**Exhibit 4.9**

NEITHER THIS SECURITY NORTHE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTEREDWITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANYSTATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BEOFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDERTHE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACTAND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGALOPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICHSHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITYMAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOANSECURED BY SUCH SECURITIES AS PERMITTED BY LAW AND THE SECURITIES PURCHASEAGREEMENT PURSUANT TO WHICH THE SECURITIES WERE ISSUED.
| **                 ****COMMON STOCK PURCHASE WARRANT** |   | NO. 1 |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-------|

 

To Purchase Shares of Common Stock of

**UNIPIXEL, INC.**

This COMMON STOCKPURCHASE WARRANT (this “***Warrant***”)certifies that, for value received, TRIDENT GROWTH FUND, L.P., a Delawarelimited partnership (the “***Holder***”),is entitled, upon the terms and subject to the limitations on exercise and theconditions hereinafter set forth, at any time on or after the date hereof, May24, 2006 (the “***Initial Exercise Date***”),and on or prior to the close of business on the fifth anniversary of theInitial Exercise Date (the “***Termination Date***”),to subscribe for and purchase from UNIPIXEL, INC., a Delaware corporation (the “***Company***”), such number of sharesof common stock, par value $001 per share, of the Company (the “***Common Stock***”), subject toadjustment herein (the “***Warrant Shares***”)as follows:

750,000 dividedby: the lesser of (i) $1.75; or (ii) 70% of the average price per share of the Common Stock and Common StockEquivalents sold to any Person in the first Qualifying Transaction to beconsummated following the Original Issue Date (determined by dividing the totalnumber of shares of Common Stock issued plus shares issuable under Common StockEquivalents in such Qualifying Transaction, by the aggregate considerationreceived by the Company plus all consideration to be received uponexercise or conversion of all Common Stock Equivalents issued in suchQualifying Transaction).  With respect todetermining the price paid per share in any asset purchase, only shares ofCommon Stock actually issued and outstanding shall be used in determining suchper share calculation.

In the event no Qualifying Transaction has been consummated on or bythe first anniversary hereof, then the number of Warrant Shares purchasablehereby shall equal 5% (subject to adjustment as set forth in Section 4.15 ofthe Purchase Agreement) of then outstanding Common Stock, computed on a FullyDiluted Basis.

1

----

 

Notwithstanding the foregoing, the parties agree that the number ofWarrant Shares to be issued in accordance herewith shall be adjusted up fromthe determination resulting from the foregoing formula by mutual agreement ofthe parties in the event that any convertible securities are sold to investorsin any Qualifying Transaction, the parties hereby recognizing that the issuancethereof, even at an exercise or conversion price above the Exercise Price (asdefined below), would increase the value of the securities issued to suchinvestors and thus entitle Holder to a greater number of Warrant Shares.  The parties agree to negotiate suchdetermination in good faith.

The purchase priceof one share of Common Stock under this Warrant shall be equal to the ExercisePrice, as defined in Section 2(b).

Section 1.               Definitions.  Capitalizedterms used and not otherwise defined herein shall have the meanings set forthin that certain Securities Purchase Agreement (the “***Purchase Agreement***”), of even date herewith, enteredinto by and among the Company and the Holder.

Section 2.               Exercise.

a)             Exerciseof Warrant.  Exercise of the purchaserights represented by this Warrant may be made at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date (each, an “***Exercise Date***”) by delivery tothe Company of a duly executed facsimile copy of the Notice of Exercise Formannexed  hereto (or such other office oragency of the Company as it may designate by notice in writing to theregistered Holder at the address of such Holder appearing on the books of theCompany); *provided, however*,within five Business Days of the date said Notice of Exercise is delivered tothe Company, the Holder shall have surrendered this Warrant to the Company andthe Company shall have received  paymentof the aggregate Exercise Price of the shares thereby purchased by wiretransfer or cashier’s check drawn on a United States bank.

b)            Exercise Price.  The ***Exercise Price*** (so calledherein) of each share of Common Stock under this Warrant shall be equal to thelesser of:

(i)                                     90%of the average price per share of the Common Stock and Common StockEquivalents sold to any Person in the first Qualifying Transaction to beconsummated following the Initial Exercise Date (determined by dividing thetotal number of shares of Common Stock issued plus shares issuable under CommonStock Equivalents in such Qualifying Transaction, by the aggregateconsideration received by the Company plus all consideration to be receivedupon exercise or conversion of all Common Stock Equivalents issued in suchQualifying Transaction).  With respect todetermining the price paid per share in any asset purchase, only shares ofCommon Stock actually issued and outstanding shall be used in determining suchper share calculation; or

2

----

 

(ii)                                  $1.75 per share (which such Exercise Priceshall apply in the event no Qualifying Transaction has closed on or by theExercise Date.

