EXECUTION COPY
WARRANT
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE
BENEFICIARY OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A PRIVATE EQUITY
LINE AGREEMENT, DATED AS OF AUGUST 9, 1999, BETWEEN PIXTECH, INC. AND
KINGSBRIDGE CAPITAL LIMITED. A COPY OF THE PORTION OF THE AFORESAID AGREEMENT
EVIDENCING SUCH OBLIGATIONS MAY BE OBTAINED FROM PIXTECH, INC.'S EXECUTIVE
OFFICES.
August 9, 1999
Warrant to Purchase up to 100,000 Shares of Common Stock of Pixtech, Inc.
Pixtech, Inc., a Delaware corporation (the "Company"), hereby agrees that
Kingsbridge Capital Limited (the "Investor") or any other Warrant Holder is
entitled, on the terms and conditions set forth below, to purchase from the
Company at any time during the Exercise Period up to 100,000 fully paid and
nonassessable shares of Common Stock, par value $.01 per share, of the Company
(the "Common Stock"), as the same may be adjusted from time to time pursuant to
Section 6 hereof, at the Exercise Price (hereinafter defined), as the same may
be adjusted pursuant to Section 6 hereof. The resale of the shares of Common
Stock or other securities issuable upon exercise or exchange of this Warrant is
subject to the provisions of the Registration Rights Agreement (as defined
below).
Section 1. Definitions.
"Agreement" shall mean the Private Equity Line Agreement, dated the date
hereof, between the Company and the Investor.
"Capital Shares" shall mean the Common Stock and any shares of any other
class of common stock whether now or hereafter authorized, having the right to
participate in the distribution of earnings and assets of the Company.
"Date of Exercise" shall mean the date that the advance copy of the
Exercise Form is sent by facsimile to the Company, provided that the original
Warrant and Exercise Form are received by the Company within reasonable time
thereafter. If the Warrant Holder has not
1
sent advance notice by facsimile, the Date of Exercise shall be the date the
original Exercise Form is received by the Company.
"Exercise Period" shall mean that period beginning on the earlier of (i)
the 181st day after the Subscription Date and (ii) the Effective Date and
continuing until the expiration of the three-year period thereafter; provided
that such period shall be extended one day for each day after such 181st day
after the Subscription Date, that a Registration Statement is not effective
during the period such Registration Statement is required to be effective
pursuant to the Registration Rights Agreement.
"Exercise Price" shall mean two dollars and thirty cents ($2.30).
"Per Share Warrant Value" shall mean the difference resulting from
subtracting the Exercise Price from the Bid Price of one share of Common Stock
on the Trading Day next preceding the Date of Exercise.
"Registration Rights Agreement" shall mean the registration rights
agreement, dated the date hereof between the Company and the Investor.
"Subscription Date" shall mean the date on which the Agreement is executed
and delivered by the parties hereto.
"Warrant Holder" shall mean the Investor or any assignee or transferee of
all or any portion of this Warrant; and
other capitalized terms used but not defined herein shall have their
respective meanings set forth in the Agreement.
Section 2. Exercise; Cashless Exercise.
(a) Method of Exercise. This Warrant may be exercised in whole or in part
(but not as to a fractional share of Common Stock), at any time and from time to
time during the Exercise Period, by the Warrant Holder by (i) surrender of this
Warrant, with the form of exercise attached hereto as Exhibit A duly executed by
the Warrant Holder (the "Exercise Notice"), to the Company at the address set
forth in Section 13 hereof, accompanied by payment of the Exercise Price
multiplied by the number of shares of Common Stock for which this Warrant is
being exercised (the "Aggregate Exercise Price") or (ii) telecopying an executed
and completed Exercise Notice to the Company and delivering to the Company
within three business days thereafter the original Exercise Notice, this Warrant
and the Aggregate Exercise Price. Each date on which an Exercise Notice is
received by the Company in accordance with clause (i) and each date on which the
Exercise Notice is telecopied to the Company in accordance with clause (ii)
above shall be deemed an "Exercise Date".
(b) Payment of Aggregate Exercise Price. Subject to paragraph (c) below,
payment of the Aggregate Exercise Price shall be made by check or bank draft
payable to the order of the Company or by wire transfer to an account designated
by the Company. If the amount of the payment received by the Company is less
than the Aggregate Exercise Price, the Warrant Holder will be notified of the
deficiency and shall make payment in that amount within five (5) business days.
