BIOSHIELD TECHNOLOGIES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Warrant Agent
WARRANT AGREEMENT
Dated as of _______________, 1998
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WARRANT AGREEMENT, dated as of_________, 1998, between BioShield
Technologies, Inc., a Georgia corporation (hereinafter called the "Company"),
and American Stock Transfer & Trust Company, as warrant agent
(hereinafter called the "Warrant Agent");
WHEREAS, the Company proposes to issue 750,000 Redeemable Common
Stock Purchase Warrants (hereinafter called the "Warrants"), entitling the
holders thereof to purchase one share of Common Stock, no par value
(hereinafter called the "Common Stock") for each Warrant, in connection with
the proposed issuance by the Company of 750,000 Units, each Unit consisting
of two shares of Common Stock and one Warrant, and the Company also
proposes to issue up to 112,500 Warrants underlying the Underwriters'
over-allotment option and 75,000 Warrants underlying a warrant to
purchase Units to be granted to the Representatives of the Underwriters;
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
registration, transfer, exchange and exercise of Warrants; NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the
parties hereto agree as follows:
Section
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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 in this Agreement set forth, and the Warrant Agent hereby
accepts such appointment.
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Section 2. Form of Warrant. The text of the Warrant and of the form of
election to purchase shares to be printed on the reverse thereof shall be
substantially as set forth in Exhibit A attached hereto. The Warrant Price
to purchase one share of Common Stock shall be as provided and defined in
Section 8. The Warrants shall be executed on behalf of the Company by the
manual or facsimile signature of the present or any future Chairman of the
Board or President or Vice President of the Company, under its corporate
seal, affixed or in facsimile, attested by the manual or facsimile
signature of the present or any future Secretary or Assistant Secretary of
the Company.
Warrants shall be dated as of the date of issuance thereof by the Warrant
Agent either upon initial issuance or upon transfer or exchange.
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Section 3. Countersignature and Registration. The Warrant Agent shall
maintain books for the transfer and registration of the Warrants. 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 signatures appear thereon as proper
officers of the Company shall have ceased to be such officers at the time
of such countersignature or delivery.
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Section 4. Transfers and Exchanges. The Warrant Agent shall transfer, from
time to time after the sale of the Units, any outstanding Warrants upon 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. 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. The 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 Common Stock. The Warrant
Agent is hereby irrevocably authorized to countersign in accordance with
Section 3 of this Agreement the new Warrants required pursuant to the
provisions of this Section, 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.
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Section 5. Exercise of Warrants. Subject to the provisions of this
Agreement, each registered holder of Warrants shall have the right, which
may be exercised as in such Warrants expressed, to purchase from theCompany
(and the Company shall issue and sell to such registered holder of
Warrants) the number of fully paid and nonassessable shares of Common Stock
specified in such Warrants, upon surrender of such Warrants to the Company
at the office of the Warrant Agent, with the form of election to purchase
on the reverse thereof duly filled in and signed, and upon payment to the
Warrant Agent for the account of the Company of the Warrant Price for the
number of shares of Common Stock in respect of which such Warrants are then
exercised. Payment of such Warrant Price may be made in cash, or by
certified or official bank check payable in New York Clearing House Funds,
payable in United States dollars, to the order of the Warrant Agent. No
adjustment shall be made for any dividends on any shares of Common Stock
issuable upon exercise of a Warrant. Upon such surrender of Warrants, and
payment of the Warrant Price as aforesaid subject to collection, the
Company 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 number of full shares of Common Stock
so purchased upon the exercise of such Warrants. Such certificate or
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 shares as of the date of the surrender of such Warrants and
payment of the Warrant Price as aforesaid; provided, however, that if, at
the date of surrender of such Warrants and payment of the Warrant Price,
the transfer books for the Common Stock or other class of 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 rights 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 only 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, a new Warrant or
Warrants will be issued for the remaining number of shares 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 Section and of Section 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
purpose.
