PHIL.\97687-5
EXHIBIT B
to
Securities Purchase
Agreement
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY __, 2003
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Right to Purchase ________
Shares of
Common Stock, no par value per
share
Date: January__, 1998
ACCENT COLOR SCIENCES, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received,
______________________________, or its registered assigns, is
entitled to purchase from ACCENT COLOR SCIENCES, INC., a
corporation organized under the laws of the State of Connecticut
(the "Company"), at any time or from time to time during the
period specified in Section 2 hereof,
______________________________ (_______) fully paid and
nonassessable shares of the Company=s common stock, no par value
per share (the "Common Stock"), at an exercise price per share
(the "Exercise Price") equal to $_____. The number of shares of
Common Stock purchasable hereunder (the "Warrant Shares") and the
Exercise Price are subject to adjustment as provided in Section 4
hereof. The term "Warrants" means this Warrant and the other
warrants of the Company issued pursuant to that certain
Securities Purchase Agreement, dated as of the date hereof, by
and among the Company and the other signatories thereto (the
"Securities Purchase Agreement").
This Warrant is subject to the following terms, provisions,
and conditions:
1. Manner of Exercise; Issuance of Certificates; Payment
for Shares. Subject to the provisions hereof, including, without
limitation, the limitations contained in Section 7 hereof, this
Warrant may be exercised by the holder hereof, in whole or in
part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any
business day at the Company=s principal executive offices (or
such other office or agency of the Company as it may designate by
notice to the holder hereof), and upon (i) payment to the Company
in cash, by certified or official bank check or by wire transfer
for the account of the Company, of the Exercise Price for the
Warrant Shares specified in the Exercise Agreement or (ii) if the
holder is effectuating Cashless Exercise (as defined in Section
11(c) hereof) pursuant to Section 11(c) hereof, delivery to the
Company of a written notice of an election to effect a Cashless
Exercise for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or such holder's designee, as the
record owner of such shares, as of the close of business on the
date on which this Warrant shall have been surrendered, the
completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares as set forth above
or, if such date is not a business date, on the next succeeding
business date. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the
Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding two (2) business days,
after this Warrant shall have been so exercised (the "Delivery
Period"). The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall
be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which
this Warrant shall not then have been exercised.
If, at any time, a holder of this Warrant submits this
Warrant, an Exercise Agreement and payment to the Company of the
Exercise Price for each of the Warrant Shares specified in the
Exercise Agreement (including pursuant to a Cashless Exercise),
and the Company fails for any reason to deliver, on or prior to
the fourth business day following the expiration of the Delivery
Period for such exercise, the number of shares of Common Stock to
which the holder is entitled upon such exercise (an "Exercise
Default"), then the Company shall pay to the holder payments
("Exercise Default Payments") for an Exercise Default in the
amount of (a) (N/365), multiplied by (b) the amount by which the
Market Price (as defined in Section 4(l) hereof) on the date the
Exercise Agreement giving rise to the Exercise Default is
transmitted in accordance with Section 1 (the "Exercise Default
Date") exceeds the Exercise Price, multiplied by (c) the number
of shares of Common Stock the Company failed to so deliver in
such Exercise Default, multiplied by (d) .24, where N = the
number of days from the Exercise Default Date to the date that
the Company effects the full exercise of this Warrant which gave
rise to the Exercise Default. The accrued Exercise Default
Payment for each calendar month shall be paid in cash or shall be
convertible into Common Stock, at the holder=s option, as
follows:
(a) In the event holder elects to take such payment in
cash, cash payment shall be made to holder by the fifth (5th) day
of the month following the month in which it has accrued; and
(b) In the event holder elects to take such payment in
Common Stock, the holder may convert such payment amount into
Common Stock (in accordance with the terms contained in Article
IV of the Certificate of Designations, Preferences and Rights
(the "Certificate of Designation") governing the Company's Series
B Convertible Preferred Stock (the "Series B Preferred Stock"))
at the lower of the Exercise Price or the Market Price (as
defined in Section 4(l)) (as in effect at the time of conversion)
at any time after the fifth (5th) day of the month following the
month in which it has accrued.
Nothing herein shall limit the holder=s right to
pursue actual damages for the Company=s failure to maintain a
sufficient number of authorized shares of Common Stock as
required pursuant to the terms of Section 3(b) hereof or to
otherwise issue shares of Common Stock upon exercise of this
Warrant in accordance with the terms hereof, and the holder shall
have the right to pursue all remedies available at law or in
equity (including a decree of specific performance and/or
injunctive relief).
