Document:

jmar_10q-ex0401.htm

     

    EXHIBIT 4.1

     

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
      STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
      OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
      SAID
      ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO JMAR TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

    Right
      to
      Purchase up to 80,000,000 Shares of Common Stock of

    JMAR
      Technologies, Inc.

    (subject
      to adjustment as provided herein)

     

    COMMON
      STOCK PURCHASE WARRANT A

     

    
      	No.
              _________________ 	
              Issue
                Date:  August 31, 2007

            

    

     

    JMAR
      TECHNOLOGIES, INC., a corporation organized under the laws of the State of
      Delaware (the “Company”), hereby certifies that, for value
      received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”),
      is entitled, subject to the terms set forth below, to purchase from the Company
      (as defined herein) from and after the Issue Date of this Warrant  and
      at any time or from time to time before 5:00 p.m., New York time on August
      31,
      2017 (the “Expiration Date”), up to 80,000,000 fully paid and nonassessable
      shares of Common Stock (as hereinafter defined), $0.01 par value per share,
      at
      the applicable Exercise Price per share (as defined below).  The
      number and character of such shares of Common Stock and the applicable Exercise
      Price per share are subject to adjustment as provided herein.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings:

     

    (a)           The
      term “Common Stock” includes (i) the Company’s Common Stock,
      $0.01 par value per share; and (ii) any other securities into which or for
      which
      any of the securities described in the preceding clause (i) may be converted
      or
      exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
      of assets or otherwise.

     

    (b)           The
      term “Company” shall include JMAR Technologies, Inc. and any
      person or entity which shall succeed, or assume the obligations of, JMAR
      Technologies, Inc. hereunder.

     

    (c)           The
      “Exercise Price” applicable under this Warrant shall be $0.01
      per share.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)           The
      term “Other Securities” refers to any stock (other than Common
      Stock) and other securities of the Company or any other person (corporate or
      otherwise) which the holder of the Warrant at any time shall be entitled to
      receive, or shall have received, on the exercise of the Warrant, in lieu of
      or
      in addition to Common Stock, or which at any time shall be issuable or shall
      have been issued in exchange for or in replacement of Common Stock or Other
      Securities pursuant to Section 4 or otherwise.

     

    (e)           The
      term “Purchase Agreement” means the Securities Purchase
      Agreement dated as of the date hereof among the Holder and the Company, as
      amended, modified, restated and/or supplemented from time to time.

     

    1.           Exercise
      of Warrant.

     

    1.1           Number
      of Shares Issuable upon Exercise.  From and after the date hereof
      through and including the Expiration Date, the Holder shall be entitled to
      receive, upon exercise of this Warrant in whole or in part, by delivery of
      an
      original or fax copy of an exercise notice in the form attached hereto as
      Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
      subject to adjustment pursuant to Section 4.

     

    1.2           Fair
      Market Value.  For purposes hereof, the “Fair Market Value” of a
      share of Common Stock as of a particular date (the “Determination Date”) shall
      mean:

     

    (a)           If
      the Company’s Common Stock is traded on the American Stock Exchange or another
      national exchange or is quoted on the National or Capital Market of The Nasdaq
      Stock Market, Inc. (“Nasdaq”), then the closing or last sale price,
      respectively, reported for the last business day immediately preceding the
      Determination Date.

     

    (b)           If
      the Company’s Common Stock is not traded on the American Stock Exchange or
      another national exchange or on the Nasdaq but is traded on the NASD Over The
      Counter Bulletin Board, then the mean of the average of the closing bid and
      asked prices reported for the last business day immediately preceding the
      Determination Date.

     

    (c)           Except
      as provided in clause (d) below, if the Company’s Common Stock is not publicly
      traded, then as the Holder and the Company agree or in the absence of agreement
      by arbitration in accordance with the rules then in effect of the American
      Arbitration Association, before a single arbitrator to be chosen from a panel
      of
      persons qualified by education and training to pass on the matter to be
      decided.

     

    (d)           If
      the Determination Date is the date of a liquidation, dissolution or winding
      up,
      or any event deemed to be a liquidation, dissolution or winding up pursuant
      to
      the Company’s charter, then all amounts to be payable per share to holders of
      the Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then issuable
      upon exercise of the Warrant are outstanding at the Determination
      Date.

     

    
      
        
        

      

      
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    1.3           Company
      Acknowledgment.  The Company will, at the time of the exercise of
      this Warrant, upon the request of the holder hereof acknowledge in writing
      its
      continuing obligation to afford to such holder any rights to which such holder
      shall continue to be entitled after such exercise in accordance with the
      provisions of this Warrant. If the holder shall fail to make any such request,
      such failure shall not affect the continuing obligation of the Company to afford
      to such holder any such rights.

     

    1.4           Trustee
      for Warrant Holders.  In the event that a bank or trust company
      shall have been appointed as trustee for the holders of this Warrant pursuant
      to
      Subsection 3.2, such bank or trust company shall have all the powers and duties
      of a warrant agent (as hereinafter described) and shall accept, in its own
      name
      for the account of the Company or such successor person as may be entitled
      thereto, all amounts otherwise payable to the Company or such successor, as
      the
      case may be, on exercise of this Warrant pursuant to this Section
      1.

     

    2.           Procedure
      for Exercise.

     

    2.1           Delivery
      of Stock Certificates, Etc., on Exercise.  The Company agrees that
      the shares of Common Stock purchased upon exercise of this Warrant shall be
      deemed to be issued to the Holder as the record owner of such shares as of
      the
      close of business on the date on which this Warrant shall have been surrendered
      and payment made for such shares in accordance herewith.  As soon as
      practicable after the exercise of this Warrant in full or in part, and in any
      event within three (3) business days thereafter, the Company at its expense
      (including the payment by it of any applicable issue taxes) will cause to be
      issued in the name of and delivered to the Holder, or as such Holder (upon
      payment by such Holder of any applicable transfer taxes) may direct in
      compliance with applicable securities laws, a certificate or certificates for
      the number of duly and validly issued, fully paid and nonassessable shares
      of
      Common Stock (or Other Securities) to which such Holder shall be entitled on
      such exercise, plus, in lieu of any fractional share to which such holder would
      otherwise be entitled, cash equal to such fraction multiplied by the then Fair
      Market Value of one full share, together with any other stock or other
      securities and property (including cash, where applicable) to which such Holder
      is entitled upon such exercise pursuant to Section 1 or otherwise.

     

    2.2           Exercise.

     

    (a)           Payment
      may be made either (i) in cash of immediately available funds or by certified
      or
      official bank check payable to the order of the Company equal to the applicable
      aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common
      Stock and/or Common Stock receivable upon exercise of this Warrant in accordance
      with the formula set forth in subsection (b) below, or (iii) by a combination
      of
      any of the foregoing methods, for the number of Common Shares specified in
      such
      Exercise Notice (as such exercise number shall be adjusted to reflect any
      adjustment in the total number of shares of Common Stock issuable to the Holder
      per the terms of this Warrant) and the Holder shall thereupon be entitled to
      receive the number of duly authorized, validly issued, fully-paid and
      non-assessable shares of Common Stock (or Other Securities) determined as
      provided herein.

