Exhibit 10.3


 


NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY BE SOLD OR TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER SAID ACT AND IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.


 


September 28, 2007


 


UNI-PIXEL, INC.


 


COMMON STOCK PURCHASE WARRANT


 


Void after September 28, 2017


 


This WARRANT (this “Warrant”) entitles Merrill Lynch Pierce, Fenner &
Smith Incorporated (including any successors or assigns, the “Holder”), for value
received, to purchase from Uni-Pixel,
Inc., a Delaware corporation, at any time and from time to time, subject
to the terms and conditions set forth herein, all or any portion of the Warrant
Shares (as defined in Section 1 below) at the Exercise Price (as defined
in Section 1 below), during the period starting from 5:00 a.m. on the
Initial Exercise Date (as defined in Section 1 below) to 5:00 p.m.,
Eastern time, on the Expiration Date (as defined in Section 1 below), at
which time this Warrant shall expire and become void. This Warrant is subject
to the following terms and conditions:


 


1.             Definitions.  As used in this Warrant, the following
terms shall have the respective meanings set forth below or elsewhere in this
Warrant:


 


“Affiliate”
of any Person means any other Person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, such Person, as such terms are used and construed under Rule 144 under
the Securities Act of 1933, as amended (the “Securities
Act”), including, without limitation, any other Person that
serves as a general partner, managing member and/or investment adviser or in a
similar capacity of such Person or any other Person for which such Person serves
as a general partner, managing member and/or investment adviser or in a similar
capacity.


 


“Board” means the Board of
Directors of the Company.


 


“Business Day” means any day except
Saturday, Sunday and any day which is a federal legal holiday or a day on which
banking institutions in the State of New York or Texas are authorized or
required by law or other governmental action to close.


 

















 


“Certificate
of Designations” means the Certificate of Designations of the
Series C Preferred Stock filed on or before the Closing (as defined in the
Securities Purchase Agreement) by the Company with the Secretary of State of
the State of Delaware, establishing the rights, preferences and privileges of
the Series C Preferred Stock.


 


“Common Stock”
means the Company’s common stock, par value $0.001 per share (including any
securities into which or for which such shares may be exchanged, or converted,
pursuant to any stock dividend, stock split, stock combination,
recapitalization, reclassification, reorganization or other similar event).


 


“Company”
means Uni-Pixel, Inc., a Delaware corporation.


 


“Exercise Price”
means $1.40 per share of Common Stock, subject to adjustment under the terms of
this Warrant.


 


“Expiration Date”
means September 28, 2017.


 


“Fair Market
Value” on any date of determination shall mean (i) if the Common
Stock is listed on a national securities exchange or admitted to quotation on a
national automated quotation system, then the last reported sale price per
share of Common Stock on such exchange or quotation system, as the case may be,
on the date immediately preceding the date of determination or, if no such sale
price is reported on such date, such price on the next preceding trading day in
which such price was reported, (ii) if the Common Stock is not listed on a
national securities exchange or quoted on a national automated quotation
system, but is actively traded over-the-counter, then the average of the
closing bid and asked prices over the five (5) trading days ended on the
trading day immediately preceding the date of determination or (iii) if such
Common Stock is not traded, quoted or listed on any national securities
exchange, national automated quotation system or the over-the-counter market,
then the fair market value of a share of Common Stock, as determined in good
faith by the Board.


 


“Holder”
has the meaning set forth in the preamble of this Warrant.


 


“Initial
Exercise Date” means September 28, 2007.


 


“Initial
Public Offering” means the closing of the Company’s first public
offering of the Company’s Common Stock registered under the Securities Act.


 


“Investor’s
Rights Agreement” means that certain Investor’s Rights Agreement
dated September 28, 2007, by and between the Company and the Holder.


 


“Person”
(whether or not capitalized) means an individual, entity, partnership, limited
liability company, corporation, association, trust, joint venture,
unincorporated organization, and any government, governmental department or
agency or political subdivision thereof.


 


2

















 


“SEC”
means the Securities and Exchange Commission.


 


“Securities
Purchase Agreement” means that certain Securities Purchase
Agreement dated September 28, 2007, by and between the Company and the Holder.


 


“Series C Preferred” means the
Company’s Series C Preferred Stock, par value $0.001 per share.


 


“Warrant Shares”
means an aggregate of 3,214,289 shares
of Common Stock, subject to adjustments under the terms of this Warrant, issued
or issuable upon the exercise of this Warrant.


