WARRANT AGREEMENT
This Representative's Warrant Agreement (the "Agreement") is dated as
of August __, 1999 between Bio-Aqua Systems, Inc., a Florida corporation (the
"Company"), Nutmeg Securities, Ltd. and Xxxxxxx Xxxxxxx & Associates, Inc.
(hereinafter collectively referred to as the "Underwriter").
WITNESSETH
WHEREAS, the Company proposes to issue to the Underwriter 120,000
warrants (the "Representative's Warrants"at $.001 per Representative Warrant,
each Representative Warrant shall be exercisable for Class A Common Stock (the
"Shares") after a lock up period of twelve months, at a purchase price of $8.25
per share and for warrants (the "warrants") at $.206 per warrant which shall be
exercisable for Shares purchase price of $10.725.
WHEREAS, the Underwriter has agreed pursuant to the Underwriting
Agreement dated August ___, 1999 between the Underwriter and the Company to act
as the Underwriter in connection with the Company's proposed public offering
(the "Offering") of 1,380,000 shares of Class A Stock at an initial public
offering price of $5.00 per share and 1,380,000 warrants (the "Warrants") at an
initial public offering price of $0.125 per Warrant (inclusive of an
Over-Allotment Option); and
WHEREAS, the Representative's Warrants issued pursuant to this
Agreement are being issued by the Company to the Underwriter, or to its
designees who are officers of the Underwriter or to members of the selling group
participating in the Offering and/or their respective officers or partners
(collectively, the "Designees"), in consideration for, and as part of the
Underwriter's compensation in connection with acting as the Underwriter for the
Offering;
NOW, THEREFORE, in consideration of these premises, the payment by the
Underwriter or its designees to the Company of One Hundred Twenty Dollars
($120.00), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. GRANT.
------
The Underwriter and/or the Designees are hereby granted the right to
purchase, commencing ________ __, 2000 until 5:00 P.M., Eastern time, on
_________, 2004 (the "Warrant Exercise Term"), up to 120,000 fully-paid and
non-assessable Shares at an initial exercise price (subject to adjustment as
provided in Article 6 hereof) of $8.25 per Share and up to 120,000 warrants at
an initial exercise price (subject to adjustment as provided in Article 6
hereof) of $0.206 per warrant exercisable for Shares at a purchase price of
$10.725. The warrants are exercisable at any time commencing _________, 1999
until 5:00 P.M., Eastern time on ________, 2004. The Holder (defined hereafter)
may purchase, upon exercise of the Representative's Warrants, either all or part
of the Shares or all or part of the warrants, or all or part of both. The Shares
and, except as provided in Article 13 hereof, the warrants are in all respects
identical to the Shares and Warrants, respectively, being sold to the public
pursuant to the terms and provisions of the Underwriting Agreement.
2. WARRANT CERTIFICATES.
---------------------
The warrant certificates delivered, and to be delivered pursuant to
this Agreement shall be for the Representative's Warrants in the form set forth
in Exhibit A attached hereto (the "Representative's Warrant Certificates") and
for the warrants in the form of Exhibit B attached hereto (the "warrant
Certificate"), each with such appropriate insertions, omissions, substitutions
and other variations as required or permitted by this Agreement.
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3. EXERCISE OF WARRANTS.
---------------------
The Representative's Warrants initially are exercisable at a purchase
price of $8.25 per Share and $0.206 per warrant, payable in cash or by check to
the order of the Company, or any combination thereof, subject to adjustment as
provided in Article 8 hereof. Upon surrender of the Representative's Warrant
Certificate(s) with an Form of Election to Purchase duly executed, together with
payment of the Exercise Price (as hereinafter defined) for the Shares and
warrants purchased, at the Company's principal offices in Florida (currently
located at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 33431) the
registered holder of a Representative's Warrant Certificate ("Holder(s)") shall
be entitled to receive a certificate or certificates for the Shares so purchased
and/or a certificate or certificates for the warrants so purchased. The purchase
rights represented by each Representative's Warrant Certificate are exercisable
at the option of the Holder thereof, in whole or in part (but not as to
fractional Shares or fractional warrants). In the case of the purchase of less
than all Shares or warrants purchasable under any Representative's Warrant
Certificate, the Company shall cancel said Representative's Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Representative's
Warrant Certificate of like tenor for the balance of the Shares or warrants
purchasable thereunder.