In the event the payment exceeds the Aggregate Exercise Price, the Company will
refund the excess to the Warrant Holder within three (3) business days of
receipt.
2
(c) Cashless Exercise. If a Registration Statement is not effective for the
resale of the Warrant Shares by the Warrant Holder, as an alternative to payment
of the Aggregate Exercise Price in accordance with paragraph (b) above, the
Warrant Holder may elect to effect a cashless exercise by so indicating on the
Exercise Notice and including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"Cashless Exercise"). In the event of a Cashless Exercise, the Warrant Holder
shall surrender this Warrant for that number of shares of Common Stock
determined by (i) multiplying the number of Warrant Shares for which this
Warrant is being exercised by the Per Share Warrant Value and (ii) dividing the
product by the Bid Price of one share of the Common Stock on the Trading Day
next preceding the Date of Exercise.
(d) Replacement Warrant. In the event that the Warrant is not exercised in
full, the number of Warrant Shares shall be reduced by the number of such
Warrant Shares for which this Warrant is exercised, and the Company, at its
expense, shall forthwith issue and deliver to or upon the order of the Warrant
Holder a new Warrant of like tenor in the name of the Warrant Holder or as the
Warrant Holder may request, reflecting such adjusted number of Warrant Shares.
Section 3. Ten Percent Limitation. The Warrant Holder may not exercise this
Warrant such that the number of Warrant Shares to be received pursuant to such
exercise aggregated with all other shares of Common Stock then owned by the
Warrant Holder beneficially or deemed beneficially owned by the Warrant Holder
would result in the Warrant Holder owning more than 9.9% of all of such Common
Stock as would be outstanding on such Closing Date, as determined in accordance
with Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder. As of any date prior to the Date of Exercise, the aggregate number
of shares of Common Stock into which this Warrant is exercisable, together with
all other shares of Common Stock then beneficially owned (as such term is
defined in Rule 16a-1 under the Exchange Act) by such Warrant Holder and its
affiliates, shall not exceed 9.9% of the total outstanding shares of Common
Stock as of such date.
Section 4. Delivery of Stock Certificates.
(a) Subject to the terms and conditions of this Warrant, as soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) Trading Days thereafter, the Company at its expense
(including, without limitation, the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the Warrant Holder, or
as the Warrant Holder may lawfully direct, a certificate or certificates for the
number of validly issued, fully paid and non-assessable Warrant Shares to which
the Warrant Holder shall be entitled on such exercise, together with any other
stock or other securities or property (including cash, where applicable) to
which the Warrant Holder is entitled upon such exercise in accordance with the
provisions hereof; provided, however, that any such delivery to a location
outside of the United States shall be made within five (5) Trading Days after
the exercise of this Warrant in full or in part.
(b) This Warrant may not be exercised as to fractional shares of Common
Stock. In the event that the exercise of this Warrant, in full or in part, would
result in the issuance of any fractional share of Common Stock, then in such
event the Warrant Holder shall receive in cash an amount equal to the Bid Price
of such fractional share within three (3) Trading Days.
3
Section 5. Representations, Warranties and Covenants of the Company.
(a) The Company shall take all necessary action and proceedings as may be
required and permitted by applicable law, rule and regulation for the legal and
valid issuance of this Warrant and the Warrant Shares to the Warrant Holder.
(b) From the date hereof through the last date on which this Warrant is
exercisable, the Company shall take all steps reasonably necessary and within
its control to insure that the Common Stock remains listed or quoted on the
Principal Market.
(c) The Warrant Shares, when issued in accordance with the terms hereof,
will be duly authorized and, when paid for or issued in accordance with the
terms hereof, shall be validly issued, fully paid and non-assessable.
(d) The Company has authorized and reserved for issuance to the Warrant
Holder the requisite number of shares of Common Stock to be issued pursuant to
this Warrant. The Company shall at all times reserve and keep available, solely
for issuance and delivery as Warrant Shares hereunder, such shares of Common
Stock as shall from time to time be issuable as Warrant Shares.