 


2.             Exercise of Warrant.


 


2.1           Method of Exercise. Subject to all of the terms and conditions hereof,
this Warrant may be exercised, in whole or in part, at any time and from time
to time during the period commencing on the Initial Exercise Date and ending on
the Expiration Date. Exercise shall be by the presentation and surrender to the
Company at its principal office, or to the transfer agent of the Company, of
this Warrant and the Notice and Subscription form attached hereto as Exhibit
1, executed by the Holder, which shall indicate the number of Warrant
Shares for which the Holder intends to exercise this Warrant, together with
payment to the Company in accordance with Section 3 hereof in an amount
equal to the product of (x) the Exercise Price multiplied by (y) the number of
Warrant Shares issuable upon such exercise. Upon and as of receipt by the
Company (or the transfer agent) of such properly completed and duly executed
Notice and Subscription form accompanied by payment as herein provided, the
Holder (or its designee) shall be deemed to be the Holder of record of the
Warrant Shares issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then actually be, or have been,
delivered to the Holder.


 


2.2           Delivery of Stock
Certificates on Exercise. As soon as practicable after an
exercise of this Warrant, and in any event within five (5) Business Days
thereafter, the Company, at its expense, and in accordance with applicable
securities laws, shall cause to be issued in the name of and delivered to the
Holder, or as the Holder may direct (subject in all cases, to the provisions of
Section 8 hereof), a certificate or certificates for the number of
Warrant Shares issued on the date of such exercise, plus,  in lieu of any fractional share to which the
Holder would otherwise be entitled, an amount of cash equal to such fraction
multiplied by the Fair Market Value.


 


2.3           Shares To Be Fully Paid
and Nonassessable. All Warrant Shares issued upon
an exercise of this Warrant shall be validly issued, fully paid and
nonassessable, free of all liens, taxes, charges and other encumbrances or
restrictions on sale (other than those expressly set forth herein).


 


2.4           Fractional Shares. No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issued upon the
exercise of this 


 


3

















 


Warrant. With respect to any
fraction of a share of Common Stock otherwise issuable upon any exercise
hereof, the Company shall make a cash payment to the Holder as set forth in Section
2.2 hereof.


 


2.5           Issuance of New Warrants;
Company Acknowledgment. Upon any partial exercise of
this Warrant, the Company, at its expense, will as soon as practicable and, in
any event within five (5) Business Days thereafter, issue and deliver to the
Holder a new Warrant, registered in the name of the Holder, exercisable, in the
aggregate, for the balance of the Warrant Shares and substantially identical to
this Warrant. Moreover, the Company shall, at the time of any exercise of this
Warrant, upon the request of the Holder, acknowledge in writing its continuing
obligation to afford to the Holder any rights to which the Holder shall
continue to be entitled after such exercise in accordance with the provisions
of this Warrant; provided, however,
that if the Holder does not make any such request, the continuing obligation of
the Company to afford to the Holder any such rights shall not be affected.


 


2.6           Payment of Taxes and
Expenses.
The Company shall pay any recording,
filing, stamp or similar tax which may be payable in respect of any transfer
involved in the issuance of, and the preparation and delivery of certificates
(if applicable) representing, (i) any Warrant Shares issued upon exercise of
this Warrant and (ii) new or replacement Warrants in the Holder’s name or the
name of any transferee of all or any portion of this Warrant; provided, however, that
any tax payable as a result of such transfer by the Holder to a transferee
shall be paid by the Holder.


 


3.             Payment of Exercise Price. The Exercise Price for the Warrant Shares being
purchased upon any exercise of this Warrant may be paid, at the election of the
Holder (i) in cash, by certified check or by wire transfer to an account
designated in writing by the Company, (ii)
by cancellation of indebtedness owing from the Company to the Holder, (iii) by
the Holder surrendering a number of Warrant Shares having a Fair Market Value on
the date of exercise equal to, greater than (but only if by a fractional share)
or less than the Exercise Price, in which case the Holder shall receive the
number of Warrant Shares to which it would otherwise be entitled upon such
exercise, less the surrendered shares, or (iv) any combination of the methods
described in the foregoing clauses (i), (ii) and (iii).