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Section 6. Mutilated or Missing Warrants. In case any of the Warrants shall
be mutilated, lost, stolen or destroyed, the Company will issue and the
Warrant Agent will 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 Company and the Warrant Agent of
such loss, theft or destruction of such Warrant 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.
Section 7. Reservation and Registration of Common Stock.
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(a) There have been reserved, and the Company shall at all times keep
reserved, out of the authorized and unissued shares of Common Stock, a
number of shares sufficient to provide for the exercise of the rights
of purchase represented by the Warrants, and the Transfer Agent for the
Common Stock and every subsequent Transfer Agent for any shares of the
Company's capital 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 shares as
shall be requisite for such purpose. The Company will keep a copy of
this Agreement on file with the Transfer Agent for the Common Stock and
with every subsequent Transfer Agent for any shares of the Company's
capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably
authorized to requisition from time to time such Transfer Agent for
stock certificates required to honor outstanding Warrants. The Company
will supply such Transfer Agents with duty executed stock certificates
for such purpose and will itself provide or otherwise make available
any cash which may be issuable as provided in Section 9 of this
Agreement. 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 stock
which have been issued upon the exercise of such Warrants.
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(b) The Company represents that it has registered under the
Securities Act of 1933, as amended, the shares of Common Stock issuable
upon exercise of the Warrants and will use its best reasonable efforts
to maintain the effectiveness of such registration by post-effective
amendment during the entire period in which the Warrants are
exercisable, and that it will use its best reasonable efforts to
qualify such Common Stock for sale under the securities laws of such
states of the United States as may be necessary to permit the exercise
of the Warrants in the states in which the Units are initially
qualified and to maintain such qualifications during the entire period
in which the Warrants are exercisable.
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Section 8. Warrant Price; Adjustments.
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(a) The price at which Common Stock shall be purchasable upon
exercise of Warrants at any time after the Common Stock and Warrants
become separately tradable until _______________, 2003 shall be $7.80
per share of Common Stock (hereinafter called the "Warrant Price") or,
if adjusted as provided in this Section, shall be such price as so
adjusted. The Common Stock and Warrants shall become separately
tradable on _______________, 1999, unless earlier separated upon ten
days prior written notice from Tejas Securities Group, Inc., a
Representative of the Underwriters, to the Company.
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(b) The Warrant Price shall be subject to adjustment from time
to time as follows:
(i) Except as hereafter provided, in case the Company shall at
any time or from time to time after the date hereof until
__________, 2003 issue any additional shares of Common Stock
for a consideration per share less than the Warrant Price in
effect immediately prior to the issuance of such additional
shares, or without consideration, then, upon each such
issuance, the Warrant Price in effect immediately prior to the
issuance of such additional shares shall forthwith be reduced
to a price (calculated to the nearest full cent) determined by
dividing:
(1) An amount equal to (i) the total number of shares
of Common Stock outstanding immediately prior to such
issuance multiplied by the Warrant Price in effect
immediately prior to such issuance, plus (ii) the
consideration, if any, received by the Company upon
such issuance, by
(2) The total number of shares of Common
Stock outstanding immediately after the issuance of
such additional shares.
(ii) Company shall not be required to make any such
adjustment of the Warrant Price in accordance with the
foregoing if the amount of such adjustment shall be less than
$0.25 (adjustment will be made when cumulative adjustment
equals or exceeds $0.25) but in such case the Company shall
maintain a cumulative record of the Warrant Price as it would
have been in the absence of this provision (the "Constructive
Warrant Price"), and for the purpose of computing a new
Warrant Price after the next subsequent issuance of additional
shares (but not for the purpose of determining whether an
adjustment thereof is required under the terms of this
paragraph) the constructive Warrant Price shall be deemed to
be the Warrant Price in effect immediately prior to such
issuance.
(iii) For the purpose of this Section 8 the following
provisions shall also be applicable:
(1) In the case of the issuance of
additional shares of Common Stock for cash, the
consideration received by the Company therefor shall
be deemed to be the net cash proceeds received by the
Company for such shares before deducting any
commissions or other expenses paid or incurred by the
Company for any underwriting of, or otherwise in
connection with, the issuance of such shares.
