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EXHIBIT 4.2
WARRANT
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE
UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF,
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE
BENEFICIARY OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A STOCK
PURCHASE AGREEMENT, DATED AS OF OCTOBER 31, 2000, BETWEEN CHROMATICS
COLOR SCIENCES INTERNATIONAL, INC. AND CRESCENT INTERNATIONAL LTD. A COPY
OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY
BE OBTAINED FROM CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.'S
EXECUTIVE OFFICES.
October 31, 2000
Warrant to Purchase up to 270,000 Shares of Common Stock of
Chromatics Color Sciences International, Inc. (hereinafter, the "Incentive
Warrant").
Chromatics Color Sciences International, Inc., an entity organized
and existing under the laws of the State of New York (the "Company"), hereby
agrees that Crescent International Ltd. (the "Investor") or any other Warrant
Holder is entitled, on the terms and conditions set forth below, to purchase
from the Company at any time during the Exercise Period (as defined below) up
to 270,000 fully paid and nonassessable shares of Common Stock, par value
$.001 per share, of the Company (the "Common Stock"), as the same may be
adjusted from time to time pursuant to Section 6 hereof, at the Exercise Price
(as defined below), as the same may be adjusted pursuant to Section 6 hereof.
The resale of the shares of Common Stock or other securities issuable upon
exercise or exchange of this Incentive Warrant is subject to the provisions of
the Registration Rights Agreement (as defined below).
Section 1. Definitions.
"Aggregate Exercise Price" shall mean, with respect to any
exercise (in whole or in part) of this Incentive Warrant the Exercise Price
multiplied by the total number of shares of Common Stock for which this
Incentive Warrant is being exercised.
"Agreement" shall mean the Stock Purchase Agreement, dated the
date hereof, between the Company and the Investor.
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"Bid Price" shall mean the closing bid price of the Common
Stock as reported by Bloomberg L.P.
"Capital Shares" shall mean the Common Stock and any shares of
any other class of common stock whether now or hereafter authorized, having
the right to participate in the distribution of dividends (as and when
declared) and assets (upon liquidation of the Company).
"Closing Date" shall mean the date on which the Agreement is
executed and delivered by the parties hereto.
"Exercise Date" shall mean, with respect to any exercise (in
whole or in part) of this Incentive Warrant either (i) the date this Incentive
Warrant, the Exercise Notice and the Aggregate Exercise Price are received by
the Company or (ii) the date a copy of the Exercise Notice is sent by
facsimile to the Company, provided that this Incentive Warrant, the original
Exercise Notice, and the Aggregate Exercise Price are received by the Company
within five Trading Days thereafter and provided further that if this
Incentive Warrant, the original Exercise Notice and the Aggregate Exercise
Price are not received within five Trading Days in accordance with clause (ii)
above, the Exercise Date for this clause (ii) shall be the date that the
Company receives this Incentive Warrant, the original Exercise Notice and the
Aggregate Exercise Price.
"Exercise Notice" shall mean, with respect to any exercise (in
whole or in part) of this Incentive Warrant, the exercise form attached hereto
as Exhibit A, duly executed by the Warrant Holder.
"Exercise Period" shall mean the period beginning on the
Closing Date and continuing until the expiration of the five-year period
thereafter; provided that such period shall be extended one day for each day
after the Closing Date, that the Registration Statement covering (i) the
Conversion Shares issuable upon conversion of the Preferred Stock and (ii) the
Warrant Shares purchasable through exercise of this Incentive Warrant, is not
effective during the period such Registration Statement is required to be
effective pursuant to the Registration Rights Agreement.
"Exercise Price" as of the date hereof shall mean $1.00 per
share of Common Stock, subject to the adjustments provided for in Section 6 of
this Incentive Warrant.
"Per Share Warrant Value" shall mean, with respect to any
exercise (in whole or in part) of this Incentive Warrant the difference
resulting from subtracting the Exercise Price from the Bid Price of one share
of Common Stock on the Trading Day immediately preceding the Exercise Date.
"Preferred Stock" shall mean the Class B Series 4 Preferred
Stock, par value $.01 per share, of the Company.
"Registration Rights Agreement" shall mean the registration
rights agreement, dated the date hereof between the Company and the Investor.
