Document:

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                                                                     EXHIBIT 4.1
                                October 11, 2000

Millennium Partners, L.P.
c/o Millennium Management, L.L.C.
666 Fifth Avenue
New York, New York 10103

Dear Sirs:

                  Reference is made to that certain Securities Purchase
Agreement, dated as of August 16, 2000 (the "Purchase Agreement"), by and
between Chromatics Color Sciences International, Inc. (the "Company") and
Millennium Partners, L.P. (the "Purchaser"), that certain Registration Rights
Agreement, dated as of August 16, 2000, by and between the Company and the
Purchaser (the "Registration Rights Agreement") and that certain Adjustable
Warrant to purchase shares of the common stock, par value $.001, of the Company,
dated August 16, 2000, issued by the Company to the Purchaser (the "Warrant").
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Warrant.

                  The Company proposes to enter into a purchase and sale
agreement (the "Crescent Agreement") with Crescent International Ltd.
("Crescent"), pursuant to which the Company would issue and sell to Crescent,
and Crescent would purchase, shares of a newly-authorized series of preferred
stock of the Company (the "Crescent Preferred") for an aggregate purchase price
of up to Four Million Dollars ($4,000,000).

                  With respect to the foregoing, the Company and the Purchaser
agree as follows:

                  1.       Amendments to the Purchase Agreement.

                  (A)      The Company and the Purchaser hereby agree to delete
Section 3.14(a) of the Purchase Agreement in its entirety.

                  (B)      The Company and the Purchaser hereby agree to delete
Section 3.14(b) of the Purchase Agreement in its entirety.

                  (C)      The Company and the Purchaser hereby agree to delete
Section 3.14(d) of the Purchase Agreement in its entirety.

                  (D)      The Company and the Purchaser hereby agree to delete
Section 3.14(e) of the Purchase Agreement in its entirety.

                  (E)      The Company and the Purchaser hereby agree to delete
Section 3.14(f) of the Purchase Agreement in its entirety.

                  (F)      The Company and the Purchaser hereby agree to delete
Section 3.14(g) of the Purchase Agreement in its entirety.

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                  (G)      The Company and the Purchaser hereby agree to amend
Section 3.14(h) of the Purchase Agreement to read in full as follows:

                  "(h)     The Company fails to file with the Securities and
                  Exchange Commission a request for the acceleration of the
                  effectiveness of the Underlying Shares Registration Statement
                  of the Company, filed with the Securities and Exchange
                  Commission on September 18, 2000 (SEC File No. 333-46020),
                  within one business day of the Company's securing from the
                  National Association of Securities Dealers, Inc. confirmation
                  of its acceptance of the Company's proposal for remaining
                  listed on the Nasdaq SmallCap Market."

                  (H)      The Company and the Purchaser hereby agree to amend
Section 3.14(i) of the Purchase Agreement to read in full as follows:

                  "(i)     The Company shall fail for any reason to deliver
                  certificates to a Purchaser by the fifth day in accordance
                  with Section 3.1(b) of this Agreement; provided, however, that
                  the Company's failure to deliver certificates as a result of
                  the limitations with respect to the issuance of Underlying
                  Shares set forth in Section 10(c) of the Adjustable Warrant
                  shall not be deemed an Event."

                  (I)      The Company and the Purchaser hereby agree to delete
Section 3.14(j) of the Purchase Agreement in its entirety.

                  2.       Amendments to the Registration Rights Agreement.

                  (A)      The Company and the Purchaser hereby agree to amend
Section 1 of the Registration Rights Agreement to include the following
definition:

                  " "Subsequent Market" means the New York Stock Exchange, the
                  American Stock Exchange or Nasdaq National Market."

                  (B)      The Company and the Purchaser hereby agree to amend
Section 2(c) of the Registration Rights Agreement to read in full as follows:

                           "(c)     If (a) a Registration Statement is not filed
                  on or prior to its Filing Date (if the Company files such
                  Registration Statement without affording the Holder the
                  opportunity to review and comment on the same as required by
                  Section 3(a) hereof, the Company shall not be deemed to have
                  satisfied this clause (a)), or (b) the Company fails to file a
                  request for acceleration in accordance with Rule 461
                  promulgated under the Securities Act, within five days of the
                  date that the Company is notified (orally or in writing,
                  whichever is earlier) by the Commission that a Registration
                  Statement will not be "reviewed," or not subject tpa
                  Registration Statement filed hereunder is not declared
                  effective by the Commission on or prior to its Effectiveness
                  Date, or (c) after a Registration Statement is filed with and
                  declared effective by the Commission, such Registration
                  Statement ceases to be effective as