2. Period of Exercise.
(a) This Warrant is immediately exercisable, at any
time or from time to time on or after the date of initial
issuance of this Warrant (the "Issue Date") and before 5:00 p.m.,
New York City time, on the fifth (5th) anniversary of the Issue
Date (the "Exercise Period"). The Exercise Period shall
automatically be extended by one (1) day for each day on which
the Company does not have a number of shares of Common Stock
reserved for issuance upon exercise hereof at least equal to the
number of shares of Common Stock issuable upon exercise hereof.
3. Certain Agreements of the Company. The Company hereby
covenants and agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will,
upon issuance in accordance with the terms of this Warrant, be
validly issued, fully paid, and nonassessable and free from all
taxes, liens, claims and encumbrances.
(b) Reservation of Shares. During the Exercise
Period, the Company shall at all times have authorized, and
reserved for the purpose of issuance upon exercise of this
Warrant, a sufficient number of shares of Common Stock to provide
for the exercise in full of this Warrant (without giving effect
to the limitations on exercise set forth in Section 7(g) hereof).
(c) Listing. The Company shall promptly secure the
listing of the shares of Common Stock issuable upon exercise of
this Warrant upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are
then listed or become listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so
long as any other shares of Common Stock shall be so listed, such
listing of all shares of Common Stock from time to time issuable
upon the exercise of this Warrant; and the Company shall so list
on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of,
any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of the
same class shall be listed on such national securities exchange
or automated quotation system.
(d) Certain Actions Prohibited. The Company will not,
by amendment of its charter 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 to be
observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may
reasonably be requested by the holder of this Warrant in order to
protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor
and purpose of this Warrant. Without limiting the generality of
the foregoing, the Company (i) will not increase the par value of
any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) will
take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this
Warrant.
(e) Successors and Assigns. This Warrant will be
binding upon any entity succeeding to the Company by merger,
consolidation, or acquisition of all or substantially all of the
Company=s assets.
(f) Blue Sky Laws. The Company shall, on or before
the date of issuance of any Warrant Shares, take such actions as
the Company shall reasonably determine are necessary to qualify
the Warrant Shares for, or obtain exemption for the Warrant
Shares for, sale to the holder of this Warrant upon the exercise
hereof under applicable securities or "blue sky" laws of the
states of the United States, and shall provide evidence of any
such action so taken to the holder of this Warrant prior to such
date; provided, however, that the Company shall not be required
to qualify as a foreign corporation or file a general consent to
service of process in any such jurisdiction.
4. Antidilution Provisions. During the Exercise Period,
the Exercise Price and the number of Warrant Shares issuable
hereunder and for which this Warrant is then exercisable pursuant
to Section 2 hereof shall be subject to adjustment from time to
time as provided in this Section 4.
In the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise
Price shall be rounded up or down to the nearest cent.
(a) Adjustment of Exercise Price. Except as otherwise
provided in Sections 4(c) and 4(e) hereof, if and whenever during
the Exercise Period the Company issues or sells, or in accordance
with Section 4(b) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a
consideration per share less than the Market Price (as
hereinafter defined) on the date of issuance (a "Dilutive
Issuance"), then effective immediately upon the Dilutive
Issuance, the Exercise Price will be adjusted in accordance with
the following formula:
E' = E x O + P/M
CSDO
where:
E' = the adjusted Exercise Price;
E = the then current Exercise Price;
M = the then current Market Price
(as defined in Section 4(1)(ii));
O = the number of shares of Common
Stock outstanding immediately prior to the
Dilutive Issuance;
P = the aggregate consideration,
calculated as set forth in Section 4(b)
hereof, received by the Company upon such
Dilutive Issuance; and
CSDO = the total number of shares of
Common Stock Deemed Outstanding (as defined
in Section 4(l)(i)) immediately after the
Dilutive Issuance.
