Document:

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                                                                     EXHIBIT 4.2

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS ADJUSTMENT WARRANT SHALL
NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.

                               ADJUSTMENT WARRANT

No. A1

              To Purchase Shares of $.001 Par Value Common Stock of

                                 BLUE ZONE, INC.

         THIS CERTIFIES that, for value received, [___________] (the "INVESTOR")
is entitled, upon the terms, at the times and subject to the conditions
hereinafter set forth, prior to 5:00 p.m. New York City Time on the Termination
Date (as defined herein) but not thereafter, to subscribe for and purchase from
time to time from BLUE ZONE, INC., a Nevada corporation (the "COMPANY"), all or
a portion of an aggregate number of shares of Common Stock of the Company (the
"ADJUSTMENT SHARES") determined in accordance with Section 3(c) hereof. The
"EXERCISE PRICE" per share is $.001. The exercise price per share and the number
of shares for which the Adjustment Warrant is exercisable shall be subject to
adjustment as provided herein. This Adjustment Warrant is being issued in
connection with the Common Stock Investment Agreement dated as of September 8,
2000 (the "AGREEMENT") entered into among, inter alia, the Company and the
Investor. Any capitalized terms used but not defined in this Adjustment Warrant
shall have the meaning specified in the Agreement.

1.       Title of Adjustment Warrant. Prior to the expiration hereof and subject
         to compliance with applicable laws, this Adjustment Warrant and all
         rights hereunder are transferable, in whole or in respect of the right
         to purchase any part of the Adjustment Shares, at the office or agency
         of the Company by the holder hereof in person or by duly authorized
         attorney, upon surrender of this Adjustment Warrant together with (a)
         the Assignment Form annexed hereto properly endorsed, and (b) any other
         documentation reasonably necessary to satisfy the Company that such
         transfer is in compliance with all applicable securities laws.

2.       Authorization of Shares. The Company covenants that all shares of
         Common Stock which may be issued upon the exercise from time to time of
         rights represented by this Adjustment Warrant will, upon exercise of
         the rights represented by this Adjustment Warrant and payment of the
         Exercise Price as set forth herein, be duly authorized, validly
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         issued, fully paid and nonassessable and free from all taxes, liens and
         charges in respect of the issue thereof (other than taxes in respect of
         any transfer occurring contemporaneously with such issue or otherwise
         specified herein).

3.       Exercise of Adjustment Warrant for Adjustment Shares.

(a)      Definitions.

         "ADJUSTMENT NUMBER" means the sum of (1) the number of the Initial
         Shares currently held by the Investor, plus (2) the number of
         Adjustment Shares previously acquired and then held by the Investor,
         plus (3) the total number of Adjustment Shares the Investor then has
         the right to acquire under this Adjustment Warrant (for this purpose
         ignoring the provisions of Section 15 hereof) (such Adjustment Shares
         then issuable as described in this clause (3) are herein called
         "ACCRUED ADJUSTMENT SHARES"). The Adjustment Number shall be
         appropriately adjusted from time to time to reflect stock splits, stock
         dividends, recapitalizations and the like.

         "ADJUSTMENT PERIOD" means the last 30 Trading Days immediately
         preceding but not including the 90 calendar day anniversary of the
         Closing Date, and the last 30 Trading Days of each successive 90
         calendar day period thereafter, provided that there shall be no more
         Adjustment Periods following the earlier of (i) the eighth (8th)
         consecutive Adjustment Period and (ii) the date on which the closing
         bid price for a share of Common Stock on the Principal Market (as
         reported by Bloomberg) exceeds 175% of the Share Purchase Price for ten
         (10) consecutive Trading Days after Effective Registration.

         "ADJUSTMENT SETTLEMENT DATE" means, for a particular Adjustment Period,
         the third Trading Day immediately following the end of such Adjustment
         Period.

         "ADJUSTMENT SHARE PURCHASE PRICE" means, for an Adjustment Period, the
         average of the closing bid price of a share of Common Stock on the
         Principal Market on the ten (10) lowest closing bid price Trading Days
         during such Adjustment Period. The Adjustment Share Purchase Price
         shall be appropriately adjusted from time to time to reflect stock
         splits, stock dividends, recapitalizations and the like.

         "EFFECTIVE REGISTRATION" shall have the meaning specified in the
         Purchase Agreement.

         "SET PRICE" means, for the first Adjustment Period, the Share Purchase
         Price (as defined in the Agreement), and for each subsequent Adjustment
         Period, the Adjustment Share Purchase Price for the most recently
         preceding Adjustment Period.

         "TERMINATION DATE" means the date which is thirty days following the
         later of (i) the end of the last Adjustment Period hereunder, or (ii)
         the date on which the holder hereof receives written notice from the
         Company that the closing bid price for a share of Common Stock on the
         Principal Market (as reported by Bloomberg) has exceeded 175% of the
         Share Purchase Price for ten (10) consecutive Trading Days after
         Effective Registration.

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(b)      (i) Exercise of Adjustment Warrant by Investor. Exercise of the rights
         represented by this Adjustment Warrant may be made at any time or
         times, in whole or in part, after the end of the first Adjustment
         Period and prior to 5:00 p.m. New York City time on the Termination
         Date, or such earlier date on which this Adjustment Warrant may
         terminate as provided in Section 13(d) below, by the surrender on any
         business day of this Adjustment Warrant and a Notice of Exercise in the
         form annexed hereto duly completed and executed, at the principal
         office of the Company (or such other office or agency of the Company as
         it may designate by notice in writing to the registered holder hereof
         at the address of such holder appearing on the books of the Company),
         and upon payment of the full Exercise Price of the shares thereby
         purchased; whereupon the holder of this Adjustment Warrant shall be
         entitled to receive a certificate for the number of Adjustment Shares
         for which this Adjustment Warrant has been so exercised.

         (ii) Cashless Exercise. Alternatively, the Warrant holder may exercise
         this Adjustment Warrant, in whole or in part in a "cashless" or
         "net-issue" exercise by delivering to the offices of the Company or any
         transfer agent for the Common Stock this Adjustment Warrant, together
         with a Notice of Exercise specifying the number of Adjustment Shares to
         be delivered to such Warrant holder ("DELIVERABLE SHARES") and the
         number of Adjustment Shares with respect to which this Adjustment
         Warrant is being surrendered in payment of the aggregate Exercise Price
         for the Deliverable Shares ("SURRENDERED SHARES").

         The number of Deliverable Shares shall be calculated as follows:

<TABLE>
         <S>                                                  <C>

         # of Deliverable Shares = # of Surrendered Shares  x  Fair Market Value of Common Stock less Exercise Price
                                                               -----------------------------------------------------
                                                               Fair Market Value of Common Stock
</TABLE>

         "FAIR MARKET VALUE" shall have the meaning specified in Section 14(c).

         The number of Adjustment Shares shall be reduced by the number of such
         Adjustment Shares for which this Adjustment Warrant is exercised and/or
         surrendered, and the Company, at its expense, shall within five (5)
         Trading Days issue and deliver to or upon the order of the Warrant
         holder a new Adjustment Warrant of like tenor in the name of Warrant
         holder or as Warrant holder may request, reflecting such adjusted
         Adjustment Shares.

         (iii) Date of Exercise; Delivery of Certificates. All exercises will be
         deemed to occur as of the date of the Notice of Exercise, and
         certificates for shares of Common Stock purchased hereunder shall be
         delivered to the holder hereof within four (4) Trading Days after the
         date on which this Adjustment Warrant shall have been exercised as
         aforesaid. The Warrant holder may withdraw its Notice of Exercise under
         this Section 3(b) at any time thereafter if the Company fails to timely
         deliver the applicable certificates to the Warrant holder as provided
         in this Adjustment Warrant.

         (iv) Company Election of Cash or Stock. Subject to the other provisions
         of this Adjustment Warrant, the Company shall elect, by delivering
         written notice received by

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         the Investor on the first Trading Day of a particular Adjustment
         Period, to satisfy its adjustment obligations (if any) for such
         Adjustment Period either wholly in cash or wholly in Adjustment Shares
         (or Accrued Adjustment Shares, as the case may be), but not in a
         combination of the two. Such election may be made by the Company only
         if the sum of the Initial Shares then owned by the Investor, the
         Adjustment Shares then owned by the Investor, plus Accrued Adjustment
         Shares, exceeds 200% of the Initial Shares acquired by the Investor.
         For avoidance of doubt, the Company's right to satisfy its adjustment
         obligation in cash, as provided above, shall not be retroactive and
         shall not apply to Adjustment Shares which have been issued or should
         have been issued or to Accrued Adjustment Shares for any prior
         Adjustment Period. The number of Adjustment Shares deliverable (or
         Accrued Adjustment Shares, as the case may be) will be calculated in
         accordance with Section 3(c) and the amount of cash deliverable will be
         calculated in accordance with Section 3(d). If the Company fails to
         make any election for a particular Adjustment Period, the default
         method of payment will be Accrued Adjustment Shares.

