EXHIBIT
4.2
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE MEDICAL EXCHANGE INC. THAT SUCH REGISTRATION IS
NOT REQUIRED .
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Right to
Purchase ________ shares of Common Stock of The Medical Exchange
Inc. (subject to adjustment as provided herein)
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FORM OF CLASS A COMMON STOCK
PURCHASE WARRANT
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No. 2007-A-001
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Issue Date: February ___,
2007
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The Medical Exchange Inc., a corporation
organized under the laws of the State of Nevada (the
“Company”), hereby certifies that, for value received,
__________________________,
__________________________________________________________, or its
assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time
after the Issue Date until 5:00 p.m., E.S.T on the fifth
anniversary of the Actual Effective Date (as defined in Section
11.1(iv) of the Subscription Agreement) (the “Expiration
Date”), ________ fully paid and nonassessable shares of
Common Stock at a per share purchase price of $5.00. The
aforedescribed purchase price per share, as adjusted from time to
time as herein provided, is referred to herein as the
“Purchase Price.” The number and character of such
shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein. The Company may reduce the Purchase
Price without the consent of the Holder. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in
that certain Subscription Agreement (the “
Subscription Agreement ”), dated February
___, 2007, entered into by the Company and Holders.
As used herein the following terms, unless the
context otherwise requires, have the following respective
meanings:
(a)
The term “Company” shall
mean The Medical Exchange Inc. and any corporation which shall
succeed or assume the obligations of The Medical Exchange Inc.
hereunder.
(b)
The term “Common Stock”
includes (a) the Company’s common stock, $0.001 par
value per share, as authorized on the date of the Subscription
Agreement, and (b) any Other Securities into which or for which any
of the securities described in (a) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
(c)
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 5 or otherwise.
(d)
The term “Warrant
Shares” shall mean the Common Stock issuable upon exercise of
this Warrant.
1.
Exercise of Warrant .
1.1.
Number of Shares Issuable upon
Exercise . From and after
the Issue Date through and including the Expiration Date, the
Holder hereof shall be entitled to receive, upon exercise of this
Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, Common Stock of the Company,
subject to adjustment pursuant to Section 4.
1.2.
Full Exercise
. This Warrant may be exercised in
full by the Holder hereof by delivery of an original or facsimile
copy of the form of subscription attached as Exhibit A hereto
(the “Subscription Form”) duly executed by such Holder
and surrender of the original Warrant within four (4) days of
exercise, to the Company at its principal office or at the office
of its Warrant Agent (as provided hereinafter), accompanied by
payment, in cash, wire transfer or by certified or official bank
check payable to the order of the Company, in the amount obtained
by multiplying the number of shares of Common Stock for which this
Warrant is then exercisable by the Purchase Price then in
effect.
1.3.
Partial Exercise
. This Warrant may be exercised in
part (but not for a fractional share) by surrender of this Warrant
in the manner and at the place provided in subsection 1.2
except that the amount payable by the Holder on such partial
exercise shall be the amount obtained by multiplying (a) the
number of whole shares of Common Stock designated by the Holder in
the Subscription Form by (b) the Purchase Price then in
effect. On any such partial exercise, the Company, at its expense,
will forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of shares
of Common Stock for which such Warrant may still be exercised for
the balance of.
1.4.
Fair Market Value
. 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 an exchange or is
quoted on the National Association of Securities Dealers, Inc.
Automated Quotation (“NASDAQ”), National Market System,
the NASDAQ Capital Market or the American Stock Exchange, LLC, 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 an exchange or on
the NASDAQ National Market System, the NASDAQ Capital Market or the
American Stock Exchange, Inc., but is traded in the
over-the-counter market, then the average of the closing bid and
ask 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 such an agreement, by
arbitration in accordance with the rules then standing 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; or
(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 all of
the Warrants are outstanding at the Determination Date.
1.5.
Company Acknowledgment . The Company will, at the time of
the exercise of the 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.
1.6.
Trustee for Warrant Holders . In the event that a qualified
bank or trust company shall have been appointed as trustee for the
Holder of the Warrants 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.
1.7.
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
hereof 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 as aforesaid. As soon
as practicable after the exercise of this Warrant in full or in
part, and in any event within four (4) business days thereafter
(“Warrant Share Delivery Date”), 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
hereof, 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
of Common Stock, 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. The Company understands that a delay in the delivery of
the Warrant Shares after the Warrant Share Delivery Date could
result in economic loss to the Holder. As compensation to the
Holder for such loss, the Company agrees to pay (as liquidated
damages and not as a penalty) to the Holder for late issuance of
Warrant Shares upon exercise of this Warrant the amount of $100 per
business day after the Warrant Share Delivery Date for each $10,000
of Purchase Price of Warrant Shares for which this Warrant is
exercised which are not timely delivered. The Company shall pay any
payments incurred under this Section in immediately available funds
upon demand. Furthermore, in addition to any other remedies which
may be available to the Holder, in the event that the Company fails
for any reason to effect delivery of the Warrant Shares by the
Warrant Share Delivery Date, the Holder may revoke all or part of
the relevant Warrant exercise by delivery of a notice to such
effect to the Company whereupon the Company and the Holder shall
each be restored to their respective positions immediately prior to
the exercise of the relevant portion of this Warrant, except that
the liquidated damages described above shall be payable through the
date notice of revocation or rescission is given to the
Company.
2.
Cashless Exercise .
(a)
Payment upon exercise may be made at the option of the Holder
either in (i) cash, wire transfer or by certified or official
bank check payable to the order of the Company equal to the
applicable aggregate Purchase Price, (ii) by cashless exercise in
accordance with Section (b) below or (iii) by a
combination of any of the foregoing methods, for the number of
shares of Common Stock specified in such form (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.
(b)
If the Fair Market Value of one share of Common Stock is greater
than the Purchase 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 cancelled) by surrender
of this Warrant at the principal office of the Company together
with the properly endorsed Subscription Form in which event the
Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
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X=
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the number of
shares of Common Stock to be issued to the holder
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Y=
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the number of
shares of Common Stock purchas
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