Notwithstanding theforegoing, the parties agree that the Exercise Price shall be adjusted downfrom the determination resulting from the foregoing formula by mutual agreementof the parties in the event that any convertible securities are sold toinvestors in any Qualifying Transaction, the parties hereby recognizing thatthe issuance thereof, even at an exercise or conversion price above theExercise Price, would increase the value of the securities issued to suchinvestors and thus entitle Holder to a greater number of shares of Common Stockupon conversion hereof.  The partiesagree to negotiate such determination in good faith.

c)             CashlessExercise.  If at any time after oneyear from the date of issuance of this Warrant there is no effectiveRegistration Statement registering the resale of the Warrant Shares by theHolder, then this Warrant may also be exercised at such time by means of a “cashlessexercise” in which the Holder shall be entitled to receive a certificate forthe number of Warrant Shares equal to the quotient obtained by dividing [(A-B)(X)] by (A), where:

(A)             =   the price of said Common Stock determined byreference to the last reported sale price for the Common Stock on such day onthe principal securities exchange on which the Common Stock is listed oradmitted to trading or if no such sale takes place on such date, the average ofthe closing bid and asked prices thereof as officially reported, or, if not solisted or admitted to trading on any securities exchange, the last sale pricefor the Common Stock on the National Association of Securities Dealers nationalmarket system on such date, or, if there shall have been no trading on suchdate or if the Common Stock shall not be listed on such system, the average ofthe closing bid and asked prices in the over-the-counter market as furnished byany NASD member firm selected from time to time by the Company for such purposeor, if the Common Stock is not traded, then such price as is reasonablydetermined by the Company’s Board of Directors (the “***MarketValue***”);

(B)               =   the Exercise Price of this Warrant, asadjusted; and

(X)              =   the number of Warrant Shares issuable upon exerciseof this Warrant in accordance with the terms of this Warrant by means of a cashexercise rather than a cashless exercise.

Notwithstanding anything herein to the contrary, onthe Termination Date, this Warrant shall be automatically exercised via cashlessexercise pursuant to this Section 2(c).

d)            ExerciseLimitations.  The Holder shall nothave the right to exercise any portion of this Warrant, pursuant to Section 2or otherwise, to the extent that after giving 

3

----

effect to such issuance after exercise, the Holder(together with the Holder’s affiliates), as set forth on the applicable Noticeof Exercise, would beneficially own in excess of 4.99% (or as applicable,9.99%) of the number of shares of the Common Stock outstanding immediatelyafter giving effect to such issuance.  For purposes of the foregoingdetermination, the number of shares of Common Stock beneficially owned by theHolder and its affiliates shall include the number of shares of Common Stockissuable upon such exercise of this Warrant less the number of shares of CommonStock which would be issuable upon (A) exercise of the remaining, nonexercisedportion of this Warrant and (B) exercise or conversion of the unexercised orunconverted portion of any other Securities (including, without limitation, anyother Debentures or Warrants) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by theHolder.  Except as set forth in the preceding sentence, for purposes ofthis Section 2(d), beneficial ownership shall be calculated in accordance withSection 13(d) of the Exchange Act.  Tothe extent that the limitation contained in this Section 2(d) applies, thedetermination of whether this Warrant is exercisable (in relation to othersecurities owned by the Holder) and of which a portion of this Warrant isexercisable shall be in the sole discretion of such Holder.  For purposes of this Section 2(d), indetermining the number of outstanding shares of Common Stock, the Holder mayrely on the number of outstanding shares of Common Stock as reflected in (x) Schedule3.1(g) to the Purchase Agreement, (y) a more recent public announcement bythe Company, including the most recent annual or quarterly report of Form10-KSB or 10-QSB filed with the Commission; or (z) any other notice by theCompany or the Company’s transfer agent setting forth the number of shares ofCommon Stock outstanding.  Upon the written or oral request of the Holder,the Company shall within two Business Days confirm orally and in writing to theHolder the number of shares of Common Stock then outstanding.  Theprovisions of this Section 2(d) may be waived by the Holder upon, at theelection of the Holder, not less than 61 days’ prior notice to the Company, andthe provisions of this Section 2(d) shall continue to apply until such 61st day(or such later date, as determined by the Holder, as may be specified in suchnotice of waiver).

e)             Mechanicsof Exercise.

