WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement") is made and entered into as of
this ____ day of ___________, 2000, by and between BIO-AQUA SYSTEMS, INC. a
corporation organized and existing under the laws of the State of Florida
("Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as warrant agent
("Warrant Agent").
WHEREAS, the Company proposes to offer and sell a maximum of 500,000
Units ("Units") containing 1,000,000 shares of common stock ("Class A Common
Stock"), $.0001 par value per share and 1,000,000 redeemable Class A Common
Stock purchase warrants ("Warrants") exercisable for an aggregate of 1,000,000
shares of Class A Common Stock, plus up to an additional 75,000 Units issuable
in connection with the Underwriters' over-allotment, together with all of the
Class A Common Stock and Warrants comprising all such Units and the shares of
Class A Common Stock issuable upon exercise of the warrants, pursuant to a
Registration Statement on Form SB-2 (the "Prospectus"), File Number 333-81829,
filed with the Securities and Exchange Commission; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, registration of transfer, exchange and exercise of the
Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent
to act as agent for the Company in accordance with the instructions hereinafter
set forth in this Agreement, and the Warrant Agent hereby accepts such
appointment.
2. Form of Warrants. The text and the terms of the Warrants, and the form of
election to purchase shares of Class A Common Stock appearing on the reverse
side thereof shall be substantially as set forth in Exhibit A attached hereto
and made a part hereof. The Warrants shall be executed on behalf of the Company
by the manual or facsimile signature of the president or a vice president of the
Company and by the manual or facsimile signature of the secretary or assistant
secretary of the Company under its corporate seal, affixed or in facsimile.
The Warrants shall be dated by the Warrant Agent as of the initial date
of issuance thereof, and upon transfer or exchange, the Warrant shall be dated
as of such subsequent issuance date.
3. Registration and Countersignature. The Warrant Agent shall maintain books
for the transfer and registration of the Warrants. Upon the initial issuance of
the Warrants, the Warrant Agent shall issue and register the Warrants in the
names of the respective registered holders, and upon subsequent issuance, such
Warrants shall be registered in the names of the respective succeeding
registered holders. The Warrants shall be countersigned by the Warrant Agent (or
by any successor to the Warrant Agent then acting as warrant agent under this
Agreement) and shall not be valid for any purpose unless so countersigned.
Warrants may be so countersigned, however, by the Warrant Agent (or by its
successor as warrant agent) and be delivered by the Warrant Agent,
notwithstanding that the persons whose manual or facsimile signature appears
thereon as proper officers of the Company shall have ceased to be such officers
at the time of such countersignature or delivery. Until a Warrant is transferred
on the books of the Warrant Agent, the Company and the Warrant Agent may treat
any registered holder of Warrants as the absolute owner thereof for all
purposes, notwithstanding any notice to the contrary.
4. Registration of Transfers and Exchanges. The Warrant Agent shall transfer
any outstanding Warrants on the books to be maintained by the Warrant Agent for
that purpose, upon surrender thereof for transfer, properly endorsed or
accompanied by appropriate instructions for transfer with proper documentary
stamps affixed thereto, if requested. Upon any such transfer, a new Warrant
shall be issued to the transferee, and the surrendered Warrant shall be canceled
by the Warrant Agent. Warrants so canceled shall be delivered by the Warrant
Agent to the Company from time to time. Warrants may be exchanged at the option
of the holder thereof when surrendered at the office of the Warrant Agent, for
another Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of shares of
Class A Common Stock. The Warrant Agent is hereby irrevocably authorized to
countersign and deliver the Warrants in accordance with the provisions of this
Paragraph 4, and the Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrants duly executed on behalf of the Company
for such purpose.