(c)      Adjustment Share Calculations. The number of Adjustment Shares (if any)
         issuable in respect of a particular Adjustment Period shall be
         calculated immediately following the close of the Principal Market on
         the final Trading Day of such Adjustment Period, using the following
         formula:

<TABLE>
                  <S>                      <C>                                     <C>
                  # of Adjustment Shares  = Adjustment Number   x   Set Price   -   Adjustment Number
                                            ---------------------------------
                                            Adjustment Share Purchase Price
</TABLE>

         The Adjustment Share Purchase Price in the above formula is the
         Adjustment Share Purchase Price for the Adjustment Period then ended,
         and the Adjustment Number in the above formula is the Adjustment Number
         on the last day of such Adjustment Period. The aggregate number of
         Adjustment Shares which may be purchased on exercise of this Adjustment
         Warrant shall equal the total of all Adjustment Shares issuable with
         respect to each Adjustment Period, calculated separately for each
         Adjustment Period pursuant to the above formula. Under no circumstances
         shall the number of Adjustment Shares calculated for any prior
         Adjustment Period be reduced as a result of the calculation of
         Adjustment Shares for the then present or any subsequent Adjustment
         Period. Under no circumstances may the number of Adjustment Shares for
         any Adjustment Period calculated pursuant to the above formula be less
         than zero.

(d)      Cash Calculations. If the Company is permitted to elect and elects
         under Section 3(b) to pay cash, the amount of cash (if any) payable in
         respect of a particular Adjustment Period shall be calculated
         immediately following the close of the Principal Market on the final
         Trading Day of such Adjustment Period, and shall be equal to the
         product obtained by multiplying (x) the total number of Adjustment
         Shares issuable pursuant to Section 3(c) above with respect to such
         Adjustment Period (not including any Accrued Adjustment Shares issuable
         from prior Adjustment Periods) (for this purpose and for purposes of
         calculations pursuant to Section 3(b)(iv), ignoring the provisions of
         Section 15) by (y) the Adjustment Share Purchase Price for the
         Adjustment Period then ended.

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(e)      Closing. Promptly after performing the calculations pursuant to Section
         3(c) or 3(d) for the Investor on the final Trading Day of such
         Adjustment Period, the Company shall deliver its written calculations
         to the Investor by facsimile. At 10:00 a.m. New York City time on the
         Adjustment Settlement Date relating to such Adjustment Period, the
         Company will deliver to the Investor the applicable amount of cash or,
         if the Investor has exercised or is exercising this Adjustment Warrant
         in whole or in part, the applicable number of Adjustment Shares, in
         each case at the offices of KKWC (each such event being a "FILL-UP
         CLOSING"). Such exercise of this Adjustment Warrant at any Fill-up
         closing shall be deemed for all purposes a "cashless" exercise.

(f)      Effective Registration During Stock Adjustment Period.

                  (i)      If at any time during an Adjustment Period (other
         than the first Adjustment Period following the Closing) there shall be
         a lack of Effective Registration, the Investor (as to itself only) may
         at its option either (x) waive the lack of Effective Registration, in
         which case the Adjustment Period will continue uninterrupted with
         respect to such Investor in accordance with the other provisions of
         this Section 3, or (y) by written notice to the Company (delivered no
         later than three (3) Trading Days after actually receiving written
         notification from the Company of such lack of Effective Registration)
         elect to suspend such Adjustment Period with respect to itself (a
         "SUSPENSION NOTICE"), or (z) require the Company, at the conclusion of
         such Adjustment Period, to make payment to the Investor of cash for all
         Adjustment Shares and Accrued Adjustment Shares calculated pursuant to
         Section 3(c) above for all Adjustment Periods, at a price calculated
         under Section 3(g) below.

                  (ii)     If an Investor elects pursuant to subsection (i)
         above to suspend a particular Adjustment Period and Effective
         Registration is subsequently re-established either before or after the
         scheduled end of such Adjustment Period, then such Investor may, at its
         option, elect either (x) to treat such Adjustment Period as tolled for
         the duration (however long) of the lack of Effective Registration, such
         that the first full day of Effective Registration following delivery of
         the Suspension Notice shall be treated as and deemed to be the next day
         of that tolled Adjustment Period, or (y) to treat such Adjustment
         Period as having never commenced, such that the first full day of
         Effective Registration following delivery of the Suspension Notice
         shall be treated as and deemed to be the first day of the Adjustment
         Period interrupted by the lack of Effective Registration. The Investor
         shall have two (2) Trading Days after receiving written notice from the
         Company of the re-establishment of Effective Registration to make such
         election.

(g)      Effective Registration as of Fill-up Closing. If there is not Effective
         Registration on the date of a Fill-up Closing, then the Investor shall
         have the option but not the obligation to receive from the Company, in
         lieu of the Adjustment Shares otherwise deliverable, an amount in
         immediately available funds equal to the product of (i) the greater of
         the highest closing bid price of the Common Stock on the Principal
         Market from the final Trading Day of the applicable Adjustment Period
         through and including the Trading Day immediately prior to the
         Adjustment Settlement Date and the Adjustment Share Purchase

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         Price for the Adjustment Period then ended, and (ii) the number of
         Adjustment Shares the Company otherwise would be obligated to deliver
         to such Investor at such Fill-up Closing (for this purpose ignoring the
         provisions of Section 14).

(h)      New Adjustment Warrant. Whenever this Adjustment Warrant is exercised
         and surrendered to the Company in accordance with Section 3(b) above,
         the Company shall issue a new Adjustment Warrant for the unexercised
         portion (if any) of this Adjustment Warrant and for the unexpired term
         (through the Termination Date) of this Adjustment Warrant; such new
         Adjustment Warrant shall be issued even if the surrendered Adjustment
         Warrant was exercised for all the Adjustment Shares then issuable under
         such Adjustment Warrant.

(i)      Remedies. If the Company fails to deliver the specified number of
         Adjustment Shares or amount of immediately available funds, as
         applicable, to an Investor within 5 Trading Days of the time and at the
         place specified in this Section 3, then such Investor may, without
         reducing its other rights at law or in equity, compel the Company to
         repurchase all or a part of its Securities (including the number of
         Adjustment Shares which, without regard to Effective Registration,
         should have been delivered (for this purpose ignoring the provisions of
         Section 14) by the Company) at the applicable Premium Redemption Price
         (as defined in, and as specified in, the Registration Rights
         Agreement).

(j)      Adjustments. The number of Adjustment Shares and Accrued Adjustment
         Shares shall be appropriately adjusted to reflect any stock split,
         stock dividend, recapitalization or similar event so that the Investor
         receives the same economically equivalent value of Adjustment Shares as
         it would in the absence of such event.

(k)      Miscellaneous. The Adjustment Shares shall upon delivery to the
         Investors be fully-paid, nonassessable, shares of Common Stock, free
         and clear of all liens and encumbrances and duly eligible for trading
         on the Nasdaq National Market System or if the Common Stock is not
         quoted thereon, on such exchange or market (which for purposes of this
         Agreement shall mean the New York Stock Exchange, the American Stock
         Exchange or the Nasdaq Small Cap Market) upon which the Common Stock is
         principally traded or quoted (in either case, the "PRINCIPAL MARKET").

4.       Non-Certificated Shares, In lieu of delivering physical certificates
         representing the Adjustment Shares, provided the Company's transfer
         agent is participating in the Depository Trust Company ("DTC") Fast
         Automated Securities Transfer ("FAST") program, upon request of the
         Investor, the Company shall use its best efforts to cause its transfer
         agent to electronically transmit the Adjustment Shares to the Investor
         by crediting the account of the Investor's prime broker with DTC
         through its Deposit Withdrawal Agent Commission ("DWAC") system. The
         time periods for delivery described in the immediately preceding
         paragraph shall apply to the electronic transmittals described herein.

5.       Representations of Holder. The holder of this Adjustment Warrant, by
         the acceptance hereof, represents that it is acquiring this Adjustment
         Warrant and the Adjustment Shares

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         for its own account and not with a view towards, or for resale in
         connection with, the public sale or distribution of this Adjustment
         Warrant or the Adjustment Shares in violation of the Securities Act;
         provided, however, that by making the representations herein, the
         holder does not agree to hold this Adjustment Warrant or any of the
         Adjustment Shares for any minimum or other specific term and reserves
         the right to dispose of this Adjustment Warrant and the Warrant Shares
         at any time in accordance with or pursuant to a registration statement
         or an exemption under the Securities Act or other legally permissible
         manner. The holder of this Adjustment Warrant further represents, by
         acceptance hereof, that, as of this date, such holder is an "accredited
         investor" as such term is defined in Rule 501(a)(1) of Regulation D
         promulgated by the Securities and Exchange Commission under the
         Securities Act (an "ACCREDITED INVESTOR"). If such holder would not be
         able to make such representations upon exercise hereof because they
         would be factually incorrect, it shall be a condition to such holder's
         exercise of this Adjustment Warrant that the Company receive such other
         representations as the Company considers reasonably necessary to assure
         the Company that the issuance of its securities upon exercise of this
         Adjustment Warrant shall not violate any United States or state
         securities laws.

