Contract

EXHIBIT 4.2NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OFTHIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREINMAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPTPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS ORAN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THEOPINION OF COUNSEL FOR THE COMPANY, IS AVAILABLE. VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON THE LAST DAY OF THE EXERCISE PERIOD, AS DEFINED IN THE WARRANT COMMON STOCK PURCHASE WARRANT OF STARMED GROUP, INC. This is to certify that, FOR VALUE RECEIVED, __________________________(the “HOLDER”), is entitled to purchase, subject to the provisions of thisWarrant, from StarMed Group, Inc.., a Nevada corporation (the “COMPANY”), at anexercise price per share of One Dollar ($1.00), subject to adjustment asprovided in this Warrant (the “WARRANT EXERCISE PRICE”), __________________(___________) shares of common stock, par value $0.01 per share (the “COMMONSTOCK”). The shares of Common Stock deliverable upon such exercise, and asadjusted from time to time, are hereinafter sometimes referred to as the”WARRANT SHARES.” 1. ISSUANCE OF WARRANT. This Warrant is being issued pursuant to thatcertain Subscription Agreement dated as of ___________ between the Company andthe Holder (the “SUBSCRIPTION AGREEMENT”). Capitalized terms used but nototherwise defined herein shall have the meanings ascribed thereto in theSubscription Agreement or the Memorandum (hereinafter defined). In addition, thefollowing terms shall have the meanings set forth below: “CLOSING PRICE” means, as of any date, the last trading pricefor the Common Stock as reported by the NASDAQ OTC Bulletin Board, or otherprincipal exchange or electronic trading system on which the shares of CommonStock are quoted or traded. “COMMON STOCK PURCHASE PRICE,” shall mean $0.25. “CONVERTIBLE SECURITIES” shall mean evidences of indebtedness,shares of stock or other securities, which are convertible into or exchangeable,with or without payment of additional consideration in cash and/or property, forshares of Common Stock, either immediately or upon the occurrence of a specifieddate or a specified event. “EXERCISE PERIOD” shall mean the period commencing on the datehereof and ending at 5:00 p.m., Eastern Time on __________. “MEMORANDUM” shall mean the Company’s Confidential PrivatePlacement Memorandum dated as of October 5, 2005 (as amended or supplemented,and together with all exhibits attached thereto). – 1 – “PERMITTED ISSUANCES” shall mean (i) Common Stock issuedpursuant to a stock split or subdivision, (ii) Common Stock issuable or issuedto employees, consultants, officers, directors, or advisors of the Companydirectly or pursuant to a stock purchase plan or other compensation arrangementapproved by the Board of Directors of the Company which are issued at fairmarket value at the date of issuance, (iii) Common Stock issued or issuable uponexercise or conversion of any warrants, options or any other securitiesexercisable or exchangeable for, or convertible into shares of Common Stockoutstanding as of October 5, 2005, (iv) securities issued upon the exercise ofthis Warrant or any other warrants issued in the Placement, (v) securitiesissued pursuant to acquisitions or strategic transactions, provided any suchissuance shall only be to a person which is, itself or through subsidiaries, anoperating company in a business synergistic with the business of the Company andin which the Company receives benefits in addition to the investment of funds,but shall not include a transaction in which the Company is issuing securitiesprimarily for the purpose of raising capital or to an entity whose primarybusiness is investing in securities, and (vi) securities issued to a vendor orlessor in any equipment lease or similar equipment financing transaction inwhich the Company or any subsidiary obtains the use of equipment for itsbusiness. “PLACEMENT” means the private placement by the Company of upto $2,750,000 worth of Units (including $750,000 worth of Additional Units)consisting of shares of the Company’s Common Stock and Warrants, including thisWarrant. “ACCELERATED EXPIRATION CONDITIONS” means each of thefollowing conditions to an accelerated expiration of this Warrant by theCompany: (i) the shares of Common Stock have had an average Closing Price at orabove One Dollar and Fifty Cents ($1.50) per share (as adjusted for any stocksplits, combinations or other recapitalizations) for 20 consecutive trading daysending on the date of the Acceleration Notice (hereinafter defined) (the”ACCELERATION MEASURING PERIOD”), (ii) trading volume in the Company’s CommonStock exceeds 150,000 shares per day for each trading day during such 20-dayperiod; and (iii) the resale of the shares of Common Stock issuable uponexercise of this Warrant is registered with the Securities and ExchangeCommission (the “SEC”) for resale to the public under an effective registrationstatement and all such shares remain registered throughout the AccelerationMeasuring Period up to and including the Acceleration Date. “SECURITIES ACT” means the Securities Act of 1933, as amended,and all rules and regulations promulgated thereunder. 