-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hy33pMhVNXTNXwGe5BTcI0cX/2+y8i6/L9WJJwtKCxioN3BJu+gbEg8PiRsbDaB0 qsUZ5tSMbj4RN6IHAZ77pA== 0000927016-99-000021.txt : 19990108 0000927016-99-000021.hdr.sgml : 19990108 ACCESSION NUMBER: 0000927016-99-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19981222 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIXTECH INC /DE/ CENTRAL INDEX KEY: 0000946144 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER TERMINALS [3575] IRS NUMBER: 043214691 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26380 FILM NUMBER: 99502024 BUSINESS ADDRESS: STREET 1: AVENUE VICTOIRE 13790 CITY: ROUSSET FRANCE STATE: I0 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): DECEMBER 22, 1998 PIXTECH, INC. (Exact name of registrant as specified in its charter) DELAWARE 0-26380 04-3214691 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) AVENUE OLIVIER PERROY, 13790 ROUSSET, FRANCE (Address of principal executive offices and zip code) Registrant's telephone number, including area code: 011-33-4-42-29-10-00 ITEM 5. OTHER EVENTS. On December 22, 1998, PixTech, Inc. (the "Company"), The Kaufmann Fund, Inc., Wingate Capital Ltd., Fisher Capital Ltd., The Atherton Co. and Banque Generale de Luxembourg, fonds Interselex Equity Easdaq (the "Investors") entered into a Preferred Stock Purchase Agreement (the "Agreement"). The Agreement and a press release relating thereto are attached hereto as exhibits. Pursuant to the Agreement, the Investors purchased an aggregate of 367,269 shares of the Company's newly designated Series E Convertible Preferred Stock for an aggregate purchase price of $8,275,000. The rights and preferences of the Series B Convertible Preferred Stock are as set forth in the Certificate of Designations which was filed with the Secretary of State of the State of Delaware on December 22, 1998. The Series E Convertible Preferred Stock is convertible into common stock after June 21, 1999 at a conversion price generally equal to approximately $2.25 per share or the market price of the common stock at the time of the conversion. In addition to the conversion feature, the preferred stock has a liquidation preference equal to the purchase price of the preferred stock and a cumulative dividend. The preferred stock will automatically convert into common stock on December 22, 2003. The preferred stock is redeemable at the option of the Company at the issue price upon certain events. The Company has also undertaken to file a registration statement by January 21, 1999 covering the resale of the common stock issuable upon conversion of the preferred stock. On January 5, 1999, Dieter Mezger, the Company's President, was appointed by the Company's board of directors to succeed Jean-Luc Grand-Clement as Chief Executive Officer. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits 1.1 Preferred Stock Purchase Agreement among PixTech, Inc., The Kaufmann Fund, Inc., Wingate Capital Ltd., Fisher Capital Ltd., The Atherton Co. and Banque Generale de Luxembourg, fonds Interselex Equity Easdaq dated as of December 22, 1998. 2.1 Certificate of Designations of the Company. 99.1 Press Release issued by the Company on December 23, 1998. 99.2 Press Release issued by the Company on January 5, 1998. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. January 6, 1999 PIXTECH, INC. By: /s/ Yves Morel ----------------- Yves Morel Chief Financial Officer 3 EXHIBIT INDEX ------------- 1.1 Preferred Stock Purchase Agreement among PixTech, Inc., The Kaufmann Fund, Inc., Wingate Capital Ltd., Fisher Capital Ltd., The Atherton Co. and Banque Generale de Luxembourg, fonds Interselex Equity Easdaq dated as of December 22, 1998. 2.1 Certificate of Designations of the Company. 99.1 Press Release issued by the Company on December 23, 1998. 99.2 Press Release issued by the Company on January 5, 1999. 4 EX-1.1 2 PREFERRED STOCK PURCHASE AGREEMENT Exhibit 1.1 PREFERRED STOCK PURCHASE AGREEMENT among PIXTECH, INC., THE KAUFMANN FUND, INC., WINGATE CAPITAL LTD., FISHER CAPITAL LTD., THE ATHERTON CO., AND BANQUE GENERALE DE LUXEMBOURG, FONDS INTERSELEX EQUITY EASDAQ dated as of December 22, 1998 TABLE OF CONTENTS
Page No. -------- 1. Authorization of Sale of the Shares.............................................. 1 2. Delivery of the Shares at the Closing............................................ 1 3. Representations, Warranties and Covenants of PixTech............................. 2 3.1. Organization and Qualification................................................... 2 3.2. Authorized Capital Stock......................................................... 2 3.3. Consents; Due Execution; Delivery and Performance of the Agreement............... 3 3.4. Issuance, Sale and Delivery of the Shares........................................ 3 3.5. Exempt Transaction............................................................... 3 3.6. Compliance with Rule 144......................................................... 4 3.7. Disclosure....................................................................... 4 3.8. Additional Information; Eligibility for Use of Form S-3.......................... 4 3.9. No Material Changes.............................................................. 4 3.10. Investment Company Act........................................................... 4 3.11. No Investment Advisor Affiliation................................................ 5 3.12. Possession of Intellectual Property.............................................. 5 3.13. Possession of Licenses and Permits............................................... 5 3.14. Legal Proceedings................................................................ 5 3.15. Taxes............................................................................ 5 3.16. Certificate of Designations Amendments........................................... 6 3.17. Listing of Common Stocks......................................................... 6 3.18. Governmental Approvals........................................................... 6 3.19. No Undisclosed Events, Liabilities, Developments or Circumstances................ 6 3.20. Application of Takeover Protections.............................................. 6 3.21. Rights Agreement................................................................. 6 3.22. Foreign Corrupt Practices........................................................ 6 3.23. No Other Agreements.............................................................. 7 4. Representations, Warranties and Covenants of The Purchasers...................... 7 4.1. Investment Considerations........................................................ 7 4.2. Due Execution, Delivery and Performance of the Agreement......................... 8 5. Conditions to the Obligations of the Purchasers.................................. 9 5.1. Accuracy of Representations and Warranties....................................... 9 5.2. Performance...................................................................... 9 5.3. Opinion of Counsel............................................................... 9 5.4. Certificates and Documents....................................................... 9 5.5. Sumitomo Consent................................................................. 9 5.6. Nasdaq Exception................................................................. 9 5.7. Extraordinary Events............................................................. 10 5.8. Material Changes................................................................. 10 5.9. Other Matters.................................................................... 10 6. Conditions to the Obligations of PixTech......................................... 10 6.1. Accuracy of Representations and Warranties....................................... 10 6.2. Performance...................................................................... 10 7. Survival of Representations, Warranties and Agreements; Assignability of Rights.. 10
Page No. -------- 8. Registration Rights.............................................................. 11 8.1. Registration of Shares on Form S-3............................................... 11 8.2. Failure to Register.............................................................. 12 8.3. Information by Holder............................................................ 13 8.4. Indemnification.................................................................. 13 8.5. Contribution..................................................................... 15 8.6. Transferability of Registration Rights........................................... 15 8.7. Non-Exclusivity.................................................................. 15 8.8. Termination...................................................................... 15 8.9. Public Availability of Information............................................... 16 8.10. Supplying Information............................................................ 16 9. Miscellaneous.................................................................... 16 9.1. Notices.......................................................................... 16 9.2. Entire Agreement................................................................. 17 9.3. Assignment....................................................................... 17 9.4. Amendments and Waivers........................................................... 17 9.5. Headings......................................................................... 17 9.6. Severability..................................................................... 17 9.7. Governing Law.................................................................... 17 9.8. Counterparts..................................................................... 17 9.9. Expenses......................................................................... 18 9.10. Publicity........................................................................ 18 9.11. Specific Performance............................................................. 18
Schedule 3.2 - ------------ Exhibit A List of Purchases - --------- Exhibit B Amendment to Restated Certificate of Incorporation - --------- Exhibit C Form of Opinion of Palmer & Dodge LLP - --------- Exhibit D Form of Secretary's Certificate - --------- Exhibit E Form of Officer's Certificate - --------- PREFERRED STOCK PURCHASE AGREEMENT THIS PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") dated as of December 22, 1998 (the "Effective Date") is made among PixTech, Inc., a corporation organized under the laws of the State of Delaware having its principal offices at Avenue Olivier Perroy, Zone Industrielle de Rousset, 13790 Rousset France, ("PixTech"), and the purchasers listed on Exhibit A hereto (each a "Purchaser" --------- and collectively, the "Purchasers") and certain other entities whose names appear at the end hereof for the limited purposes described herein. R E C I T A L WHEREAS, PixTech desires to sell to the Purchasers, and the Purchasers desire to purchase from PixTech, shares of PixTech's Series E Convertible Preferred Stock on the terms described herein, in each case in amounts set forth opposite the Purchaser's name in Exhibit A hereto. --------- NOW THEREFORE, in consideration of the promises and of the covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto mutually agree as follows: 1. Authorization of Sale of the Shares. Subject to the terms and ----------------------------------- conditions of this Agreement, PixTech has authorized the issuance and sale of three hundred sixty seven thousand two hundred sixty nine (367,269) shares (the "Shares") of the Series E Convertible Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of PixTech with the rights, preferences, powers, privileges and restrictions, qualifications and limitations contained in the Certificate of Designations set forth in Exhibit B hereto (the "Certificate of --------- Designations"), to the Purchasers at a price per share equal to ten times the average of the closing prices of the Common Stock, par value $0.01 per share (the "Common Stock"), of PixTech as reported on the Nasdaq National Market System ("Nasdaq") for the ten trading days immediately preceding the Effective Date. The aggregate purchase price for the Shares (the "Stock Purchase Price") shall be eight million two hundred seventy five thousand dollars ($8,275,000) and shall be allocated in the manner set forth opposite each Purchaser's name on Exhibit A. - --------- 2. Delivery of the Shares at the Closing. The closing of the purchase ------------------------------------- and sale of the Shares (the "Closing") shall occur on December 22, 1998 (the "Closing Date") at 10:00 a.m., eastern standard time at the offices of Palmer & Dodge LLP, One Beacon Street, Boston, Massachusetts, or on such other business day thereafter as may be agreed upon by PixTech and the Purchasers. Subject to the terms and conditions of this Agreement, at the Closing, the Purchasers shall pay to PixTech an amount in cash or by wire transfer equal to the Stock Purchase Price and PixTech shall deliver to each of the Purchasers or its agent one or more stock certificates (the "Stock Certificates") registered in the name of the Purchasers, or in such nominee name(s) as designated by the Purchasers, representing the number of shares of the Preferred Stock set forth opposite each such Purchaser's name on Exhibit A. If prior to the Closing, the --------- Stock Certificates have already been provided to the Purchasers, the Purchasers, or its agent, agrees to hold such Stock Certificates in escrow until PixTech has given oral 1 confirmation of receipt of the funds required to be delivered by the Purchasers under this Agreement. If at the Closing, PixTech shall fail to tender the Stock Certificates to the Purchasers as provided above in this Section 2 or any of the conditions specified in Section 5 shall not have been fulfilled to satisfaction of the Purchasers, the Purchasers, in their sole discretion, may elect to be relieved of all further obligations under this Agreement, without thereby waiving any rights they may have by reason of such failure or such nonfulfillment. 