     

    
      
        
        

      

      
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    (b)           Notwithstanding
      any provisions herein to the contrary, if the Fair Market Value of one share
      of
      Common Stock is greater than the Exercise Price (at the date of calculation
      as
      set forth below), in lieu of exercising this Warrant for cash, the Holder may
      elect to receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being exercised) by surrender of this Warrant at the
      principal office of the Company together with the properly endorsed Exercise
      Notice in which event the Company shall issue to the Holder a number of shares
      of Common Stock computed using the following formula:

     

    
      	
               

            	
              X=

            	
              Y(A-B)

            

    

    
      	
               

            	
                   A

            

    

     

    
      	 	
              Where
                X =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder

            

      	 	 	 

      	
               

            	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable under this Warrant or,
                if
                only a portion of this Warrant is being exercised, the portion of
                this
                Warrant being exercised (at the date of such
                calculation)

            

    

     

    
      	
               

            	
              A
                =

            	
              the
                Fair Market Value of one share of the Company’s Common Stock (at the date
                of such calculation)

            

    

     

    
      	
               

            	
              B
                =

            	
              the
                Exercise Price per share (as adjusted to the date of such
                calculation)

            

    

     

    Notwithstanding
      anything to the contrary set forth in Section 2.2(a) above, to the extent that
      a
      registration statement registering all the shares of Common Stock of the Company
      issuable upon exercise of this Warrant has been declared effective by the
      Securities and Exchange Commission and remains effective as of the date of
      the
      proposed exercise set forth in an Exercise Notice, the Holder shall upon such
      proposed exercise, make payment to the Company of each respective Exercise
      Price
      set forth in such Exercise Notice in cash by wire transfer of immediately
      available funds or by certified or official bank check only.

     

    3.           Effect
      of Reorganization, Etc.; Adjustment of Exercise Price.

     

    3.1           Reorganization,
      Consolidation, Merger, Etc.  In case at any time or from time to
      time, the Company shall (a) effect a reorganization, (b) consolidate with or
      merge into any other person, or (c) transfer all or substantially all of its
      properties or assets to any other person under any plan or arrangement
      contemplating the dissolution of the Company, then, in each such case, as a
      condition to the consummation of such a transaction, proper and adequate
      provision shall be made by the Company whereby the Holder, on the exercise
      hereof as provided in Section 1 at any time after the consummation of such
      reorganization, consolidation or merger or the effective date of such
      dissolution, as the case may be, shall receive, in lieu of the Common Stock
      (or
      Other Securities) issuable on such exercise prior to such consummation or such
      effective date, the stock and other securities and property (including cash)
      to
      which such Holder would have been entitled upon such consummation or in
      connection with such dissolution, as the case may be, if such Holder had so
      exercised this Warrant, immediately prior thereto, all subject to further
      adjustment thereafter as provided in Section 4.

     

    
      
        
        

      

      
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    3.2           Dissolution.  In
      the event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, concurrently with
      any distributions made to holders of its Common Stock, shall at its expense
      deliver or cause to be delivered to the Holder the stock and other securities
      and property (including cash, where applicable) receivable by the Holder
      pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to
      a
      bank or trust company specified by the Holder and having its principal office
      in
      New York, NY as trustee for the Holder.

     

    3.3           Continuation
      of Terms.  Upon any reorganization, consolidation, merger or
      transfer (and any dissolution following any transfer) referred to in this
      Section 3, this Warrant shall continue in full force and effect and the terms
      hereof shall be applicable to the shares of stock and other securities and
      property receivable on the exercise of this Warrant after the consummation
      of
      such reorganization, consolidation or merger or the effective date of
      dissolution following any such transfer, as the case may be, and shall be
      binding upon the issuer of any such stock or other securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant as provided in Section
      4.  In the event this Warrant does not continue in full force and
      effect after the consummation of the transactions described in this Section
      3,
      then the Company’s securities and property (including cash, where applicable)
      receivable by the Holder will be delivered to the Holder or the Trustee as
      contemplated by Section 3.2.

     

    4.           Extraordinary
      Events Regarding Common Stock.  In the event that the Company
      shall (a) issue additional shares of the Common Stock as a dividend or other
      distribution on outstanding Common Stock or any preferred stock issued by the
      Company, (b) subdivide its outstanding shares of Common Stock, (c) combine
      its
      outstanding shares of the Common Stock into a smaller number of shares of the
      Common Stock, then, in each such event, the number of shares of Common Stock
      that the holder shall thereafter, on the exercise hereof as provided in Section
      1, be entitled to receive shall be adjusted to a number determined by
      multiplying the number of shares of Common Stock that would otherwise (but
      for
      the provisions of this Section 4) be issuable on such exercise by a fraction
      of
      which (a) the numerator is the number of any issued and outstanding shares
      of
      common stock immediately after such event that would otherwise (but for the
      provisions of this Section 4) be in effect, and (b) the denominator is number
      of
      any issued and outstanding shares of common stock immediately prior to such
      event.  Notwithstanding the foregoing, in no event shall the Exercise
      Price be less than the par value of the Common Stock.

     

    5.           Certificate
      as to Adjustments.  In each case of any adjustment or readjustment
      in the shares of Common Stock (or Other Securities) issuable on the exercise
      of
      this Warrant, the Company at its expense will promptly cause its Chief Financial
      Officer or other appropriate designee to compute such adjustment or readjustment
      in accordance with the terms of this Warrant and prepare a certificate setting
      forth such adjustment or readjustment and showing in detail the facts upon
      which
      such adjustment or readjustment is based, including a statement of (a) the
      consideration received or receivable by the Company for any additional shares
      of
      Common Stock (or Other Securities) issued or sold or deemed to have been issued
      or sold, (b) the number of shares of Common Stock (or Other Securities)
      outstanding or deemed to be outstanding, and (c) the Exercise Price and the
      number of shares of Common Stock to be received upon exercise of this Warrant,
      in effect immediately prior to such adjustment or readjustment and as adjusted
      or readjusted as provided in this Warrant.  The Company will forthwith
      mail a copy of each such certificate to the holder and any warrant agent of
      the
      Company (appointed pursuant to Section 11 hereof).

     

    
      
        
        

      

      
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    6.           Reservation
      of Stock, Etc., Issuable on Exercise of Warrant.  Except as to the
      portion of the shares of Common Stock that are in excess of the Company’s total
      authorized shares of Common Stock, the Company will at all times reserve and
      keep available, solely for issuance and delivery on the exercise of this
      Warrant, shares of Common Stock (or Other Securities) from time to time issuable
      on the exercise of this Warrant.

