which the other provisions of this Section 4 are not
strictly applicable but as to which the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in accordance
with the essential intent and principles hereof (including, without limitation,
the issuance of securities other than Common Stock which have the right to
participate in distributions to the holders of Common Stock, the granting of
“phantom stock” rights or “stock appreciation rights” or the repurchase of
outstanding shares of Common Stock, Convertible Securities or Stock Purchase
Rights for a purchase price exceeding the fair market value thereof), then, in
each such case, either the Warrant Holder, Warrant Stock Holder or the Company
may request that the Appraisal Bank make a determination as to the adjustment,
if any, required to be made on a basis consistent with the essential intent and
principles established herein as a result of such event in order to preserve the
purchase rights represented by the Warrants. The
decision of the Appraisal Bank shall be final and binding on the Company and all
affected holders of Warrants or Warrant Stock. Promptly after receipt of the
opinion of the Appraisal Bank, the Company shall take any actions necessary to
implement same.

 

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4.8.
Other
Provisions Applicable to Adjustments Under this Section. The
following provisions shall be applicable to the adjustments provided for
pursuant to this Section 4:

 

(a)
When
Adjustments To Be Made. The
adjustments required by this Section 4 shall be made whenever and as often
as any specified event requiring such an adjustment shall occur. For the purpose
of any such adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence.

 

(b)
Record
Date. In case
the Company shall take a record of the holders of the Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Convertible Securities or Stock Purchase Rights or
(ii) to subscribe for or purchase Common Stock, Convertible Securities or
Stock Purchase Rights, then all references in this Section 4 to the date of the
issuance or sale of such shares of Common Stock, Convertible Securities or Stock
Purchase Rights shall be deemed to be references to such record
date.

 

(c)
Fractional
Interests. In
computing adjustments under this Section 4, fractional interests in Common
Stock shall be taken into account to the nearest 1/100th of a
share.

 

(d)
When
Adjustment Not Required. If the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or distribution to which the provisions
of Section 4.1 would apply, but shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment shall be required
by reason of the taking of such record and any such adjustment previously made
in respect thereof shall be rescinded and annulled.

 

(e)
Maximum
Exercise Price. Except
as provided in Section 4.1 above, at no time shall the Exercise Price per share
of Common Stock exceed the amount set forth in the preamble of this
Warrant.

 

(f)
Certain
Limitations.
Notwithstanding anything herein to the contrary, the Company agrees not to enter
into any transaction that, by reason of any adjustment under Section 4.1, 4.2 or
4.3 above, would cause the Exercise Price to be less than the par value of the
Common Stock, if any, unless the Company first reduces the par value of the
Common Stock to be less than the Exercise Price that would result from such
transaction.

 

(g)
Notice
of Adjustments.
Whenever the number of shares of Common Stock for which this Warrant is
exercisable or the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall forthwith prepare a certificate to be executed
by the chief financial officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated, specifying the number of shares of Common Stock for
which this Warrant is exercisable and (if such adjustment was made pursuant to
Section 4.5) describing the number and kind of any other shares of stock or
Other Property for which this Warrant is exercisable, and any related change in
the Exercise Price, after giving effect to such adjustment or change. The
Company shall promptly cause a signed copy of such certificate to be delivered
to each Holder in accordance with Section 13.2. The Company shall keep at
its principal office or at the Designated Office, if different, copies of all
such certificates and cause the same to be available for inspection at said
office during normal business hours by any Holder or any prospective transferee
of a Warrant designated by a Holder thereof.

 

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(h)
Independent
Application. Except
as otherwise provided herein, all subsections of this Section 4 are intended to
operate independently of one another (but without duplication). If an event
occurs that requires the application of more than one subsection, all applicable
subsections shall be given independent effect without duplication.

 

4.9.
Pre-emptive
Rights. In the
event that the Company at any time grants any pre-emptive rights to any holder
of equity securities of the Company to purchase any shares of Common
Stock, Convertible Securities or Stock Purchase Rights, the Company shall grant
similar pre-emptive rights to each holder of Warrant Stock then outstanding or
thereafter issued. 