Section 6. Adjustment of the Exercise Price. The Exercise Price and,
accordingly, the number of Warrant Shares issuable upon exercise of the Warrant,
shall be subject to adjustment from time to time upon the happening of certain
events as follows; provided, however, that nothing contained in this Section 6
shall be construed to require such adjustment to the exercise price of this
Warrant for the payment of any placement agent, in Capital Stock or otherwise,
in consideration of the transactions contemplated by the Agreement:
(a) Reclassification, Consolidation, Merger or Mandatory Share Exchange. If
the Company, at any time while this Warrant is unexpired and not exercised in
full, (i) reclassifies or changes its Outstanding Capital Shares (other than a
change in par value, or from par value to no par value per share, or from no par
value per share to par value or as a result of a subdivision or combination of
outstanding securities issuable upon exercise of the Warrant) or (ii)
consolidates, merges or effects a mandatory share exchange with or into another
corporation (other than a merger or mandatory share exchange with another
corporation in which the Company is a continuing corporation and that does not
result in any reclassification or change, other than a change in par value, or
from par value to no par value per share, or from no par value per share to par
value, or as a result of a subdivision or combination of Outstanding Capital
Shares issuable upon exercise of the Warrant) at any time while this Warrant is
unexpired and not exercised in full, then in any such event the Company, or such
successor or purchasing corporation, as the case may be, shall, without payment
of any additional consideration therefore, amend this Warrant or issue a new
Warrant providing that the Warrant Holder shall have rights not less favorable
to the holder than those then applicable to this Warrant and to receive upon
exercise under such amendment of this Warrant or new Warrant, in lieu of each
share of Common Stock theretofore issuable upon exercise of the Warrant
hereunder, the kind and amount of shares of stock, other securities, money or
property receivable upon such reclassification, change, consolidation, merger,
mandatory share exchange, sale or transfer by the holder of one share of Common
Stock issuable upon exercise of the Warrant had the Warrant been exercised
immediately prior to such reclassification, change, consolidation, merger,
mandatory share exchange or sale or transfer. Such amended Warrant shall provide
for
4
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6.1. The provisions of this subsection
(a) shall similarly apply to successive reclassifications, changes,
consolidations, mergers, mandatory share exchanges and sales and transfers.
(b) Subdivision or Combination of Shares. If the Company, at any time while
this Warrant is unexpired and not exercised in full, shall subdivide its Common
Stock, the Exercise Price shall be proportionately reduced as of the effective
date of such subdivision, or, if the Company shall take a record of holders of
its Common Stock for the purpose of so subdividing, as of such record date,
whichever is earlier. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall combine its Common Stock, the
Exercise Price shall be proportionately increased as of the effective date of
such combination, or, if the Company shall take a record of holders of its
Common Stock for the purpose of so combining, as of such record date, whichever
is earlier.
(c) Stock Dividends. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall pay a dividend in its Capital Shares,
or make any other distribution of its Capital Shares, then the Exercise Price
shall be adjusted, as of the date the Company shall take a record of the holders
of its Capital Shares for the purpose of receiving such dividend or other
distribution (or if no such record is taken, as at the date of such payment or
other distribution), to that price determined by multiplying the Exercise Price
in effect immediately prior to such payment or other distribution by a fraction:
1. the numerator of which shall be the total number of Outstanding Capital
Shares immediately prior to such dividend or distribution, and
2. the denominator of which shall be the total number of Outstanding
Capital Shares immediately after such dividend or distribution. The provisions
of this subsection (c) shall not apply under any of the circumstances for which
an adjustment is provided in subsections (a) or (b).
(d) Issuance of Additional Capital Shares. If the Company, at any time
while this Warrant is unexpired and not exercised in full, shall issue any
additional Capital Shares ("Additional Capital Shares"), otherwise than as
provided in the foregoing subsections (a) through (c) above, at a price per
share less, or for other consideration lower, than the Bid Price in effect
immediately prior to such issuance, or without consideration, then upon such
issuance the Exercise Price shall be reduced to that price determined by
multiplying the Exercise Price in effect immediately prior to such event by a
fraction:
1. the numerator of which shall be the number of Outstanding Capital Shares
immediately prior to the issuance of the Additional Capital Shares plus the
number of Capital Shares that the aggregate consideration for the total number
of such Additional Capital Shares so issued would purchase at the then effective
Bid Price, and
2. the denominator of which shall be the number of Outstanding Capital
Shares immediately after the issuance of the Additional Capital Shares. The
provisions of this subsection (d) shall not apply under any of the circumstances
for which an adjustment is provided in subsections (a), (b) or (c).