     

    7.           Assignment;
      Exchange of Warrant.  Subject to compliance with applicable
      securities laws, this Warrant, and the rights evidenced hereby, may be
      transferred by any registered holder hereof (a “Transferor”) in whole or in
      part.  On the surrender for exchange of this Warrant, with the
      Transferor’s endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form”) and together with evidence reasonably
      satisfactory to the Company demonstrating compliance with applicable securities
      laws, which shall include, without limitation, a legal opinion from the
      Transferor’s counsel (at the Company’s expense) that such transfer is exempt
      from the registration requirements of applicable securities laws, the Company
      at
      its expense (but with payment by the Transferor of any applicable transfer
      taxes) will issue and deliver to or on the order of the Transferor thereof
      a new
      Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
      specified in such Transferor Endorsement Form (each a “Transferee”), calling in
      the aggregate on the face or faces thereof for the number of shares of Common
      Stock called for on the face or faces of the Warrant so surrendered by the
      Transferor.

     

    8.           Replacement
      of Warrant.  On receipt of evidence reasonably satisfactory to the
      Company of the loss, theft, destruction or mutilation of this Warrant and,
      in
      the case of any such loss, theft or destruction of this Warrant, on delivery
      of
      an indemnity agreement or security reasonably satisfactory in form and amount
      to
      the Company or, in the case of any such mutilation, on surrender and
      cancellation of this Warrant, the Company at its expense will execute and
      deliver, in lieu thereof, a new Warrant of like tenor.

     

    9.           Limitations
      on Exercise.

     

    9.1           Notwithstanding
      anything herein to the contrary, in no event shall the Holder be entitled to
      exercise any portion of this Warrant which would cause the total number of
      issued and outstanding shares of the Company’s Common Stock plus the number of
      shares of Common Stock reserved for issuance upon exercise of all outstanding
      options and warrants and upon conversion of all outstanding shares of
      convertible preferred stock to be in excess of the number of the Company’s
      authorized shares of Common Stock.

     

    
      
        
        

      

      
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    9.2           Notwithstanding
      anything herein to the contrary, in no event shall the Holder be entitled to
      exercise any portion of this Warrant in excess of that portion of this Warrant
      upon exercise of which the sum of (1) the number of shares of Common Stock
      beneficially owned by the Holder and its Affiliates (other than shares of Common
      Stock which may be deemed beneficially owned through the ownership of the
      unexercised portion of the Warrant or the unexercised or unconverted portion
      of
      any other security of the Holder subject to a limitation on conversion analogous
      to the limitations contained herein) and (2) the number of shares of Common
      Stock issuable upon the exercise of the portion of this Warrant with respect
      to
      which the determination of this proviso is being made, would result in
      beneficial ownership by the Holder and its Affiliates of any amount greater
      than
      9.99% of the then outstanding shares of Common Stock (whether or not, at the
      time of such exercise, the Holder and its Affiliates beneficially own more
      than
      9.99% of the then outstanding shares of Common Stock). As used herein, the
      term
“Affiliate” means any person or entity that, directly or indirectly through one
      or more intermediaries, controls or is controlled by or is under common control
      with a person or entity, as such terms are used in and construed under Rule
      144
      under the Securities Act.   For purposes of the second preceding sentence,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
      except as otherwise provided in clause (1) of such sentence.  For any
      reason at any time, upon written or oral request of the Holder, the Company
      shall within one (1) business day confirm orally and in writing to the Holder
      the number of shares of Common Stock outstanding as of any given
      date.  The limitations set forth herein (x) may be waived by the
      Holder upon provision of no less than sixty-one (61) days prior notice to the
      Company and (y) shall automatically become null and void following notice to
      the
      Company upon the occurrence and during the continuance of an Event of Default
      (as defined in the Note referred to in the Purchase Agreement).

     

    10.           Warrant
      Cancellation. If the Obligations (as defined in the Security Agreement
      referred to in the Reaffirmation Agreement dated as of the issue date hereof
      among the Holder, the Company, and certain of the subsidiaries of the Company)
      have been repaid in full on or before (a) six (6) months from the date hereof,
      the Holder shall surrender this Warrant for cancellation and shall issue a
      new
      Warrant to Holder in the face amount of this Warrant less thirty percent (30%)
      of the shares otherwise issuable under this Warrant, (b) more than six months
      but fewer than nine (9) months from the date hereof, the Holder shall surrender
      this Warrant for cancellation and shall issue a new Warrant  to Holder
      in the face amount of this Warrant less twenty percent (20%) of the shares
      otherwise issuable under this Warrant; (c) more than nine (9) months but fewer
      than twelve (12) months from the date hereof, the Holder shall surrender this
      Warrant for cancellation and shall issue a new Warrant to Holder in the face
      amount of this Warrant less ten percent (10%) of the shares otherwise issuable
      under this Warrant; and (d) more than twelve (12) months but fewer than eighteen
      (18) months from the date hereof, the Holder shall surrender this Warrant for
      cancellation and shall issue a new Warrant to Holder in the face amount of
      this
      Warrant less five percent (5%) of the shares otherwise issuable under this
      Warrant.

     

    11.           Warrant
      Agent.  The Company may, by written notice to the each Holder of
      the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
      Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
      this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
      Section 8, or any of the foregoing, and thereafter any such issuance, exchange
      or replacement, as the case may be, shall be made at such office by such
      agent.

     

    
      
        
        

      

      
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    12.           Transfer
      on the Company’s Books.  Until this Warrant is transferred on the
      books of the Company, the Company may treat the registered holder hereof as
      the
      absolute owner hereof for all purposes, notwithstanding any notice to the
      contrary.

     

    13.           Rights
      of Shareholders.  No Holder shall be entitled to vote or receive
      dividends or be deemed the holder of the shares of Common Stock or any other
      securities of the Company which may at any time be issuable upon exercise of
      this Warrant for any purpose (the “Warrant Shares”), nor shall
      anything contained herein be construed to confer upon the Holder, as such,
      any
      of the rights of a shareholder of the Company or any right to vote for the
      election of directors or upon any matter submitted to shareholders at any
      meeting thereof, or to give or withhold consent to any corporate action (whether
      upon the recapitalization, issuance of shares, reclassification of shares,
      change of nominal value, consolidation, merger, conveyance or otherwise) or
      to
      receive notice of meetings, or to receive dividends or subscription rights
      or
      otherwise, in each case, until the earlier to occur of (x) the date of actual
      delivery to Holder (or its designee) of the Warrant Shares issuable upon the
      exercise hereof or (y) the third business day following the date such Warrant
      Shares first become deliverable to Holder, as provided herein.

     

    14.           Sale
      Limitation.  Notwithstanding anything contained herein to the
      contrary, the Holder shall not be entitled to sell any shares of Common Stock
      of
      the Company received by the Holder upon the exercise of all or any portion
      of
      this Warrant prior to the first anniversary of the date hereof.  The
      sale limitation described on this Section 14 shall automatically become null
      and
      void without notice to the Company upon the occurrence and during the
      continuance of an Event of Default (as defined in the Note).