5. Exercise of Warrants. Subject to the provisions of this Agreement, each
registered holder of Warrants shall have the right, which right may be exercised
as in such Warrants expressed, during the five year period commencing thirty
days from the date of the Company's Prospectus dated _________ ____, 2000
("Prospectus") to purchase from the Company, and the Company shall issue and
sell to such registered holder of Warrants, the number of fully paid and
non-assessable shares of Class A Common Stock specified in such Warrants, upon
surrender to the Company at the office of the Warrant Agent, with the form of
election to purchase on the reverse side thereof duly completed and signed, and
upon payment to the Warrant Agent for the account of the Company of the Exercise
Price, as hereinafter defined, for the number of shares of Class A Common Stock
in respect of which such Warrants are then exercised. Payment of such Exercise
Price may be made in cash or by certified check, bank draft, or postal or
express money order, payable in United States dollars, to the order of the
Company. Subject to the provisions of Paragraph 8 hereof, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company, acting
through the Warrant Agent, shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the registered holder of
such Warrants and in such name or names as such registered holder may designate,
a certificate or certificates for the full number of shares of Class A Common
Stock so purchased upon the exercise of such Warrants. Such certificates shall
be deemed to have been issued, and any person so designated to be named therein
shall be deemed to have become a holder of record of such Class A Common Stock,
as of the date of surrender of such Warrants and payment of the Exercise Price,
as aforesaid; provided, however, that if, at the date of surrender of such
Warrants and the payment of such Exercise Price, the transfer books for the
Class A Common Stock purchasable upon the exercise of such Warrants shall be
closed, the certificates for the shares in respect of which such Warrants are
then exercised shall be issuable as of the date on which such books shall next
be opened, and until such date the Company shall be under no duty to deliver any
certificate for such shares; provided further, however, that the transfer books
aforesaid, unless otherwise required by law, shall not be closed at any one time
for a period longer than 20 days. The right of purchase represented by the
Warrants shall be exercisable, at the election of the registered holders
thereof, either as an entirety or, from time to time, for part of the shares
specified therein, and in the event that any Warrant is exercised in respect of
less than all of the shares specified therein at any time prior to the date of
expiration of the Warrants, a new Warrant or Warrants will be issued for the
remaining number of Class A Common Stock specified in the Warrant so
surrendered, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrants pursuant to the provisions
of this Paragraph 5 and of Paragraph 3 of this Agreement, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrants duly executed on behalf of the Company for such purposes.
Notwithstanding anything contained herein to the contrary, no Warrant
may be exercised if the issuance of Class A Common Stock in connection therewith
would constitute a violation of the registration provisions of federal or state
securities laws.
The Company will use its best efforts to file and keep effective a
current prospectus which will permit the purchase and sale of the Warrants and
the Class A Common Stock underlying the Warrants. In addition, the Company will
use its best efforts to qualify for sale the Warrants and the Class A Common
Stock underlying the Warrants in those states in which the Warrants and the
Class A Common Stock are to be offered.
Upon thirty (30) days' prior written notice to all holders of the
Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Warrants in compliance with the requirements of Rule
13e-4 to the extent applicable.
The "Exercise Price" of the Warrants shall mean the exercise price
specified in the Warrants until the occurrence of a recapitalization or
reclassification that, pursuant to the provisions hereof, shall require an
increase or decrease in the exercise price of the Warrants, and thereafter shall
mean said price as adjusted from time to time in accordance with the provisions
hereof. No such adjustment shall be made unless such adjustment would change the
then purchase price per share by Ten Cents ($.10) or more; provided, however,
that all adjustments not so made shall be deferred and made when the aggregate
thereof would change the then purchase price per share by Ten Cents ($.10) or
more. No adjustment made pursuant to any provision hereof shall have the effect
of increasing the total consideration payable upon exercise of any of the
Warrants.