i.      Authorizationof Warrant Shares.  The Companycovenants that all Warrant Shares which may be issued upon the exercise of thepurchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant, be duly authorized, validly issued, fullypaid and nonassessable and free from all taxes, liens and charges in respect ofthe issuance thereof (other than taxes in respect of any transfer occurringcontemporaneously with such issuance). The Company covenants that during the period the Warrant is outstanding,it will reserve from its authorized and unissued Common Stock a sufficientnumber of shares to provide for the issuance of the Warrant Shares upon theexercise of any purchase rights under this Warrant.  The Company further covenants that its issuanceof this Warrant shall constitute full authority to its officers who are chargedwith the duty of executing stock certificates to execute and issue thenecessary certificates for the Warrant Shares upon the exercise of the purchaserights under this Warrant.  The 

4

----

Company will take all such reasonable action as may benecessary to assure that such Warrant Shares may be issued as provided hereinwithout violation of any applicable law or regulation, or of any requirementsof the Trading Market upon which the Common Stock may be listed.

ii.     Deliveryof Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by thetransfer agent of the Company to the Holder by crediting the account of theHolder’s prime broker with the Depository Trust Company through its DepositWithdrawal Agent Commission (“DWAC”) system if the Company is aparticipant in such system and if the certificates may be issued without arestrictive legend in accordance with applicable federal securities laws, andotherwise by physical delivery to the address specified by the Holder in theNotice of Exercise within two (2) Business Days from the delivery to theCompany of the Notice of Exercise Form, surrender of this Warrant and paymentof the aggregate Exercise Price as set forth above (“***WarrantShare Delivery Date***”). This Warrant shall be deemed to have been exercised on the date theExercise Price is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder orany other person so designated to be named therein shall be deemed to havebecome a holder of record of such shares for all purposes, as of the date theWarrant has been exercised by payment to the Company of the Exercise Price andall taxes required to be paid by the Holder, if any, pursuant to Section2(d)(vii) prior to the issuance of such shares, have been paid.

iii.    Deliveryof New Warrants Upon Exercise.  Ifthis Warrant shall have been exercised in part, the Company shall, at the timeof delivery of the certificate or certificates representing Warrant Shares,deliver to Holder a new Warrant evidencing the rights of Holder to purchase theunpurchased Warrant Shares called for by this Warrant, which new Warrant shallin all other respects be identical with this Warrant.

iv.    RescissionRights.  If the Company fails tocause its transfer agent to transmit to the Holder a certificate orcertificates representing the Warrant Shares pursuant to this Section 2(d)(iv)by the Warrant Share Delivery Date, then the Holder will have the right torescind such exercise.

v.     Failureto Timely Deliver Certificates Upon Exercise.  In addition to any other rights available tothe Holder, if the Company or the Company’s transfer agent fails to causedelivery to the Holder of a certificate or certificates representing theWarrant Shares or if the Company or its transfer agent fails to deliver suchcertificates without the restrictive legend (if applicable) on or before theWarrant Share Delivery Date, the Company shall pay to Purchaser, in cash, aspartial liquidated damages and not as a penalty, the greater of (i) $500 foreach Business 

5

----

Day after the Warrant Share Delivery Date until suchcertificate is delivered with an appropriate legend or without a restrictivelegend, as the case may be; and (ii) the difference in the Market Value of theWarrant Shares on the Warrant Share Delivery Date and the date such shares areactually received by the Holder.  Nothingherein shall limit Purchaser’s right to pursue actual damages for the Company’sfailure to deliver certificates representing any Securities as required herein,and Purchaser shall have the right to pursue all remedies available to it atlaw or in equity including, without limitation, a decree of specificperformance and/or injunctive relief.

vi.    NoFractional Shares or Scrip.  Nofractional shares or scrip representing fractional shares shall be issued uponthe exercise of this Warrant.  As to anyfraction of a share which Holder would otherwise be entitled to purchase uponsuch exercise, the Company shall round such fractional share up to the nextwhole number.

vii.   Charges,Taxes and Expenses.  Issuance ofcertificates for Warrant Shares shall be made without charge to the Holder forany issue or transfer tax or other incidental expense in respect of theissuance of such certificate, all of which taxes and expenses shall be paid bythe Company, and such certificates shall be issued in the name of the Holder orin such name or names as may be directed by the Holder; provided, however,that in the event certificates for Warrant Shares are to be issued in a nameother than the name of the Holder, this Warrant when surrendered for exerciseshall be accompanied by the Assignment Form attached hereto duly executed bythe Holder; and the Company may require, as a condition thereto, the payment ofa sum sufficient to reimburse it for any transfer tax incidental thereto.

viii.  Closingof Books.  The Company will not closeits stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.