     

    15.           Notices,
      Etc.  All notices and other communications from the Company to the
      Holder shall be mailed by first class registered or certified mail, postage
      prepaid, at such address as may have been furnished to the Company in writing
      by
      such Holder or, until any such Holder furnishes to the Company an address,
      then
      to, and at the address of, the last Holder who has so furnished an address
      to
      the Company.

     

    
      
        
        

      

      
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    16.           Miscellaneous.  This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL
      BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  ANY ACTION
      BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE
      BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN
      THE
      STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS
      PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK.  The
      individuals executing this Warrant on behalf of the Company agree to submit
      to
      the jurisdiction of such courts and waive trial by jury.  The
      prevailing party shall be entitled to recover from the other party its
      reasonable attorneys’ fees and costs.  In the event that any provision
      of this Warrant is invalid or unenforceable under any applicable statute or
      rule
      of law, then such provision shall be deemed inoperative to the extent that
      it
      may conflict therewith and shall be deemed modified to conform with such statute
      or rule of law.  Any such provision which may prove invalid or
      unenforceable under any law shall not affect the validity or enforceability
      of
      any other provision of this Warrant.  The headings in this Warrant are
      for purposes of reference only, and shall not limit or otherwise affect any
      of
      the terms hereof.  The invalidity or unenforceability of any provision
      hereof shall in no way affect the validity or enforceability of any other
      provision hereof.  The Company acknowledges that legal counsel
      participated in the preparation of this Warrant and, therefore, stipulates
      that
      the rule of construction that ambiguities are to be resolved against the
      drafting party shall not be applied in the interpretation of this Warrant to
      favor any party against the other party.

     

    

     

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    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above.

     

    
      	 	 	
              JMAR
                TECHNOLOGIES, INC.

            
	
              WITNESS:

            	 	 
	 	 	
              By:

            	
              
                /s/
                  C. NEIL BEER

              

            
	 	 	
              Name:

            	
              C.
                Neil Beer

            
	 	 	Title:	
              Chief
                Executive Officer

            

    

     

    

    
      
        
        

      

      
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    EXHIBIT
      A

     

    FORM
      OF SUBSCRIPTION

    (To
      Be
      Signed Only On Exercise Of Warrant)

     

    
      	
              TO:

            	
              JMAR
                Technologies,
                Inc._____________________

            

    

     

    
      	
               

            	
              _____________________

            

    

     

     

    Attention:      Chief
      Financial Officer

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.____), hereby irrevocably elects to purchase (check applicable
      box):

     

    
      	
              ________

            	
              ________
                shares of the common stock covered by such warrant;
                or

            

    

     

    
      	
              ________

            	
              the
                maximum number of shares of common stock covered by such warrant
                pursuant
                to the cashless exercise procedure set forth in Section
                2.

            

    

     

    The
      undersigned herewith makes payment of the full Exercise Price for such shares
      at
      the price per share provided for in such Warrant, which is
      $___________.  Such payment takes the form of (check applicable box or
      boxes):

     

    
      	
              ________

            	
              $__________
                in lawful money of the United States;
                and/or

            

    

     

    
      	
              ________

            	
              the
                cancellation of such portion of the attached Warrant as is exercisable
                for
                a total of _______ shares of Common Stock (using a Fair Market Value
                of
                $_______ per share for purposes of this calculation);
                and/or

            

    

     

    
      	
              ________

            	
              the
                cancellation of such number of shares of Common Stock as is necessary,
                in
                accordance with the formula set forth in Section 2.2, to exercise
                this
                Warrant with respect to the maximum number of shares of Common Stock
                purchasable pursuant to the cashless exercise procedure set forth
                in
                Section 2.

            

    

     

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to ______________________________________________ whose
      address is
      ___________________________________________________________________________.

     

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the “Securities Act”) or pursuant to an exemption from registration
      under the Securities Act.

     

    
      	 	 	 	 
	
              Dated:

            	 	 	
              (Signature
                must conform to name of holder as specified on the face of the
                Warrant)

            
	 	 	 	
              Address:

            	 
	 	 	 	 	 

    

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF TRANSFEROR ENDORSEMENT

    (To
      Be
      Signed Only On Transfer Of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading “Transferees” the right represented by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of JMAR Technologies, Inc. into which the within Warrant relates specified
      under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
      person Attorney to transfer its respective right on the books of JMAR
      Technologies, Inc. with full power of substitution in the premises.

     

    
      	
              Transferees

            	
              Address

            	
              Percentage

              Transferred

            	
              Number

              Transferred

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

    
      	 	 	 	 
	
              Dated:

            	 	 	
              (Signature
                must conform to name of holder as specified on the face of the
                Warrant)

            
	 	 	 	
              Address:

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              SIGNED
                IN THE PRESENCE OF: 

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
               (Name)

            

    

     

     

    ACCEPTED
      AND AGREED:

    [TRANSFEREE]

     

     
      
        

      

    

    
      (Name)

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IRREVOCABLE
      PROXY

     

    For
      good
      and valuable consideration, receipt of which is hereby acknowledged, Laurus
      Master Fund, Ltd. (“Laurus”), hereby appoints ___________________ (the “Proxy
      Holder” or the “Company”), with a mailing address at
      ___________________________, with full power of substitution, as proxy, to
      vote
      all shares of Common Stock of the Company, now or in the future owned by Laurus
      to the extent such shares are issued to Laurus upon its exercise of (a) the
      Common Stock Purchase Warrant (the “Warrant”), issued by the Company to Laurus
      as of the date hereof and (b) all other warrants and/or options issued by the
      Company in favor of Laurus with an exercise price equal to or less than the
      greater of $0.01 and the par value of the Company’s common stock (the “Other
      Options and Warrants”) (collectively, the “Shares”).

     

    This
      proxy is irrevocable and coupled with an interest.  Upon the sale or
      other transfer of the Shares, in whole or in part, or the assignment of the
      Warrant or any of the Other Options and Warrants, this proxy shall automatically
      terminate (x) with respect to such sold or transferred Shares at the time of
      such sale and/or transfer, and (y) in the case of an assignment of the Warrant
      and/or Other Options and Warrants, at the time of such assignment in respect
      of
      the Shares issuable upon exercise of such assigned Warrant and/or Other Options
      and Warrants, in each case, without any further action required by any
      person.

     

    Laurus
      shall use its best efforts to forward to Proxy Holder within two (2) business
      days following Laurus’ receipt thereof, at the address for Proxy Holder set
      forth above, copies of all materials received by Laurus relating, in each case,
      to the solicitation of the vote of shareholders of the Company.

     

    This
      proxy shall remain in effect with respect to the Shares of the Company during
      the period commencing on the date hereof and continuing until the payment in
      full of all obligations and liabilities owing by the Company to Laurus (as
      the
      same may be amended, restated, extended or modified from time to
      time).

     

    IN
      WITNESS WHEREOF, the undersigned has executed this irrevocable proxy as of
      the
      31st day of August 2007.