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                  to all Registrable Securities to which it is required to
                  relate at any time prior to the expiration of the
                  Effectiveness Period without being succeeded within ten
                  Business Days by an amendment to such Registration Statement
                  or by a subsequent Registration Statement filed with and
                  declared effective by the Commission, or (d) the exercise
                  rights of the Holders pursuant to the Warrants are suspended
                  for any reason, or (e) an amendment to a Registration
                  Statement is not filed by the Company with the Commission
                  within ten Business Days of the Commission's notifying the
                  Company that such amendment is required in order for such
                  Registration Statement to be declared effective (any such
                  failure or breach being referred to as an "Event," and for
                  purposes of clauses (a), (b), (d) the date on which such Event
                  occurs, or for purposes of clauses (c) and (e) the date which
                  such ten Business Day-period is exceeded, being referred to as
                  "Event Date"), then, on each such Event Date and every monthly
                  anniversary thereof until the applicable Event is cured, the
                  Company shall pay to each Holder an amount in cash, as
                  liquidated damages and not as a penalty, equal to 2.0% of the
                  purchase price paid by such Holder pursuant to the Purchase
                  Agreement. If the Company fails to pay any liquidated damages
                  pursuant to this Section in full within seven days after the
                  date payable, the Company will pay interest thereon at a rate
                  of 18% per annum (or such lesser maximum amount that is
                  permitted to be paid by applicable law) to the Holder,
                  accruing daily from the date such liquidated damages are due
                  until such amounts, plus all such interest thereon, are paid
                  in full. The liquidated damages pursuant to the terms hereof
                  shall apply on a pro-rata basis for any portion of a month
                  prior to the cure of an Event."

                  3.       Amendments to the Warrant.

                  (A)      The Company and the Purchaser hereby agree to amend
Section 3(a) of the Warrant to read in full as follows:

                           "(a)     The vesting of the Warrant Shares which the
                  Holder is permitted to acquire pursuant to this Warrant shall
                  occur on the dates set forth below. On each such date, this
                  Warrant shall vest on a cumulative basis with respect to a
                  number of Warrant Shares calculated pursuant to Section 3(b)
                  below. Only the Warrant Shares that have vested may be
                  acquired upon exercise of this Warrant.

                                    (i)      The "First Vesting Date" shall
                           occur on March 30, 2001. A Vesting Period shall be
                           extended for a number of days that an Underlying
                           Shares Registration Statement ceases to be effective
                           or the

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                           prospectus included in the Underlying Shares
                           Registration Statement may not be used by the holders
                           thereof for the resale of Underlying Shares.

                                    (ii)     The "Second Vesting Date" shall
                           occur on October 11, 2001.

                           Each of the First Vesting Date and the Second Vesting
                  Date shall be referred to herein as a "Vesting Date" and each
                  of the 40 Trading Day periods ending on the First Vesting Date
                  or the Second Vesting Date, respectively, shall be referred to
                  herein as a "Vesting Period."

                  (B)      The Company and the Purchaser hereby agree to amend
Section 3(b) of the Warrant to read in full as follows:

                           "(b)     On each Vesting Date, this Warrant shall
                  vest and become exercisable with respect to the number of
                  Warrant Shares calculated in accordance with the following
                  formula (the capitalized terms contained in the formula are
                  defined in Exhibit A attached hereto):

                  (Applicable Share Number) x [(Purchase Price/0. 87) -
                  (Adjustment Period Price)]

                             Adjustment Period Price

                           If the number calculated in accordance with the
                  foregoing formula is zero or a negative number, no Warrant
                  Shares shall vest hereunder for such Vesting Date and the
                  Holder shall not be obligated to transfer any shares of Common
                  Stock to the Company. In addition, the Holder shall not be
                  obligated to transfer any shares of Common Stock to the
                  Company and the number of Warrant Shares exercisable hereunder
                  which shall have previously vested will not decrease.
                  Notwithstanding anything herein to the contrary, the
                  Adjustment Period Price for purposes of the First Vesting Date
                  only shall be deemed to be the greater of (i) $1.00 and (ii)
                  the average of the lowest 10 Per Share Market Values (which
                  need not occur on consecutive Trading Days) during the 40
                  consecutive Trading Days preceding the First Vesting Date."

                  (C)      The Company and the Purchaser hereby agree to amend
the first paragraph of Section 3(e) of the Warrant to read in full as follows:

                           "(e)     Notwithstanding the foregoing provisions of
                  this Section 3, if any of the following events (each, an
                  "Event") shall occur, the Holder shall have the option to
                  elect, by notice to the Company (an "Event Vesting Notice"),
                  to have this Warrant vest with respect to

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                  those Warrant Shares (whether by increase to 100% of the
                  unused portion of the Applicable Share Number, an acceleration
                  of the next scheduled Vesting Date or otherwise) that have not
                  yet already vested (the "Vested Warrant Shares");"

                  (D)      The Company and the Purchaser hereby agree to delete
Section 3(e)(iv) of the Warrant in its entirety.

                  (E)      The Company and the Purchaser hereby agree to delete
Section 3(e)(v) of the Warrant in its entirety.

