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Exhibit 4.2
THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, AND NO
INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE
TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH
TRANSACTION INVOLVING
SAID SECURITIES, (B) THE COMPANY RECEIVES AN OPINION OF LEGAL
COUNSEL FOR THE
HOLDER OF THE SECURITIES SATISFACTORY TO THE COMPANY STATING THAT
SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION OR (C) THE COMPANY
OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
No. W-___
WARRANT TO PURCHASE COMMON STOCK
ISSUED: __________,
2005
Void After _________, 2015
LIGHT SCIENCES ONCOLOGY, INC.
WARRANT
THIS
IS TO CERTIFY that, for value received and subject to these terms
and
conditions, _______________, or such person to whom this Warrant is
transferred
(the "HOLDER"), is entitled to exercise this Warrant to purchase
________ fully
paid and nonassessable shares of Light Sciences Oncology, Inc., a
Washington
corporation (the "COMPANY"), $0.001 par value per share of common
stock (the
"WARRANT STOCK") at a price per share of [$6.25] (the "EXERCISE
PRICE") (such
number of shares, type of security and the Exercise Price being
subject to
adjustment as provided below).
1. METHOD OF
EXERCISE
1.1
CASH EXERCISE
RIGHT
This
Warrant may be exercised by the Holder, at any time after the date
of
issuance, but not later than _____________, 2015 (the "EXERCISE
PERIOD"), in
whole or in part, by delivering to the Company at 34931 SE Douglas
Street, Suite
200, Snoqualmie, WA 98065 (or such other office or agency of the
Company as it
may designate by notice in writing to the Holder at the address of
the Holder
appearing on the books of the Company) (a) this Warrant
certificate, (b) a
certified or cashier's check payable to the Company, or canceled
indebtedness of
the Company to the Holder, in the amount of the Exercise Price
multiplied by the
number of shares for which this Warrant is being exercised (the
"PURCHASE
PRICE"), and (c) the Notice of Cash Exercise attached as EXHIBIT A
duly
completed and executed by the Holder. Upon exercise, the Holder
shall be
entitled to receive from the Company a stock certificate in proper
form
representing the number of shares of Warrant Stock purchased.
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1.2
NET ISSUANCE RIGHT
Notwithstanding the payment provisions set forth above, the Holder
may
elect to convert all or a portion of this Warrant into shares of
Warrant Stock
by surrendering this Warrant at the office of the Company at the
address set
forth in Section 1.1 and delivering to the Company the Notice of
Net Issuance
Exercise attached as EXHIBIT B duly completed and executed by the
Holder, in
which case the Company shall issue to the Holder the number of
shares of Warrant
Stock of the Company equal to the result obtained by (a)
subtracting B from A,
(b) multiplying the difference by C, and (c) dividing the product
by A as set
forth in the following equation:
X = (A - B) x C where:
A
X = the
number of shares of Warrant Stock issuable upon net issuance
exercise
pursuant to the provisions of this Section 1.2.
A = the
Fair Market Value (as defined below) of one share of Warrant Stock
on
the
date of net issuance exercise.
B = the
Exercise Price for one share of Warrant Stock under this Warrant
(as
adjusted from time to time pursuant to Section 4 hereof).
C = the
number of shares of Warrant Stock as to which this Warrant is
exercisable pursuant to the provisions of this Warrant or, if only
a
portion of this Warrant is being exercised, the portion of this
Warrant
being exercised as set forth in the Notice of Net Issuance
Exercise.
If
the foregoing calculation results in a negative number, then no
shares
of Warrant Stock shall be issued upon net issuance exercise
pursuant to this
Section 1.2.
"FAIR MARKET VALUE" of a share of Warrant Stock shall mean:
(a)
if the net issuance exercise is in connection with a
transaction
specified in Section 4.1, the value of the consideration
(determined, in the
case of noncash consideration, in good faith by the Company's Board
of
Directors) to be received pursuant to such transaction by the
holder of one
share of Warrant Stock;
(b)
if the net issuance exercise is in connection with the initial
public
offering of the Company's common stock, $0.001 par value per share
(the "COMMON
STOCK"), the initial public offering price (before deducting
commission,
discounts or expenses) at which the Common Stock is sold in such
offering;
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(c)
if the net issuance exercise is after the occurrence of the
initial
public offering of the Company's Common Stock:
(1) if the Company's Common Stock is traded on an exchange or
is
quoted on the Nasdaq National Market, the average of the closing or
last sale
price reported for the 5 trading days immediately preceding the
date of net
issuance exercise;
(2) if the Company's Common Stock is not traded on an exchange or
on
the Nasdaq National Market, but is traded in the over-the-counter
market, the
average of the closing bid and asked prices reported for the 5
trading days
immediately preceding the date of net issuance exercise; and
(d)
In all other cases, the fair value as determined in good faith by
the
Company's Board of Directors.