     

    
      	 	LAURUS
              MASTER FUND, LTD	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

    

     

     

    13jmar_10q-ex0402.htm

    EXHIBIT
      4.2

     

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
      STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
      OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
      SAID
      ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO JMAR TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

    Right
      to
      Purchase up to 39,000,000 Shares of Common Stock of

    JMAR
      Technologies, Inc.

    (subject
      to adjustment as provided herein)

     

    COMMON
      STOCK PURCHASE WARRANT B

     

    
      	No.
              _________________ 	
              Issue
                Date:  August 31, 2007

            

    

     

    JMAR
      TECHNOLOGIES, INC., a corporation organized under the laws of the State of
      Delaware (the “Company”), hereby certifies that, for value
      received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”),
      is entitled, subject to the terms set forth below, to purchase from the Company
      (as defined herein) from and after March 5, 2008   and at any
      time or from time to time before 5:00 p.m., New York time on August 31, 2017
      (the “Expiration Date”), up to 39,000,000 fully paid and nonassessable shares of
      Common Stock (as hereinafter defined), $0.01 par value per share, at the
      applicable Exercise Price per share (as defined below).  The number
      and character of such shares of Common Stock and the applicable Exercise Price
      per share are subject to adjustment as provided herein.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings:

     

    (a)           The
      term “Common Stock” includes (i) the Company’s Common Stock,
      $0.01 par value per share; and (ii) any other securities into which or for
      which
      any of the securities described in the preceding clause (i) may be converted
      or
      exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
      of assets or otherwise.

     

    (b)           The
      term “Company” shall include JMAR Technologies, Inc. and any
      person or entity which shall succeed, or assume the obligations of, JMAR
      Technologies, Inc. hereunder.

     

    (c)           The
      “Exercise Price” applicable under this Warrant shall be $0.01
      per share.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)           The
      term “Other Securities” refers to any stock (other than Common
      Stock) and other securities of the Company or any other person (corporate or
      otherwise) which the holder of the Warrant at any time shall be entitled to
      receive, or shall have received, on the exercise of the Warrant, in lieu of
      or
      in addition to Common Stock, or which at any time shall be issuable or shall
      have been issued in exchange for or in replacement of Common Stock or Other
      Securities pursuant to Section 4 or otherwise.

     

    (e)           The
      term “Purchase Agreement” means the Securities Purchase
      Agreement dated as of the date hereof among the Holder and the Company, as
      amended, modified, restated and/or supplemented from time to time.

     

    1.           Exercise
      of Warrant.

     

    1.1           Number
      of Shares Issuable upon Exercise.  From and after the date hereof
      through and including the Expiration Date, the Holder shall be entitled to
      receive, upon exercise of this Warrant in whole or in part, by delivery of
      an
      original or fax copy of an exercise notice in the form attached hereto as
      Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
      subject to adjustment pursuant to Section 4.

     

    1.2           Fair
      Market Value.  For purposes hereof, the “Fair Market Value” of a
      share of Common Stock as of a particular date (the “Determination Date”) shall
      mean:

     

    (a)           If
      the Company’s Common Stock is traded on the American Stock Exchange or another
      national exchange or is quoted on the National or Capital Market of The Nasdaq
      Stock Market, Inc. (“Nasdaq”), then the closing or last sale price,
      respectively, reported for the last business day immediately preceding the
      Determination Date.

     

    (b)           If
      the Company’s Common Stock is not traded on the American Stock Exchange or
      another national exchange or on the Nasdaq but is traded on the NASD Over The
      Counter Bulletin Board, then the mean of the average of the closing bid and
      asked prices reported for the last business day immediately preceding the
      Determination Date.

     

    (c)           Except
      as provided in clause (d) below, if the Company’s Common Stock is not publicly
      traded, then as the Holder and the Company agree or in the absence of agreement
      by arbitration in accordance with the rules then in effect of the American
      Arbitration Association, before a single arbitrator to be chosen from a panel
      of
      persons qualified by education and training to pass on the matter to be
      decided.

     

    (d)           If
      the Determination Date is the date of a liquidation, dissolution or winding
      up,
      or any event deemed to be a liquidation, dissolution or winding up pursuant
      to
      the Company’s charter, then all amounts to be payable per share to holders of
      the Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then issuable
      upon exercise of the Warrant are outstanding at the Determination
      Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    1.3           Company
      Acknowledgment.  The Company will, at the time of the exercise of
      this Warrant, upon the request of the holder hereof acknowledge in writing
      its
      continuing obligation to afford to such holder any rights to which such holder
      shall continue to be entitled after such exercise in accordance with the
      provisions of this Warrant. If the holder shall fail to make any such request,
      such failure shall not affect the continuing obligation of the Company to afford
      to such holder any such rights.

     

    1.4           Trustee
      for Warrant Holders.  In the event that a bank or trust company
      shall have been appointed as trustee for the holders of this Warrant pursuant
      to
      Subsection 3.2, such bank or trust company shall have all the powers and duties
      of a warrant agent (as hereinafter described) and shall accept, in its own
      name
      for the account of the Company or such successor person as may be entitled
      thereto, all amounts otherwise payable to the Company or such successor, as
      the
      case may be, on exercise of this Warrant pursuant to this Section
      1.

     

    2.           Procedure
      for Exercise.

     

    2.1           Delivery
      of Stock Certificates, Etc., on Exercise.  The Company agrees that
      the shares of Common Stock purchased upon exercise of this Warrant shall be
      deemed to be issued to the Holder as the record owner of such shares as of
      the
      close of business on the date on which this Warrant shall have been surrendered
      and payment made for such shares in accordance herewith.  As soon as
      practicable after the exercise of this Warrant in full or in part, and in any
      event within three (3) business days thereafter, the Company at its expense
      (including the payment by it of any applicable issue taxes) will cause to be
      issued in the name of and delivered to the Holder, or as such Holder (upon
      payment by such Holder of any applicable transfer taxes) may direct in
      compliance with applicable securities laws, a certificate or certificates for
      the number of duly and validly issued, fully paid and nonassessable shares
      of
      Common Stock (or Other Securities) to which such Holder shall be entitled on
      such exercise, plus, in lieu of any fractional share to which such holder would
      otherwise be entitled, cash equal to such fraction multiplied by the then Fair
      Market Value of one full share, together with any other stock or other
      securities and property (including cash, where applicable) to which such Holder
      is entitled upon such exercise pursuant to Section 1 or otherwise.

