SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

HOLL EDWARD

(Last)

(First)

(Middle)

268 BUSH STREET

#4000

(Street)

SAN FRANCISCO

94104

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
PHOTOWORKS INC /WA [ PHTW ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
01/24/2008

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock (Right to Buy)	$0.35	01/24/2008		D			60,000	⁽¹⁾	05/21/2012	Common Stock	60,000	$0.0	0	D
Warrant to Purchase common stock	$0.4	01/24/2008		D			187,000	⁽²⁾⁽³⁾	05/31/2011	Common Stock	187,000	$0.0	0	I	By Martinicus LP⁽⁵⁾
Warrant to Purchase common stock	$0.4	01/24/2008		D			31,250	⁽³⁾⁽⁴⁾	05/31/2011	Common Stock	31,250	$0.0	0	I	By Martinicus LP⁽⁵⁾

Explanation of Responses:

1. This option, granted pursuant to the Company's 2005 Equity Incentive Plan in which 5000 of the options are exercisable as of the date of grant and the remainder of the options vest ratably on a monthly basis through January 2011 was cancelled pursuant to the merger agreement between issuer and AG.Com, Inc. in exchange for a cash payment representing the difference between the exercise price of the option and $0.595 per share.

2. Matinicus L.P. purchased from the Company a warrant to purchase 187,500 shares of common stock. The warrant is immediately exercisable.

3. This warrant was terminated pursuant to the merger agreement between issuer and AG.com, Inc. in exchange for a cash payment representing the difference between the exercise price of the warrant and $0.595 per share.

4. Matinicus L.P. purchased from the Company a warrant to purchase 31,250 shares of common stock. The warrant is immediately exercisable.

5. Mr. Holl is principal and general manager of Martincus, L.P., which holds these shares directly. The address of Matinicus L.P. is the same as Mr. Holl.

	/s/ Matinicus, LP /s/ Edward Holl By: Edward Holl, Manager /s/ HZ Partners, FBO Edward Holl /s/ Edward Holl By: Edward Holl, General Partner /s/ California Atlantic Limited Inc. /s/ Edward Holl By: Edward Holl, President	01/28/2008
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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