Exhibit
10.4


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933.


 


	
  Warrant No.

  	
  Number of Shares:

  
	
  Date of Issuance:

  	
  (subject to adjustment)

  



 


VISTA
MEDICAL TECHNOLOGIES, INC.


 


Common
Stock Purchase Warrant


 


Vista Medical Technologies, Inc. (the “Company”),
for value received, hereby certifies that
                                      ,
or its registered assigns (the “Registered Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
after the date hereof and on or before
                              
    ,        (subject to
Section 1(c) below) (the “Expiration Date”), up to
                  
shares (as adjusted from time to time pursuant to the provisions of this
Warrant) of Common Stock of the Company, at a purchase price of
$           per share.  The shares purchasable upon exercise of this
Warrant and the purchase price per share, as adjusted from time to time
pursuant to the provisions of this Warrant, are sometimes hereinafter referred
to as the “Warrant Stock” and the “Purchase Price,” respectively.


 


This Warrant is issued in connection with that certain
Subscription Agreement, dated as of
                      
      , 2004, by and between the Company and the
Registered Holder (the “Subscription Agreement”) and is subject to the
terms and conditions of the Subscription Agreement.  The Warrant Stock possesses certain registration rights pursuant
to the Subscription Agreement.


 


1.             Exercise.


 


(a)           Manner of Exercise.  This
Warrant may be exercised by the Registered Holder, in whole or in part, by
surrendering this Warrant, with the purchase/exercise form appended hereto as Exhibit A
(“Exercise Form”) duly executed by such Registered Holder or by such Registered
Holder’s duly authorized attorney, at the principal office of the Company, or
at such other office or agency as the Company may designate, accompanied by
payment in full of the Purchase Price payable in respect of the number of
shares of Warrant Stock purchased upon such exercise.  The Purchase Price may be paid only by cash, check, or wire
transfer; provided, however, that if this Warrant is exercised after delivery
of the Notice (as defined in Section 1(c) below) and prior to termination
pursuant to Section 1(c), the Registered Holder may elect to receive, without
payment by the Registered Holder of any additional consideration and upon
surrender of this Warrant to the Company together with a duly completed
Exercise Form,


 

















 


that number of
shares of Warrant Stock Shares determined in accordance with the following
formula (a “Net Exercise”):


 




	
  X=

  	
   

  	
  Y(A-B)

  
	
   

  	
  A

  






 


	
  where:

  	
   

  	
  X
  =    the number of shares of Warrant Stock to be issued
  to the Registered Holder;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y
  =    the number of shares of Warrant Stock with respect
  to which the Holder is exercising its purchase rights under this Warrant;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  =    the fair market value of one (1) share of shares of
  Warrant Stock on the date of exercise; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B
  =    the Purchase Price.

  



 


(b)           Effective Time of Exercise.  Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
day on which this Warrant shall have been surrendered to the Company as
provided in Section 1(a) above.  At such
time, the person or persons in whose name or names any certificates for Warrant
Stock shall be issuable upon such exercise as provided in Section 1(c) below
shall be deemed to have become the holder or holders of record of the Warrant
Stock represented by such certificates.


 


(c)           Early
Termination.  If on any
date after the later of (i) the effectiveness of the Registration Statement (as
defined in the Subscription Agreement), and (ii) the date on which Shareholder
Approval (as defined in the Subscription Agreement) is obtained, the closing
price of the Common Stock, as quoted on the Nasdaq National Market, the Nasdaq
SmallCap Market or the principal exchange on which the Common Stock is listed,
or if not so listed then in the over-the-counter market as published in The
Wall Street Journal, for 20 consecutive trading days equals at least $3.40
(subject to adjustment in the event of any subdivision, combination or reclassification
affecting the Common Stock), the Company shall have the right, as its option
and upon 30 days written notice (the “Notice”) to the Registered Holder, to
terminate this Warrant; provided that (i) the Registered Holder shall have the
right to exercise this Warrant at any time prior to such termination pursuant
to Section 1(a), and (ii) the Registration Statement shall be effective at all
times during such 30-day notice period. 
Upon such termination, the Registered Holder shall have no further rights
hereunder.  The Registered Holder shall
have the right to exercise the Warrant until the earlier of (i) the termination
of the 30 day notice period or (ii) the Expiration Date.