2. EXERCISE OF WARRANT. This Warrant may be exercised in whole or inpart at any time or from time to time from the date hereof until the end of theExercise Period by presentation and surrender of this Warrant to the Company atits principal office, or at the office of its stock transfer agent, if any, withthe Purchase Form annexed hereto duly executed and accompanied by payment of theWarrant Exercise Price for the number of shares of Common Stock specified insuch form. If this Warrant should be exercised in part only, the Company shall,upon surrender of this Warrant for cancellation, execute and deliver a newWarrant evidencing the rights of the Holder to purchase the balance of theshares of Common Stock purchasable hereunder. Upon receipt by the Company ofthis Warrant at its office, or by the stock transfer agent of the Company at itsoffice, in proper form for exercise, the Holder shall be deemed to be the holderof record of the shares of Common Stock issuable upon such exercise,notwithstanding that the stock transfer books of the Company shall then beclosed or that certificates representing such shares of Common Stock shall notthen actually be delivered to the Holder. As soon as practicable after eachexercise of this Warrant, in whole or in part, and in any event within seven (7)days thereafter, the Company at its expense (including the payment by it of anyapplicable issue taxes) will cause to be issued in the name of and delivered tothe Holder hereof or, – 2 -subject to Section 11 hereof, as the Holder (upon payment by the Holder of anyapplicable transfer taxes) may direct, a certificate or certificates (withappropriate restrictive legends, as applicable) for the number of dulyauthorized, validly issued, fully paid and non-assessable shares of Common Stockto which the Holder shall be entitled upon exercise. All issuances of CommonStock pursuant to the exercise of this Warrant shall be rounded (up or down asthe case may be) to the nearest whole share. 3. RESERVATION OF SHARES/FRACTIONAL SHARES. The Company hereby agreesthat at all times there shall be reserved for issuance and/or delivery uponexercise of this Warrant such number of shares of Common Stock as shall berequired for issuance and delivery upon exercise of this Warrant. No fractionalshares or script representing fractional shares shall be issued upon theexercise of this Warrant. Instead, the Company will round up to the nearestwhole share. 4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant isexchangeable, without expense, at the option of the Holder, upon presentationand surrender of this Warrant to the Company for other Warrants of differentdenominations entitling the Holder thereof to purchase in the aggregate the samenumber of shares of Common Stock purchasable hereunder. Upon surrender of thisWarrant to the Company or at the office of its warrant agent, if any, with theAssignment Form annexed hereto duly executed and funds sufficient to pay anyapplicable transfer tax, the Company shall, without charge, execute and delivera new Warrant in the name of the assignee named in such instrument of assignmentand this Warrant shall promptly be canceled. This Warrant may be divided orcombined with other Warrants which carry the same rights upon presentation ofthis Warrant at the office of the Company or at the office of its stock transferagent, if any, together with a written notice specifying the names anddenominations in which new Warrants are to be issued and signed by the Holderhereof. The term “Warrant” as used herein includes any Warrants into which thisWarrant may be divided or for which it may be exchanged. Upon receipt by theCompany of evidence satisfactory to it of the loss, theft, destruction ormutilation of this Warrant, (and, in the case of loss, theft or destruction, ofreasonably satisfactory indemnification), and upon surrender and cancellation ofthis Warrant, the Company will execute and deliver a new Warrant of like tenor.Any such new Warrant executed and delivered shall constitute an additionalcontractual obligation on the part of the Company, whether or not this Warrantso lost, stolen, destroyed, or mutilated shall be at any time enforceable byanyone. 