3. Representations, Warranties and Covenants of PixTech. PixTech ---------------------------------------------------- hereby represents and covenants with the Purchasers as follows: 3.1. Organization and Qualification. PixTech (a) is a corporation duly ------------------------------ organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to conduct its business as currently conducted, (b) has the power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct its business in which it is currently engaged and (c) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect (as defined in Section 3.7). 3.2. Authorized Capital Stock. (a) As of the date hereof, the authorized ------------------------ capital stock of PixTech consists of (a) 30,000,000 shares of common stock, $0.01 par value per share, of which on December 10, 1998, 14,778,107 shares were validly issued and outstanding, fully paid and non-assessable, (b) 500,000 shares of Series E Preferred Stock, $0.01 par value per share, none of which are issued and outstanding, and (c) 500,000 shares of undesignated preferred stock, $0.01 par value per share, none of which are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and fully paid and nonassessable. Except as disclosed in Schedule 3.2, (i) no shares of PixTech's capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by PixTech, (ii) there are no outstanding securities or instruments of PixTech which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which PixTech is or may become bound to redeem a security of PixTech, (iii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Shares or the shares of Common Stock issuable upon conversion of the Shares or as payment of dividends thereon (collectively, the "Converted Shares") as described in this Agreement, and (iv) PixTech does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement. (b) Giving effect to the application provisions of the PixTech's Amended and Restated Certificate of Incorporation, and all other instruments affecting the rights of holders of shares or capital stock of PixTech to which the Company is a party or is bound and subject to the limitations set forth in the Certificate of Designations upon issuance each outstanding Share will be convertible into Common Stock in such amounts as calculated in accordance with the Certificate of Designations; there are no restrictions or limitations, contractual or otherwise, binding upon the PixTech or to which PixTech is subject that prohibit or limit the enforceability of the terms and provisions of the Certificate of Designations, will 2 prohibit or limit the right of a holder of Shares to convert Shares into shares of Common Stock; the conversion of Shares into shares of Common Stock will not violate or result in or constitute a default under any loan or credit agreement, note, bond, mortgage, indenture, lease, permit, concession, franchise, license or any other contract, agreement, arrangement or understanding to which the PixTech is a party or by which it or any of its properties or assets are bound; and PixTech will reserve such amounts of Common Stock as is necessary for the conversion of the Shares into Common Stock. 3.3. Consents; Due Execution; Delivery and Performance of the Agreement. ------------------------------------------------------------------ PixTech's execution, delivery and performance of this Agreement and the adoption of the Certificate of Designations relating to the Shares and other actions contemplated herein or therein (a) has been duly authorized by all requisite corporate action by PixTech's board of directors and, to the extent necessary, stockholders, (b) will not violate any material law or the Restated Certificate of Incorporation (the "Charter") or Restated By-laws of PixTech or any other corporation of which PixTech owns at least 50% of the outstanding voting stock (a "PixTech Subsidiary") or any provision of any material indenture, mortgage, agreement, contract or other material instrument to which PixTech or any PixTech Subsidiary is a party or by which any of their respective properties or assets is bound as of the date hereof, (c) will not require any consent, except as stated in Section 5.5 below, by any person under, constitute or result (upon notice or lapse of time or both) in a breach of any term, condition or provision of, or constitute a default or give rise to any right of termination or acceleration under any such indenture, mortgage, agreement, contract or other material instrument or result in the creation or imposition of any lien, security interest, mortgage, pledge, charge or other encumbrance, of any material nature whatsoever, upon any properties or assets of PixTech or any PixTech Subsidiary and (d) will not require any consent, authorization, approval, filing, notice to, or other act, by or in respect of any governmental authority. Upon its execution and delivery, and assuming the valid execution thereof by the Purchasers, the Agreement will constitute a valid and binding obligation of PixTech, enforceable against PixTech in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3.4. Issuance, Sale and Delivery of the Shares. When issued and paid for, ----------------------------------------- the Shares to be sold hereunder by PixTech and, upon conversion of the Shares, the Converted Shares, as defined below, will be validly issued and outstanding, fully paid and non-assessable and free from all taxes, liens and charges with respect thereto. 3.5. Exempt Transaction. Subject to the accuracy of the Purchasers' ------------------ representations in Section 4.1 of this Agreement, the issuance and sale of the Shares and the issuance of Converted Shares upon conversion will constitute a transaction exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") in reliance upon Section 4(2), in the case of the Shares, and Section 3(a)(9), in the case of the Converted Shares, of the Securities Act and the regulations promulgated pursuant thereto and state securities laws; and neither PixTech nor any affiliate (as defined in Rule 501(b) of Regulation D of the Securities Act) or any agent acting on behalf of PixTech or any such affiliate 3 has directly, or through any agent, sold, offered for sale or solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the sale of the Shares or the issuance of the Common Stock issuable upon conversion of the shares (the "Converted Shares") in a manner that would require registration under the Securities Act of the offering of the Shares or the issuance of the Converted Shares contemplated by this Agreement. 3.6. Compliance with Rule 144. At the written request of any Purchaser ------------------------ at any time and from time to time, PixTech shall furnish to such Purchaser, within three days after receipt of such request, a written statement confirming PixTech's compliance with the filing requirements of the Securities and Exchange Commission (the "SEC") set forth in Rule 144 of the Securities Act as amended from time to time. 3.7. Disclosure. Neither this Agreement, nor any other items prepared or ---------- supplied to the Purchasers by or on behalf of PixTech with respect to the transactions contemplated hereby contain any untrue statement of a material fact required to be stated therein or omit a material fact necessary to make each statement contained herein or therein not misleading. There is no fact which PixTech has not disclosed to the Purchasers in writing and of which any of its directors or executive officers is aware (other than general economic conditions) and which has had or would reasonably be expected to have a material adverse effect upon the financial condition, results of operations, earnings, assets, properties, customer, supplier or employee relations or business prospects of PixTech or PixTech Subsidiaries taken as a whole , or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or the authority or ability of PixTech to perform its obligations under this Agreement or the Certificate of Designations (a "Material Adverse Effect"). 3.8. Additional Information; Eligibility for Use of Form S-3. All reports ------------------------------------------------------- filed by PixTech with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), when filed, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. PixTech has made all filings with the SEC which it is required to make, and PixTech has not received any request from the SEC to file any amendment or supplement to any such reports. PixTech meets the eligibility requirements set forth in paragraph I of the General Instructions to Form S-3 for the use of such Form for the registration of securities in a transaction involving secondary offerings, as described in such General Instructions. 3.9. No Material Changes. As of the date hereof, there has been no ------------------- material adverse change in the financial condition, or any development involving a prospective material adverse change in the financial condition, results of operations, earnings, assets, operations, properties, customer, supplier or employee relations (a "Material Adverse Change") of PixTech since the filing date of PixTech's last report with the Securities and Exchange Commission pursuant to the reporting requirements of the Exchange Act. 3.10. Investment Company Act. PixTech is not an "investment company" or a ---------------------- company "controlled" by an "investment company" within the meaning of the Investment 4 Company Act of 1940, as amended (the "1940 Act"), and PixTech will not be required to register as an "investment company" as a result of the transactions contemplated herein. 3.11. No Investment Advisor Affiliation. PixTech is not an "investment --------------------------------- advisor," "affiliated company" or an "affiliated person" of an "investment advisor" within the meaning of the 1940 Act. 3.12. Possession of Intellectual Property. Except as disclosed in reports ----------------------------------- filed with the SEC pursuant to the Exchange Act, PixTech owns or possesses, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, the "Intellectual Property") necessary to carry on the business now operated by PixTech and, except as disclosed in reports filed with the SEC pursuant to the Exchange Act, PixTech has not received or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of PixTech, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect. 3.13. Possession of Licenses and Permits. PixTech possesses such permits, ---------------------------------- licenses, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by it; PixTech is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure to so comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and PixTech has not received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. 3.14. Legal Proceedings. Except as disclosed in reports filed with the ----------------- SEC pursuant to the Exchange Act, there are no legal, governmental, administrative or arbitration proceedings pending to which PixTech is a party or to which any of the properties of PixTech are subject or, to the best of PixTech's knowledge, threatened against it, that would, if adversely determined against it, have a Material Adverse Effect on PixTech or on the power of PixTech to perform its obligations hereunder or to consummate the transactions contemplated hereby. 3.15. Taxes. PixTech has timely filed or caused to be timely filed all ----- tax returns which are required to be filed and has timely paid all taxes (whether or not shown to be due and payable on said returns) and on any assessments made against it or any property and all other taxes, fees or other charges imposed on it or any property by an governmental authority in the jurisdictions in which it operates, except for (a) any taxes and assessments the amount of which is not individually or in the aggregate material to the business or operations of PixTech or (b) the amount, applicability or validity of which is currently being contested in good faith by 5 appropriate proceedings and with respect to which PixTech has established adequate reserves for such taxes in accordance with generally accepted accounting principles. 3.16. Certificate of Designations Amendments. PixTech shall not amend, -------------------------------------- alter or repeal the Certificate of Designations, or otherwise amend its Charter in a manner adverse to the holders of shares of Series E Convertible Preferred Stock, without the written consent or affirmative vote of the holders of a majority of the then outstanding shares of Series E Convertible Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class. 3.17. Listing of Common Stock. The Corporation shall use all commercially ----------------------- reasonable efforts to list the Common Stock required to be delivered upon conversion of the Series E Convertible Preferred Stock, prior to such delivery, upon each United States securities exchange or market, if any, upon which the Common Stock is listed at the time of such delivery. 3.18. Governmental Approvals. Prior to the delivery of any securities that ---------------------- the Corporation will be obligated to deliver upon the conversion of the Series E Convertible Preferred Stock, the Corporation shall use its best efforts to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof by, any governmental authority. 3.19. No Undisclosed Events, Liabilities, Developments or Circumstances. ----------------------------------------------------------------- No event, liability, development or circumstance has occurred or exists, or is contemplated to occur, with respect to PixTech or its business, properties, prospects, operations or financial condition, that would be required to be disclosed by PixTech under applicable securities laws on a registration statement filed with the SEC relating to an issuance and sale by PixTech of its Common Stock and which has not been publicly announced. 3.20. Application of Takeover Protections. PixTech and its board of ----------------------------------- directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti- takeover provision under the Restated Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to the Purchasers as a result of the transactions contemplated by this Agreement, including, without limitation, PixTech's issuance of the Shares and the Converted Shares and the Purchasers's ownership of the Shares and the Converted Shares. 