     

    2.2           Exercise.

     

    (a)           Payment
      may be made either (i) in cash of immediately available funds or by certified
      or
      official bank check payable to the order of the Company equal to the applicable
      aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common
      Stock and/or Common Stock receivable upon exercise of this Warrant in accordance
      with the formula set forth in subsection (b) below, or (iii) by a combination
      of
      any of the foregoing methods, for the number of Common Shares specified in
      such
      Exercise Notice (as such exercise number shall be adjusted to reflect any
      adjustment in the total number of shares of Common Stock issuable to the Holder
      per the terms of this Warrant) and the Holder shall thereupon be entitled to
      receive the number of duly authorized, validly issued, fully-paid and
      non-assessable shares of Common Stock (or Other Securities) determined as
      provided herein.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)           Notwithstanding
      any provisions herein to the contrary, if the Fair Market Value of one share
      of
      Common Stock is greater than the Exercise Price (at the date of calculation
      as
      set forth below), in lieu of exercising this Warrant for cash, the Holder may
      elect to receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being exercised) by surrender of this Warrant at the
      principal office of the Company together with the properly endorsed Exercise
      Notice in which event the Company shall issue to the Holder a number of shares
      of Common Stock computed using the following formula:

     

    
      	
               

            	
              X=

            	
              Y(A-B)

            

    

    
      	
               

            	
                   A

            

    

     

    
      	 	
              Where
                X =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder

            

      	 	 	 

      	
               

            	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable under this Warrant or,
                if
                only a portion of this Warrant is being exercised, the portion of
                this
                Warrant being exercised (at the date of such
                calculation)

            

    

     

    
      	
               

            	
              A
                =

            	
              the
                Fair Market Value of one share of the Company’s Common Stock (at the date
                of such calculation)

            

    

     

    
      	
               

            	
              B
                =

            	
              the
                Exercise Price per share (as adjusted to the date of such
                calculation)

            

    

     

    Notwithstanding
      anything to the contrary set forth in Section 2.2(a) above, to the extent that
      a
      registration statement registering all the shares of Common Stock of the Company
      issuable upon exercise of this Warrant has been declared effective by the
      Securities and Exchange Commission and remains effective as of the date of
      the
      proposed exercise set forth in an Exercise Notice, the Holder shall upon such
      proposed exercise, make payment to the Company of each respective Exercise
      Price
      set forth in such Exercise Notice in cash by wire transfer of immediately
      available funds or by certified or official bank check only.

     

    3.           Effect
      of Reorganization, Etc.; Adjustment of Exercise Price.

     

    3.1           Reorganization,
      Consolidation, Merger, Etc.  In case at any time or from time to
      time, the Company shall (a) effect a reorganization, (b) consolidate with or
      merge into any other person, or (c) transfer all or substantially all of its
      properties or assets to any other person under any plan or arrangement
      contemplating the dissolution of the Company, then, in each such case, as a
      condition to the consummation of such a transaction, proper and adequate
      provision shall be made by the Company whereby the Holder, on the exercise
      hereof as provided in Section 1 at any time after the consummation of such
      reorganization, consolidation or merger or the effective date of such
      dissolution, as the case may be, shall receive, in lieu of the Common Stock
      (or
      Other Securities) issuable on such exercise prior to such consummation or such
      effective date, the stock and other securities and property (including cash)
      to
      which such Holder would have been entitled upon such consummation or in
      connection with such dissolution, as the case may be, if such Holder had so
      exercised this Warrant, immediately prior thereto, all subject to further
      adjustment thereafter as provided in Section 4.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.2           Dissolution.  In
      the event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, concurrently with
      any distributions made to holders of its Common Stock, shall at its expense
      deliver or cause to be delivered to the Holder the stock and other securities
      and property (including cash, where applicable) receivable by the Holder
      pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to
      a
      bank or trust company specified by the Holder and having its principal office
      in
      New York, NY as trustee for the Holder.

     

    3.3           Continuation
      of Terms.  Upon any reorganization, consolidation, merger or
      transfer (and any dissolution following any transfer) referred to in this
      Section 3, this Warrant shall continue in full force and effect and the terms
      hereof shall be applicable to the shares of stock and other securities and
      property receivable on the exercise of this Warrant after the consummation
      of
      such reorganization, consolidation or merger or the effective date of
      dissolution following any such transfer, as the case may be, and shall be
      binding upon the issuer of any such stock or other securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant as provided in Section
      4.  In the event this Warrant does not continue in full force and
      effect after the consummation of the transactions described in this Section
      3,
      then the Company’s securities and property (including cash, where applicable)
      receivable by the Holder will be delivered to the Holder or the Trustee as
      contemplated by Section 3.2.

     

    4.           Extraordinary
      Events Regarding Common Stock.  In the event that the Company
      shall (a) issue additional shares of the Common Stock as a dividend or other
      distribution on outstanding Common Stock or any preferred stock issued by the
      Company, (b) subdivide its outstanding shares of Common Stock, (c) combine
      its
      outstanding shares of the Common Stock into a smaller number of shares of the
      Common Stock, then, in each such event, the number of shares of Common Stock
      that the holder shall thereafter, on the exercise hereof as provided in Section
      1, be entitled to receive shall be adjusted to a number determined by
      multiplying the number of shares of Common Stock that would otherwise (but
      for
      the provisions of this Section 4) be issuable on such exercise by a fraction
      of
      which (a) the numerator is the number of any issued and outstanding shares
      of
      common stock immediately after such event that would otherwise (but for the
      provisions of this Section 4) be in effect, and (b) the denominator is number
      of
      any issued and outstanding shares of common stock immediately prior to such
      event.  Notwithstanding the foregoing, in no event shall the Exercise
      Price be less than the par value of the Common Stock.

     

    5.           Certificate
      as to Adjustments.  In each case of any adjustment or readjustment
      in the shares of Common Stock (or Other Securities) issuable on the exercise
      of
      this Warrant, the Company at its expense will promptly cause its Chief Financial
      Officer or other appropriate designee to compute such adjustment or readjustment
      in accordance with the terms of this Warrant and prepare a certificate setting
      forth such adjustment or readjustment and showing in detail the facts upon
      which
      such adjustment or readjustment is based, including a statement of (a) the
      consideration received or receivable by the Company for any additional shares
      of
      Common Stock (or Other Securities) issued or sold or deemed to have been issued
      or sold, (b) the number of shares of Common Stock (or Other Securities)
      outstanding or deemed to be outstanding, and (c) the Exercise Price and the
      number of shares of Common Stock to be received upon exercise of this Warrant,
      in effect immediately prior to such adjustment or readjustment and as adjusted
      or readjusted as provided in this Warrant.  The Company will forthwith
      mail a copy of each such certificate to the holder and any warrant agent of
      the
      Company (appointed pursuant to Section 11 hereof).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    6.           Reservation
      of Stock, Etc., Issuable on Exercise of Warrant.  Except as to the
      portion of the shares of Common Stock that are in excess of the Company’s total
      authorized shares of Common Stock, the Company will at all times reserve and
      keep available, solely for issuance and delivery on the exercise of this
      Warrant, shares of Common Stock (or Other Securities) from time to time issuable
      on the exercise of this Warrant.