5
The provisions of this subsection (d) shall not apply to the issuance of any
Additional Capital Shares that are issued pursuant to the exercise of any
warrants, options or other subscription or purchase rights or pursuant to the
exercise of any conversion or exchange rights in any convertible or exchangeable
securities or in connection with any merger, equipment or other leasing
arrangement, or collaboration or other transaction not primarily intended to be
a financing transaction.
(e) Issuance of Warrants, Options or Other Rights. If the Company, at any
time while this Warrant is unexpired and not exercised in full, shall issue any
warrants, options or other rights to subscribe for or purchase any Additional
Capital Shares, other than employee stock option and stock purchase plans
granted in the ordinary course of business, and the price per share for which
Additional Capital Shares may at any time thereafter be issuable pursuant to
such warrants, options or other rights shall be less than the Bid Price in
effect immediately prior to such issuance, then, upon the issuance of such
warrants, options or other rights, the Exercise Price shall be adjusted as
provided in subsection (d) hereof on the basis that:
1. the maximum number of Additional Capital Shares issuable on the date of
determination (subject to adjustment on the date(s) of exercise) pursuant to all
such warrants, options or other rights shall be deemed to have been issued as of
the date of actual issuance of such warrants, options or other rights, and
2. the aggregate consideration for such maximum number of Additional
Capital Shares issuable pursuant to such warrants, options or other rights,
shall be deemed to be the consideration received by the Company for the issuance
of such warrants, options, or other rights plus the minimum consideration to be
received by the Company for the issuance of Additional Capital Shares pursuant
to such warrants, options, or other rights.
In the event that the Exercise Price is adjusted pursuant to this Section
6(e), and any warrants, options or other rights that were the basis of such
adjustment expire, are redeemed, are cancelled or otherwise no longer provide
the holders thereof with any right to purchase Additional Capital Shares, the
Exercise Price shall be re-adjusted to such price that the Exercise Price would
have been but for such adjustment.
(f) Issuance of Convertible or Exchangeable Securities. If the Company, at
any time while this Warrant is unexpired and not exercised in full, shall issue
any securities convertible into or exchangeable for Capital Shares and the
consideration per share for which Additional Capital Shares may at any time
thereafter be issuable pursuant to the terms of such convertible or exchangeable
securities shall be less than the Bid Price in effect immediately prior to such
issuance, then, upon the issuance of such convertible or exchangeable
securities, the Exercise Price shall be adjusted as provided in subsection (d)
hereof on the basis that:
1. the maximum number of Additional Capital Shares necessary on the date of
determination (subject to adjustment on the date(s) of conversion or exchange)
to effect the conversion or exchange of all such convertible or exchangeable
securities shall be deemed to have been issued as of the date of issuance of
such convertible or exchangeable securities, and
2. the aggregate consideration for such maximum number of Additional
Capital Shares shall be deemed to be the consideration received by the Company
for the issuance of such convertible or exchangeable securities plus the minimum
consideration received by the
6
Company for the issuance of such Additional Capital Shares pursuant to the terms
of such convertible or exchangeable securities.
No adjustment of the Exercise Price shall be made under this subsection (f)
upon the issuance of any convertible or exchangeable securities that are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights therefor, if the issuance of such warrants, options or other
rights was subject to subsection (e) hereof.
In the event that the Exercise Price is adjusted pursuant to this Section
6(f), and any convertible or exchangeable securities that were the basis of such
adjustment expire, are redeemed, are cancelled or otherwise no longer provide
the holders thereof with any right to purchase Additional Capital Shares, the
Exercise Price shall be re-adjusted to such price that the Exercise Price would
have been but for such adjustment.
(g) Adjustment of Number of Shares. Upon each adjustment of the Exercise
Price pursuant to any provisions of this Section 6.1, the number of Warrant
Shares issuable hereunder at the option of the Warrant Holder shall be
calculated, to the nearest one hundredth of a whole share, multiplying the
number of Warrant Shares issuable prior to an adjustment by a fraction:
1. the numerator of which shall be the Exercise Price before any adjustment
pursuant to this Section 6.1; and
2. the denominator of which shall be the Exercise Price after such
adjustment.
