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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
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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.
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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
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EXHIBIT INDEX
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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
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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
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
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<C> <S> <C>
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
</TABLE>
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<TABLE>
<CAPTION>
Page No.
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<C> <S> <C>
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
</TABLE>
Schedule 3.2
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Exhibit A List of Purchases
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Exhibit B Amendment to Restated Certificate of Incorporation
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Exhibit C Form of Opinion of Palmer & Dodge LLP
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Exhibit D Form of Secretary's Certificate
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Exhibit E Form of Officer's Certificate
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<PAGE>
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
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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
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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
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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
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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
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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
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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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
Schedule 3.2
None
21
<PAGE>
Exhibit A
List of Purchases
-----------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Jurisdiction of Number of Aggregate
Name Organization Shares Purchase Price
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
- -----------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Jurisdiction of Number of Aggregate
Name Organization Shares Purchase Price
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
- -----------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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)
