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EXECUTION COPY
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.
COMMON STOCK ADJUSTMENT WARRANT
No. AW1
To Receive Shares of $.001 Par Value Common Stock of
CONSTELLATION 3D, INC.
THIS CERTIFIES that, for value received, Koor's Investors (the
"Investor") is entitled, upon the terms, at the times and subject to the
conditions hereinafter set forth, at any time after the termination of the
Adjustment Period (as defined herein) but prior to 5:00 p.m. New York City time
on August 31, 2005 (the "Termination Date"), to subscribe for and receive from
time to time from CONSTELLATION 3D, INC., a Florida corporation (the "Company"),
all or any portion of an aggregate number of shares of Common Stock of the
Company determined pursuant to Section 3 hereof (the "Adjustment Shares"). The
"Exercise Price" is $0. 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 August 31, 2000 (the "Purchase Agreement") entered into by the
Company and the Investor. Any capitalized terms used but not defined in this
Adjustment Warrant shall have the meaning specified in the Purchase 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 receive 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, upon exercise of the
rights represented by this Adjustment Warrant, will be duly authorized,
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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 Adjustment Warrant for Adjustment Shares.
(a) Definitions.
Subject to Section 3(e), "Adjustment Period" means the period starting
15 Trading Days after the day on which a registration statement
covering the Initial Shares is first declared effective by the SEC and
ending on and including the 50th consecutive Trading Day thereafter.
For the avoidance of doubt, the Adjustment Period with respect to an
Adjustment Warrant issued in connection with the exercise of an
Optional Warrant shall be the same period in time as the Adjustment
Period with respect to the Adjustment Warrants issued in connection
with the sale of the Initial Shares, even if the Adjustment Period has
ended prior to the exercise of such Optional Warrant.
"Adjusted Share Purchase Price" means 115% of the Share Purchase Price.
The Adjusted Share Purchase Price shall be appropriately adjusted to
reflect stock splits, reverse stock splits, stock dividends,
recapitalizations, etc.
"Average Price" means the average of the 20 lowest daily trades for a
share of Common Stock during the Adjustment Period.
"Effective Registration" shall have the meaning specified in the
Purchase Agreement.
"Principal Market" shall have the meaning specified in the Purchase
Agreement.
(b) The number of Adjustment Shares deliverable will be calculated in
accordance with Section 3(c). No shares will be due pursuant to Section
3(c) unless the Average Price is less than the Adjusted Share Purchase
Price.
(c) Adjustment Share Calculations. Subject to Sections 3(e) and (f), the
number of Adjustment Shares (if any) issuable in respect of the
Adjustment Period shall be calculated immediately following the close
of trading of the Principal Market on the final Trading Day of the
Adjustment Period, using the following formula:
# of Adjustment Shares = ($2,300,490/ Average Price) - # of Initial
Shares
The number of Initial Shares used in the above calculation shall be
appropriately adjusted for any stock slit, reverse stock split, stock
dividend, recapitalization, etc. Promptly after performing the
calculations pursuant to Section 3(c), the Company shall deliver its
written calculations to the Investor by facsimile.
If this Adjustment Warrant was issued to the Investor pursuant to the
exercise of an Optional Warrant, the term "Initial Shares" as used in
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this Adjustment Warrant shall be deemed to mean the Optional Warrant
Shares received upon such exercise of such Optional Warrant.
(d) Exercise of Adjustment Warrant. Exercise of the rights represented by
this Adjustment Warrant may be made at any time or times, in whole or
in part, after the termination of the Adjustment Period and prior to
5:00 p.m. New York City time on the Termination Date, 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); 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. Certificates
for Adjustment Shares shall be delivered to the holder hereof within
three (3) Trading Days after the date on which this Adjustment Warrant
shall have been exercised as aforesaid (such event being a "Fill-Up
Closing"). An exercise of this Adjustment Warrant shall be deemed for
all purposes a "cashless" exercise.
(e) Effective Registration During Stock Adjustment Period.
(i) If at any time during the Adjustment Period 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 the Investor in accordance with the other provisions of this
Section 3, or (y) by written notice to the Company (delivered no later
than 24 hours after actually receiving written notification from the
Company of such lack of Effective Registration) elect to suspend such
Adjustment Period with respect to itself only (a "Suspension Notice").
(ii) If the 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
the Adjustment Period, then the Investor may, at its option, elect (x)
to treat the 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 the tolled
Adjustment Period, (y) to treat the 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, or (z) to treat
the Adjustment Period as having been extended by such number of days
that is equal to the duration of 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.