4. ISSUANCE OF CERTIFICATES.
-------------------------
Upon the exercise of the Representative's Warrants, the issuance of
certificates for the Shares purchased and certificates for the warrants
purchased, and upon the exercise of the warrants, the issuance of certificates
for the Shares purchased shall be made forthwith (and in any event within three
(3) business days thereafter)without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall be issued in the name of, or in such names
as may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
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The Representative's Warrant Certificates and the certificates
representing the Shares and the warrants shall be executed on behalf of the
Company by the manual or facsimile signature of the present or any future
Chairman or Vice Chairman of the Board of Directors or Chief Executive Officer,
President or Vice President of the Company under its corporate seal reproduced
thereon, attested to by the manual or facsimile signature of the present or any
future Secretary or Assistant Secretary of the Company. Representative's Warrant
Certificates and certificates representing the warrants shall be dated the date
of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
5. RESTRICTION ON TRANSFER OF WARRANTS AND REDEMPTION.
---------------------------------------------------
The Holder of a Representative's Warrant Certificate, by the Holder's
acceptance thereof, covenants and agrees that the Representative's Warrants are
being acquired as an investment and not with a view to the distribution thereof,
and that the Representative's Warrants, Shares, warrants and Shares obtained by
exercise of the warrants, may not be sold, transferred, assigned, pledged or
hypothecated or otherwise disposed of, in whole or in part, for a period of one
(1) year from the date hereof, except to the Underwriter or to the Designees.
The Representative's 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
Underwriter, if the closing bid price of the Company's Common Stock, as reported
by the principal exchange on which the Common Stock is traded, the NASDAQ
SmallCap Market or the National Quotation Bureau, Incorporated, as the case may
be, equals or exceeds $8.50 per share for thirty (30) consecutive trading days.
However, the Company may not redeem the Representative's Warrants at any time
that a current registration statement under the Securities Act of 1933 covering
the shares of Common Stock issuable upon exercise of the Representative's
Warrants is not then in effect. On and after the date fixed for redemption, the
Holder shall have no rights with respect to the Representative's Warrants except
to receive the $.05 per Representative's Warrant upon surrender of this
Representative's Warrant Certificate.
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6. PRICE.
------
6.1. INITIAL AND ADJUSTED EXERCISE PRICE.
------------------------------------
The initial exercise price of each Representative's Warrant shall be
$8.25 per Share and $0.206 per warrant. The adjusted exercise price per Share
and the adjusted exercise price per warrant shall be the prices which shall
result from time to time from any and all adjustments of the initial exercise
price per Share or per warrant, as the case may be, in accordance with the
provisions of Article 8 hereof.
6.2. EXERCISE PRICE.
---------------
The term "Exercise Price" herein shall mean the initial exercise price
or the adjusted exercise price, depending upon the context.
7. REGISTRATION RIGHTS.
--------------------
7.1. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
----------------------------------------------
All of the Representative's Warrants, the Shares, the warrants, and the
shares underlaying the warrants have been registered for purposes of public
distribution under the Securities Act of 1933, as amended (the "Act").
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7.2. REGISTRABLE SECURITIES.
-----------------------
As used herein the term "Registrable Security" means each of the
Representative's Warrants, the Shares, the warrants, and the Shares underlaying
the warrants and any Shares issued upon any stock split or stock dividend in
respect of such Shares; provided, however, that with respect to any particular
Registrable Security, such security shall cease to be a Registrable Security
when, as of the date of determination, (i) it has been effectively registered
under the Act and disposed of pursuant thereto, (ii) registration under the Act
is no longer required for subsequent public distribution of such security, or
(iii) it has ceased to be outstanding. The term "Registrable Securities" means
any and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the Shares such adjustment shall be made in the definition of "Registrable
Security" as is appropriate in order to prevent any dilution or enlargement of
the rights granted pursuant to this Article.
7.3. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION.
------------------------------------------------------
The Company covenants and agrees as follows:
(a) Once effective, the Company will use its best efforts to maintain
the effectiveness of the Registration Statement until the earlier of (i) the
date that all of the Registrable Securities have been sold or (ii) the date the
Holders thereof receive an opinion of counsel to the Company that all of the
Registrable Securities may be freely traded without registration under the Act,
under Rule 144(k) promulgated under the Act or otherwise.
