Exhibit 4.2





Ex. 4.2





THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACT OF ANY STATE AND
MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACTS COVERING THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS
WARRANT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACTS.



BIOLARGO, INC.




FORM OF WARRANT TO PURCHASE COMMON STOCK

(One-Year Warrant)




			
	 	 	 
	WARRANT NO. W-XXX
	 	ISSUED: XXXX, 2009






THIS CERTIFIES THAT, for value received, XXXX (the “Holder”), is entitled to
subscribe for and purchase from BIOLARGO, INC., a corporation organized under the laws of the state
of Delaware (the “Company”), subject to Section 1(b) hereof, commencing at the time periods
prescribed herein and ending at 5:00 p.m. California time on June 1, 2010, XXXX shares (the
“Shares”) of common stock, par value, $0.00067, of the Company (the “Common
Stock”). The exercise price for each Share subject to this Warrant (the “Warrant
Price”) is equal to $0.75. The number of Shares and the Warrant Price are subject to adjustment
from time to time as provided in Section 4 of this Warrant.



This Warrant is issued in connection with and as consideration for the Convertible Note due
June 1, 2012 dated the date hereof and issued by the Company in favor of the Holder, which
Convertible Note has been issued pursuant the Holder’s investment in the Company.



1. Method of Exercise; Payment; Issuance of New Warrant.



(a) The purchase right represented by this Warrant may be exercised by the Holder, in whole or
in part, subject to the limitation set forth below, and from time to time, by (i) the surrender of
this Warrant (with a notice of exercise in the form attached hereto as Exhibit A, duly
executed) at the principal office of the Company and (ii) the payment to the Company, by check or
wire transfer of funds to an account specified in writing by the Company, of an amount equal to the
aggregate Warrant Price. The Shares so purchased, representing the aggregate number of shares
specified in the executed Exhibit A, shall be delivered to the Holder within a reasonable
time, not exceeding ten (10) business days, after this Warrant shall have been so exercised. Upon
receipt by the Company of this Warrant at the office of the Company, in proper form for exercise
and accompanied by the amount equal to the aggregate Warrant Price, the Holder shall be deemed to
be the holder of record of the Shares issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates representing such Shares
shall not then be actually delivered to the Holder.


 


 









 





(b) If this Warrant shall have been exercised only in part, the Company shall, at the time of
delivery of such Shares, deliver to the Holder a new Warrant evidencing the right to purchase the
remaining Shares called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or, at the request of Holder, appropriate notation may be made on this
Warrant which shall then be returned to Holder.



2. Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all preemptive rights, taxes, liens and charges with respect to the
issue thereof; provided, however, that the Company shall not be required to pay any transfer taxes
with respect to the issue of shares in any name other than that of the registered holder hereof.
During the period within which the rights represented by this Warrant may be exercised, the Company
will at all times have authorized, and reserved for the purpose of the issue upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant. The Company shall at all times take
all such action and obtain all such permits or orders as may be necessary to enable the Company
lawfully to issue such Common Stock as duly and validly issued, fully paid and nonassessable shares
upon exercise in full of this Warrant.



3. Fractional Shares. No fractional shares of Common Stock will be issued in
connection with any exercise hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefor upon the basis of the Fair Market Value of such Shares.



4. Adjustment. This Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:



(a) Adjustment for Stock Splits and Combinations. If the Company shall at any time or
from time to time after the date hereof effect a subdivision of the outstanding Common Stock, the
Warrant Price then in effect immediately before that subdivision shall be proportionately
decreased. If the Company shall at any time or from time to time after the date hereof combine the
outstanding Common Stock, the Warrant Price then in effect immediately before the combination shall
be proportionately increased. Any adjustment under this subsection shall become effective at the
close of business on the date the subdivision or combination becomes effective.