(h) Liquidating Dividends, Etc. If the Company, at any time while this
Warrant is unexpired and not exercised in full, makes a distribution of its
assets or evidences of indebtedness to the holders of its Capital Shares as a
dividend in liquidation or by way of return of capital (other than dividends
paid or distributions made in respect of preferred stock) or other than as a
dividend payable out of earnings or surplus legally available for dividends
under applicable law or any distribution to such holders made in respect of the
sale of all or substantially all of the Company's assets (other than under the
circumstances provided for in the foregoing subsections (a) through (g)) while
an exercise is pending, then the Warrant Holder shall be entitled to receive
upon such exercise of the Warrant in addition to the Warrant Shares receivable
in connection therewith, and without payment of any consideration other than the
Exercise Price, an amount in cash equal to the value of such distribution per
Capital Share multiplied by the number of Warrant Shares that, on the record
date for such distribution, are issuable upon such exercise of the Warrant (with
no further adjustment being made following any event which causes a subsequent
adjustment in the number of Warrant Shares issuable), and an appropriate
provision therefor shall be made a part of any such distribution. The value of a
distribution that is paid in other than cash shall be determined in good faith
by the Board of Directors of the Company.
(i) Other Provisions Applicable to Adjustments Under this Section. The
following provisions will be applicable to the making of adjustments in any
Exercise Price hereinabove provided in this Section 6.1:
1. Computation of Consideration. To the extent that any Additional Capital
Shares or any convertible or exchangeable securities or any warrants, options or
other rights to
7
subscribe for or purchase any Additional Capital Shares or any convertible or
exchangeable securities shall be issued for a cash consideration, the
consideration received by the Company therefor shall be deemed to be the amount
of the cash received by the Company therefor, or, if such Additional Capital
Shares or convertible or exchangeable securities are offered by the Company for
subscription, the subscription price, or, if such Additional Capital Shares or
convertible or exchangeable securities are sold to or through underwriters or
dealers for public offering without a subscription offering, the initial public
offering price, in any such case excluding any amounts paid or incurred by the
Company for and in the underwriting of, or otherwise in connection with the
issue thereof. To the extent that such issuance shall be for a consideration
other than cash, then, the amount of such consideration shall be deemed to be
the fair value of such consideration at the time of such issuance as determined
in good faith by the Company's Board of Directors. The consideration for any
Additional Capital Shares issuable pursuant to any warrants, options or other
rights to subscribe for or purchase the same shall be the consideration received
by the Company for issuing such warrants, options or other rights, plus the
additional consideration payable to the Company upon the exercise of such
warrants, options or other rights. The consideration for any Additional Capital
Shares issuable pursuant to the terms of any convertible or exchangeable
securities shall be the consideration paid or payable to the Company in respect
of the subscription for or purchase of such convertible or exchangeable
securities, plus the additional consideration, if any, payable to the Company
upon the exercise of the right of conversion or exchange in such convertible or
exchangeable securities. In case of the issuance at any time of any Additional
Capital Shares or convertible or exchangeable securities in payment or
satisfaction of any dividend upon any class of stock preferred as to dividends
in a fixed amount, the Company shall be deemed to have received for such
Additional Capital Shares or convertible or exchangeable securities a
consideration equal to the amount of such dividend so paid or satisfied.