5. RIGHTS AND OBLIGATIONS OF THE HOLDER. The Holder shall not, byvirtue of this Warrant, be entitled to any rights of a stockholder of theCompany, either at law or equity, and the rights of the Holder are limited tothose expressed in this Warrant and are not enforceable against the Companyexcept to the extent set forth herein. In addition, no provision hereof, in theabsence of affirmative action by the Holder to purchase shares of Common Stock,and no enumeration herein of the rights or privileges of the Holder hereof shallgive rise to any liability of such Holder for the purchase price of any CommonStock or as a stockholder of the Company, whether such liability is asserted bythe Company or by creditors of the Company. 6. ANTI-DILUTION PROVISIONS. The Warrant Exercise Price in effect at any time and thenumber and kind of securities purchasable upon exercise of each Warrant, shallbe subject to adjustment as follows. The Company shall give each Holder noticeof any event described below which requires an adjustment pursuant to thisSection 6 at the time of such event: – 3 – (a) Stock Dividends, Subdivisions and Combinations. If at anytime the Company shall: (i) take a record of the holders of its Common Stockfor the purpose of entitling them to receive a dividend payable in, or otherdistribution of, shares of Common Stock, (ii) subdivide or reclassify its outstanding sharesof Common Stock into a larger number of shares of Common Stock, or (iii) combine or reclassify its outstanding shares ofCommon Stock into a smaller number of shares of Common Stock or otherwise effecta reverse stock split, then: (A) the number of shares of Common Stock forwhich this Warrant is exercisable immediately after the occurrence of any suchevent shall be adjusted to equal the number of shares of Common Stock which arecord holder of the same number of shares of Common Stock for which thisWarrant is exercisable immediately prior to the occurrence of such event, or therecord date therefor, whichever is earlier, would own or be entitled to receiveafter the happening of such event, and (B) the Warrant Exercise Price shall beadjusted to equal: (x) the Warrant Exercise Price immediately prior to suchevent multiplied by the number of shares of Common Stock for which this Warrantis exercisable immediately prior to the adjustment divided by (y) the number ofshares for which this Warrant is exercisable immediately after such adjustment. (b) Certain Other Distributions and Adjustments. (i) If at any time the Company shall take a record ofthe holders of its Common Stock for the purpose of entitling them to receive anydividend or other distribution of: (A) cash, (B) any evidences of its indebtedness, anyshares of its capital stock or any other securities or property of any naturewhatsoever (other than Convertible Securities or shares of Common Stock), or (C) any warrants or other rights tosubscribe for or purchase any evidences of its indebtedness, any shares of itsstock or any other securities or property of any nature whatsoever (other thanConvertible Securities or shares of Common Stock),the Holder shall be entitled to receive such dividend or distribution as if theHolder had exercised this Warrant. (ii) A reclassification of the Common Stock (otherthan a change in par value, or from par value to no par value or from no parvalue to par value) into shares of Common Stock and shares of any other class ofstock shall be deemed a distribution by the Company to the holders of its CommonStock of such shares of such other class of stock and in such event the Holdershall be entitled to receive such distribution as if the Holder had exercisedthis Warrant and, if the outstanding shares of Common Stock shall be changedinto a larger or smaller number of shares of Common Stock as a part of suchreclassification, such change shall be deemed a subdivision or combination, asthe case may be, of the outstanding shares of Common Stock within the meaning ofSection 6(a). (c) Issuance of Additional Shares of Common Stock. – 4 – (i) Except in connection with Permitted Issuances,if, at any time prior to the first anniversary of the Final Closing (as definedin the Subscription Agreement), the Company shall issue or sell any shares ofCommon Stock (or other securities convertible into Common Stock) for noconsideration or for consideration in an amount per share of Common Stock (orother securities convertible into Common Stock) less than the Common StockPurchase Price (the “DISCOUNTED PRICE,” each such sale or issuance, a”DISCOUNTED PRICE TRANSACTION” and the number of shares sold or issued in suchDiscounted Price Transaction the “DISCOUNTED SALE VOLUME”), the Warrant ExercisePrice then in effect shall immediately, and without any further action by