6. Adjustments in Certain Cases. In case the Company shall at any time prior
to the exercise or termination of any of the Warrants effect a recapitalization
or reclassification of such character that its Class A Common Stock shall be
changed into or become exchangeable for a larger or smaller number of shares,
then, upon the effective date thereof, the number of shares of Class A Common
Stock that the holders of the Warrants shall be entitled to purchase upon
exercise thereof shall be increased or decreased, as the case may be, in direct
proportion to the increase or decrease in such number of shares of Class A
Common Stock by reason of such recapitalization or reclassification on, and the
purchase price per share of such recapitalized or reclassified Class A Common
Stock shall, in the case of an increase in the number of shares, be
proportionately decreased and, in the case of a decrease in the number of
shares, be proportionately increased.
In case the Company shall at any time prior to the exercise or
termination of any of the Warrants distribute to holders of its Class A Common
Stock cash, evidences of indebtedness, or other securities or assets, other than
as dividends or distributions payable out of current or accumulated earnings,
then, in any such case, the holders of the Warrants shall be entitled to
receive, upon exercise thereof, with respect to each share of Class A Common
Stock issuable upon such exercise, the amount of cash or evidences of
indebtedness or other securities or assets that such holder would have been
entitled to receive with respect to the Class A Common Stock as a result of the
happening of such event, had the Warrants been exercised immediately prior to
the record date or other date fixing shareholders to be affected by such event
(without giving effect to any restriction upon such exercise).
In case the Company shall at any time prior to the exercise or
termination of any of the Warrants consolidate or merge with any other
corporation or transfer all or substantially all of its assets to any other
corporation preparatory to a dissolution, then the Company shall, as a condition
precedent to such transaction, cause effective provision to be made so that the
holders of the Warrants, upon the exercise thereof after the effective date of
such transaction, shall be entitled to receive the kind and amount of shares,
evidences of indebtedness, and/or other property receivable on such transaction
by a holder of the number of shares of Class A Common Stock as to which the
Warrants were exercisable immediately prior to such transaction (without giving
effect to any restriction upon such exercise); and, in any such case,
appropriate provision shall be made with respect to the rights and interests of
the holders thereof to the effect that the provisions of the Warrants shall
thereafter be applicable (as nearly as may be practicable) with respect to any
shares, evidences of indebtedness, or other securities or assets thereafter
deliverable upon exercise of the Warrants.
Whenever the number of shares of Class A Common Stock or other types of
securities or assets purchasable upon exercise of any of the Warrants shall be
adjusted as provided herein, the Company shall forthwith obtain and file with
its corporate records a certificate or letter from a firm of independent public
accountants of recognized standing, which may include the Company's then
independent auditing firm setting forth the computation and the adjusted number
of shares of Class A Common Stock or other securities or assets purchasable
hereunder resulting from such adjustments, and a copy of such certificate or
letter shall be mailed to each of the registered holders of the Warrants. Any
such certificate or letter shall be conclusive evidence as to the correctness of
the adjustment or adjustments referred to therein and shall be available for
inspection by the holders of the Warrants on any day during normal business
hours.
In the event that at any time as a result of an adjustment made
pursuant hereto the holders of the Warrants shall become entitled to purchase
upon exercise thereof shares, evidences of indebtedness, or other securities or
assets (other than Class A Common Stock, then, wherever appropriate, all
references herein to Class A Common Stock shall be deemed to refer to and
include such shares, evidences of indebtedness, or other securities or assets,
and thereafter the number of such shares, evidences of indebtedness, or other
securities or assets shall be subject to adjustment from time to time in a
manner and upon terms as nearly equivalent as practicable to the provisions
hereof.
7. Redemption. The Warrants may be redeemed at the option of the Company, at a
redemption price of $.05 per Warrant (subject to adjustment as set forth herein)
at any time commencing twelve (12) months from the date of the Prospectus upon
not less than thirty (30) days prior written notice, subject to exercise by the
Warrant holder, if the closing price of the Company's Class A Common Stock, as
reported by the principal exchange on which the Class A Common Stock is traded,
the American Stock Exchange, as the case may be, equals or exceeds $____ per
share for thirty (30) consecutive trading days. However, the Company may not
redeem the Warrants at any time that a current registration statement under the
Securities Act of 1933 covering the shares of Class A Common Stock issuable upon
exercise of the Warrants is not then in effect. On and after the date fixed for
redemption, the Registered Holder shall have no rights with respect to the
Warrants except to receive the $.05 per Warrant upon surrender of this Warrant
Certificate.
8. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of securities upon the exercise of the
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes that may be payable in respect of any transfer involved in the
issue or delivery of any securities in a name other than that of the registered
holder of Warrants in respect of which such securities are issued and, in such
case, neither the Company nor the Warrant Agent shall be required to issue or
deliver any certificate representing such securities or any Warrant until the
person requesting the same has paid to the Company or the Warrant Agent the
amount of such tax or has established to the Company's satisfaction that such
tax has been paid. 9.ab Mutilated or Missing Warrants. In case any of the
Warrants shall be mutilated, lost, stolen or destroyed, the Warrant Agent may
countersign and deliver in exchange and substitution for and upon cancellation
of the mutilated Warrant or in lieu of and substitution for the Warrant lost,
stolen or destroyed, a new Warrant of like tenor and representing an equivalent
right or interest, but only upon receipt of evidence satisfactory to the Warrant
Agent of such loss, theft or destruction of such Warrants and indemnity, if
requested, also satisfactory to them. Applicants for such substitute Warrants
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
10. Reservation of Class A Common Stock. Prior to the issuance of any
Warrants, there shall have been reserved, and the Company shall at all times
keep reserved out of the authorized and unissued Class A Common Stock, a number
of shares of Class A Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the Warrants, and the transfer agent for the
Class A Common Stock and every subsequent transfer for any of the Company's
Class A Common Stock issuable upon the exercise of any of the rights of purchase
aforesaid are hereby irrevocably authorized and directed at all times to reserve
such number of authorized and unissued Class A Common Stock as shall be
requisite for such purpose. The Company agrees that all Class A Common Stock
issued upon exercise of the Warrants shall be, at the time of delivery of the
certificates representing such Class A Common Stock, validly issued and
outstanding, fully paid and non-assessable. The Company will keep a copy of this
Agreement on file with the transfer agent for the Class A Common Stock and with
every subsequent transfer agent for the Company's Class A Common Stock issuable
upon the exercise of the right of purchase represented by the Warrants. The
Warrant Agent is hereby irrevocably authorized to requisition from time to time
from such transfer agent stock certificates required to honor outstanding
Warrants that have been exercised. The Company will supply such transfer agent
with duly executed stock certificates for such purpose. All Warrants surrendered
in the exercise of the rights thereby evidenced shall be canceled by the Warrant
Agent and shall thereafter be delivered to the Company, and such canceled
Warrants shall constitute sufficient evidence of the number of shares of Class A
Common Stock that have been issued upon the exercise of such Warrants. All
Warrants surrendered for transfer, exchange or partial exercise shall be
canceled by the Warrant Agent and delivered to the Company. Promptly after the
date of expiration of the Warrants, the Warrant Agent shall certify to the
Company the total aggregate amount of Warrants then outstanding and, thereafter,
no Class A Common Stock shall be subject to reservation in respect of such
Warrants.