(b) Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section
4(a) hereof, the following will be applicable:
(i) Issuance of Rights or Options. If the
Company in any manner issues or grants any warrants, rights or
options, whether or not immediately exercisable, to subscribe for
or to purchase Common Stock or other securities exercisable,
convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred
to as "Options") and the price per share for which Common Stock
is issuable upon the exercise of such Options is less than the
Market Price on the date of issuance ("Below Market Options"),
then the maximum total number of shares of Common Stock issuable
upon the exercise of all such Below Market Options (assuming full
exercise, conversion or exchange of Convertible Securities, if
applicable) will, as of the date of the issuance or grant of such
Below Market Options, be deemed to be outstanding and to have
been issued and sold by the Company for such price per share.
For purposes of the preceding sentence, the Price per share for
which Common Stock is issuable upon the exercise of such Below
Market Options@ is determined by dividing (i) the total amount,
if any, received or receivable by the Company as consideration
for the issuance or granting of all such Below Market Options,
plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the exercise of all such Below
Market Options, plus, in the case of Convertible Securities
issuable upon the exercise of such Below Market Options, the
minimum aggregate amount of additional consideration payable upon
the exercise, conversion or exchange thereof at the time such
Convertible Securities first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Below Market
Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon the
exercise of such Below Market Options or upon the exercise,
conversion or exchange of Convertible Securities issuable upon
exercise of such Below Market Options.
(ii) Issuance of Convertible Securities.
(A) If the Company in any manner issues or
sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common
Stock is issuable upon such exercise, conversion or exchange (as
determined pursuant to Section 4(b)(ii)(B) if applicable) is less
than the Market Price on the date of issuance, then the maximum
total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have
been issued and sold by the Company for such price per share.
For the purposes of the preceding sentence, the "price per share
for which Common Stock is issuable upon such exercise, conversion
or exchange" is determined by dividing (i) the total amount, if
any, received or receivable by the Company as consideration for
the issuance or sale of all such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise, conversion or exchange
thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum
total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of all such Convertible
Securities. No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon exercise,
conversion or exchange of such Convertible Securities.
(B) If the Company in any manner issues or
sells any Convertible Securities with a fluctuating conversion or
exercise price or exchange ratio (a "Variable Rate Convertible
Security"), then the "price per share for which Common Stock is
issuable upon such exercise, conversion or exchange" for purposes
of the calculation contemplated by Section 4(b)(ii)(A) shall be
deemed to be the lowest price per share which would be applicable
(assuming all holding period and other conditions to any
discounts contained in such Convertible Security have been
satisfied) if the Market Price on the date of issuance of such
Convertible Security was 75% of the Market Price on such date
(the "Assumed Variable Market Price"). Further, if the Market
Price at any time or times thereafter is less than or equal to
the Assumed Variable Market Price last used for making any
adjustment under this Section 4 with respect to any Variable Rate
Convertible Security, the Exercise Price in effect at such time
shall be readjusted to equal the Exercise Price which would have
resulted if the Assumed Variable Market Price at the time of
issuance of the Variable Rate Convertible Security had been 75%
of the Market Price existing at the time of the adjustment
required by this sentence.
(iii) Change in Option Price or Conversion
Rate. If there is a change at any time in (i) the amount of
additional consideration payable to the Company upon the exercise
of any Options; (ii) the amount of additional consideration, if
any, payable to the Company upon the exercise, conversion or
exchange of any Convertible Securities; or (iii) the rate at
which any Convertible Securities are convertible into or
exchangeable for Common Stock (in each such case, other than
under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such
change will be readjusted to the Exercise Price which would have
been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed additional
consideration or changed conversion rate, as the case may be, at
the time initially granted, issued or sold.
(iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of
shares of Common Stock issuable upon exercise of any Option or
upon exercise, conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise
such Option or to exercise, convert or exchange such Convertible
Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which
would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or
termination (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof),
never been issued.
(v) Calculation of Consideration Received. If
any Common Stock, Options or Convertible Securities are issued,
granted or sold for cash, the consideration received therefor for
purposes of this Warrant will be the amount received by the
Company therefor, before deduction of reasonable commissions,
underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance,
grant or sale. In case any Common Stock, Options or Convertible
Securities are issued or sold for a consideration part or all of
which shall be other than cash, the amount of the consideration
other than cash received by the Company will be the fair market
value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of
the date of receipt. In case any Common Stock, Options or
Convertible Securities are issued in connection with any merger
or consolidation in which the Company is the surviving
corporation, the amount of consideration therefor will be deemed
to be the fair market value of such portion of the net assets and
business of the non-surviving corporation as is attributable to
such Common Stock, Options or Convertible Securities, as the case
may be. The fair market value of any consideration other than
cash or securities will be determined in good faith by an
investment banker or other appropriate expert of national
reputation selected by the Company and reasonably acceptable to
the holder hereof, with the costs of such appraisal to be borne
by the Company.