(2) In case of the issuance (otherwise than
upon conversion or exchange of shares of Common
Stock) of additional shares of Common Stock for a
consideration other than cash or a consideration a
part of which shall be other than cash, the amount of
the consideration other than cash received by the
Company for such shares shall be deemed to be the
value of such consideration as determined in good
faith by the Board of Directors of the Company, as of
the date of the adoption of the resolution of said
Board, providing for the issuance of such shares for
consideration other than cash or for consideration a
part of which shall be other than cash, such fair
value to include goodwill and other intangibles to
the extent determined in good faith by the Board.
(3) In case of the issuance by the Company
after the date hereof of any security (other than the
Warrants) that is convertible into shares of Common
Stock or of any warrants, rights or options to
purchase shares of Common Stock (except the options
and warrants referred to in subsection (h) of this
Section 8), (i) the Company shall be deemed (as
provided in subparagraph (5) below) to have issued
the maximum number of shares of Common Stock
deliverable upon the exercise of such conversion
privileges or warrants, rights or options, and (ii)
the consideration therefor shall be deemed to be the
consideration received by the Company for such
convertible securities or for such warrants, rights
or options, as the case may be, before deducting
therefrom any expenses or commissions incurred or
paid by the Company for any underwriting of, or
otherwise in connection with, the issuance of such
convertible security or warrants, rights or options,
plus (A) the minimum consideration or adjustment
payment to be received by the Company in connection
with such conversion, or (B) the minimum price at
which shares of Common Stock are to be delivered upon
exercise of such warrants, rights or options or, if
no minimum price is specified and such shares are to
be delivered at an option price related to the market
value of the subject shares, an option price bearing
the same relation to the market value of the subject
shares at the time such warrants, rights or options
were granted; provided that as to such options such
further adjustment as shall be necessary on the basis
of the actual option price at the time of exercise
shall be made at such time if the actual option price
is less than the aforesaid assumed option price. No
further adjustment of the Warrant Price shall be made
as a result of the actual issuance of the shares of
Common Stock referred to in this subparagraph (3). On
the expiration of such warrants, rights or options,
or the termination of such right to convert, the
Warrant Price shall be readjusted to such Warrant
Price as would have pertained had the adjustments
made upon the issuance of such warrants, rights,
options or convertible securities been made upon the
basis of the delivery of only the number of shares of
Common Stock actually delivered upon the exercise of
such warrants, rights or options or upon the
conversion of such securities.
(4) For the purposes hereof, any additional
shares of Common Stock issued as a stock dividend
shall be deemed to have been issued for no
consideration.
(5) The number of shares of Common Stock at
any time outstanding shall include the aggregate
number of shares deliverable in respect of the
convertible securities, rights and options referred
to in subparagraph (3) of this paragraph; provided
that with respect to shares referred to in clause (i)
of subparagraph (3), to the extent that such
warrants, options, rights or conversion privileges
are not exercised, such shares shall be deemed to be
outstanding only until the expiration dates of the
warrants, rights, options or conversion privileges or
the prior cancellation thereof.
(c) In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Warrant Price in effect immediately prior to such subdivision shall be
proportionately reduced and, in case the outstanding shares of the
Common Stock of the Company shall be combined into a smaller number of
shares, the Warrant Price in effect immediately prior to such
combination shall be proportionately increased.
(d) Upon adjustment of the Warrant Price pursuant to the
provisions of subsection (c) of this Section 8, the number of shares
issuable upon the exercise of each Warrant shall be adjusted by
multiplying the Warrant Price in effect prior to the adjustment by the
number of shares of Common Stock covered by the Warrant and dividing
the product so obtained by the adjusted Warrant Price.
(e) Except upon consolidation or reclassification of the
shares of Common Stock of the Company as provided for in subsection (c)
hereof and except for readjustment of the Warrant Price upon expiration
of warrants, rights or options as provided for in subparagraph (3) of
paragraph (iii) of subsection (b) hereof, the Warrant Price in effect
at any time may not be adjusted upward or increased in any manner
whatsoever.