                  (F)      The Company and the Purchaser hereby agree to amend
Section 3(e)(vii) of the Warrant to read in full as follows:

                  "(vii)   The Company fails to file with the Securities and
                  Exchange Commission a request for the acceleration of the
                  effectiveness of the Underlying Shares Registration Statement
                  of the Company, filed with the Securities and Exchange
                  Commission on September 18, 2000 (SEC File No. 333-46020),
                  within one business day of the Company's securing from the
                  National Association of Securities Dealers, Inc. confirmation
                  of its acceptance of the Company's proposal for remaining
                  listed on the Nasdaq SmallCap Market."

                  (G)      The Company and the Purchaser hereby agree to amend
Section 3(e)(viii) of the Warrant to read in full as follows:

                  "(viii)  The Company shall fail for any reason to deliver
                  certificates to a Holder by the fifth day iafter a Date of
                  Exercise pursuant to and in accordance with Section 4(a) of
                  this Agreement; provided, however, that the Company's failure
                  to deliver certificates as a result of the limitations with
                  respect to the issuance of Underlying Shares set forth in
                  Section 10(c) hereof shall not be deemed an Event."

                  (H)      The Company and the Purchaser hereby agree to delete
Section 3(e)(ix) of the Warrant in its entirety.

                  (I)      The Company and the Purchaser hereby agree to delete
Section 3(e)(x) of the Warrant in its entirety.

                  (J)      The Company and the Purchaser hereby agree to amend
Section 10(c) of the Warrant to read in full as follows:

                           "(c)     If the Company Stock is then listed for
                  trading on the Nasdaq or the Nasdaq SmallCap Market and the
                  Company has not obtained the Shareholder Approval (as defined
                  below), then the Company may not, upon exercise of this
                  Warrant, issue in excess of the product of (i) 3,342,071
                  Warrant Shares (which equals 19.999% of the number of shares
                  of Common Stock outstanding on the Closing Date) and (ii) the
                  quotient obtained by dividing (x) the number of shares of
                  Common Stock issued and sold to the original Holder on the
                  Closing Date by (y) the number of shares of Common Stock
                  issued and sold by the Company on the Closing Date (such
                  number of shares, the "Issuable Maximum"). If any Holder shall
                  no longer hold Warrants then such Holder's remaining portion
                  of the Issuable Maximum shall be

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                  allocated pro-rata among the remaining Holders. If on any Date
                  of Exercise (A) the Company Stock is listed for trading on the
                  Nasdaq or the Nasdaq SmallCap Market, (B) the Exercise Price
                  then in effect is such that the aggregate number of shares of
                  Common Stock that would then be issuable upon exercise in full
                  of this Warrant, together with any shares of Common Stock
                  previously issued upon exercise of this Warrant, would equal
                  or exceed the Issuable Maximum, and (C) the Company shall not
                  have previously obtained the vote of shareholders, if any, as
                  may be required by the applicable rules and regulations of the
                  Nasdaq Stock Market to approve the issuance of shares of
                  Common Stock in excess of the Issuable Maximum pursuant to the
                  terms hereof (the "Shareholder Approval"), then the Company
                  shall issue to the Holder a number of shares of Common Stock
                  equal to the Issuable Maximum and, with respect to the shares
                  whose issuance would result in an issuance of shares of Common
                  Stock in excess of the Issuable Maximum, (the "Excess Warrant
                  Shares"), the Holder shall require the Company to use its best
                  efforts to obtain the Shareholder Approval applicable to such
                  issuance as soon as possible, but in any event no later than
                  60 days after such request. The Company and the Holder
                  understand and agree that shares of Common Stock issued upon
                  exercise of this Warrant and then held by the Holder or an
                  affiliate thereof may not cast votes or be deemed outstanding
                  for purposes of any vote to obtain the Shareholder Approval."

                  (K)      The Company and the Purchaser hereby agree to amend
the definition of "Applicable Share Number" set forth in item (ii) of Exhibit A
to the Warrant to read in full as follows:

                  "(ii)    "Applicable Share Number" (i) for purposes of
                  calculating the number of Warrant Shares which shall vest and
                  become exercisable on the First Vesting Date means 1/3 of the
                  number of shares of Common Stock purchased by the Holder
                  pursuant to the Purchase Agreement and (ii) for purposes of
                  calculating the number of Warrant Shares which shall vest and
                  become exercisable on the Second Vesting Date means 2/3 of the
                  number of shares of Common Stock purchased by the Holder
                  pursuant to the Purchase Agreement."

                  4.       Waiver. Solely for purposes of the transaction
contemplated by the Crescent Agreement, the Purchaser hereby agrees to
irrevocably waive any right or claim that it may have (i) to adjust the Exercise
Price of the Warrant or the number of Warrant Shares issuable thereto as a
result of the issuance of the Crescent Preferred and (ii) pursuant to Section
3.9 of the Purchase Agreement.

                  5.       Ratification. By the execution and delivery hereof,
each of the parties hereto hereby ratifies and confirms the terms of the
Purchase Agreement, the Registration Rights Agreement and the Warrant as hereby
amended.