 


(d)           Fair
Market Value.  For
purposes of this Warrant, the fair market value of one share of the Company’s
Common Stock on the date of calculation shall mean:


 


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(A)          if the Company’s Common Stock is
traded on a securities exchange or The Nasdaq Stock Market, the fair market
value shall be deemed to be the average of the closing prices over a thirty
(30) day period ending three days before date of calculation; or


 


(B)           if the Company’s Common Stock is
actively traded over-the-counter, the fair market value shall be deemed to
be the average of the closing bid or sales price (whichever is applicable)
over the fifteen (15) day period ending three trading days before the date of
calculation; or


 


(C)           if neither (A) nor (B) is applicable,
the fair market value shall be the price determined in good faith by the
Company’s Board of Directors.


 


(e)           Delivery to Holder.  As soon as practicable after the
exercise of this Warrant in whole or in part, and in any event within ten (10)
days thereafter, the Company at its expense will cause to be issued in the name
of, and delivered to, the Registered Holder, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:


 


(i)      a certificate or certificates for the
number of shares of Warrant Stock to which such Registered Holder shall be
entitled, and


 


(ii)     in case such exercise is in part only, a
new warrant or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of Warrant
Stock equal (without giving effect to any adjustment therein) to the number of
such shares called for on the face of this Warrant minus the number of such
shares purchased by the Registered Holder upon such exercise as provided in
Section 1(a) above.


 


2.             Adjustments.


 


(a)     Stock Splits and Dividends.  If outstanding shares of the Company’s
Common Stock shall be subdivided into a greater number of shares or a dividend
in Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately
reduced.  If outstanding shares of
Common Stock shall be combined into a smaller number of shares, the Purchase
Price in effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination, be proportionately increased.  When any adjustment is required to be made
in the Purchase Price, the number of shares of Warrant Stock purchasable upon
the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the
exercise of this Warrant immediately prior to such adjustment, multiplied by
the Purchase Price in effect immediately prior to such adjustment, by
(ii) the Purchase Price in effect immediately after such adjustment.


 


(b)     Reclassification, Etc.  In case of any reclassification or
change of the outstanding securities of the Company or of any reorganization of
the Company (or any other corporation the stock or securities of which are at
the time receivable upon the exercise of this


 


3

















 


Warrant) or any
similar corporate reorganization on or after the date hereof, then and in each
such case the holder of this Warrant, upon the exercise hereof at any time
after the consummation of such reclassification, change, reorganization, merger
or conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property to which such holder
would have been entitled upon such consummation if such holder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in Section 2(a); and in each such case, the terms of this
Section 2 shall be applicable to the shares of stock or other securities
properly receivable upon the exercise of this Warrant after such consummation.


 


(c)     Adjustment Certificate.  When any adjustment is required to be
made in the Warrant Stock or the Purchase Price pursuant to this Section 2, the
Company shall promptly mail to the Registered Holder a certificate setting
forth (i) a brief statement of the facts requiring such adjustment, (ii) the
Purchase Price after such adjustment and (iii) the kind and amount of stock or
other securities or property into which this Warrant shall be exercisable after
such adjustment.


 


3.             Transfers.


 


(a)     Unregistered Security.  Each holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), and agrees
not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose
of this Warrant or any Warrant Stock issued upon its exercise in the absence of
(i) an effective registration statement under the Act as to this Warrant or
such Warrant Stock and registration or qualification of this Warrant or such
Warrant Stock under any applicable U.S. federal or state securities law then in
effect or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required.  Each certificate or other instrument for Warrant Stock issued
upon the exercise of this Warrant shall bear a legend substantially to the
foregoing effect.


 


(b)     Transferability.  Subject to the provisions of Section 3(a)
hereof (and any other restrictions
conferred herein) this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of the Warrant with a
properly executed assignment (in the form of Exhibit B hereto) at the
principal office of the Company provided, however, that this Warrant may not
be transferred unless the transferee agrees in writing to be bound by the terms
of this Warrant and the terms of the Subscription Agreement.


 


(c)     Warrant Register.   The Company will maintain a register
containing the names and addresses of the Registered Holders of this
Warrant.  Until any transfer of this
Warrant is made in the warrant register, the Company may treat the Registered
Holder of this Warrant as the absolute owner hereof for all purposes; provided,
however, that if this Warrant is properly assigned in blank, the Company
may (but shall not be required to) treat the bearer hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary.  Any Registered Holder may change such
Registered Holder’s address as shown on the warrant register by written notice
to the Company requesting such change.


 


4

















 


4.             Representations and Warranties of
Registered Holders.  The
Registered Holder represents and warrants to the Company as follows:


 


(a)     This Warrant and the Warrant Stock issuable
upon exercise thereof are being acquired for its own account, for investment
and not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Act.  Upon exercise of this Warrant, the
Registered Holder shall, if so requested by the Company, confirm in writing, in
a form satisfactory to the Company, that the securities issuable upon exercise
of this Warrant are being acquired for investment and not with a view toward
distribution or resale.