"Warrant Holder" shall mean the Investor or any assignee or
transferee of all or any portion of this Incentive Warrant.
Other capitalized terms used but not defined herein shall have
their respective meanings set forth in the Agreement.
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Section 2. Exercise; Cashless Exercise.
(a) Method of Exercise. This Incentive Warrant may be exercised
in whole or in part (but not as to a fractional share of Common Stock), at any
time and from time to time during the Exercise Period, by the Warrant Holder
by (i) the surrender of this Incentive Warrant, the Exercise Notice and the
Aggregate Exercise Price to the Company at the address set forth in Section 11
hereof or (ii) the delivery by facsimile of an executed and completed Exercise
Notice to the Company and delivery to the Company within five Trading Days
thereafter of this Incentive Warrant, the original Exercise Notice and the
Aggregate Exercise Price.
(b) Payment of Aggregate Exercise Price. Subject to paragraph
(c) below, payment of the Aggregate Exercise Price shall be made by check or
bank draft payable to the order of the Company or by wire transfer to an
account designated by the Company. If the amount of the payment received by
the Company is less than the Aggregate Exercise Price, the Warrant Holder will
be notified of the deficiency and shall make payment in that amount within
five Trading Days of such notice. In the event the payment exceeds the
Aggregate Exercise Price, the Company will refund the excess to the Warrant
Holder within three Trading Days of both the receipt of such payment and the
knowledge of such excess.
(c) Cashless Exercise. As an alternative to payment of the
Aggregate Exercise Price in accordance with Section 2(b) above, the Warrant
Holder may elect to effect a cashless exercise by so indicating on the
Exercise Notice and including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"Cashless Exercise"). In the event of a Cashless Exercise, the Warrant Holder
shall surrender this Incentive Warrant for that number of shares of Common
Stock determined by (i) multiplying the number of Warrant Shares for which
this Incentive Warrant is being exercised by the Per Share Warrant Value and
(ii) dividing the product by the Bid Price of one share of the Common Stock on
the Trading Day immediately preceding the Exercise Date.
(d) Replacement Warrant. In the event that the Incentive Warrant
is not exercised in full, the number of Warrant Shares shall be reduced by the
number of such Warrant Shares for which this Incentive Warrant is exercised,
and the Company, at its expense, shall forthwith issue and deliver to the
Warrant Holder a new Incentive Warrant of like tenor in the name of the
Warrant Holder or as the Warrant Holder may request, reflecting such adjusted
number of Warrant Shares.
Section 3. Ten Percent Limitation. At no time may the Warrant Holder
exercise this Incentive Warrant such that the number of Warrant Shares to be
received pursuant to such exercise aggregated with all other shares of Common
Stock then owned by the Warrant Holder beneficially or deemed beneficially
owned by the Warrant Holder would result in the Warrant Holder owning more
than 9.9% of all of such Common Stock as would be outstanding on such Exercise
Date, as determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. As of any date prior to the
Exercise Date, the aggregate number of shares of Common Stock into which this
Incentive Warrant is exercisable, together with all other shares of Common
Stock then beneficially owned (as such term is defined in Rule 13(d) under the
Exchange Act) by such Warrant Holder and its affiliates, shall not exceed 9.9%
of the total outstanding shares of Common Stock as of such date.
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Section 4. Delivery of Stock Certificates.
(a) Subject to the terms and conditions of this Incentive
Warrant, as soon as practicable after the exercise of this Incentive Warrant
in full or in part, and in any event within five Trading Days thereafter, the
Company at its expense (including, without limitation, the payment by it of
any applicable issue taxes) will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder lawfully may direct,
a certificate or certificates for the number of validly issued, fully paid and
non-assessable Warrant Shares to which the Warrant Holder shall be entitled on
such exercise, together with any other stock or other securities or property
(including cash, where applicable) to which the Warrant Holder is entitled
upon such exercise in accordance with the provisions hereof; provided,
however, that any such delivery to a location outside of the United States
also shall be made within five Trading Days after the exercise of this
Incentive Warrant in full or in part.