Section 3.               Certain Adjustments.

a)             StockDividends and Splits. If the Company, at any time while this Warrant isoutstanding: (A) pays a stock dividend or otherwise make a distribution ordistributions on shares of its Common Stock or any other equity or equityequivalent securities payable in shares of Common Stock excludingPayment-in-Kind Preferred Stock Dividends as provided for in the Company’sSeries A, B, or other Preferred Stock offerings (which, for avoidance of doubt,shall not include any shares of Common Stock issued by the Company pursuant tothis Warrant), (B) subdivides outstanding shares of Common Stock into a largernumber of shares, (C) combines (including by way of reverse stock split)outstanding shares of Common Stock into a smaller number of shares, or (D)issues by reclassification of shares of the Common Stock any shares of capitalstock of the Company, then in each case the Exercise Price shall be multipliedby a 

6

----

fraction of which the numerator shall be the number ofshares of Common Stock (excluding treasury shares, if any) outstanding beforesuch event and of which the denominator shall be the number of shares of CommonStock outstanding after such event and the number of shares issuable uponexercise of this Warrant shall be proportionately adjusted.  Any adjustment made pursuant to this Section3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distributionand shall become effective immediately after the effective date in the case ofa subdivision, combination or re-classification.

b)            SubsequentEquity Sales. If the Company at any time while this Warrant is outstanding,shall offer, sell, grant any option to purchase or offer, sell or grant anyright to reprice its securities, or otherwise dispose of or issue  any Common Stock or Common Stock Equivalentsentitling any Person to acquire shares of Common Stock, at an effective priceper share less than the then Exercise Price (such lower price, the “***Base Share Price***” and suchissuances collectively, a “***Dilutive Issuance***”),as adjusted hereunder (if the holder of the Common Stock or Common StockEquivalents so issued shall at any time, whether by operation of purchase priceadjustments, reset provisions, floating conversion, exercise or exchange pricesor otherwise, or due to warrants, options or rights per share which is issuedin connection with such issuance, be entitled to receive shares of Common Stockat an effective price per share which is less than the Exercise Price, suchissuance shall be deemed to have occurred for less than the Exercise Price),then, the Exercise Price shall be reduced to equal the Base Share Price and thenumber of Warrant Shares issuable hereunder shall be increased such that theaggregate Exercise Price payable hereunder, after taking into account thedecrease in the Exercise Price, shall be equal to the aggregate Exercise Priceprior to such adjustment.  Suchadjustment shall be made whenever such Common Stock or Common Stock Equivalentsare issued.  The Company shall notify theHolder in writing, no later than the Business Day following the issuance of anyCommon Stock or Common Stock Equivalents subject to this section, indicatingtherein the applicable issuance price, or of applicable reset price, exchangeprice, conversion price and other pricing terms (such notice the “***Dilutive Issuance Notice***”).  For purposes of clarification, whether or notthe Company provides a Dilutive Issuance Notice pursuant to this Section 3(b),upon the occurrence of any Dilutive Issuance, after the date of such DilutiveIssuance the Holder is entitled to receive a number of Warrant Shares basedupon the Base Share Price regardless of whether the Holder accurately refers tothe Base Share Price in the Notice of Exercise.

c)             ProRata Distributions.  If the Company,at any time prior to the Termination Date, shall distribute to all holders ofCommon Stock (and not to Holders of the Warrants) evidences of its indebtednessor assets or rights or warrants to subscribe for or purchase any security otherthan the Common Stock (which shall be subject to Section 3(b)), then in eachsuch case the Exercise Price shall be adjusted by multiplying the ExercisePrice in effect immediately prior to the record date fixed for determination ofstockholders entitled to receive such distribution by a fraction of which thedenominator shall be the closing bid price of the Common Stock on the thenprincipal Trading Market determined as of the record date mentioned above (ifthe closing bid price of the Common Stock on the then principal Trading Marketshall then be determinable and otherwise the fair market value per share asdetermined by the Board of Directors in good 

7

----

faith, and of which the numerator shall be suchclosing bid price of the Common Stock on the then principal Trading Market onsuch record date less the then per share fair market value at such record dateof the portion of such assets or evidence of indebtedness so distributed applicableto one outstanding share of the Common Stock as determined by the Board ofDirectors in good faith.  In either casethe adjustments shall be described in a statement provided to the Holders ofthe portion of assets or evidences of indebtedness so distributed or suchsubscription rights applicable to one share of Common Stock.  Such adjustment shall be made whenever anysuch distribution is made and shall become effective immediately after therecord date mentioned above.