theCompany or the Holder required, be adjusted, concurrently with such issuance, toa price equal to the Discounted Price. (ii) Except in connection with Permitted Issuances,if, at any time after the first anniversary of the Final Closing the Companyshall issue or sell any shares of Common Stock (or other securities convertibleinto Common Stock) in a Discounted Price Transaction, then (A) the WarrantExercise Price then in effect shall be adjusted (or further adjusted as the casemay be) to a price determined by multiplying the Warrant Exercise Price ineffect immediately prior to such event by a fraction, of which the numeratorshall be the sum of money raised in the Placement plus the sum of money raisedin all Subsequent Discounted Price Transactions, and of which the denominatorshall be the sum of money raised in the Placement plus the sum of money equal tothe product of the cumulative Discounted Sale Volumes of all Discounted PriceTransactions and such Common Stock Purchase Price, and (B) the number of sharesof Common Stock for which this Warrant is exercisable shall be adjusted to equalthe product obtained by multiplying the Warrant Exercise Price in effectimmediately prior to such Discounted Price Transaction by the number of sharesof Common Stock for which this Warrant is exercisable immediately prior to suchDiscounted Price Transaction and dividing the product thereof by the WarrantExercise Price resulting from the adjustment made pursuant to clause (A) above. (iii) The provisions of paragraph (i) and (ii) ofthis Section 6(c) shall not apply to any issuance of shares of Common Stock forwhich an adjustment is provided under Section 6(a) or 6(b). No adjustment of thenumber of shares of Common Stock for which this Warrant shall be exercisableshall be made under paragraph (i) of this Section 6(c) upon the issuance of anyshares of Common Stock which are issued pursuant to the exercise of any warrantsor other subscription or purchase rights or pursuant to the exercise of anyconversion or exchange rights in any Convertible Securities, if any suchadjustment shall previously have been made upon the issuance of such warrants orother rights or upon the issuance of such Convertible Securities (or upon theissuance of any warrant or other rights therefor) pursuant to Section 6(d). (d) Issuance of Warrants or Other Rights. (i) If at any time the Company shall take a record ofthe holders of its Common Stock for the purpose of entitling them to receive adistribution of, or shall in any manner (whether directly or by assumption in amerger in which the Company is the surviving corporation) issue or sell, anywarrants or other rights to subscribe for or purchase any shares of Common Stockor any Convertible Securities, whether or not the rights to exchange or convertthereunder are immediately exercisable, and the price per share for which CommonStock is issuable upon the exercise of such warrants or other rights or uponconversion or exchange of such Convertible Securities shall be less than theCommon Stock Purchase Price, then the number of shares for which this Warrant isexercisable and the Warrant Exercise Price shall be adjusted as provided inSection 6(c)(i) or (ii) hereof (depending upon the time at which such record istaken) on the basis that the maximum number of shares of Common Stock issuablepursuant to all such warrants or other rights or necessary to effect theconversion or – 5 -exchange of all such Convertible Securities shall be deemed to have been issuedand outstanding and the Company shall be deemed to have received all theconsideration payable therefor, if any, as of the date of issuance of suchwarrants or other rights. No further adjustment of the Warrant Exercise Price(s)shall be made upon the actual issue of such Common Stock or of such ConvertibleSecurities upon exercise of such warrants or other rights or upon the actualissuance of such Common Stock upon such conversion or exchange of suchConvertible Securities. (ii) If at any time the Company shall take a recordof the holders of its Common Stock for the purpose of entitling them to receivea distribution of, or shall in any manner (whether directly or by assumption ina merger in which the Company is the surviving corporation) issue or sell, anywarrants or other rights to subscribe for or purchase any shares of Common Stockor any Convertible Securities, whether or not the rights to exchange or convertthereunder are immediately exercisable, and the price per share for which CommonStock is issuable upon the exercise of such warrants or other rights or uponconversion or exchange of such Convertible Securities shall be equal to or morethan the Common Stock Purchase Price, but less than the Warrant Exercise