 

	
      5.
	
      NO
      IMPAIRMENT

 

The
Company shall not by any action, including, without limitation, amending its
charter documents or through any reorganization, reclassification, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other similar 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 the Holder
against impairment. Without limiting the generality of the foregoing, the
Company shall take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, free and clear of all
Liens, and shall use its best 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.

	
      6.
	
      RESERVATION
      AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY
      GOVERNMENTAL AUTHORITY

 

From and
after the Original Issue Date, the Company shall at all times reserve and keep
available for issuance upon the exercise of the Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
issuable pursuant to the terms hereof, when issued upon exercise of this Warrant
with payment therefor in accordance with the terms hereof, shall be duly and
validly issued and fully paid and nonassessable, not subject to preemptive
rights and shall be free and clear of all Liens. Before taking any action that
would result in an adjustment in the number of shares of Common Stock 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 over
such action. If any shares of Common Stock required to be reserved for issuance
upon exercise of Warrants require registration or qualification with any
governmental authority under any federal or state law before such shares may be
so issued, the Company will in good faith and as expeditiously as possible and
at its expense endeavor to cause such shares to be duly registered.

 

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      7.
	
      NOTICE
      OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER
BOOKS

 

7.1.
Notices
of Corporate Actions. In the
event of: (a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of capital stock of any class or any
other securities, (b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person or any
transfer or other disposition of all or substantially all the assets of the
Company to another Person, (c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, (d) any amendment of the Certificate
of Incorporation of the Company or (e) any registration or public offering of
Common Stock, the Company shall mail to each Holder of a Warrant in accordance
with the provisions of Section 13.2 hereof a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, disposition, dissolution, liquidation, winding-up, amendment or
offering is to take place or become effective, the time, if any such time is to
be fixed, as of which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for the securities or Other Property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, disposition, dissolution, liquidation or
winding-up and a description in reasonable detail of the transaction. Such
notice shall be mailed to the extent practicable at least thirty (30), but not
more than ninety (90) days prior to the date therein specified. In the event
that the Company at any time sends any other notice to the holders of its Common
Stock, it shall concurrently send a copy of such notice to each Holder of a
Warrant.

 

7.2.
Taking
of Record. In the
case of all dividends or other distributions by the Company to the holders of
its Common Stock with respect to which any provision of any Section hereof
refers to the taking of a record of such holders, the Company will in each such
case take such a record and will take such record as of the close of business on
a Business Day.

 

7.3.
Closing
of Transfer Books. The
Company shall not at any time, except upon dissolution, liquidation or winding
up of the Company, close its stock transfer books or Warrant transfer books so
as to result in preventing or delaying the exercise or transfer of any
Warrant. 

 

	
      8.
	
      REGISTRATION
      RIGHTS

 

8.1.
Certain Definitions. For the purposes of this Section 8:

 

(a) The
Holders of Warrants and Warrant Stock are collectively referred to as “WS
Holders”.

 

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(b) Each
WS Holder shall be deemed to “hold”, as of any specified date, the aggregate of
(i) the number of shares of Warrant Stock held by such WS Holder as of such date
plus (ii) the
number of shares of Warrant Stock issuable upon exercise of any Warrants held by
such WS Holder as of such date.

 

(c) The
total number of shares of Warrant Stock deemed “outstanding” as of a specified
date will be equal to (i) the total number of shares of Warrant Stock
Outstanding as of such date plus (ii) the
number of shares of Warrant Stock issuable upon exercise of all outstanding
Warrants as of such date.