d)            FundamentalTransaction. If, at any time while this Warrant is outstanding, thereoccurs a Fundamental Transaction, then, upon any subsequent conversion of thisWarrant, the Holder shall have the right to receive, for each Warrant Sharethat would have been issuable upon such exercise absent such FundamentalTransaction, at the option of the Holder, (a) upon exercise of this Warrant,the number of shares of Common Stock of the successor or acquiring corporationor of the Company, if it is the surviving corporation, and Alternate Considerationreceivable upon or as a result of such reorganization, reclassification,merger, consolidation or disposition of assets by a Holder of the number ofshares of Common Stock for which this Warrant is exercisable immediately priorto such event or (b) if the Company is acquired in an all cash transaction,cash equal to the value of this Warrant as determined by the difference betweenthe applicable Exercise Price and the amount of cash paid per share to theshareholders of the Company (the “***Alternate Consideration***”).  For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply tosuch Alternate Consideration based on the amount of Alternate Considerationissuable in respect of one share of Common Stock in such FundamentalTransaction, and the Company shall apportion the Exercise Price among theAlternate Consideration in a reasonable manner reflecting the relative value ofany different components of the Alternate Consideration.  If holders of Common Stock are given anychoice as to the securities, cash or property to be received in a FundamentalTransaction, then the Holder shall be given the same choice as to the AlternateConsideration it receives upon any exercise of this Warrant following suchFundamental Transaction.  To the extentnecessary to effectuate the foregoing provisions, any successor to the Companyor surviving entity in such Fundamental Transaction shall issue to the Holder anew warrant consistent with the foregoing provisions and evidencing the Holder’sright to exercise such warrant into Alternate Consideration. The terms of anyagreement pursuant to which a Fundamental Transaction is effected shall includeterms requiring any such successor or surviving entity to comply with theprovisions of this Section 3(d) and insuring that this Warrant (or any suchreplacement security) will be similarly adjusted upon any subsequenttransaction analogous to a Fundamental Transaction.

e)             ExemptIssuance. Notwithstanding the foregoing, no adjustments, AlternateConsideration, nor notices shall be made, paid, or issued under this Section 3in respect of an Exempt Issuance.

f)             Calculations.All calculations under this Section 3 shall be made to the nearest cent or thenearest 1/100th of a share, as the case may be. The number of shares 

8

----

of Common Stock outstanding at any given time shallnot includes shares of Common Stock owned or held by or for the account of theCompany, and the description of any such shares of Common Stock shall beconsidered on issue or sale of Common Stock.  For purposes of thisSection 3, the number of shares of Common Stock deemed to be issued andoutstanding as of a given date shall be the sum of the number of shares ofCommon Stock (excluding treasury shares, if any) issued and outstanding.

g)            VoluntaryAdjustment By Company. The Company may at any time during the term of thisWarrant reduce the then current Exercise Price to any amount and for any periodof time deemed appropriate by the Board of Directors of the Company.

h)            *Intentionally Omitted*.

i)              Noticeto Holders.

i.      Adjustment to Exercise Price. Whenever the ExercisePrice is adjusted pursuant to this Section 3, the Company shall promptly mailto each Holder a notice setting forth the Exercise Price after such adjustmentand setting forth a brief statement of the facts requiring such adjustment. Ifthe Company issues a variable rate security, despite the prohibition thereon inthe Purchase Agreement, the Company shall be deemed to have issued Common Stockor Common Stock Equivalents at the lowest possible conversion or exercise priceat which such securities may be converted or exercised in the case of aVariable Rate Transaction (as defined in the Purchase Agreement), or the lowestpossible adjustment price in the case of an MFN Transaction.  The term “***MFNTransaction***” shall mean a transaction in which the Companyissues or sells any securities in a capital raising transaction or series ofrelated transactions which grants to an investor the right to receive additionalshares based upon future transactions of the Company on terms more favorablethan those granted to such investor in such offering.

ii.   Noticeto Allow Exercise by Holder. If (A) the Company shall declare a dividend(or any other distribution) on the Common Stock; (B) the Company shall declarea special nonrecurring cash dividend on or a redemption of the Common Stock;(C) the Company shall authorize the granting to all holders of the Common Stockrights or warrants to subscribe for or purchase any shares of capital stock ofany class or of any rights; (D) the approval of any stockholders of the Companyshall be required in connection with any reclassification of the Common Stock,any consolidation or merger to which the Company is a party, any sale or transferof all or substantially all of the assets of the Company, of any compulsoryshare exchange whereby the Common Stock is converted into other securities,cash or property; (E) the Company shall authorize the voluntary or involuntarydissolution, liquidation or winding up of the affairs of the Company; then, ineach case, the Company shall cause to be mailed to the Holder at its lastaddress as it shall appear upon the Warrant 

9

----

Register of the Company, at least 20 calendar daysprior to the applicable record or effective date hereinafter specified, anotice stating (x) the date on which a record is to be taken for the purpose ofsuch dividend, distribution, redemption, rights or warrants, or if a record isnot to be taken, the date as of which the holders of the Common Stock of recordto be entitled to such dividend, distributions, redemption, rights or warrantsare to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to becomeeffective or close, and the date as of which it is expected that holders of theCommon Stock of record shall be entitled to exchange their shares of the CommonStock for securities, cash or other property deliverable upon suchreclassification, consolidation, merger, sale, transfer or share exchange; *provided, however* that the failureto mail such notice or any defect therein or in the mailing thereof shall notaffect the validity of the corporate action required to be specified in suchnotice.  The Holder is entitled toexercise this Warrant during the 20-day period commencing the date of suchnotice to the effective date of the event triggering such notice.

