NEITHER THIS
WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES
LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH
REGISTRATION AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE FORM AND SUBSTANCE OF WHICH IS
ACCEPTABLE TO THE ISSUER.
MERRIMAN CURHAN FORD GROUP,
INC.
COMMON STOCK PURCHASE
WARRANT
Warrant No.
___
______ Shares
Original Issue Date: __________,
2009
THIS CERTIFIES THAT, FOR VALUE RECEIVED,
[________________] or its registered assigns (the "
Holder ") is entitled to purchase, on the terms and
conditions hereinafter set forth, at any time in whole or in part
from the Original Issue Date set forth above until 5:00 p.m.,
Eastern Time, on the tenth anniversary of the Original Issue Date,
or if such date is not a day on which the Company (as hereinafter
defined) is open for business, then the next succeeding day on
which the Company is open for business (such date is the "
Expiration Date "), but not thereafter,
[_____________] thousand (______,000) shares of the Common Stock,
$0.0001 par value per share (the " Common Stock
"), of MERRIMAN CURHAN FORD GROUP, INC. , a Delaware
corporation (the " Company "), at Fifty Cents ($0.50)
per share (the " Exercise Price "), such number of
shares and Exercise Price being subject to adjustment upon the
occurrence of the contingencies set forth in this Warrant. Each
share of Common Stock as to which this Warrant is exercisable is a
" Warrant Share " and all such shares are
collectively referred to as the " Warrant Shares
."
Section 1.
Definitions .
(a) " Effective Date " shall mean the
date on which the Warrant shall be deemed to have been
exercised.
(b) " Initial Issuance Date " shall mean
the date on which Secured Convertible Promissory Notes are first
purchased pursuant to the Subscription Agreement.
(c) " Subscription Agreement " shall mean
the Subscription Agreement by and among the Company and the
purchasers set forth on Schedule A thereto, dated
[________], 2009.
(d) " Secured Convertible Promissory
Notes " shall mean the secured convertible promissory notes
convertible into shares of Common Stock issued pursuant to the
terms of the Subscription Agreement.
Section 2. Exercise of Warrant;
Conversion of Warrant .
(a) Subject to the limitations described in
Section 2(a) above, this Warrant may, at the option of the Holder,
be exercised in whole or in part from time to time, on or before
5:00 p.m., Eastern Time, on the Expiration Date, by delivery to the
Company at its principal office (i) a written notice of such
Holder's election to exercise this Warrant (the " Exercise
Notice "), which notice may be in the form of the Notice of
Exercise attached hereto, properly executed and completed by the
Holder or an authorized officer thereof, (ii) a check or other
funds (the " Funds ") payable to the order of the
Company, in an amount equal to the product of the Exercise Price
multiplied by the number of Warrant Shares specified in the
Exercise Notice, and (iii) this Warrant (the items specified
in (i), (ii), and (iii) are collectively the " Exercise
Materials "); provided, however , that if this
Warrant is not exercised in whole immediately prior to the
consummation by the Company of a Change in Control Event (as
defined in the Secured Convertible Promissory Notes), then
immediately following the consummation by the Company of such
Change in Control Event, this Warrant will not be exercisable and
shall be null and void for all purposes. Notwithstanding anything
in this Warrant Agreement to the contrary, if this Warrant shall
not have been exercised in full immediately prior to a Change in
Control Event, then this Warrant shall be automatically exercised
pursuant to Section 3 below, without further action on the part of
the Holder (and the Holder hereof shall be deemed to be a holder of
the Common Stock issued upon such automatic exercise), immediately
prior to the Change in Control Event, unless at any time on or
before such time, the Holder shall notify the Company in writing
that no such automatic exercise is to occur.
(b) As promptly as practicable, and in any event
within five (5) business days after the later of (i) its receipt of
the Exercise Materials and (ii) the clearing of the Funds, the
Company shall execute or cause to be executed and delivered to the
Holder a certificate or certificates representing the number of
Warrant Shares specified in the Exercise Notice, together with cash
in lieu of any fraction of a share. The stock certificate or
certificates shall be registered in the name of the Holder or such
other name or names as shall be designated in the Exercise Notice.
The Effective Date and the date the person in whose name any
certificate evidencing the Common Stock issued upon the exercise
hereof is issued shall be deemed to have become the holder of
record of such shares, shall be the date the Company receives the
Exercise Materials, irrespective of the date of delivery of a
certificate or certificates evidencing the Common Stock issued upon
the exercise or conversion hereof, provided, however
, that if the Exercise Materials are received by the Company
on a date on which the stock transfer books of the Company are
closed, the Effective Date shall be the next succeeding date on
which the stock transfer books are open. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Warrantholder a new Warrant
representing the right to purchase the number of shares with
respect to which this Warrant shall not then have been exercised.
In the event that this Warrant is exercised, in whole in connection
with a Change in Control Event, the Effective Date shall be the
date of the consummation by the Company of such Change in Control
Event. All shares of Common Stock issued upon the exercise or
conversion of this Warrant will, upon issuance, be fully paid and
non-assessable and free from all taxes, liens, and charges with
respect thereto.
Section 3.
Cashless Exercise . In lieu of exercising this
Warrant pursuant to Section 2(c) , the Holder may elect to
receive, without payment by the Holder of any additional
consideration, shares of Common Stock equal to the value of this
Warrant (or the portion thereof being cancelled) by surrender of
this Warrant at the principal office of the Company together with
an Exercise Notice, in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the
following formula:
Y (A - B)
X=
A
Where:
X =
The number of shares of Common Stock to be
issued to the
Holder pursuant to this cashless
exercise;
The number of
Warrant Shares in respect of which the cashless exercise election
is made;
The fair market
value of one (1) share of Common Stock at the time the cashless
exercise election is made; and
B =
The Exercise Price (as adjusted to the date of
the cashless exercise)
For purposes of this Section 3 , the fair
market value of one (1) share of Common Stock as of a particular
date shall be determined as follows: (i) if listed or quoted for
trading on a securities market or exchange, the value shall be
deemed to be the average closing price of the securities on such
exchange over the thirty (30) day period ending three (3) days
prior to the cashless exercise election; (ii) if traded
over-the-counter, the value shall be deemed to be the average of
the closing bid or sale prices (whichever is applicable) over the
thirty (30) day period ending three (3) days prior to the cashless
exercise election; and (iii) if there is no active public market,
the value shall be the fair market value thereof, as jointly
determined in good faith by the Holder and the Company's Board of
Directors. If the Holder and the Company's Board of Directors are
unable to reach such a determination, the Holder and the Company's
Board of Directors shall jointly select an appraiser, who is
experienced in such matters. The decision of such appraiser shall
be final and conclusive, and the cost of such appraiser shall be
borne equally by the Holder and the Company.
Section 4.
Adjustments to Warrant Shares;
Antidilution .
The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 4
.
(a) Subdivisions, Combinations and Other
Issuances . If the Company shall at any time prior to the
expiration of this Warrant subdivide its Common Stock,