 

8.2.
Registration
of Warrant Stock.

 

(a) The
Company shall:

 

(1)
Within 45 days of the Original Issue Date, file a registration statement for the
sale or other disposition of all of the Warrant Stock (which registration
statement shall specify that the registered offering is being made on a delayed
or continued basis pursuant to Rule 415 under the Securities Act) (the
“Registration Statement”) and use the Company’s best efforts to have the
Registration Statement declared effective under the Securities Act within 120
days of the Original Issue Date; and

 

(2) Use
the Company’s best efforts to keep such Registration Statement Continuously
Effective until the Expiration Date or such earlier date as of which all Warrant
Stock covered by the Registration Statement shall have been disposed of in the
manner described therein (such period, the “Effective Period”).

 

(b) The
Company shall be entitled to suspend for up to 90 days the ability of WS Holders
to sell under the Registration Statement if the Board determines, in its good
faith reasonable judgment (with the concurrence of the managing underwriter, if
any), that the Transfer of Warrant Stock at such time would materially interfere
with, or require premature disclosure of, any financing, acquisition,
reorganization or other material transaction involving the Company or any of its
Subsidiaries and the Company promptly gives notice to Nomura and each WS Holder
of such determination; provided,
however, that
the Company shall have the ability to suspend the effectiveness of the
Registration Statement pursuant to this Section 8.2(b) only once during any
given 12-month period.

 

(c) The
Registration Statement shall be on Form SB-2 or such appropriate registration
form of the Commission as shall be selected by the Company and be reasonably
acceptable to Nomura. If any offering to be made pursuant to the Registration
Statement involves an underwritten offering (whether on a “firm”, “best efforts”
or “all reasonable efforts” basis or otherwise), or an agented offering, the
Majority Holders shall have the right to select the underwriter or underwriters
and manager or managers to administer such underwritten offering or the
placement agent or agents for such agented offering; provided,
however, that
each Person so selected shall be reasonably acceptable to the
Company.

 

8.3.
Registration
Procedures. In
connection with the filing of the Registration Statement, the Company shall, as
expeditiously as practicable:

 

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(a)
Before filing the Registration Statement or related prospectus or any amendments
or supplements thereto, including documents incorporated by reference after the
initial filing of the Registration Statement and prior to effectiveness thereof,
the Company shall furnish to counsel for Nomura, copies of all such documents in
the form substantially as proposed to be filed with the Commission at least four
(4) Business Days prior to filing for review and comment by such
counsel.

 

(b)
Prepare and file with the Commission such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act and rules thereunder with respect to the disposition of all
securities covered by the Registration Statement. If a WS Holder wishes to make
any sales under the Registration Statement through the means of an underwritten
offering, the Company shall amend the Registration Statement or supplement the
related prospectus whenever required by the terms of the underwriting agreement
entered into pursuant to Section 8.4(e). Subject to Rule 415 under the
Securities Act, the Company shall amend the Registration Statement or supplement
the related prospectus so that it will remain current and in compliance with the
requirements of the Securities Act throughout the Effective Period, and if
during such period any event or development occurs as a result of which the
Registration Statement or related prospectus contains a misstatement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Company shall promptly notify each WS
Holder, amend the Registration Statement or supplement the related prospectus so
that each will thereafter comply with the Securities Act and furnish to each WS
Holder such amended or supplemented prospectus, which each such WS Holder shall
thereafter use in the Transfer of Warrant Stock covered by the Registration
Statement. Pending such amendment or supplement each such Selling Holder shall
cease making offers or Transfers of Warrant Stock pursuant to the prior
prospectus. In the event that any Warrant Stock included in the Registration
Statement remains unsold at the end of the Effective Period, the Company may
file a post-effective amendment to the Registration Statement for the purpose of
removing such Warrant Stock from registered status.

 

(c)
Furnish to each WS Holder, without charge, such numbers of copies of the
Registration Statement, any pre-effective or post-effective amendment thereto,
the prospectus, including each preliminary prospectus and any amendments or
supplements thereto, in each case in conformity with the requirements of the
Securities Act and the rules thereunder, and such other related documents as
each WS Holder may reasonably request in order to facilitate the disposition of
Registrable Securities owned by it.