3.21. Rights Agreement. PixTech has not adopted a shareholder rights plan ---------------- or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of PixTech. 3.22. Foreign Corrupt Practices. Neither the Company, nor any of its ------------------------- Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in 6 violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. 3.23. No Other Agreements. PixTech has not, directly or indirectly, made ------------------- any agreements with any Purchasers relating to the terms or conditions of the transactions contemplated by this Agreement and the Certificate of Designations except as set forth in this Agreement and the Certificate of Designations. 4. Representations, Warranties and Covenants of The Purchasers. ----------------------------------------------------------- 4.1. Investment Considerations. Each of the Purchasers represents and ------------------------- warrants to, and covenants with, PixTech only with respect to itself that: (a) The Purchaser is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares presenting an investment decision like that involved in the purchase of the Shares, including investments in securities issued by companies comparable to PixTech, and has requested, received, reviewed and considered all information it deems relevant in making an informed decision to purchase the Shares; (b) The Purchaser is acquiring the Shares in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the distribution of such Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act; (c) The Purchaser understands that the Shares are "restricted securities" under the federal securities laws inasmuch as they are being acquired from PixTech in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection the Purchaser represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act; (d) The Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares except in compliance with the Securities Act, and the rules and regulations promulgated thereunder; (e) The Purchaser qualifies as an "accredited investor" within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act and is a resident of the state identified in Exhibit A; and --------- 7 (f) It is understood that the Stock Certificates shall bear the following legend unless and until the resale of the Shares pursuant to an effective Registration Statement or until the Shares may be sold under Rule 144 without restrictions: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR, IF REQUESTED BY PIXTECH, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO PIXTECH AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. The legend set forth above shall be removed and PixTech shall issue a certificate without such legend to the holder of the Shares upon which it is stamped and no legend shall be placed on the Converted Shares, if, unless otherwise required by state securities laws, (i) such Shares or Converted Shares are registered for sale under the Securities Act, (ii) in connection with a sale transaction, such holder provides PixTech with an opinion of counsel, in a generally acceptable form, to the effect that a public sale, assignment or transfer of the Shares or the Converted Shares, as the case may be, may be made without registration under the Securities Act, or (iii) such holder provides PixTech with reasonable assurances (including an opinion of counsel) that the Shares or the Converted Shares, as the case may be, can be sold pursuant to Rule 144 without any restriction as to the number of securities acquired as of a particular date that can then be immediately sold. 4.2. Due Execution, Delivery and Performance of the Agreement. Each of -------------------------------------------------------- the Purchasers further represents and warrants to, and covenants with, PixTech that (a) the Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction identified in Exhibit A and has full --------- right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, (b) the execution, delivery and performance of this Agreement will not violate any law of the jurisdiction of such Purchaser's organization or the charter documents of the Purchaser or any other corporation of which the Purchaser owns at least 50% of the outstanding voting stock (a "Purchaser Subsidiary") or any provision of any material indenture, mortgage, agreement, contract or other material instrument to which the Purchaser or any Purchaser Subsidiary is a party or by which the Purchaser, any Purchaser Subsidiary, or any of their respective properties or assets is bound as of the date hereof, or result in a breach of or constitute (upon notice or lapse of time or both) a default under any such indenture, mortgage, agreement, contract or other material instrument or result in the creation or imposition of any lien, security interest, mortgage, pledge, charge or encumbrance, of any material nature whatsoever, upon any assets of the Purchaser or any the Purchaser Subsidiary, and (c) upon the execution and delivery of this Agreement, and assuming the valid execution thereof by PixTech, this Agreement shall constitute a valid and binding obligation of the Purchaser enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights 8 generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 5. Conditions to the Obligations of the Purchasers. ----------------------------------------------- The obligations of the Purchasers under this Agreement are subject to the fulfillment, or the waiver by the Purchasers, of the conditions set forth in this Section 5 on or before the Closing Date. 5.1. Accuracy of Representations and Warranties. Each representation and ------------------------------------------ warranty of PixTech contained in this Agreement shall be true on and as of the Closing Date with the same effect as though such representation and warranty had been made on and as of that date. 5.2. Performance. PixTech shall have performed and complied with all ----------- agreements and conditions contained in this Agreement required to be performed or complied with by PixTech prior to or at the Closing. 5.3. Opinion of Counsel. The Purchasers shall have received an opinion ------------------ from Palmer & Dodge LLP, counsel to PixTech, dated as of the Closing Date, addressed to the Purchasers, and substantially in the form attached hereto as Exhibit C. 5.4. Certificates and Documents. PixTech shall have delivered to counsel -------------------------- to the Purchasers: (a) a certificate of the Secretary or Assistant Secretary of PixTech dated as of the Closing Date, substantially in the form attached hereto as Exhibit D certifying as to (i) the incumbency of officers of PixTech executing - --------- this Agreement and all other documents executed and delivered in connection herewith, (ii) a copy of the By-Laws of PixTech, as in effect on and as of the Closing Date, (iii) a copy of the resolutions of the Board of Directors of PixTech, and (iv) a copy of the authorization of Sumitomo approving PixTech's execution, delivery and performance of this Agreement, all matters in connection with this Agreement, and the transactions contemplated thereby; and (b) a certificate substantially in the form attached hereto as Exhibit E, executed by the Chief Financial Officer of PixTech as of the Closing - --------- Date, certifying to the fulfillment of all of the conditions to the Purchasers' obligations under this Agreement, as set forth in this Section 5. 5.5. Sumitomo Consent. PixTech shall have received the written consent and ---------------- waiver by Sumitomo Corporation ("Sumitomo") under the Credit Agreement dated July 21, 1997 between Sumitomo and PixTech regarding registration rights of Common Stock issuable upon conversion of a certain Convertible Note in the principal amount of $5,000,000 held by Sumitomo. 5.6. Nasdaq Exception. PixTech has received a written exception from the ---------------- Nasdaq, and PixTech shall have complied with any conditions set forth in such exception, 9 pursuant to Marketplace Rule 4460(i) in which Nasdaq waives PixTech's requirement to obtain shareholder approval before issuance of the Shares or the Converted Shares, and has provided a copy of such writing to each Purchaser. 5.7. Extraordinary Events. Since the date of this Agreement, there shall -------------------- not have occurred (a) a suspension or material limitation in the trading in securities generally on the Nasdaq National Market System or the establishment of minimum prices on such exchange, (b) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (c) any outbreak or escalation of hostilities involving the United States or any other national or international calamity or emergency. 5.8. Material Changes. Since the date of this Agreement, there has not ---------------- been any fact, change, occurrence or event that has had or is reasonably likely to have a Material Adverse Change on PixTech. 5.9. Other Matters. All corporate and other proceedings in connection with ------------- the transactions contemplated at the Closing by this Agreement, and all documents and instruments incident to such transactions, shall be reasonably satisfactory in substance and form to the Purchasers and their counsel, and the Purchasers and their counsel shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request. 6. Conditions to the Obligations of PixTech. ---------------------------------------- The obligations of PixTech under this Agreement are subject to the fulfillment, or the waiver by PixTech, of the conditions set forth in this Section 6 on or before the Closing Date. 6.1. Accuracy of Representations and Warranties. Each representation ------------------------------------------ and warranty of the Purchasers contained in this Agreement shall be true on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of that date. 6.2. Performance. The Purchasers shall have performed and complied with ----------- all agreements and conditions contained in this Agreement required to be performed or complied with by the Purchasers prior to or at the Closing. 7. Survival of Representations, Warranties and Agreements; Assignability --------------------------------------------------------------------- of Rights. Notwithstanding any investigation made by any party to this - --------- Agreement, all covenants, agreements, representations and warranties made by PixTech and the Purchasers herein, except as otherwise provided herein, shall survive the execution of this Agreement, the delivery to the Purchasers of the Shares being purchased and the payment therefor. Except as otherwise provided herein, (i) the covenants, agreements, representations and warranties of PixTech made herein shall bind the Company's successors and assigns and shall insure to the benefit of the Purchasers and the Purchasers' successors and assigns and (ii) the covenants, agreements, representations and warranties of the Purchasers made herein shall bind the Purchasers' successors and assigns and shall insure to the benefit of PixTech and PixTech's successors and assigns. 10 8. Registration Rights. ------------------- 8.1. Registration of Shares on Form S-3. PixTech covenants and agrees ---------------------------------- that: (a) within 30 days following the Closing, PixTech shall prepare and file a registration statement on one or more Forms S-3 covering the resale by the holders of the Registrable Shares (as defined below) of the Converted Shares and the shares of Common Stock issued or to be issued to Mezler Investment GmbH ("Mezler") and PICTET & Cie as of the date hereof (or, in the case of Mezler, no later than January 5, 1999) (collectively, the "Registrable Shares"), as of the date of the filing of such registration statement (or, if PixTech is not then eligible to use such Form, on any other form of registration statement promulgated by the SEC which would cover the resale of the Registrable Shares) and cause such registration statement to become effective within 90 days following the Closing in order that the Purchasers may sell the Registrable Shares in accordance with the proposed plan of distribution; provided, however, -------- ------- that PixTech will furnish to the Purchasers and their counsel copies of all documents proposed to be filed, which documents will be subject to the review of such counsel, and PixTech will give reasonable consideration in good faith to any comments of the Purchasers and such counsel regarding such registration statement; (b) it shall prepare and file with the Securities and Exchange Commission such amendments and supplements to such registration statement(s) and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the resale of the Registrable Shares covered by such registration statement(s) until such time as the Purchasers no longer hold any Registrable Shares, subject to earlier termination as provided in Section 8.8, and to correct an untrue statement of a material fact or omission to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances then existing, not misleading; provided, however, that PixTech will furnish to the Purchasers and their counsel - -------- ------- copies of all such amendments and supplements proposed to be filed and the proposed prospectus and any supplements thereto, which documents will be subject to the review of such counsel, and PixTech will give reasonable consideration in good faith to any comments of the Purchasers and such counsel regarding such registration statement; (c) it shall furnish the Purchasers such number of copies of such prospectus as they may reasonably request in order to facilitate the resale of the Registrable Shares; (d) it shall file documents required of PixTech to comply with state securities laws regarding the registration and offering of the Registrable Shares in states specified in writing by the Purchasers; provided, however, that -------- ------- PixTech shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is now not so qualified or has not so consented; (e) it shall do any and all other reasonable acts and things which may be reasonably necessary or advisable to enable the Purchasers to consummate the sale of the Registrable Shares as contemplated in this Section 8.1; and 11 (f) it shall bear all expenses in connection with the procedures set forth in paragraphs (a) through (e) of this Section 8.1 and the registration of the Registrable Shares covered by the registration statement, other than fees and