     

    7.           Assignment;
      Exchange of Warrant.  Subject to compliance with applicable
      securities laws, this Warrant, and the rights evidenced hereby, may be
      transferred by any registered holder hereof (a “Transferor”) in whole or in
      part.  On the surrender for exchange of this Warrant, with the
      Transferor’s endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form”) and together with evidence reasonably
      satisfactory to the Company demonstrating compliance with applicable securities
      laws, which shall include, without limitation, a legal opinion from the
      Transferor’s counsel (at the Company’s expense) that such transfer is exempt
      from the registration requirements of applicable securities laws, the Company
      at
      its expense (but with payment by the Transferor of any applicable transfer
      taxes) will issue and deliver to or on the order of the Transferor thereof
      a new
      Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
      specified in such Transferor Endorsement Form (each a “Transferee”), calling in
      the aggregate on the face or faces thereof for the number of shares of Common
      Stock called for on the face or faces of the Warrant so surrendered by the
      Transferor.

     

    8.           Replacement
      of Warrant.  On receipt of evidence reasonably satisfactory to the
      Company of the loss, theft, destruction or mutilation of this Warrant and,
      in
      the case of any such loss, theft or destruction of this Warrant, on delivery
      of
      an indemnity agreement or security reasonably satisfactory in form and amount
      to
      the Company or, in the case of any such mutilation, on surrender and
      cancellation of this Warrant, the Company at its expense will execute and
      deliver, in lieu thereof, a new Warrant of like tenor.

     

    9.           Limitations
      on Exercise.

     

    9.1           Notwithstanding
      anything herein to the contrary, in no event shall the Holder be entitled to
      exercise any portion of this Warrant which would cause the total number of
      issued and outstanding shares of the Company’s Common Stock plus the number of
      shares of Common Stock reserved for issuance upon exercise of all outstanding
      options and warrants and upon conversion of all outstanding shares of
      convertible preferred stock to be in excess of the number of the Company’s
      authorized shares of Common Stock.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    9.2           Notwithstanding
      anything herein to the contrary, in no event shall the Holder be entitled to
      exercise any portion of this Warrant in excess of that portion of this Warrant
      upon exercise of which the sum of (1) the number of shares of Common Stock
      beneficially owned by the Holder and its Affiliates (other than shares of Common
      Stock which may be deemed beneficially owned through the ownership of the
      unexercised portion of the Warrant or the unexercised or unconverted portion
      of
      any other security of the Holder subject to a limitation on conversion analogous
      to the limitations contained herein) and (2) the number of shares of Common
      Stock issuable upon the exercise of the portion of this Warrant with respect
      to
      which the determination of this proviso is being made, would result in
      beneficial ownership by the Holder and its Affiliates of any amount greater
      than
      9.99% of the then outstanding shares of Common Stock (whether or not, at the
      time of such exercise, the Holder and its Affiliates beneficially own more
      than
      9.99% of the then outstanding shares of Common Stock). As used herein, the
      term
“Affiliate” means any person or entity that, directly or indirectly through one
      or more intermediaries, controls or is controlled by or is under common control
      with a person or entity, as such terms are used in and construed under Rule
      144
      under the Securities Act.   For purposes of the second preceding sentence,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
      except as otherwise provided in clause (1) of such sentence.  For any
      reason at any time, upon written or oral request of the Holder, the Company
      shall within one (1) business day confirm orally and in writing to the Holder
      the number of shares of Common Stock outstanding as of any given
      date.  The limitations set forth herein (x) may be waived by the
      Holder upon provision of no less than sixty-one (61) days prior notice to the
      Company and (y) shall automatically become null and void following notice to
      the
      Company upon the occurrence and during the continuance of an Event of Default
      (as defined in the Note referred to in the Purchase Agreement).

     

    10.           Warrant
      Cancellation. If the Obligations (as defined in the Security Agreement
      referred to in the Reaffirmation Agreement dated as of the issue date hereof
      among the Holder, the Company, and certain of the subsidiaries of the Company)
      have been repaid in full on or before (a) six (6) months from the date hereof,
      the Holder shall surrender this Warrant for cancellation and shall issue a
      new
      Warrant to Holder in the face amount of this Warrant less thirty percent (30%)
      of the shares otherwise issuable under this Warrant, (b) more than six months
      but fewer than nine (9) months from the date hereof, the Holder shall surrender
      this Warrant for cancellation and shall issue a new Warrant  to Holder
      in the face amount of this Warrant less twenty percent (20%) of the shares
      otherwise issuable under this Warrant; (c) more than nine (9) months but fewer
      than twelve (12) months from the date hereof, the Holder shall surrender this
      Warrant for cancellation and shall issue a new Warrant to Holder in the face
      amount of this Warrant less ten percent (10%) of the shares otherwise issuable
      under this Warrant; and (d) more than twelve (12) months but fewer than eighteen
      (18) months from the date hereof, the Holder shall surrender this Warrant for
      cancellation and shall issue a new Warrant to Holder in the face amount of
      this
      Warrant less five percent (5%) of the shares otherwise issuable under this
      Warrant.

     

    11.           Warrant
      Agent.  The Company may, by written notice to the each Holder of
      the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
      Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
      this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
      Section 8, or any of the foregoing, and thereafter any such issuance, exchange
      or replacement, as the case may be, shall be made at such office by such
      agent.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    12.           Transfer
      on the Company’s Books.  Until this Warrant is transferred on the
      books of the Company, the Company may treat the registered holder hereof as
      the
      absolute owner hereof for all purposes, notwithstanding any notice to the
      contrary.

     

    13.           Rights
      of Shareholders.  No Holder shall be entitled to vote or receive
      dividends or be deemed the holder of the shares of Common Stock or any other
      securities of the Company which may at any time be issuable upon exercise of
      this Warrant for any purpose (the “Warrant Shares”), nor shall
      anything contained herein be construed to confer upon the Holder, as such,
      any
      of the rights of a shareholder of the Company or any right to vote for the
      election of directors or upon any matter submitted to shareholders at any
      meeting thereof, or to give or withhold consent to any corporate action (whether
      upon the recapitalization, issuance of shares, reclassification of shares,
      change of nominal value, consolidation, merger, conveyance or otherwise) or
      to
      receive notice of meetings, or to receive dividends or subscription rights
      or
      otherwise, in each case, until the earlier to occur of (x) the date of actual
      delivery to Holder (or its designee) of the Warrant Shares issuable upon the
      exercise hereof or (y) the third business day following the date such Warrant
      Shares first become deliverable to Holder, as provided herein.

     

    14.           Sale
      Limitation.  Notwithstanding anything contained herein to the
      contrary, the Holder shall not be entitled to sell any shares of Common Stock
      of
      the Company received by the Holder upon the exercise of all or any portion
      of
      this Warrant prior to the first anniversary of the date hereof.  The
      sale limitation described on this Section 14 shall automatically become null
      and
      void without notice to the Company upon the occurrence and during the
      continuance of an Event of Default (as defined in the Note).