 


4.             Adjustment of Exercise
Price and Number of Warrant Shares. The
Exercise Price and number of Warrant Shares shall be subject to adjustment from
time to time upon the occurrence of certain events as follows:


 


4.1.          Subdivision or Combination
of Stock.
If at any time or from time to time
after the date hereof, the Company shall subdivide (by way of stock dividend,
stock split or otherwise) its outstanding shares of Common Stock, the Exercise
Price in effect immediately prior to such subdivision shall be reduced
proportionately and the number of Warrant Shares (calculated to the nearest
whole share) shall be increased proportionately, and conversely, in the event
the outstanding shares of Common Stock shall be combined (whether by stock
combination, reverse stock split or otherwise) into a smaller number of shares,
the Exercise Price in effect immediately prior to such combination shall be
increased 


 


4

















 


proportionately and the number of
Warrant Shares (calculated to the nearest whole share) shall be decreased
proportionately. The Exercise Price and the number of Warrant Shares, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described in this Section 4.1.


 


4.2           Adjustment for Stock
Dividends.
If at any time after the date hereof,
the Company shall declare a dividend or make any other distribution upon any
class or series of capital stock of the Company payable in shares of Common
Stock or other rights or securities convertible into or exercisable for shares
of Common Stock (other than the payment of dividends on the Series A Preferred
Stock of the Company (the “Series A Preferred”)
in accordance with the terms of the Certificate of Designations for the Series
A Preferred as in effect on the date hereof, the Exercise Price and the number
of Warrant Shares shall be adjusted proportionately. The Exercise Price and the
number of Warrant Shares, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described in this Section
4.2.


 


4.3           Adjustments for
Reclassifications. If the Common Stock issuable
upon exercise of this Warrant shall be changed into, or the right to receive,
the same or a different number of shares of any other class(es) or series of
stock or other securities or property, whether by reclassification,
reorganization or otherwise (other than an adjustment under Section 4.1
and Section 4.2 or a merger, consolidation, or sale of assets provided
for under Section 4.4), then and in each such event, the Holder
hereof shall have the right thereafter to receive upon exercise of this Warrant
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, reorganization or other
change in respect of a number of shares of Common Stock equal to the number of
Warrant Shares otherwise issuable upon such exercise of this Warrant, all
subject to successive adjustments thereafter from time to time pursuant to and
in accordance with the provisions of this Section 4.


 


4.4           Sale of
Shares Below Exercise Price.


 


(a)           If at
any time or from time to time after the Initial Exercise Date, the Company
issues or sells, or is deemed by the express provisions of this Section 4.4(a)
to have issued or sold, Additional Shares of Common Stock (as defined below),
other than as provided in Section 4.1, Section 4.2 or Section
4.3, for an Effective Price (as defined below) less than the then effective
Exercise Price (such issuance, a “Qualifying Dilutive Issuance”),
then and in each such case, the then existing Exercise Price shall be reduced,
as of the opening of business on the date immediately after such issue or sale,
(x) in the event such date occurs within twenty-four (24) months following the
date hereof, to a price equal to the Effective Price and (y) in the event such
date occurs after twenty-four (24) months following the date hereof,  to a price determined by multiplying the
Exercise Price in effect immediately prior to such issuance or sale by a
fraction:


 


(i)            the numerator of which shall be (x) the
number of shares of Common Stock deemed outstanding (as determined below)
immediately prior to such issue or sale, plus (y) the number of shares
of Common Stock which the Aggregate Consideration (as defined 


 


5

















 


below) received or deemed received by the Company for the total number
of Additional Shares of Common Stock so issued would purchase at the then
effective Exercise Price (prior to such adjustment); and


 


(ii)           the denominator of which shall be the number
of shares of Common Stock deemed outstanding (as determined below) immediately
prior to such issue or sale plus the total number of Additional Shares
of Common Stock so issued.


 


For the purposes of the preceding sentence, the number of shares of
Common Stock deemed to be outstanding as of a given date shall be the sum of
(x) the number of shares of Common Stock outstanding and (y) the number of
shares of Common Stock into which the then outstanding shares of Series C
Preferred could be converted if fully converted on the day immediately
preceding the given date.


 


(b)           No
adjustment shall be made to the Exercise Price in an amount less than one cent
per share. Any adjustment otherwise required by this Section 4.4 that is
not required to be made due to the preceding sentence shall be included in any
subsequent adjustment to the Exercise Price.