(vi) Exceptions to Adjustment of Exercise Price.
No adjustment to the Exercise Price will be made (i) upon the
exercise of any warrants, options or convertible securities
issued and outstanding on the Issue Date and set forth on
Schedule 3(c) of the Securities Purchase Agreement in accordance
with the terms of such securities as of such date; (ii) upon the
grant or exercise of any stock or options which may hereafter be
granted or exercised under any employee benefit plan of the
Company now existing or to be implemented in the future, so long
as the issuance of such stock or options is approved by a
majority of the non-employee members of the Board of Directors of
the Company or a majority of the members of a committee of non-
employee directors established for such purpose; (iii) upon the
issuance of any shares of Series B Preferred Stock or Warrants
issued or issuable in accordance with the terms of the Securities
Purchase Agreement; or (iv) upon conversion of the Series B
Preferred Stock or exercise of the Warrants.
(c) Subdivision or Combination of Common Stock. If
the Company, at any time during the Exercise Period, subdivides
(by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of
Common Stock into a greater number of shares, then, after the
date of record for effecting such subdivision, the Exercise Price
in effect immediately prior to such subdivision will be
proportionately reduced. If the Company, at any time during the
Exercise Period, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise)
its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the
Exercise Price in effect immediately prior to such combination
will be proportionately increased.
(d) Adjustment in Number of Shares. Upon each
adjustment of the Exercise Price pursuant to the provisions of
this Section 4, the number of shares of Common Stock issuable
upon exercise of this Warrant and for which this Warrant is or
may become exercisable shall be adjusted by multiplying a number
equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable or
for which this Warrant is or may become exercisable (as
applicable) upon exercise of this Warrant immediately prior to
such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
(e) Consolidation, Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into
any other corporation, or in case of any sale or conveyance of
all or substantially all of the assets of the Company other than
in connection with a plan of complete liquidation of the Company
at any time during the Exercise Period, then as a condition of
such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the holder of this Warrant will
have the right to acquire and receive upon exercise of this
Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such
shares of stock, securities, cash or assets as may be issued or
payable with respect to or in exchange for the number of shares
of Common Stock immediately theretofore acquirable and receivable
upon exercise of this Warrant had such consolidation, merger or
sale or conveyance not taken place. In any such case, the
Company will make appropriate provision to insure that the
provisions of this Section 4 hereof will thereafter be applicable
as nearly as may be in relation to any shares of stock or
securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger
or sale or conveyance unless prior to the consummation thereof,
the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Warrant and the
obligations to deliver to the holder of this Warrant such shares
of stock, securities or assets as, in accordance with the
foregoing provisions, the holder may be entitled to acquire.
(f) Distribution of Assets. In case the Company shall
declare or make any distribution of its assets (or rights to
acquire its assets) to holders of Common Stock as a partial
liquidating dividend, stock repurchase by way of return of
capital or otherwise (including any dividend or distribution to
the Company=s shareholders of cash or shares (or rights to
acquire shares) of capital stock of a subsidiary) (a
"Distribution"), at any time during the Exercise Period, then the
holder of this Warrant shall be entitled upon exercise of this
Warrant for the purchase of any or all of the shares of Common
Stock subject hereto, to receive the amount of such assets (or
rights) which would have been payable to the holder had such
holder been the holder of such shares of Common Stock on the
record date for the determination of shareholders entitled to
such Distribution.
(g) Notice of Adjustment. Upon the occurrence of any
event which requires any adjustment of the Exercise Price, then,
and in each such case, the Company shall give notice thereof to
the holder of this Warrant, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease
in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
Such calculation shall be certified by the chief financial
officer of the Company.
(h) Minimum Adjustment of Exercise Price. No
adjustment of the Exercise Price shall be made in an amount of
less than 1% of the Exercise Price in effect at the time such
adjustment is otherwise required to be made, but any such lesser
adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together
with any adjustments so carried forward, shall amount to not less
than 1% of such Exercise Price.
(i) No Fractional Shares. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant,
but the Company shall pay a cash adjustment in respect of any
fractional share which would otherwise be issuable in an amount
equal to the same fraction of the Market Price of a share of
Common Stock on the date of such exercise.
