Exhibit 4.3
THE SECURITIES
REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER HEREOF FOR ITS
OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR CAUSING
TO BE MADE A PUBLIC DISTRIBUTION OF ALL OR ANY PORTION
THEREOF. SUCH SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT.
No.
____ __________, 2008
Z TRIM HOLDINGS,
INC.
FORM OF WARRANT TO PURCHASE
COMMON STOCK
Void after ___________,
[2013]
Z Trim Holdings,
Inc. , an Illinois
corporation (the “ Company ”), hereby certifies
that, for value received, ______________________ (including any
successors and assigns, “ Holder ”), is
entitled, subject to the terms set forth below, to purchase from
the Company at any time or from time to time during the Exercise
Period, defined below, and prior to 5:00 PM Central time, on
________, [2012] (the “ Expiration Date ”),
fully paid and nonassessable shares of Common Stock (the “
Warrant Shares ”) under the terms set forth
herein.
This Warrant is issued pursuant to that certain
Subscription Agreement dated _______________, 2008 by and between
the Company and the Holder (the “ Subscription
Agreement ”) that was executed and delivered in
connection with that certain Confidential Private Placement
Memorandum of the Company dated ________, 2008 (the “
Private Offering ”).
1. Number of Warrant Shares; Exercise
Price . This Warrant shall evidence the right of the
Holder to purchase up to
[ ] Warrant
Shares at an exercise price per Warrant Share of $____per share
(the “ Exercise Price ”), subject to adjustment
as provided in Section 6 below.
2. Definitions . As used
herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term “ Common Stock
” shall mean the common stock, par value $.00005 per share,
of the Company.
(b) The term “ Company ”
shall include any company which shall succeed to or assume the
obligations of the Company hereunder.
(c) The term “
Corporate Transaction ” shall mean (i) a sale, lease
transfer or conveyance of all or substantially all of the assets of
the Company; (ii) a consolidation of the Company with, or merger of
the Company with or into, another corporation or other business
entity in which the stockholders of the Company immediately prior
to such consolidation or merger own less than 50% of the voting
power of the surviving entity immediately after such consolidation
or merger; or (iii) any transaction or series of related
transactions to which the Company is a party in which in excess of
50% of the Company’s voting power is transferred, excluding
any consolidation or merger effected exclusively to change the
domicile of the Company.
(d) The term “
Stock ” shall mean (i) Common Stock or (ii) any other
class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no par
value to par value.
3. Exercise Date; Expiration
. Subject to the terms hereof, this Warrant may be
exercised by the Holder at any time or from time to time before the
Expiration Date (the “ Exercise Period
”).
4. Exercise of Warrant;
Partial Exercise . This Warrant may be exercised in
full by the Holder by surrender of this Warrant, together with the
Holder’s duly executed form of subscription attached hereto
as Exhibit A , to the Company at its principal office,
accompanied by payment, in cash or by certified or official bank
check payable to the order of the Company, of the aggregate
exercise price (as determined above) of the number of Warrant
Shares to be purchased hereunder. The exercise of this
Warrant pursuant to this Section 4 shall be deemed to have been
effected immediately prior to the close of business on the business
day on which this Warrant is surrendered to the Company as provided
in this Section 4, and at such time the person in whose name any
certificate for Warrant Shares shall be issuable upon such exercise
shall be deemed to be the record holder of such Warrant Shares for
all purposes. As soon as practicable after the exercise
of this Warrant, the Company at its expense will cause to be issued
in the name of and delivered to the Holder, or as the Holder may
direct, a certificate or certificates for the number of fully paid
and nonassessable full shares of Warrant Shares to which the Holder
shall be entitled on such exercise, together with cash, in lieu of
any fraction of a share, equal to such fraction of the current fair
market value of one full Warrant Share as determined in good faith
by the Board of Directors, and, if applicable, a new warrant
evidencing the balance of the shares remaining subject to the
Warrant.
5. Net Issuance .
(a) Cashless Exercise
. Only in the event that there is not in effect on or
before the 6-month anniversary of the date of this Warrant a
registration statement with the SEC covering the Warrant Shares, in
addition to and without limiting the rights of the Holder under the
terms of this Warrant, the Holder shall have the right to convert
this Warrant (the “ Conversion Right ”) into
Warrant Shares as provided in this Section 5 at any time or from
time to time beginning on the 6-month anniversary of the date of
this Warrant and ending at the expiration of the Exercise
Period. Upon exercise of the Conversion Right with
respect to shares subject to the Warrant (the “ Converted
Warrant Shares ”), the Company shall deliver to the
Holder (without payment by the Holder of any exercise price or any
cash or other consideration) that number of fully paid and
nonassessable Warrant Shares computed using the following
formula:
X = Y (A -
B)
A
Where: X
= the
number of Warrant Shares to be delivered to the Holder;
Y
= the
number of Converted Warrant Shares;
A
= the
fair market value of one Warrant Share on the Conversion Date (as
defined below); and
B
= the
Exercise Price (as adjusted on the Conversion Date).