6.       No Fractional Shares or Scrip. No fractional shares or scrip
         representing fractional shares shall be issued upon the issuance of the
         Adjustment Shares

7.       Charges, Taxes and Expenses. Issuance of certificates for shares of
         Common Stock upon the exercise of this Adjustment Warrant shall be made
         without charge to the holder hereof for any issue or transfer tax or
         other incidental expense in respect of the issuance of such
         certificate, all of which taxes and expenses shall be paid by the
         Company, and such certificates shall be issued in the name of the
         holder of this Adjustment Warrant or in such name or names as may be
         directed by the holder of this Adjustment Warrant; provided, however,
         that in the event certificates for shares of Common Stock are to be
         issued in a name other than the name of the holder of this Adjustment
         Warrant, this Adjustment Warrant when surrendered for exercise shall be
         accompanied by the Assignment Form attached hereto duly executed by the
         holder hereof; and provided further, that the Company shall not be
         required to pay any tax or taxes which may be payable in respect of any
         transfer involved in the issuance of any Adjustment Warrant
         certificates or any certificates for the Adjustment Shares other than
         the issuance of a Adjustment Warrant Certificate to the Investor in
         connection with the Investor's surrender of a Adjustment Warrant
         Certificate upon the exercise of less than all of the Adjustment
         Warrants evidenced thereby, 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.

8.       Closing of Books. The Company will at no time close its shareholder
         books or records in any manner which interferes with the timely
         exercise of this Adjustment Warrant.

9.       No Rights as Shareholder until Exercise. Subject to Sections 13 and 14
         of this Adjustment Warrant and the provisions of any other written
         agreement between the

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         Company and the Investor, the Investor shall not be entitled to vote or
         receive dividends or be deemed the holder of Adjustment Shares or any
         other securities of the Company that may at any time be issuable on the
         exercise hereof for any purpose, nor shall anything contained herein be
         construed to confer upon the Investor, as such, any of the rights of a
         stockholder of the Company or any right to vote for the election of
         directors or upon any matter submitted to stockholders at any meeting
         thereof, or to give or withhold consent to any corporate action
         (whether upon any recapitalization, issuance of stock, reclassification
         of stock, change of par value, or change of stock to no par value,
         consolidation, merger, conveyance or otherwise) or to receive notice of
         meetings, or to receive dividends or subscription rights or otherwise
         until the Adjustment Warrant shall have been exercised as provided
         herein. However, at the time of the exercise of this Adjustment Warrant
         pursuant to Section 3 hereof, the Adjustment Shares so purchased
         hereunder shall be deemed to be issued to such holder as the record
         owner of such shares as of the close of business on the date of the
         Notice of Exercise.

10.      Assignment and Transfer of Adjustment Warrant. This Adjustment Warrant
         may be assigned in whole or in part by the surrender of this Adjustment
         Warrant and the Assignment Form annexed hereto duly executed at the
         office of the Company (or such other office or agency of the Company as
         it may designate by notice in writing to the registered holder hereof
         at the address of such holder appearing on the books of the Company);
         provided, however, that this Adjustment Warrant may not be resold or
         otherwise transferred except (i) in a transaction registered under the
         Securities Act of 1933, as amended (the "ACT"), or (ii) in a
         transaction pursuant to an exemption, if available, from registration
         under the Act and whereby, if requested by the Company, an opinion of
         counsel reasonably satisfactory to the Company is obtained by the
         holder of this Adjustment Warrant to the effect that the transaction is
         so exempt.

11.      Loss, Theft, Destruction or Mutilation of Adjustment Warrant. Upon
         receipt by the Company of evidence reasonably satisfactory to it of the
         loss, theft, destruction or mutilation of any Adjustment Warrant or
         stock certificate representing the Adjustment Shares, and in case of
         loss, theft or destruction, of indemnity reasonably satisfactory to it,
         and upon reimbursement to the Company of all reasonable expenses
         incidental thereto, or upon surrender and cancellation of such
         Adjustment Warrant or stock certificate, if mutilated, the Company will
         promptly make and deliver a new Adjustment Warrant or stock certificate
         of like tenor and dated as of such delivery, in lieu of this Adjustment
         Warrant or stock certificate.

12.      Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
         taking of any action or the expiration of any right required or granted
         herein shall be a Saturday, Sunday or a legal holiday, then such action
         may be taken or such right may be exercised on the next succeeding day
         not a legal holiday.

13.      Effect of Certain Events. If at any time while this Adjustment Warrant
         or any portion thereof is outstanding and unexpired there shall be (i)
         a sale or conveyance of all or substantially all of the Company's
         assets or (ii) a transaction (by merger or otherwise) in which more
         than 50% of the voting power of the Company is disposed of
         (collectively, a

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         "SALE OR MERGER TRANSACTION"), in which the consideration to be
         received by the Company or its shareholders consists solely of cash,
         and in case the Company shall at any time effect a Sale or Merger
         Transaction in which the consideration to be received by the Company or
         its shareholders consists in part of consideration other than cash, the
         holder of this Adjustment Warrant shall have the right thereafter to
         purchase, by exercise of this Adjustment Warrant and payment of the
         Exercise Price in effect immediately prior to such action, the kind and
         amount of shares and other securities and property which it would have
         owned or have been entitled to receive after the happening of such
         transaction had this Adjustment Warrant been exercised immediately
         prior thereto, subject to further adjustment as provided in Section 13.
         Notwithstanding the above, a Sale or Merger Transaction shall not be
         deemed to occur in the event the Company is the acquiring entity in
         connection with an acquisition by the Company.

14.      Adjustments of Exercise Price and Number of Adjustment Warrant Shares.

         The number of and kind of securities purchasable upon exercise of this
         Adjustment Warrant shall be subject to adjustment from time to time as
         follows:

(a)      Subdivisions, Combinations and other Issuances. If the Company shall at
         any time after the date hereof but prior to the expiration of this
         Adjustment Warrant subdivide its outstanding securities as to which
         purchase rights under this Adjustment Warrant exist, by split-up,
         spin-off, or otherwise, or combine its outstanding securities as to
         which purchase rights under this Adjustment Warrant exist, the number
         of Adjustment Shares as to which this Adjustment Warrant is exercisable
         as of the date of such subdivision, split-up, spin-off or combination
         shall forthwith be proportionately increased in the case of a
         subdivision, or proportionately decreased in the case of a combination.

(b)      Stock Dividend. If at any time after the date hereof the Company
         declares a dividend or other distribution on Common Stock payable in
         Common Stock or other securities or rights convertible into Common
         Stock ("COMMON STOCK EQUIVALENTS") without payment of any consideration
         by holders of Common Stock for the additional shares of Common Stock or
         the Common Stock Equivalents (including the additional shares of Common
         Stock issuable upon exercise or conversion thereof), then the number of
         shares of Common Stock for which this Adjustment Warrant may be
         exercised shall be increased as of the record date (or the date of such
         dividend distribution if no record date is set) for determining which
         holders of Common Stock shall be entitled to receive such dividends, in
         proportion to the increase in the number of outstanding shares (and
         shares of Common Stock issuable upon conversion of all such securities
         convertible into Common Stock) of Common Stock as a result of such
         dividend.

(c)      Other Distributions. If at any time after the date hereof the Company
         distributes to holders of its Common Stock, other than as part of its
         dissolution, liquidation or the winding up of its affairs, any shares
         of its capital stock, any evidence of indebtedness or any of its assets
         (other than Common Stock), then the number of Adjustment Shares for
         which this Adjustment Warrant is exercisable shall be increased to
         equal: (i) the number of Adjustment Shares for which this Adjustment
         Warrant is exercisable immediately prior

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         to such event, (ii) multiplied by a fraction, (A) the numerator of
         which shall be the Fair Market Value (as defined below) per share of
         Common Stock on the record date for the dividend or distribution, and
         (B) the denominator of which shall be the Fair Market Value price per
         share of Common Stock on the record date for the dividend or
         distribution minus the amount allocable to one share of Common Stock of
         the value (as jointly determined in good faith by the Board of
         Directors of the Company and the Adjustment Warrant holder) of any and
         all such evidences of indebtedness, shares of capital stock, other
         securities or property, so distributed. Alternatively, the Investor
         shall have the option but not the obligation to participate in such
         distribution on an "on converted" basis without regard to Section 14.
         For purposes of this Adjustment Warrant, "FAIR MARKET VALUE" shall
         equal the 10 Trading Day average closing price of the Common Stock on
         the Principal Market for the 10 Trading Days preceding the date of
         determination or, if the Common Stock is not listed or admitted to
         trading on any Principal Market, the average of the closing bid and
         asked prices on the over-the-counter market as furnished by any New
         York Stock Exchange member firm reasonably selected from time to time
         by the Company for that purpose and reasonably acceptable to the
         Holder, or, if the Common Stock is not listed or admitted to trading on
         the Principal Market or traded over-the-counter and the average price
         cannot be determined as contemplated above, the Fair Market Value of
         the Common Stock shall be as reasonably determined in good faith by the
         Company's Board of Directors with the concurrence of the Holder.