 

(d) Use
the Company’s best efforts (i) to register and qualify the securities covered by
the Registration Statement under such other securities or blue sky laws of such
states or jurisdictions (including foreign jurisdictions) as shall be reasonably
requested by the Majority Holders, and (ii) to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of the
offer and transfer of the Warrant Stock in any jurisdiction, at the earliest
possible moment; provided,
however, that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.

 

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(e) In
the event that any WS Holder shall choose to enter into an underwriting
agreement or agency agreement with respect to any portion of the offering to be
made pursuant to the Registration Statement, enter into and perform the
Company’s obligations under an underwriting or agency agreement (including
indemnification and contribution obligations of underwriters or agents), in
usual and customary form, with the managing underwriter or underwriters of or
agents for such offering. The Company shall also cooperate with the Selling
Holders and the managing underwriter for such offering in the marketing of the
Warrant Stock, including making available the Company’s officers, accountants,
counsel, premises, books and records for such purpose, provided that the Company
shall not be required to incur any out-of-pocket expense (other than
out-of-pocket expenses that the relevant WS Holder has agreed to reimburse)
pursuant to this Section 8.3(e). 

 

(f)
Promptly notify Nomura and each other WS Holder of any stop order issued or
threatened to be issued by the Commission in connection with the Registration
Statement (and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered).

 

(g) Make
generally available to the Company’s security holders copies of all periodic
reports, proxy statements, and other information referred to in Section 8.8(a)
and an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 90 days following the end of the 12-month period
beginning with the first month of the Company’s first fiscal quarter commencing
after the effective date of the Registration Statement.

 

(h) Make
available for inspection by Nomura or any other Majority Holder, any underwriter
participating in any offering pursuant to the Registration Statement and the
representatives of Nomura or any other Majority Holder and such underwriter, all
financial and other information as shall be reasonably requested by them, and
provide Nomura or any other Majority Holder, any underwriter participating in
such offering and any of their representatives the opportunity to discuss the
business affairs of the Company with its principal executives and independent
public accountants who have certified the audited financial statements included
in the Registration Statement, in each case all as necessary to enable them to
exercise their due diligence responsibility under the Securities Act;
provided,
however, that
information that the Company determines, in good faith, to be confidential and
which the Company advises such Person in writing is confidential shall not be
disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company or the related Selling Holder agrees to be
responsible for such Person’s breach of confidentiality on terms reasonably
satisfactory to the Company.

 

(i) Use
the Company’s best efforts to obtain a so-called “comfort letter” from its
independent public accountants, and legal opinions of counsel to the Company
addressed to the Selling Holders, in customary form and covering such matters of
the type customarily covered by such letters, and in a form that shall be
reasonably satisfactory to the Selling Holders. The Company shall furnish to
each Selling Holder a signed counterpart of any such comfort letter or legal
opinion. Delivery of any such opinion or comfort letter shall be subject to the
recipient furnishing such written representations or acknowledgements as are
customarily provided by selling shareholders who receive such comfort letters or
opinions.

 

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(j)
Provide and cause to be maintained a transfer agent and registrar for all
Warrant Stock from and after a date not later than the effective date of the
Registration Statement.

 

(k) Use
all reasonable efforts to cause the Warrant Stock covered by the Registration
Statement (i) if the Common Stock is then listed on a securities exchange or
included for quotation in a recognized trading market, to continue to be so
listed or included for a reasonable period of time after the offering, and (ii)
to be registered with or approved by such other United States, state or foreign
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the WS Holders to consummate
the disposition of such Registrable Securities.

 

(l) Use
the Company’s reasonable efforts to provide a CUSIP number for the Common Stock
prior to the effective date of the Registration Statement and to maintain such
CUSIP number for so long as the Registration Statement shall be
effective.

 

(m) Take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of Warrant Stock.

