exv4w2



 





Exhibit 4.2




	 	 	 
	Certificate
No.          
	 	          Rights







NEITHER THIS RIGHTS CERTIFICATE NOR THE RIGHTS REPRESENTED HEREBY ARE
TRANSFERABLE, ASSIGNABLE, SUBJECT TO PLEDGE OR OTHERWISE ALIENABLE. THE
REGISTERED HOLDER HEREOF WILL FORFEIT THE NUMBER OF RIGHTS EQUAL TO THE NUMBER
OF SHARES OF COMMON STOCK, PAR VALUE $.001 PER SHARE (“COMMON
STOCK”), OF LIPID
SCIENCES, INC., A DELAWARE CORPORATION (FORMERLY KNOWN AS NZ CORPORATION, AN
ARIZONA CORPORATION) (THE “COMPANY”), TO WHICH SUCH RIGHTS RELATE SOLD OR
OTHERWISE TRANSFERRED BY THE HOLDER DURING THE PERIOD COMMENCING ON NOVEMBER
28, 2001 AND ENDING ON (AND INCLUDING) NOVEMBER 29, 2003 AND SUCH RIGHTS WILL
BE NULL AND VOID AND HAVE NO FURTHER FORCE OR EFFECT. ADDITIONAL SHARES OF
COMMON STOCK, IF ANY, WILL BE ISSUED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SPECIFIED BELOW AS SOON AS PRACTICABLE AFTER NOVEMBER 29, 2003 TO
THOSE HOLDERS OF RIGHTS WHO HAVE NOT OTHERWISE FORFEITED SUCH RIGHTS.



RIGHTS CERTIFICATE



LIPID SCIENCES, INC.




          This certifies that    is the registered holder of
the number of Rights set forth above, each of which entitles the registered
holder thereof, subject to the terms and conditions set forth in this Rights
Certificate and in the Agreement and Plan of Merger dated July 9, 2001 by and
between Lipid Sciences, Inc., a Delaware corporation (formerly known as NZ
Corporation, an Arizona corporation) (the “Company”), and Lipid Sciences, Inc.,
a privately held company (“Pre-Merger Lipid”), (the “Merger Agreement”), the
Joint Proxy Statement/Prospectus of the Company and Pre-Merger Lipid dated
November 8, 2001 (the “Original Joint Proxy Statement/Prospectus”) and the
Prospectus Supplement of the Company and Pre-Merger Lipid dated March 6, 2002
(together with the Original Joint Proxy Statement/Prospectus, being referred to
herein, collectively, as the “Joint Proxy Statement/Prospectus”), to qualify to
receive additional shares of Common Stock, par value $.001 per share (“Common
Stock”), of the Company. The number of Rights evidenced by this Rights
Certificate set forth above, shall be subject to adjustment in certain events
as provided below and in the Merger Agreement and the Joint Proxy
Statement/Prospectus.



          This Rights Certificate is subject to all of the definitions, terms and
conditions of the Merger Agreement and the Joint Proxy Statement/Prospectus,
which definitions, terms and conditions are hereby incorporated herein by
reference, unless otherwise specified herein. Copies of the Merger Agreement
and Joint Proxy Statement/Prospectus are on file at the principal office of the
Company and are available from the Company upon written request.



          In order to qualify to receive additional shares of Common Stock
(“Additional Merger Shares”), if any, the registered holder hereof must have
been a direct registered holder of Common Stock as of November 28, 2001
(“Pre-Merger Common Stock”), or must have taken whatever action necessary to
become a direct registered owner of Pre-Merger Common Stock on or before April
30, 2002, as provided in the Merger Agreement and Joint Proxy
Statement/Prospectus. The registered holder hereof shall forfeit the number of
Rights equal to the number of shares of Pre-Merger Common Stock sold or
otherwise transferred by such holder during the period commencing on November 28, 2001 and ending on (and
including) November 29, 2003 (the “Holding Period”).



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          Additional Merger Shares, if any, shall be issued to the holders of Rights
who have not otherwise forfeited such Rights as a result of selling or
otherwise transferring their Pre-Merger Common Stock during the Holding Period
if, at no time during the Holding Period, does:


          (i)     the Closing Price (as defined below) per share of the Common
Stock equal or exceed $12.00 per share (subject to adjustment as provided
below) (“Minimum Price”) over any period of 20 consecutive trading days,
and



          (ii)     the total Volume (as defined below) of the shares of Common
Stock trading at the Minimum Price or greater during such 20 day equals
or exceeds an aggregated 1,500,000 shares (“Minimum Volume”).




          The number of Additional Merger Shares, if any, to be issued to the holder
of the Rights shall be calculated as follows: each Right (other than a
forfeited Right) shall entitle the holder thereof to the number of Additional
Merger Shares equal to (a) the difference between (1) the Minimum Price and (2)
the average of the highest consecutive 100 Closing Prices per share of Common
Stock during the one-year period immediately prior to the second anniversary of
the Effective Date (“Hundred Day Average Price”), divided by (b) the Hundred
Day Average Price.



          No fractional Additional Merger Shares shall be issued. In lieu thereof,
any fractional shares shall be rounded up to the nearest whole share of Common
Stock. Notwithstanding the foregoing, each Right will entitle the holder
thereby to a maximum of one Additional Merger Share, subject to adjustment as
provided below.



          Additional Merger Shares, if any, shall be issued to the holders of record
of the Rights at the close of business, Eastern Standard Time, on November 29,
2003 in accordance with the records of the Company as promptly as practicable
after November 29, 2003 to those holders of Rights Certificates who have not
otherwise forfeited their Rights.