(b) This Incentive Warrant may not be exercised as to fractional
shares of Common Stock. In the event that the exercise of this Incentive
Warrant, in full or in part, would result in the right to acquire any
fractional share of Common Stock, then in such event such fractional share
shall be considered a whole share of Common Stock and shall be added to the
number of Incentive Warrant Shares issuable to the Investor upon exercise of
this Incentive Warrant.
Section 5. Representations, Warranties and Covenants of the Company.
(a) The Company shall take all necessary action and proceedings
as may be required and permitted by applicable law, rule and regulation for
the legal and valid issuance of this Incentive Warrant and the Warrant Shares
to the Warrant Holder.
(b) At all times during the Exercise Period, the Company shall
take all steps reasonably necessary and within its control to insure that the
Common Stock remains listed or quoted on the Principal Market.
(c) The Warrant Shares, when issued in accordance with the terms
hereof, will be duly authorized and, when paid for or issued in accordance
with the terms hereof, shall be validly issued, fully paid and non-assessable.
(d) The Company has authorized and reserved for issuance to the
Warrant Holder the requisite number of shares of Common Stock to be issued
pursuant to this Incentive Warrant. The Company at all times shall reserve and
keep available, solely for issuance and delivery as Warrant Shares hereunder,
such shares of Common Stock as from time to time shall be issuable as Warrant
Shares, and accordingly shall adjust the number of such shares of Common Stock
promptly upon the occurrence of any of the events specified in Section 6
hereof.
Section 6. Adjustment of the Exercise Price. The Exercise Price and,
accordingly, the number of Warrant Shares issuable upon exercise of the
Incentive Warrant, shall be subject to adjustment from time to time upon the
happening of certain events as follows:
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(a) Reclassification, Consolidation, Merger; Mandatory Share
Exchange; Sale Transfer or Lease of Assets. If the Company, at any time while
this Incentive Warrant is unexpired and not exercised in full, (i)
reclassifies or changes its Outstanding Capital Shares (other than a change in
par value, or from par value to no par value per share, or from no par value
per share to par value or as a result of a subdivision or combination of
outstanding securities issuable upon exercise of the Incentive Warrant) or
(ii) consolidates, merges or effects a mandatory share exchange (x) with
another corporation (other than a merger or mandatory share exchange with
another corporation in which the Company is a continuing corporation and that
does not result in any reclassification or change, other than a change in par
value, or from par value to no par value per share, or from no par value per
share to par value, or (y) as a result of a subdivision or combination of
Outstanding Capital Shares issuable upon exercise of the Incentive Warrant) or
(iii) sells, transfers or leases all or substantially all of its assets, then
in any such event the Company, or such successor or purchasing corporation, as
the case may be, shall, without payment by the Warrant Holder of any
additional consideration therefor, amend this Incentive Warrant or issue a new
Incentive Warrant providing that the Warrant Holder shall have rights not less
favorable to the Warrant Holder than those then applicable to this Incentive
Warrant and to receive upon exercise under such amendment of this Incentive
Warrant or new Incentive Warrant, in lieu of each share of Common Stock
theretofore issuable upon exercise of the Incentive Warrant hereunder, the
kind and amount of shares of stock, other securities, money or property
receivable upon such reclassification, change, consolidation, merger,
mandatory share exchange, lease, sale or transfer by the holder of one share
of Common Stock issuable upon exercise of the Incentive Warrant had the
Incentive Warrant been exercised immediately prior to such reclassification,
change, consolidation, merger, mandatory share exchange or sale or transfer
(without giving effect to the limitation on ownership set forth in Section 3
hereof), and an appropriate provision for the foregoing shall be made by the
Company as part of any such event. Such amended Incentive Warrant or new
Incentive Warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 6. The provisions of this Section 6(a) shall similarly apply to
successive reclassifications, changes, consolidations, mergers, mandatory
share exchanges, sales, transfers and leases.