 


(c)           For the
purpose of making any adjustment required under this Section 4.4, the
aggregate consideration received by the Company for any issue or sale of
Additional Shares of Common Stock (the “Aggregate Consideration”)
shall be defined as: (i) to the extent it consists of cash, the amount of cash
received by the Company before deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the Company in
connection with such issue or sale and without deduction of any expenses
payable by the Company in connection with such issue or sale, (ii) to the
extent it consists of property other than cash, the fair market value of that
property as determined in good faith by the Board (irrespective of accounting
treatment), and (iii) if Additional Shares of Common Stock, Convertible
Securities (as defined below) or rights or options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued or sold
together with other stock or securities or other assets of the Company for a
consideration which covers both, the portion of the consideration so received
that may be reasonably determined in good faith by the Board to be allocable to
such Additional Shares of Common Stock, Convertible Securities or rights or
options.


 


(d)           For the
purpose of the adjustment required under this Section 4.4, if the
Company issues or sells (x) preferred stock or other stock, options, warrants,
purchase rights or other securities convertible into Additional Shares of
Common Stock (such convertible stock or instruments being herein referred to as
“Convertible Securities”) or (y) rights or options
for the purchase of Additional Shares of Common Stock or Convertible Securities
and if the Effective Price (defined below) of such Additional Shares of Common
Stock is less than the then effective Exercise Price, in each case the Company
shall be deemed to have issued at the time of the issuance of such rights or
options or Convertible Securities the maximum number of Additional Shares of
Common Stock


 


6

















 


issuable upon exercise or conversion in full thereof and to have
received as consideration for the issuance of such shares an amount equal to
the total amount of the consideration, if any, received by the Company for the
issuance of such rights or options or Convertible Securities plus:


 


(i)            in the case of such rights or options, the
minimum amount of consideration, if any, payable to the Company upon the
exercise of such rights or options; and


 


(ii)           in the case of Convertible Securities, the
minimum amount of consideration, if any, payable to the Company upon the
conversion thereof (other than by cancellation of liabilities or obligations
evidenced by such Convertible Securities); provided, however, that if the minimum amount of such consideration
cannot be ascertained, but are a function of antidilution or similar protective
clauses, the Company shall be deemed to have received the minimum amount of
consideration without reference to such clauses.


 


If the minimum amount of consideration payable to the Company upon the
exercise or conversion of rights, options or Convertible Securities is reduced
over time or on the occurrence or non-occurrence of specified events other than
by reason of antidilution adjustments, the Effective Price shall be
recalculated using the decreased minimum amount of consideration; provided further, however, that if the minimum amount of
consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities is subsequently increased (other than
by reason of antidilution adjustments), the Effective Price also shall be
recalculated using the increased minimum amount of consideration.


 


No further adjustment of the Exercise Price, as adjusted upon the
issuance of such rights, options or Convertible Securities, shall be made as a
result of the actual issuance of Additional Shares of Common Stock or the
exercise of any such rights or options or the conversion of any such
Convertible Securities. If any such rights or options or the conversion
privilege represented by any such Convertible Securities shall expire or
terminate without having been exercised, the then effective Exercise Price,
which was adjusted upon the issuance of such rights, options or Convertible
Securities, shall be readjusted on the basis of the Additional Shares of Common
Stock, if any, actually issued or sold on the exercise of such rights or
options or rights of conversion of such Convertible Securities, the
consideration actually received by the Company upon such exercise (other than
by cancellation of liabilities or obligations evidenced by such Convertible
Securities) and the consideration, if any, actually received by the Company
upon the original issuance of all such rights or options or Convertible
Securities, whether or not exercised; provided, however,
that such readjustment shall not apply to prior exercises of Warrants. No
adjustments made pursuant to this Section 4.4 shall apply to prior
exercises of Warrants.


 


(e)           For the
purpose of making any adjustment to the Exercise Price required under this Section
4.4, “Additional Shares of Common Stock” shall
mean all shares of Common Stock issued by the Company or deemed to be issued
pursuant to this 


 


7

















 


Section 4.4 (including shares of Common
Stock subsequently reacquired or retired by the Company), other than:


 


(i)            shares of Common Stock issued upon conversion
of shares of Series A Preferred, Series B Preferred Stock of the Company or
Series C Preferred or exercise of any other Convertible Securities (including
the other warrants issued concurrently with the Series C Preferred under the
Securities Purchase Agreement or the other warrants issued concurrently with
the Series B Preferred) outstanding as of the Initial Exercise Date;