(b) In connection with the registration under Section 7.1 hereof, the
Company shall file the Registration Statement as expeditiously as possible, but
in any event no later than furnish each Holder of Registrable Securities such
number of prospectuses as shall reasonably be requested.
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(c) The Company shall pay all costs, fees and expenses (other than
underwriting fees, discounts and non-accountable expense allowance applicable to
the Registrable Securities and fees and expenses of counsel retained by the
holders of Registrable Securities) in connection with all Registration
Statements filed pursuant to Section 7.1 hereof including, without limitation,
the Company's legal and accounting fees, printing expenses, and blue sky fees
and expenses.
(d) The Company will take all necessary action which may be required in
qualifying or registering the Registrable Securities included in the
Registration Statement, for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the holders of such
securities.
(e) The Company shall indemnify any holder of the Registrable
Securities to be sold pursuant to any Registration Statement and any underwriter
or person deemed to be an underwriter under the Act and each person, if any, who
controls such holder or underwriter or person deemed to be an underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such registration statement to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify the
Underwriter, and to provide for just and equitable contribution, as set forth in
Section 7 of the Underwriting Agreement.
(f) Any holder of Registrable Securities to be sold pursuant to a
registration statement, and such holder's successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such holder, or such holder's
successors or assigns, for specific inclusion in such Registration Statement to
the same extent and with the same effect as the provisions pursuant to which the
Underwriter has agreed to indemnify the Company, and to provide for just and
equitable contribution, as set forth in Section ___ of the Underwriting
Agreement.
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(g) Nothing contained in this Agreement shall be construed as requiring
any holder to exercise the Representative's Warrants or the warrants held by
such holder prior to the initial filing of any registration statement or the
effectiveness thereof.
(h) If the Company shall fail to comply with the provisions of this
Article , the Company shall, in addition to any other equitable or other relief
available to the holders of Registrable Securities, be liable for any or all
incidental, special and consequential damages sustained by the holders of
Registrable Securities, requesting registration of their Registrable Securities.
(i) The Company shall promptly deliver copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the Registration Statement to each holder of Registrable Securities included
for such registration in such Registration Statement pursuant to Section 7.1
hereof requesting such correspondence and memoranda and to the managing
underwriter, if any, of the offering in connection with which such Holder's
Registrable Securities are being registered and shall permit each holder of
Registrable Securities and such underwriter to do such reasonable investigation,
upon reasonable advance notice, with respect to information contained in or
omitted from the Registration Statement as it deems reasonably necessary to
comply with applicable securities laws or rules of the NASD. Such investigation
shall include access to books, records and properties and opportunities to
discuss the business of the Company with its officers and independent auditors,
all to such reasonable extent and at such reasonable times and as often as any
such holder of Registrable Securities or underwriter shall reasonably request.
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8. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SECURITIES.
-------------------------------------------------------
The following adjustments apply to the Exercise Price of the
Representative's Warrants with respect to the Shares and the number of Shares
purchasable upon exercise of the Representative's Warrants. In the event the
Exercise Price per Share and/or the number of Shares so purchasable is adjusted,
then the Exercise Price of the Representative's Warrants relating to the
warrants and the number of warrants purchasable thereunder shall be adjusted in
the same proportion.
8.1. DISTRIBUTION OF SECURITIES.
---------------------------
In case the Company shall at any time after the date hereof pay a
dividend in shares of common stock or make any issuance or distribution in
shares of common stock or any securities convertible into or exercisable or
exchangeable for common stock (other than securities to employees of the Company
pursuant to an employee stock purchase or option plan that has been approved by
the Company's stockholders in which non-executive employees are eligible to
participate), then upon such dividend or distribution, the holder of
Representative's Warrants shall receive the amount of such dividend in shares of
common stock or the amount of such other distribution in shares of common stock
which would have otherwise been payable to such holder if it been the holder of
record of common stock issuable upon exercise of its Representative's Warrant on
the record date for the determination of those entitled to such stock dividend
or distribution.
8.2. SUBDIVISION AND COMBINATION.
----------------------------
In case the Company shall at any time subdivide or combine the
outstanding shares of common stock, the Exercise Price shall forthwith be
proportionately decreased in the case of subdivision or increased in the case of
combination.