Price,then the Warrant Exercise Price shall be adjusted downward to match the exerciseprice of such new warrants or other rights. (e) Superseding Adjustment. If at any time after anyadjustment of the number of shares of Common Stock for which this Warrant isexercisable and the Warrant Exercise Price(s) shall have been made pursuant toSection 6(d) as the result of any issuance of warrants, rights or ConvertibleSecurities, (i) such warrants or rights, or the right ofconversion or exchange in such other Convertible Securities, shall expire, andall or a portion of such warrants or rights, or the right of conversion orexchange with respect to all or a portion of such other Convertible Securities,as the case may be, shall not have been exercised, or (ii) the consideration per share for which shares ofCommon Stock are issuable pursuant to such warrants or rights, or the terms ofsuch other Convertible Securities, shall be increased solely by virtue ofprovisions therein contained for an automatic increase in such consideration pershare upon the occurrence of a specified date or event, then for each outstanding Warrant such previous adjustment shall berescinded and annulled and the shares of Common Stock which were deemed to havebeen issued by virtue of the computation made in connection with the adjustmentso rescinded and annulled shall no longer be deemed to have been issued byvirtue of such computation made in connection with the adjustment so rescindedand annulled shall no longer be deemed to have been issued by virtue of suchcomputation. Thereupon, a re-computation shall be made of the effect of suchrights or options or other Convertible Securities on the basis of: (A) treating the number of shares of CommonStock or other property, if any, theretofore actually issued or issuablepursuant to the previous exercise of any such warrants or rights or any suchright of conversion or exchange, as having been issued on the date or dates ofany such exercise and for the consideration actually received and receivabletherefor, and (B) treating any such warrants or rights orany such other Convertible Securities which then remain outstanding as havingbeen granted or issued immediately after the time of such increase of theconsideration per share for which shares of Common Stock or other property areissuable under such warrants or rights or other convertible Securities;whereupon a new adjustment – 6 -of the number of shares of Common Stock for which this Warrant is exercisableand the Warrant Exercise Price(s) shall be made, which new adjustment shallsupersede the previous adjustment so rescinded and annulled. (f) No adjustment in the Warrant Exercise Price shall berequired unless such adjustment would require an increase or decrease of atleast One Cent ($0.01) in such price; provided, however, that any adjustmentswhich by reason of this Section 6(f) are not required to be made shall becarried forward and taken into account in any subsequent adjustment. Allcalculations under this Section 6(f) shall be made to the nearest cent or to thenearest one-hundredth of a share, as the case may be. (g) The Company may retain a firm of independent publicaccountants of recognized standing selected by the Board (who may be the regularaccountants employed by the Company) to make any computation required by thisSection 6. (h) In the event that at any time, as a result of anadjustment made pursuant to Section 6(a), (b) or (c) of this Warrant, the Holderof any Warrant thereafter shall become entitled to receive any shares of theCompany’s capital stock, other than Common Stock, thereafter the number of suchother shares so receivable upon exercise of this Warrant shall be subject toadjustment from time to time in a manner and on terms as nearly equivalent aspracticable to the provisions with respect to the Common Stock contained inSections 6(a) through (h), inclusive, of this Warrant. (i) Notwithstanding the foregoing, no adjustment pursuant tothis Section 6 shall be effected due to, or as a result of, any PermittedIssuances. 