EX-4.2 E-2 FORM OF WARRANT FOR COMMON SHRS OF CMPY



 



EXHIBIT 4.2



THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH
REGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS
NOT REQUIRED.




	 	 	 
	Date:	 	
Warrant to Purchase
	August 8, 2003	 	
***______***
	 	 	
Shares





DATATRAK International, Inc.


(Incorporated under the laws of the State of Ohio)


REPRESENTATIVE’S WARRANT FOR THE PURCHASE OF SHARES OF


THE NO PAR VALUE COMMON SHARES [the Warrant will be for the same Securities

sold in the Placement]


Warrant Price: $ 4.80 per share, subject to adjustment as provided below.


     THIS IS TO CERTIFY that, for value received, _______________________
(“Placement Agent”) and its assigns (collectively, the “Holder”), is entitled
to purchase, subject to the terms and conditions hereinafter set forth, up to
***______*** shares of the no par value common shares (“Common Shares”) of
DATATRAK International, Inc., an Ohio corporation (the “Company”), and to
receive certificate(s) for the Common Shares so purchased.


     1. Exercise Period and Vesting. The exercise period is the period
beginning on the date of this Warrant (the “Issuance Date”) and ending at 5:00
p.m., Cleveland, Ohio time, on August 8, 2008 (the “Exercise Period”). This
Warrant is vested in full as of the Issuance Date and is immediately
exercisable by Holder. This Warrant will terminate automatically and
immediately upon the expiration of the Exercise Period.


     2. Exercise of Warrant. This Warrant may be exercised, in whole or in
part, at any time and from time to time during the Exercise Period. Such
exercise shall be accomplished by tender to the Company of the purchase price
set forth above as the warrant price (the “Warrant Price”), in cash, by wire
transfer or by certified check or bank cashier’s check, payable to the order of
the Company, together with presentation and surrender to the Company of this
Warrant


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with an executed subscription in substantially the form attached hereto as
Exhibit A (the “Subscription”). Upon receipt of the foregoing, the Company will
deliver to the Holder, as promptly as possible, a certificate or certificates
representing the shares of Common Shares so purchased, registered in the name
of the Holder or its transferee (as permitted under Section 3 below). With
respect to any exercise of this Warrant, the Holder will for all purposes be
deemed to have become the holder of record of the number of shares of Common
Shares purchased hereunder on the date this Warrant, a properly executed
Subscription and payment of the Warrant Price is received by the Company (the
“Exercise Date”), irrespective of the date of delivery of the certificate
evidencing such shares, except that, if the date of such receipt is a date on
which the stock transfer books of the Company are closed, such person will be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open. Fractional
shares of Common Shares will not be issued upon the exercise of this Warrant.
In lieu of any fractional shares that would have been issued but for the
immediately preceding sentence, the Holder will be entitled to receive cash
equal to the current market price of such fraction of a share of Common Shares
on the trading day immediately preceding the Exercise Date. In the event this
Warrant is exercised in part, the Company shall issue a new Warrant to the
Holder covering the aggregate number of shares of Common Shares as to which
this Warrant remains exercisable for.



     3. Transferability and Exchange.


     This Warrant, and the Common Shares issuable upon the exercise hereof, may
not be sold, transferred, pledged or hypothecated unless the Company shall have
been provided with an opinion of counsel, or other evidence reasonably
satisfactory to it, that such transfer is not in violation of the Securities
Act, and any applicable state securities laws. Subject to the satisfaction of
the aforesaid condition, this Warrant and the underlying shares of Common
Shares shall be transferable from time to time by the Holder upon written
notice to the Company (However, Placement Agent agrees not to transfer the
warrant to any competitor of the Company). If this Warrant is transferred, in
whole or in part, the Company shall, upon surrender of this Warrant to the
Company, deliver to each transferee a Warrant evidencing the rights of such
transferee to purchase the number of shares of Common Shares that such
transferee is entitled to purchase pursuant to such transfer. The Company may
place a legend similar to the legend at the top of this Warrant on any
replacement Warrant and on each certificate representing shares issuable upon
exercise of this Warrant or any replacement Warrants. Only a registered Holder
may enforce the provisions of this Warrant against the Company. A transferee
of the original registered Holder becomes a registered Holder only upon
delivery to the Company of the original Warrant and an original Assignment,
substantially in the form set forth in Exhibit B attached hereto.