(b) Subdivision or Combination of Shares; Stock Dividends. If
the Company, at any time while this Incentive Warrant is unexpired and not
exercised in full, shall (x) subdivide its Common Stock, (y) combine its
Common Stock or (z) pay a dividend in its Capital Shares, or make any other
distribution of its Capital Shares, then the Exercise Price shall be adjusted,
as of the date the Company shall take a record of the holders of its Capital
Shares for the purpose of effecting such subdivision, combination or dividend
or other distribution (or if no such record is taken, as of the effective date
of such subdivision, combination, dividend or other distribution), to that
price determined by multiplying the Exercise Price in effect immediately prior
to such subdivision, combination, dividend or other distribution by a
fraction:
(i) the numerator of which shall be the total number of
Outstanding Capital Shares immediately prior to such subdivision, combination,
dividend or other distribution, and
(ii) the denominator of which shall be the total number of
Outstanding Capital Shares immediately after such subdivision, combination,
dividend or other distribution.
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The provisions of this Section 6(b) shall not apply under any of the
circumstances for which an adjustment is made pursuant to Section 6(a).
(c) Liquidating Dividends, Etc. If the Company, at any time
while this Incentive Warrant is unexpired and not exercised in full, makes a
distribution of its assets or evidences of indebtedness to the holders of its
Capital Shares as a dividend in liquidation or by way of return of capital or
other than as a dividend payable out of earnings or surplus legally available
for dividends under applicable law or any distribution to such holders made in
respect of the sale of all or substantially all of the Company's assets (other
than under the circumstances provided for in the foregoing subsections (a) and
(b)) while an exercise is pending, then the Warrant Holder shall be entitled
to receive upon such exercise of the Incentive Warrant in addition to the
Warrant Shares receivable in connection therewith, and without payment of any
consideration other than the Exercise Price, an amount in cash equal to the
value of such distribution per Capital Share multiplied by the number of
Warrant Shares that, on the record date for such distribution, are issuable
upon such exercise of the Incentive Warrant (without giving effect to the
limitation on ownership set forth in Section 3 hereof), and an appropriate
provision therefor shall be made by the Company as part of any such
distribution. No further adjustment shall be made following any event that
causes a subsequent adjustment in the number of Warrant Shares issuable. The
value of a distribution that is paid in other than cash shall be determined in
good faith by the Board of Directors of the Company.
(d) Adjustment of Number of Shares. Upon each adjustment of the
Exercise Price pursuant to any provisions of this Section 6, the number of
Warrant Shares issuable hereunder at the option of the Warrant Holder shall be
calculated, to the nearest one hundredth of a whole share, multiplying the
number of Warrant Shares issuable prior to an adjustment by a fraction:
(i) the numerator of which shall be the Exercise Price
before any adjustment pursuant to this Section 6; and
(ii) the denominator of which shall be the Exercise Price
after such adjustment.
(e) Other Action Affecting Capital Shares. In the event after
the date hereof the Company shall take any action affecting the number of
Outstanding Capital Shares, other than an action specifically described in any
of the foregoing subsections (a) through (c) hereof, inclusive (including,
without limitation, a subdivision or combination of Common Stock, or the
payment of a dividend in its Capital Shares or any other distribution in its
Warrant Closing), that in the reasonable opinion of the Warrant Holder would
have a materially adverse effect upon the rights of the Warrant Holder at the
time of exercise of the Incentive Warrant, the Exercise Price shall be
adjusted in such manner and at such time as the Board of Directors on the
advice of the Company's independent public accountants shall in good faith
determine to be equitable in the circumstances.
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(f) Notice of Certain Actions; Notice of Adjustments.
(i) In the event the Company shall, at a time while the
Incentive Warrant is unexpired and outstanding, take any action pursuant to
subsections (a) through (e) of this Section 6 that may result in an adjustment
of the Exercise Price, the Company shall notify the Warrant Holder of such
action ten days in advance of its effective date in order to afford to the
Warrant Holder an opportunity to exercise the Incentive Warrant prior to such
action becoming effective.
(ii) Whenever the Exercise Price or number of Warrant
Shares shall be adjusted pursuant to Section 6 hereof, the Company shall
promptly deliver by facsimile, with the original delivered by express courier
service in accordance with Section 11 hereof, a certificate, which shall be
signed by the Company's President or a Vice President and by its Treasurer or
Assistant Treasurer or its Secretary or Assistant Secretary, setting forth in
reasonable detail the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Company's Board of Directors made any
determination hereunder), and the Exercise Price and number of Incentive
Warrant Shares purchasable at that Exercise Price after giving effect to such
adjustment.