11. Disposition of Proceeds on Exercise of Warrants. Upon the exercise of the
Warrants, the Warrant Agent shall promptly deposit the payment into an escrow
account established by mutual agreement of the Company and the Warrant Agent at
a federally insured commercial bank. All funds deposited in the escrow account
will be disbursed on a weekly basis to the Company once they have been
determined by the Warrant Agent to be collected funds. Once the funds are
determined to be collected, the Warrant Agent shall cause the share
certificate(s) representing the exercised Warrants to be issued. 12.ab Merger or
Consolidation or Change of Name of Warrant Agent. Any corporation or company
that may succeed to the business of the Warrant Agent by merger or consolidation
or otherwise to which the Warrant Agent shall be a party, or any corporation or
company or otherwise succeeding to the business of the Warrant Agent shall be
the successor to the Warrant Agent hereunder without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provided,
however, that such corporation would be eligible for appointment as a successor
Warrant Agent under the provision of Paragraph 14 of this Agreement. In case at
the time such successor to the Warrant Agent shall succeed to the agency created
by this Agreement or in case at any time the name of the Warrant Agent shall be
changed, and any of the Warrants shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrants so
countersigned; and in case at the time any of the Warrants shall not have been
countersigned, the successor to the Warrant Agent may countersign such Warrants,
either in the name of the predecessor Warrant Agent or in the name of the
successor Warrant Agent; and in all such cases, such Warrants shall have the
full force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrants so countersigned; and if at that time any of the Warrants
shall not have been countersigned, the Warrant Agent may countersign such
Warrants either in its prior name or in its changed name; and in all such cases,
such Warrants shall have the full force provided in the Warrants and this
Agreement.
13. Duties of the Warrant Agent.
(a) The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company shall be bound:
(i) The statements contained herein and in the
Warrants shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same, except such as
described by the Warrant Agent or action or actions taken or to be taken by it.
The Warrant Agent assumes no responsibility with respect to the distribution of
the Warrants, except as herein otherwise provided.
(ii) The Warrant Agent shall not be responsible
or any failure of the Company to comply with any of the covenants contained in
this Agreement or in the Warrants to be complied with by the Company.
(iii) The Warrant Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty hereunder,
either itself, or by or through its attorneys, agents or employees.
(iv) The Warrant Agent may consult at any time
with counsel satisfactory to it (who may be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company or to
any holder of any Warrant in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or advice of such
counsel, provided the Warrant Agent shall have exercised reasonable care in the
selection and continued employment of such counsel.
(v) The Warrant Agent shall incur no liability
or responsibility to the Company or to any holder of any Warrant for any action
taken in reliance upon any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument reasonably believed by it to
have been signed, sent or presented by the proper party or parties.
(vi) The Company agrees to pay the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
execution of this Agreement; to reimburse the Warrant Agent for all expenses,
taxes, governmental charges and other charges of any kind and nature incurred by
the Warrant Agent in the execution of this Agreement; and to indemnify the
Warrant Agent and save it harmless from and against any and all liabilities,
including judgments, costs and reasonable attorneys' fees for anything done or
omitted by the Warrant Agent in the execution of this Agreement, except as a
result of the Warrant Agent's negligence or bad faith.
(vii) The Warrant Agent shall be under no obligation
to institute any action, suit or legal proceeding, or to take any other action
likely to involve expense, unless the Company or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity. All rights of action under this Agreement or under any of the
Warrants or in the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent, and any recovery of judgment
shall be for the benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(viii) The Warrant Agent and any shareholder,
director, officer, partner or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to or otherwise act as fully and
freely as though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
(ix) The Warrant Agent shall act hereunder solely as
agent, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything that it may do or refrain from
doing in connection with this Agreement, except for its own negligence or bad
faith.
(x) The Warrant Agent shall keep copies of this
Agreement available for inspection by holders of the Warrants during normal
business hours at its principal office in Colorado.
14. Change of Warrant Agent. The Warrant Agent may resign and be discharged
from its duties under this Agreement by giving notice in writing to the Company
and by giving notice by mail to holders of the Warrants at their addresses as
such addresses appear on the Warrant register of such resignation, specifying a
date when such resignation shall take effect, which date shall not be less than
30 days after the mailing of said notice. The Warrant Agent may be removed at
the discretion of the Company by like notice to the Warrant Agent from the
Company and by like mailing of notice to the holders of the Warrants. If the
Warrant Agent shall resign or be removed or otherwise become incapable of
acting, the Company shall appoint a successor to the Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after
such removal, or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the registered
holder of a Warrant (who shall, with such notice, submit his Warrant for
inspection by the Company), then the registered holder of any Warrant may apply
to any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. After appointment, any successor Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed, but the former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall give notice thereof to
the predecessor Warrant Agent and each transfer agent for the Class A Common
Stock, and shall forthwith give notice to the holders of the Warrants in the
manner prescribed in this section. Failure to file or mail any notice provided
for in this Section 14, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent or the
appointment of any successor Warrant Agent, as the case may be.