expenses, if any, of counsel or other advisors to the Purchasers. (g) The initial registration statement prepared pursuant hereto shall register for resale at least 200% of the number of shares of Registrable Shares issuable as of the date immediately preceding the date the registration statement is initially filed with the SEC, subject to adjustment as provided in Section 8.1(i). (h) The initial number of shares of Common Stock included in any registration statement filed pursuant to this Section 8.1 and each increase in the number of shares of Common Stock included therein shall be allocated pro rata among the Purchasers based on the number of Shares held by each Purchaser at the time the registration statement covering such initial number of shares of Common Stock or increase thereof is declared effective by the SEC. In the event that a Purchaser sells or otherwise transfers any of such Purchaser's Shares, each transferee shall be allocated a pro rata portion of the then remaining number of shares of Common Stock included in such registration statement for such transferor. Any shares of Common Stock included in a registration statement and which remain allocated to any Purchaser or transferees of such Purchaser which ceases to hold any Shares or Registrable Shares shall be allocated to the remaining Purchasers or to transferees of such Purchasers, pro rata based on the number of Shares or Registrable Shares then held by such Purchasers or transferees of such Purchasers. (i) In the event the number of shares of Common Stock available under a registration statement filed pursuant to this Section 8.1 is insufficient to cover all of the Registrable Shares issuable (without regard to any limitations on conversions) or a Purchaser's allocated portion of the shares of Common Stock covered by a registration statement pursuant to Section 8.1(h), PixTech shall amend the registration statement, or file a new registration statement (on the short form available therefor, if applicable), or both, so as to cover at least 200% of the Registrable Shares issuable (based on the market price of the Common Stock), in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises. PixTech shall use its best efforts to cause such amendment and/or new registration statement to become effective as soon as practicable following the filing thereof. For purposes of the foregoing provision, the number of shares available under a registration statement shall be deemed "insufficient to cover all of the Registrable Shares issuable" if at any time the number of Registrable Shares issued or issuable upon conversion of the Shares is greater than the quotient determined by dividing (i) the number of shares of Common Stock available for resale under such registration statement by (ii) 1.33. For purposes of the calculation set forth in the foregoing sentence, any restrictions on the convertibility of the Shares shall be disregarded and such calculation shall assume that the Shares are then convertible into shares of Common Stock at the then prevailing Conversion Price (as defined in the Certificate of Designations). 8.2 Failure to Register. If PixTech fails to prepare and file a ------------------- registration statement or fails to cause such registration statement's effectiveness in accordance with Section 8.1(a) herein (provided such failure is not the result of any unreasonable delay by the Purchasers 12 in providing information to PixTech for inclusion in a registration statement or providing comments on a registration statement), each Purchaser, at its sole option, shall have the right to have this Agreement rescinded, and deemed null and void with respect to such Purchaser. Upon such occurrence, PixTech shall return all payments received from such Purchaser hereunder to such Purchaser within two business days of receipt of such Purchaser's return for cancellation of all certificates representing the Shares held by such Purchaser. 8.3. Information by Holder. The Purchasers shall promptly furnish to --------------------- PixTech such information regarding the Purchasers and the distribution proposed by the Purchasers as PixTech may request in writing and as shall be required from time to time in connection with any registration, qualification or compliance referred to in this Section 8. 8.4. Indemnification. For the purpose of this Section 8.4, --------------- (a) the term "Selling Stockholder" shall mean each Purchaser and any officer, director, employee, agent, affiliate or person deemed to be in control of such Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; (b) the term "Registration Statement" shall mean any final prospectus, exhibit, supplement or amendment included in, incorporated by reference in or relating to the registration statement referred to in Section 8.1; and (c) the term "untrue statement" shall mean any untrue statement or alleged untrue statement of, or any omission or alleged omission to state, in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. PixTech agrees to indemnify and hold harmless each Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement on the effective date thereof, or arise out of any failure by PixTech to fulfill any undertaking included in the Registration Statement and PixTech will reimburse such Selling Stockholder for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however, that PixTech shall not be liable in any such case to -------- ------- the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement in reliance upon and in conformity with written information furnished to PixTech by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement, or any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Purchasers prior to the pertinent sale or sales by the Purchasers. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Selling Stockholder and shall survive the transfer of such securities by the seller. Each Purchaser agrees, severally but not jointly, to indemnify and hold harmless PixTech (and each person, if any, who controls PixTech within the meaning of Section 15 of the Securities Act, each officer of PixTech who signs the Registration Statement and each director of 13 PixTech) from and against any losses, claims, damages or liabilities to which PixTech (or any such officer, director or controlling person) or each underwriter (if any) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement on the effective date thereof if such untrue statement was made in reliance upon and in conformity with written information furnished by or on behalf of such Purchaser specifically for use in preparation of the Registration Statement, and such Purchaser will reimburse PixTech (or such officer, director or controlling person, as the case may be) or each underwriter (if any), for any legal or other expenses reasonably incurred in investigating, defending, or preparing to defend any such action, proceeding or claim; provided, however, -------- ------- that (i) no Selling Stockholder shall be liable for any untrue statement that is corrected by any Selling Stockholder in writing to PixTech or its agents prior to the sale of the Registrable Shares, whether or not such correction was made in any amendment or supplement to any Registration Statement by PixTech; and (ii) in no event shall the liability of any Selling Stockholder exceed the amount of the proceeds of the sale of the Shares or the Registrable Shares received by such Selling Stockholder giving rise to such indemnification obligation. Promptly after receipt by any indemnified person of a notice of a claim or the commencement of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 8.4, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, and, subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person and such indemnifying person shall have been notified thereof, such indemnifying person shall be entitled to participate therein, and, to the extent it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person; provided that the failure of any indemnified person to give -------- notice as provided herein shall not relieve the indemnifying party of its obligations under this Section 8.4, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice; provided, however, -------- ------- that the indemnifying person shall not agree to a settlement of any such action without the consent of the indemnified person, which consent shall not be unreasonably withheld. After notice from the indemnifying person to such indemnified persons of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there exists or shall exist a -------- ------- conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any officer, director, employee, agent, affiliate or person deemed to be in control of such indemnifying person within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person. It is understood, however, that PixTech shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits, or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such indemnified parties not having actual or potential differing interests with PixTech or among themselves. 14 8.5. Contribution. If the indemnification provided for in this Section 8 ------------ for any reason is held by a court of competent jurisdiction to be unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault of the indemnified party in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party under this Section 8.5 as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. Notwithstanding the foregoing, in no event shall a Selling Stockholder be required to contribute an amount under this Section 8.5 which exceeds the amount of the proceeds of the sale of the Shares or the Registrable Shares received by such Selling Stockholder giving rise to such contribution obligation. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8.5 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 8.6 Transferability of Registration Rights. For all purposes of this -------------------------------------- Section 8, the rights granted hereunder to the Purchasers shall be transferred to any assignee or transferee of the Shares or Registrable Shares who acquires such Shares or Registrable Shares from a Purchaser, in a transaction that is not pursuant to the registration statement described in Section 8.1, provided that the transferee provides written notice of such transfer to the Company and agrees to be bound by the terms and conditions set forth herein. 8.7. Non-Exclusivity. The obligations of the parties under this Section 8 --------------- shall be in addition to any liability which any party may otherwise have to any other party. 8.8. Termination. Each Purchaser's rights under Section 8.1 hereunder ----------- shall terminate as to any Registrable Shares held by such Purchaser or its transferees upon the earlier of (i) the time that all Registrable Shares held by such Purchaser or its transferees may be sold 15 pursuant to Rule 144 of the Securities Act within any three month period or (ii) at such time as no such Shares or Registrable Shares are held by the Purchasers or their transferees. 8.9. Public Availability of Information. PixTech shall comply with all ---------------------------------- public information reporting requirements of the Commission, to the extent required from time to time to enable the Purchasers to sell the Shares and the Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission. 8.10. Supplying Information. PixTech shall cooperate with the Purchasers in --------------------- supplying such information as may be necessary for the Purchasers to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an exemption from the Securities Act for the sale of any Shares or Registrable Shares. 9. Miscellaneous. ------------- 9.1. Notices. Any consent, notice or report required or permitted to be ------- given or made under this Agreement by one of the parties hereto to the other shall be in writing, delivered personally or by facsimile (and promptly confirmed by telephone, personal delivery or overnight courier) or overnight courier, postage prepaid (where applicable), addressed to such other party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor and shall be effective upon receipt by the addressee. If to PixTech: PixTech, Inc. Avenue Olivier Perroy Zone Industrielle de Rousset 13790 Rousset France Attention: Chief Executive Officer Telephone: 011 334 4229 1000 Telecopy: 011 334 4229 0509 with a copy to: Palmer & Dodge LLP One Beacon Street Boston, Massachusetts 02108 Attention: Michael Lytton, Esq. Telephone: (617) 573-0100 Telecopy: (617) 227-4420 16 If to the Purchasers, at the applicable address given in Exhibit A hereto: --------- 9.2. Entire Agreement. This Agreement and the Certificate of Designations ---------------- contain the entire understanding of the parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly merged in and made a part of this Agreement. 9.3. Assignment. Except as otherwise provided herein, neither this ---------- Agreement nor any of the rights and obligations contained herein may be assigned or otherwise transferred by either party without the consent of the other party; provided, however, that PixTech or any Purchaser may, without such consent, assign its rights and obligations under this Agreement (i) to any entity, all or substantially all of the equity interest of which is owned and controlled by such party or its direct or indirect parent, or (ii) in connection with a merger, consolidation or sale of substantially all of such party's assets to an unrelated third party; provided, however, that such party's rights and obligations under this Agreement shall be assumed by its successor in interest in any such transaction and shall not be transferred separate from all or substantially all of its other business assets, including those business assets; provided further that a Purchaser may assign some or all of its rights hereunder (including the Shares or Converted Shares), without the consent of PixTech, to any entity which, immediately prior to such assignment, (a) has the same principal investment adviser as the Purchaser or (b) holds Shares or Converted Shares. Any purported assignment in violation of the preceding sentence shall be void. If any party assigns some or all of its rights hereunder, the other party must be notified of the assignee in writing within 2 business days of such assignment. Any permitted assignee shall assume all obligations of its assignor under this Agreement. 