(f) Irrespective of any adjustment or change in the Warrant
Price or the number of shares of Common Stock actually purchasable
under the several Warrants, the Warrants theretofore and thereafter
issued may continue to express the Warrant Price per share and the
number of shares purchasable thereunder as the Warrant Price per share
and the number of shares purchasable were expressed in the Warrants
when initially issued.
(g) If any capital reorganization or reclassification of the
capital stock of the Company (other than a distribution of stock in
accordance with Section 10(b)) or consolidation or merger of the
Company with another corporation or the sale of all or substantially
all of its assets to another corporation shall be effected, then, as a
condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby the
holder of each Warrant then outstanding shall thereafter have the right
to purchase and receive upon the basis and upon the terms and
conditions specified herein and in the Warrants and in lieu of the
shares of the Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented
by each such Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares
of such Common stock immediately theretofore purchasable and receivable
upon the exercise of the rights represented by each such Warrant had
such reorganization, reclassification, consolidation, merger or sale
not taken place, and in any such case appropriate provisions shall be
made with respect to the rights and interest of the holder of each
Warrant then outstanding to the end that the provisions thereof
(including without limitation provisions for adjustment of the Warrant
Price and of the number of shares purchasable upon the exercise of each
Warrant then outstanding) shall thereafter be applicable as nearly as
may be in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of each Warrant.
(h) No adjustment of the Warrant Price shall be made in
connection with the issuance or sale of shares of Common Stock issuable
pursuant to currently outstanding options and warrants granted to
officers, directors, employees, advisory directors, or affiliates of
the Company.
(i) Whenever the Warrant Price is adjusted as herein provided,
the Company shall (a) forthwith file with the Warrant Agent a
certificate signed by the Chairman of the Board or a President or a
Vice President of the Company and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Company,
showing in detail the facts requiring such adjustment and the Warrant
Price and the number of shares of Common Stock purchasable upon
exercise of the Warrants after such adjustment and (b) cause a notice
stating that such adjustment has been effected and stating the adjusted
Warrant Price and the number of shares of Common Stock purchasable upon
exercise of the Warrants to be published at least once a week for two
consecutive weeks in a newspaper of general circulation in Dallas,
Texas and in New York, New York. The Company, at its option, may cause
a copy of such notice to be sent by first class mail, postage prepaid,
to each registered holder of Warrants at his address appearing on the
Warrant register. The Warrant Agent shall have no duty with respect to
any such certificate filed with it except to keep the same on file and
available for inspection by holders of Warrants during reasonable
business hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any holder of a Warrant to determine whether
any facts exist which may require any adjustment of the Warrant Price,
or with respect to the nature or extent of any adjustment of the
Warrant Price when made, or with respect to the method employed in
making such adjustment.
(j) The Company may retain a firm of independent certified
public accountants of recognized standing (which may be the firm that
regularly examines the financial statements of the Company) selected by
the Board of Directors of the Company or the Executive Committee, of
said Board and approved by the Warrant Agent, to make any computation
required under this Section 8, and a certificate signed by such firm
shall be conclusive evidence of the correctness of any computation made
under this Section 8.
(k) In case at any time conditions shall arise by reason of
action taken by the Company which, in the opinion of the Board of
Directors of the Company, are not adequately covered by the other
provisions of this Agreement and which might materially and adversely
affect the rights of the holders of the Warrants, or in case at any
time any such conditions are expected to arise by reason of any action
contemplated by the Company, the Board of Directors of the Company
shall appoint a firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the
financial statements of the Company), who shall give their opinion as
to the adjustment, if any (not inconsistent with the standards
established in this Section 8), of the Warrant Price and the number of
shares of Common Stock purchasable pursuant hereto (including, if
necessary, any adjustment as to the property which may be purchasable
in lieu thereof upon exercise of the Warrants) which is, or would be,
required to preserve without dilution the rights of the holders of the
Warrants. The Board of Directors of the Company shall make the
adjustment recommended forthwith upon the receipt of such opinion or
the taking of any such action contemplated, as the case may be;
provided, however, that no adjustment of the Warrant Price shall be
made which in the opinion of the accountant or firm of accountants
giving the aforesaid opinion would result in an increase of the Warrant
Price to more than the Warrant Price then in effect except as otherwise
provided in subsection (e) of this Section 8.
Section 9. No Fractional Interests. The Company shall not be required
to issue fractions of shares of Common Stock on the exercise of Warrants. If
any fraction of a share of Common Stock would, except for the provisions of
this Section, be issuable on the exercise of any Warrant (or specified
portions thereof), the Company shall purchase such fraction for an amount in
cash equal to the current value of such fraction (a) computed, if the Common
Stock shall be listed or admitted to unlisted trading privileges on any
national or
regional securities exchange, on the basis of the last reported sale price of
the Common Stock on such exchange on the last business day prior to the date
of exercise upon which such a sale shall have been effected (or, if the Common
Stock shall be listed or admitted to unlisted trading privileges on more than
one such exchange, on the basis of such price on the exchange designated from
time to time for such purpose by the Board of Directors
of the Company) or (b) computed, if the Common Stock shall not be listed or
admitted to unlisted trading privileges, on the basis of the average of the
high and low bid prices of the Common Stock in the Nasdaq Small
Cap Market, on the last business day prior to the date
of exercise.
Special 10. Notice to Warrantholders.
(a) Nothing contained in this Agreement or in any of the
Warrants shall be construed as conferring upon the holders thereof the
right to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders for the election of directors
of the Company or any other matters, or any rights whatsoever as
stockholders of the Company; provided, however, that in the event that
a meeting of stockholders shall be called to consider and take action
on a proposal for the voluntary dissolution of the Company, other than
in connection with a consolidation, merger or sale of all, or
substantially all, of its property, assets, business and goodwill as an
entirety, then and in that event the Company shall cause a notice
thereof to be published at least once a week for two consecutive weeks
in a newspaper of general circulation in Dallas, Texas and New York,
New York, such publication to be completed at least 20 days prior to
the date fixed as a record date or the date of closing the transfer
books for the determination of the stock holders entitled to vote at
such meeting. The Company shall also cause a copy of such notice to be
sent by first class mail, postage prepaid, at least 20 days prior to
said date fixed as a record date or said date of closing the transfer
books, to each registered holder of Warrants at his address appearing
on the Warrant register; but failure to mail or receive such notice or
any defect therein or in the mailing thereof shall not affect the
validity of any action taken in connection with such voluntary
dissolution. If such notice shall have been so given and if such a
voluntary dissolution shall be authorized at such meeting or any
adjournment thereof, then for and after the date on which such
voluntary dissolution shall have been duly authorized by the
stockholders, the purchase rights represented by the Warrants and other
rights with respect thereto shall cease and terminate.
(b) If the Company shall make any distribution on, or to
holders of, its Common Stock (or other property which may be
purchasable in lieu thereof upon the exercise of Warrants) of any
property (other than a cash dividend), the Company shall cause a notice
of its intention to make such distribution to be published at least
once a week for two consecutive weeks in a newspaper of general
circulation in Dallas, Texas and New York, New York, such publication
to be completed at least 20 days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of
the stockholders entitled to receive such distribution. The Company
shall also cause a copy of such notice to be sent by first class mail,
postage prepaid at least 20 days prior to said date fixed as a record
date or said date of closing the transfer books, to each registered
holder of Warrants at his address appearing on the Warrant register;
but failure to mail or to receive such notice or any defect therein or
in the mailing thereof shall not affect the validity of any action
taken in connection with such distribution.
Section 11. Disposition of Proceeds on Exercise of Warrants.
(a) The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company
all monies received by the Warrant Agent for the purchase of shares of
the Company's stock through the exercise of such Warrants.
(b) The Warrant Agent shall keep copies of this Agreement
available for inspection by holders of Warrants during normal business
hours at its principal office.
Section 12. Redemption of Warrants.