     This Warrant is exchangeable upon its surrender by the Holder to the
Company for new Warrants of like tenor and date representing in the aggregate
the right to purchase the number of shares purchasable hereunder, each of such
new Warrants to represent the right to purchase such number of shares as may be
designated by the Holder at the time of such surrender.


     4. Adjustments to Warrant Price and Number of Shares Subject to Warrant.
The Warrant Price and the number of shares of Common Shares purchasable upon
the exercise of this Warrant are subject to adjustment from time to time upon
the occurrence of any of the


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events specified in this Section 4. For the purpose of this Section 4,
“Common Shares” means shares now or hereafter authorized of any class of common
shares of the Company and any other stock of the Company, however designated,
that has the right to participate in any distribution of the assets or earnings
of the Company without limit as to per share amount (excluding, and subject to
any prior rights of, any class or series of preferred stock).



     In case the Company shall (i) pay a dividend or make a distribution in
shares of Common Shares or other securities, (ii) subdivide its outstanding
shares of Common Shares into a greater number of shares, (iii) combine its
outstanding shares of Common Shares into a smaller number of shares, or (iv)
issue by reclassification of its shares of Common Shares other securities of
the Company, then the Warrant Price in effect at the time of the record date
for such dividend or on the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Shares (or such other securities other than Common Shares)
of the Company, at the same aggregate Warrant Price, that, if such Warrant had
been exercised immediately prior to such date, the Holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
distribution, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.


     In case the Company shall fix a record date for the making of a
distribution to all holders of Common Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
surviving corporation) of cash, evidences of indebtedness or assets, or
subscription rights or warrants, the Warrant Price to be in effect after such
record date shall be determined by multiplying the Warrant Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price per share of Common Shares on such record
date, less the amount of cash so to be distributed (or the fair market value
(as determined in good faith by, and reflected in a formal resolution of, the
Board of Directors of the Company) of the portion of the assets or evidences of
indebtedness so to be distributed, or of such subscription rights or warrants,
applicable to one share of Common Shares, and the denominator of which shall be
such current market price per share of Common Shares. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Warrant Price shall again be adjusted to
be the Warrant Price which would then be in effect if such record date had not
been fixed.


     For the purpose of any computation under any subsection of this Section 4,
the “current market price” per share of Common Shares on any date shall be the
per share price of the Common Shares on the trading day immediately prior to
the event requiring an adjustment hereunder and shall be: (i) if the principal
trading market for such securities is a national or regional securities
exchange, the closing price on such exchange on such day; or (ii) if sales
prices for shares of Common Shares are reported by the Nasdaq National Market
System or Small Cap Market System (or a similar system then in use), the last
reported sales price so reported on such day; or (iii) if neither (i) nor (ii)
above are applicable, and if bid and ask prices for shares of Common Shares are
reported in the over-the-counter market by Nasdaq (or, if not so reported, by
the National Quotation Bureau), the average of the high bid and low ask prices
so reported on such day. Notwithstanding the foregoing, if there is no
reported closing price, last reported sales price, or bid and ask prices, as
the case may be, for the day in question, then the


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current market price shall be determined as of the latest date prior to
such day for which such closing price, last reported sales price, or bid and
ask prices, as the case may be, are available, unless such securities have not
been traded on an exchange or in the over-the-counter market for 30 or more
days immediately prior to the day in question, in which case the current market
price shall be determined in good faith by, and reflected in a formal
resolution of, the Board of Directors of the Company.



     Notwithstanding any provision herein to the contrary, no adjustment in the
Warrant Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Warrant Price; provided, however,
that any adjustments which by reason of this subsection (d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4 shall be made to the nearest
cent or the nearest one-hundredth of a share, as the case may be.