9.4. Amendments and Waivers. This Agreement may not be modified or amended ---------------------- except pursuant to an instrument in writing signed by PixTech and the Purchasers. The waiver by either party hereto of any right hereunder or the failure to perform or of a breach by the other party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other party whether of a similar nature or otherwise. 9.5. Headings. The headings of the various sections of this Agreement have -------- been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 9.6. Severability. In case any provision contained in this Agreement ------------ should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 9.7. Governing Law. This Agreement shall be governed by and construed in ------------- accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. 9.8. Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 17 9.9. Expenses. Except as otherwise specifically provided herein, each -------- party shall bear its own expenses in connection with this Agreement. 9.10. Publicity. The parties to this Agreement agree that shortly after the --------- Closing Date, PixTech will issue a press release to disclose the transaction contemplated by this agreement, provided, however, that any such press release does not cause the offering contemplated by this Agreement to violate Section 5 of the Securities Act, including but not limited to Rule 135c of the Securities Act. However, neither party hereto shall issue any press releases or otherwise make any public statement with respect to the transactions contemplated by this Agreement without the prior written consent of the other party, which may not be unreasonably withheld, except as may be required by applicable law or regulation. 9.11. Specific Performance. Each party hereto acknowledges and agrees that -------------------- each other party hereto would be irreparably harmed and would have no adequate remedy of law if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that, in addition to any other remedies by law or in equity which may be available, the parties hereto shall be entitled to obtain temporary and permanent injunctive relief with respect to any breach or threatened breach of, or otherwise obtain specific performance of the covenants and other agreements contained in this Agreement without the necessity of posting a bond or other security. 18 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written. PIXTECH, INC. By: /s/ Jean-Luc Grand-Clement -------------------------- Jean-Luc Grand-Clement Chief Executive Officer THE PURCHASERS: THE KAUFMANN FUND, INC. By: /s/ Lawrence Auriana -------------------- Name: Lawrence Auriana ----------------- Title: Chairman -------- WINGATE CAPITAL LTD. By: /s/ Michael J. Hughes --------------------- Name: Michael J. Hughes Title: Authorized Signatory FISHER CAPITAL LTD. By: /s/ Michael J. Hughes --------------------- Name: Michael J. Hughes Title: Authorized Signatory THE ATHERTON CO. By: /s/ Jack S. Euphrat ------------------- Name: Jack S. Euphrat Title: General Partner 19 BANQUE GENERALE DE LUXEMBOURG, FONDS INTERSELEX EQUITY EASDAQ By: /s/ Jan Smedts -------------- Name: Jan Smedts Title: Fund Manager ACCEPTED AND AGREED TO FOR SECTION 8 PURPOSES ONLY: PICTET & CIE By: /s/ L. Chappuis /s/ M. Allemann --------------- --------------- Name: L. Chappuis M. Allemann Title: MEZLER INVESTMENT GMBH By: Name: Title: 20 Schedule 3.2 None 21 Exhibit A List of Purchases -----------------
- ----------------------------------------------------------------------------------------------------- Jurisdiction of Number of Aggregate Name Organization Shares Purchase Price - ----------------------------------------------------------------------------------------------------- The Kaufmann Fund, Inc. Maryland 266,297 $6,000,000 140 East 45th Street 43rd Floor New York, NY 10017 Attention: Jonathan Art Telephone: (212) 922-0123 Telecopy: (212) 661-2266 With a copy of all notices to: Gary S. Schpero, Esq. Simpson, Thacher & Bartlett 424 Lexington Avenue New York, NY 10017 Telephone: (212) 455-2000 Telecopy: (212) 455-2502 - ----------------------------------------------------------------------------------------------------- Wingate Capital Ltd. c/o Citadel Investment Group, Cayman Islands 31,068 $ 700,000 L.L.C. 225 West Washington Street Chicago, Illinois 60606 Attention: Michael J. Hughes Facsimile: (312) 338-0780 Telephone: (312) 338-7803 With a copy of all notices to: Katten Muchin & Zavis 525 W. Monroe Street Chicago, Illinois 60661-3693 Attention: Robert J. Brantman, Esq. Facsimile: (312) 902-1061 Telephone: (312) 902-5200 - -----------------------------------------------------------------------------------------------------
22
- ----------------------------------------------------------------------------------------------------- Jurisdiction of Number of Aggregate Name Organization Shares Purchase Price - ----------------------------------------------------------------------------------------------------- Fisher Capital Ltd. Cayman Islands 57,698 $1,300,000 c/o Citadel Investment Group, L.L.C. 225 West Washington Street Chicago, Illinois 60606 Attention: Michael J. Hughes Facsimile: (312) 338-0780 Telephone: (312) 338-7803 With a copy of all notices to: Katten Muchin & Zavis 525 W. Monroe Street Chicago, Illinois 60661-3693 Attention: Robert J. Brantman, Esq. Facsimile: (312) 902-1061 Telephone: (312) 902-5200 - ----------------------------------------------------------------------------------------------------- The Atherton Co. California 8,877 $ 200,000 415 Walsh Road Atherton, CA 94027 - ----------------------------------------------------------------------------------------------------- Banque Generale de Luxembourg, France 3,329 $ 75,000 fonds Interselex Equity Easdaq FIMAGEST Gestion Actions 23 rue de l'amiral d'Estaing F-75209 PARIS CEDEX 16 FRANCE - ----------------------------------------------------------------------------------------------------- TOTAL: 367,269 $8,275,000 - -----------------------------------------------------------------------------------------------------
23 EX-2.1 3 CERTIFICATE OF DESIGNATION OF THE COMPANY Exhibit 2.1 CERTIFICATE OF DESIGNATIONS OF PIXTECH, INC. We, the acting Chief Executive Officer and Secretary of PixTech, Inc. (hereinafter called the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, do hereby certify as follows: Pursuant to the authority conferred upon the Board of Directors of the Corporation by its Restated Certificate of Incorporation, the Board of Directors of the Corporation on November 18, 1998 adopted the following Certificate of Designations (the "Certificate") with respect to a series of Preferred Stock designated as Series E Convertible Preferred Stock: Five Hundred Thousand (500,000) shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated "Series E Convertible Preferred Stock" (the "Series E Preferred Stock") with the rights, preferences, powers, privileges and restrictions, qualifications and limitations set forth below: 1. Dividends. --------- (a). The holders of the Series E Preferred Stock shall be entitled to receive as and if declared by the Board of Directors of the Corporation, out of any funds legally available therefor, cumulative compounding dividends at the rate of (i) six percent (6%) of the purchase price paid for the shares of Series E Preferred Stock (the "Original Issue Price") per annum pro rated daily on the basis of twelve 30 day months and a 360 day year, plus (ii) the greater of (x) two percent (2%) of the purchase price per annum pro rated daily on the basis of twelve 30 day months and a 360 day year for the number of days that the Closing Bid Price (as defined below) of the Common Stock (the "Closing Price") is less than one tenth (1/10) of the Original Issue Price and (y) four percent (4%) of the purchase price per annum, pro rated on the basis of twelve 30 day months and a 360 day year for the number of days that the Closing Price is less than one twentieth (1/20) of the Original Issue Price. Such dividends shall be payable in preference and priority to any payment of any cash dividend on Common Stock or any other shares of capital stock of the Corporation other than the Series E Preferred Stock, when and as declared by the Board of Directors of the Corporation. Such dividends shall accrue and be deemed to accrue from day to day beginning on the date such shares of Series E Preferred Stock are issued whether or not earned or declared, and shall be cumulative so that if such dividends on the Series E Preferred Stock shall not have been paid, or declared and set apart for payment, the deficiency shall be fully paid on or declared and set apart for payment before any dividend shall be paid on or declared or set apart for any other shares of capital stock of the Corporation. (b). Corporation's Option to Pay Dividends in Cash. Upon a conversion of --------------------------------------------- Series E Preferred Stock, the Corporation shall have the right to elect to pay the accrued and unpaid dividends on such shares of Series E Preferred Stock, whether or not declared, in cash, in lieu of conversion to Common Stock. If the Corporation elects to pay the accrued and unpaid dividends in cash, such cash shall be paid within two business days of the delivery to the holder of the certificates representing the Common Stock issuable upon conversion in accordance with Section 4(d)(i) or upon the credit to the holder's or its designees' account with The Depository Trust Company. In order to exercise its right to pay any dividends in cash, the Corporation must advise each holder of Series E Preferred Stock in writing (the "Cash Dividend Notice") that the dividends shall be paid in cash until such time as the Corporation shall terminate the Cash Dividend Notice by providing at least five business days prior written notice of such termination (the "Termination Notice"). The Cash Dividend Notice shall set forth the effective date of the Cash Dividend Notice, which date shall be at least five business days after the date the Cash Dividend Notice is deemed to have been delivered to each holder of Series E Preferred Stock. The Termination Notice shall be effective on the fifth business day after the date the Termination Notice is delivered to each holder of Series E Preferred Stock unless a later date shall be specified in the Termination Notice. (c). "Closing Bid Price" means, for any security as of any date, the last ----------------- closing bid price for such security on the Nasdaq National Market as reported by Bloomberg Financial Markets ("Bloomberg"), or, if the Nasdaq National Market is not a securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the "pink sheets" by the National Quotation Bureau, Inc. If the Closing Bid Price cannot be calculated for such security on such date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Corporation and the holders of the Shares. All such determinations shall be appropriately adjusted for any stock dividend, stock split or other similar transaction. 2. Liquidation, Dissolution or Winding Up. -------------------------------------- (a). In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series E Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, after and subject to the payment in full of all amounts required to be distributed to the holders of any other class or series of stock of the Corporation ranking on liquidation prior and in preference to the Series E Preferred Stock (collectively referred to as "Senior Preferred Stock"), but before any payment shall be made to the holders of Common Stock or any other class or series of stock ranking on liquidation junior to the Series E Preferred Stock (such Common Stock and other stock being collectively referred to as "Junior Stock") by reason of their ownership thereof, an amount equal to $22.5313 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), plus any accrued but unpaid dividends, whether or not declared, with respect thereof. If upon any such liquidation, dissolution or winding up of the Corporation the remaining assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series E Preferred Stock the full amount to which they shall be entitled, the holders of shares of Series E Preferred Stock and any class or series of stock ranking on liquidation on a parity with the Series E Preferred Stock shall share 2 ratably in any distribution of the remaining assets and funds of the Corporation in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. So long as any shares of Series E Preferred Stock remain outstanding, the Corporation shall not issue any Senior Preferred Stock or any capital stock which ranks pari passu with the Series E Preferred Stock without the prior written consent of all of the holders of the outstanding shares of Series E Preferred Stock. (b). After the payment of all preferential amounts required to be paid to the holders of Senior Preferred Stock, Series E Preferred Stock and any other class or series of stock of the Corporation ranking on liquidation on a parity with the Series E Preferred Stock, upon the dissolution, liquidation or winding up of the Corporation, the holders of shares of Junior Stock then outstanding shall be entitled to receive, on a pro-rata basis (based, in the case of any convertible securities, on the number of shares of Common Stock into which such convertible securities are then convertible), the remaining funds and assets of the Corporation available for distribution to its stockholders. (c). The merger or consolidation of the Corporation into or with another corporation, or the sale of all or substantially all the assets of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 2 unless the holders of at least 51% of the then outstanding shares of Series E Preferred Stock elect to have such events not deemed to be a liquidation, dissolution or winding up of the Corporation by giving written notice thereof to the Corporation at least 5 days before the effective date of such event. If such notice is given, the provisions of Subsection 4(k) below shall apply. The amount deemed distributed to the holders of Series E Preferred Stock upon any such merger or consolidation shall be the cash or the value of the property, rights or securities distributed to such holders by the acquiring person, firm or other entity. The value of such property, rights or other securities shall be determined in good faith by the Board of Directors of the Corporation. Not less than 15 days before the effective date of any such event described in this section, the Corporation shall notify each holder of Series E Preferred Stock of the value determined by the Board of Directors pursuant to the preceding sentence and the methodology employed in determining such value. If, prior to the effective date of such event, the holders of more than 50% of the outstanding shares of Series E Preferred Stock notify the Corporation that they disagree with such valuation, then the Corporation shall promptly retain a nationally recognized investment banking firm, selected by a majority of the Board of Directors and reasonably acceptable to the holders of more than 50% of the shares of Series E Preferred Stock, to advise the Corporation as to such valuation within thirty days following such retention; provided that, the Corporation need not require such investment banking firm to render an opinion as to such valuation. Except in the case of manifest error, the advice of such investment banking firm shall be binding on the Corporation and the holders of the Series E Preferred Stock. Pending the receipt of the advice of the investment banking firm, no distribution shall be made to any stockholder of the Corporation as a result of such event. 