15. Identity of Transfer Agent. Forthwith upon the appointment of any transfer
agent other than the Warrant Agent for the Class A Common Stock of the Company
issuable upon the exercise of the rights of purchase represented by the
Warrants, the Company will file with the Warrant Agent a statement setting forth
the name and address of such transfer agent.
16. Notices. Any notice pursuant to this Agreement to be given or made by the
Warrant Agent or by the registered holder of any Warrant to the Company shall be
deemed to have been sufficiently given or made if sent by certified mail, return
receipt requested, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent) as follows:
To the Company: Bio-Aqua Systems, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
To the Warrant Agent: American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Any notice pursuant to this Agreement to be given or made by the Company or by
the registered holder of any Warrant to the Warrant Agent shall be deemed to
have been sufficiently given or made if sent by certified mail, return receipt
requested, postage prepaid, addressed (until another address is filed ln writing
by the Warrant Agent with the Company) to the Warrant Agent as set forth above.
17. Standard of Conduct. Notwithstanding any implication to the contrary
elsewhere herein, whenever the Company or the Warrant Agent are required or
permitted to make any judgment or to take any action, no such judgment or action
shall be made or taken in bad faith or in any arbitrary or capricious fashion.
18. Supplements and Amendments. The Company and the Warrant Agent may, from
time to time, supplement or amend this Agreement without the approval of any of
the holders of the Warrants in order to cure any ambiguity or to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder that the Company and the Warrant Agent
may deem necessary or desirable, that shall not be inconsistent with the
provisions of the Warrants, and that shall not materially adversely affect the
rights of the holders of the Warrants.
19. Successors. All of the covenants and provisions hereof by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
20. Merger or Consolidation of the Company. The Company will not merge or
consolidate with or into any other corporation, unless the corporation resulting
from such merger or consolidation (if not the Company) shall expressly assume,
by supplemental agreement satisfactory in form to the Warrant Agent and executed
and delivered to the Warrant Agent, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
21. Florida Contract. This Agreement and each Warrant issued hereunder shall
be deemed to be a contract made under the laws of the State of Florida and for
all purposes shall be construed in accordance with the laws of said state.
22. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give any person or corporation, other than the Company, the Warrant Agent and
the registered holders of the Warrants, any legal or equitable right, remedy or
claim under this Agreement, but this Agreement shall be for the sole and
exclusive benefit of the Company and the Warrant Agent and their respective
successors and of the holders of the Warrant certificates.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
BIO-AQUA SYSTEMS, INC.
By:______________________________
Name: __________________________
Its: _____________________________
ATTEST:
------------------------
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:______________________________
Name: __________________________
Its: _____________________________
ATTEST:
------------------------
[FORM OF FACE OF WARRANT CERTIFICATE]
No.___ ____ Warrants
VOID AFTER ____________, 2005
WARRANT CERTIFICATE FOR PURCHASE
OF CLASS A COMMON STOCK
BIO-AQUA SYSTEMS, INC.