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                  6.       Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York,
without reference to the choice of law provisions thereof.

                  7.       Effectiveness. The effectiveness of the agreements
set forth herein shall be subject to and conditioned upon (i) the closing of the
transactions contemplated by the Crescent Agreement, pursuant to which Crescent
will make an investment in the Company of not less than $2,000,000, (ii) the
Company's securing from the National Association of Securities Dealers, Inc.
confirmation of its acceptance of the Company's proposal for remaining listed on
the Nasdaq SmallCap Market and (iii) the Company's entering into letter
agreements with LB I Group, Inc. (the "Lehman Agreement") and the holders of the
Company's outstanding 14% Senior Convertible Debentures, due April 15, 2002 (the
"Debenture Holders' Agreement"), in the forms attached hereto as Exhibit C and
Exhibit D. If each of the foregoing conditions has not been satisfied on or
prior to 5:00 p.m. New York time on November 1, 2000, this Agreement shall be
void and of no further force or effect.

                  8.       Entire Agreement. This Agreement, together with the
Lehman Agreement and the Debenture Holders' Agreement, constitutes the entire
agreement and supersedes all prior agreements and undertakings, both written and
oral, between the parties with respect to the subject matter hereof and thereof.

                  9.       Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.

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                  If you agree to the foregoing, please so indicate by signing
the enclosed counterpart of this Agreement and returning it to the undersigned,
whereupon this Agreement shall become a binding contract between the parties
hereto.

                                                  Very truly yours,

                                                  CHROMATICS COLOR SCIENCES
                                                  INTERNATIONAL, INC.

                                                  By:
                                                     --------------------------
                                                     Darby S. Macfarlane
                                                     Chairperson of the Board

    ACCEPTED AND AGREED TO
    THIS ____ DAY OF OCTOBER, 2000:

    MILLENNIUM PARTNERS, L.P.

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

                                       8<PAGE>   1
                                                                     EXHIBIT 4.2

          Certificate of Amendment of the Certificate of Incorporation

                                       of

                  CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.

                Under Section 805 of the Business Corporation Law

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

                  It is hereby certified that:

                  FIRST:   The name of the corporation (the "Corporation") is
CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.

                  SECOND:  The Certificate of Incorporation of the Corporation
was filed by the Department of State on March 30, 1984. The Corporation was
formed under the name Chromatics International, Inc.

                  THIRD:   The Certificate of Incorporation of the Corporation,
as heretofore amended, is hereby further amended to fix the relative rights,
preferences and limitations with respect to the Class B Preferred Stock of the
Corporation.

                  FOURTH:  To accomplish the foregoing,

                  (i)      Section 3 of Paragraph D of Article FOURTH of the
Certificate of Incorporation of the Corporation is hereby amended to read in
full as follows:

"3.      Class B Series 2 Preferred Stock:

                  (1)      The Corporation has authorized the creation of a
series of Class B Preferred Stock to be designated "Class B Series 2 Convertible
Preferred Stock" (the "Series 2 Preferred Stock").

                  (2)      The number of shares constituting the Series 2
Preferred Stock shall be fixed at 80,000. The Series 2 Preferred Stock shall
have no par value.

                  (3)      The shares of Series 2 Preferred Stock shall, with
respect to the distribution of assets on liquidation, dissolution or winding up
of the Corporation, rank (i) senior and prior to the common stock, $.001 par
value (the "Common Stock"), of the Corporation and any other class or series of
capital stock of the Corporation hereafter issued, the terms of which
specifically provide that shares of such class or series shall rank junior to
shares of Series 2 Preferred Stock (collectively, the "Junior Securities"), (ii)
on a parity with any other class or series of capital stock of the Corporation
hereafter issued, the terms of which specifically provide that shares of such
class or series shall rank on a parity with the shares of Series 2 Preferred
Stock (collectively, the "Parity Securities") and (iii) junior to the Class A
Convertible Preferred Stock and any other class or series of capital stock of
the Corporation hereafter issued, the terms

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of which specifically provide that shares of such class or series shall rank
senior to shares of Series 2 Preferred Stock (collectively, the "Senior
Securities").

                  (4)      The holders of shares of Series 2 Preferred Stock
shall not be entitled to any voting rights other than those provided by law.
However, so long as any shares of Series 2 Preferred Stock are outstanding, the
Corporation shall not and shall cause its subsidiaries not to, without the
affirmative vote of the holders of a majority of the shares of the Series 2
Preferred Stock then outstanding, (a) alter or change adversely the absolute or
relative powers, preferences or rights given to the Series 2 Preferred Stock,
(b) alter or amend this Certificate of Amendment, (c) authorize or create any
class of stock ranking as to dividends or distribution of assets upon a
liquidation or otherwise senior to the Series 2 Preferred Stock, (d) amend its
Certificate of Incorporation, bylaws or other charter documents so as to affect
adversely any rights of any holders of Series 2 Preferred Stock, (e) increase
the authorized number of shares of Series 2 Preferred Stock or (f) enter into
any agreement with respect to the foregoing.

