Exhibit 4.2
FORM OF SECURITY
UNATION, INC.
REVENUE-BACKED PARTICIPATION SECURITY
This Revenue-Backed Participation 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” means the automatic conversion of each Revenue-Backed Participation Security into one share of the Company’s Class A common stock upon a Conversion Event. |
| ● | “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 Distributions
| ● | Revenue Participation Distributions, if any, are expected to be calculated quarterly and distributed pro rata among holders, subject to Company revenue performance and the terms of this Security. |
| ● | Distributions shall be distributed pro rata among all holders |
2.4 No Guaranteed Distributions
The Company shall have no obligation to make payments except from actual Gross Revenues.
Revenue Participation Distributions are contingent upon Company revenue performance and are not guaranteed.
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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:
| ● | Upon the occurrence of a Conversion Event, each Revenue-Backed Participation Security shall automatically convert on a one-for-one basis into one share of the Company’s Class A common stock. |
| ● | No additional payment or consideration shall be required upon conversion. |
| ● | No action is required by the Holder. |
4.2 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:
| ● | Revenue Participation Distributions are reduced, delayed, suspended, or not made due to Company revenue performance or the Company’s determination that retention of revenues is reasonably necessary for operations, legal obligations, working capital, growth initiatives, or other corporate purposes. |
7. No Voting Rights
The Revenue-Backed Participation Securities offered hereby do not provide voting rights prior to conversion into shares of the Company’s Class A common stock.
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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