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8.3. ADJUSTMENT IN NUMBER OF SECURITIES.
-----------------------------------
Upon each adjustment of the Exercise Price pursuant to the provisions
of this Article , the number of Shares issuable upon the exercise of each
Representative's Warrant shall be adjusted to the nearest full number by
multiplying a number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of Shares issuable upon exercise of the
Representative's Warrants immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price. Notwithstanding the
foregoing, in the case of adjustments to the exercise price of the
Representative's Warrants with respect to the warrants and/or the number of
warrants purchasable upon exercise of the Representative's Warrants, if an event
occurs that results in an adjustment of the number and/or price of the shares of
common stock issuable upon exercise of the Warrants pursuant to the Warrant
Agreement by and among the Company and the Underwriter, resulting in automatic
adjustment in the number and/or price of the Shares underlaying the warrants
issuable upon exercise of the Representative's Warrants pursuant to Section 8.5
hereof, then the adjustment provided for in this Section shall not, in such
instance, result in any further adjustment in the aggregate number of Shares
ultimately issuable upon exercise of the Representative's Warrants.
8.4. RECLASSIFICATION, CONSOLIDATION, MERGER, ETC.
---------------------------------------------
In case of any reclassification or change of the outstanding shares of
common stock(other than a change in par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or in the
case of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of common stock, except a change as a result
of a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holders shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holders were the owners of both the Shares
and the underlaying warrant Shares immediately prior to any such events.
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8.5. ADJUSTMENT OF UNDERLYING WARRANTS' EXERCISE PRICE
AND SECURITIES ISSUABLE UPON EXERCISE OF WARRANTS.
--------------------------------------------------
With respect to any of the warrants, whether or not the warrants have
been exercised and whether or not the warrants are issued and outstanding, the
exercise price for, and the number of Shares issuable upon exercise of the
warrants shall automatically be proportionately adjusted in accordance with the
Warrant Agreement, upon the occurrence of any of the events described therein.
Thereafter, until the next such adjustment or until otherwise adjusted in
accordance with this Section 8.5, the warrants shall be exercisable at such
adjusted exercise price and for such adjusted number of Shares.
8.6. DISTRIBUTION OF ASSETS.
-----------------------
In the event that the Company shall at any time prior to the exercise
of all Representative's Warrants or warrants make any distribution of its assets
to holders of its common stock as a liquidating or a partial liquidating
dividend, then the holder of Representative's Warrants and warrants who
exercises its Representative's Warrants or warrants after the record date for
the determination of those holders of common stock entitled to such distribution
of assets as a liquidating or partial liquidating dividend shall be entitled to
receive for the Representative's Warrant Price or warrant price per
Representative's Warrant or Warrant, in addition to each share of common stock,
the amount of such distribution (or, at the option of the Company, a sum equal
to the value of any such assets at the time of such distribution as determined
by the Board of Directors of the Company in good faith) which would have been
payable to such holder had he been the holder of record of the common stock
receivable upon exercise of his Representative Warrant or warrant on the record
date for the determination of those entitled to such distribution. At the time
of any such dividend or distribution, the Company shall make appropriate
reserves to ensure the timely performance of the provisions of this Subsection
8.6.
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9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.
-------------------------------------------------
Each Representative's Warrant Certificate or warrant Certificate is
exchangeable without expense, upon the surrender thereof by the registered
Holder at the principal executive office of the Company, for a new
Representative's Warrant Certificate or warrant Certificate of like tenor and
date representing in the aggregate the right to purchase the same number of
securities in such denominations as shall be designated by the Holder thereof at
the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Representative's Warrant
Certificate or warrant Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to it, and reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of the Representative's Warrant Certificate, or warrant
Certificate, if mutilated, the Company will make and deliver a new
Representative's Warrant Certificate or warrant Certificate of like tenor, in
lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS.
------------------------------------
The Company shall not be required to issue certificates representing
fractions of Shares or fractions of warrants upon the exercise of the
Representative's Warrants, nor shall it be required to issue scrip or pay cash
in lieu of fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of Shares and warrants.
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11. RESERVATION AND LISTING OF SECURITIES.