Section 7. No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or By-Laws 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 Incentive 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 Warrant Holder against impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase
the par value of any Warrant 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 Warrant Shares on the exercise of this Incentive Warrant.
Section 8. Rights As Stockholder. Prior to exercise of this Incentive
Warrant and except as provided in Section 6 hereof, the Warrant Holder shall
not be entitled to any rights as a stockholder of the Company with respect to
the Warrant Shares, including (without limitation) the right to vote such
shares, receive dividends or other distributions thereon or be notified of
stockholder meetings. However, in the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend) or other distribution, any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, the Company shall
mail to each Warrant Holder, at least ten days prior to the date specified
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.
Section 9. Replacement of Incentive Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of the Incentive Warrant and, in the case of any such loss, theft
or destruction of the Incentive Warrant, upon delivery of
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an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such Incentive Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Incentive Warrant of like tenor.
Section 10. Restricted Securities.
(a) Registration or Exemption Required. This Incentive Warrant
has been issued in a transaction exempt from the registration requirements of
the Securities Act in reliance upon Section 4(2) of the Securities Act. This
Incentive Warrant and the Warrant Shares issuable upon exercise of this
Incentive Warrant may not be resold except pursuant to an effective
registration statement or an exemption to the registration requirements of the
Securities Act and applicable state laws.
(b) Legend. Any replacement Incentive Warrants issued pursuant
to Section 2 hereof and any Warrant Shares issued upon exercise hereof, shall
bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE
BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY OF
CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A STOCK PURCHASE
AGREEMENT, DATED AS OF OCTOBER 31, 2000, BETWEEN CHROMATICS COLOR
SCIENCES INTERNATIONAL, INC. AND CRESCENT INTERNATIONAL LTD. A COPY
OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH OBLIGATIONS
MAY BE OBTAINED FROM THE CHROMATICS COLOR SCIENCES INTERNATIONAL,
INC.'S EXECUTIVE OFFICES."
Removal of such legend shall be in accordance with the legend removal
provisions in the Agreement.
(c) No Other Legend or Stock Transfer Restrictions. No legend
other than the one specified in paragraph (b) of this Section 10 has been or
shall be placed on the share certificates representing the Incentive Warrant
Shares, and no instructions or "stop transfer orders," so called, "stock
transfer restrictions" or other restrictions have been or shall be given to
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the Company's transfer agent with respect thereto other than as expressly set
forth in this Section 10.
(d) Assignment. Assuming the conditions of Section 10(a) above
regarding registration or exemption have been satisfied, the Warrant Holder
may sell, transfer, assign, pledge or otherwise dispose of this Incentive
Warrant, in whole or in part. The Warrant Holder shall deliver a written
notice to the Company substantially in the form of the assignment form
attached hereto as Exhibit B (the "Assignment Notice") indicating the person
or persons to whom this Incentive Warrant shall be assigned and the respective
number of warrants to be assigned to each assignee. The Company shall effect
the assignment within ten (10) days of receipt of such Assignment Notice, and
shall deliver to the assignee(s) designated by the Warrant Holder a Incentive
Warrant or Incentive Warrants of like tenor and terms for the specified number
of shares.
(e) Investor's Compliance. Nothing in this Section 10 shall
affect in any way the Investor's obligations under any agreement to comply
with all applicable securities laws upon resale of the Common Stock.
Section 11. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be
in writing and shall be deemed duly given (i) upon delivery if hand delivered
at the address designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received), (ii) on the fifth
business day after deposit into the mail, if deposited in the mail, registered
or certified, return receipt requested, postage prepaid, addressed to the
address designated below, (iii) upon delivery if delivered by reputable
express courier service to the address designated below, or (iv) upon
confirmation of transmission if transmitted to the facsimile number designated
below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery
(if delivered other than on a business day during normal business hours where
such notice is to be received). The addresses and facsimile numbers for such
communications shall be:
if to the Company:
Chromatics Color Sciences International, Inc.
5 East 80th Street
New York, NY 10021
Attention: Darby S. Macfarlane, Chairperson
Telephone: (212) 717-6544
Facsimile: (212) 717-6675
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with a copy (which shall not constitute notice) to:
Patterson, Belknap, Webb & Tyler LLP
1133 Avenue of the Americas
New York, NY 10036
Attention: Jeffrey E. La Gueux, Esq.