 


(ii)           the payment of dividends on the Series A
Preferred in additional shares of Series A Preferred in accordance with the
terms of the Certificate of Designations for the Series A Preferred as in
effect on the date hereof;


 


(iii)          the shares of Common Stock (or options
thereon) issued after the Initial Exercise Date to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary pursuant
to stock purchase or stock option plans or other compensatory arrangements
which, if required by the Certificate of Designations, have been approved by
the requisite holders of Series C Preferred (collectively, “Plans”); provided, however, that any such issuances are approved by the Board;


 


(iv)          shares of Common Stock or Convertible
Securities issued pursuant to any equipment loan or leasing arrangement, real
property leasing arrangement or debt financing from a bank or similar financial
institution approved by the Board;


 


(v)           shares of Common Stock or Convertible
Securities issued in connection with bona fide acquisitions, mergers or similar
transactions, the terms of which are approved by the Board; or


 


(vi)          shares of Common Stock or Convertible Securities
issued to any person as a component of any business relationship with such
person primarily for (A) joint venture, technology licensing or development
activities purposes, (B) purposes of distribution, supply or manufacture of the
Company’s products or services or (C) any purposes other than raising capital,
the terms of which are approved by the Board.


 


References to Common Stock in the subsections of this clause (e) above
shall mean all shares of Common Stock issued by the Company or deemed to be issued
pursuant to this Section 4.4.


 


8

















 


(f)            The “Effective
Price” of Additional Shares of Common Stock shall mean the quotient determined
by dividing the total number of Additional Shares of Common Stock issued or
sold, or deemed to have been issued or sold by the Company under this Section
4.4, into the Aggregate Consideration received, or deemed to have been
received, by the Company for such issue under this Section 4.4, for such
Additional Shares of Common Stock. In the event that the number of shares of
Additional Shares of Common Stock or the Effective Price cannot be ascertained
at the time of issuance, such Additional Shares of Common Stock shall be deemed
issued immediately upon the occurrence of the first event that makes such
number of shares or the Effective Price, as applicable, determinable.


 


(g)           In the
event that the Company issues or sells, or is deemed to have issued or sold,
Additional Shares of Common Stock in a Qualifying Dilutive Issuance (the “First
Dilutive Issuance”) and then issues or sells, or is deemed to have
issued or sold, Additional Shares of Common Stock in additional Qualifying
Dilutive Issuances as part of the same transaction or series of related
transactions as the First Dilutive Issuance (a “Subsequent
Dilutive Issuance”), then and in each such case upon a Subsequent
Dilutive Issuance the Exercise Price shall be reduced to the Exercise Price
that would have been in effect had the First Dilutive Issuance and each
Subsequent Dilutive Issuance all occurred on the closing date of the First
Dilutive Issuance.


 


4.5           Adjustments for Merger or
Consolidation. In the event that, at any time
or from time to time after the date hereof, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other Person, or (c)
sell or transfer all or substantially all of its properties or assets or more
than fifty percent (50%) of the voting capital stock of the Company (whether
issued and outstanding, newly issued, from treasury, or any combination
thereof) to any other person under any plan or arrangement contemplating the
consolidation or merger, sale or transfer, or dissolution of the Company, then,
in each such case, the Holder, upon the exercise of this Warrant at any time or
from time to time after the consummation of such reorganization, consolidation,
merger or sale or the effective date of such dissolution, as the case may be,
shall receive, in lieu of the Warrant Shares otherwise issuable upon such
exercise, the stock and property (including cash) to which the Holder would
have been entitled upon the consummation of such consolidation or merger, or
sale or transfer, or in connection with such dissolution, as the case may be,
if the Holder had exercised this Warrant immediately prior thereto (assuming
the payment by the Holder of the Exercise Price therefor as required hereby,
which payment shall be included in the assets of the Company for the purposes
of determining the amount available for distribution), all subject to successive
adjustments thereafter from time to time pursuant to, and in accordance with,
the provisions of this Section 4.


 


4.6           Continuation
of Terms. Upon any reorganization, consolidation, merger or transfer (and any
dissolution following any such transfer) referred to in this Section 4,
this Warrant shall continue in full force and effect and the terms hereof shall
be applicable to the shares of stock and other securities and property to which
the Holder has a right to receive upon the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any 


 


9

















 


such
transfer, as the case may be, and shall be binding upon the issuer or owner of
any such stock or other securities and property, including, in the case of any
such transfer, the Person acquiring all or substantially all of the properties
or assets or more than fifty percent (50%) of the voting capital stock of the
Company (whether issued and outstanding, newly issued or from treasury or any
combination thereof), whether or not such Person shall have expressly assumed
the terms of this Warrant.