(a) At any time on or after _____________, 1998, the Company
may, at its option, redeem some or all of the outstanding Warrants at
$0.05 per Warrant, upon thirty (30) days prior written notice, if the
closing sale price of the Common Stock on any national securities
exchange, or the closing bid quotation on the Nasdaq Small Cap Market,
has equaled or exceeded $13.00 for ten (10) consecutive trading days
within the 30 day period immediately preceding the date notice of
redemption is given (the "Redemption Price"). In the event of an
adjustment in the Warrant Price pursuant to Section 8, the Redemption
Price shall also be automatically adjusted.
(b) The election of the Company to redeem some or all of the
Warrants shall be evidenced by a resolution of the Board of Directors
of the Company.
(c) Warrants may be exercised at any time on or before the
date fixed for redemption (the "Redemption Date").
(d) Notice of redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to
the Redemption Date, to each holder of Warrants, at his address
appearing in the Warrant register.
All notices of redemption shall state:
(i) The Redemption Date;
(ii) That on the Redemption Date the Redemption Price
will become due and payable upon each Warrant;
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(iii) The place where such Warrants are to be
surrendered for redemption and payment of the Redemption
Price; and
(iv) The current Warrant Price of the Warrants, the
place or places where such Warrants may be surrendered for
exercise, and the time at which the right to exercise the
Warrants will terminate in accordance with this Agreement.
(e) Notice of redemption of Warrants at the election of the
Company shall be given by the Company or, at the Company's request, by
the Warrant Agent in the name and at the expense of the Company.
(f) Prior to any Redemption Date, the Company shall deposit
with the Warrant Agent an amount of money sufficient to pay the
Redemption Price of all the Warrants which are to be redeemed on that
date. If any Warrant is exercised pursuant to Section 5, any money so
deposited with the Warrant Agent for the redemption of such Warrant
shall be paid to the Company.
(g) Notice of redemption having been given as aforesaid, the
Warrants so to be redeemed shall, on the Redemption Date, become
redeemable at the Redemption Price therein specified and on such date
(unless the Company shall default in the payment of the Redemption
Price), such Warrants shall cease to be exercisable and thereafter
represent only the right to receive the Redemption Price. Upon
surrender of such Warrants for redemption in accordance with said
notice, such Warrants shall be redeemed by the Company for the
Redemption Price.
Section 13. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the corporate trust 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 that such corporation would be eligible for
appointment as a successor warrant agent under the provisions of Section 15
of this Agreement. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement and at such time any
of the Warrants shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the
Warrant Agent and deliver such Warrants so countersigned; and in case at
the time any of the Warrants shall not have been countersigned, any
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 Warrant 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 in case at that time any of
the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants whether 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 in this Agreement.
Section 14. Duties of Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Warrants, by
their acceptance thereof, shall be bound:
(a) 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
describe the Warrant Agent or action 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.
(b) The Warrant Agent shall not be responsible for 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.
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it to perform any duty hereunder
either itself or by or through its attorneys, agents or employees.
(d) 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 the advice of such counsel, provided the Warrant Agent shall
have exercised reasonable care in the selection and continued
employment of such counsel.
(e) 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 on any notice, resolution, waiver, consent,
order, certificate, or other paper, document or instrument believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(f) The Company agrees to pay to 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 and 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
against any and all liabilities, including judgments, costs and
reasonable counsel 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.
(g) 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 for any cost and expense which may be
incurred, but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider proper,
whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the
Warrants or 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 ratable benefit of the
registered holders of the Warrants, as their respective rights or
interests may appear.
(h) The Warrant Agent and any stockholder, director, officer
or employee of the Warrant Agent may buy, sell, or deal in any of the
Warrants or other securities of the Company or become peculiarly
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 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.
(i) The Warrant Agent shall act hereunder solely as agent and
not in a ministerial capacity, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be liable
for anything which it may do or refrain from doing in connection with
this Agreement except for its own negligence or bad faith.