 

8.4.
Selling
Holders’ Obligations. It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section 8 with respect to the Registration Statement
that the Holder of such Warrant Stock shall furnish
to the Company such information regarding such Holder, the number of Shares of
Warrant Stock owned by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder’s
Warrant Stock, and to cooperate with the Company in preparing such
registration;

 

8.5.
Expenses
of Registration.
Expenses incurred in connection with the Registration Statement shall be
allocated and paid as follows:

 

(a) The
Company shall bear and pay all expenses incurred in connection with the
Registration Statement, including all registration, filing and NASD fees, all
fees and expenses of complying with securities or blue sky laws or similar
non-U.S. laws, all word processing, duplicating and printing expenses, messenger
and delivery expenses, the fees and disbursements of counsel for the Company,
and of the Company’s independent public accountants, including the expenses of
“comfort” letters required by or incident to such performance and compliance,
and, with respect to the initial filing of the Registration Statement and each
amendment to the Registration Statement or supplement to the related prospectus,
the reasonable fees and disbursements of one firm of counsel for the Holders of
Warrant Stock (the “Registration Expenses”), but excluding underwriting
discounts and commissions relating to Registrable Securities (which shall be
paid on a pro rata basis by the Selling Holders). 

 

(b) Any
failure of the Company to pay any Registration Expenses as required by this
Section 8.5 shall not relieve the Company of its obligations under this Section
8.

 

8.6.
Indemnification;
Contribution. In
connection with the Registration Statement,

 

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(a) To
the extent permitted by applicable law, the Company shall indemnify and hold
harmless each Selling Holder, each Person, if any, who controls such Selling
Holder within the meaning of the Securities Act, and each officer, director,
partner, and employee of such Selling Holder and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint or
several), including attorneys’ fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”):

 

(i) Any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including any preliminary prospectus or final prospectus
contained therein, or any amendments or supplements thereto;

 

(ii) The
omission or alleged omission to state therein a material fact required to be
stated in the Registration Statement, or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or

 

(iii) Any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any applicable state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any applicable state
securities law;

 

provided,
however, that
the indemnification required by this Section 8.6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or expense if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or expense to the extent that it is
determined by a court of competent jurisdiction by a final non-appealable order
to have solely arisen out of or be based upon a Violation which occurred in
reliance upon and in conformity with written information furnished to the
Company by the indemnified party expressly for use in connection with such
registration; provided,
further, that
the indemnity agreement contained in this Section 8.6(a) shall not apply to any
underwriter to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an omission
or alleged omission to state a material fact, contained in or omitted from any
preliminary prospectus if the final prospectus shall correct such untrue
statement or alleged untrue statement, or such omission or alleged omission, and
a copy of the final prospectus has not been sent or given to such person at or
prior to the confirmation of sale to such person if such underwriter was under
an obligation to deliver such final prospectus and failed to do so. The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers, directors, agents and employees and each person who controls such
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the extent provided in the underwriting
agreement.

 

(b) To
the extent permitted by applicable law, each Selling Holder shall indemnify and
hold harmless the Company, each of its directors, each of its officers who shall
have signed the Registration Statement, each Person, if any, who controls the
Company within the meaning of the Securities Act, any other Selling Holder, any
controlling Person of any such other Selling Holder and each officer, director,
partner, and employee of such other Selling Holder and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint and
several), including attorneys’ fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may otherwise become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses are determined by a court of competent jurisdiction by
a final non-appealable order to have solely arisen out of or be based upon a
Violation that occurred in reliance upon and in conformity with written
information furnished by such Selling Holder expressly for use in connection
with such Registration Statement; provided,
however, that
(x) the indemnification required by this Section 8.6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or expense
if settlement is effected without the consent of the relevant Selling Holder,
which consent shall not be unreasonably withheld, and (y) in no event shall the
amount of any indemnity under this Section 8.6(b) exceed the net proceeds from
the applicable offering received by such Selling Holder.