--------------------------------------
The Company shall at all times reserve and keep available out of its
authorized shares of common stock, solely for the purpose of issuance upon the
exercise of the Representative's Warrants and the warrants, such number of
Shares as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Representative's Warrants and payment of the
Exercise Price therefor, all Shares issuable upon such exercise shall be duly
and validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any shareholder. The Company further covenants and agrees that upon
exercise of the warrants and payment of the respective warrant exercise price
therefor, all Shares for warrants issuable upon such exercise shall be duly and
validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any shareholder. As long as the Representative's Warrants shall be
outstanding, the Company shall use its best efforts to cause all Shares issuable
upon the exercise of the Representative's Warrants and the warrants and all
warrants to be listed on or quoted by NASDAQ or listed on such national
securities exchange, in the event the common stock is listed on a national
securities exchange.
12. NOTICES TO WARRANT HOLDERS.
---------------------------
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Representative's Warrants and their exercise, any of the following events
shall occur:
(a) the Company shall take a record of the holders of its Shares for
the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company; or
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(b) the Company shall offer to all the holders of its Shares any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed; or
(d) reclassification or change of the outstanding Shares (other than a
change in par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination),consolidation of the Company with, or
merger of the Company into, another corporation (other than a consolidation or
merger in which the Company is the surviving corporation and which does not
result in any reclassification or change of the outstanding Shares, except a
change as a result of a subdivision or combination of such shares or a change in
par value, as aforesaid), or a sale or conveyance to another corporation of the
property of the Company as an entirety is proposed; or
(e) The Company or an affiliate of the Company shall propose to issue
any rights to subscribe for Shares or any other securities of the Company or of
such affiliate to all the shareholders of the Company; then, in any one or more
of said events, the Company shall give written notice to the Holder or Holders
of such event at least fifteen (15) days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
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13. WARRANTS.
---------
As set forth in Section 8.3 of this Agreement, the exercise price of
the warrants and the number of Shares issuable upon the exercise of the warrants
are subject to adjustment, whether or not the Representative's Warrants have
been exercised and the warrants have been issued, in the manner and upon the
occurrence of the events set forth in the Warrant Agreement, which is hereby
incorporated herein by reference and made a part hereof as if set forth in its
entirety herein. Subject to the provisions of this Agreement and upon issuance
of the warrants, each registered holder of such warrants shall have the right to
purchase from the Company (and the Company shall issue to such registered
holders) up to the number of fully paid and non-assessable Shares underlaying
the warrants, free and clear of all preemptive rights of shareholders, provided
that such registered holder complies, in connection with the exercise of such
holders' warrants, with the terms governing exercise of the Warrants set forth
in the Warrant Agreement, and pays the applicable exercise price, determined in
accordance with the terms of the Warrant Agreement. Upon exercise of the
warrants, the Company shall forthwith issue to the registered holder of any such
warrants, in such holder's name or in such name as may be directed by such
holder, certificates for the number Shares so purchased. The warrants shall be
transferable in the manner provided in the Warrant Agreement, and upon any such
transfer, a new warrant shall be issued promptly to the transferee. The Company
covenants to, and agrees with, each Holder that without the prior written
consent of all the Holders, the Warrant Agreement will not be modified, amended,
canceled, altered or superseded, and that the Company will send to each Holder,
irrespective of whether or not the warrants have been exercised, any and all
notices required by the Warrant Agreement to be sent to holders of the Warrants.
14. NOTICES.
--------
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
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(a) If to a registered Holder of the Representative's Warrants or
warrants, to the address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 of this
Agreement or to such other address as the Company may designate by notice to the
Holders.
15. SUPPLEMENTS AND AMENDMENTS.
---------------------------
The Company and the Underwriter may from time to time supplement or
amend this Agreement without the approval of any Holders of the Representative's
Warrants or warrants in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem not to
adversely affect the interests of the Holders of Representative's Warrant
Certificates or warrant Certificates.
16. SUCCESSORS.
-----------
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
17. TERMINATION.
------------
This Agreement shall terminate at the close of business on _________,
2005. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when all Representative's Warrants and warrants have been exercised
and all Warrant Securities have been resold to the public; provided, however,
that the provisions of Section 7.3 (a), (c), (d), (e) and (h) shall survive any
termination pursuant to this Section until the close of business on __________,
2006.