                  (5)      Except as set forth in Section 7 hereof, the holders
of shares of Series 2 Preferred Stock shall not be entitled to receive dividends
with respect thereto.

                  (6)      (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, before
any distribution or payment shall be made to the holders of outstanding Junior
Securities, including, but not limited to, the Common Stock, the holders of
outstanding shares of Series 2 Preferred Stock shall be entitled to receive, out
of the assets of the Corporation at the time legally available therefor, in
exchange for their shares of Series 2 Preferred Stock an amount in cash equal to
$100.00 per share of Series 2 Preferred Stock, together with all accrued but
unpaid dividends thereon, on a pari passu basis with the rights of the holders
of any Parity Securities; provided, however, that the holders of the Series 2
Preferred Stock and any outstanding Parity Securities shall not be entitled to
receive such preferential liquidation payments until the preferential
liquidation payments on all outstanding Senior Securities have been paid in
full. If, upon any such voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the assets of the Corporation
available therefor shall be insufficient to permit the payment in full to the
holders of outstanding shares of Series 2 Preferred Stock of the preferential
liquidation amounts to which they are then entitled pursuant to the provisions
of this clause (a), the entire assets of the Corporation thus distributable
shall be distributed among the holders of outstanding shares of Series 2
Preferred Stock and any Parity Securities ratably, in proportion to the full
amounts to which such holders would otherwise be entitled if such assets were
sufficient to permit payment in full.

                  (b)      Upon any such voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, after
the payment in full to the holders of outstanding shares of Series 2 Preferred
Stock and any Parity Securities of the preferential liquidation amounts to which
they are then entitled pursuant to the provisions of clause (a) above, the
holders of outstanding shares of Series 2 Preferred Stock shall not be entitled
to participate in any further distributions made to the holders of the Common
Stock or any other class of Senior Securities or Junior Securities.

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                  (c)      At the option of the holders of a majority of the
issued and outstanding Series 2 Preferred Stock, the sale of all or
substantially all of the assets of the Corporation or the merger of the
Corporation with or into another corporation shall be deemed to be a
dissolution, liquidation or winding up of the Corporation.

                  (7)      (a) On the third anniversary of the date of initial
issuance of the shares of Series 2 Preferred Stock (the "Redemption Date"), and
provided the Corporation has not delivered a timely Extension Notice (as
hereinafter defined), all of the outstanding shares of Series 2 Preferred Stock
shall be subject to mandatory redemption by the Corporation for shares of the
Corporation's Common Stock (the "Redemption Shares") at the Redemption Ratio (as
hereinafter defined). As used herein, "Redemption Ratio" shall equal the number
of shares of Common Stock into which one share of Series 2 Preferred Stock is
convertible pursuant to this Section 7(a), which shall be determined by dividing
$115.00 by the then effective Conversion Price (as hereinafter defined). The
Redemption Ratio shall be subject to adjustment as provided in Section 8(d).

                  (b)      From and after the Redemption Date, unless (i)
default shall be made by the Corporation on the Redemption Date in delivering to
the holders of the shares of Series 2 Preferred Stock the certificate or
certificates representing the Redemption Shares, or (ii) the Corporation, in its
sole discretion, has notified the holders of the shares of Series 2 Preferred
Stock by written notice delivered at least thirty (30) days prior to the
Redemption Date (the "Extension Notice") of its election to extend the
Redemption Date to the fifth anniversary of the date of initial issuance of the
shares of Series 2 Preferred Stock (the "Extended Redemption Date"), all rights
of the holders of the shares of Series 2 Preferred Stock surrendered for
redemption, except the right to receive the Redemption Shares in respect of such
shares, shall cease and terminate. The redemption of the shares of Series 2
Preferred Stock upon the Redemption Date shall take place at the principal place
of business of the Corporation. On the Redemption Date, the Corporation shall
tender the certificate or certificates representing the Redemption Shares
against receipt of the certificate or certificates representing the shares of
Series 2 Preferred Stock being redeemed.

                  (c)      If the Redemption Date has been extended to the
Extended Redemption Date by timely delivery by the Corporation of the Extension
Notice to each of the holders of the shares of Series 2 Preferred Stock then
outstanding, on the Extended Redemption Date all of the outstanding shares of
Series 2 Preferred Stock shall be subject to mandatory redemption by the
Corporation for Redemption Shares at the Extended Redemption Ratio (as
hereinafter defined). From and after the Extended Redemption Date, unless
default shall be made by the Corporation on the Extended Redemption Date in
delivering to the holders of Series 2 Preferred Stock the certificate or
certificates representing the Redemption Shares, all rights of the holders of
the shares of Series 2 Preferred Stock surrendered for redemption, except the
right to receive the Redemption Shares in respect of such shares, shall cease
and terminate. The redemption of the shares of Series 2 Preferred Stock upon the
Extended Redemption Date shall take place at the principal place of business of
the Corporation. On the Extended Redemption Date, the Corporation shall tender
the certificate or certificates representing the Redemption Shares against
receipt of the certificate or certificates representing the shares of Series 2
Preferred Stock being redeemed. As used herein, "Extended Redemption Ratio"
shall equal the number of shares of

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Common Stock into which one share of Series 2 Preferred Stock is convertible
pursuant to this Section 7(c), which shall be determined by dividing $131.00 by
the then effective Conversion Price. The Extended Redemption Ratio shall be
subject to adjustment as provided in Section 8(d).