 


4.7           Certificate as to
Adjustments. Upon the occurrence of each
event requiring adjustment or readjustment of the Exercise Price and number of
Warrant Shares pursuant to this Section 4, this Warrant shall, without
any action on the part of the Holder, be adjusted in accordance with this Section
4, and the Company, at its expense, promptly shall compute such adjustment
or readjustment in accordance with the terms hereof and prepare and furnish to
the Holder a certificate setting forth such adjustment or readjustment, showing
in reasonable detail the facts and calculations upon which such adjustment or
readjustment is based. The Company will forthwith send a copy of each such
certificate to the Holder in accordance with Section 10.4 below.


 


4.8           Delivery.
The Holder shall have the right to have the shares of Common Stock delivered to
a designee of the Holder upon the exercise of this Warrant.


 


5.             Registration Rights. The Warrant Shares shall be entitled to registration
rights and all other rights as applicable to such shares in accordance with the
Investor’s Rights Agreement.


 


6.             Notices of Record Date. Upon (a) any establishment by the Company of a
record date of the holders of Common Stock for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
or right or option to acquire securities of the Company, or any other right, or
(b) any capital reorganization, reclassification, recapitalization, merger
or consolidation of the Company with or into any other corporation, any
transfer of all or substantially all the assets of the Company, or any voluntary
or involuntary dissolution, liquidation or winding up of the Company, or the
sale, in a single transaction, of more than fifty percent (50%) of the Company’s
voting capital stock (whether newly issued, or from treasury, or previously
issued and then outstanding, or any combination thereof), the Company shall
mail to the Holder at least ten (10) Business Days, or such longer period as
may be required by law, prior to the applicable record date or effective date,
a notice specifying (i) the date established as the record date for the purpose
of such dividend, distribution, option or right and a description of such
dividend, distribution, option or right, (ii) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up, or sale is expected to become effective and (iii)
the date, if any, fixed as to when the holders of record of Common Stock shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up.


 


7.             Exchange
of Warrant. Subject to the provisions of Section 8 hereof (if and to the
extent applicable), this Warrant shall be exchangeable, upon the surrender
hereof by the 


 


10

















 


Holder at
the principal office of the Company, for new Warrants, each registered in the
name of the Holder or in the name of such other persons as the Holder may
direct (upon payment by the Holder of any applicable transfer taxes). Each of
such new Warrants shall be exercisable for such number of Warrant Shares as the
Holder shall direct; provided, however, that all of such new Warrants shall represent, in
the aggregate, the right to purchase the same number of Warrant Shares and
cash, securities or other property, if any, which may be purchased by the
Holder upon exercise of this Warrant at the time of its surrender and shall
otherwise be substantially identical as this Warrant.


 


8.             Transfer Provisions, etc.


 


8.1           Legends. Each certificate representing
Warrant Shares issued upon exercise of this Warrant shall bear the following
legend:


 


“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
REGISTRATION UNDER SAID ACT.”


 


8.2           Mechanics of Transfer.


 


(a)           Subject to compliance with the
Investor’s Rights Agreement and the Securities Purchase Agreement, any transfer of
all or any portion of this Warrant, or of any interest herein, that is
otherwise in compliance with applicable law and the Securities Purchase
Agreement shall be effected by surrendering this Warrant to the Company at its
principal office, together with a duly executed form of assignment, in the form
attached as Exhibit 2 hereto.


 


(b)           In the event of any transfer
of all or any portion of this Warrant in accordance with Section 8.2(a)
above, the Company shall issue (i) a new Warrant to the transferee,
representing the right to purchase the number of Warrant Shares, and cash,
securities or other property, if any, which were purchasable by the Holder of
the transferred portion of this Warrant, and (ii) a new Warrant to the Holder,
representing the right to purchase the number of Warrant Shares, and cash,
securities or other property, if any, purchasable by the Holder of the balance
of this Warrant. Until this Warrant or any portion thereof is transferred on
the books of the Company, the Company may treat the Holder as the absolute
holder of this Warrant and all right, title and interest therein for all
purposes, notwithstanding any notice to the contrary.