7. ACCELERATED EXPIRATION. (a) Acceleration Option. Upon the satisfaction of theAcceleration Expiration Conditions, the Company may, at the option of its Boardof Directors at any time following the Final Closing accelerate all (but notless than all) of the Warrants by delivering to each Holder an AccelerationNotice (as hereafter defined). (b) Notice. Notice of any proposed acceleration of theWarrants pursuant to this Section 7 shall be given by the Company by sending bycertified mail, postage prepaid, a copy of such notice (the “ACCELERATIONNOTICE”) at least 30 days prior to the date on which it proposes to acceleratethe Warrants (the “ACCELERATION DATE”) to the holders of the Warrants includingthe Holder or any subsequent holder(s) of record of this Warrant, at theirrespective addresses appearing on the books of the Company or given by suchholder(s) to the Company for the purposes of notice, or if no such addressappears or is given, at the principal office of the Company. Such notice shallstate the Acceleration Date to which such notice relates, the number of Warrantsto be accelerated from all holders thereof and from the Holder of this Warrant,the record date for purposes of such acceleration and the date on which suchholders’ right to exercise the Warrants will terminate, and shall call upon theHolders to surrender to the Company on said Acceleration Date at the placedesignated in the notice such holder’s certificate or certificates representingthe Warrants to be accelerated unless exercised prior to such date. (c) Acceleration Procedures. On or after an Acceleration Date,the Holder shall surrender this Warrant to the Company, or its agent, at theplace designated in the aforesaid notice. Each surrendered Warrant shall becancelled. – 7 – (d) Termination of Rights. Notwithstanding that the Warrantsso called for acceleration shall not have been surrendered, from and after theAcceleration Date, all rights of the Holder of this Warrant and all otherholders of Warrants shall forthwith cease and terminate. 8. OFFICER’S CERTIFICATE. Whenever the Warrant Exercise Price(s) shallbe adjusted as required by the provisions of Section 6 of this Warrant, theCompany shall forthwith file in the custody of its Secretary or an AssistantSecretary at its principal office and with its stock transfer agent, if any, anofficer’s certificate showing the adjusted Warrant Exercise Price(s) and theadjusted number of shares of Common Stock issuable upon exercise of thisWarrant, determined as herein provided, setting forth in reasonable detail thefacts requiring such adjustment, including a statement of the number ofadditional shares of Common Stock, if any, and such other facts as shall benecessary to show the reason for and the manner of computing such adjustment.Each such officer’s certificate shall be forwarded to the Holder in the mannerprovided in Section 13 hereof. 9. NOTICES TO WARRANT HOLDERS. So long as this Warrant shall beoutstanding, (a) if the Company shall pay any dividend or make any distributionupon Common Stock, or (b) if the Company shall offer to the holders of CommonStock for subscription or purchase by them any share of any class or any otherrights, or (c) if any capital reorganization of the Company, reclassification ofthe capital stock of the Company, consolidation or merger of the Company with orinto another entity, tender offer transaction for the Company’s Common Stock,sale, lease or transfer of all or substantially all of the property and assetsof the Company, or voluntary or involuntary dissolution, liquidation or windingup of the Company shall be effected, or (d) if the Company shall file aregistration statement under the Securities Act, on any form other than on FormS-4 or S-8 or any successor form, then in any such case, the Company shall causeto be mailed by certified mail to the Holder, at least ten (10) days prior tothe date specified in clauses (a), (b), (c) or (d), as the case may be, of thisSection 9 a notice containing a brief description of the proposed action andstating the date on which (i) a record is to be taken for the purpose of suchdividend, distribution or rights, or (ii) such reclassification, reorganization,consolidation, merger, tender offer transaction, conveyance, lease, dissolution,liquidation or winding up is to take place and the date, if any is to be fixed,as of which the holders of Common Stock or other securities shall receive cashor other property deliverable upon such reclassification, reorganization,consolidation, merger, conveyance, dissolution, liquidation or winding up, or(iii) such registration statement is to be filed with the SEC. 10. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of anyreclassification, capital reorganization or other change of outstanding sharesof Common Stock of the Company, or in case of any consolidation or merger of theCompany with or into another corporation (other than a merger with a subsidiaryin which merger the Company is the continuing or surviving corporation and whichdoes not result in any reclassification, capital reorganization or other changeof outstanding shares of Common Stock of the class issuable upon exercise ofthis Warrant) or in case of any sale, lease or conveyance of all orsubstantially all of the assets of the Company, the Company shall, as acondition precedent to such transaction, cause effective provisions to be madeso that (i) the Holder shall have the right thereafter by exercising thisWarrant, to purchase the kind and amount of shares of stock and other securitiesand property receivable upon such reclassification, capital reorganization andother change, consolidation, merger, sale or conveyance by a holder of thenumber of shares of Common Stock which could have been purchased upon exerciseof this Warrant immediately prior to such reclassification, change,consolidation, merger, sale or conveyance, and (ii) the successor or acquiringentity shall expressly assume the due and punctual observance and performance ofeach covenant and condition of this Warrant to be performed and observed by theCompany and all obligations and liabilities hereunder (including but not limitedto the provisions of Section 6 regarding the increase in – 8 -the number of Warrant Shares potentially issuable hereunder). Any such provisionshall include provision for adjustments which shall be as nearly equivalent aspossible to the adjustments provided for in this Warrant. The foregoingprovisions of this Section 10 shall similarly apply to successivereclassifications, capital reorganizations and changes of shares of Common Stockand to successive consolidations, mergers, sales or conveyances. In the eventthat in connection with any such capital reorganization or reclassification,consolidation, merger, sale or conveyance, additional shares of Common Stockshall be issued in exchange, conversion, substitution or payment, in whole inpart, for a security of the Company other than Common Stock, any such issueshall be treated as an issuance of Common Stock covered by the provisions ofSection 6 of this Warrant. 11. TRANSFER TO COMPLY WITH THE SECURITIES ACT. This Warrant, theWarrant Shares or any other security issued or issuable upon the exercise ofthis Warrant may not be sold or otherwise disposed of except as follows: (a) to a person who, in the opinion of counsel for theCompany, is a person to whom this Warrant or Warrant Shares may legally betransferred without registration and without the delivery of a currentprospectus under the Securities Act with respect thereto and then only againstreceipt by the Company of an agreement of such person to comply with theprovisions of this Section 11 with respect to any resale or other disposition ofsuch securities, which agreement shall be satisfactory in form and substance tothe Company and its counsel; or (b) to any person upon delivery of a prospectus then meetingthe requirements of the Securities Act relating to such securities and theoffering thereof for such sale or disposition. 12. GOVERNING LAW; JURISDICTION. The corporate laws of the State of NewYork shall govern all issues concerning the relative rights of the Company andits stockholders. All issues concerning the construction, validity, enforcementand interpretation of this Warrant shall be governed by and construed inaccordance with the internal laws of the State of New York without giving effectto the principles of conflicts of law thereof. The parties hereto agree thatvenue in any and all actions and proceedings related to the subject matter ofthis Warrant shall be in the state and federal courts in and for New York, NewYork, which courts shall have exclusive jurisdiction for such purpose, and theparties hereto irrevocably submit to the exclusive jurisdiction of such courtsand irrevocably waive the defense of an inconvenient forum to the maintenance ofany such action or proceeding. Service of process may be made in any mannerrecognized by such courts. This Warrant and any term hereof may be changed,waived, discharged or terminated only by an instrument in writing signed by theparty against which enforcement of the change, waiver, discharge or terminationis sought. 13. NOTICES. Except as provided in Section 7(b) hereof, any and allnotices or other communications or deliveries required or permitted to beprovided hereunder shall be in writing and shall be deemed given and effectiveon the earliest of (a) the date of transmission, if such notice or communicationis delivered via facsimile at the facsimile telephone number specified in thisSection prior to 6:30 p.m. (New York City time) on a Business Day, (b) theBusiness Day after the date of transmission, if such notice or communication isdelivered via facsimile at the facsimile telephone number specified in thisAgreement later than 6:30 p.m. (New York City time) on any date and earlier than11:59 p.m. (New York City time) on such date, (c) the Business Day following thedate of mailing, if sent by nationally recognized overnight courier service, or(d) upon actual receipt by the party to whom such notice is required to begiven. The address for such notices and