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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)
Reclassification or Reorganization . If the
Warrant Shares issuable upon the exercise of this Warrant shall be
changed into the same or different number of shares of any class or
classes of stock, whether by capital reorganization,
reclassification or otherw
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