Section 4.               Transfer of Warrant.

a)             Transferability.  Subject to compliance with any applicable securitieslaws and the conditions set forth in Sections 5(a) and 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and allrights hereunder are transferable, in whole or in part, upon surrender of thisWarrant at the principal office of the Company, together with a writtenassignment of this Warrant substantially in the form attached hereto dulyexecuted by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, suchpayment, the Company shall execute and deliver a new Warrant or Warrants in thename of the assignee or assignees and in the denomination or denominations specifiedin such instrument of assignment, and shall issue to the assignor a new Warrantevidencing the portion of this Warrant not so assigned, and this Warrant shallpromptly be cancelled.  A Warrant, ifproperly assigned, may be exercised by a new holder for the purchase of WarrantShares without having a new Warrant issued.

b)            NewWarrants. This Warrant may be divided or combined with other Warrants uponpresentation hereof at the aforesaid office of the Company, together with awritten notice specifying the names and denominations in which new Warrants areto be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), asto any transfer which may be involved in such division or combination, theCompany shall execute and deliver a new Warrant or Warrants in exchange for theWarrant or Warrants to be divided or combined in accordance with such notice.

c)             WarrantRegister. The Company shall register this Warrant, upon records to bemaintained by the Company for that purpose (the “***WarrantRegister***”), in the name of the record Holder hereof from time totime.  The Company may deem and treat theregistered Holder of this Warrant as the absolute owner hereof for the purposeof any 

10

----

exercise hereof or any distribution to the Holder, andfor all other purposes, absent actual notice to the contrary.

d)            TransferRestrictions. If, at the time of the surrender of this Warrant inconnection with any transfer of this Warrant, the transfer of this Warrantshall not be registered pursuant to an effective registration statement underthe Securities Act and under applicable state securities or blue sky laws, theCompany may require, as a condition of allowing such transfer (i) that theHolder or transferee of this Warrant, as the case may be, furnish to theCompany a written opinion of counsel (which opinion shall be in form, substanceand scope customary for opinions of counsel in comparable transactions) to theeffect that such transfer may be made without registration under the SecuritiesAct and under applicable state securities or blue sky laws, (ii) that theholder or transferee execute and deliver to the Company an investment letter inform and substance acceptable to the Company and (iii) that the transferee bean “accredited investor” as defined in Rule 501(a) of Regulation D promulgatedunder the Securities Act or a qualified institutional buyer as defined in Rule144A(a) under the Securities Act.

Section 5.               Covenants.

(a)           Negative Covenants. Solong as any portion of this Warrant is outstanding, without the prior writtenconsent of the Holder, which consent may be withheld in the sole discretion ofthe Holder, the Company will not and will not permit any of its Subsidiaries todirectly or indirectly:

i.              Saleof Assets, Dissolution, Etc. Transfer, sell, assign, lease or otherwise dispose of all orsubstantially all of its properties or assets, or any assets or propertiesnecessary or desirable for the proper conduct of its business, or transfer,sell, assign or otherwise dispose of any of its accounts, or contract rights toany person or entity, or change the nature of its business, wind-up,liquidate or dissolve, or agree to any of the foregoing, other than in theordinary course of business;

ii.             NoFurther Issuance of Securities. Other than in accordance herewith or with respect to an Exempt Issuance,create, issue or permit the issuance of any additional securities of theCompany or of any of its Subsidiaries (including with respect to any QualifyingTransaction), if any, or any rights, options or warrants to acquire any suchsecurities; *provided, however*, that inthe event that Company desires to issue securities with preferences or rightsgreater than that which the Common Stock has and the Holder consents to same,the Holder will then have the option of converting all or any part of thisWarrant into such stock in lieu of the Common Stock;;

iii.            Agreement.           Enter into any agreement obligatingthe Company to undertake any of the matters set forth in this Section 5(a).