(j) Other Notices. In case at any time:
(i) the Company shall declare any dividend upon
the Common Stock payable in shares of stock of any class or make
any other distribution (other than dividends or distributions
payable in cash out of retained earnings consistent with the
Company's past practices with respect to declaring dividends and
making distributions) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of
stock of any class or other rights;
(iii) there shall be any capital reorganiza
tion of the Company, or reclassification of the Common Stock, or
consolidation or merger of the Company with or into, or sale of
all or substantially all of its assets to, another corporation or
entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of
this Warrant (a) notice of the date on which the books of the
Company shall close or a record shall be taken for determining
the holders of Common Stock entitled to receive any such divi
dend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, notice of the date
(or, if not then known, a reasonable estimate thereof by the
Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription
rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization, re
classification, consolidation, merger, sale, dissolution, liqui
dation, or winding-up, as the case may be. Such notice shall be
given at least seventy-five (75) days prior to the record date or
the date on which the Company=s books are closed in respect
thereto. Failure to give any such notice or any defect therein
shall not affect the validity of the proceedings referred to in
clauses (i), (ii), (iii) and (iv) above.
(k) Certain Events. If, at any time during the
Exercise Period, any event occurs of the type contemplated by the
adjustment provisions of this Section 4 but not expressly
provided for by such provisions, the Company will give notice of
such event as provided in Section 4(g) hereof, and the Company=s
Board of Directors will make an appropriate adjustment in the
Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of
the holder shall be neither enhanced nor diminished by such
event.
(l) Certain Definitions.
(i) "Common Stock Deemed Outstanding" shall mean
the number of shares of Common Stock actually outstanding (not
including shares of Common Stock held in the treasury of the
Company), plus (x) in the case of any adjustment required by
Section 4(a) resulting from the issuance of any Options, the
maximum total number of shares of Common Stock issuable upon the
exercise of the Options for which the adjustment is required
(including any Common Stock issuable upon the conversion of
Convertible Securities issuable upon the exercise of such
Options), and (y) in the case of any adjustment required by
Section 4(a) resulting from the issuance of any Convertible
Securities, the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of the
Convertible Securities for which the adjustment is required, as
of the date of issuance of such Convertible Securities, if any.
(ii) "Market Price," as of any date, (i) means the
average of the closing sale prices for the shares of Common Stock
as reported on the Nasdaq National Market by Bloomberg Financial
Markets ("Bloomberg") for the five (5) consecutive trading days
immediately preceding such date, or (ii) if the Nasdaq National
Market is not the principal trading market for the shares of
Common Stock, the average of the last sale prices reported by
Bloomberg on the principal trading market for the Common Stock
during the same period, or, if there is no sale price for such
period, the last bid price reported by Bloomberg for such period,
or (iii) if the foregoing do not apply, the last sale price of
such security in the over-the-counter market on the pink sheets
or bulletin board for such security as reported by Bloomberg, or
if no sale price is so reported for such security, the last bid
price of such security as reported by Bloomberg, or (iv) if
market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the average fair
market value as reasonably determined by an investment banking
firm selected by the Company and reasonably acceptable to the
holder, with the costs of the appraisal to be borne by the
Company. The manner of determining the Market Price of the
Common Stock set forth in the foregoing definition shall apply
with respect to any other security in respect of which a
determination as to market value must be made hereunder.
(iii) "Common Stock," for purposes of this
Section 4, includes the Common Stock and any additional class of
stock of the Company having no preference as to dividends or
distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only Common
Stock in respect of which this Warrant is exercisable, or shares
resulting from any subdivision or combination of such Common
Stock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in
Section 4(e) hereof, the stock or other securities or property
provided for in such Section.
5. Issue Tax. The issuance of certificates for Warrant
Shares upon the exercise of this Warrant shall be made without
charge to the holder of this Warrant or such shares for any
issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery
of any certificate in a name other than the holder of this
Warrant.
6. No Rights or Liabilities as a Shareholder. This
Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Company. No provision of
this Warrant, in the absence of affirmative action by the holder
hereof to purchase Warrant Shares, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise
to any liability of such holder for the Exercise Price or as a
shareholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
7. Transfer, Exchange, Redemption and Replacement of
Warrant.