(d)      Merger, etc. If at any time after the date hereof there shall be a
         merger or consolidation of the Company with or into or a transfer of
         all or substantially all of the assets of the Company to another
         entity, then the Adjustment Warrant Holder shall be entitled to receive
         upon or after such transfer, merger or consolidation becoming
         effective, and upon payment of the Exercise Price then in effect, the
         number of shares or other securities or property of the Company or of
         the successor corporation resulting from such merger or consolidation,
         which would have been received by Adjustment Warrant Holder for the
         shares of stock subject to this Adjustment Warrant had this Adjustment
         Warrant been exercised just prior to such transfer, merger or
         consolidation becoming effective or to the applicable record date
         thereof, as the case may be. The Company will not merge or consolidate
         with or into any other corporation, or sell or otherwise transfer its
         property, assets and business substantially as an entirety to another
         corporation, unless the corporation resulting from such merger or
         consolidation (if not the Company), or such transferee corporation, as
         the case may be, shall expressly assume in writing the due and punctual
         performance and observance of each and every covenant and condition of
         this Adjustment Warrant to be performed and observed by the Company.

(e)      Reclassification, etc. If at any time after the date hereof there shall
         be a reorganization or reclassification of the securities as to which
         purchase rights under this Adjustment Warrant exist into the same or a
         different number of securities of any other class or classes, then the
         Adjustment Warrant Holder shall thereafter be entitled to receive upon
         exercise of this Adjustment Warrant, during the period specified herein
         and upon payment of the Exercise Price then in effect, the number of
         shares or other securities or property resulting from such
         reorganization or reclassification, which would have been

                                       10
<PAGE>   11

         received by the Adjustment Warrant Holder for the shares of stock
         subject to this Adjustment Warrant had this Adjustment Warrant at such
         time been exercised.

15.      9.99% Limitation.

(a)      Notwithstanding anything to the contrary contained herein, the number
         of shares of Common Stock that may be acquired by the Investor upon
         exercise pursuant to the terms hereof shall not exceed a number that,
         when added to the total number of shares of Common Stock deemed
         beneficially owned by such holder (other than by virtue of the
         ownership of securities or rights to acquire securities (including the
         Warrant) that have limitations on the Investor's right to convert,
         exercise or purchase similar to the limitation set forth herein (the
         "Excluded Shares")), together with all shares of Common Stock deemed
         beneficially owned (not counting such affiliate's Excluded Shares) by
         the holder's "affiliates" (as defined Rule 144 of the Act)
         ("AGGREGATION PARTIES") that would be aggregated for purposes of
         determining whether a group under Section 13(d) of the Securities
         Exchange Act of 1934, as amended, exists, would exceed 9.99% of the
         total issued and outstanding shares of the Company's Common Stock (the
         "RESTRICTED OWNERSHIP PERCENTAGE"). Each Holder shall have the right
         (w) at any time and from time to time to reduce its Restricted
         Ownership Percentage immediately upon notice to the Company and (x) at
         any time and from time to time, to increase its Restricted Ownership
         Percentage immediately in the event of the announcement as pending or
         planned of an event of:

                  (i)      any consolidation or merger of the Company with or
         into any other corporation or other entity or person (whether or not
         the Company is the surviving corporation), or any other corporate
         reorganization or transaction or series of related transactions in
         which in excess of 50% of the Company's voting power is transferred
         through a merger, consolidation, tender offer or similar transaction,

                  (ii)     any person (as defined in Section 13(d) of the
         Exchange Act), together with its affiliates and associates (as such
         terms are defined in Rule 405 under the 1933 Act), beneficially owns or
         is deemed to beneficially own (as described in Rule 13d-3 under the
         Exchange Act without regard to the 60-day exercise period) in excess of
         50% of the Company's voting power,

                  (iii)    there is a replacement of more than one-half of the
         members of the Company's Board of Directors which is not approved by
         those individuals who are members of the Company's Board of Directors
         on the date thereof, in one or a series of related transactions, or

                  (iv)     a sale or transfer of all or substantially all of the
         assets of the Company, determined on a consolidated basis.

(b)      The Investor covenants at all times on each day (each such day being
         referred to as a "COVENANT DAY") as follows: During the balance of such
         Covenant Day and the succeeding sixty-one (61) days (the balance of
         such Covenant Day and the succeeding 61

                                       11
<PAGE>   12

         days being referred to as the "COVENANT PERIOD") such Investor will not
         acquire shares of Common Stock pursuant to any right (including the
         exercise of the Warrant) existing at the commencement of the Covenant
         Period to the extent the number of shares so acquired by such holder
         and its Aggregation Parties (ignoring all dispositions) would exceed:

                  (x)      the Restricted Ownership Percentage of the total
                           number of shares of Common Stock outstanding at the
                           commencement of the Covenant Period,

                           minus

                  (y)      the number of shares of Common Stock owned by such
                           holder and its Aggregation Parties at the
                           commencement of the Covenant Period.

                  A new and independent covenant will be deemed to be given by
         the holder as of each moment of each Covenant Day. No covenant will
         terminate, diminish or modify any other covenant. The holder agrees to
         comply with each such covenant. This Section 14 controls in the case of
         any conflict with any other provision of the Transaction Documents.

                  The Company's obligation to issue Adjustment Shares which
         would exceed such limits referred to in this Section 14 shall be
         suspended to the extent necessary until such time, if any, as shares of
         Common Stock may be issued in compliance with such restrictions.

16.      Miscellaneous.

(a)      Issue Date; Choice Of Law; Venue; Jurisdiction.THE PROVISIONS OF THIS
         ADJUSTMENT WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL
         RESPECTS AS IF IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE
         DATE HEREOF. THIS ADJUSTMENT WARRANT SHALL BE BINDING UPON ANY
         SUCCESSORS OR ASSIGNS OF THE COMPANY. THIS ADJUSTMENT WARRANT WILL BE
         CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
         THE STATE OF NEW YORK, EXCEPT FOR MATTERS ARISING UNDER THE ACT,
         WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE
         PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE U.S. DISTRICT
         COURT SITTING IN THE STATE OF CITY OF NEW YORK IN THE STATE OF NEW YORK
         IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS ADJUSTMENT WARRANT
         AND HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
         OBJECTION, INCLUDING ANY OBJECTION BASED ON FORUM NON CONVENIENS, TO
         THE BRINGING OF ANY SUCH PROCEEDING IN SUCH JURISDICTION. EACH PARTY
         HEREBY AGREES THAT IF THE OTHER PARTY TO THIS ADJUSTMENT WARRANT
         OBTAINS A JUDGMENT AGAINST IT IN SUCH A PROCEEDING, THE PARTY

                                       12
<PAGE>   13

         WHICH OBTAINED SUCH JUDGMENT MAY ENFORCE SAME BY SUMMARY JUDGMENT IN
         THE COURTS OF ANY COUNTRY HAVING JURISDICTION OVER THE PARTY AGAINST
         WHOM SUCH JUDGMENT WAS OBTAINED, AND EACH PARTY HEREBY WAIVES ANY
         DEFENSES AVAILABLE TO IT UNDER LOCAL LAW AND AGREES TO THE ENFORCEMENT
         OF SUCH A JUDGMENT. EACH PARTY TO THIS ADJUSTMENT WARRANT IRREVOCABLY
         CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY THE
         MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
         PREPAID, TO SUCH PARTY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 16(C).
         NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN
         ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY WAIVES ITS RIGHT TO A
         TRIAL BY JURY.

(b)      Modification and Waiver. This Adjustment Warrant and any provisions
         hereof may be changed, waived, discharged or terminated only by an
         instrument in writing signed by the party against which enforcement of
         the same is sought. Any amendment effected in accordance with this
         paragraph shall be binding upon the Investor, each future holder of
         this Adjustment Warrant and the Company. No waivers of, or exceptions
         to, any term, condition or provision of this Adjustment Warrant, in any
         one or more instances, shall be deemed to be, or construed as, a
         further or continuing waiver of any such term, condition or provision.