 

- 24
-

(c)
Promptly after receipt by an indemnified party under this Section 8.6 of notice
of the commencement of any action, suit, proceeding, investigation or threat
thereof made in writing for which such indemnified party may make a claim under
this Section 8.6, such indemnified party shall deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties;
provided,
however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and disbursements and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time following the commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 8.6 but shall not relieve the indemnifying party of any liability that
it may have to any indemnified party otherwise than pursuant to this Section
8.6. Any fees and expenses incurred by the indemnified party (including any fees
and expenses incurred in connection with investigating or preparing to defend
such action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party
(regardless of whether it is ultimately determined that an indemnified party is
not entitled to indemnification hereunder).  Any such
indemnified party shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and expenses
or (ii) the indemnifying party shall have failed to promptly assume the defense
of such action, claim or proceeding or (iii) the named parties to any such
action, claim or proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party, based on advice of outside
counsel, a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such action, claim or
proceeding, in which event the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels). No indemnifying party
shall be liable to an indemnified party for any settlement of any action,
proceeding or claim without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld.

 

- 25
-

(d) If
the indemnification required by this Section 8.6 from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to in this Section 8.6:

 

(i) The
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such Violation. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8.6(a) and Section
8.6(b), any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.

 

(ii) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8.6(d) were determined by pro rata allocation or
by any other method of allocation which does not take into account the equitable
considerations referred to in Section 8.6(d)(i) above. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

- 26
-

(e) If
indemnification is available under this Section 8.6, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
this Section 8.6 without regard to the relative fault of such indemnifying party
or indemnified party or any other equitable consideration referred to in Section
8.6(d) above.

 

(f) The
indemnification required by this Section 8.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred.

 

(g) The
obligations of the Company and the Selling Holders under this Section 8.6 shall
survive the completion of any offering of Warrant Stock pursuant to the
Registration Statement, and otherwise.

 

8.7.
Holdback. Each WS
Holder, if so requested by the managing underwriter in connection with a
registered offering by the Company of Common Stock, Convertible Securities Stock
Purchase Rights, shall not effect any public sale or distribution of shares of
Common Stock (excluding any sale pursuant to Rule 144 or Rule 144A under the
Securities Act and any sale as part of such underwritten or agented
registration), during the 5-day period prior to, and during the 90-day period
beginning on, the date such registration statement is declared effective under
the Securities Act by the Commission, provided that
such WS Holder is timely notified of such effective date in writing by such
managing underwriter and provided further that such WS Holder is given the right
to participate as a seller in such underwritten or agented offering on the same
terms as the Company or such other Persons on whose behalf Registration
Statement has been filed have agreed to sell their securities.

 

8.8.
Additional
Covenants of the Company. The
Company hereby agrees and covenants as follows:

 

(a) The
Company shall file as and when applicable, on a timely basis, all reports
required to be filed by it under the Exchange Act. If the Company is not
required to file reports pursuant to the Exchange Act or fails to file required
reports, upon the request of any WS Holder, the Company shall make available to
such requesting WS Holder the information specified in subparagraph (c)(2) of
Rule 144 of the Securities Act, and take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable WS Holders to Transfer Warrants or Warrant
Stock without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act or any similar rule or
regulation hereafter adopted by the Commission. In addition, promptly upon the
request of any WS Holder, the Company shall provide such WS Holder with such
financial statements, reports and other information as may be required to permit
such WS Holder to Transfer shares of Warrant Stock to Qualified Institutional
Buyers pursuant to Rule 144A of the Securities Act.

 

(b) The
Company shall not, and shall not permit its Subsidiaries to, effect any public
or private sale or distribution of any shares of Common Stock, Convertible
Securities or Stock Purchase Rights, or file any Registration Statement relating
to such a sale, during the 5 Business Days prior to, and during the 90-day
period beginning following any date specified by Nomura in a notice given to the
Company, provided that Nomura shall not designate more than one such date in any
12-month period.

 

- 27
-

	
      9.
	
      LOSS
      OR MUTILATION

 

Upon
receipt by the Company from any Warrant Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it (it
being understood that the written indemnification agreement of or affidavit of
loss of Nomura shall be a sufficient indemnity) and, in case of mutilation, upon
surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to such Holder; provided,
however, in the
case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.