(a) Restriction on Transfer. This Warrant and the
rights granted to the holder hereof are transferable, in whole or
in part, upon surrender of this Warrant, together with a properly
executed assignment in the form attached hereto, at the office or
agency of the Company referred to in Section 7(e) below, pro
vided, however, that any transfer or assignment shall be subject
to the conditions set forth in Sections 7(f) and (g) hereof and
to the provisions of Sections 2(f) and 2(g) of the Securities
Purchase Agreement. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all
purposes, and the Company shall not be affected by any notice to
the contrary. Notwithstanding anything to the contrary contained
herein, the registration rights described in Section 8 hereof are
assignable only in accordance with the provisions of that certain
Registration Rights Agreement, dated as of the date hereof, by
and among the Company and the other signatories thereto (the
"Registration Rights Agreement").
(b) Warrant Exchangeable for Different Denominations.
This Warrant is exchangeable, upon the surrender hereof by the
holder hereof at the office or agency of the Company referred to
in Section 7(e) below, for new Warrants of like tenor of
different denominations representing in the aggregate the right
to purchase the number of shares of Common Stock which may be
purchased hereunder, each of such new Warrants to represent the
right to purchase such number of shares as shall be designated by
the holder hereof at the time of such surrender.
(c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of
any such loss, theft, or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its
expense, will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
(d) Cancellation; Payment of Expenses. Upon the
surrender of this Warrant in connection with any transfer,
exchange, or replacement as provided in this Section 7, this
Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and
all other expenses (other than legal expenses, if any, incurred
by the Holder or transferees) and charges payable in connection
with the preparation, execution, and delivery of Warrants
pursuant to this Section 7. The Company shall indemnify and
reimburse the holder of this Warrant for all costs and expenses
(including legal fees) incurred by such holder in connection with
the enforcement of its rights hereunder.
(e) Warrant Register. The Company shall maintain, at
its principal executive offices (or such other office or agency
of the Company as it may designate by notice to the holder
hereof), a register for this Warrant, in which the Company shall
record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
(f) Exercise or Transfer Without Registration. If, at
the time of the surrender of this Warrant in connection with any
exercise, transfer, or exchange of this Warrant, this Warrant
(or, in the case of any exercise, the Warrant Shares issuable
hereunder), shall not be registered under the Securities Act and
under applicable state securities or blue sky laws, the Company
may require, as a condition of allowing such exercise, transfer,
or exchange, (i) that the holder or transferee of this Warrant,
as the case may be, furnish to the Company a written opinion of
counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to
the effect that such exercise, transfer, or exchange may be made
without registration under the Securities Act and under
applicable state securities or blue sky laws (the cost of which
shall be borne by the Company if the Company's counsel renders
such an opinion and up to $250 of such cost shall be borne by the
Company if the holder's counsel is requested to render such
opinion), (ii) that the holder or transferee execute and deliver
to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under
the Securities Act; provided that no such opinion, letter, or
status as an "accredited investor" shall be required in
connection with a transfer pursuant to Rule 144 under the
Securities Act.
(g) Additional Restrictions on Exercise or Transfer.
Notwithstanding anything contained herein to the contrary, unless
the holder hereof delivers a waiver in accordance with the last
sentence of this Section 7(g), this Warrant shall not be
exercisable by a holder hereof to the extent (but only to the
extent) that (a) the number of shares of Common Stock
beneficially owned by such holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned
through the ownership of the unexercised portion of the Warrants
or the unexercised or unconverted portion of any other securities
of the Company (including the Series B Preferred Stock) subject
to a limitation on conversion or exercise analogous to the
limitation contained herein) and (b) the number of shares of
Common Stock issuable upon exercise of the Warrant (or portion
thereof) with respect to which the determination described herein
is being made, would result in beneficial ownership by such
holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock. To the extent the above limitation
applies, the determination of whether and to what extent this
Warrant shall be exercisable vis-a-vis other securities owned by
such holder shall be in the sole discretion of the holder and
submission of this Warrant for full or partial exercise shall be
deemed to be the holder's determination of whether and the extent
to which this Warrant is exercisable, in each case subject to
such aggregate percentage limitation. No prior inability to
exercise the Warrant pursuant to this Section shall have any
effect on the applicability of the provisions of this Section
with respect to any subsequent determination of exerciseability.