(c)      Notices. Any notice, request or other document required or permitted to
         be given or delivered to the Investor or future holders hereof or the
         Company shall be personally delivered or shall be sent by certified or
         registered mail, postage prepaid, to the Investor or each such holder
         at its address as shown on the books of the Company or to the Company
         at the address set forth in the Agreement. All notices under this
         Adjustment Warrant shall be deemed to have been given when received.

         A party may from time to time change the address to which notices to it
         are to be delivered or mailed hereunder by notice in accordance with
         the provisions of this Section 16(c).

(d)      Severability. Whenever possible, each provision of this Adjustment
         Warrant shall be interpreted in such manner as to be effective and
         valid under applicable law, but if any provision of this Adjustment
         Warrant is held to be invalid, illegal or unenforceable in any respect
         under any applicable law or rule in any jurisdiction, such invalidity,
         illegality or unenforceability shall not affect the validity, legality
         or enforceability of any other provision of this Adjustment Warrant in
         such jurisdiction or affect the validity, legality or enforceability of
         any provision in any other jurisdiction, but this Adjustment Warrant
         shall be reformed, construed and enforced in such jurisdiction as if
         such invalid, illegal or unenforceable provision had never been
         contained herein.

(e)      No Impairment. The Company will not, by amendment of its Certificate of
         Incorporation or through any reorganization, transfer of assets,
         consolidation, merger, dissolution, issue or sale of securities or any
         other voluntary action, avoid or seek to avoid the observance

                                       13
<PAGE>   14

         or performance of any of the terms of this Adjustment Warrant, but will
         at all times in good faith assist in the carrying out of all such terms
         and in the taking of all such action as may be necessary or appropriate
         in order to protect the rights of the Adjustment Warrant Holder against
         impairment. Without limiting the generality of the foregoing, the
         Company will take all such action as may be reasonably necessary or
         appropriate in order that the Company may validly and legally issue
         fully paid and nonassessable Adjustment Warrant Shares on the exercise
         of this Adjustment Warrant.

                            [Signature Page Follows]

                                       14
<PAGE>   15

         IN WITNESS WHEREOF, the Company has caused this Adjustment Warrant to
be executed by its officers thereunto duly authorized.

Dated: September 8, 2000

                                                     BLUE ZONE, INC

                                                     By:
                                                        ------------------------
                                                          Name:
                                                          Title:

Agreed and Accepted
this 8th day of September, 2000

[INVESTOR]

By:
   ----------------
     Name:
     Title:

                                       15
<PAGE>   16

                               NOTICE OF EXERCISE

To:      BLUE ZONE, INC.

(1)      The undersigned hereby elects:

                  (A)      to purchase ________ shares of Common Stock of BLUE
                           ZONE, INC. pursuant to the terms of the attached
                           Adjustment Warrant, and tenders herewith payment of
                           the Exercise Price in full.

                  (B)      in a "cashless" or "net-issue" exercise for, and to
                           purchase hereunder, ______ shares of Common Stock,
                           and herewith makes payment therefor with ______
                           Surrendered Shares.

(2)      Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                           -------------------------------
                           (Name)

                           -------------------------------
                           (Address)
                                                           ; and in addition
                           -------------------------------

(3)      Please issue a new Adjustment Warrant for the unexercised portion (if
any) and for the unexercised term (through the Termination Date) of the attached
Adjustment Warrant in the name of the undersigned or in such other name as is
specified below:

                           Other Name:
                                       --------------------

                                             -----------------------------------
                                             (Name)

--------------------                         -----------------------------------
(Date)                                       (Signature)

                                             -----------------------------------
                                             (Address)

<PAGE>   17

                                 ASSIGNMENT FORM

              (To assign the foregoing Adjustment Warrant, execute
                   this form and supply required information.
            Do not use this form to exercise the Adjustment Warrant.)

FOR VALUE RECEIVED, the foregoing Adjustment Warrant of Blue Zone, Inc. and all
rights evidenced thereby are hereby assigned to
                                               ---------------------------------
 whose address is
                 ---------------------------------------------------------------

   ----------------------------------------------------------------------------.

Dated:
        --------------,   ----

Holder's Signature:
                           -----------------------------
Holder's Address:
                           -----------------------------

                           -----------------------------

Signature Guaranteed:
                       -------------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Adjustment Warrant, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in an fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Adjustment Warrant.<PAGE>   1
                                                                     EXHIBIT 4.3

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THIS OPTION SHALL NOT CONSTITUTE AN OFFER
TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES ARE
"RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE
ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

THIS OPTION IS BEING ISSUED IN CONNECTION WITH THE COMMON STOCK INVESTMENT
AGREEMENT DATED AS OF SEPTEMBER 8, 2000 (THE "PURCHASE AGREEMENT") ENTERED INTO
BETWEEN THE COMPANY, THE INVESTOR AND OTHER INVESTOR(s) NAMED THEREIN.
CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANING
ASCRIBED THERETO IN THE PURCHASE AGREEMENT.

                         OPTION TO PURCHASE COMMON STOCK

                                       OF

                                 BLUE ZONE, INC.

         THIS CERTIFIES that, for value received, [___________] (the "INVESTOR")
is entitled, upon the terms and subject to the conditions hereinafter set forth,
at any time and from time to time on or after the date hereof and on or prior to
8:00 p.m. New York City Time on the Expiration Date (as defined below) (such
period hereinafter referred to as the "EXERCISE PERIOD"), to purchase from BLUE
ZONE, INC., a Nevada corporation (the "COMPANY") pursuant to one or more
Exercise Notices (as defined herein) (a) shares (the "OPTION SHARES") of the
Company's Common Stock, $.001 par value ("COMMON STOCK"), and (b) three-year
warrants to purchase up to the number of shares of Common Stock which is equal
to 20% of the Option Shares subject to such Exercise Notice at an exercise price
equal to 120% of the Exercise Price (as defined below) for such Option Shares,
in the form of Annex A to the Purchase Agreement ("INITIAL WARRANTS"), for a
purchase price ("PURCHASE PRICE") equal to the average of the closing price of a
share of Common Stock on the Principal Market on the three (3) consecutive
Trading Days immediately preceding such Exercise Notice (the "EXERCISE PRICE")
times the number of Option Shares subject to such Exercise Notice, for an
aggregate purchase price of up to [_____________________] Dollars
($[______________]). The number of Option Shares purchased pursuant to any
Exercise Notice shall equal the dollar amount specified in the Exercise Notice
divided by the Exercise Price. Payment of the Purchase Price shall be payment in
full for the Option Shares and Initial Warrants issuable pursuant to any
Exercise Notice. "EXPIRATION DATE" shall mean the date which is one year
following the Closing Date, provided that such

                                       1
<PAGE>   2

Expiration Date shall be deferred for one day for each day that there is a lack
of Effective Registration after the Effectiveness Deadline (as defined in the
Registration Rights Agreement).

1.       Title of Option. Prior to the expiration hereof and subject to
         compliance with applicable laws, this Option and all rights hereunder
         are transferable, in whole or in part, at the office or agency of the
         Company by the Holder hereof in person or by duly authorized attorney,
         upon surrender of this Option together with (a) the Assignment Form
         annexed hereto properly endorsed, and (b) any other documentation
         reasonably necessary to satisfy the Company that such transfer is in
         compliance with all applicable securities laws. The term "HOLDER" shall
         refer to the Investor or any subsequent transferee of this Option.

2.       Authorization of Shares. The Company covenants that all Option Shares
         and Initial Warrants which may be issued upon the exercise of rights
         represented by this Option will, upon exercise of the rights
         represented by this Option and payment of the Purchase Price as set
         forth herein will be duly authorized, validly issued, fully paid and
         nonassessable and free from all taxes, liens and charges in respect of
         the issue thereof (other than taxes in respect of any transfer
         occurring contemporaneously with such issue or otherwise specified
         herein).