 


8.3           No Restrictions on Transfer. Subject to compliance with
applicable securities laws, the Securities Purchase Agreement and the Investor’s Rights
Agreement (including, but not limited to, the transfer restrictions in the
Investor’s Rights Agreement), this
Warrant and any portion hereof, the Warrant Shares and the rights hereunder may
be transferred by the Holder in its sole discretion at any time and to any
Person or Persons, 


 


11

















 


including,
without limitation, Affiliates and affiliated groups of such Holder, without
the consent of the Company.


 


8.4           Warrant Register. The Company shall keep at its principal office a
register for the registration, and registration of transfers, of the Warrants. The
name and address of each Holder of one or more of the Warrants, each transfer
thereof and the name and address of each transferee of one or more of the
Warrants shall be registered in such register. The Company shall give to any Holder
of a Warrant promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered Holders of the Warrants.


 


9.             Lost, Stolen or Destroyed
Warrant. Upon receipt by the Company of evidence satisfactory
to the Company of loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of a customary affidavit
of the Holder and indemnity agreement, or, in the case of mutilation, upon
surrender of this Warrant, the Company at its expense will execute and deliver,
or will instruct its transfer agent to execute and deliver, a new Warrant and
any such lost, stolen or destroyed Warrant thereupon shall become void.


 


10.           General.


 


10.1         Authorized Shares, Reservation of Shares for Issuance. At all times while this
Warrant is outstanding, the Company shall maintain its corporate authority to
issue, and shall have authorized and reserved for issuance upon exercise of
this Warrant, such number of shares of Common Stock and any other capital stock
or other securities as shall be necessary to perform its obligations under this
Warrant, taking into account any and all adjustments to the Warrant Shares
under this Warrant.


 


10.2         No Dilution or Impairment. The Company will not, by
amendment of its Certificate of Incorporation or Bylaws or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities, sale or other transfer of any of its assets or
properties, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder hereunder against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (a) will not
increase the par value of any shares of Common Stock issuable upon the exercise
of this Warrant above the amount payable therefor on such exercise, and (b)
will take all action that may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock (and any other capital stock or other securities) upon the
exercise of this Warrant.


 


10.3         No Rights as Stockholder. The Holder shall not be entitled to vote or to
receive dividends or to be deemed the holder of the shares of Common Stock that
may at any time be issuable upon exercise of this Warrant for any purpose
whatsoever, nor shall anything contained herein be construed to confer upon the
Holder any of the rights of a 


 


12

















 


stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance or
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger or conveyance or otherwise), or to receive notice
of meetings (except to the extent otherwise provided in this Warrant), or to
receive dividends or subscription rights, until the Holder shall have exercised
this Warrant and been issued Warrant Shares or other securities in accordance
with the provisions hereof.


 


10.4         Notices. All notices, requests,
consents and other communications (hereinafter collectively referred to as “correspondence”)
required or permitted to be given hereunder shall be given in writing and shall
be deemed given if sent by certified or registered mail (return receipt
requested), overnight courier or telecopy (with confirmation of receipt), or
delivered by hand to the party to whom such correspondence is required or
permitted to be given hereunder. An electronic communication (“Electronic Notice”) shall be deemed
written notice for purposes of this Section 10.4 if sent with return
receipt requested to the electronic mail address specified by the receiving party
in this Section 10.4. A copy of any such communication shall also be
sent in accordance with the first sentence of this Section 10.4. Electronic
Notice shall be deemed received at the time the party sending Electronic Notice
receives verification of receipt by the receiving party. All correspondence
shall be addressed as follows:


 


	
   

  	
  (a) if to the Company at:

  
	
   

  	
   

  
	
   

  	
  Uni-Pixel, Inc.

  
	
   

  	
  8708 Technology Forest Place

  
	
   

  	
  Suite 100

  
	
   

  	
  The Woodlands, Texas 77381

  
	
   

  	
  Attention: James Tassone

  
	
   

  	
  Facsimile: (281) 825-4599

  
	
   

  	
  Email: jtassone@unipixel.com

  
	
   

  	
   

  
	
   

  	
  with copies to:

  
	
   

  	
   

  
	
   

  	
  Jones, Walker, Waechter,
  Poitevent, Carrère & Denègre, L.L.P.