Section 15. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company
notice in writing, and to the holders of the Warrants notice by
publication, of such resignation, specifying a date when such resignation
shall take effect, which notice shall be published at least once a week for
two consecutive weeks in a newspaper of general circulation in Dallas,
Texas and New York, New York, prior to the date so specified. The Warrant
Agent may be removed by like notice to the Warrant Agent from the Company
and by like publication. If the Warrant Agent shall resign or be removed or
shall 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 a Warrant may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant
Agent. Any successor warrant agent, whether appointed by the Company or by
such a court, shall be a bank or trust company having its principal office,
and having capital and surplus as shown by its last published report to its
stockholders, of at least $1,000,000. After appointment, the 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. Failure to file or publish any notice
provided for in this Section, 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 the successor warrant agent, as the
case may be.
Section 16. Identity of Transfer Agent. Forthwith upon the appointment of
any Transfer Agent for the Common Stock or of any subsequent Transfer Agent
for shares of the Common Stock or other shares of the Company's capital
stock 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.
Section 17. Notices. Any notice pursuant to this Agreement to be given or
made by the Warrant Agent or the registered holder of any Warrant to or on
the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
by the Company with the Warrant Agent) as follows:
BioShield Technologies, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxxxx X-000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxx Moss Kline & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Any notice pursuant to this Agreement to be given or made by the Company or the
registered holder of any Warrant to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________
Section 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 holders of Warrants in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may
deem necessary or desirable and which shall not be inconsistent with the
provisions of the Warrants and which shall not adversely affect the
interests of the holders of Warrants.
Section 19. Successors. All the covenants and provisions of this Agreement
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.
Section 20. Merger or Consolidation of the Company. The Company shall
not effect any consolidation or merger with, or sale of substantially all its
property to, any other corporation unless the corporation resulting
from such merger (if not the Company) or consolidation or the corporation
purchasing such property 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.
Section 21. Georgia Contract. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State
of Georgia and for all purposes shall be construed in accordance with the
laws of said State.
Section 22. Benefit of This Agreement. Nothing in this Agreement shall be
construed to give to 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, the Warrant
Agent and the registered holders of the Warrants.
Section 23. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes by deemed
to be an original, and all 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, all as of the day and year first above written.
BIOSHIELD TECHNOLOGIES, INC.
By:
Xxxxxxx X. Xxxxx
Co-Chairman of the Board, President and
Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:
Name:
G:\TEJASC~1\DEALS\SB2\BIOSHI~1\AMENDM~1\1T#7C03!.WPD0871998
349:18662-5
EXHIBIT A
[FORM OF WARRANT]
No. _____ For the Purchase of ____ Shares
of Common Stock
_______________, 1998
BIOSHIELD TECHNOLOGIES, INC.
REDEEMABLE COMMON STOCK PURCHASE WARRANT
EXERCISABLE ON OR BEFORE 5:00 P.M., New York City Time , 2003
This Warrant certifies that, for value received, _______________, or
registered assigns, is the holder of the number of Redeemable Common Stock
Purchase Warrants (the "Warrants") specified above. Each Warrant entities the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Warrant Agreement (as hereinafter defined), one fully
paid and nonassessable share of Common Stock, no par value (the "Common Stock"),
of BioShield Technologies, Inc., a Georgia corporation (the "Company") at any
time between _______________, 1998 and the Expiration Date (as hereinafter
defined), upon the presentation and surrender of the Warrant Certificate with
the Subscription Form on the reverse 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 $7.80 (the "Purchase
Price") in lawful money of the United States of America in cash or by official
bank or certified check made payable to the Warrant Agent.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and subject in all respects to the term and conditions set forth in
the Warrant Agreement (the "Warrant Agreement"), dated as of _____________,
1998, by and among the Company and the Warrant Agent.
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 the 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 the
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York City time) on
_______________, 2003, or such earlier date as the Warrants may be redeemed. If
such date shall in the State of New York be a holiday or a day on which the
banks are authorized to close, then the Expiration Date shall be 5:00 p.m. (New
York City time) the next day which in the State of New York is not a holiday or
a day in which the banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of the Warrant 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. This Warrant shall not be exercisable by a Registered
Holder in any state where the 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, together with any tax or other
governmental charges imposed in connection therewith, for registration or
transfer of this Warrant Certificate at such office, the 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.