                  (8)      (a) Subject to the provision for adjustment set forth
below, each share of the Series 2 Preferred Stock shall be convertible at the
option of the holder thereof at any time after the date hereof, into a number of
shares of Common Stock equal to the then effective Conversion Ratio (as
hereinafter defined). As used herein, "Conversion Ratio," determined as of any
date, shall equal the number of shares of Common Stock into which one share of
Series 2 Preferred Stock is convertible pursuant to this Section 8, which shall
be determined by dividing $100.00 by the then effective Conversion Price.
"Ratio" shall mean the Conversion Ratio, the Redemption Ratio or the Extended
Redemption Ratio, as the case may be, and shall be subject to adjustment as
provided in Section 8(d). "Conversion Price" shall be $4.68, subject to
adjustment as provided in Section 8(d).

                  (b)      The Corporation shall at all times reserve and keep
available for issuance upon the conversion of Series 2 Preferred Stock, free
from any preemptive rights or any other actual contingent purchase rights of
persons other than the holders of Series 2 Preferred Stock, such number of
shares of its authorized but unissued shares of Common Stock as will from time
to time be necessary to permit the conversion of all outstanding shares of
Series 2 Preferred Stock into shares of Common Stock, and shall take all action
required to increase the authorized number of shares of Common Stock if
necessary to permit the conversion of all outstanding shares of Series 2
Preferred Stock. The Corporation covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly and validly authorized, fully
paid, nonassessable and freely tradeable.

                  (c)      (i) Conversion of Series 2 Preferred Stock may be
effected by any holder thereof upon the surrender to the Corporation at the
offices of the Corporation of certificates representing Series 2 Preferred Stock
to be converted, accompanied by a written notice stating that such holder elects
to convert all or a specified portion of such Series 2 Preferred Stock in
accordance with the provisions of this Section 8 and specifying the name or
names in which such holder wishes the certificate or certificates for shares of
Common Stock to be issued. The Corporation shall pay the issue and transfer
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series 2 Preferred Stock pursuant hereto. As
promptly as practicable, and in any event within two business days after the
surrender of such certificates representing Series 2 Preferred Stock and the
receipt of such notice relating thereto, the Corporation shall deliver or cause
to be delivered (i) certificates representing the number of validly issued,
fully paid and nonassessable shares of Common Stock to which the holder of
Series 2 Preferred Stock being converted shall be entitled and (ii) if less than
all of the shares represented by the surrendered certificates are being
converted, a new certificate representing the number of shares of Series 2
Preferred Stock which remains outstanding upon such partial conversion. Such
conversion shall be deemed to have been made at the close of business on the
date of giving such notice so that the rights of the holder thereof as to Series
2 Preferred Stock being converted shall cease except for the right to receive
shares of Common Stock in

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accordance herewith, and the persons entitled to receive shares of Common Stock
shall be treated for all purposes as having become the record holder of such
shares of Common Stock at such time.

                  (ii)     If the Corporation fails to deliver to the holder the
Common Stock certificate or certificates to which it is entitled pursuant to
Section 7 or Section 8, including for purposes hereof, for any Redemption
Shares, on or prior to the third trading day after the date the holder
surrenders to the Corporation the certificates to be converted (the "Delivery
Date"), in addition to all other remedies that such holder may pursue hereunder
or otherwise, the Corporation shall pay to such holder in cash, as liquidated
damages and not as a penalty, $1,000 per day (increasing to $5,000 per day after
the fifth trading day after the Delivery Date) until such certificates are
delivered. Nothing herein shall limit a holder's right to pursue actual damages
for the Corporation's failure to deliver certificates representing shares of
Common Stock upon conversion within the period specified herein (including,
without limitation, damages relating to any purchase of shares of Common Stock
by such holder to make delivery on a sale effected in anticipation of receiving
certificates representing shares of Common Stock upon conversion, such damages
to be in an amount equal to (A) the aggregate amount paid by such holder for the
shares of Common Stock so purchased minus (B) the aggregate amount of net
proceeds, if any, received by such holder from the sale of the shares of Common
Stock issued by the Corporation pursuant to such conversion), and such holder
shall have the right to pursue all remedies available to it at law or in equity
(including, without limitation, a decree of specific performance and/or
injunctive relief).