For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (a)
hereof. Except as provided in the immediately succeeding
sentence, the restrictions contained in this Section 7(g) may not
be amended without the consent of the holder of this Warrant and
the holders of a majority of the Company's then outstanding
Common Stock. Notwithstanding the foregoing, the holder hereof
may waive the restrictions set forth in this Section 7(g) by
written notice to the Company upon not less than sixty- one (61)
days prior notice (with such waiver taking effect only upon the
expiration of such sixty-one (61) day notice period).
8. Registration Rights. The initial holder of this
Warrant (and certain assignees thereof) is entitled to the
benefit of such registration rights in respect of the Warrant
Shares as are set forth in the Registration Rights Agreement,
including the right to assign such rights to certain assignees,
as set forth therein.
9. Notices. Any notices required or permitted to be given
under the terms of this Warrant shall be sent by certified or
registered mail (return receipt requested) or delivered
personally or by courier or by confirmed telecopy, and shall be
effective five days after being placed in the mail, if mailed, or
upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a
party. The addresses for such communications shall be:
If to the Company:
Accent Color Sciences, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CEO
with a copy to:
Murtha, Cullina, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
CityPlace I
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esquire
If to the holder, at such address as such holder shall have
provided in writing to the Company, or at such other address as
such holder furnishes by notice given in accordance with this
Section 9.
10. Governing Law; Jurisdiction. This Warrant shall be
governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be
performed in the State of New York. The Company irrevocably
consents to the jurisdiction of the United States federal courts
and state courts located in the State of New York in the City of
New York in any suit or proceeding based on or arising under this
Warrant and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in such courts. The Company
irrevocably waives any objection to the laying of venue and the
defense of an inconvenient forum to the maintenance of such suit
or proceeding. The Company further agrees that service of process
upon the Company mailed by certified or registered mail shall be
deemed in every respect effective service of process upon the
Company in any such suit or proceeding. Nothing herein shall
affect the holder's right to serve process in any other manner
permitted by law. The Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
11. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof
may only be amended by an instrument in writing signed by the
Company and the holder hereof.
(b) Descriptive Headings. The descriptive headings of
the several Sections of this Warrant are inserted for purposes of
reference only, and shall not affect the meaning or construction
of any of the provisions hereof.
(c) Cashless Exercise. Notwithstanding anything to
the contrary contained in this Warrant, if the resale of the
Warrant Shares by the holder is not then registered pursuant to
an effective registration statement under the Securities Act,
this Warrant may be exercised at any time after the first
anniversary of the Issue Date until the end of the Exercise
Period, by presentation and surrender of this Warrant to the
Company at its principal executive offices with a written notice
of the holder=s intention to effect a cashless exercise,
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, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant
Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then
current Market Price of a share of the Common Stock on the date
of exercise and the Exercise Price, and the denominator of which
shall be the then current Market Price per share of Common Stock.
(d) Business Day. For purposes of this Warrant, the
term "business day" means any day, other than a Saturday or
Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law, regulation or executive
order to close.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to
be signed by its duly authorized officer.
ACCENT COLOR SCIENCES, INC.
By: _________________________________
Name:_____________________________
Title:______________________________
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
To: Accent Color Sciences, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CEO
The undersigned hereby irrevocably exercises the right to
purchase _____________ shares of the Common Stock of Accent Color
Sciences, Inc., a corporation organized under the laws of the
State of Connecticut (the "Company"), evidenced by the attached
Warrant, and herewith makes payment of the Exercise Price with
respect to such shares in full, all in accordance with the
conditions and provisions of said Warrant.
(i) The undersigned agrees not to offer, sell, transfer or
otherwise dispose of any Common Stock obtained on exercise of the
Warrant, except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state
securities laws, and agrees that the following legend may be
affixed to the stock certificate for the Common Stock hereby
subscribed for if resale of such Common Stock is not registered
or if Rule 144 is unavailable:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY
NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
(ii) The undersigned requests that stock certificates
for such shares be issued, and a Warrant representing any
unexercised portion hereof be issued, pursuant to the Warrant in
the name of the Holder and delivered to the undersigned at the
address set forth below:
Dated:_________________
_____________________________________
Signature of Holder
_____________________________________
Name of Holder (Print)
Address:
_____________________________________
_____________________________________
_____________________________________
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns,
and transfers all the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock
covered thereby set forth hereinbelow, to:
Name of Assignee Address No of Shares
, and hereby irrevocably constitutes and appoints
_____________________________________ as agent and attorney-in-
fact to transfer said Warrant on the books of the within-named
corporation, with full power of substitution in the premises.