3. Voting. Subject to Section 4(a)(ii) each holder of outstanding shares of ------ Series E Preferred Stock shall be entitled to the number of votes equal to the number of whole shares of Common Stock into which the shares of Series E Preferred Stock held by such holder are convertible (as adjusted from time to time pursuant to Section 4 hereof), at each meeting of 3 stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration. Except as provided by law or by the provisions establishing any other series of Preferred Stock, holders of Series E Preferred Stock shall vote together with the holders of Common Stock as a single class. In addition to any other voting rights that the holders of the Series E Preferred Stock may have as required by law, the Corporation shall not, without the prior written consent given by the holders of more than 75% of the outstanding shares of Series E Preferred Stock, issue debt senior to the Series E Preferred Stock, except that the Corporation may issue such senior debt without obtaining the consent required by this paragraph if such debt is issued at a time that the debt to equity ratio of the Corporation does not exceed 25%, pro forma after giving effect to the issuance of such senior debt. 4. Optional Conversion. The holders of the Series E Preferred Stock shall have ------------------- conversion rights as follows (the "Conversion Rights"): (a). (i) Right to Convert. Except as set forth in Section 4(b) below and ---------------- subject to the provisions of Section 6, each share of Series E Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time after June 22, 1999 (or at such earlier time as the Corporation has notified the holders of the Series E Preferred Stock of its intention to redeem the Series E Preferred Stock pursuant to Section 7 below), into such number of fully paid and nonassessable shares of Common Stock as is determined by a quotient, the numerator of which is the Original Issue Price plus, if the Corporation has not elected to pay dividends in cash pursuant to Section 1(b), all accrued and unpaid dividends, whether or not declared, on such shares of Series E Preferred Stock, and the denominator of which is the Conversion Price (as defined below) in effect at the time of conversion. The Conversion Price shall be equal to the lesser of (i) one tenth (1/10) of the Original Issue Price (as so computed, the "Common Stock Issue Price") and (ii) the average of the Closing Bid Prices of the Corporation's Common Stock for the 10 trading days immediately preceding (but not including) the day on which the holder of Series E Preferred Stock delivers to the Company the notice required by Section 4(d) hereof (the "Market Price"), with the certificates representing the Series E Preferred Stock being converted to follow promptly thereafter; provided that, notwithstanding the foregoing, (x) if the Market Price is greater than $15 (subject to appropriate adjustment for stock splits, stock dividends, combinations and other similar recapitalizations affecting the Common Stock), then the Conversion Price shall be determined by the following formula: Conversion Price = ((Market Price -15 (subject to appropriate adjustments for stock splits, stock dividends, combinations and other similar recapitalizations affecting the Common Stock)/ 2) + Common Stock Issue Price and 4 (y) if the Corporation shall, at any time that the Series E Preferred Stock is outstanding, issue equity securities or any other securities convertible into equity securities of the Corporation (other than options granted to employees of the Corporation with an exercise price equal to the market price at the time of grant of any such options) for a price per share that is less than the Common Stock Issue Price (as such may from time to time be adjusted pursuant to this clause), then the Common Stock Issue Price shall, for purposes of determining the number of shares into which the Series E Preferred Stock is convertible only, be deemed to be the price at which such equity securities were issued. In the event that equity securities are issued as described in this clause for consideration other than cash, the price per share for which such securities are deemed to have been issued shall be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors. Upon reaching any such determination described in the preceding sentence, the Corporation shall notify each holder of Series E Preferred Stock of the value determined by the Board of Directors and the methodology employed in determining such valuation. If, within 15 days of receipt of such notification, the holders of more than 50% of the outstanding shares of Series E Preferred Stock notify the Corporation that they disagree with such valuation, then the Corporation shall promptly retain a third party, mutually agreeable to the Corporation and the holders of more than 50% of the outstanding shares of Series E Preferred Stock, to advise the Corporation as to such valuation within thirty days following such retention. Except in the case of manifest error, the advice of such third party shall be binding on the Corporation and the holders of the Series E Preferred Stock. In the event of a notice of redemption of any shares of Series E Preferred Stock pursuant to Section 7 hereof, the Conversion Rights of the shares designated for redemption shall terminate at the close of business on the first full day preceding the date fixed for redemption, unless the redemption price is not paid when due, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a liquidation, dissolution or winding up of the Corporation, the Conversion Rights shall terminate at the close of business on the first full day preceding the date fixed for the payment of any amounts distributable on liquidation, dissolution or winding up to the holders of Series E Preferred Stock. The Corporation shall give the holders of Series E Preferred Stock 30 days' prior notice of the date fixed for such payment. (ii) Notwithstanding anything to the contrary in this Certificate of Designations, unless a holder of shares of Series E Preferred Stock notifies the Corporation in writing on the first date that such holder receives shares of Series E Preferred Stock that the provisions of this Section 4(a)(ii) shall not apply to the shares of Series E Preferred Stock held by such holder and any transferees of such holder, no holder of shares of Series E Preferred Stock (other than holders which have given notice as provided above) shall have the right to convert any shares of Series E Preferred Stock to the extent that after giving effect to such conversion such holder (together with such holder's affiliates) (A) would beneficially own in excess of 10.00% of the outstanding shares of the Common Stock following such conversion and (B) would have acquired, through conversion of shares of Series E Preferred Stock or otherwise, a number of shares of Common Stock which, when added to the number of shares of Common 5 Stock beneficially owned at the beginning of the 60-day period ending on and including the date of conversion of such shares of Series E Preferred Stock, which is in excess of 10.00% of the outstanding shares of the Common Stock following such conversion during the 60-day period ending on and including such conversion date. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by a holder and its affiliates or acquired by a holder and its affiliates, as the case may be, shall include the number of shares of Common Stock issuable upon conversion of the shares of Series E Preferred Stock with respect to which the determination of the foregoing is being made, but shall exclude the number of shares of Common Stock which would be issuable upon conversion of the remaining, nonconverted shares of Series E Preferred Stock beneficially owned by such holder and its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(a)(ii), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. Notwithstanding anything to the contrary contained herein, each conversion notice shall constitute a representation by the holder submitting such conversion notice that, after giving effect to such conversion notice, (A) the holder will not beneficially own (as determined in accordance with this Section 4(a)(ii)) in excess of 10.00% of the outstanding shares of Common Stock and (B) the holder will not have acquired, through conversion of shares of Series E Preferred Stock or otherwise, a number of shares of Common Stock which, when added to the number of shares of Common Stock beneficially owned at the beginning of the 60-day period ending on and including such conversion date, that is in excess of 10.00% of the outstanding shares of Common Stock. For purposes of this Section 4(a)(ii), in determining the number of outstanding shares Common Stock a holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Corporation's most recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent public announcement by the Corporation or (3) any other notice by the Corporation or its transfer agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of any holder, the Corporation shall immediately confirm orally and in writing to any such holder the number of shares Common Stock then outstanding. In any case, the number of outstanding shares Common Stock shall be determined after giving effect to conversions of shares of Series E Preferred Stock by such holder since the date as of which such number of outstanding shares of Common Stock was reported. (b). Conversion Upon a Public Offering. In the event that at any time after --------------------------------- June 22, 1999 the Corporation shall file with the Securities and Exchange Commission a registration statement (other than a registration statement on Form S-8 or any successor form) covering the issuance of securities of the Corporation in a public offering, the right of the holders of Series E Preferred Stock to convert such Series E Preferred Stock into shares of Common Stock pursuant to Section 4(a) shall be suspended for a period beginning on the date which is tenth business day after the Corporation has given written notice (a "Lock-Up Notice") to each holder of Series E Preferred Stock (which notice shall not be given prior to the date of the filing of the registration statement referred to above) that the Corporation desires all holders of Series E Preferred Stock to be "locked-up" pursuant to this Section 4(b) and ending on the earlier of (i) the date which is 130 days after the Corporation delivers the Lock-Up Notice to each holder of Series E Preferred Stock and (ii) the date that the offering pursuant to such registration statement is abandoned or suspended (the "Lock-Up Period"). Such Lock-Up Period may be extended if, and for so long as, such offering is continuing in good faith and the Corporation and the holders of more than 50% of the then outstanding shares of Series E Preferred Stock agree to such 6 extension. In the event that such public offering is completed, and such public offering is a firm commitment underwritten offering resulting in net proceeds to the Corporation of at least $10,000,000, unless the Corporation has notified the holders of the Series E Preferred Stock prior to the filing of such registration statement of its intention to redeem the Series E Preferred Stock pursuant to Section 7 (and is then permitted to effect such redemption), upon the closing of such offering, all of the shares of Series E Preferred Stock then outstanding shall be converted automatically into shares of Common Stock, using a Conversion Price equal to the lesser of (i) the Conversion Price and (ii) 90% of the price per share of the securities offered in such offering. In the event that such public offering is not completed within such 120 day period (as may be extended pursuant to this Section), the rights of the holders of the Series E Preferred Stock to convert such stock into Common Stock pursuant to Section 4(a) shall become effective again. Notwithstanding the foregoing, the Corporation shall not be entitled to deliver a Lock-Up Notice and to prohibit the holders of Series E Preferred Stock from converting shares of Series E Preferred Stock during the Lock-Up Period unless at all times during the period beginning on the date which is 30 days prior to the first day of the Lock-Up Period and ending on the first day of the Lock-Up period (i) the Common Stock is listed on the Nasdaq National Market and has not been suspended from trading at any time during such period, (ii) the registration statement required to be filed by the Corporation pursuant to Section 8.1 of the Preferred Stock Purchase Agreement dated as of December 22, 1998 between the Corporation and the Purchasers (as defined therein) (the "Preferred Stock Purchase Agreement") has been effective and available for the sale of at least 200% of the