          The amount of Additional Merger Shares to be issued will be computed by
the Company’s independent public accountants, and the determination by such
independent public accountants shall be final and binding on the Company and
the holders of such rights.



          For purposes of this Rights Certificate, “Closing Price” per share of
Common Stock on a Trading Day (as hereinafter defined) shall mean the last
reported sale price per share of Common Stock regular way or, in case no such
reported sale takes place on such Trading Day, the average of the closing bid
and asked prices regular way for such Common Stock for such Trading Day, in
either case on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, but is traded in the
over-the-counter market, the closing sale price per share of such Common Stock
or, in case no sale is publicly reported, the average of the closing bid and
asked quotations for the Common Stock, as reported on The Nasdaq Stock Market
(“Nasdaq”) or any comparable system or, if such Common Stock is not quoted on
Nasdaq or a comparable system, the closing sale price of Common Stock or, in
case no sale is publicly reported, the average of the closing bid and asked
prices per share, as furnished by two members of the National Association of
Securities Dealers, Inc. who make a market in such Common Stock selected from time to time by the Company for that purpose.
In addition, for purposes of this Rights Certificate, a “Trading Day” shall
mean, if such Common Stock is listed or admitted to trading on any national
securities exchange, a business day during which such exchange was open for
trading and at least one trade of Common Stock was effected on such exchange on
such business day, or if such Common Stock is not listed or admitted to trading
on any national securities exchange but is traded in the over-the-counter
market, a business day during which the over-the-counter market was open for
trading and at least one “eligible dealer” quoted both a bid and asked price
for the Common Stock. An “eligible dealer” for any day shall include any
broker-dealer who quoted both a bid and asked price for such day, but shall not
include any broker-dealer who quoted only a bid or only an asked price for such
day. For purposes of this Rights Certificate, “Volume” shall mean the volume
reported on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, but is traded in the
over-the-counter market, the volume as reported by Nasdaq or any comparable
system; provided that if any such reported volume includes both “buy side” and
“sell-side” volume, then Volume for purposes of this Rights Certificate shall
only include “buy side” volume.



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          The number of Additional Merger Shares will be subject to adjustment from
time to time during the Holding Period as hereinafter set forth:


          (i)     If the number of outstanding shares of the Common Stock is
increased by a stock dividend on the Common Stock payable in shares of
Common Stock or by a split-up, recapitalization or reclassification of
            shares of Common Stock or other similar event, then, on the effective
date thereof, the number of shares of Common Stock that may be issued
pursuant to the Right shall be increased in proportion to such increase
in outstanding shares.



          (ii)     If the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares
of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock that may be issued pursuant
to the Right shall be decreased in proportion to such decrease in
outstanding shares.




Whenever the number of shares of Common Stock that may be issued pursuant to
the Rights is adjusted, as provided herein, the Minimum Price and the Volume
shall be adjusted in similar proportion (to the nearest cent or share) so as to
maintain the relative entitlements of the Rights before and after the effective
date of the adjusting event.



          In case of any reclassification or reorganization of the outstanding
shares of Common Stock, other than a change covered by the foregoing provisions
hereof, or which solely affects the par value of such shares of Common Stock,
or in the case of any merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification
or reorganization of the outstanding shares of the Common Stock), or in the
case of any sale or conveyance to another corporation or entity of the property
of the Company as an entirety or substantially as an entirety in connection
with which the Company is dissolved, the holder of the Right shall be entitled
thereafter until the expiration of the Holding Period to receive the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a holder of the number of shares of the
Company’s Common Stock that would be issuable pursuant to the Right immediately
prior to such event; and if any reclassification also results in a change in
shares of the Company’s Common Stock covered by two paragraphs immediately
preceding this paragraph, then such adjustment shall be made pursuant to such
sections. The provisions of this paragraph shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.



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     The registered holder of this Rights Certificate, as such, shall not be
entitled to vote or receive dividends or be deemed for any purpose the holder
of Additional Merger Shares or of any other securities which may at any time be
issuable hereunder, nor shall anything contained herein or in the Merger
Agreement or the Joint Proxy Statement/Prospectus be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as expressly provided herein or in the Merger Agreement or
the Joint Proxy Statement/Prospectus), or to receive dividends or subscription
rights or otherwise, until Additional Merger Shares, if any, or other
securities, if any, become issuable to the holder hereof in accordance with the
terms hereof and the terms of the Merger Agreement and the Joint Proxy
Statement/Prospectus.



     The registered holder of this Rights Certificate shall surrender this
Rights Certificate to the Company at its principal office upon any sale,
transfer, assignment, pledge or other alienation of the Pre-Merger Common Stock
to which the Rights represented hereby relate. Upon such surrender, the holder
will be entitled to receive another Rights Certificate evidencing Rights
relating to Pre-Merger Common Stock not so sold, transferred, assigned, pledged
or otherwise alienated. The Rights relating to Pre-Merger Common Stock sold,
transferred, assigned, pledged or otherwise alienated shall be forfeited by the
registered holder and will be null and void and have no further force or effect
notwithstanding any failure by the registered holder to surrender to the
Company this Rights Certificate.



     This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been signed by the proper officers of the Company.



     WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.



Dated as of ______________, 200_.

ATTEST:



	 	 	 	 	 	 	 
	By:

	 	 
	 	By:
	 	 
	

	 	
 
	 	 	 	
 
	

	 	Phillip C. Radlick, PhD
	 	 	 	Barry D. Michaels
	

	 	President and CEO and Director
	 	 	 	Chief Financial Officer










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