(b) Adjustment for Certain Dividends and Distributions. In the event the Company at
any time or from time to time after the date hereof shall make or issue a dividend or other
distribution payable in additional shares of Common Stock, then and in each such event the Warrant
Price shall be decreased as of the time of such issuance, by multiplying the Warrant Price by a
fraction:




	 	(x)	 	the numerator of which shall be the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such
issuance; and







	 	(y)	 	the denominator of which shall be the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such
issuance plus the number of shares of Common Stock issuable in payment of
such dividend or distribution.





 


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(c) Adjustment of Number of Shares. Upon each adjustment of the Warrant Price pursuant
to either Section 4(a) or 4(b) of this Warrant, the number of shares of Common
Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common
Stock, calculated to the nearest one hundredth of a share, obtained by multiplying the number of
shares of Common Stock purchasable immediately prior to such adjustment upon the exercise of the
Warrant by the Warrant Price in effect prior to such adjustment and dividing the product so
obtained by the new Warrant Price.



(d) Adjustment for Reclassification, Exchange and Substitution. If the Common Stock
issuable upon the exercise of this Warrant are changed into the same or different number of shares
of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other
than a subdivision or combination provided for in Section 4(a) above, a dividend or
distribution provided for in Section 4(b) above, or a reorganization, merger, consolidation
or sale of assets, provided for in Section 4(e) below), then and in any such event the
Holder shall have the right thereafter to exercise this Warrant into the kind and amount of stock
and other securities receivable upon such recapitalization, reclassification or other change, by
holders of the number of shares of Common Stock for which this Warrant might have been exercised
immediately prior to such recapitalization, reclassification or change.



(e) Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from
time to time there is a capital reorganization of the Common Stock (other than a subdivision or
combination provided for in Section 4(a) above, a dividend or distribution provided for in
Section 4(b) above, or a reclassification or exchange of shares provided for in Section
4(d) above) or a merger or consolidation of the Company with or into another entity, or a sale
of all or substantially all of the Company’s properties and assets to any other person or entity,
then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so
that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the number of
shares of stock or other securities, money or property of the Company, or of the successor entity
resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable
upon conversion would have been entitled on such capital reorganization, merger, consolidation, or
sale. The Company shall not effect any reorganization, merger, consolidation or sale unless prior
to the consummation thereof each entity or person (other than the Company) that may be required to
deliver any cash, securities or other property upon the exercise of this Warrant shall assume, by
written instrument delivered to the Holder, the obligation to deliver to the Holder such cash,
securities or other property as in accordance with the foregoing provisions the Holder may be
entitled to receive. The foregoing provisions of this Section 4(e) shall similarly apply
to successive reorganizations, mergers, consolidations and sales.



(f) No Impairment. The Company will 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 terms to be observed or performed hereunder by the Company
but will at all times in good faith assist in the carrying out of all the provisions of this
Section and in the taking of all such action as may be necessary or appropriate in order to protect
the conversion rights of the Holder against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not issue any capital stock of any class which is
preferred as to dividends or as to the distribution of assets upon the voluntary or involuntary
dissolution, liquidation or winding up of the Company.



(g) Notice of Adjustments. Whenever this Warrant shall be adjusted pursuant to this
Section 4, the Company shall make a certificate signed by an officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the new Warrant Price and the type or the
number of Shares purchasable after giving effect to such adjustment, and shall cause copies of such
certificate to be mailed (by first class mail, postage prepaid) to the Holder.


 


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5. The Company’s Obligation to Make Payments.



(a) Dividends and Distributions. In the event the Company at any time or from time to
time after the date hereof shall make or issue a dividend or other distribution, whether payable in
cash, securities or other property of the Company, with respect to any of its capital stock for
which an adjustment is not made pursuant to Section 4 of this Warrant, then and in each
such event, the Company shall concurrently make a cash payment to the Holder equal to the product
of (i) the quotient obtained by dividing (x) the amount of cash plus the fair value of any property
or securities distributed by (y) the number of shares of Common Stock outstanding on the record
date for such dividend or distribution and (ii) the number of Shares on such record date.