No fractional shares shall be
issuable upon exercise of the Conversion Right, and if the number
of shares to be issued determined in accordance with the foregoing
formula is other than a whole number, the Company shall pay to the
Holder an amount in cash equal to the fair market value of the
resulting fractional share on the Conversion Date (as defined
below). Shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of the
Warrant.
(b) Method of Exercise
. The Conversion Right may be exercised by the Holder by
the surrender of the Warrant at the principal office of the Company
together with a written statement specifying that the Holder
thereby intends to exercise the Conversion Right and indicating the
total number of shares under the Warrant that the Holder is
exercising through the Conversion Right. Such conversion
shall be effective upon receipt by the Company of the Warrant
together with the aforesaid written statement, or on such later
date as is specified therein (the “ Conversion Date
”). Certificates for the shares issuable upon
exercise of the Conversion Right shall be delivered to the Holder
promptly following the Conversion Date.
(c) Determination of Fair Market
Value . For purposes of this Section 5, fair market
value of a Warrant Share on the Conversion Date shall be determined
as follows:
(i) If this Warrant is to be
exercised contingent upon and effective immediately prior to the
initial public offering of the Company’s Common Stock
pursuant to an effective registration statement under the
Securities Act of 1933, as amended (an “ Initial Public
Offering ”), the fair market value of a Warrant Share
shall be deemed to be equal to the price per share to the public of
the shares of Common Stock sold in the Initial Public Offering as
set forth on the front cover of the final prospectus relating to
the Initial Public Offering;
(ii) If the Common Stock is
traded on a stock exchange or the Nasdaq Stock Market (or a similar
national quotation system), the fair market value of a Warrant
Share shall be deemed to be the average of the closing selling
prices of the Common Stock on the stock exchange or system
determined by the Board to be the primary market for the Common
Stock over the ten (10) trading day period ending on the date prior
to the Conversion Date, as such prices are officially quoted in the
composite tape of transactions on such exchange or
system;
(iii) If the Common Stock is
traded over-the-counter, the fair market value of a Warrant Share
shall be deemed to be the average of the closing bid prices (or, if
such information is available, the closing selling prices) of the
Common Stock over the ten (10) trading day period ending on the
date prior to the Conversion Date, as such prices are reported by
the National Association of Securities Dealers through its NASDAQ
system or any successor system ; and
(iv) If there is no public
market for the Common Stock, then the fair market value of a
Warrant Share shall be determined by the Board of Directors of the
Company in good faith and, upon request of the Holder, the Board
(or a representative thereof) shall, as promptly as reasonably
practicable but in any event not later than 15 days after such
request, notify the Holder of the Fair Market Value per share of
Common Stock.
6. Adjustments to
Conversion Price and Number of Warrant Shares . For
the purposes of this Section 6, the term Exercise Price shall mean
the Exercise Price per share set forth on the first page of this
Warrant as adjusted from time to time pursuant to the provisions of
this Section 6. The number and kind of Warrant Shares
(or any shares of stock or other securities which may be) issuable
upon the exercise of this Warrant and the Exercise Price hereunder
shall be subject to adjustment from time to time upon the happening
of certain events, as follows:
(a) Splits and
Subdivisions . In the event the Company should at
any time or from time to time fix a record date for the
effectuation of a split or subdivision of the outstanding shares of
Common Stock or the determination of the holders of Common Stock
entitled to receive a dividend or other distribution payable in
additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive
directly or indirectly, additional shares of Common Stock
(hereinafter referred to as the “ Common Stock
Equivalents ”) without payment of any consideration by
such holder for the additional shares of Common Stock or Common
Stock Equivalents, then, as of such record date (or the date of
such distribution, split or subdivision if no record date is
fixed), the Exercise Price shall be appropriately decreased and the
number of Warrant Shares for which this Warrant is exercisable
shall be appropriately increased in proportion to such increase of
outstanding shares.
(b) Combination of
Shares . If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, the Exercise
Price shall be appropriately increased and the number of Warrant
Shares for which this Warrant is exercisable shall be appropriately
decreased in proportion to su