Dated: _____________________, ____
In the presence of
__________________
Name: ____________________________
Signature: _______________________
Title of Signing Officer or
Agent (if any):
________________________
Address: ____________________
_____________________
Note: The above
signature should
correspond exactly with
the name on the face of
the within Warrant.
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY 9, 2003
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Right to Purchase 166,667 Shares of
Common Stock, no par value per
share
Date: January 9, 1998
ACCENT COLOR SCIENCES, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, RGC INTERNATIONAL
INVESTORS, LDC, or its registered assigns, is entitled to
purchase from ACCENT COLOR SCIENCES, INC., a corporation
organized under the laws of the State of Connecticut (the
"Company"), at any time or from time to time during the period
specified in Section 2 hereof, One Hundred Sixty-Six Thousand Six
Hundred Sixty-Seven (166,667) fully paid and nonassessable shares
of the Company=s common stock, no par value per share (the
"Common Stock"), at an exercise price per share (the "Exercise
Price") equal to $2.75. The number of shares of Common Stock
purchasable hereunder (the "Warrant Shares") and the Exercise
Price are subject to adjustment as provided in Section 4 hereof.
The term "Warrants" means this Warrant and the other warrants of
the Company issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among the Company
and the other signatories thereto (the "Securities Purchase
Agreement").
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY 9, 2003
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Right to Purchase 129,333 Shares of
Common Stock, no par value per
share
Date: January 9, 1998
ACCENT COLOR SCIENCES, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, ZANETT LOMBARDIER,
LTD., or its registered assigns, is entitled to purchase from
ACCENT COLOR SCIENCES, INC., a corporation organized under the
laws of the State of Connecticut (the "Company"), at any time or
from time to time during the period specified in Section 2
hereof, One Hundred Twenty-Nine Thousand Three Hundred Thirty-
Three (129,333) fully paid and nonassessable shares of the
Company=s common stock, no par value per share (the "Common
Stock"), at an exercise price per share (the "Exercise Price")
equal to $2.75. The number of shares of Common Stock purchasable
hereunder (the "Warrant Shares") and the Exercise Price are
subject to adjustment as provided in Section 4 hereof. The term
"Warrants" means this Warrant and the other warrants of the
Company issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among the Company
and the other signatories thereto (the "Securities Purchase
Agreement").
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY 9, 2003
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Right to Purchase 115,385 Shares of
Common Stock, no par value per
share
Date: January 9, 1998
ACCENT COLOR SCIENCES, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, THE ZANETT
SECURITIES CORPORATION, or its registered assigns, is entitled to
purchase from ACCENT COLOR SCIENCES, INC., a corporation
organized under the laws of the State of Connecticut (the
"Company"), at any time or from time to time during the period
specified in Section 2 hereof, One Hundred Fifteen Thousand Three
Hundred Eighty-Five (115,385) fully paid and nonassessable shares
of the Company=s common stock, no par value per share (the
"Common Stock"), at an exercise price per share (the "Exercise
Price") equal to $2.50. The number of shares of Common Stock
purchasable hereunder (the "Warrant Shares") and the Exercise
Price are subject to adjustment as provided in Section 4 hereof.
The term "Warrants" means this Warrant and the other warrants of
the Company issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among the Company
and the other signatories thereto (the "Securities Purchase
Agreement").
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY 9, 2003
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Right to Purchase 4,000 Shares of
Common Stock, no par value per
share
Date: January 9, 1998
ACCENT COLOR SCIENCES, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or
his registered assigns, is entitled to purchase from ACCENT COLOR
SCIENCES, INC., a corporation organized under the laws of the
State of Connecticut (the "Company"), at any time or from time to
time during the period specified in Section 2 hereof, Four
Thousand (4,000) fully paid and nonassessable shares of the
Company=s common stock, no par value per share (the "Common
Stock"), at an exercise price per share (the "Exercise Price")
equal to $2.75. The number of shares of Common Stock purchasable
hereunder (the "Warrant Shares") and the Exercise Price are
subject to adjustment as provided in Section 4 hereof. The term
"Warrants" means this Warrant and the other warrants of the
Company issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among the Company
and the other signatories thereto (the "Securities Purchase
Agreement").