This certifies that FOR VALUE RECEIVED, _____________________ or
registered assigns (the "Registered Holder") is the owner of the number of
Common Stock Redeemable Warrants ("Warrants") specified above. Each Warrant
represented hereby entitles the Registered Holder to purchase, subject to the
terms and conditions set forth in this Warrant Certificate and the Warrant
Agreement of even date herewith (the "Warrant Agreement"), one fully paid and
nonassessable share of Class A Common Stock, par value $.0001 per share ("Common
Stock"), of BIO-AQUA SYSTEMS, INC., a Florida corporation (the "Company") at any
time commencing _______________, 2000, and expiring on the Expiration Date (as
hereinafter defined), upon the presentation and surrender of this Warrant
Certificate with the Subscription Form on the reverse side hereof duly executed,
at the corporate office of American Stock Transfer & Trust Company, as Warrant
Agent, or its successor (the "Warrant Agent"), accompanied by payment of $____
per share (subject to adjustment) (the "Purchase Price") in the lawful money of
the United States of America in cash or by official bank or certified check made
payable to the Company. No fractional shares of Common Stock will be issued.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement by and among the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (Florida Time) on
_______, 2005, or such earlier date as the Warrants shall be redeemed. If such
date shall in the State of Florida be a holiday or a day on which banks are
authorized to close, then the Expiration Date shall mean 5:00 p.m. (Florida
time) the next following day which in the State of Florida is not a holiday or a
day on which banks are authorized to be closed.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of the Warrants represented hereby unless a registration
statement under the Securities Act of 1933, as amended, with respect to such
securities is effective. The Company has covenanted and agreed that it will file
a registration statement and will use its best efforts to cause the same to
become effective and to keep such registration statement current while any of
the Warrants are outstanding. The Warrants represented hereby shall not be
exercisable by a Registered Holder in any state where such exercise would be
unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment, with the appropriate transfer fee
per certificate in addition to any tax or other governmental charge imposed in
connection therewith, for registration of transfer of this Warrant Certificate
at such office, a new Warrant Certificate or Warrant Certificates representing
an equal aggregate number of Warrants will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
The Warrants represented hereby may be redeemed at the option of the
Company, commencing twelve (12) months following the effective date of the
Company's registration statement on Form SB-2 filed with the Securities and
Exchange Commission at a redemption price of $.05 per Warrant, upon thirty (30)
days' prior written notice, if (i) the average closing price of the Common
Stock, as reported on the American Stock Exchange, the principle exchange on
which the Common Stock is traded, the American Stock Exchange, as the case may
be, equals or exceeds $____ per share for any thirty (30) consecutive trading
days ending within thirty (30) days prior to the date of the notice of
redemption. On and after the date fixed for redemption, the Registered Holder
shall have no rights with respect to the Warrants represented hereby except to
receive the $.05 per Warrant upon surrender of this Warrant Certificate. Upon
thirty (30) days' prior written notice to all holders of the Warrants and
subject to the consent of the Company's lead underwriter or representative, the
Company shall have the right to reduce the exercise price and/or extend the term
of the Warrants in compliance with the requirements of Rule 13e-4 to the extent
applicable.
2
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Florida.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile, by one of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted hereon.
BIO-AQUA SYSTEMS, INC.
Dated________________, 2000 By:______________________________
Name:____________________________
Title:___________________________
[corporate seal]
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Warrant Agent
By:____________________________
Authorized Officer
3
[FORM OF REVERSE OF WARRANT CERTIFICATE]
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
________ Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
(Please print or type name and address)
and be delivered to
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
[please print or type name and address]
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated: ____________________ X_________________________________
Signature
_________________________________
_________________________________
Address
4
________________________________
Taxpayer Identification Number
________________________________
Signature Guaranteed
________________________________
THE SIGNATURE TO THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
MEMBER OF THE MEDALLION STAMP PROGRAM.
5
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, _________________hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF TRANSFEREE
_________________________________________
_________________________________________
_________________________________________
_________________________________________
(Please print or type name and address)
___________ of the Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints ____________________ Attorney to transfer
this Warrant Certificate on the books of the Company, with full power of
substitution in the premises.
Dated: ____________________ X_________________________________
Signature
_________________________________
_________________________________
Address
_________________________________________
Taxpayer Identification Number
_________________________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE
FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A MEMBER OF THE
MEDALLION STAMP PROGRAM.
6