number of Common Stock issuable upon conversion of all the outstanding shares of Series E Preferred Stock (without regard to any limitations on conversions) and (iii) the Corporation has been in compliance with, and has not breached or been in default under, the Preferred Stock Purchase Agreement and this Certificate of Designations. (c). Fractional Shares. No fractional shares of Common Stock shall be ----------------- issued upon conversion of the Series E Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the closing price of the Corporation's Common Stock on the date of conversion of the Series E Preferred Stock. (d). Mechanics of Conversion. ----------------------- (i) In order for a holder of Series E Preferred Stock to convert shares of Series E Preferred Stock into shares of Common Stock, such holder shall surrender the certificate or certificates for such shares of Series E Preferred Stock, at the office of the transfer agent for the Series E Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Series E Preferred Stock represented by such certificate or certificates. Such notice shall state such holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his or its attorney duly authorized in writing. The date of receipt of such notice by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) shall be the conversion date ("Conversion Date" provided that the certificate or certificates representing such shares of Series E Preferred stock 7 are surrendered promptly thereafter). The Corporation shall, within two (2) days after the date the Corporation receives the shares of Series E Preferred Stock which are being converted, issue and deliver to such holder of Series E Preferred Stock, or to his or its nominees, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled, together with cash in lieu of any fraction of a share, and, if the Corporation has elected to pay dividends in cash pursuant to Section 1(b), all accrued but unpaid dividends, whether or not declared. (ii) The Corporation shall, subject to the provisions of Section 6, at all times when the Series E Preferred Stock is outstanding, reserve and keep available out of its authorized but unissued stock, for the purpose of effecting the conversion of the Series E Preferred Stock, at least 150% of such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Series E Preferred Stock. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series E Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price. (iii) All shares of Series E Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate on the Conversion Date, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor and payment of any accrued and unpaid dividends thereon, whether or not declared (unless such dividends have been converted into shares of Common Stock pursuant to Section 4(a)). Any shares of Series E Preferred Stock so converted shall be retired and canceled and shall not be reissued, and the Corporation may from time to time take such appropriate action as may be necessary to reduce the authorized Series E Preferred Stock accordingly. (iv) If the Corporation has elected pursuant to Section 1(b) to pay the accrued and unpaid dividends on the shares of Series E Preferred Stock being converted in cash, then the Corporation shall pay such accrued and unpaid dividends to the holder of shares of Series E Preferred Stock being converted within two (2) business days of conversion of such shares. (e). Adjustment for Stock Splits and Combinations. If the Corporation -------------------------------------------- shall, at any time or from time to time after the Original Issue Date, effect a subdivision of the outstanding Common Stock, the Common Stock Issue Price then in effect immediately before that subdivision shall be proportionately decreased. If the Corporation shall, at any time or from time to time while there are any shares of Series E Preferred Stock outstanding, combine the outstanding shares of Common Stock, the Common Stock Issue Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective. 8 (f). Adjustment for Certain Dividends and Distributions. In the event the -------------------------------------------------- Corporation at any time, or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock, then and in each such event the Common Stock Issue Price then in effect shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Common Stock Issue Price then in effect by a fraction: (1) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution and/or the number of shares of Common Stock issued pursuant to such securities convertible, exercisable or exchangeable for Common Stock; provided, however, if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Common Stock Issue Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Common Stock Issue Price shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions. (g). Adjustments for Other Dividends and Distributions. In the event the ------------------------------------------------- Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation other than shares of Common Stock or in cash or other assets, then and in each such event provision shall be made so that the holders of Series E Preferred Stock shall receive upon conversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation or cash or other assets that they would have received had the Series E Preferred Stock been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities or cash or other assets receivable by them as aforesaid during such period giving application to all adjustments called for during such period, under this paragraph with respect to the rights of the holders of the Series E Preferred Stock. (h). Adjustment for Reclassification, Exchange, or Substitution. If the ---------------------------------------------------------- Common Stock issuable upon the conversion of the Series E Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a reorganization, merger, consolidation, or sale of assets provided for below), then and in each such event the holder of each such share of Series E 9 Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares of Series E Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein. (i). Adjustment for Merger or Reorganization, etc. Subject to Section 2 -------------------------------------------- hereof, in case of any consolidation or merger of the Corporation with or into another corporation or the sale of all or substantially all of the assets of the Corporation to another corporation or any other similar transaction, each share of Series E Preferred Stock shall thereafter be convertible into the kind and amount of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of such Series E Preferred Stock would have been entitled upon such consolidation, merger or sale; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors and subject to the dispute resolution procedures described in Section 2(c)) shall be made in the application of the provisions set forth in this Section 4 with respect to the rights and interest thereafter of the holders of the Series E Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Conversion Price or the Common Stock Issue Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the conversion of the Series E Preferred Stock. (j). No Impairment. The Corporation will not, by amendment of its ------------- Certificate of Incorporation or By-laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series E Preferred Stock against impairment. (k). Certificate as to Adjustments. Upon the occurrence of each adjustment ----------------------------- or readjustment of the Conversion Price or the Common Stock Issue Price pursuant to this Section 4 (other than as a result of fluctuations in the Market Price), the Corporation at its expense shall promptly, and in no event later than two (2) business days, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series E Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series E Preferred Stock, furnish or cause to be furnished to such holder a similar certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price and the Common Stock Issue Price then in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which then would be received upon the conversion of Series E Preferred Stock. 10 (l). Notice of Record Date. In the event: --------------------- (i) that the Corporation declares a dividend (or any other distribution) on its Common Stock payable in Common Stock or other securities of the Corporation; (ii) that the Corporation splits, subdivides or combines its outstanding shares of Common Stock; (iii) of any reclassification of the Common Stock of the Corporation (other than a stock split, subdivision or combination of its outstanding shares of Common Stock or a stock dividend or stock distribution thereon), or of any consolidation or merger of the Corporation into or with another corporation, or of the sale of all or substantially all of the assets of the Corporation; or (iv) of the involuntary or voluntary dissolution, liquidation or winding up of the Corporation; then the Corporation shall cause to be filed at its principal office or at the office of the transfer agent of the Series E Preferred Stock, and shall cause to be mailed to the holders of the Series E Preferred Stock at their last addresses as shown on the records of the Corporation or such transfer agent, at least fifteen days prior to the record date specified in (A) below or thirty days before the date specified in (B) below, but in no event prior to the public disclosure thereof, a notice stating (A) the record date of such dividend, distribution, stock split, subdivision or combination, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, stock split, subdivision or combination are to be determined, or (B) the date on which such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution or winding up. (m). The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of the Series E Preferred Stock or the securities or other property on conversion of the Series E Preferred Stock. 5. Mandatory Conversion. --------------------- (a). The Corporation may, at its option, require all (but not less than all) of the shares of Series E Preferred Stock then outstanding to be converted automatically into shares of 11 Common Stock, at the then current Conversion Price, at any time that the Closing Bid Price of the Common Stock, as quoted on the Nasdaq National Market System or listed on any exchange is, and for at least the last 30 consecutive trading days immediately preceding written notice from the Corporation that it is exercising its rights under this Section 5(a), has been greater than $8.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares). In addition, all shares of Series E Preferred Stock (i) outstanding on the fifth anniversary of the date of issue of such shares shall be converted automatically into shares of Common Stock at the then current Conversion Price and (ii) shall be automatically converted in accordance with the terms of Section 4(b). Notwithstanding the foregoing, the Corporation shall not be entitled to deliver a Mandatory Conversion Notice (as defined below) and to require the holders of Series E Preferred Stock to convert shares of Series E Preferred Stock pursuant to this Section 5 unless at all times during the period beginning on the date which is 30 days prior to the date the Corporation delivers the Mandatory Conversion Notice to each holder of shares of Series E Preferred Stock and ending on and including the date the Corporation has selected in the Mandatory Conversion Notice for such mandatory conversion (i) the Common Stock is listed on the Nasdaq National Market and has not been suspended from trading at any time during such period, (ii) the registration statement required to be filed by the Corporation pursuant to Section 8.1 of the Preferred Stock Purchase Agreement has been effective and available for the sale of at least 150% of the number of Common Stock issuable upon conversion of all the outstanding shares of Series E Preferred Stock (without regard to any limitations on conversions) and (iii) the Corporation has been in compliance with, and has not breached or been in default under, the Preferred Stock Purchase Agreement and this Certificate of Designations. (b). All holders of record of shares of Series E Preferred Stock will be given at least 20 days' prior written notice (a "Mandatory Conversion Notice") of the date fixed and the place designated for mandatory conversion of all of such shares of Series E Preferred Stock pursuant to this Section 5. Such notice will be sent by first class or registered mail, postage prepaid, to each record holder of Series E Preferred Stock at such holder's address appearing on the stock register. On or before the date fixed for conversion, each holder of shares of Series E Preferred Stock shall surrender his or its certificate or certificates for all such shares to the Corporation at the place designated in such notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 5. On the date fixed for conversion, all rights with respect to the Series E Preferred Stock so converted will terminate, except only the rights of the holders thereof, upon surrender of their certificate or certificates therefor, to receive certificates for the number of shares of Common Stock into which such Series E Preferred Stock has been converted. If so requested by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his or its attorney duly authorized in writing. All certificates evidencing shares of Series E Preferred Stock which are required to be surrendered for conversion in accordance with the provisions hereof shall, from and after the date such certificates are so required to be surrendered, be deemed to have been retired and canceled and the shares of Series E Preferred Stock represented thereby converted into Common Stock for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates on or prior to such date. As soon as practicable, but in no event later than 2 days after the date of such mandatory conversion and the surrender of the certificate or certificates for 12 Series E Preferred Stock, the Corporation shall cause to be issued and delivered to such holder, or on his or its written order, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and cash as provided in Subsection 4(b) in respect of any fraction of a share of Common Stock otherwise issuable upon such conversion. 