 

	
      10.
	
      OFFICE
      OF THE COMPANY

 

As long
as any of the Warrants remain outstanding, the Company shall maintain an office
or agency, which may be the principal executive offices of the Company (the
“Designated Office”), where the Warrants may be presented for exercise,
registration of transfer, division or combination as provided in this Warrant.
Such Designated Office shall initially be the office of the Company at 600
Lexington Avenue, 3rd Floor,
New York, New York 10022. The Company may from time to time change the
Designated Office to another office of the Company or its agent within the
United States by notice given to all registered holders of Warrants at least ten
Business Days prior to the effective date of such change.

 

	
      11.
	
      DILUTION
      FEE

 

In the
event that the Company at any time after the Original Issue Date shall pay a
dividend or make any other distribution with respect to its Common Stock (or any
other shares of the capital stock of the Company for which this Warrant becomes
exercisable pursuant to Section 4 above) whether in the form of cash, evidences
of indebtedness, securities or other property (other than a stock dividend
subject to the provisions of Section 4.1 above), then the Holder of this Warrant
shall be entitled to receive a dilution fee (a “Dilution Fee”) payable in cash
on the date of payment of such dividend or other distribution equal to the
number of shares of Common Stock (or such other shares of stock) issuable upon
exercise of this Warrant on such date multiplied by the sum of (x) the amount of
cash and (y) the Fair Value of any evidences of indebtedness, securities or
other property distributed with respect to each share of Common Stock (or such
other stock). 

 

	
      12.
	
      CERTAIN
      COVENANTS OF THE COMPANY

 

From the
date hereof until the Expiration Date, the Company covenants and agrees
that:

12.1.
Compliance
with Laws; Preservation of Corporate Existence. The
Company will comply in all material respects with all applicable laws, rule,
regulations and orders and preserve and maintain its legal existence, and will
preserve and maintain its rights, franchises, qualifications and privileges in
all material respects.

 

- 28
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12.2.
Taxes. The
Company will pay when due all taxes, assessments, charges and levies imposed
upon it or any of its properties or which it is required to withhold and pay
over, except where such taxes, assessments or charges shall be contested in good
faith by appropriate proceedings and where adequate reserves therefor have been
set aside on its books.

 

12.3.
Litigation. The
Company will give prompt notice to Nomura of all litigation and proceedings
affecting the Company which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect on the Company.

 

12.4.
Additional
Information. The
Company shall notify Nomura if at any time it ceases to be subject to the
reporting requirements of the Exchange Act. During any period that the Company
shall not be subject to such requirements, the Company shall, until the
Expiration Date, (i) provide to Nomura information that is comparable in all
material respects to the information that the Company would have been required
to file with the Commission were it still subject to such requirements, and (ii)
notify Nomura of such information on the same schedule that it would have been
required to file such information with the Commission.

 

12.5.
Rights
Agreements. If the
Company shall adopt a stockholder rights plan or other agreement pursuant to
which holders of any Company security (including “rights” that are issued to
holders of Common Stock) shall have the right to acquire additional shares of
Common Stock, other securities or property upon the acquisition by holders of in
excess of a specified percentage of Common Stock, such plan shall specify that
the acquisition by Nomura of Common Stock, pursuant to the exercise of the
Warrants shall not trigger such right to receive Common Stock, other securities
or property.

 

	
      13.
	
      MISCELLANEOUS

 

13.1.
Nonwaiver. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of the Company or the Holder of this Warrant shall operate as a waiver of
such right or otherwise prejudice the rights, powers or remedies of such
Person.

 

13.2.
Notice
Generally. Any
notice, demand, request, consent, approval, declaration, delivery or
communication hereunder to be made pursuant to the provisions of this Warrant
shall be sufficiently given or made if in writing and either delivered in person
with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

(a) if to
any Holder of this Warrant or of Warrant Stock issued upon the exercise hereof,
at its last known address appearing on the books of the Company maintained for
such purpose;

 

- 29
-

(b) if to
the Company, at its Designated Office, with a copy to:

 

McGuireWoods
LLP

1345
Avenue of the Americas, 7th
Floor

New York,
New York 10105

Attention:
Louis W. Zehil, Esq.