2. Readjustment of Exercise Price. Upon the expiration of the right to
convert or exchange any convertible or exchangeable securities, or upon the
expiration of any rights, options or warrants, the issuance of which convertible
or exchangeable securities, rights, options or warrants effected an adjustment
in Exercise Price, if any such convertible or exchangeable securities shall not
have been converted or exchanged, or if any such rights, options or warrants
shall not have been exercised, the number of Capital Shares deemed to be issued
and Outstanding by reason of the fact that they were issuable upon conversion or
exchange of any such convertible or exchangeable securities or upon exercise of
any such rights, options, or warrants shall no longer be computed as set forth
above, and such Exercise Price shall forthwith be readjusted and thereafter be
the price that it would have been (but reflecting any other adjustments in the
Exercise Price made pursuant to the provisions of this Section 6.1 after the
issuance of such convertible or exchangeable securities, rights, options or
warrants) had the adjustment of the Exercise Price made upon the issuance or
sale of such convertible or exchangeable securities or issuance of rights,
options or warrants been made on the basis of the issuance only of the number of
Additional Capital Shares actually issued upon conversion or exchange of such
convertible or exchangeable securities, or upon the exercise of such rights,
options or warrants, and thereupon only the number of Additional Capital Shares
actually so issued, if any, shall be deemed to have been issued and only the
consideration actually received by the Company (computed as set forth in
sub-subsection (1. hereof) shall be deemed to have been received by the Company.
If the purchase price provided for in any rights, options or warrants, or the
additional consideration (if any) payable upon the conversion or exchange of any
8
convertible or exchangeable securities, or the rate at which any convertible or
exchangeable securities are convertible into or exchangeable for Capital Shares
changes at any time (other than under or by reason of provisions designed to
protect against dilution), the Exercise Price in effect at the time of the
change shall be adjusted to the Exercise Price that would have been in effect at
such time had such rights, options, warrants or convertible or exchangeable
securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold.
(j) In the event the Company shall, at a time while the Warrant is
unexpired and outstanding, take any action which pursuant to subsections (a)
through (h) of this Section 6.1 may result in an adjustment of the Exercise
Price, the Company shall give to the Warrant Holder at its last address known to
the Company written notice of such action ten (10) days in advance of its
effective date in order to afford to the Warrant Holder an opportunity to
exercise the Warrant prior to such action becoming effective.
Section 6.1 Notice of Adjustments. Whenever the Exercise Price or number of
Warrant Shares shall be adjusted pursuant to Section 6.1 hereof, the Company
shall promptly make a certificate signed by its President or a Vice President
and by its Treasurer or Assistant Treasurer or its Secretary or Assistant
Secretary, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Company's
Board of Directors made any determination hereunder), and the Exercise Price and
number of Warrant Shares purchasable at that Exercise Price after giving effect
to such adjustment, and shall promptly cause copies of such certificate to be
mailed (by first class and postage prepaid) to the Holder of the Warrant. In the
event the Company shall, at a time while the Warrant is unexpired and not
exercised in full, take any action that pursuant to subsections (a) through (g)
of Section 6.1 may result in an adjustment of the Exercise Price, the Company
shall give to the Holder of the Warrant at its last address known to the Company
written notice of such action ten (10) days in advance of its effective date in
order to afford to the Holder of the Warrant an opportunity to exercise the
Warrant prior to such action becoming effective.
Section 7. No Impairment. The Company will not, by amendment of its
Articles of Incorporation or By-Laws or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Warrant Holder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.
Section 8. Rights As Stockholder. Prior to exercise of this Warrant, the
Warrant Holder shall not be entitled to any rights as a stockholder of the
Company with respect to the Warrant Shares, including (without limitation) the
right to vote such shares, receive dividends or other distributions thereon or
be notified of stockholder meetings. However, in the event of any taking by the
Company of a record of the holders of any class of securities for the
9
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Company
shall mail to each Warrant Holder, at least ten (10) days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.
Section 9. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction of the Warrant,
upon delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
Section 10. Choice of Law. This Agreement shall be construed under the laws
of the State of Delaware.
Section 11. Entire Agreement; Amendments. This Warrant, the Registration
Rights Agreement, and the Agreement contain the entire understanding of the
parties with respect to the matters covered hereby and thereby. No provision of
this Warrant may be waived or amended other than by a written instrument signed
by the party against whom enforcement of any such amendment or waiver is sought.
Section 12. Restricted Securities.
(a) Registration or Exemption Required. This Warrant has been issued in a
transaction exempt from the registration requirements of the Securities Act in
reliance upon the provisions of Section 4(2) promulgated by the SEC under the
Securities Act. This Warrant and the Warrant Shares issuable upon exercise of
this Warrant may not be resold except pursuant to an effective registration
statement or an exemption to the registration requirements of the Securities Act
and applicable state laws.