3.       Exercise of Option.

         Mechanics of Exercise. The Holder may exercise this Option, in whole or
         in part, at any time and from time to time, by delivering (which may be
         by facsimile) to the offices of the Company or any transfer agent for
         the Common Stock an Exercise Notice in the form annexed hereto
         ("EXERCISE NOTICE") specifying the dollar amount and number of Option
         Shares with respect to which this Option is being exercised, provided
         that the Holder may only deliver an Exercise Notice if after the
         Closing Date the closing price of a share of Common Stock on the
         Principal Market is greater than the Share Purchase Price (as such
         price may be appropriately and equitably adjusted for stock splits,
         stock dividends and reclassifications of the Common Stock). Within
         three (3) Trading Days following delivery of such Exercise Notice (or
         such other date mutually agreed upon by the parties), a closing (each,
         an "OPTION CLOSING") shall occur, at which the Company will deliver to
         the Holder at the offices of KKWC duly executed certificates
         representing the requisite number of Option Shares subject to such
         Exercise Notice and duly executed Initial Warrants covered by such
         Exercise Notice, and the Holder shall deliver the Purchase Price for
         such Option Shares and Initial Warrants to the Company, whereupon the
         Holder will be deemed the record and beneficial owner of all the
         applicable Option Shares and Initial Warrants as of the date of the
         Exercise Notice; provided, however, that if the Registration Statement
         (as defined in the Registration Rights Agreement) is not effective at
         the time of such Option Closing, then the Holder will deliver to the
         Company only 80% of the applicable Purchase Price (whereupon it will be
         deemed the record and beneficial owner of all the applicable Option
         Shares and Initial Warrants as of the date of the Exercise Notice) and
         such Holder will deliver the remaining 20% of such Purchase Price to
         the Company three (3) Trading Days following the date such Holder is
         notified in writing that the Registration Statement covering all the
         Registrable Securities (as defined in the Registration Rights
         Agreement) has been declared effective. Each Option Closing

                                       2
<PAGE>   3

         shall be subject to the terms and conditions set forth in Article IV of
         the Purchase Agreement. The Holder shall not be obligated to purchase
         Option Shares and consummate an Option Closing in the event that any
         Rep Modifications may reasonably be deemed to constitute a Material
         Adverse Change or are not reasonably satisfactory to the Holder,
         provided that the Holder may waive any such condition in its sole
         discretion. The Company shall not be liable to the Holder hereunder
         solely due to such Holder's refusal to waive such condition following
         such Holder's exercise hereof.

         The Holder shall surrender to the Company this Option on or prior to
         any Option Closing. In the event that this Option is not exercised in
         full, the aggregate purchase price hereunder shall be reduced by the
         dollar amount for which this Option is exercised and/or surrendered,
         and the Company, at its expense, shall within three (3) Trading Days
         issue and deliver to the Holder a new Option of like tenor in the name
         of the Holder or as the Holder (upon payment by Holder of any
         applicable transfer taxes) may request, reflecting such adjusted
         Option.

         The Holder may withdraw its Exercise Notice at any time if the Company
         fails to timely deliver the relevant certificates and warrants to the
         Holder as provided in this Option.

         In lieu of delivering physical certificates representing the Option
         Shares issuable upon exercise of this Option, provided the Company's
         transfer agent is participating in the Depository Trust Company ("DTC")
         Fast Automated Securities Transfer ("FAST") program, upon request of
         the Holder, the Company shall use its best efforts to cause its
         transfer agent to electronically transmit the Option Shares issuable
         upon exercise to the Holder, by crediting the account of the Holder's
         prime broker with DTC through its Deposit Withdrawal Agent Commission
         ("DWAC") system. The time periods for delivery described above shall
         apply to the electronic transmittals through the DWAC system. The
         Company agrees to coordinate with DTC to accomplish this objective.

4.       No Fractional Shares or Scrip. No fractional shares or scrip
         representing fractional shares or warrants shall be issued upon the
         exercise of this Option. In lieu of issuance of a fractional share or
         warrant upon any exercise hereunder, the Company will round up to
         nearest whole number of shares or warrants.

5.       Charges, Taxes and Expenses. Issuance of the Initial Warrants and the
         certificates for shares of Common Stock upon the exercise of this
         Option shall be made without charge to the Holder hereof for any issue
         or transfer tax or other incidental expense in respect of the issuance
         of such certificate or warrants, all of which taxes and expenses shall
         be paid by the Company, and such certificates shall be issued in the
         name of the Holder of this Option or in such name or names as may be
         directed by the Holder of this Option; provided, however, that in the
         event the Initial Warrants or certificates for shares of Common Stock
         are to be issued in a name other than the name of the Holder of this
         Option, this Option when surrendered for exercise shall be accompanied
         by the Assignment Form attached hereto duly executed by the Holder
         hereof; and provided further, that the Company shall not be required to
         pay any tax or taxes which may be

                                       3
<PAGE>   4

         payable in respect of any transfer involved in the issuance of any
         Option certificates or any certificates for the Option Shares in a name
         other than that of the Holder.

6.       Closing of Books. The Company will at no time close its shareholder
         books or records in any manner which interferes with the timely
         exercise of this Option.

7.       No Rights as Shareholder until Exercise. Subject to the Purchase
         Agreement and Section 12 of this Option and the provisions of any other
         written agreement between the Company and the Investor, the Investor
         shall not be entitled to vote or receive dividends or be deemed the
         holder of Option Shares or any other securities of the Company that may
         at any time be issuable on the exercise hereof for any purpose, nor
         shall anything contained herein be construed to confer upon the
         Investor, as such, any of the rights of a stockholder of the Company or
         any right to vote for the election of directors or upon any matter
         submitted to stockholders at any meeting thereof, or to give or
         withhold consent to any corporate action (whether upon any
         recapitalization, issuance of stock, reclassification of stock, change
         of par value, or change of stock to no par value, consolidation,
         merger, conveyance or otherwise) or to receive notice of meetings, or
         to receive dividends or subscription rights or otherwise until the
         Option shall have been exercised as provided herein. However, at the
         time of the exercise of this Option pursuant to Section 3 hereof, the
         Option Shares so purchased hereunder shall be deemed to be issued to
         such Holder as the record owner of such shares as of the close of
         business on the date on which this Option shall have been exercised.

8.       Assignment and Transfer of Option. This Option may be assigned by the
         surrender of this Option and the Assignment Form annexed hereto duly
         executed at the office of the Company (or such other office or agency
         of the Company or its transfer agent as the Company may designate by
         notice in writing to the registered Holder hereof at the address of
         such Holder appearing on the books of the Company); provided, however,
         that this Option may not be resold or otherwise transferred except (i)
         in a transaction registered under the Securities Act of 1933, as
         amended (the "ACT"), or (ii) in a transaction pursuant to an exemption,
         if available, from registration under the Act and whereby, if
         reasonably requested by the Company, an opinion of counsel reasonably
         satisfactory to the Company is obtained by the Holder of this Option to
         the effect that the transaction is so exempt. If this Option is duly
         assigned in accordance with the terms hereof, then the Company agrees,
         upon the request of the assignee, to amend or supplement promptly any
         effective registration statement covering the Option Shares and the
         shares of Common Stock issuable upon exercise of the Initial Warrants
         so that the direct assignee of the original holder is added as a
         selling stockholder thereunder.

9.       Loss, Theft, Destruction or Mutilation of Option; Exchange. The Company
         represents, warrants and covenants that (a) upon receipt by the Company
         of evidence reasonably satisfactory to it of the loss, theft,
         destruction or mutilation of any Option or stock certificate
         representing the Option Shares or any Initial Warrants, and in case of
         loss, theft or destruction, of indemnity reasonably satisfactory to it,
         and (b) upon surrender and cancellation of such Option or stock
         certificate or Initial Warrant, if mutilated, the Company will make and
         deliver a new Option or stock certificate or Initial Warrant of

                                       4
<PAGE>   5

         like tenor and dated as of such cancellation, in lieu of this Option or
         stock certificate or Initial Warrant without any charge therefor.

10.      Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
         taking of any action or the expiration of any right required or granted
         herein shall be a Saturday, Sunday or a legal holiday, then such action
         may be taken or such right may be exercised on the next succeeding day
         not a legal holiday.

11.      Effect of Certain Events. If at any time while this Option or any
         portion thereof is outstanding and unexpired there shall be a
         transaction (by merger or otherwise) in which more than 50% of the
         voting power of the Company is disposed of (collectively, a "SALE OR
         MERGER TRANSACTION"), the Holder of this Option shall have the right
         thereafter to purchase, by exercise of this Option and payment of the
         aggregate Purchase Price in effect immediately prior to such action,
         the kind and amount of shares and other securities and property which
         it would have owned or have been entitled to receive after the
         happening of such transaction had this Option been exercised
         immediately prior thereto, subject to further adjustment as provided in
         Section 12.

12.      Adjustments of Exercise Price and Number of Option Shares.

         The number of and kind of securities purchasable upon exercise of this
         Option and the Exercise Price shall be subject to adjustment from time
         to time as set forth in this Section 12.