Upon
net issuance exercise in accordance with this Section 1.2, the
Holder
shall be entitled to receive from the Company a stock certificate
in proper form
representing the number of shares of Warrant Stock determined in
accordance with
the foregoing.
2. DELIVERY OF
STOCK CERTIFICATES; NO FRACTIONAL SHARES
(a)
Within 10 days after the payment of the Purchase Price following
the
exercise of this Warrant (in whole or in part) or after notice of
net issuance
exercise and compliance with Section 1.2, the Company at its
expense shall issue
in the name of and deliver to the Holder (i) a certificate or
certificates for
the number of fully paid and nonassessable shares of Warrant Stock
to which the
Holder shall be entitled upon such exercise, and (ii) a new Warrant
of like
tenor to purchase up to that number of shares of Warrant Stock, if
any, as to
which this Warrant has not been exercised if this Warrant has not
expired. The
Holder shall for all purposes be deemed to have become the holder
of record of
such shares of Warrant Stock on the date this Warrant was exercised
(the date
the Holder has fully complied with the requirements of Section 1.1
or 1.2),
irrespective of the date of delivery of the certificate or
certificates
representing the Warrant Stock; provided that, if the date such
exercise is made
is a date when the stock transfer books of the Company are closed,
such person
shall be deemed to have become the holder of record of such shares
of Warrant
Stock at the close of business on the next succeeding date on which
the stock
transfer books are open.
(b)
No fractional shares shall be issued upon the exercise of this
Warrant.
In lieu of fractional shares, the Company shall pay the Holder a
sum in cash
equal to such fraction multiplied by the Exercise Price.
3. COVENANTS AS
TO WARRANT STOCK; REPRESENTATIONS OF THE COMPANY
(a)
The Company covenants that at all times during the Exercise
Period
there shall be reserved for issuance and delivery upon exercise of
this Warrant
such number of shares of Warrant Stock as is necessary for exercise
in full of
this Warrant and, from time to time, it will take all steps
necessary to amend
its Articles of Incorporation to provide
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sufficient reserves of shares of Warrant Stock. All shares of
Warrant Stock
issued pursuant to the exercise of this Warrant will, upon their
issuance, be
validly issued and outstanding, fully paid and nonassessable, free
and clear of
all liens and other encumbrances or restrictions on sale and free
and clear of
all preemptive rights, except restrictions arising (i) under
federal and state
securities laws, (ii) not by or through the Company, or (iii) by
agreement
between the Company and the Holder or its successors.
(b)
The Company hereby represents and warrants to the Holder as of the
date
of this Warrant: (i) the Company is a corporation duly incorporated
and validly
existing under the laws of the State of Washington; (ii) the
Company has full
power and authority to execute and deliver this Warrant and to
perform its
obligations under and consummate the transactions contemplated by
this Warrant;
(iii) upon the execution of this Warrant by the Company and
delivery of this
Warrant, this Warrant shall have been duly and validly executed and
delivered by
the Company and shall constitute the legal, valid and binding
obligation of the
Company, enforceable against the Company in accordance with its
terms; and (iv)
the Warrant Stock, if issued, will be, duly authorized, validly
issued, fully
paid and nonassessable shares of the capital stock of the
Company.
4. ADJUSTMENTS;
TERMINATION OF WARRANT UPON CERTAIN EVENTS
4.1
EFFECT OF
REORGANIZATION
(A) REORGANIZATION--NO
CHANGE IN CONTROL
Upon a merger, consolidation, share exchange, acquisition of all
or
substantially all of the property or stock, liquidation or other
reorganization
of the Company (collectively, a "REORGANIZATION") during the
Exercise Period, as
a result of which the shareholders of the Company receive cash,
stock or other
property in exchange for their shares of Warrant Stock and the
holders of the
Company's voting equity securities immediately prior to such
Reo