     

    15.           Notices,
      Etc.  All notices and other communications from the Company to the
      Holder shall be mailed by first class registered or certified mail, postage
      prepaid, at such address as may have been furnished to the Company in writing
      by
      such Holder or, until any such Holder furnishes to the Company an address,
      then
      to, and at the address of, the last Holder who has so furnished an address
      to
      the Company.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    16.           Miscellaneous.  This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL
      BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  ANY ACTION
      BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE
      BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN
      THE
      STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS
      PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK.  The
      individuals executing this Warrant on behalf of the Company agree to submit
      to
      the jurisdiction of such courts and waive trial by jury.  The
      prevailing party shall be entitled to recover from the other party its
      reasonable attorneys’ fees and costs.  In the event that any provision
      of this Warrant is invalid or unenforceable under any applicable statute or
      rule
      of law, then such provision shall be deemed inoperative to the extent that
      it
      may conflict therewith and shall be deemed modified to conform with such statute
      or rule of law.  Any such provision which may prove invalid or
      unenforceable under any law shall not affect the validity or enforceability
      of
      any other provision of this Warrant.  The headings in this Warrant are
      for purposes of reference only, and shall not limit or otherwise affect any
      of
      the terms hereof.  The invalidity or unenforceability of any provision
      hereof shall in no way affect the validity or enforceability of any other
      provision hereof.  The Company acknowledges that legal counsel
      participated in the preparation of this Warrant and, therefore, stipulates
      that
      the rule of construction that ambiguities are to be resolved against the
      drafting party shall not be applied in the interpretation of this Warrant to
      favor any party against the other party.

     

    

     

    [BALANCE
      OF PAGE INTENTIONALLY LEFT BLANK;

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above.

     

    
      	 	 	
              JMAR
                TECHNOLOGIES, INC.

            
	
              WITNESS:

            	 	 
	 	 	
              By:

            	
              
                /s/
                  C. NEIL BEER

              

            
	 	 	
              Name:

            	
              C.
                Neil Beer

            
	 	 	Title:	
              Chief
                Executive Officer

            

    

     

     

    
 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    FORM
      OF SUBSCRIPTION

    (To
      Be
      Signed Only On Exercise Of Warrant)

     

    
      	
              TO:

            	
              JMAR
                Technologies,
                Inc._____________________

            

    

     

    
      	
               

            	
              _____________________

            

    

     

     

    Attention:    Chief
      Financial Officer

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.____), hereby irrevocably elects to purchase (check applicable
      box):

     

    
      	
              ________

            	
              ________
                shares of the common stock covered by such warrant;
                or

            

    

     

    
      	
              ________

            	
              the
                maximum number of shares of common stock covered by such warrant
                pursuant
                to the cashless exercise procedure set forth in Section
                2.

            

    

     

    The
      undersigned herewith makes payment of the full Exercise Price for such shares
      at
      the price per share provided for in such Warrant, which is
      $___________.  Such payment takes the form of (check applicable box or
      boxes):

     

    
      	
              ________

            	
              $__________
                in lawful money of the United States;
                and/or

            

    

     

    
      	
              ________

            	
              the
                cancellation of such portion of the attached Warrant as is exercisable
                for
                a total of _______ shares of Common Stock (using a Fair Market Value
                of
                $_______ per share for purposes of this calculation);
                and/or

            

    

     

    
      	
              ________

            	
              the
                cancellation of such number of shares of Common Stock as is necessary,
                in
                accordance with the formula set forth in Section 2.2, to exercise
                this
                Warrant with respect to the maximum number of shares of Common Stock
                purchasable pursuant to the cashless exercise procedure set forth
                in
                Section 2.

            

    

     

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to ______________________________________________ whose
      address is
      ___________________________________________________________________________.

     

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the “Securities Act”) or pursuant to an exemption from registration
      under the Securities Act.

     

    
      	 	 	 	 
	
              Dated:

            	 	 	
              (Signature
                must conform to name of holder as specified on the face of the
                Warrant)

            
	 	 	 	
              Address:

            	 
	 	 	 	 	 

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF TRANSFEROR ENDORSEMENT

    (To
      Be
      Signed Only On Transfer Of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading “Transferees” the right represented by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of JMAR Technologies, Inc. into which the within Warrant relates specified
      under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
      person Attorney to transfer its respective right on the books of JMAR
      Technologies, Inc. with full power of substitution in the premises.

    
       

      
        
          	
                  Transferees

                	
                  Address

                	
                  Percentage

                  Transferred

                	
                  Number

                  Transferred

                
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

        

        
          	 	 	 	 
	
                  Dated:

                	 	 	
                  (Signature
                    must conform to name of holder as specified on the face of the
                    Warrant)

                
	 	 	 	
                  Address:

                	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                  SIGNED
                    IN THE PRESENCE OF: 

                
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                   (Name)

                

        

         

         

        ACCEPTED
          AND AGREED:

        [TRANSFEREE]

         

         
          
            

          

        

        
          (Name)

        

      

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IRREVOCABLE
      PROXY

     

    For
      good
      and valuable consideration, receipt of which is hereby acknowledged, Laurus
      Master Fund, Ltd. (“Laurus”), hereby appoints ___________________ (the “Proxy
      Holder” or the “Company”), with a mailing address at
      ___________________________, with full power of substitution, as proxy, to
      vote
      all shares of Common Stock of the Company, now or in the future owned by Laurus
      to the extent such shares are issued to Laurus upon its exercise of (a) the
      Common Stock Purchase Warrant (the “Warrant”), issued by the Company to Laurus
      as of the date hereof and (b) all other warrants and/or options issued by the
      Company in favor of Laurus with an exercise price equal to or less than the
      greater of $0.01 and the par value of the Company’s common stock (the “Other
      Options and Warrants”) (collectively, the “Shares”).

     

    This
      proxy is irrevocable and coupled with an interest.  Upon the sale or
      other transfer of the Shares, in whole or in part, or the assignment of the
      Warrant or any of the Other Options and Warrants, this proxy shall automatically
      terminate (x) with respect to such sold or transferred Shares at the time of
      such sale and/or transfer, and (y) in the case of an assignment of the Warrant
      and/or Other Options and Warrants, at the time of such assignment in respect
      of
      the Shares issuable upon exercise of such assigned Warrant and/or Other Options
      and Warrants, in each case, without any further action required by any
      person.

     

    Laurus
      shall use its best efforts to forward to Proxy Holder within two (2) business
      days following Laurus’ receipt thereof, at the address for Proxy Holder set
      forth above, copies of all materials received by Laurus relating, in each case,
      to the solicitation of the vote of shareholders of the Company.

     

    This
      proxy shall remain in effect with respect to the Shares of the Company during
      the period commencing on the date hereof and continuing until the payment in
      full of all obligations and liabilities owing by the Company to Laurus (as
      the
      same may be amended, restated, extended or modified from time to
      time).

     

    IN
      WITNESS WHEREOF, the undersigned has executed this irrevocable proxy as of
      the
      31st day of August 2007.

     

    
      
        	 	LAURUS
                MASTER FUND, LTD	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

      

       

       

      13

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