(212)
548-2138 (direct)

(212)
548-2175 (facsimile)

 

or at
such other address as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Every notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, or three Business Days after the same shall have been
deposited in the United States mail, or one Business Day after the same shall
have been delivered to Federal Express or another overnight courier
service.

 

13.3.
Limitation
of Liability. No
provision hereof, in the absence of affirmative action by the Holder of this
Warrant to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
such Holder to pay the Exercise Price for any Warrant Stock other than pursuant
to an exercise of this Warrant or any liability as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

 

13.4.
Remedies. Each
Holder of Warrants and/or Warrant Stock, in addition to being entitled to
exercise its rights granted by law, including recovery of damages, shall be
entitled to specific performance of its rights provided 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, in an action for specific performance, to waive the defense that
a remedy at law would be adequate.

 

13.5.
Successors
and Assigns. This
Warrant and the rights evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the permitted successors and
assigns of the Holder hereof. The provisions of this Warrant are intended to be
for the benefit of all Holders from time to time of this Warrant and to the
extent applicable, all Holders of shares of Warrant Stock issued upon the
exercise hereof (including transferees), and shall be enforceable by any such
Holder.

 

13.6.
Amendment. This
Warrant and all other Warrants may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Majority Holder or
Holders, provided that no
such Warrant may be modified or amended to reduce the number of shares of Common
Stock for which such Warrant is exercisable or to increase the price at which
such shares may be purchased upon exercise of such Warrant (before giving effect
to any adjustment as provided therein) without the written consent of the Holder
thereof.

 

- 30
-

13.7.
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 provision or the remaining provisions
of this Warrant.

 

13.8.
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.

 

13.9.
GOVERNING
LAW; JURISDICTION. IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
WARRANT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO
THE VALIDITY OF THIS WARRANT, THE ISSUANCE OF WARRANT STOCK UPON EXERCISE HEREOF
AND THE RIGHTS AND DUTIES OF THE COMPANY WITH RESPECT TO REGISTRATION OF
TRANSFER, WHICH SHALL BE GOVERNED BY THE LAWS OF DELAWARE. THE COMPANY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK CITY,
SHALL HAVE, EXCEPT AS SET FORTH BELOW, EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY AND THE HOLDER OF THIS
WARRANT PERTAINING TO THIS WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT, PROVIDED, THAT IT
IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK CITY.

 

 

- 31
-

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and
attested by its Secretary or an Assistant Secretary.

 

 

MRU
HOLDINGS, INC.

 

By:_________________________

     
Name: Louis W. Zehil

     
Title: Secretary

 

- 32
-

ANNEX
A

 

SUBSCRIPTION
FORM

 

The
undersigned registered owner of this Warrant exercises this Warrant for the
purchase of ______ shares Common Stock of MRU Holdings, Inc. and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
this Warrant and requests that certificates for the shares of Common Stock
hereby purchased (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to _________________ whose
address is ______________________________________________ and represents that
the Warrant being here delivered is not subject to any lien or encumbrance,
other than any lien or encumbrance created by this Warrant. 

 

 

_________________________________

(Name of
Registered Owner)

 

_________________________________

(Signature
of Registered Owner)

 

_________________________________

(Street
Address)

 

_________________________________

(City)        
(State)             
(Zip
Code)

 

 

- i
-

ANNEX
B

 

ASSIGNMENT
FORM

 

FOR VALUE
RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

 

 

	Name and Address of
      Assignee 	 	Number of Shares
      of
Common Stock

 

 

 

 

and does
hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of MRU Holdings, Inc.
maintained for the purpose, with full power of substitution in the
premises.

 

Dated:___________________          Print
Name:___________________

 

 

Signature:_____________________

 

Witness:______________________

 

 

 

- ii
-

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