Commencing _______________, 1999, this Warrant may be redeemed at the
option of the Company at the redemption price of $.05 per Warrant, provided the
closing price of the Company's Common Stock, as reported by the Nasdaq Small Cap
Market or other national trading market on which the Common Stock may then be
listed is at least $13.00 for at least 10 consecutive trading days ending within
30 days of the date of notice of redemption. Notice of redemption shall be given
not later than the thirtieth (30th) day before the date fixed for redemption,
all as provided in the Warrant Agreement. On and after the date fixed for
redemption, the Registered Holder shall have no rights with respect to this
Warrant except to receive the $.05 per Warrant upon surrender of this
Certificate.
Prior to due presentment for registration or transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and 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 Texas.
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 two (2) of its officers thereunto
duly authorized and a facsimile of the corporate seal imprinted hereon.
Dated:_______________________
BIOSHIELD TECHNOLOGIES, INC.
Countersigned:
By:
Xxxxxxx X. Xxxxx
AMERICAN STOCK TRANSFER
Co-Chairman of the Board and
& TRUST COMPANY, Chief
Executive Officer
Warrant Agent
By:
By:
Name:
Name:
Secretary
Title:
G:\TEJASC~1\DEALS\SB2\BIOSHI~1\AMENDM~1\1T#7C03!.WPD
[FORM OF]
ELECTION TO PURCHASE
BioShield Technologies, Inc.
c/o _________________________
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for, and to purchase thereunder,
_______________ shares of the stock provided for therein, and requests that
certificates for such shares shall be issued in the name of
( Please Print )
and be delivered to
at
and, if said number of shares shall not be all of the shares purchasable
thereunder, that a new Warrant for the balance remaining of the shares
purchasable under the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:
Name of Warrantholder:
(Please Print)
Address:
Signature:
Note: The above signature must correspond with the name
as written upon the face of this Warrant in every
particular, without alteration or enlargement or
any change whatsoever.
Taxpayer ID No.:
Warrant Certificate No.:
G:\TEJASC~1\DEALS\SB2\BIOSHI~1\AMENDM~1\1T#7C03!.WPD
[FORM OF]
ASSIGNMENT
For value received
does hereby sell, assign and transfer unto
the within Warrant, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint attorney, to transfer said
Warrant on the books of the within-named Corporation, with full power of
substitution in the premises.
Date:
Signature:
Note: The above signature must correspond with the name
as written upon the face of this Warrant in every
particular, without alteration or enlargement or
any change whatsoever.
Taxpayer ID No.:
Warrant Certificate No.:
G:\TEJASC~1\DEALS\SB2\BIOSHI~1\AMENDM~1\1T#7C03!.WPD
TABLE OF CONTENTS
(Continued)
Page
-1-
TABLE OF CONTENTS
Page
Section 1. Appointment of Warrant Agent. 1
Section 2. Form of Warrant. 1
Section 3. Countersignature and Registration. 1
Section 4. Transfers and Exchanges. 2
Section 5. Exercise of Warrants. 2
Section 6. Mutilated or Missing Warrants. 3
Section 7. Reservation and Registration of Common Stock. 3
Section 8. Warrant Price; Adjustments. 4
Section 9. No Fractional Interests. 8
Special 10. Notice to Warrantholders. 9
Section 11. Disposition of Proceeds on Exercise of Warrants.
10
Section 12. Redemption of Warrants. 10
Section 13. Merger or Consolidation or Change of Name of
Warrant Agent. 11
Section 14. Duties of Warrant Agent. 12
Section 15. Change of Warrant Agent. 13
Section 16. Identity of Transfer Agent. 14
Section 17. Notices. 14
Section 18. Supplements and Amendments. 14
Section 19. Successors. 15
Section 20. Merger or Consolidation of the Company. 15
Section 21. Texas Contract. 15
Section 22. Benefit of This Agreement. 15
Section 23. Counterparts. 15