11

----

 

(b)          Affirmative Covenants.  So long as any portion of this Warrant isoutstanding and unless the Holder otherwise consents in writing, which consentmay be withheld in the sole discretion of the Holder, the Company will:

i.              TrueBooks.  Keep true books of record andaccount in which full, true and correct entries will be made of all of itsdealings and transactions, and set aside on its books such reserves as may berequired by GAAP, consistently applied, with respect to all taxes, assessments,charges, levies and claims referred to in (a) above, and with respect to itsbusiness in general, and include such reserves in interim as well as year-endfinancial statements; and

ii.             Rightof Inspection.  Permit any persondesignated by the Holder, at the Holder’s expense, to visit and inspect any ofthe properties, books and financial reports of the Company, all at suchreasonable times upon three (3) Business Days prior notice to the Company, andas often as the Holder may reasonably request, provided the Holder does notunreasonably interfere with the daily operations of the Company and Holderexecutes a confidentiality agreement.

Section 6.               Miscellaneous.

a)             Titleto Warrant.  Prior to the TerminationDate and subject to compliance with applicable laws and Section 4 of thisWarrant, this Warrant and all rights hereunder are transferable, in whole or inpart, at the office or agency of the Company by the Holder in person or by dulyauthorized attorney, upon surrender of this Warrant together with theAssignment Form annexed hereto properly endorsed.  The transferee shall sign an investmentletter in form and substance reasonably satisfactory to the Company.

b)            NoRights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or otherrights as a shareholder of the Company prior to the exercise hereof.  Upon the surrender of this Warrant and thepayment of the aggregate Exercise Price (or by means of a cashless exercise),the Warrant Shares so purchased shall be and be deemed to be issued to suchHolder as the record owner of such shares as of the close of business on thelater of the date of such surrender or payment.

c)             Loss,Theft, Destruction or Mutilation of Warrant. The Company covenants thatupon receipt by the Company of evidence reasonably satisfactory to it of theloss, theft, destruction or mutilation of this Warrant or any stock certificaterelating to the Warrant Shares, and in case of loss, theft or destruction, ofindemnity or security reasonably satisfactory to it (which, in the case of theWarrant, shall not include the posting of any bond), and upon surrender andcancellation of such Warrant or stock certificate, if mutilated, the Companywill make and deliver a new Warrant or stock certificate of like tenor anddated as of such cancellation, in lieu of such Warrant or stock certificate.

d)            Saturdays,Sundays, Holidays, etc.  If the lastor appointed day for the taking of any action or the expiration of any rightrequired or granted herein shall be a 

12

----

Saturday, Sunday or a legal holiday, then such actionmay be taken or such right may be exercised on the next succeeding day not aSaturday, Sunday or legal holiday.

e)             AuthorizedShares.

The Company covenants that during the period theWarrant is outstanding, it will reserve from its authorized and unissued CommonStock a sufficient number of shares to provide for the issuance of the WarrantShares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that itsissuance of this Warrant shall constitute full authority to its officers whoare charged with the duty of executing stock certificates to execute and issuethe necessary certificates for the Warrant Shares upon the exercise of thepurchase rights under this Warrant.  TheCompany will take all such reasonable action as may be necessary to assure thatsuch Warrant Shares may be issued as provided herein without violation of anyapplicable law or regulation, or of any requirements of the Trading Market uponwhich the Common Stock may be listed.

Except and to the extent as waived or consented to bythe Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization,transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observanceor performance of any of the terms of this Warrant, but will at all times ingood faith assist in the carrying out of all such terms and in the taking ofall such actions as may be necessary or appropriate to protect the rights ofHolder as set forth in this Warrant against impairment.  Without limiting the generality of theforegoing, the Company will (a) not increase the par value of any Warrant Sharesabove the amount payable therefor upon such exercise immediately prior to suchincrease in par value, (b) take all such action as may be necessary orappropriate in order that the Company may validly and legally issue fully paidand nonassessable Warrant Shares upon the exercise of this Warrant, and (c) usecommercially reasonable efforts to obtain all such authorizations, exemptionsor consents from any public regulatory body having jurisdiction thereof as maybe necessary to enable the Company to perform its obligations under thisWarrant.

Before taking any action which would result in anadjustment in the number of Warrant Shares for which this Warrant isexercisable or in the Exercise Price, the Company shall obtain all suchauthorizations or exemptions thereof, or consents thereto, as may be necessaryfrom any public regulatory body or bodies having jurisdiction thereof.

f)             Jurisdiction.All questions concerning the construction, validity, enforcement andinterpretation of this Warrant shall be determined in accordance with theprovisions of the Purchase Agreement.

g)            Restrictions.  The Holder acknowledges that the WarrantShares acquired upon the exercise of this Warrant, if not registered, will haverestrictions upon resale imposed by state and federal securities laws.