(a)      Subdivisions, Combinations, Stock Dividends and other Issuances. If the
         Company shall, at any time while this Option is outstanding, (A) pay a
         stock dividend or otherwise make a distribution or distributions on any
         equity securities (including instruments or securities convertible into
         or exchangeable for such equity securities) in shares of Common Stock,
         (B) subdivide outstanding shares of Common Stock into a larger number
         of shares, or (C) combine outstanding Common Stock into a smaller
         number of shares, then each Affected Exercise Price (as defined below)
         shall be multiplied by a fraction, the numerator of which shall be the
         number of shares of Common Stock outstanding before such event and the
         denominator of which shall be the number of shares of Common Stock
         outstanding after such event. Any adjustment made pursuant to this
         Section 12(a) shall become effective immediately after the record date
         for the determination of stockholders entitled to receive such dividend
         or distribution and shall become effective immediately after the
         effective date in the case of a subdivision or combination. As used
         herein, the Affected Exercise Prices (each an "AFFECTED EXERCISE
         PRICE") shall refer to each reported price for the Common Stock on the
         Principal Market occurring on any Trading Day included in the period
         used for determining the Exercise Price, which Trading Day occurred
         before the record date in the case of events referred to in clause (A)
         of this subparagraph 12(a) and the effective date in the case of the
         events referred to in clauses (B) and (C) of this subparagraph 12(a).

(b)      Merger, etc. If at any time after the date hereof there shall be a
         merger or consolidation of the Company with or into or a transfer of
         all or substantially all of the assets of the

                                       5
<PAGE>   6

         Company to another entity, then the Holder shall be entitled to receive
         upon or after such transfer, merger or consolidation becoming
         effective, and upon payment of the Purchase Price then in effect, the
         number of shares or other securities or property of the Company or of
         the successor corporation resulting from such merger or consolidation,
         which would have been received by the Holder for the shares of stock
         subject to this Option had this Option been exercised just prior to
         such transfer, merger or consolidation becoming effective or to the
         applicable record date thereof, as the case may be. The Company will
         not merge or consolidate with or into any other corporation, or sell or
         otherwise transfer its property, assets and business substantially as
         an entirety to another corporation, unless the corporation resulting
         from such merger or consolidation (if not the Company), or such
         transferee corporation, as the case may be, shall expressly assume in
         writing the due and punctual performance and observance of each and
         every covenant and condition of this Option to be performed and
         observed by the Company.

(c)      Reclassification, etc. If at any time after the date hereof there shall
         be a reorganization or reclassification of the securities as to which
         purchase rights under this Option exist into the same or a different
         number of securities of any other class or classes, then the Holder
         shall thereafter be entitled to receive upon exercise of this Option,
         during the period specified herein and upon payment of the Purchase
         Price then in effect, the number of shares or other securities or
         property resulting from such reorganization or reclassification, which
         would have been received by the Holder for the shares of stock subject
         to this Option had this Option at such time been exercised. The terms
         of any reorganization, consolidation, merger, sale, transfer or share
         exchange shall include such terms so as to continue to give to the
         holder hereof the right to receive the securities or property set forth
         in this Section 12 upon any exercise following any such
         reclassification, consolidation, merger, sale, transfer or share
         exchange.

(d)      Other. In the event that any distributions or other issuances or
         reorganizations by the Company affects any Affected Exercise Price,
         such Affected Exercise Price such be appropriately and equitably
         adjusted.

14.      Notice of Adjustment; Notice of Events. (i) Whenever the number of
         Option Shares or number or kind of securities or other property
         purchasable upon the exercise of this Option or an Affected Exercise
         Price is adjusted, the Company shall promptly mail to the Holder of
         this Option a notice setting forth setting forth the computation of
         such adjustment and a brief statement of the facts requiring such
         adjustment. (ii) If: (A) the Company shall declare a dividend (or any
         other distribution) on its Common Stock; or (B) the Company shall
         declare a special nonrecurring cash dividend on or a redemption of its
         Common Stock; or (C) the Company shall authorize the granting to all
         holders of the Common Stock rights or warrants to subscribe for or
         purchase any shares of capital stock of any class or of any rights; or
         (D) the approval of any stockholders of the Company shall be required
         in connection with any reclassification of the Common Stock of the
         Company, any consolidation or merger to which the Company is a party,
         any sale or transfer of all or substantially all of the assets of the
         Company, or any compulsory share exchange whereby the Common Stock is
         converted into other securities, cash or property; or (E) the Company
         shall authorize the voluntary dissolution, liquidation or winding up of

                                       6
<PAGE>   7

         the affairs of the Company, then the Company shall cause to be mailed
         to each Option holder at their last addresses as they shall appear upon
         the Option register of the Company, at least 30 calendar days prior to
         the applicable record or effective date hereinafter specified, a notice
         stating (x) the date on which a record is to be taken for the purpose
         of such dividend, distribution, redemption, rights or warrants, or if a
         record is not to be taken, the date as of which the holders of Common
         Stock of record to be entitled to such dividend, distributions,
         redemption, rights or warrants are to be determined or (y) the date on
         which such reclassification, consolidation, merger, sale, transfer or
         share exchange is expected to become effective or close, and the date
         as of which it is expected that holders of Common Stock of record shall
         be entitled to exchange their shares of Common Stock for securities,
         cash or other property deliverable upon such reclassification,
         consolidation, merger, sale, transfer, share exchange, dissolution,
         liquidation or winding up.

15.      Authorized Shares. The Company covenants that during the Exercise
         Period it will reserve from its authorized and unissued Common Stock a
         sufficient number of shares to provide for the issuance of the Option
         Shares upon the exercise of any and all purchase rights under this
         Option and for the issuance of the shares underlying the Initial
         Warrants. The Company further covenants that its issuance of this
         Option shall constitute full authority to its officers who are charged
         with the duty of executing stock certificates to execute and issue the
         necessary Initial Warrants and certificates for the Option Shares upon
         the exercise of the purchase rights under this Option. The Company will
         take all such reasonable action as may be necessary to assure that the
         issuance of the Option Shares and Initial Warrants upon the exercise of
         any and all purchase rights under this Option may be issued as provided
         herein without violation of any applicable law, regulation, or rule of
         any applicable market or exchange.

16.      9.99% Limitation.

(a)      Notwithstanding anything to the contrary contained herein, the number
         of shares of Common Stock that may be acquired by the holder upon
         exercise pursuant to the terms hereof shall not exceed a number that,
         when added to the total number of shares of Common Stock deemed
         beneficially owned by such holder (other than by virtue of the
         ownership of securities or rights to acquire securities (including the
         Option Shares) that have limitations on the holder's right to convert,
         exercise or purchase similar to the limitation set forth herein),
         together with all shares of Common Stock deemed beneficially owned
         (other than by virtue of the ownership of securities or rights to
         acquire securities that have limitations on the right to convert,
         exercise or purchase similar to the limitation set forth herein) by the
         holder's "affiliates" (as defined in Rule 144 of the Act) ("AGGREGATION
         PARTIES") that would be aggregated for purposes of determining whether
         a group under Section 13(d) of the Securities Exchange Act of 1934 as
         amended, exists, would exceed 9.99% of the total issued and outstanding
         shares of the Common Stock (the "RESTRICTED OWNERSHIP PERCENTAGE").
         Each holder shall have the right (w) at any time and from time to time
         to reduce its Restricted Ownership Percentage immediately upon notice
         to the Company and (x) (subject to waiver) at any time and from time to
         time, to increase its Restricted Ownership Percentage immediately in
         the event of the

                                       7
<PAGE>   8

         announcement as pending or planned, of a change of control transaction
         (including without limitation a transaction that would result in a
         transfer of more than 50% of the Company's voting power or equity, or a
         transaction that would result in a person or "group" being deemed the
         beneficial owner of 50% or more of the Company's voting power or
         equity).

(b)      The holder covenants at all times on each day (each such day being
         referred to as a "COVENANT DAY") as follows: During the balance of such
         Covenant Day and the succeeding sixty-one (61) days (the balance of
         such Covenant Day and the succeeding 61 days being referred to as the
         "COVENANT PERIOD") such holder will not acquire shares of Common Stock
         pursuant to any right (including exercise of Options) existing at the
         commencement of the Covenant Period to the extent the number of shares
         so acquired by such holder and its Aggregation Parties (ignoring all
         dispositions) would exceed:

                           (1)      the Restricted Ownership Percentage of the
                                    total number of shares of Common Stock
                                    outstanding at the commencement of the
                                    Covenant Period, minus

                           (2)      the number of shares of Common Stock
                                    actually owned by such holder and its
                                    Aggregation Parties at the commencement of
                                    the Covenant Period.

                           A new and independent covenant will be deemed to be
         given by the holder as of each moment of each Covenant Day. No covenant
         will terminate, diminish or modify any other covenant. The holder
         agrees to comply with each such covenant. This Section 16 controls in
         the case of any conflict with any other provision of the Agreement or
         any agreement entered into in connection therewith.

                           The Company's obligation to issue Common Stock which
         would exceed such limits referred to in this Section 16 shall be
         suspended to the extent necessary until such time, if any, as shares of
         Common Stock may be issued in compliance with such restrictions.