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18. GOVERNING LAW.
--------------
This Agreement and each Representative's Warrant Certificate and
warrant Certificate 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.
19. BENEFITS OF THIS AGREEMENT.
---------------------------
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Underwriter and any other registered
holder or holders of the Representative's Warrant Certificates or warrant
Certificates any legal or equitable right, remedy or claim under this Agreement;
and this Agreement shall be for the sole and exclusive benefit of the Company
and the Underwriter and any other holder or holders of the Representative's
Warrant Certificates or warrant Certificates.
20. COUNTERPARTS.
-------------
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
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BIO-AQUA SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
NUTMEG SECURITIES, LTD.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
XXXXXXX XXXXXXX & ASSOCIATES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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EXHIBIT A
THE TRANSFER OR EXCHANGE OF THE REPRESENTATIVE'S WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE REPRESENTATIVE'S WARRANT
AGREEMENT REFERRED TO HEREIN.
EXERCISABLE AT ANY TIME COMMENCING _________, 2000
UNTIL 5:00 P.M., EASTERN TIME, _______, 2004
_______ Representative's Warrants
Representative's Warrant Certificate
This Representative's Warrant Certificate certifies
that______________________________________ or registered assigns, is the
registered holder of __________ Representative's Warrants to purchase, at any
time until 5:00 P.M. Eastern time on _______, 2004 (the "Expiration Date"), up
to 120,000 fully-paid and non-assessable shares (the "Shares") of the common
stock, par value $.0001 per share of Bio-Aqua Systems, Inc., a Florida
corporation (the "Company"), at an initial exercise price, subject to adjustment
in certain events (the "Exercise Price"), of $8.50 per
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Share, and up to 120,000 purchase warrants exercisable upon surrender of the
warrant Certificate and payment of the Exercise Price of $10.725 at an office or
agency of the Company, but subject to the conditions set forth herein and in the
Representative's Warrant Agreement dated as of _______, 1999 between the
Company, Nutmeg Securities, Ltd. and Xxxxxxx Xxxxxxx & Associates, Inc. Payment
of the Exercise Price may be made in cash, or by certified or official bank
check in New York Clearing House funds payable to the order of the Company, or
any combination thereof.
No Representative's Warrant may be exercised after 5:00 P.M., Eastern
time, on the Expiration Date, at which time all Representative's Warrants
evidenced hereby, unless exercised prior thereto, shall thereafter be void.
The Representative's Warrants evidenced by this Representative's
Warrant Certificate are part of a duly authorized issue of Representative's
Warrants issued pursuant to the Representative's Warrant Agreement, which
Representative's Warrant Agreement is hereby incorporated by reference in and
made a part of this instrument and is hereby referred to in a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Company and the holders (the words "Holder(s)" meaning the registered
holders or registered holder) of the Representative's Warrants.
The Representative's Warrant Agreement provides that upon the
occurrence of certain events, the Exercise Price and the type and/or number of
the Company's securities issuable thereupon may, subject to certain conditions,
be adjusted. In such event, the Company will, at the request of the holder,
issue a new Representative's Warrant Certificate evidencing the adjustment in
the Exercise Price and the number and/or type of securities issuable upon the
exercise of the Representative's Warrants; provided, however, that the failure
of the Company to issue such new Representative's Warrant Certificate shall not
in any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Representative's Warrant Agreement.
This Representative's Warrant Certificate may be divided or combined
with other Representative's Warrant Certificates of other denominations upon
surrender hereof at an office or agency maintained by the Company for such
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purpose, together with a written notice specifying the names and denominations
(in whole Representative's Warrants) in which new Representative's Warrant
Certificates are to be issued, signed by the holder thereof or his duly
authorized attorney, together with the funds to pay any transfer, documentary,
stamp or other taxes or government charges payable in connection with such
transfer and any other amounts required pursuant to this Representative's
Warrant Certificate. Upon such surrender and payment, a new Representative's
Warrant Certificate or Certificates representing a like aggregate number of
Representative's Warrants shall be issued and delivered in accordance with such
notice.
Upon the exercise of less than all of the Representative's Warrants
evidenced by this Certificate, the Company shall forthwith issue to the holder
hereof a new Representative's Warrant Certificate representing such number of
unexercised Representative's Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Representative's Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s) hereof,
and for all other purposes, and the Company shall not be affected by any notice
to the contrary.