     In the event that at any time, as a result of an adjustment made pursuant
to subsection (a) above, the Holder of any Warrant thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than shares of Common Shares, thereafter the number of such other shares so
receivable upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Common Shares contained in this
Section 4, and the other provisions of this Warrant shall apply on like terms
to any such other shares.


     If the Company merges or consolidates into or with another corporation or
entity, or if another corporation or entity merges into or with the Company
(excluding such a merger in which the Company is the surviving or continuing
corporation and which does not result in any reclassification, conversion,
exchange, or cancellation of the outstanding shares of Common Shares), or if
all or substantially all of the assets or business of the Company are sold or
transferred to another corporation, entity, or person, then, as a condition to
such consolidation, merger, or sale (a “Transaction”), lawful and adequate
provision shall be made whereby the Holder shall have the right from and after
the Transaction to receive, upon exercise of this Warrant and upon the terms
and conditions specified herein and in lieu of the shares of the Common Shares
that would have been issuable if this Warrant had been exercised immediately
before the Transaction, such shares of stock, securities, or assets as the
Holder would have owned immediately after the Transaction if the Holder had
exercised this Warrant immediately before the effective date of the
Transaction.


     5. Registration Rights. The Company hereby grants to Holder, with respect
to the shares of Common Shares underlying this Warrant, registration rights
identical to those that are granted to Purchasers in the Placement (as such
terms are defined in that certain Placement Agency Agreement, dated as of
August 6, 2003, by and between the Company and Placement Agent); it being
specifically agreed and understood that the shares of Common Shares underlying
this Warrant will be included in any registration statement filed by the
Company which includes shares of Common Shares, or shares of Common Shares
underlying any securities, issued to Purchasers in the Placement.


     6. Reservation of Shares. The Company agrees at all times to reserve and
hold available out of its authorized but unissued shares of Common Shares the
number of shares of


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Common Shares issuable upon the full exercise of this Warrant. The
Company further covenants and agrees that all shares of Common Shares that may
be delivered upon the exercise of this Warrant will, upon delivery, be fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the purchase thereof hereunder.



     7. Notices to Holder. Upon any adjustment of the Warrant Price (or number
of shares of Common Shares purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such adjustment. Such notice shall include the
Warrant Price (and/or the number of shares of Common Shares purchasable upon
the exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company’s method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions of this Section 7.


     In the event of (a) any fixing by the Company of a record date with
respect to the holders of any class of securities of the Company for the
purpose of determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire
any shares of capital stock of any class or any other securities or property,
or to receive any other right, (b) any capital reorganization of the Company,
or reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all of the assets or business of the
Company to, or consolidation or merger of the Company with or into, any other
entity or person, or (c) any voluntary or involuntary dissolution or winding up
of the Company, then and in each such event the Company will give the Holder a
written notice specifying, as the case may be (i) the record date for the
purpose of such dividend, distribution, or right, and stating the amount and
character of such dividend, distribution, or right; or (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, conveyance, dissolution, liquidation, or winding up is
to take place and the time, if any is to be fixed, as of which the holders of
record of Common Shares (or such capital stock or securities receivable upon
the exercise of this Warrant) shall be entitled to exchange their shares of
Common Shares (or such other stock securities) for securities or other property
deliverable upon such event. Any such notice shall be given at least 10 days
prior to the earliest date therein specified.


     8. No Rights as a Shareholder. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company, nor to
any other rights whatsoever except the rights herein set forth.


     9. Additional Covenants of the Company. For so long as the Common Shares
are listed for trading on any regional or national securities exchange or
Nasdaq (National Market or Small Cap Market), the Company shall, upon issuance
of any shares for which this Warrant is exercisable, at its expense, promptly
obtain and maintain the listing of such shares. The Company shall also comply
with the reporting requirements of Sections 13 and 15(d) of the Exchange Act
for so long as and to the extent that such requirements apply to the Company.


     The Company shall not, by amendment of its Articles of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the


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terms of this Warrant. Without limiting the generality of the foregoing,
the Company (a) will at all times reserve and keep available, solely for
issuance and delivery upon exercise of this Warrant, shares of Common Shares
issuable from time to time upon exercise of this Warrant, (b) will not increase
the par value of any shares of capital stock receivable upon exercise of this
Warrant above the amount payable therefor upon such exercise, and (c) will take
all such actions as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable stock.