(b) Redemption of Capital Stock. In the event the Company at any time or from time to
time after the date hereof shall repurchase or redeem any of its capital stock or any rights,
including without limitation, options, warrants or other convertible or exchangeable securities, to
acquire such capital stock, then and in each such event, the Company shall concurrently make a cash
payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the
aggregate amount of cash and the aggregate fair value of any property paid out by the Company in
connection with any such repurchase or redemption by (y) the number of shares of Common Stock
outstanding on a fully diluted basis immediately after such repurchase or redemption and (2) the
number of Shares.




6. Notice of Record Date. In the event:




	 	(1)	 	that the Company declares a dividend (or any other distribution) on any of its
capital stock (including without limitation, its Common Stock);







	 	(2)	 	that the Company repurchases or redeems any of its capital stock (including
without limitation, its Common Stock) or any rights to acquire such capital stock;







	 	(3)	 	that the Company subdivides or combines its outstanding shares of Common Stock;







	 	(4)	 	of any reclassification of the Common Stock, or of any consolidation, merger or
share exchange of the Company into or with another entity, or of the sale of all or
substantially all of the assets of the Company;







	 	(5)	 	of the involuntary or voluntary dissolution, liquidation or winding up of the
Company; or







	 	(6)	 	of any offer of its Common Stock or any rights to acquire such Common Stock for
consideration paid per share of Common Stock less than the Warrant Price then in
effect.






 


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 then the Company shall notify the Holder at least 30 days prior to the date specified in (A), (B)
or (C) below, in writing stating:




(A) the record date of such dividend, distribution, repurchase, redemption,
subdivision or combination, or, if a record is not to be taken, the date as to which the
holders of Common Stock of record to be entitled to such dividend, distribution,
repurchase, redemption, subdivision or combination are to be determined;




(B) the date on which such reclassification, consolidation, merger, share exchange,
sale, dissolution, liquidation or winding up is expected to become effective, and the date
as of which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, dissolution or winding up; or




(C) the date on which such offering of its Common Stock or any rights to acquire such
Common Stock for consideration paid per share of Common Stock less than the Warrant Price
is expected to become consummated.



7. Compliance with Securities Act; Disposition of Warrant or Common
Stock.



(a) Compliance with Securities Act. The Holder, by acceptance hereof, agrees that
this Warrant and the Shares to be issued upon exercise hereof are being acquired for investment and
that such Holder will not offer, sell or otherwise dispose of this Warrant or any Common Stock to
be issued upon exercise hereof except under circumstances which will not result in a violation of
the Securities Act of 1933, as amended (the “Act”). All Shares issued upon exercise of
this Warrant (unless registered under the Act or sold or transferred pursuant to Rule 144
promulgated under the Act) shall be stamped or imprinted with a legend in substantially the
following form:




“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES ACTS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS SECURITY OR PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACTS.”



(b) Disposition of Warrant or Shares. Subject to the terms and conditions of this
Warrant and applicable securities laws, this Warrant and the rights represented by this Warrant may
be transferred, assigned or pledged, in whole or in part with prior written notice to the Company.
Any transfer shall be accompanied by the Notice of Transfer form attached hereto as Exhibit B.



8. Rights as Shareholders. The Holder shall not, by virtue hereof, be entitled to any
rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the Company except to
the extent set forth herein.



9. Representations and Warranties. The Company represents and warrants
to the Holder as follows:



(a) This Warrant has been duly authorized and executed by the Company and is a valid and
binding obligation of the Company enforceable in accordance with its terms;


 


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(b) The Shares have been duly authorized and reserved for issuance by the Company and, when
issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable;



(c) The rights, preferences, privileges and restrictions granted to or imposed upon the Shares
and the holders thereof are as set forth in the Company’s Certificate of Incorporation;



(d) The execution and delivery of this Warrant are not, and the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the
Company’s Articles of Incorporation or by-laws, do not and will not contravene any law,
governmental rule or regulation, judgment or order applicable to the Company, and, except for
consents that have already been obtained by the Company, do not and will not conflict with or
contravene any provision of, or constitute a default under, any indenture, mortgage, contract or
other instrument of which the Company is a party or by which it is bound or require the consent or
approval of, the giving of notice to, the registration with or the taking of any action in respect
of or by, any federal, state or local government authority or agency or other person; and



10. Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.