 


(b)     The Registered Holder understand that this
Warrant and the Warrant Stock have not been registered under the Act, and that
they must be held by the Registered Holder indefinitely, and that the
Registered Holder must therefore bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Act or is exempted from such registrations.


 


(c)     The Registered Holder has such knowledge
and experience in financial and business matters that is capable of evaluating
the merits and risks of the purchase of this Warrant and the Warrant Stock
purchasable pursuant to the terms of this Warrant and of protecting its
interests in connection therewith.


 


(d)     The Registered Holder is able to bear the
economic risk of the purchase of the Warrant Stock pursuant to the terms of
this Warrant.


 


(e)     The Restated Holder confirms all
representations made by it in the Subscription Agreement.


 


5.             Reservation of Stock.  The Company will at all times reserve and
keep available, solely for the issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.


 


6.             Exchange of
Warrants.  Upon the
surrender by the Registered Holder of any Warrant or Warrants, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 3 hereof, issue and deliver to or
upon the order of such Holder, at the Company’s expense, a new Warrant or
Warrants of like tenor, in the name of such Registered Holder or as such
Registered Holder (upon payment by such Registered Holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face or faces thereof for
the number of shares of Common Stock called for on the face or faces of the
Warrant or Warrants so surrendered.


 


7.             Replacement of
Warrants.  Upon receipt
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender


 


5

















 


and cancellation
of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like
tenor.


 


8.             Notices.  Any notice required or permitted by this
Warrant shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or forty-eight (48) hours after being deposited in the regular mail
as certified or registered mail (airmail if sent internationally) with postage
prepaid, addressed (a) if to the Registered Holder, to the address of the
Registered Holder most recently furnished in writing to the Company and (b) if
to the Company, to the address set forth below or subsequently modified by
written notice to the Registered Holder.


 


9.             No Rights as
Stockholder.  Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.


 


10.           No
Fractional Shares.  No
fractional shares of Common Stock will be issued in connection with any
exercise hereunder.  In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the fair market value of
one share of Common Stock on the date of exercise, as determined in good faith
by the Company’s Board of Directors.


 


11.           Amendment
or Waiver.  Any term of
this Warrant may be amended or waived only by an instrument in writing signed
by the party against which enforcement of the amendment or waiver is sought.


 


12.           Headings.  The headings in this Warrant are for
purposes of reference only and shall not limit or otherwise affect the meaning
of any provision of this Warrant.


 


6

















 


13.           Governing
Law. This Warrant shall be governed, construed and interpreted
in accordance with the laws of the State of California, without giving effect
to principles of conflicts of law.


 


 


	
   

  	
  VISTA MEDICAL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax Number:

  	
   

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED

  	
   

  
	
   

  	
   

  
	
  REGISTERED HOLDER

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
											



 


7

















 


EXHIBIT A


 


PURCHASE/EXERCISE FORM


 


	
  To:

  	
   

  	
  Vista Medical
  Technologies, Inc

  	
   

  	
  Dated:

  
	
   

  	
   

  	
  2101 Faraday Avenue

  	
   

  	
   

  
	
   

  	
   

  	
  Carlsbad, CA 92008

  	
   

  	
   

  



 


1.             Choose
one:


 


o            The undersigned, pursuant to the
provisions set forth in the attached Warrant No.
              ,
hereby irrevocably elects to purchase
           shares of the
Common Stock covered by such Warrant and herewith makes payment of $
                  ,
representing the full purchase price for such shares at the price per share
provided for in such Warrant.


 


o            The undersigned, pursuant to the Net
Exercise provisions set forth in Section 1(a) of the attached Warrant No.
              ,
hereby irrevocably elects to purchase           
shares of the Common Stock covered by such Warrant.


 


2.             Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:


 


	
   

  	
   

  
	
   

  	
  (Name and address)

  	
   

  
				



 


3.             The
undersigned hereby represents and warrants that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such
shares.  The undersigned further
represents and warrants that all representations and warranties of the
undersigned set forth in Section 4 of the attached Warrant are true and correct
as of the date hereof.


 


	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name (print):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title (if applic.)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Company (if applic.):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									



 


i

















 


EXHIBIT B


 


ASSIGNMENT FORM


 


FOR VALUE RECEIVED,
                                                                                  
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant
                    
with respect to the number of shares of Common Stock covered thereby set forth
below, to:


 


	
  Name of Assignee

  	
   

  	
  Address/Fax
  Number

  	
   

  	
  No. of
  Shares

  	
   

  
	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Witness:

  	
   

  	
   

  
													



 


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