(c)      Notwithstanding anything contained herein, in no event shall the
         Company issue shares of Common Stock hereunder to the extent that the
         total number of shares issued or deemed issued to the Investors under
         the Purchase Agreement would exceed 19.9% of the Company's issued and
         outstanding shares of Common Stock on the date of issuance hereof.

17.      Compliance with Securities Laws. (a) The Holder hereof acknowledges
         that the Option Shares acquired upon the exercise of this Option, if
         not registered (or if no exemption from registration exists), will have
         restrictions upon resale imposed by state and federal securities laws.
         Each certificate representing the Option Shares issued to the Holder
         upon exercise (if not registered, for resale or otherwise, or if no
         exemption from registration exists) will bear substantially the
         following legend:

                                       8
<PAGE>   9

         THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
         SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, TRANSFERRED,
         SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
         AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
         APPLICABLE STATE SECURITIES LAWS.

(b)      Without limiting the Investor's right to transfer, assign or otherwise
         convey the Option or Option Shares in compliance with all applicable
         securities laws, the Investor of this Option, by acceptance hereof,
         acknowledges that this Option and the Option Shares to be issued upon
         exercise hereof are being acquired solely for the Investor's own
         account and not as a nominee for any other party, and that the Investor
         will not offer, sell or otherwise dispose of this Option or any Option
         Shares to be issued upon exercise hereof except under circumstances
         that will not result in a violation of applicable federal and state
         securities laws.

18.      Miscellaneous.

(a)      Issue Date; Choice of Law; Venue; Jurisdiction. The provisions of this
         Option shall be construed and shall be given effect in all respects as
         if it had been issued and delivered by the Company on the date hereof.
         This Option shall be binding upon any successors or assigns of the
         Company. This Option will be construed and enforced in accordance with
         and governed by the laws of the State of New York, except for matters
         arising under the Act, without reference to principles of conflicts of
         law. Each of the parties consents to the exclusive jurisdiction of the
         Federal And State courts sitting in the County of New York in the State
         of New York in connection with any dispute arising under this Option
         and hereby waives, to the maximum extent permitted by law, any
         objection, including any objection based on forum non conveniens or
         venue, to the bringing of any such proceeding in such jurisdiction.
         Each party hereby agrees that if the other party to this Option obtains
         a judgment against it in such a proceeding, the party which obtained
         such judgment may enforce same by summary judgment in the courts of any
         country having jurisdiction over the party against whom such judgment
         was obtained, and each party hereby waives any defenses available to it
         under local law and agrees to the enforcement of such a judgment. Each
         party to this Option irrevocably consents to the service of process in
         any such proceeding by the mailing of copies thereof by registered or
         certified mail, postage prepaid, to such party at its address in
         accordance with Section 18(c). Nothing herein shall affect the right of
         any party to serve process in any other manner permitted by law.

(b)      Modification and Waiver. This Option and any provisions hereof may be
         changed, waived, discharged or terminated only by an instrument in
         writing signed by the party

                                       9
<PAGE>   10

         against which enforcement of the same is sought. Any amendment effected
         in accordance with this paragraph shall be binding upon the Investor,
         each future holder of this Option and the Company. No waivers of, or
         exceptions to, any term, condition or provision of this Option, in any
         one or more instances, shall be deemed to be, or construed as, a
         further or continuing waiver of any such term, condition or provision.

(c)      Notices. Any notice, request or other document required or permitted to
         be given or delivered to the Investor or future holders hereof or the
         Company shall be personally delivered or shall be sent by certified or
         registered mail, postage prepaid, to the Investor or each such holder
         at its address as shown on the books of the Company or to the Company
         at the address set forth in the Purchase Agreement. All notices under
         this Option shall be deemed to have been given when received.

         A party may from time to time change the address to which notices to it
         are to be delivered or mailed hereunder by notice in accordance with
         the provisions of this Section 18(c).

(d)      Severability. Whenever possible, each provision of this Option shall be
         interpreted in such manner as to be effective and valid under
         applicable law, but if any provision of this Option is held to be
         invalid, illegal or unenforceable in any respect under any applicable
         law or rule in any jurisdiction, such invalidity, illegality or
         unenforceability shall not affect the validity, legality or
         enforceability of any other provision of this Option in such
         jurisdiction or affect the validity, legality or enforceability of any
         provision in any other jurisdiction, but this Option shall be reformed,
         construed and enforced in such jurisdiction as if such invalid, illegal
         or unenforceable provision had never been contained herein.

(e)      No Impairment. The Company will not, by amendment of its Articles of
         Incorporation or through any reorganization, transfer of assets,
         consolidation, merger, dissolution, issue or sale of securities or any
         other voluntary action, avoid or seek to avoid the observance or
         performance of any of the terms of this Option, but will at all times
         in good faith assist in the carrying out of all such terms and in the
         taking of all such action as may be necessary or appropriate in order
         to protect the rights of the Holder against impairment. Without
         limiting the generality of the foregoing, the Company (a) will not
         increase the par value of any Option Shares above the amount payable
         therefor on such exercise, and (b) will take all such action as may be
         reasonably necessary or appropriate in order that the Company may
         validly and legally issue fully paid and nonassessable Option Shares on
         the exercise of this Option.

(f)      Specific Enforcement. The Company and the Holder acknowledge and agree
         that irreparable damage would occur in the event that any of the
         provisions of this Option were not performed in accordance with their
         specific terms or were otherwise breached. It is accordingly agreed
         that the parties shall he entitled to an injunction or injunctions to
         prevent or cure breaches of the provisions of this Option and to
         enforce specifically the terms and provisions hereof, this being in
         addition to any other remedy to which either of them may be entitled by
         law or equity.

                                       10
<PAGE>   11

                            [Signature Page Follows]

                                       11
<PAGE>   12

IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
officers thereunto duly authorized.

Dated: September 8, 2000

                                     BLUE ZONE, INC

                                     By:
                                        -------------------------------
                                     Name:
                                     Title:

ATTEST:

------------------------------
Name:

Agreed and Accepted
this 8th day of September, 2000

[INVESTOR]

By:
   ------------------------------
    Name:
    Title:

                                       12
<PAGE>   13

                                 EXERCISE NOTICE

BLUE ZONE, INC
329 Railway Street
Vancouver, British Columbia V6A
Facsimile:  604-685-4391

This undersigned hereby elects to exercise the right of purchase represented by
the within Option ("Option") for:

(a) _______________ shares of Common Stock* ("Option Shares") provided for
therein at an aggregate purchase price of $_______________; and

(b) Initial Warrants to purchase 20% of the number of Option Shares stated in
(a) above;

and requests that certificates for the Option Shares and the Initial Warrants be
issued as follows:

                           -------------------------------
                           Name

                           --------------------------------
                           Address

                           --------------------------------

                           --------------------------------

and, if the number of Option Shares shall not be all the Option Shares
purchasable upon exercise of the Option, that a new Option for the balance of
the Option Shares be issued.

In lieu of delivering physical certificates representing the Option Shares
purchasable upon exercise of this Option, provided the Company's transfer agent
is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Holder, the Company
shall use its best efforts to cause its transfer agent to electronically
transmit the Option Shares issuable upon conversion or exercise to the
undersigned, by crediting the account of the undersigned's prime broker with DTC
through its Deposit Withdrawal Agent Commission ("DWAC") system.

Dated:                                 Signature:
      ----------------------                     -------------------------------

                                                 -------------------------------
                                                 Name (please print)

                                                 -------------------------------
                                                 Address (please print)

                                                 -------------------------------

         The Investor exercising this Option hereby represents and warrants that
such Investor's representations and warranties contained in the Purchase
Agreement are true and correct as of the date of this exercise.

--------------------------
 * NOTE: If conversion of the Option is made by surrender of the Option and the
   number of shares indicated exceeds the maximum number of shares to which a
   holder is entitled, the Company will issue such maximum number of shares
   purchasable upon exercise of the Option registered in the name of the
   undersigned Optionholder or the undersigned's Assignee as below indicated and
   deliver same to the address stated below.

                                       13
<PAGE>   14

                                 ASSIGNMENT FORM

                    (To assign the foregoing Option, execute
                   this form and supply required information.
                  Do not use this form to exercise the Option.)

         FOR VALUE RECEIVED, the foregoing Option and all rights evidenced
thereby are hereby assigned to

                                                whose address is
------------------------------------------------

---------------------------------------------------------------.

---------------------------------------------------------------

                                           Dated:              ,
                                                 --------------

            Holder's Signature:
                                ---------------------------------
            Holder's Address:
                                ---------------------------------

                                ---------------------------------

Signature Guaranteed:
                     ----------------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Option, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Option.

                                       14

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