13

----

 

h)            Expenses.  If the Company willfully and knowingly failsto comply with any provision of this Warrant, which results in any materialdamages to the Holder, the Company shall pay to Holder such amounts as shall besufficient to cover any costs and expenses including, but not limited to,reasonable attorneys’ fees, including those of appellate proceedings, incurredby Holder in collecting any amounts due pursuant hereto or in otherwiseenforcing any of its rights, powers or remedies hereunder.

i)              Notices.  Any notice, request or other documentrequired or permitted to be given or delivered to the Holder by the Companyshall be delivered in accordance with the notice provisions of the PurchaseAgreement.

j)              Limitationof Liability.  No provision hereof,in the absence of any affirmative action by Holder to exercise this Warrant orpurchase Warrant Shares, and no enumeration herein of the rights or privilegesof Holder, shall give rise to any liability of Holder for the purchase price ofany Common Stock or as a stockholder of the Company, whether such liability isasserted by the Company or by creditors of the Company.

k)             Remedies.  Holder, in addition to being entitled toexercise all rights granted by law, including recovery of damages, will beentitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damageswould not be adequate compensation for any loss incurred by reason of a breachby it of the provisions of this Warrant and hereby agrees to waive the defensein any action for specific performance that a remedy at law would be adequate.

l)              Successorsand Assigns.  Subject to applicablesecurities laws, this Warrant and the rights and obligations evidenced herebyshall inure to the benefit of and be binding upon the successors of the Companyand the successors and permitted assigns of Holder.  The provisions of this Warrant are intendedto be for the benefit of all Holders from time to time of this Warrant andshall be enforceable by any such Holder or holder of Warrant Shares.

m)            Amendmentand Waiver.  This Warrant may bemodified or amended only with the written consent of the Company and theHolder.  No course of dealing or anydelay or failure to exercise any right hereunder on the part of Holder shalloperate as a waiver of such right or otherwise prejudice Holder’s rights,powers or remedies, notwithstanding the fact that all rights hereunderterminate on the Termination Date.  

n)            Severability.  Wherever possible, each provision of thisWarrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by orinvalid under applicable law, such provision shall be ineffective to the extentof such prohibition or invalidity, without invalidating the remainder of suchprovisions or the remaining provisions of this Warrant.

o)            Headings.  The headings used in this Warrant are for theconvenience of reference only and shall not, for any purpose, be deemed a partof this Warrant.

p)            Registration Rights. The Holderhas certain rights with respect to the registration of the Warrant Shares uponexercise of this Warrant, such rights being 

14

----

specifically set forth in the Purchase Agreemententered into by and between Holder and the Company on the date hereof.

[*Signature Page Follows*]

15

----

 

**INWITNESS WHEREOF**, the Company has caused this Warrant to beexecuted by its officer thereunto duly authorized as of the date first writtenabove.
|            | **UNIPIXEL, INC.** |
|------------|--------------------|
| ** ** | By:                | ** ** |
| ** ** | ** **         | Name: Reed Killion |
| ** ** | ** **         | Title: President |

 

 

----

 

**NOTICE OF EXERCISE**

TO:         UNIPIXEL, INC.

(1)   The undersigned hereby elects to purchase________ Warrant Shares of UniPixel, Inc. pursuant to the terms of the attachedWarrant (only if exercised in full), and tenders herewith payment of theexercise price in full, together with all applicable transfer taxes, if any.

(2)   Payment shall take the form of (checkapplicable box):

[  ] in lawful money of the United States; or

[  ] the cancellation of such number of WarrantShares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of WarrantShares purchasable pursuant to the cashless exercise procedure set forth insubsection 2(c).

(3)   Please issue a certificate or certificatesrepresenting said Warrant Shares in the name of the undersigned or in suchother name as is specified below:

_______________________________

The Warrant Shares shall be delivered to thefollowing:

_______________________________

_______________________________

_______________________________

(4)  AccreditedInvestor.  The undersigned, and, ifapplicable, the person or entity identified in subsection 3 above, is an “accreditedinvestor” as defined in Regulation D promulgated under the Securities Act of1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:_____________________________________________________________

*Signature of Authorized Signatory of InvestingEntity*: _______________________________________

Name of Authorized Signatory: _________________________________________________________

Title of Authorized Signatory:__________________________________________________________

Date:______________________________________________________________________________

----

 

**ASSIGNMENTFORM**

(To assign the foregoing warrant, executethis form and supply required information. Do not use this form to exercise the warrant.)

FOR VALUERECEIVED, the foregoing Warrant and all rights evidenced thereby are herebyassigned to

_______________________________________________whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:   _____________________________

Holder’s Address:     _____________________________

           _____________________________

SignatureGuaranteed: ___________________________________________

NOTE:  The signature to this Assignment Form mustcorrespond with the name as it appears on the face of the Warrant, withoutalteration or enlargement or any change whatsoever, and must be guaranteed by abank or trust company.  Officers ofcorporations and those acting in a fiduciary or other representative capacityshould file proper evidence of authority to assign the foregoing Warrant.

 

----