                  (iii)    In addition to any other rights available to the
holder, if the Corporation fails to deliver to the holder such certificate or
certificates pursuant to Section 8(c)(ii) by the Delivery Date and after the
Delivery Date the holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver to the satisfaction of a sale by such holder
of the shares underlying the Series 2 Preferred Stock which the holder
anticipated receiving on the Delivery Date upon such conversion (a "Buy-In"),
then the Corporation shall pay in cash to the holder (in addition to any
remedies available to or elected by the holder) the amount by which (A) the
holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock purchased for a Buy-In exceeds (B) the aggregate
Conversion Price for the number of shares of Common Stock in the Buy-In for
which such conversion was not timely honored. For example, if the holder
purchases shares of Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted conversion of $10,000 aggregate
Conversion Price for the number of shares of Common Stock in the Buy-In, the
Corporation shall be required to pay the holder $1,000. The holder shall provide
the Corporation written notice indicating the amounts payable to the holder in
respect of the Buy-In.

                  (d)      (i) In the event of any change in the number of
issued and outstanding shares of capital stock of the Corporation by reason of
any stock split, stock dividend, subdivision, merger, consolidation,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Corporation which would have
the effect of diluting or otherwise adversely affecting the rights and
privileges of the holders of Series 2 Preferred Stock under this Section 8, the
Ratio and Conversion Price in effect on the effective date thereof shall be
adjusted so that the holder of any shares of Series 2

                                       5
<PAGE>   6

Preferred Stock shall be entitled to receive the number and type of shares of
Common Stock or other securities of the Corporation which such holder would have
owned or have been entitled to receive after the happening of any of the events
described above had such shares of Series 2 Preferred Stock been converted into
Common Stock immediately prior to the happening of such event or the record date
therefor. An adjustment made pursuant to this Section 8(d) shall become
effective (x) in the case of any such dividend or distribution to holders of
shares of Common Stock entitled to receive such dividend or distribution, or (y)
in the case of such subdivision, merger, consolidation, recapitalization,
combination, conversion or exchange, at the close of business on the day upon
which such corporate action becomes effective.

                  (ii)     Except with respect to Excluded Securities (as
defined below), in case the Corporation shall issue any shares of Common Stock
or Common Stock Equivalents (as defined below) after the Issue Date at a price
per share (or having a conversion or exercise price per share) of less than the
Conversion Price per share (the "Adjusted Conversion Price"), in each such case
the Conversion Price as in effect immediately prior thereto shall be reduced
(but not increased) to the Adjusted Conversion Price and the Ratio shall be
recalculated and increased (but not decreased) by substituting the Adjusted
Conversion Price for the Conversion Price in the Ratio calculation. Any
adjustment made pursuant to this clause (ii) shall be made on the next business
day following the date on which any such issuance is made and shall be effective
retroactively to the close of business on the date of such issuance. For
purposes of this clause (ii), the consideration receivable by the Corporation in
connection with the issuance of additional shares of Common Stock or of Common
Stock Equivalents since the Issue Date shall be deemed to be equal to (X) in the
case the consideration received by the Corporation is cash, the sum of the
aggregate offering price (before deduction of underwriting discounts or
commissions and expenses payable to third parties, if any) of all such Common
Stock and/or Common Stock Equivalents plus the minimum aggregate amount, if any,
payable upon conversion, exchange or exercise of any such Common Stock
Equivalents, and (Y) in the case the consideration received by the Corporation
is other than cash, the fair market value of the consideration received by the
Corporation as determined by the good faith judgment of the Board of Directors
of the Corporation provided, however, that in the event the holder disagrees in
good faith with the determination of the Board of Directors of the Corporation,
such fair market value shall be determined by a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (an "Appraiser") selected in good faith by
the holders of the Series 2 Preferred Stock; and provided, further, that the
Corporation, after receipt of the determination by such Appraiser shall have the
right to select in good faith an additional Appraiser meeting the same
qualifications, in which case the fair market value shall be equal to the
average of the determinations by each such Appraiser. Such adjustment shall be
made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above. The issuance or reissuance of
any shares of Common Stock or Common Stock Equivalents (whether treasury shares
or newly issued shares) pursuant to a dividend or distribution on, or
subdivision, combination or reclassification of, the outstanding shares of
Common Stock requiring an adjustment in the Conversion Price and Ratio pursuant
to this clause (ii) shall not be deemed to constitute an issuance of Common
Stock or Common Stock Equivalents by the Corporation to which clause (i) of this
Section 8(d) applies. Upon the expiration or termination of any unconverted,
unexchanged or unexercised Common Stock Equivalents for which an adjustment has
been made pursuant to this clause (ii), the