All terms used in this Representative's Warrant Certificate which are
defined in the Representative's Warrant Agreement shall have the meanings
assigned to them in the Representative's Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Representative's
Warrant Certificate to be duly executed under its corporate seal.
Dated:___________, 1999
BIO-AQUA SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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EXHIBIT B
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE AT ANY TIME COMMENCING _________, 2000
UNTIL 5:00 P.M., EASTERN TIME, _______, 2004
No. W- _________ Warrants
Warrant Certificate
This warrant Certificate certifies that ______________________ , or
registered assigns, is the registered holder of __________________________
(_______) warrants to purchase, at any time until 5:00 P.M. Eastern time on
_______, 2004 ("Expiration Date"), an aggregate of up to 120,000 shares of
common stock, par value $.0001 per share (the "Shares), of Bio-Aqua Systems,
Inc., a Florida corporation (the "COMPANY"), at an initial exercise price,
subject to adjustment in certain events (the "Exercise Price"), of $10.725 per
Share, upon surrender of this warrant Certificate and payment of the Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the Representative's Warrant Agreement dated as of _______,
1999 between the Company and Nutmeg Securities, Ltd. and Xxxxxxx Xxxxxxx (the
"Representative's Warrant Agreement"). Payment of the Exercise Price may be made
in cash, or by certified or official bank check in New York Clearing House funds
payable to the order of the Company, or any combination thereof.
The warrants issuable upon exercise of the Representative's Warrants
will be exercisable at any time from _______, 1999 (or such earlier date on
which the Underwriter consents to the exercise of the Public Warrants (as
defined in the Representative's Warrant Agreement which is hereinafter defined)
until 5:00 P.M. Eastern time _______, 2004 each warrant entitling the holder
thereof to purchase one fully-paid and non-assessable share of common stock of
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the Company, at an initial exercise price, subject to adjustment in certain
events, of $10.725 per share. The warrants are issuable pursuant to the terms
and provisions of a certain agreement dated as of August 27, 1999 by and among
the Company, Nutmeg Securities, Ltd. and Xxxxxxx Xxxxxxx (the "Representative's
Warrant Agreement"). The Representative's Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to (except as otherwise provided in the Warrant Agreement) for a
description of the rights, limitations of rights, manner of exercise,
anti-dilution provisions and other provisions with respect to the warrants.
No warrant may be exercised after 5:00 P.M., Eastern time, on the
Expiration Date, at which time all warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The warrants evidenced by this warrant Certificate are part of a duly
authorized issue of warrants issued pursuant to the Representative's Warrant
Agreement, which Representative's Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to in a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "Holders" or
"Holder" meaning the registered holders or registered holder) of the warrants.
The Representative's Warrant Agreement provides that, upon the
occurrence of certain events, the Exercise Price and the type and/or number of
the Company's securities issuable thereupon may, subject to certain conditions,
be adjusted. In such event, the Company will, at the request of the holder,
issue a new warrant Certificate evidencing the adjustment in the Exercise Price
and the number and/or type of securities issuable upon the exercise of the
warrants; provided, however, that the failure of the Company to issue such new
warrant Certificates shall not in any way change, alter, or otherwise impair the
rights of the holder as set forth in the Representative's Warrant Agreement.
This warrant Certificate may be divided or combined with other warrant
Certificates of other denominations upon surrender hereof at an office or agency
maintained by the Corporation for such purpose, together with a written notice
specifying the names and denominations (in whole warrants) in which new warrant
Certificates are to be issued,
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signed by the holder thereof or his duly authorized attorney, together with the
funds to pay any transfer, documentary, stamp or other taxes or government
charges payable in connection with such transfer and any other amounts required
pursuant to this warrant Certificate. Upon such surrender and payment, a new
warrant Certificate or certificates representing a like aggregate number of
warrants shall be issued and delivered in accordance with such notice.
Upon the exercise of less than all of the warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
warrant Certificate representing such number of unexercised warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this warrant Certificate which are defined in the
Representative's Warrant Agreement shall have the meanings assigned to them in
the Representative's Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this warrant
Certificate to be duly executed under its corporate seal.
Dated:_____________, 1999
BIO-AQUA SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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