(f) 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 (as to itself only) but not the obligation to receive
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from the Company, in lieu of the Adjustment Shares otherwise
deliverable, an amount in immediately available funds equal to the
product of (i) the highest closing bid price of the Common Stock on the
Principal Market from the final Trading Day of the Adjustment Period
through and including the Trading Day immediately prior to such Fill-Up
Closing and (ii) the number of Adjustment Shares the Company otherwise
would be obligated to deliver to such Investor at such Fill-Up Closing.
(g) Remedies. If the Company fails to deliver the specified number of
Adjustment Shares to the Investor within 10 Trading Days of the time
and at the place specified herein, then the 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 by the Company) at the applicable Premium
Redemption Price (as defined and specified in the Registration Rights
Agreement).
(h) Adjustments. The number of Adjustment Shares shall be appropriately
adjusted to reflect any stock split, reverse 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.
(i) Short Sales. The Investor agrees that prior to expiration of the
Adjustment Period, it will not engage in short sales of Common Shares
with the intent of lowering the market price of such shares. The fact
that the market price of the Common Shares declines contemporaneously
with short sales effected by the Investor shall not be deemed a
presumption that the Investor had the intent of so lowering the market
price.
(j) Miscellaneous. The Adjustment Shares shall upon delivery to the
Investor be fully-paid, nonassessable, shares of Common Stock, free and
clear of all liens and encumbrances and duly eligible for trading on
each exchange and market on which shares of Common Stock are then
traded.
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
Adjustment Warrant holder, the Company shall use its best efforts to
cause its transfer agent to electronically transmit the Adjustment
Shares to the Adjustment Warrant holder by crediting the account of the
Adjustment Warrant holder'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.
The term "Trading Day" means (x) if the Common Stock is listed on the
New York Stock Exchange or the American Stock Exchange, a day on which
there is trading on such stock exchange, or (y) if the Common Stock is
not listed on either of such stock exchanges but sale prices of the
Common Stock are reported on an automated quotation system, a day on
which trading is reported on the principal automated quotation system
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on which sales of the Common Stock are reported, or (z) if the
foregoing provisions are inapplicable, a day on which quotations are
reported by National Quotation Bureau Incorporated.
5. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the issuance of the
Adjustment Shares
6. 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.
7. 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.
8. No Rights as Shareholder until Exercise. Subject to Section 13 of this
Adjustment Warrant 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
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 received 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 Adjustment Warrant shall have been
exercised.
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9. 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.
10. 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. Upon surrender and cancellation of such Adjustment
Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Adjustment Warrant or stock certificate of like tenor and
dated as of such cancellation, in lieu of this Adjustment Warrant or
stock certificate.
11. 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.
12. Effect of Certain Events. 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 (collectively, a "Sale or Merger Transaction"), the
holder of this Adjustment Warrant shall have the right thereafter to
purchase, by exercise of this Adjustment Warrant, the kind and amount
of cash, 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.
13. Adjustment of 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
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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 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 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. In lieu
of such change to the number of Adjustment Shares for which this
Adjustment Warrant is exercisable, the Investor (as to itself only) may
elect, in its sole discretion, to participate in such distribution and
receive the shares of capital stock, evidence of indebtedness or other
assets on an "as exercised" basis as if the Adjustment Warrant had been
exercised in full for Adjustment Shares as of the record date for such
distribution, without regard to the restrictions contained in Section
14.
For purposes of this Adjustment Warrant, "Fair Market Value" shall
equal the 10 Trading Day average closing trading 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
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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. 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, the number of shares or other securities or property resulting
from such reorganization or reclassification, which would have been
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.
14. 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
Warrants) 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 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:
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(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 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 the exercise of the Adjustment
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 Shares of Common Stock which
would exceed such limits referred to in this Section 14 shall be
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suspended to the extent necessary until such time, if any, as shares of
Common Stock may be issued in compliance with such restrictions.
15. Miscellaneous.
(a) 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 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 15(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.
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(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 15(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 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 (a) will not increase the par value of any Adjustment 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 Adjustment Shares on the exercise of this Adjustment
Warrant.
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IN WITNESS WHEREOF, the Company has caused this Adjustment Warrant to
be executed by its officers thereunto duly authorized.
Dated: August 31, 2000
CONSTELLATION 3D, INC.
By: /s/ Eugene Levich
-----------------------
Name: Eugene Levich
Title: President
Agreed and Accepted
this 31st day of August, 2000
KOOR'S INVESTORS
By: /s/ Kobi Zecharia
---------------------------------
Name: Kobi Zecharia
Title:
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NOTICE OF EXERCISE
To: CONSTELLATION 3D, INC.
(1) The undersigned hereby elects to receive ________ shares of Common Stock of
CONSTELLATION 3D, INC. pursuant to the terms of the attached Adjustment Warrant
in a "cashless" exercise.
(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)
(3) Please issue a new Adjustment Warrant for the unexercised portion 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>
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
Constellation 3D, 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.