(b) Legend. Any replacement Warrants issued pursuant to Section 2 hereof
and any Warrant Shares issued upon exercise hereof, shall bear the following
legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT
FROM, OR NOT SUBJECT TO,
10
SUCH REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY
OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A PRIVATE EQUITY
LINE AGREEMENT, DATED AS OF AUGUST 5, 1999, BETWEEN PIXTECH, INC. AND
KINGSBRIDGE CAPITAL LIMITED. A COPY OF THE PORTION OF THE AFORESAID
AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY BE OBTAINED FROM THE
COMPANY'S EXECUTIVE OFFICES."
Removal of such legend shall be in accordance with the legend removal
provisions in the Agreement.
(c) No Other Legend or Stock Transfer Restrictions. No legend other than
the one specified in Section 12(b) has been or shall be placed on the share
certificates representing the Warrant Shares and no instructions or "stop
transfer orders," so called, "stock transfer restrictions" or other restrictions
have been or shall be given to the Company's transfer agent with respect thereto
other than as expressly set forth in this Section 12 and as may be required
under Delaware law for corporations with more than one class of stock
outstanding.
(d) Assignment. Assuming the conditions of Section 12(a) above regarding
registration or exemption have been satisfied, the Warrant Holder may sell,
transfer, assign, pledge or otherwise dispose of this Warrant, in whole or in
part, provided, however, that any partial sale, transfer, assignment, pledge or
other disposition shall be in respect of at least 25,000 Warrant Shares. The
Warrant Holder shall deliver a written notice to Company, substantially in the
form of the Assignment attached hereto as Exhibit B, indicating the person or
persons to whom the Warrant shall be assigned and the respective number of
warrants to be assigned to each assignee. The Company shall effect the
assignment within ten (10) days, and shall deliver to the assignee(s) designated
by the Warrant Holder a Warrant or Warrants of like tenor and terms for the
appropriate number of shares.
(e) Investor's Compliance. Nothing in this Section 12 shall affect in any
way the Investor's obligations under any agreement to comply with all applicable
securities laws upon resale of the Common Stock.
Section 13. Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing and
shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile (with
accurate confirmation generated by the transmitting facsimile machine) at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be as
set forth in the Agreement.
11
Section 14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
12
IN WITNESS WHEREOF, this Warrant was duly executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.
PIXTECH, INC.
By: /s/ Dieter Mezger
------------------------
Name:
President and Chief Executive Officer
Attested:
By:
--------------------
Name:
Title:
13
EXHIBIT A TO THE WARRANT
EXERCISE FORM
PIXTECH, INC.
The undersigned hereby irrevocably exercises the right to purchase
__________________ shares of Common Stock of Pixtech, Inc., a Delaware
corporation, evidenced by the attached Warrant, and herewith makes payment of
the Exercise Price with respect to such shares in full in the form of [cash or
certified check in the amount of $___________], [______] Warrant Shares, which
represent the amount of Warrant Shares as provided in the attached Warrant to be
canceled in connection with such exercise], all in accordance with the
conditions and provisions of said Warrant.
The undersigned requests that stock certificates for such Warrant Shares be
issued, and a Warrant representing any unexercised portion hereof be issued,
pursuant to this Warrant in the name of the registered Holder and delivered to
the undersigned at the address set forth below.
Dated:_______________________________________
_____________________________________________
Signature of Registered Holder
Name of Registered Holder (Print)
_____________________________________________
Address
14
NOTICE
The signature to the foregoing Exercise Form must correspond to the name as
written upon the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatsoever.
15
EXHIBIT B TO THE WARRANT
ASSIGNMENT
(To be executed by the registered Warrant Holder desiring to transfer the
Warrant)
FOR VALUED RECEIVED, the undersigned Warrant Holder of the attached Warrant
hereby sells, assigns and transfers unto the persons below named the right to
purchase ______________ shares of the Common Stock of Pixtech, Inc. evidenced by
the attached Warrant and does hereby irrevocably constitute and appoint
______________________ attorney to transfer the said Warrant on the books of the
Company, with full power of substitution in the premises.
Dated:
_________________________________________
Signature
16
Fill in for new Registration of Warrant:
_________________________________________
Name
_________________________________________
Address
_________________________________________
Please print name and address of assignee
(including zip code number)
17
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatsoever.
18