Telephone: (212) 336-2000
Facsimile: (212) 336-2222
if to the Investor:
Crescent International Ltd.
c/o GreenLight (Switzerland) SA
84, av Louis-Casai
1216 Geneva, Cointrin
P.O. Box 42
Switzerland
Attention: Mel Craw/Maxi Brezzi
Telephone: +41 22 791 7169
Facsimile: +41 22 929 53 94
with a copy (which shall not constitute notice) to:
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, NY 10166
Attention: Earl S. Zimmerman, Esq.
Telephone: (212) 878-8000
Facsimile: (212) 878-8375
Either party hereto may from time to time change its address or facsimile
number for notices under this Section 11 by giving at least ten days'
prior written notice of such changed address or facsimile number to the
other party hereto.
Section 12. Miscellaneous. This Incentive Warrant and any term
hereof may be changed, waived, discharged or terminated only by an instrument
in writing signed by the party against which enforcement of such change,
waiver, discharge or termination is sought. The headings in this Incentive
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
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IN WITNESS WHEREOF, this Incentive Warrant was duly executed
by the undersigned, thereunto duly authorized, as of the date first set forth
above.
CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.
By:
-----------------------------------------------
Name:
Title:
Attested:
By:
-----------------------------------------------
Name:
Title: Secretary
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EXHIBIT A TO THE INCENTIVE WARRANT
EXERCISE FORM
CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.
The undersigned (the "Registered Holder") hereby irrevocably
exercises the right to purchase __________________ shares of Common Stock of
Chromatics Color Sciences International, Inc., an entity organized and
existing under the laws of the State of New York (the "Company"), evidenced by
the attached Incentive Warrant, and herewith makes payment of the Exercise
Price with respect to such shares in full in the form of (check the
appropriate box) (i) Ycash or certified check in the amount of $________; (ii)
Ywire transfer to the Company's account at __________________, _________,
_________ (Account No.:_________); or (iii) Y______ Warrant Shares, which
represent the amount of Warrant Shares as provided in the attached Incentive
Warrant to be canceled in connection with such exercise, all in accordance
with the conditions and provisions of said Incentive Warrant.
The undersigned requests that stock certificates for such Warrant
Shares be issued, and an Incentive Warrant representing any unexercised
portion hereof be issued, pursuant to this Incentive Warrant in the name of
the Registered Holder and delivered to the undersigned at the address set
forth below.
Dated:
------------------------------------------
------------------------------------------------
Signature of Registered Holder
Name of Registered Holder (Print)
------------------------------------------------
Address
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NOTICE
The signature to the foregoing Exercise Form must correspond to the
name as written upon the face of the attached Incentive Warrant in every
particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT B TO THE INCENTIVE WARRANT
ASSIGNMENT
(To be executed by the registered Warrant Holder (the "Registered
Holder") desiring to transfer the Incentive Warrant, in whole or in part.)
FOR VALUED RECEIVED, the undersigned Warrant Holder of the attached
Incentive Warrant hereby sells, assigns or transfers unto the person(s) named
below (the "Assignee") the right to purchase ______________ shares of the
Common Stock of Chromatics Color Sciences International, Inc. evidenced by the
attached Incentive Warrant and does hereby irrevocably constitute and appoint
______________________ (attorney) to transfer the number of shares specified
of the said Incentive Warrant on the books of the Company, with full power of
substitution in the premises.
The undersigned requests that such Incentive Warrant be issued, and
an Incentive Warrant representing any unsold, unassigned or non-transferred
portion hereof be issued, pursuant to this Incentive Warrant in the name of
the Registered Holder and delivered to the undersigned at the address set
forth below.
Dated:
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Signature of Registered Holder
Name of Registered Holder (Print)
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Address of Registered Holder
Name of Assignee (Print)
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Address of Assignee (including zip code number)
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<PAGE> 15
Fill in for new Registration of Incentive Warrant:
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Name
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Address
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Please print name and address of assignee
(including zip code number)
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NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of the attached Incentive Warrant in every
particular, without alteration or enlargement or any change whatsoever.
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