Exhibit 4.2
FORM OF SECURITY
UNATION, INC.
REVENUE-BACKED CONVERTIBLE SECURITY
REVENUE-BACKED CONVERTIBLE SECURITY
This Revenue-Backed Convertible Security (this “Security”) is issued by UNATION, Inc., a Delaware corporation (the “Company”), to the holder identified in the Company’s records (the “Holder”), as of the date of issuance.
1. Definitions
For purposes of this Security:
| ● | “Investment Amount” means the amount paid by the Holder for this Security. |
| ● | “Return Cap” means an amount equal to 150% of the Investment Amount. |
| ● | “Gross Revenues” means the Company’s gross revenues as determined in accordance with U.S. GAAP. |
| ● | “Revenue Allocation” means approximately 8% of Gross Revenues, allocated among holders of all outstanding securities of this type on a pro rata basis. |
| ● | “Conversion Price” means $6.00 per share of Class A common stock. |
| ● | “Conversion Event” means the satisfaction of the Return Cap as described herein. |
2. Revenue Participation
2.1 Allocation
The Company shall allocate to the holders of all outstanding Securities, on a pro rata basis:
| ● | 8% of its Gross Revenues. |
2.2 Nature of Participation
The Holder acknowledges that:
| ● | This Security represents a contractual participation right in revenue |
| ● | It is not a debt instrument |
| ● | It is not secured |
| ● | It is not senior to any other obligations of the Company |
The Holder has no claim on any specific assets of the Company.
2.3 Payment
| ● | Payments shall be made quarterly, to the extent revenue has been generated |
| ● | Payments shall be distributed pro rata among all holders |
2.4 No Guaranteed Payments
The Company shall have no obligation to make payments except from actual Gross Revenues.
If Gross Revenues are insufficient:
| ● | Payments may be reduced or not made |
3. Return Cap
The Holder shall be entitled to receive aggregate payments equal to the Return Cap.
Upon reaching the Return Cap:
| ● | The Holder’s right to further revenue participation shall terminate |
4. Conversion
4.1 Automatic Conversion
Upon satisfaction of the Return Cap:
| ● | This Security shall automatically convert into shares of the Company’s Class A common stock |
No action is required by the Holder.
4.2 Conversion Calculation
The number of shares issued upon conversion shall be equal to:
| ● | Investment Amount divided by the Conversion Price |
4.3 Effect of Conversion
Upon conversion:
| ● | All rights under this Security shall terminate |
| ● | The Holder shall become a holder of Class A common stock |
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5. Company Prepayment Right
The Company may, at its sole discretion:
| ● | Pay the Holder an amount equal to the remaining Return Cap at any time |
Upon such payment:
| ● | The Return Cap shall be deemed satisfied |
| ● | The Security shall convert as described above |
6. No Maturity; No Default
This Security:
| ● | Has no maturity date |
| ● | Does not require repayment on a fixed schedule |
The Company shall not be in default if:
| ● | Revenues are insufficient to generate payments |
| ● | Payments are delayed or not made due to performance |
7. No Voting Rights
Prior to conversion:
| ● | The Holder shall have no voting rights |
| ● | The Holder shall have no management or governance rights |
8. Transfer Restrictions
This Security is a restricted security.
It may not be transferred except:
| ● | In compliance with applicable securities laws; and |
| ● | Subject to the prior written consent of the Company |
Permitted transfers may include:
| ● | Transfers to affiliates |
| ● | Estate planning transfers |
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9. No Redemption Rights
The Holder shall have no right to:
| ● | Require the Company to redeem or repurchase this Security |
10. No Security Interest
This Security:
| ● | Is not secured |
| ● | Does not create any lien or claim on Company assets |
11. Ranking
This Security:
| ● | Does not constitute indebtedness |
| ● | Is not senior to any obligations of the Company |
| ● | Does not have priority over any other securities |
12. Governing Law
This Security shall be governed by and construed in accordance with the laws of the State of Delaware.
13. Amendments
This Security may be amended
| ● | By the Company with the consent of holders of a majority of outstanding Securities of this type |
14. Records
The Company (or its transfer agent, VStock Transfer, LLC) shall maintain records of ownership of this Security. The transfer agent’s records shall serve as the official record of ownership for all purposes.
Ownership shall be reflected in the Company’s books and records.
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SIGNATURE
IN WITNESS WHEREOF, the Company has caused this Security to be issued as of the date set forth above.
| Accepted by UNATION, INC. | ||
| By: | /s/ John J. Bartoletta | |
| Name: | John J. Bartoletta | |
| Title: | Authorized Officer | |
| Date: | 5-1-2026 | |
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