                                       6
<PAGE>   7

adjustments shall forthwith be reversed to effect such Ratio as would have been
in effect at the time of such expiration or termination had such Common Stock
Equivalents, to the extent outstanding immediately prior to such expiration or
termination, had never been issued. As used herein, "Excluded Securities" shall
mean: (i) shares of Common Stock issuable upon conversion of the Series 2
Preferred Stock; (ii) shares of Common Stock issuable or issued to employees of
or consultants to the Corporation pursuant to the Management Option Plan (as
hereinafter defined); (iii) any capital stock issued as a stock dividend or upon
any stock split or other subdivision or combination of shares of the
Corporation's capital stock; (iv) shares of Common Stock issuable upon
conversion of any Common Stock Equivalents outstanding on the Issue Date, (v)
shares of Common Stock issuable upon conversion of the Corporation's Class A
Convertible Preferred Stock outstanding on the Issue Date or (vi) Common Stock
issued upon the conversion or exercise of Common Stock Equivalents issued after
the Issue Date as to which an adjustment to the Ratio has been made pursuant to
this clause (d) upon the issuance of such Common Stock Equivalents. As used
herein, "Common Stock Equivalents" shall mean securities convertible into, or
exchangeable or exercisable for, shares of Common Stock of the Corporation. As
used herein, the "Management Option Plan" shall mean the Corporation's 1992
Stock Option Plan, as amended.

                  (iii)    If the Corporation shall set a record date for the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution and shall thereafter, and before such dividend or
distribution is paid or delivered to stockholders entitled thereto, legally
abandon its plan to pay or deliver such dividend or distribution, then no
adjustment in the Ratio or the Conversion Price then in effect shall be made by
reason of the taking of such record, and any such adjustment previously made as
a result of the taking of such record shall be reversed.

                  (e)      (i) Unless sooner redeemed or converted in accordance
with the provisions of Section 7 hereof or this Section 8 the outstanding shares
of Series 2 Preferred Stock shall be subject to involuntary conversion at the
option of the Corporation, at its sole discretion, in whole but not in part, at
any time after six months after the Issue Date, for shares of the Corporation's
Common Stock at the Conversion Ratio. The Corporation may effectuate such
involuntary conversion on such date (the "Involuntary Conversion Date") provided
that the following conditions have been met:

         (A)      the Current Market Price (as hereinafter defined) of the
                  Common Stock is equal to or in excess of one hundred and fifty
                  percent (150%) of the Conversion Price for a period of at
                  least ten (10) consecutive trading days; and

         (B)      all of the shares of Common Stock into which the Preferred
                  Stock is being converted have been registered under the
                  Securities Act of 1933, as amended, and such registration has
                  been declared effective by the Securities and Exchange
                  Commission, and is effective on such date; and

         (C)      the Corporation has a sufficient number of authorized shares
                  of Common Stock reserved for issuance upon full conversion of
                  the Series 2 Preferred Stock.

                                       7
<PAGE>   8

As used herein, "Current Market Price" shall mean for any day, the last sale
price for the Common Stock on the principal securities exchange on which the
Common Stock is listed or admitted to trading, or, if not so listed or admitted
to trading on any securities exchange, the last sale price for the Common Stock
on the National Association of Securities Dealers National Market System, or, if
the Common Stock shall not be listed on such system, the closing bid price in
the over-the-counter market.

                  (ii)     Notice of involuntary conversion of outstanding
shares of Series 2 Preferred Stock shall be sent by or on behalf of the
Corporation, postage prepaid, to the holders of record of outstanding shares of
Series 2 Preferred Stock not less than ten (10) and not more than twenty (20)
days prior to the Involuntary Conversion Date.

                  (iii)    Notice having been so given as provided in clause
(ii) above, from and after the Involuntary Conversion Date, unless default shall
be made by the Corporation on the Involuntary Conversion Date in issuing the
Common Stock issuable upon conversion of the Series 2 Preferred Stock pursuant
to the Conversion Ratio, all rights of the holders of the shares of Series 2
Preferred Stock surrendered for conversion, except the right to receive the
Common Stock in respect of such shares, shall cease and terminate. The
involuntary conversion of the shares of Series 2 Preferred Stock for the Common
Stock upon the Involuntary Conversion Date shall take place at the principal
place of business of the Corporation. On the Involuntary Conversion Date, the
Corporation shall tender such Common Stock against receipt of the certificate or
certificates representing the shares of Series 2 Preferred Stock being
converted.

                  (9)      Upon any adjustment of the Conversion Price and the
Ratio then in effect pursuant to the provisions of Section 8, then, and in each
such case, the Corporation shall promptly deliver to each of the holders of
Series 2 Preferred Stock a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment, the method by which such adjustment was
calculated and the Conversion Price and Ratio then in effect following such
adjustment. Where appropriate, such notice to the holders of Series 2 Preferred
Stock may be given in advance."

                  FIFTH:   The foregoing Amendment of the Certificate of
Incorporation of the Corporation was authorized by unanimous consent of the
Board of Directors of the Corporation.

Signed on November 1, 2000
                                    ----------------------------
                                      Darby S. Macfarlane
                                      Chairperson of the Board

                                       8

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