6. Availability of Common Stock for Conversion. The Corporation shall at ------------------------------------------- all times that the Series E Preferred Stock may be converted into shares of Common Stock hereunder, reserve and keep available, out of its authorized and unissued shares of Common Stock, a number of shares of Common Stock sufficient for the conversion of at least 150% of all shares of Series E Preferred Stock then outstanding; provided however, that unless the Corporation increases the number of its authorized shares the Corporation shall not be required by this Section 6 at any time to reserve and keep available a number of shares of Common Stock in excess of the number of shares of Common Stock authorized and unissued on the date of the filing of this Certificate of Designations, less (i) the number of shares of Common Stock reserved for issuance on the date of filing of this Certificate upon the conversion or exercise of convertible securities that are outstanding on the date hereof, and (ii) the number of shares of Common Stock (not to exceed an aggregate of 400,00 shares) that may hereafter be granted pursuant to compensation plans approved by the stockholders of the Corporation prior to the date this Certificate is filed; and provided further, that, to the extent that at any time the number of shares of Common Stock reserved and kept available by the Corporation pursuant to this Section 6 is insufficient for the conversion of all shares of Series E Preferred Stock then outstanding, the Corporation shall use its best efforts promptly to cause the number of authorized but unissued shares of Common Stock to be increased to a number sufficient for the conversion of all shares of Series E Preferred Stock then outstanding. The initial number of shares of Common Stock reserved for conversions of the shares of Series E Preferred Stock and each increase in the number of shares so reserved shall be allocated pro rata among the holders of the shares of Series E Preferred Stock based on the number of shares of Series E Preferred Stock held by each holder at the time of issuance of the shares of Series E Preferred Stock or increase in the number of reserved shares, as the case may be. In the event a holder shall sell or otherwise transfer any of such holder's shares of Series E Preferred Stock, each transferee shall be allocated a pro rata portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and allocated to any person which ceases to hold any shares of Series E Preferred Stock shall be allocated to the remaining holders of shares of Series E Preferred Stock, pro rata based on the number of shares of Series E Preferred Stock then held by such holders. 7. Redemption of Series E Preferred Stock at Option of Corporation. The --------------------------------------------------------------- Corporation may, at any time that the Series E Preferred Stock may be required to be converted pursuant to Section 5, elect to redeem all of the Series E Preferred Stock at a price equal to 100% of the Original Issue Price (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares) plus all accrued and unpaid dividends whether or not declared on such shares to be redeemed (the "Redemption Price"), subject to the holders' right to first convert the shares of Series E Preferred Stock pursuant to Section 4. The Corporation may exercise the right of redemption granted herein by providing written notice ("Redemption Notice") to all holders of Series E Preferred Stock setting forth the number of shares to be redeemed and designating the date, which shall not be less than 13 30 days following the date of such notice, on which the redemption is to occur (the "Redemption Date"). On the Redemption Date, each holder that has not elected to convert all of such holder's shares of Series E Preferred Stock shall surrender to the Corporation certificates representing a number of shares of Series E Preferred Stock not less than the number of shares of such holder to be redeemed. Within five (5) days of receipt of certificates as described in the preceding sentence, the Corporation shall pay the Redemption Price to the holder surrendering such certificates and shall cause its transfer agent to deliver to such holder a certificate representing the balance of the shares of Series E Preferred Stock, if any, not redeemed by the Corporation. From and after the Redemption Date, unless there shall be a default in payment of the Redemption Price, all rights of each holder with respect to shares of Series E Preferred Stock redeemed on the Redemption Date shall cease (except the right to receive the Redemption Price without interest upon surrender of the certificate or certificates therefor), and such shares shall not be deemed to be outstanding for any purpose whatsoever. Such shares of Series E Preferred Stock shall not be reissued, and the Corporation may from time to time take such appropriate action as may be necessary to reduce the authorized Preferred Stock accordingly. Notwithstanding the foregoing, the Corporation shall not be entitled to deliver a Redemption Notice and to redeem the shares of Series E Preferred Stock pursuant to this Section 7 unless at all times during the period beginning on the date which is 30 days prior to the date the Corporation delivers the Redemption Notice to each holder of shares of Series E Preferred Stock and ending on and including the Redemption Date (i) the Common Stock is listed on the Nasdaq National Market and has not been suspended from trading at any time during such period, (ii) the registration statement required to be filed by the Corporation pursuant to Section 8.1 of the Preferred Stock Purchase Agreement has been effective and available for the sale of at least 200% of the number of Common Stock issuable upon conversion of all the outstanding shares of Series E Preferred Stock (without regard to any limitations on conversions) and (iii) the Corporation has been in compliance with, and has not breached or been in default under, the Preferred Stock Purchase Agreement and this Certificate of Designations. [THE SIGNATURE PAGE FOLLOWS] 14 IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be signed by its President and attested by its Secretary this 22nd day of December, 1998. /s/ Jean-Luc Grand Clement -------------------------- Jean-Luc Grand Clement Chief Executive Officer ATTESTED: /s/ Michael Lytton - ------------------------- Michael Lytton Secretary 15 EX-99.1 4 PRESS RELEASE Exhibit 99.1 PixTech Enters Into Private Placement of Preferred Stock SANTA CLARA, Calif., and ROUSSET, France, Dec. 23 /PRNewswire/ -- PixTech, Inc. (Nasdaq: PIXT; EASDAQ: PIXT) today announced that certain investors have purchased preferred stock of the Company for an aggregate investment of $8,275,000. The preferred stock sold by the Company is convertible into PixTech common stock after June 21, 1999 at a conversion price generally equal to approximately $2.25 per share or the market price of the common stock at the time of the conversion. In addition to the conversion feature, the preferred stock has a liquidation preference equal to the purchase price of the preferred stock and a cumulative dividend. The preferred stock will automatically convert into common stock on December 22, 2003. The preferred stock is redeemable at the option of the Company at the issue price upon certain events. PixTech has also undertaken to file a registration statement covering the resale of both the newly issued common stock and the common stock issuable upon conversion of the preferred stock. Jean-Luc Grand-Clement, PixTech's Chairman and Chief Executive Officer, stated, "This financing reflects continuing support from certain existing investors, as well as interest from new investors, both in the U.S. and in Europe." The issuance of the preferred stock has not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under such Act. About PixTech, Inc. PixTech designs, develops and manufactures field emission displays (FEDs), a new type of flat-panel display. The Company operates a flat-panel display pilot manufacturing facility in Montpellier, France and an R&D facility and sales office in Santa Clara, Calif. PixTech is currently developing high-volume manufacturing capabilities for its FEDs in Taiwan, under a contract manufacturing arrangement with Unipac, a Taiwanese AM-LCD manufacturer. PixTech has also established a marketing partnership with Sumitomo Corporation, its exclusive distributor in Japan. More information is available from the Company's web site at www.pixtech.com. Statements that are not historical facts, including statements about PixTech's confidence and strategies, the timing of its manufacturing plans with Unipac, and its distribution agreement with Sumitomo, the development of new or existing products, technologies and opportunities, marked demand or acceptance of new or existing products are forward-looking statements that involve risks and uncertainties. These uncertainties include but are not limited to, the risk associated with transitioning to high volume manufacturing of FED displays at Unipac, product demand and market acceptance risks, commitment of Unipac and/ or of PixTech licensees, ability of the Company to grant other licenses under FED technology, validity and enforceability of PixTech's patent rights, infringement by PixTech of other patent rights, impact of competitive product and prices, product development, commercialization or technological delays or difficulties, trade, legal, social and economic risks and other risks detailed in PixTech's Securities and Exchange Commission filing including its Form 10-K for the year 1997 and any subsequent filings. SOURCE PixTech, Inc. /CONTACT: Yves Morel, VP, Chief Financial Officer of PixTech, Inc., in Europe, 33-0-4-42-29-10-00; or Lillian Armstrong or Kris Otridge of Lippert/Heilshorn & Associates, 415-433-3777, for PixTech, Inc.; or investors, Laurence Kipfer, or media, Laurence Marquezy of Actus Finance & Communication, in Europe, 33-0-1-53- 67-36-36, for PixTech, Inc. EX-99.2 5 PRESS RELEASE ISSUED BY THE COMPANY 1/5/1999 Exhibit 99.2 PixTech Announces Appointment of Dieter Mezger to Chief Executive Officer SANTA CLARA, Calif. and ROUSSET, France, Jan. 5 /PRNewswire/ -- PixTech, Inc. (Nasdaq: PIXT; Easdaq) today announced that Dieter Mezger has been appointed by the Board of Directors to succeed Jean-Luc Grand-Clement as the company's Chief Executive Officer. Grand-Clement, who founded the Company in 1992, will remain Chairman of PixTech's Board of Directors. Mezger continues to hold the additional position of President of PixTech, which he has held since joining the company in March of 1998. His extensive career in the electronics industry includes over 15 years with Texas Instruments and 13 years with VLSI in Europe and San Jose, California. Mezger stated, "PixTech is undergoing a transition, from a research and development driven company to a commercial product company. Our opportunity is to build our momentum in volume production, while maintaining our technology leadership in Field Emission Display (FED). This requires evolutionary changes in our strategic positioning, which will be a primary focus of my efforts as Chief Executive Officer." Grand-Clement added, "PixTech has a history of being 'first' in FED development, the most recent example of which was the announcement of our first large screen, high voltage display two weeks ago. Dieter has made tremendous contributions to our company since his arrival, including his dedication and attention to streamlining our manufacturing processes both in Montpellier and Taiwan, as well as focussing our R&D endeavors. I look forward to PixTech's continued success under Dieter's leadership." Mezger concluded, "Jean-Luc and I will continue to work closely to effect a smooth transition. Our immediate attention is focused on building volume production and marketing our new 5" color display. Jean-Luc will continue making key contributions to PixTech in the areas of strategic vision and investor relations." About PixTech, Inc. PixTech designs, develops and manufactures field emission displays (FEDs), a new type of flat-panel display. The company operates a flat-panel display pilot manufacturing facility in Montpellier, France and an R&D facility and sales office in Santa Clara, California. PixTech is currently developing high- volume manufacturing capabilities for its FEDs in Taiwan, under a contract manufacturing arrangement with Unipac, a Taiwanese AM-LCD manufacturer. PixTech has also established a marketing partnership with Sumitomo Corporation, its exclusive distributor in Japan. More information is available from the company's web site at www.pixtech.com. Statements that are not historical facts, including statements about PixTech's confidence and strategies, the timing of its manufacturing plans with Unipac, and its distribution agreement with Sumitomo, the development of new or existing products, technologies and opportunities, marked demand or acceptance of new or existing products are forward-looking statements that involve risks and uncertainties. These uncertainties include but are not limited to, the risk associated with transitioning to high volume manufacturing of FED displays at Unipac, product demand and market acceptance risks, commitment of Unipac and/or of PixTech licensees, ability of the company to grant other licenses under FED technology, validity and enforceability of PixTech's patent rights, infringement by PixTech of other patent rights, impact of competitive product and prices, product development, commercialization or technological delays or difficulties, trade, legal social and economic risks and other risks detailed in PixTech's Securities and Exchange Commission filing including its Form 10-K for the year 1997 and any subsequent filings. SOURCE PixTech, Inc. -0- 01/05/99 /CONTACT: Yves Morel, VP, Chief Financial Officer of PixTech, Inc., 33-0-4-42-29-10-00; or Lillian Armstrong or Kris Otridge of Lippert/Heilshorn & Associates, 415-433-3777; or investors, Laurence Kipfer, or press, Laurence Marquezy of Actus Finance & Communication, 33-0-1-53-67-36-36/ /Web site: http://www.pixtech.com/ ----------------------- (PIXT) -----END PRIVACY-ENHANCED MESSAGE-----