communications shall be as follows: – 9 – If to the Company: StarMed Group, Inc. 2029 Century Park East, Suite 1112 Los Angeles, California 90067 Attn: Herman H. Rappaport Facsimile No.: (310) 551-2724 With a copy to: Steven Weinberger, Esq. Schneider Weinberger LLP 2200 Corporate Blvd., N.W., Suite 210 Boca Raton, Florida 33431-7307 Facsimile No.: (561) 362-9612 If to the Holder: To the Address Set Forth In the Records of the Company With copies to: Joseph Stevens & Company, Inc. 59 Maiden Lane New York, N.Y. 10038 Facsimile No.: (212) 361-3333 Attn: Joseph Sorbara 14. PAYMENT OF TAXES. The Company will pay the cost of all applicabledocumentary stamp taxes, if any, attributable to the issuance of shares ofCommon Stock underlying this Warrant upon exercise of this Warrant; provided,however, that the Company shall not be required to pay any tax which may bepayable in respect of any transfer involved in the registration of anycertificate for shares of Common Stock underlying this Warrant in a name otherthat of the Holder. The Holder is responsible for all other tax liability thatmay arise as a result of holding or transferring this Warrant or receivingshares of Common Stock underlying this Warrant upon exercise hereof. 15. INCONSISTENCIES. To the extent there are any inconsistenciesbetween the terms and provisions of this Warrant and the terms and provisions ofthe Subscription Agreement or the Memorandum, the terms and provisions of thisWarrant shall govern and be controlling. IN WITNESS WHEREOF, this Warrant has been duly executed as of ________. STARMED GROUP, INC. By: ________________________________ Name: Herman Rappaport, President Address: 2029 Century Park East, Suite 1112 Los Angeles, California 90067 – 10 – EXHIBIT A FORM OF EXERCISE NOTICE [To be executed only upon exercise of Warrant]To STARMED GROUP, INC..: The undersigned registered holder of the within Warrant herebyirrevocably exercises the Warrant pursuant to Section 2 of the Warrant withrespect to __________(1) shares of the Common Stock, at an exercise price pershare of Common Stock of $____, which the holder would be entitled to receiveupon the cash exercise hereof, and requests that the certificates for the sharesbe issued in the name of, and delivered to, whose address is:Dated: _______________ ________________________________________ Print or Type Name ________________________________________ (Signature must conform in all respects to name of holder as specified on the face of Warrant) ________________________________________ (Street Address) ________________________________________ (City) (State) (Zip Code)__________________(1) Insert here the number of shares called for on the face of this Warrant (or,in the case of a partial exercise, the portion thereof as to which this Warrantis being exercised), in either case without making any adjustment of shares ofCommon Stock or any other stock or other securities or property or cash which,pursuant to the adjustment provisions of this Warrant, may be delivered uponexercise. In the case of a partial exercise, a new Warrant or Warrants will beissued and delivered, representing the unconverted portion of the Warrant, tothe holder surrendering the Warrant. – 11 – PURCHASE FORM ————- Dated: _______________, 20_____ The undersigned hereby irrevocably elects to exercise the withinWarrant to the extent of purchasing _____ shares of Common Stock and herebymakes payment of $___________ in payment of the stated exercise price thereof.Schedule 1 attached hereto specifies the Warrant Shares from which the shares ofCommon Stock are being purchased and the Warrant Exercise Price(s) for suchshares. ________________________________________ – 12 – INSTRUCTIONS FOR REGISTRATION OF STOCK ————————————–Name:___________________________________________ (Please typewrite or print in block letters)Signature:________________________________________Social Security or Employer Identification No.:_________________________ – 13 – ASSIGNMENT FORM ————— FOR VALUE RECEIVED, _____________________________________ hereby sells,assigns and transfer unto:Name:_______________________________________________ (Please typewrite or print in block letters)Address:_____________________________________________Social Security or Employer Identification No.:__________________________The right to purchase Common Stock represented by this Warrant to the extent ofshares as to which such right is exercisable and does hereby irrevocablyconstitute and appoint _________ as attorney to transfer the same on the booksof the Company with full power of substitution. Dated: _________________, 200_. Signature:___________________________Signature Guaranteed:____________________________________ – 14 –