  
	
   

  	
  Four United Plaza

  
	
   

  	
  8555 United Plaza Boulevard

  
	
   

  	
  Baton Rouge, LA 70809

  
	
   

  	
  Attention: Scott D. Chenevert,
  Esq.

  
	
   

  	
  Facsimile: (225) 248-2010

  
	
   

  	
  Email:
  schenevert@joneswalker.com

  



 


(b)  if to the Holder, at the
Holder’s address appearing in the books maintained by the Company.


 


13

















 


11.           Amendment and Waiver. No failure or delay of the
Holder in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The terms of this Warrant may be amended, modified
or waived only with the written consent of the Company and the Holder.


 


12.           Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, as such laws are applied to
contracts entered into and wholly to be performed within the State of Delaware
and without giving effect to any principles of conflicts or choice of law that
would result in the application of the laws of any other jurisdiction.


 


13.           Covenants
To Bind Successor and Assigns. All covenants, stipulations,
promises and agreements in this Warrant contained by or on behalf of the
Company shall bind its successors and assigns, whether so expressed or not.


 


14.           Severability. In case any one or more of the
provisions contained in this Warrant shall be held 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. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.


 


15.           Construction. The definitions of this
Warrant shall apply equally to both the singular and the plural forms of the
terms defined. Wherever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The section and paragraph
headings used herein are for convenience of reference only, are not part of
this Warrant and are not to affect the construction of or be taken into
consideration in interpreting this Warrant.


 


16.           Remedies. The Holder, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate. In any action
or proceeding brought to enforce any provision of this Warrant or where any
provision hereof is validly asserted as a defense, the successful party to such
action or proceeding shall be entitled to recover reasonable attorneys’ fees in
addition to any other available remedy.


 


[The remainder of this page is left intentionally
blank.]


 


14





















 


IN WITNESS WHEREOF, the Company has executed this Common Stock Purchase
Warrant as of the date set forth above.


 


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNI-PIXEL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Reed J. Killion

  
	
   

  	
   

  	
  Title:

  	
  President

  
					



 


 


SIGNATURE PAGE TO COMMON STOCK PURCHASE
WARRANT OF


UNI-PIXEL, INC.


 

















 


EXHIBIT 1


 


NOTICE AND


SUBSCRIPTION


 


 


	
  To:

  	
  Uni-Pixel, Inc.

  	
  Date:

  	
   

  
	
   

  	
  8708 Technology Forest Place

  	
   

  	
   

  
	
   

  	
  Suite 100

  	
   

  	
   

  
	
   

  	
  The Woodlands, Texas 77381

  	
   

  	
   

  



 


The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to exercise thereunder,                      
shares of Common Stock of Uni-Pixel, Inc., a Delaware corporation, and tenders
herewith payment of $                      ,
representing the aggregate purchase price for such shares based on the price
per share provided for in such Warrant. Such payment is being made in
accordance with [Section 3(i)] [Section 3(ii)] [Section 3(iii)] [Section 3(iv)]
of the attached Warrant.


 


Please issue a certificate or
certificates for such shares of Common Stock in the following name or names and
denominations and deliver such certificate or certificates to the person or
persons listed below at their respective addresses set forth below:


 


 


If said number of shares of Common
Stock shall not be all the shares of Common Stock issuable upon exercise of the
attached Warrant, a new Warrant is to be issued in the name of the undersigned
for the balance remaining of such shares of Common Stock less any fraction of a
share of Common Stock paid in cash.


 


	
  Dated:                            
  ,        

  	
   

  	
   

  
	
   

  	
  Signature

  



 

















 


EXHIBIT 2


 


FORM OF ASSIGNMENT


 


 


For value received,                                                                    
hereby sells, assigns and transfers unto                                  
the attached Warrant [a portion of the attached Warrant representing the right
to purchase            ,
of the total           ,
shares of Common Stock issuable upon exercise of this Warrant, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint                                             
attorney to transfer said Warrant [said portion of said Warrant] on the books
of Uni-Pixel, Inc., a Delaware corporation, with full power of substitution in
the premises.


 


If only a portion of the attached Warrant is to be so transferred, a
new Warrant is to be issued in the name of the undersigned for the balance of
said Warrant.


 


The undersigned hereby agrees that it will not sell, assign, or
transfer the right, title and interest in and to the Warrant unless applicable
federal and state securities laws have been complied with.


 


 


	
  Dated:                           
  ,          

  	
   

  	
   

  
	
   

  	
  Signature