     10. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, the Holder and their respective successors
and permitted assigns.


     11. Notices. The Company agrees to maintain a ledger of the ownership of
this Warrant (the “Ledger”). Any notice hereunder shall be given by registered
or certified mail if to the Company, at its principal executive office and, if
to the Holder, to its address shown in the Ledger of the Company; provided,
however, that the Holder may at any time on three (3) days written notice to
the Company designate or substitute another address where notice is to be
given. Notice shall be deemed given and received after a certified or
registered letter, properly addressed with postage prepaid, is deposited in the
U.S. mail.


     12. Severability. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of
this Warrant.


     13. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Ohio without giving effect to the
principles of choice of laws thereof.


     14. Attorneys’ Fees. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys’ fees in addition to its costs and expenses and any other
available remedy.


     15. Entire Agreement. This Warrant (including the Exhibits attached
hereto) constitutes the entire understanding between the Company and the Holder
with respect to the subject matter hereof, and supersedes all prior
negotiations, discussions, agreements and understandings relating to such
subject matter.


     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of the date first set forth above.



	 	 	 	 	 	 	 
	 	 	DATATRAK INTERNATIONAL, INC
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	
Title:	 	 	 	 
	 	 	 	 	






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Exhibit A


SUBSCRIPTION FORM


     (To be Executed by the Holder to Exercise the Rights To Purchase Common
Shares Evidenced by the Within Warrant)


     The
undersigned hereby irrevocably subscribes for

   
         
 
shares (the
“Shares”) of the Common Shares of DATATRAK International, Inc. (the “Company”)
pursuant to and in accordance with the terms and conditions of the attached
Warrant (the “Warrant”), and hereby makes payment of $ 

   
         
 
therefor ($4.80
per Share) by tendering cash, wire transferring or delivering a certified check
or bank cashier’s check, payable to the order of the Company. The undersigned
requests that a certificate for the Shares be issued in the name of the
undersigned and be delivered to the undersigned at the address stated below.
If the Shares is not all of the shares purchasable pursuant to the Warrant, the
undersigned requests that a new Warrant of like tenor for the balance of the
remaining shares purchasable thereunder be delivered to the undersigned at the
address stated below.


     In connection with the issuance of the Shares, I hereby represent to the
Company that I am acquiring the Shares for my own account for investment and
not with a view to, or for resale in connection with, a distribution of the
shares within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”).


     I understand that because the Shares may not be registered at the time of
exercise of the Warrant under the Securities Act, I must hold such Shares
indefinitely unless the Shares are subsequently registered and qualified under
the Securities Act or is exempt from such registration and qualification. I
shall make no transfer or disposition of the Shares unless (a) such transfer or
disposition can be made without registration under the Securities Act by reason
of a specific exemption from such registration and such qualification, or (b) a
registration statement has been filed pursuant to the Securities Act and has
been declared effective with respect to such disposition.


     In the event the Shares are not registered at the time of exercise of the
Warrant, I agree that each certificate representing the Shares delivered to me
shall bear substantially the same legend as set forth on the front page of the
Warrant.


     I further agree that the Company may place stop orders on the certificates
evidencing the Shares with the transfer agent, if any, to the same effect as
the above legend. The legend and stop transfer notice referred to above shall
be removed only upon my furnishing to the Company of an opinion of counsel
(reasonably satisfactory to the Company) to the effect that such legend may be
removed.



	 	 	 	 	 	 	 
	Date:	 	 	 	Signed:	 	 
	 	 	
	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	Address:
	 	 	 	 	 	







A-1







 


Exhibit B


ASSIGNMENT


     (To be Executed by the Holder to Effect Transfer of the Attached Warrant)
For Value Received _____________________hereby sells, assigns and
transfers to ____________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Shares in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _____________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.




	 	 	 
	Dated:   	 	
Signed:    
	
	 	

	Please print or typewrite	 	
Please insert Social Security
	name and address of	 	
or other Tax Identification
	assignee:	 	
Number of Assignee: