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 such decrease in outstanding shares.
(c)