11. Notices. Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier
or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered to the
applicable party at its address specified opposite its signature below, or at such other address as
shall be designated by such party in a written notice to the other. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or telecopier.



12. Descriptive Headings. The descriptive headings of the several sections of this
Warrant are inserted for convenience only and do not constitute a part of this Warrant.



13. Governing Law. THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF CALIFORNIA.



14. Binding Effect on Successors. This Warrant shall be binding upon any entity
succeeding the Company by merger, consolidation or acquisition of all or substantially all of the
Company’s assets, and all of the obligations of the Company relating to the Common Stock issuable
upon the exercise of this Warrant shall survive the exercise, and termination of this Warrant and
all of the covenants and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.



15. Severability. In case any one or more of the provisions contained in this Warrant
shall be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions, the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.


 


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16. Lost Warrants or Stock Certificates. The Company covenants to the Holder that upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of
any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the
Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Warrant or stock certificate.



IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and delivered by its
duly authorized officer on the day and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	BIOLARGO, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	XXXXXX	 	 
	 	 	 	 	 	 	 
	 

	 	Name:
	 	Dennis P. Calvert, President	 	 
	 

	 	Address:
	 	2603 Main Street, Suite 1155

Irvine, California 92614
 Attention: Dennis P. Calvert	 	 






	 	 	 	 	 	 	 
	ACKNOWLEDGED AND ACCEPTED:	 	 
	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Print Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 






Federal ID

or Social Security No.               
                 
                 
                 




 


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EXHIBIT A




NOTICE OF EXERCISE




TO: BIOLARGO, INC.



(1) The undersigned hereby elects to purchase                      shares of Common Stock of BIOLARGO,
INC. (the “Company”) pursuant to the terms of the attached Warrant, and, unless such Warrant allows
the exercise to be “cashless,” tenders herewith payment of the Warrant Price for such shares in
full.



(2) The undersigned represents and warrants to the Company that, as of the date hereof, the
undersigned is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D
under the Securities Exchange Act of 1934, as amended.



(3) Please issue a certificate or certificates representing said shares of Common Stock in the
name of the undersigned or in such other name as is specified below:



	 	 	 	 	 
	 

	 	 

(Name)
	 	 






	 	 	 	 	 
	 

	 	 

(Name)
	 	 






(4) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name
of the undersigned or in such other name as is specified below:



	 	 	 	 	 
	 

	 	 

(Name)
	 	 
	
 
	 	 	 	 






	 	 	 	 	 
	 

	 	 

(Address)
	 	 






	 	 	 	 	 
	 

	 	 

(Federal ID or Social Security No.)
	 	 






	 	 	 	 	 
	 

	 	 

(Signature)
	 	 






	 	 	 	 	 
	 

	 	 

(Date)
	 	 





 


 









 





EXHIBIT B




NOTICE
OF TRANSFER


(To be signed only upon transfer of Warrant and subject to other conditions of this Warrant)




FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                         the right represented by the attached Warrant to
purchase                      shares of the Common Stock of BIOLARGO, INC., to which the attached Warrant
relates, and appoints                      as Attorney-in-fact to transfer such right on the books
of BIOLARGO, INC., with full power of substitution in the premises.



The undersigned understands that any transfer of the attached Warrant is subject to full
compliance with Federal and applicable state securities laws and other requirements, which
requirements shall be determined and which issues shall be decided by BIOLARGO, INC., in its sole
and absolute discretion, prior to consenting to and recognizing such transfer.




Dated:                    



	 	 	 	 	 
	 

	 	 

(Signature must conform in all respects to the name of
the Holder as specified on the face of the Warrant)
	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

(Address)
	 	 






Signed in the presence of: