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Exhibit 10.4  

        [*****] = Certain
confidential information contained in this document, marked with brackets, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 

DISPLAYTECH, INC.    
    
    NOTE PURCHASE AGREEMENT    
    

        This Note Purchase Agreement (the "Agreement") is made as of December 31, 2003 between Displaytech, Inc., a Colorado corporation (the "Company"),
and the purchasers set forth on Exhibit A hereto (the "Purchasers"). 

Section 1  

Authorization and Sale of the Notes  

        1.1    Authorization of the Note.    The Company represents and warrants to the Purchasers that it has authorized the
sale and issuance of convertible promissory notes in substantially the form attached hereto as Exhibit B (each a "Note"). 

        1.2    Sale of the Notes.    Subject to the terms and conditions hereof and in reliance upon the representations,
warranties and agreements included and incorporated by reference herein, each of the Purchasers, severally and not jointly, agrees to purchase Notes from the Company in an initial aggregate principal
amount as set forth opposite such Purchaser's name on Exhibit A (each an
"Individual Purchase Commitment"). The total initial aggregate principal amount of all Notes sold by the Company to the Purchasers shall not exceed $1,500,000 (the "Aggregate Purchase Commitment").
Each sale (a "Sale") of Notes by the Company to the Purchasers from time to time shall be in an aggregate amount (the "Sale Amount") specified by the Company in a written request to the Purchasers
(each a "Purchase Request"). In the event of a Sale, each Purchaser shall purchase a Note in the amount of its pro rata share, determined by multiplying the Sale Amount by a fraction, the numerator of
which is such Purchaser's Individual Purchase Commitment and the denominator of which is the Aggregate Purchase Commitment (each a "Pro Rata Share"). Each sale of the Notes to each of the Purchasers
will constitute a separate sale hereunder. 

        1.3    Increased Commitment.    Notwithstanding anything herein to the contrary, (a) the Aggregate Purchase
Commitment may be increased from time to time upon the written consent of the Company and Purchasers holding at least 80% of the aggregate principal amount of the Notes then outstanding, and
(b) subject to clause (a), an Individual Purchase Commitment may be increased from time to time upon the written consent of the Company and the Purchaser whose Individual Purchase
Commitment is to be so increased. 

Section 2  

Closings; Delivery; Conditions  

        2.1.    Closings.    The purchase and sale of the Notes under this Agreement shall take place in one or more closings,
each such closing (a "Closing") to take place at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York 10166. The initial Closing shall take place on
December 31, 2003, or at such other time and date as the parties may agree. Each subsequent Closing, if any, shall occur on the dates as determined by the Company and the Purchasers. 

        2.2    Delivery.    At the initial Closing, subject to the terms and conditions hereof, the Company will deliver to
each Purchaser the initial Notes to be purchased by such Purchaser from the Company, dated the date of the initial Closing, and such other certificates, consents, waivers and agreements as are
reasonably requested by the Purchasers (together with this Agreement, collectively the "Transaction Documents"), against payment of the purchase price therefor payable as of the date of such Closing
by 

 

wire
transfer. On any subsequent Closing, the Company will deliver to each Purchaser additional Notes subject to the terms and conditions hereof (including without limitation payment by the Purchasers
of the purchase price therefor). 

        2.3    Conditions to Obligations of the Purchasers to Purchase the Initial Notes.    The Purchasers' obligations to
purchase the Notes at the initial Closing are subject to the following conditions: 

        2.3.1    Note.    Each Purchaser shall have received its respective duly executed initial Note. 

        2.3.2    Certified Board Resolutions.    The Purchasers shall have received a copy of the resolutions of the directors
of the Company authorizing the transactions contemplated by each of the Transaction Documents, and the Company shall have acknowledged that such resolutions are true, complete and correct. 

        2.3.3    Waivers; Consents.    All proceedings to have been taken and all waivers, consents and approvals to be
obtained in connection with the transactions contemplated by this Agreement shall have been taken or obtained, and all Transaction Documents shall be reasonably satisfactory to the Purchasers, and the
Purchasers shall have received copies (executed or certified, as may be appropriate) of the documents which the Purchasers may reasonably have requested in connection with such transactions. 

        2.3.4    Governmental Authorizations.    All consents, permits, approvals, qualifications and/or registrations
required to be obtained or effected prior to the initial Closing under any applicable state securities or "Blue Sky" laws of any jurisdiction shall have been obtained or effected. 

        2.3.5    Opinion of Counsel.    The Purchasers shall have received from Faegre & Benson LLP, counsel for the
Company, an opinion dated as of the initial Closing date, in the form set forth on Exhibit C hereto. 

        2.4    Conditions to Obligations of the Purchasers to Purchase Notes on any Subsequent Closing.    

        2.4.1    Note.    Each Purchaser shall have received its respective duly executed Note. 

        2.4.2    Representations and Warranties.    The Purchasers shall have received a certificate of an officer of the
Company certifying that all representations and warranties of the Company included and incorporated by reference herein are accurate, correct and complete in all material respects at and as of such
Closing date as if made at and as of such date, except for those representations and warranties made as of a specific date other than the date of this Agreement, which shall be true and correct as of
such other date. 

        2.4.3    Opinion of Counsel.    The Purchasers shall have received from Faegre & Benson LLP, counsel for the
Company, an opinion dated as of such Closing date with respect to such matters as the Purchasers reasonably request. 

        2.5    Conditions to Obligations of the Company.    The Company's obligations to sell the Notes on any Closing are
subject to the following conditions: 

        2.5.1    Payment.    The Company shall have received full payment referenced in Section 2.2 hereof to be
delivered to the Company in consideration of the issuance of such Notes. 

        2.5.2    Representations and Warranties.    All representations and warranties of the Purchasers included and
incorporated by reference herein shall be accurate, correct and complete in all material respects at and as of such Closing date as if made at and as of such date, except for those representations and
warranties made as of a specific date other than the date of this Agreement, which shall be true and correct as of such other date. 

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        2.5.3    Blue Sky.    The Company shall have obtained all necessary Blue Sky law permits and qualifications, or
secured an exemption therefrom, required by any state for the offer and sale of such Notes. 

Section 3  

Representations and Warranties  

        The Company and the Purchasers, severally and not jointly, represent and warrant as follows as of the date hereof, except as set forth in the schedules attached
hereto: 

        (a)   The
Company and the Purchasers agree that their respective representations and warranties set forth in Sections 4 and 5 of that certain Stock Purchase Agreement, dated
as of February 11, 2003, among the Company and the Purchasers (the "Series E Agreement"), including the exceptions thereto set forth in the Schedule of Exceptions, are incorporated by
reference herein and applicable as of the date hereof; provided, that all references in such sections to "Agreement," "Shares," "Conversion Shares" and
"Closing Date" shall be deemed references to "this Agreement," "the Notes," "the shares issuable upon conversion of the Notes" and "the initial Closing hereunder," respectively, for purposes hereof;  provided, further, that the Schedule of Exceptions attached to the Series E Agreement shall be
deemed amended and restated for purposes of this Agreement only in the manner set forth on Exhibit D hereto. 

        (b)   Notwithstanding
the foregoing, for purposes of this Agreement only, the parties agree that (i) the reference to "February 7, 2003" set forth in
Section 4.2(a) of the Series E Agreement shall be replaced with "April 25, 2003", (ii) the references to "December 31, 2002" set forth in Section 4.6(b) of
the Series E Agreement shall be replaced with "September 30, 2003" and (iii) the reference to "January 31, 2003" set forth in Section 4.19(i) of the
Series E Agreement shall be replaced with "November 30, 2003". 

Section 4  

Covenants  

        4.1    Future Bridge Financings.    If the Company enters into another debt financing (including rights and agreements
ancillary thereto, but excluding any renewal, extension or modification of the Company's existing indebtedness to Hewlett-Packard Company ("HP") in the principal amount of $10,000,000 plus accrued
interest thereon (the "HP Debt")) during the term of the Notes in which any of the terms provided to the lender(s) therein are more favorable than those provided to the Purchasers, then the Notes
automatically shall be and hereby are amended to include such more favorable terms, and the Company promptly shall execute and deliver documents reflecting such amended terms;  provided that the Notes as
so amended shall in all events be subordinate to the HP Debt and all obligations owed to Silicon Valley Bank ("SVB") under
that certain Loan and Security Agreement, dated April 4, 2003, as set forth in Section 3 of the form of Note attached hereto as  Exhibit B and in that certain Subordination Agreement,
dated December 31, 2003, between the Purchasers and SVB. 

        4.2    Subordination.    The Purchasers agree upon request to execute and deliver to HP such subordination agreements
and other documents and instruments as may reasonably be requested by HP in order to effectuate the provisions hereof. The Purchasers further agree that HP is a third-party beneficiary of this
Agreement and may directly enforce the obligations of the Purchasers hereunder. 

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Section 5  

Miscellaneous  

        5.1    Expenses.    The Company shall be responsible for its attorneys' fees incurred in the preparation, execution
and delivery of this Agreement, the Notes, any other Transaction Documents and other related documentation, and shall pay, simultaneously with the initial Closing, $40,000 of such fees and other costs
and expenses of the Purchasers as a group in connection with the closing of the sale of the Notes (including, without limitation, the fees and expenses of Gibson, Dunn & Crutcher LLP). Should
any legal action, arbitration or other proceeding be commenced between the parties hereto concerning this Agreement, the Notes or any matters relating thereto, the party prevailing in such legal
action, arbitration or other proceeding shall be entitled, in addition to such other relief as may be granted, to recover attorneys' fees and costs in such legal action, arbitration or other
proceeding, which fees and costs shall be determined by the court or arbitrator, as the case may be. 

        5.2    Incorporation by Reference.    

        (a)   The
provisions of Sections 6, 12, 13, 16 and 19 of the Series E Agreement are incorporated by reference herein and applicable as of the date hereof;  provided, that all references in such sections to
"Agreement," "Shares," "Conversion Shares" and "Closing Date" shall be deemed references to "this
Agreement," "the Notes," "the shares issuable upon conversion of the Notes" and "the initial Closing hereunder," respectively, for purposes hereof. 

        (b)   The
parties acknowledge and agree that (i) the incorporation by reference made in Section 3 and Section 5.2(a) hereof is intended to apply the
substantive meaning of certain sections of the Series E Agreement to the sale and issuance of the Notes as contemplated herein and (ii) to the extent any additional amendments to the
sections of the Series E Agreement that are incorporated by reference herein are required to accomplish such intention, such additional amendments shall be and hereby are made. 

        (c)   In
the event that any provision of the Series E Agreement incorporated by reference herein may be held to conflict with provisions of this Agreement and/or the
Notes, the provisions of this Agreement and/or the Notes, as the case may be, shall control. 

Section 6  

Notice  

        All notices, requests, demands, consents and other communications hereunder shall be in writing and shall be delivered by hand or shall be sent by telex or
telecopy (confirmed by registered, certified or overnight mail or courier, postage and delivery charges prepaid), (i) if to the Company, to Displaytech, Inc., 2602 Clover Basin Drive,
Longmont, CO 80503-7603, Attention: Chief Executive Officer, Fax: (303) 772-2193, with a copy to Faegre & Benson LLP, 3200 Wells Fargo Center, 1700 Lincoln
Street, Denver, CO 80203, Attention: Nathaniel G. Ford, Esq., Fax: (303) 607-3600, or (ii) if to the Purchasers, at the address indicated on Exhibit A hereto, with a
copy to Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 48th floor, New York, NY 10166, Attention: Steven R. Shoemate, Esq., Fax: (212) 351-4035, or at
such other address as a party may from time to time designate as its address in writing to the other party to this Agreement. Whenever any notice is required to be given hereunder, such notice shall
be deemed given and such requirement satisfied only when such notice is delivered or, if sent by telex or telecopier, when received. 

[Remainder
of page intentionally blank; signature page follows immediately] 

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 

	 	 	DISPLAYTECH, INC.
	

 	
 	

By:	
 	

/s/ RICHARD D. BARTON
 Name: Richard D. Barton

Title: CEO
	

Accepted and Agreed to as of the date first above written by the undersigned Purchasers:	
 	

 	
 	

 

	

FLEMING US DISCOVERY FUND III, L.P.
	

 	

By:	
 	

FLEMING US DISCOVERY PARTNERS, L.P., its general partner
	

 	

By:	
 	

FLEMING US DISCOVERY, LLC, its general partner
	

 	

By:	
 	

/s/ ROBERT L. BURR
	
 	

 
	 	Name:

Title:	 	 	 	 
	

FLEMING US DISCOVERY OFFSHORE FUND III, L.P.
	

 	

By:	
 	

FLEMING US DISCOVERY PARTNERS, L.P., its general partner
	

 	

By:	
 	

FLEMING US DISCOVERY, LLC, its general partner
	

 	

By:	
 	

/s/ ROBERT L. BURR
	
 	

 
	 	Name:

Title:	 	 	 	 

	INTERWEST CAPITAL, INC.	 	 
	

By:	
 	

/s/ WM. C. GLYNN
 Name: Wm. C. Glynn

Title: President	
 	

 

EXHIBIT A  

	Purchaser
 
	 	Individual Purchase Commitment

	Fleming US Discovery Fund III, L.P.

1221 Avenue of the Americas, 40th Floor

New York, New York 10020

Attn: Robert L. Burr	 	$	646,400
	

Fleming US Discovery Offshore Fund III, L.P.

1221 Avenue of the Americas, 40th Floor

New York, New York 10010020

Attn: Robert L. Burr	
 	
$	

103,600
	

InterWest Capital, Inc.

P.O. Box 7608

555 S. Cole Rd.

Boise, Idaho 83707

Attn: William C. Glynn	
 	
$	

750,000

EXHIBIT B  

        THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED
UNLESS THE COMPANY HAS RECEIVED A WRITTEN OPINION FROM COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSFER IS BEING MADE IN COMPLIANCE WITH ALL APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM. 

        THIS
PROMISSORY NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN SUBORDINATION AGREEMENT, DATED DECEMBER 31, 2003, BETWEEN THE HOLDERS AND SILICON VALLEY BANK. 

DISPLAYTECH, INC.

PROMISSORY NOTE  

	$            	 	Longmont, Colorado

December 31, 2003

        FOR VALUE RECEIVED, the undersigned, Displaytech, Inc., a Colorado corporation (the
"Company"), promises to pay to the order of                        , or its
registered assigns (the "Holder"),
the principal sum of                        DOLLARS
($                        ), with interest thereon from time to time as provided herein.
 

        1.    Agreement.    This promissory note (this
"Note" and together with all other promissory notes issued pursuant to the Agreement (as defined below), the
"Notes") is issued pursuant to the Note Purchase Agreement dated as of December 31, 2003 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Agreement"), between the Company, the Holder and the other purchasers named therein (the "Other
Holders" and together with the Holder, the "Holders"), and the Holder is subject to the terms and entitled to the benefits of
this Note and the Agreement and may enforce the agreements of the Company contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect
hereto and thereto. Capitalized terms used herein without definition have the meanings assigned thereto in the Agreement. 

        2.    Maturity Date; Interest.    The principal under this Note shall
be due and payable on April 30, 2004 (the "Maturity Date"). Interest shall accrue from the date hereof (computed on the basis of a
360-day year of twelve 30-day months), at the rate per annum from time to time announced in the Wall Street Journal as the prime
commercial lending rate, plus 2% (the "Interest Rate"), on the unpaid principal amount of the Note, and shall be due and payable in cash or, subject to
Section 5, convertible into shares, at the option of the Holder, at the earlier of (i) the Maturity Date and (ii) the date of conversion of the Note;  provided, however, that upon the occurrence and during the continuance of an Event of Default (as
defined herein), interest shall accrue at the rate of fifteen percent (15%) per annum. 

        3.    Rank.    The Note shall rank senior to all indebtedness of the
Company, whether presently existing or hereinafter incurred, with the exception of indebtedness owed by the Company to Hewlett-Packard Company ("HP") in
the original principal amount of $10,000,000 plus accrued interest ("HP Debt"), and all obligations owed to Silicon Valley Bank
("SVB") under that certain Loan and Security Agreement, dated April 4, 2003 (the "SVB Loan
Agreement"). The Holder acknowledges that its priority and right of payment hereunder are subordinate to payment of the HP Debt and all obligations owed to SVB under the SVB
Loan Agreement (as more fully described in that certain Subordination Agreement, dated December 31, 2003, between the Holders and SVB (the "SVB Subordination
Agreement"). Notwithstanding any provision of this Note to the contrary, upon any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization
or arrangement with creditors (whether or not pursuant to bankruptcy or other insolvency laws), sale of all or substantially 

 

all
of the assets, dissolution, liquidation or any other marshaling of the assets and liabilities of the Company, or in the event this Note shall become due and payable, whether at maturity, upon
acceleration or otherwise: (i) no amount shall be paid by the Company or accepted or retained by the Holder, whether in cash or property, in respect of the principal of or interest on this Note
at the time outstanding, unless and until the full amount of the HP Debt then outstanding shall have been paid in full, (ii) if any such amount is received by the Holder on account of or with
respect to this Note, the Holder shall forthwith pay over same to HP, and until so paid, any such amount shall be held by the Holder in trust for HP and shall not be commingled with other funds or
property of the Holder, and (iii) no claim or proof of claim shall be filed with the Company by or on behalf of the Holder which shall assert any right to receive any payments in respect of the
principal of and interest on this Note except subject to the payment in full of all of the HP Debt then outstanding; provided, that nothing in this
Section 3 shall affect the Holder's right to convert the unpaid principal and interest on this Note into shares of the Company's capital stock pursuant to Section 5 hereof. 

        4.    Prepayment.    The Company shall have no right to prepay the
Notes in whole or in part at any time prior to the Maturity Date without the prior written consent of the Holders. 

        5.    Conversion.    

        (a)   Subject
to any required waivers or consents by holders of the Company's capital stock, upon the Company's establishment, on or prior to the Maturity Date, of a new
Senior Security (as defined below), the Holder shall convert the unpaid principal and interest on this Note into such Senior Security, on the same terms and with the same rights, preferences and
privileges as are received by any other holders of such Senior Security. The number of Senior Securities to be issued to the Holder shall equal (i) the outstanding principal amount of this Note
plus accrued interest thereon as of such conversion date, divided by (ii) the price per share at which the Company issues the Senior Security. The Company shall give the Holder not less than
ten (10) days prior written notice of the establishment of the Senior Security. For purposes of this Note, "Senior Security" shall mean the
Company's proposed Series G Convertible Preferred Stock or any similar series of preferred stock intended to be the Company's senior-most security at the time of its establishment. 

        (b)   If
(i) the holders of the Company's capital stock fail to grant any required waivers or consents or (ii) the Senior Security is not established prior to
the Maturity Date, then interest with respect to the Note shall continue to accrue at the Interest Rate for ten business days following the Maturity Date. On such tenth day, the Company shall pay all
amounts due hereunder; provided, that if the Company fails to so make such payment, then the annual interest rate shall increase to fifteen percent
(15%); provided further, that during such ten-day period, the Holder may, at its option, convert the unpaid principal and interest on this
Note into such number of shares of the Company's Series E-1 Senior Preferred Stock, par value $.001 per share, equal to (x) the outstanding principal amount of this Note plus
accrued interest thereon as of such conversion date, divided by (y) $100. 

        (c)   If
this Note has not been previously converted as provided above, then the Holder may, at its option, convert the unpaid principal and interest on the Note into shares
of the Company's common stock if the Company completes an initial public offering of common stock on or before the Maturity Date. The conversion price for the common stock shall be the offering price
for the common stock in the initial public offering. 

        (d)   Upon
a Fundamental Change (as defined below) prior to the Maturity Date, the Holder may, at its option upon written notice to the Company, (i) accelerate payment
of the unpaid principal and accrued interest on the Note to the date of consummation of such Fundamental Change, (ii) convert the Note into any of the Company's securities being acquired in
connection with the Fundamental Change at the price per share paid for such 

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securities
in the Fundamental Change, (iii) keep the Notes outstanding such that interest shall continue to accrue until the Maturity Date, or (iv) select a combination of any or all of
the foregoing. 

        For
purposes hereof, "Fundamental Change" means any of the following events: 

          (i)  the
sale (or functional equivalent of a sale) of all or substantially all of the assets of the Company; 

         (ii)  any
consolidation of the Company with, or merger of the Company into, any other person, any merger of another person into the Company or any other business combination
involving the Company which results in the holders of the Company's stock immediately prior to giving effect to such transaction owning shares of capital stock of the surviving corporation in such
transaction representing (x) fifty percent (50%) or less of the total voting power of all shares of capital stock of such surviving corporation entitled to vote generally in the election of
directors or (y) fifty percent (50%) or less of the total value of all capital stock of such surviving corporation; or 

        (iii)  any
person, together with "affiliates" and "associates" of such person (within the meaning of the Securities Exchange Act of 1934, as amended), shall acquire after the
date hereof beneficial ownership within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, which when aggregated with the beneficial ownership on or
prior to the date hereof, shall constitute greater than 50% of the voting power of the capital stock of the Company. 

        Notwithstanding
the foregoing, "Fundamental Change" shall not mean any change in ownership of the Company, voting power of the Company's stockholders or composition of the Company's
Board of Directors resulting from or occurring in connection with the establishment of the Senior Security. 

        (e)   In
the event of any conversion as provided above, the Company shall not issue fractional securities but shall pay the dollar equivalent of any fractional securities. 

        (f)    The
Company shall not be obligated to issue certificates evidencing the securities issuable upon such conversion unless the Note is either delivered to the Company or
its transfer agent, or the Holder notifies the Company or its transfer agent that the Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the
Company from any loss incurred by it in connection with the Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver at such office
to the Holder, a certificate or certificates for the securities to which the Holder shall be entitled as the result of a conversion, as mutually agreed to between the Company and the Holder. Such
conversion shall be deemed to have been made on the date of establishment of the Senior Security, on the Maturity Date, or immediately prior to the Company's initial public offering or Fundamental
Change, as applicable. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such
date. 

        (g)   In
the event that any principal of or interest on this Note remains unpaid at any time after payment thereof is due hereunder, the Holder shall retain all rights
hereunder, including but not limited to conversion rights, until such time as amounts due, including additional accrued interest, have been paid in full. Subject to the foregoing, upon
(i) either (A) payment in full by the Company to the Holder of all principal, interest and any other amounts due pursuant to the terms hereof or (B) conversion of this Note in
full pursuant to the terms hereof and (ii) fulfillment by the Company of all its other obligations hereunder, this Note 

3

 

shall
terminate; provided, that the rights of the Holder to seek legal and equitable relief in connection with claims arising (y) out of the
representations and warranties of the Company or performance by the Company of its obligations hereunder on or prior to the date of such termination or (z) for any other reason in connection
with this Note prior to its termination, shall survive such termination date. 

        6.    Anti-dilution Adjustments.    

        The
conversion price for securities issued upon conversion of the Note, if such securities have a conversion price, will be subject to proportional adjustment for stock splits, stock
dividends, reverse stock splits, subdivisions or combinations, reclassifications, recapitalizations and the like. 

        7.    Defaults and Remedies.    

        (a)    Events of Default.    An "Event of Default" shall occur
hereunder if: 

          (i)  the
Company shall fail to pay the principal or interest of this Note, when and as the same shall become due and payable, whether upon demand or by acceleration or
otherwise; or 

         (ii)  the
Company shall breach the due observance or performance of any covenant, condition or agreement on the part of the Company to be observed or performed pursuant to
the Agreement, this Note or the promissory notes issued by the Company to Other Holders pursuant to the Agreement, and such breach shall continue unremedied for more than fifteen (15) business
days following written notice to the Company thereof; or 

        (iii)  any
representation, warranty, certification or statement made by or on behalf of the Company in the Agreement, this Note or the promissory notes issued by the Company
to Other Holders pursuant to the Agreement, or in any certificate or other document delivered pursuant hereto or thereto shall have been incorrect in any material respect when made; or 

        (iv)  the
Company shall breach any terms or provisions of any other agreements which gives any third party (A) the right to accelerate, after the expiration of all
applicable grace periods, payment of a material obligation or (B) grounds to establish the breach of or to terminate any other material agreement, and such breach shall continue unremedied for
more than fifteen (15) business days following written notice to the Company thereof; or 

         (v)  an
involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (A) relief in respect of the
Company or of a substantial part of its property or assets, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or a similar official for the Company or for a substantial part of its property or
assets, or (C) the winding up or liquidation of the Company; and such proceeding or petition shall continue undismissed for sixty (60) days, or an order or decree approving or ordering
any of the foregoing shall be entered; or 

        (vi)  the
Company shall (A) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (B) consent to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding for the filing of any petition described in paragraph (v) of this Section 7(a), (C) apply for or consent to the appointment of a receiver, trustee, 

4

 

custodian,
sequestrator, conservator or similar official for the Company, or for a substantial part of its property or assets, (D) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors, (F) become unable, admit in writing its inability or fail generally to pay
its debts as they become due or (G) take any action for the purpose of effecting any of the foregoing. 

        (b)    Acceleration.    If an Event of Default occurs, then the outstanding principal of and interest on this Note
shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are expressly waived and the Holder shall be entitled to exercise all
of its rights and remedies hereunder and under the Agreement whether at law or in equity. 

        8.    Suits for Enforcement.    Upon the occurrence of any one or more
Events of Default, the Holder may proceed to protect and enforce its rights and remedies hereunder by suit in equity, action at law or by other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in the Agreement or this Note or in aid of the exercise of any power granted in the Agreement or this Note, or may proceed to enforce the payment of
this Note, or to enforce any other legal or equitable right of the Holder of this Note. 

        9.    Remedies Cumulative.    No remedy herein conferred upon the
Holder is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise. To the extent permitted by applicable law, the Company and the Holder waive presentment for payment, demand, protest and notice of dishonor. 

        10.    Holder; Transfer.    

        (a)   The
term "Holder" as used herein shall also include any permitted transferee of this Note whose name has been recorded by
the Company in the register referred to in Section 10(b). The Holder acknowledges that this Note has not been registered under the Securities Act of 1933, as amended, or any state securities
laws, and may be transferred only upon receipt by the Company of an opinion of counsel, which opinion shall be reasonably satisfactory in form and substance to the Company, stating that such transfer
is being made in compliance with all applicable federal and state securities laws or pursuant to an applicable exemption therefrom. This Note may not be transferred other than to an
affiliate (as defined in Rule 501 under the Securities Act) of the Holder without the prior written consent of the Company, which consent shall not be unreasonably withheld. 

        (b)   The
Company shall maintain a register in its office for the purpose of registering the Note and any transfer thereof, which register shall reflect and identify, at all
times, the ownership of the Note. Upon the issuance of this Note, the Company shall record the name of the initial purchaser of this Note in such register as the first Holder. Thereafter, the Company
shall duly record the name of a permitted transferee on such register promptly after receipt of the opinion referred to in Section 10(a) above. 

        11.    Payments.    All payments of principal of and interest on this
Note shall be made in lawful money of the United States of America; provided, that nothing in this Section 11 shall affect the Holder's right to
convert the unpaid principal and interest on this Note into shares of the Company's capital stock pursuant to Section 5 hereof. 

        12.    Covenants Bind Successors and Assigns.    All the covenants,
stipulations, promises and agreements contained in this Note by or on behalf of the Company shall bind its successors and permitted assigns, whether so expressed or not. 

5

 

        13.    Governing Law.    This Note shall be governed by and construed
in accordance with the laws of the State of New York regardless of conflicts of law principles. 

        14.    Variation in Pronouns.    All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. 

        15.    Headings.    The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. 

        16.    Attorney's Fees.    If the indebtedness represented by this
Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to
pay, in addition to the principal payable hereunder, reasonable attorneys' fees and costs incurred by the Holder. 

        17.    Assignment.    The Holder shall not assign its rights or
obligations under this Note to any third party, except pursuant to the provisions of Section 10(a). Any assignment in breach of the foregoing shall be void and of no force or effect. 

        18.    Amendment; Waiver.    Except as otherwise expressly provided
herein, any term of the Notes may be amended and the observance of any term of the Notes may be waived only with the written consent of the Company and Holders holding at least 80% of the aggregate
principal amount of the Notes then outstanding. Notwithstanding anything herein to the contrary, if the Company enters into another debt financing (including rights and agreements ancillary thereto,
but excluding any renewal, extension or modification of the HP Debt) during the term of the Notes in which any of the terms provided to the lender(s) therein are more favorable than those provided to
the Holders, then the Notes automatically shall be deemed amended to include such more favorable terms, and the Company promptly shall execute and deliver documents reflecting such amended terms;  provided, that the Notes as so amended shall in all events be subordinate to the HP Debt and all obligations owed to SVB under the SVB Loan Agreement,
as set forth in Section 3 of this Note and in the SVB Subordination Agreement. Any amendment or waiver effected in accordance with this section shall be binding upon all Holders, and the
Company shall promptly give notice to all Holders of any amendment effected in accordance with this Section 18. 

[Remainder
of page intentionally blank; signature page follows immediately] 

6

 

        IN WITNESS WHEREOF, this Note has been executed by the Company by its duly authorized officer as of the day and year first above written. 

	 	 	DISPLAYTECH, INC.
	

 	
 	
By:	

	 	 	 	Name:	Richard Barton
	 	 	 	Title:	Chief Executive Officer

7

EXHIBIT C  

December 31,
2003 

Fleming
US Discovery Fund III, L.P.

Fleming US Discovery Offshore Fund III, L.P.

1221 Avenue of the Americas, 40th Floor

New York, New York 10020 

InterWest
Capital, Inc.

P.O. Box 7608

555 S. Cole Road

Boise, Idaho 83707 

	Re:
	Displaytech, Inc.

Sale of Promissory Notes 

Ladies
and Gentlemen: 

        We
have acted as counsel to Displaytech, Inc., a Colorado corporation (the "Company"), in connection with the issuance and sale by the Company of, initially, up to $1,500,000
aggregate principal amount of the Company's Promissory Notes (the "Notes"), pursuant to the Note Purchase Agreement, dated as of December 31, 2003 (the "Purchase Agreement"), among the Company,
Fleming US Discovery Fund III, L.P., Fleming US Discovery Offshore Fund III, L.P., and InterWest Capital, Inc. (collectively, the "Purchasers"). Capitalized terms used herein but not defined
herein have the respective meanings given to them in the Purchase Agreement. We are rendering this opinion letter to you at the request of the Company pursuant to Section 2.3.5 of the Purchase
Agreement. As used herein, the term "Transaction Documents" shall mean: (i) the Purchase Agreement, and (ii) the Notes. 

        As
counsel, we have examined the Transaction Documents and such other certificates, documents and records, and have made such examinations of law, as we have deemed necessary to enable
us to render
the opinions expressed below. In addition, we have examined and relied as to matters of fact upon representations and warranties of the Company made in the Transaction Documents, certificates of
officers and representatives of the Company, and other certificates of public officials, without independent verification or inquiry. 

        In
giving the opinions below, we have assumed with your consent: 

	(i)
	the
genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as
copies;

	(ii)
	that
each party to the Transaction Documents other than the Company has the power and authority, or in the case of individuals, the capacity, to execute and deliver and
to perform and observe the provisions of each Transaction Document, and has duly authorized, executed and delivered each Transaction Document, and that each Transaction Document constitutes the legal,
valid and binding obligations of each such party;

	(iii)
	that
there are no oral or written modifications of, or amendments to, any Transaction Document, and there has been no waiver of any of the provisions of any
Transaction Document by action or conduct of the parties or otherwise;

	(iv)
	that
all public records reviewed are accurate and complete; and

	(v)
	that
you have received all documents you were to receive under the Transaction Documents; that each of the Transaction Documents is an obligation binding upon the
parties thereto other than the Company; and that there are no extrinsic agreements or understandings among the parties to the Transaction Documents that would modify or interpret the terms of the
Transaction Documents. 

 

        Whenever
our opinion in this letter with respect to the existence or absence of facts is indicated to be based on our knowledge, it is intended to signify that, in the course of our
representation of the Company in connection with the matter described in the first paragraph hereof, Nathaniel G. Ford and James H. Carroll (who are the only attorneys in this firm who have devoted
significant attention to such representation) have not acquired actual knowledge of the existence or absence of such facts. We have not undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to our knowledge of the existence or absence of such facts should be drawn from the fact of our representation of the Company. 

        For
purposes of this opinion, we have assumed that each Purchaser has taken any and all necessary action to execute and deliver each of the Transaction Documents to which it is a party,
and we are assuming that the representations and warranties made by each Purchaser in the Transaction Documents and pursuant thereto are true and correct. 

        Our
opinion is expressed only with respect to the federal laws of the United States of America, and the laws of the State of Colorado. We note that, to the extent that the parties to the
Transaction Documents have designated the laws of the State of New York as the laws governing the Transaction Documents, our opinion in paragraph 5 below as to the validity, binding effect and
enforceability of the Transaction Documents is premised upon the result that would be obtained if a Colorado court were to apply the internal laws of the State of Colorado (notwithstanding the
designation of the laws of the State of New York). We express no opinion as to whether the laws of any particular jurisdiction apply, and no opinion to the extent that the laws of any jurisdiction
other than those identified above are applicable to the subject matter hereof. Neither special rulings of such authorities nor opinions of counsel in said jurisdiction have been obtained. We are not
rendering any opinion as to compliance with (i) any federal or state law, rule or regulation relating to antitrust or limitations on corporate distributions or (ii) any antifraud law,
rule or regulation relating to securities, or to the sale or issuance thereof. 

        With
regard to our opinion in paragraph 4 below with respect to material defaults under any agreement known to us, we have relied solely upon (i) inquiries of officers of
the Company, and (ii) an examination of the items listed on Exhibit A to this letter; we have made no further investigation. 

        With
regard to our opinion in paragraph 5 below, we express no opinion regarding any law or governmental rule or regulation regarding maximum allowable interest rates. We note
that Colorado Revised Statutes Annotated Section 18-15-104 prescribes penalties for charging a loan finance charge where the charge exceeds an annual percentage rate of
45 percent (45%) and that the basic interest rate under the Notes is the prime commercial lending rate as set forth in the Wall Street Journal
plus 2%. We are unable to render an opinion regarding compliance with Colorado Revised Statutes Annotated Section 18-15-104, however, because we cannot conclude that the
provisions of the Notes (including those relating to, among other things, default interest, conversion price adjustments, payment of expenses, and payment of attorneys fees) would not, under any
circumstances, result in a loan finance charge in excess of 45 percent (45%). In particular, we note that we are not aware of any Colorado authority which determines how the value of
conversion rights would be calculated for purposes of determining whether the maximum statutory rate on a loan finance charge has been exceeded. 

        Based
upon and subject to the foregoing, we are of the opinion that: 

        1.     The
Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Colorado, with all requisite corporate power and
authority to carry on its business and to own, lease and operate its properties and assets as now being and as heretofore conducted. 

2

 

        2.     The
Transaction Documents have been duly authorized, executed and delivered by the Company. 

        3.     The
Company has the requisite corporate power and authority to enter into and perform its obligations under the Transaction Documents. 

        4.     Except
as disclosed by the Company on Schedule 4.5(a) of the Schedule of Exceptions to the Purchase Agreement, the execution and delivery by the Company of each of
the Transaction Documents, and the performance by the Company of its obligations thereunder (a) do not result in a violation of any provision of the Articles of Incorporation or Bylaws of the
Company, (b) assuming execution by the Company's Series E-1 Preferred Shareholders of certain consents and waivers of their contract rights, and assuming the execution by
each of the Purchasers of a Subordination Agreement with Silicon Valley Bank, do not breach or result in a material violation of, or material default under, any indenture, mortgage, deed of trust,
agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (c) do not violate or contravene (i) any governmental statute, rule or regulation applicable to the Company or (ii) any order, writ,
judgment, injunction, decree, determination or award which has been entered against the Company and of which we are aware, the violation or contravention of which would materially and adversely affect
the Company, its assets, financial condition or operations, and (d) do not require any approval from any Government Authority, except those approvals that may be required under state securities
or blue sky laws. For purposes of this letter, "Governmental Authority" means any executive, legislative, judicial, administrative or regulatory bodies of the State of Colorado or United States of
America. 

        5.     The
Purchase Agreement and the Notes to be issued on the date hereof constitute the legal, valid and binding obligations of the Company enforceable against the Company in
accordance with such terms and conditions, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, receivership, and other laws related to or affecting
creditors' rights generally,
and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that (a) the enforcement of rights with respect to
indemnification and contribution obligations and (b) provisions (i) purporting to waive or limit rights to trial by jury, oral amendments to written agreements or rights to setoff or,
(ii) relating to choice of law, submission to jurisdiction, venue or service of process, may be limited by applicable law or considerations of public policy. 

        6.     To
our knowledge, there is no legal or governmental action, investigation, suit or proceeding pending or threatened against the Company in law, equity or otherwise before
any court, administrative agency or arbitrator (a) asserting the invalidity of the Transaction Documents, (b) seeking to prevent the consummation of any of the transactions provided for
in the Transaction Documents, or (c) which would materially and adversely affect the ability of the Company to perform its obligations under, or the validity or enforceability (with respect to
the Company) of, the Transaction Documents, or (d) which would result in a material adverse change in the assets, properties, liabilities, business affairs, results of operations, condition
(financial or otherwise) or prospects of the Company. For purposes of the opinion set forth in this paragraph, we have not regarded any legal or governmental actions, investigations or proceedings to
be "threatened" unless the potential litigant or Governmental Authority has communicated in writing to the Company a present intention to initiate such actions, investigations or proceedings against
the Company. 

        7.     Assuming
the accuracy of the representations and warranties of the Purchasers contained or incorporated by reference in the Purchase Agreement and compliance with the
terms and provisions of the Purchase Agreement, it is not necessary in connection with the offer and sale of 

3

 

the
Notes or the Conversion Shares (as defined below), if any, by the Company to the Purchasers under the circumstances contemplated by the Purchase Agreement to register the Notes or the Conversion
Shares under the Securities Act of 1933, as amended. The term "Conversion Shares" as used herein means the shares of the Company's capital stock issuable upon conversion of the Notes in accordance
with their terms. 

        We
are furnishing this opinion letter to you solely for your benefit in connection with the transactions referred to herein. This opinion letter is not to be relied upon, used,
circulated, quoted or otherwise referred to by any other person or entity or for any other purpose without our prior written consent. In addition, we disclaim any obligation to update this opinion
letter for changes in fact or law, or otherwise. 

	 	Very truly yours,
	

 	

FAEGRE & BENSON LLP

4

 
EXHIBIT A

to

FAEGRE & BENSON LLP

OPINION  

	1.
	Articles
of Incorporation of Displaytech, Inc., as amended February 11, 2003.

	2.
	Restated
Bylaws of Displaytech, Inc., dated June 20, 2000.

	3.
	Stock
Purchase Agreement, dated February 11, 2003, among Displaytech, Inc., Fleming US Discovery Fund III, L.P., Fleming US Discovery Offshore Fund III,
L.P., and Interwest Capital, Inc.

	4.
	Note
Purchase Agreement, dated as of February 12, 1999, by and between Displaytech, Inc. and Hewlett-Packard Company, as amended by Amendment No. 1
to Note Purchase Agreement, dated as of February 19, 1999 and by the Second Amendment to Note Purchase Agreement, dated as of February 11, 2003.

	5.
	Series E
Shareholders' Rights Agreement, dated February 11, 2003, among Displaytech, Inc. and the Purchasers of Series E Preferred Stock.

	6.
	Bill
of Exchange Purchase Agreement, dated April 30, 2002, by and between Silicon Valley Bank and Displaytech, Inc.

	7.
	Loan
and Security Agreement, dated April 4, 2003, by and between Silicon Valley Bank and Displaytech, Inc.

	8.
	Promissory
Note, dated December 30, 2001, by Displaytech, Inc. and in favor of Cadwalader, Wickersham & Taft, in the original principal amount of
$150,000.

	9.
	Lease
Agreement, dated July 7, 2000, by and between Displaytech, Inc. zand Conseco Vendor Finance Services Corporation.

	10.
	Letter
Agreement, dated June 11, 2002, by and between Displaytech, Inc. and Amkor Technology.

	11.
	Manufacturing
Agreement, dated December 10, 1998, by and between Displaytech, Inc. and Miyota Co., Ltd., as amended by Amendment No. 1, dated
March 25, 1999, Amendment No. 2, dated July 24, 2001, Amendment No. 3, dated March 13, 2003, and Amendment No. 4, dated April 24, 2003.

	12.
	University
Research Corporation Technology License and Industrial Research Agreement with Displaytech, Inc., dated June 1, 1994.

	13.
	Lease
Agreement, dated July 30, 1996, by and between Displaytech, Inc., as Tenant, and Pratt Land Limited Liability Company, as Landlord, as amended by
that certain Addendum to Lease Agreement, dated June 1, 2002.

	14.
	Winding-Up
of Alliance, Production and Marketing Framework Agreement by and between Displaytech, Inc. and Agilent Technologies, Inc., effective
November 15, 1999 and amended April 26, 2002. 

5

EXHIBIT D  

SCHEDULE OF EXCEPTIONS  

        The following is a list of schedules and exceptions to certain of the representations and warranties made by Displaytech, Inc. (the "Company") in that
certain Note Purchase Agreement (the "Agreement"), dated December 31, 2003, among the Company, Fleming US Discovery Fund III, L.P., Fleming US Discovery Offshore Fund III, L.P., and InterWest
Capital, Inc. (collectively, the "Purchasers"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement. All descriptions of agreements
or other matters appearing herein are summary in nature and are qualified by reference to the complete documents. 

        Nothing
in this Schedule of Exceptions shall constitute an admission of any liability or obligation of the Company to any third party, an admission against the Company's interests or an
acknowledgment that any matter disclosed in this Schedule of Exceptions is required to be disclosed (particularly where such disclosure is required in accordance with a materiality standard or as not
in the ordinary course of business). 

        The
information contained in this Schedule of Exceptions is confidential and proprietary information of the Company. 

	Schedule 4.2(a) - (i)	 	 
	 	Authorized capital stock of the Company:	 	 
	 	Common Stock	 	25,000,000
	 	Preferred Stock	 	5,000,000
	

Schedule 4.2(a) - (ii)	
 	

 
	 	Number of designated shares in each Series or Class:	 	 
	 	Series B Convertible Preferred Stock	 	750,000
	 	Series D Convertible Preferred Stock	 	510,000
	 	Series E-B Convertible Preferred Stock	 	500,000
	 	Series E-D Convertible Preferred Stock	 	510,000
	 	Series E-1 Senior Preferred Stock	 	600,000
	 	Series E-2 Senior Preferred Stock	 	400,000
	

Schedule 4.2(a) - (iii)	
 	

 
	 	Number of shares outstanding in each Series or Class after issuance of shares on Closing Date:	 	 
	 	Common Stock	 	242
	 	Series B Convertible Preferred Stock	 	260,051
	 	Series D Convertible Preferred Stock	 	144,856
	 	Series E-1 Senior Preferred Stock	 	47,596
	 	Series E-2 Senior Preferred Stock	 	0
	 	Series E-B Convertible Preferred Stock	 	225,638
	 	Series E-D Convertible Preferred Stock	 	185,785

Schedule 4.2(a)
- (1) 

        Shares of capital stock outstanding at Closing which were subject to preemptive rights when issued:

Except
for a small number of shares of Series B Convertible Preferred Stock obtained by individuals in the "reverse conversion" of Common Stock into the Series B, all outstanding shares
of Series B and Series D Preferred Convertible Stock were subject to preemptive rights when issued but, after giving effect to the Certificates of Designation, no longer are. 

 

Schedule 4.2(a)
- (2) 

Shares of capital stock outstanding at Closing which provide the holders thereof preemptive rights:

        None 

Schedule 4.2(b) 

Number and purpose for which shares of the Company's Common Stock are reserved:

	Shares Reserved
 
	 	Purpose

	740,000	 	Issuance of Options under the 1988 Incentive Stock Option Plan
	2,699,022	 	Issuance of Options under the 1998 Stock Incentive Plan
	294,545	 	Warrants Outstanding
	

3,657,539	
 	

Conversion of the Series B Convertible Preferred Stock
	2,633,745	 	Conversion of the Series D Convertible Preferred Stock
	3,173,530	 	Conversion of the Series E-B Convertible Preferred Stock
	3,377,909	 	Conversion of the Series E-D Convertible Preferred Stock

Exception
§4.2(c) 

Agreements for options for which stock has not been reserved:

Consultants
to the Company have been granted options to purchase a total of 26,374 common shares that have not been issued under an existing Plan and which have not been reserved by the Company. 

Exception
§4.2(d) 

Potential registration rights to be granted include

	Shareholder
 
	 	Shares Owned
	 	Explanation

	University Research Corporation, assigned to University of Colorado Foundation, Inc., assigned to University Technology Corporation (current owner)	 	10 Series B Convertible Preferred shares	 	Subject to Stock Purchase Agreement dated May 1, 1990.

Schedule 4.2(e)

Other Agreements regarding voting of stock:

On
January 1, 1992 certain employees signed an Employee Stock Purchase and Restriction Agreement that obligated the employees to vote any shares purchased pursuant to stock options granted
under the Company's 1988 Incentive Stock Option Plan in favor of any merger or sale of the Company approved by the Company's Board of Directors. These agreements were later amended on March 31,
1995 to require the employees to vote their option shares in favor of the election of Richard Hokin and J. Kermit Birchfield, Jr. to the Company's Board of Directors. 

Schedule 4.2(f) 

Anti-dilution protections in effect under various Agreements:

	1.
	Hewlett-Packard
Company—Note Purchase Agreement dated February 12, 1999, as amended by Amendment No. 1, dated February 19, 1999, and the Second
Amendment to 

2

 

Note
Purchase Agreement, dated February 11, 2003, and the Amended and Restated Convertible Note maturing February 19, 2008 

	2.
	Fleming
US Discovery Fund III, L.P.; Fleming US Discovery Offshore Fund III, L.P., DB Capital Partners SBIC, L.P., Kingdon Partners, L.P., Kingdon Associates, L.P., M. Kingdon Offshore
NV, and InterWest Capital, Inc.,—Stock Purchase Agreement dated July 30, 2001

	

	Antidilution
protection in above two agreements, as well as with respect to Series B Convertible Preferred Stock, Series D Convertible Preferred Stock,
Series E-B Convertible Preferred Stock and Series E-D Convertible Preferred Stock, is limited to stock splits, combinations, reclassifications and the like. 

Schedule 4.2(h)

Owners of 5% or more of outstanding Capital Stock:

	InterWest Capital, Inc.	 	 
	Century America LLC	 	 
	JKB-Displaytech LLC	 	Combined
	Guthrie Birchfield	 	 
	J. Kermit Birchfield, Jr.	 	 
	

Kingdon Associates, LP	
 	

 
	Kingdon Partners, LP	 	Combined
	M. Kingdon Offshore, NV	 	 
	

Fleming US Discovery Fund III, L.P.	
 	

 
	Fleming US Discovery Offshore Fund III, LP	 	Combined
	

MidOcean Capital Partners SB, LP	
 	

 
	

Hewlett-Packard Company	
 	

 

Schedule 4.5(a)

Defaults or Conflicts:  

Loan
and Security Agreement, dated April 4, 2003, between Silicon Valley Bank and the Company (the "SVB Agreement") contains a negative covenant against additional indebtedness by the Company
other than certain permitted indebtedness including obligations that are subordinate to Silicon Valley Bank. To comply with such requirements for the issuance of the Notes, the Purchasers are required
to enter into a subordination agreement in a form reasonably acceptable to Silicon Valley Bank and certain legends will need to be added to the Notes. 

Section
8.1(b) of the certain Note Purchase Agreement (as amended, the "HP Agreement"), dated as of February 12, 1999, by and between the Company and Hewlett-Packard Company ("HP"), as amended
by Amendment No. 1 to Note Purchase Agreement, dated as of February 19, 1999 and by the Second Amendment to Note Purchase Agreement, dated as of February 11, 2003, permits the
Company to borrow certain amounts of unsecured subordinate indebtedness so long as the notice and other requirements set forth in Section 8.1(b) are complied with. The Company has not complied
with such requirements and, therefore, the issuance of the Notes may result in a default under the HP Agreement. In addition, in the event of such a default, the Company could be in default under the
SVB Agreement. 

Stock
Purchase Agreement among the Company and certain Investors, dated as of February 11, 2003. 

3

 

Certificate
of Designation and Determination of Preferences of the Series E-1 Senior Preferred Stock. 

Schedule 4.6(a)

Disclosure Materials previously provided: 

	1.
	All
of the closing documents and related agreements associated with the Company's Series E Preferred Stock financing including but not limited to those agreements
referenced on the closing binder index attached hereto.

	2.
	Private
Placement Memorandum dated October 2000.

	3.
	List
of Displaytech's financings.

	4.
	Stock
Purchase Agreement, dated January 27, 1998, between Hewlett-Packard Company and Displaytech, Inc.

	5.
	Note
Purchase Agreement, dated February 19, 1999, between Hewlett-Packard Company and Displaytech, Inc.

	6.
	Amendment
No. 1 to the Note Purchase Agreement, dated February 19, 1999, between Hewlett-Packard Company and Displaytech, Inc.

	7.
	Second
Amendment to the Note Purchase Agreement, dated February 11, 2003, between Hewlett-Packard Company and Displaytech, Inc.

	8.
	Amended
and Restated Convertible Note, dated February 11, 2003, with Displaytech, Inc. as maker in favor of Hewlett-Packard Company.

	9.
	Certificate
of Designation and Determination of Preferences of Series HP Convertible Stock.

	10.
	Certificate
of Designation and Determination of Preferences of Series B Convertible Stock.

	11.
	Stock
Purchase Agreement dated January 7, 2000 between Fleming US Discovery Fund III, LP and Displaytech, Inc.

	12.
	Schedule
of Exceptions to the Stock Purchase Agreement dated January 7, 2000 and all attachments related thereto.

	13.
	Private
Placement Memorandum dated March 2001.

	14.
	Weekly
cash meetings at which Weekly Cash/Ships Updates were sent electronically to investors.

	13.
	Weekly
telephone conference calls for customer and business updates at which slides were sent electronically to investors.

	14.
	New
product plans and product roadmaps; presentation materials at board meetings.

	15.
	Audited
financial statements of the Company at December 31, 2002.

	16.
	Unaudited
financial statements of the Company at September 30, 2003.

	17.
	Loan
and Security Agreement, dated April 4, 2003, between Silicon Valley Bank and Displaytech, Inc. 

4

 

Schedule 4.9(a)

List of Benefit Plans:

Medical
insurance, administered by Humana Insurance Co.

Dental insurance provided by MetLife

Vision Service Plan

Life Insurance provided by GE Financial Assurance Co.

Disability Insurance provided by GE Financial Assurance Co.

Displaytech, Inc. Profit Sharing and 401(k) Plan 

Schedule 4.9(k) 

Accruals under Unfunded Benefit Plans:

None 

Schedule 4.11

All outstanding securities of the Company:

See attached 

Schedule 4.12(a) 

List of Intellectual Property:

See attached 

Exception
§4.12(a)(iii) 

Statement re suspected infringement:

Displaytech
suspects several companies affiliated with [****] particularly [*****] are developing products that may infringe the Company's patents and
patents licensed from Noel Clark and Sven Lagerwall. However, because the companies are headquartered in [*****] and are not producing commercial quantities of products,
Displaytech had not initiated formal infringement action. 

Displaytech
is also aware that [*****] has developed a laboratory display panel that is suspected of infringing the patents licensed from Noel Clark and Sven Lagerwall, and
possibly, some of Displaytech's patents. The [*****] researchers contacted Noel Clark and inquired about licensing. Professor Clark responded to the
[*****] researchers that any discussion about intellectual property would have to include Displaytech. Displaytech has met with the [*****] researchers
and notified them of Displaytech's intellectual property rights in this area. 

Exception
§4.12(b)(i) 

Statement re grounds for claim against Company of patent infringement

Displaytech
has had discussions with a current supplier of FLC chemical components to obtain a license to a patent of unknown validity and which may cover FLC components that are useful in
Displaytech's products. Discussions with the supplier for such license ceased without the issuance of such license. As a result, Displaytech began purchasing FLC chemicals components from an
alternative supplier, and has proceeded on the assumption that there is an implied license for the FLC chemical components it buys and uses. 

Exception
§4.12(b)(ii) 

Statement re third party patent applications

Displaytech
is aware of a third party foreign patent application that may cover a component that had been considered for a projection project. Displaytech already has an issued United States patent
and pending foreign patent applications on this same technology. If this patent application continues to be 

5

 

prosecuted
through the United States Patent and Trademark Office with the same claims as the foreign patent application, it may provoke an interference proceeding with Displaytech's issued United
States patent. 

Exception
§4.12(c) 

Statement re filing of prior art

Displaytech
is aware that in one of its issued patents a relevant, but, in the Company's opinion, an immaterial prior art document was inadvertently not disclosed to the United States Patent and
Trademark Office during the pendency of the patent application. This prior art document has been disclosed in a currently-pending continuation of this original patent application in which relatively
broader claims are being sought. 

Schedule 4.14 

Leased Property

        The
Company leases approximately 30,000 square feet of office and manufacturing space from Pratt Land LLC located at 2602 Clover Basin Drive, Longmont, CO. 

        The
Company leases office space in Tokyo, Japan at the Yurakucho Business Center. The material terms of the lease are as follows: 

	Landlord:	 	Mitsubishi Estate Co., Ltd.
	Address:	 	Business Center Yurakucho

11F Yurakucho Bldg.

1-10-1 Yurakucho, Chiyoda-ku

Tokyo 100-0006, Japan
	Lease Amount:	 	472,500 yen monthly
	Term:	 	Month to month renewal

Schedule 4.15(b)

        None

Schedule 4.16(a)

Environmental Compliance:

None 

Schedule 4.16(b)

Storage of Hazardous Materials

None 

Schedule 4.18 

Offering of Shares

None 

6

 

Schedule 4.19 

        List the amount of all Indebtedness, any Lien with respect thereto, and a description of the agreement therefore:

	EQUIPMENT LEASES WITH FOLLOWING LESSORS
 
	 	MONTHLY RENTAL
	 	LIABILITY @11/30/03

	Wells Fargo Financial (formerly Conseco Finance) pursuant to that certain Lease Agreement, dated July 7, 2000, by and between Conseco Vendor Services Corporation and Displaytech, Inc.	 	1,922.36	 	33,243.70
	TOTAL	 	1,922.36	 	33,243.70
	
OTHER INDEBTEDNESS
 
	
 	

 
	
 	

LIABILITY @11/30/03

	Amended and Restated Convertible Note, dated February 11, 2003 payable to HP as well as the HP Agreement	 	 	 	14,117,500.00
	Promissory Note, dated December 30, 2001, payable to Cadwalader, Wickersham, & Taft (interest has been paid through 11/30/03)	 	 	 	150,000.00
	Amkor Technology Letter Agreement, dated June 11, 2002	 	 	 	275,540.95
	Miyota (payables under that certain Manufacturing Agreement, dated December 10, 1998, by and between Displaytech, Inc. and Miyota Co., Ltd., as amended	 	 	 	424,917.09
	Silicon Valley Bank pursuant to the SVB Loan Agreement and related documents (including, but not limited to, the Negative Pledge Agreement, dated April 4, 2003, by and between the Company and Silicon Valley
Bank	 	 	 	469,885.30
	 	 	 	 	

	 	TOTAL	 	 	 	15,437,843.34
	 	 	 	 	

7

 
Liens  

	1.	 	UCC-1 Financing Statement

Filed: CO Secretary of State—7/28/2000—Reception No. 20002068604

Secured Party: Conseco Finance Vendor Services Corp.
	 	 	Collateral:	 	Specific equipment (Computer/telephone)
	2.	 	UCC-1 Financing Statement

Filed: CO Secretary of State—3/21/2002—Reception No. 20022030043

Secured Party: Transamerica Technology Finance Corporation, successor in interest to Transamerica Business Credit Corporation
	 	 	Collateral:	 	Filed as evidence of equipment lease only (specific equipment)
	 	 	The indebtedness relating to the foregoing lien has been paid in full and the Company expects that a UCC-3 termination statement will be filed
	3.	 	UCC-1 Financing Statement

Filed: CO Secretary of State—6/14/2002—Reception No. 20022063462

Secured Party: Silicon Valley Bank
	 	 	Collateral:	 	Purchased accounts receivable of account debtors Miyota Co. Ltd. and Nissho Electronics
	4.	 	UCC-1 Financing Statement

Filed: CO Secretary of State—4/08/2003—Reception No. 20032036771

Secured Party: Silicon Valley Bank
	 	 	Collateral:	 	Goods and equipment, inventory, contract rights, general intangibles, accounts, documents, etc.
	5.	 	UCC-1 Financing Statement

Filed: CO Secretary of State—4/9/2003—Reception No. 20032037894

Secured Party: Silicon Valley Bank
	 	 	Collateral:	 	Goods and equipment, inventory, contract rights, general intangibles, copyright rights and applications, etc.

Schedule 4.23(a)

List all the Company's insurance policies:

Commercial
general liability insurance provided by The Hartford: 

Personal
Property

Business Income and Extra Expense

Accounts Receivable

Original Information Property

Hired and Non-owned Autos

General Liability

Products Completed Operations

Personal & Advertising Injury

Manufacturer's Errors and Omissions Liability

Crime Coverage, Employee Dishonesty

Commercial Catastrophe Liability

Worker's Compensation 

Policies
provided through AIG American International Companies 

Directors,
Officers and Private Company Liability Insurance

Employee Benefit Plan Fiduciary Liability Insurance 

Life
Insurance/Individual provided by Sun Life of Canada for: 

Haviland
Wright and Mark Handschy (Chief Scientist) 

8

   Schedule 4.11  

	Name
 
	 	Preferred

Series E-1

Stock
	 	Preferred

Series E-1 Stock

Purchase Price
	 	Preferred

Series E-D

Convertible Stock
	 	Preferred

Series E-D

Pro Forma

on an as

converted

basis of

$5.50
	 	Perferred

Series E-D Convertible Stock

Purchase Price
	 	Perferred

Series E-B Convertible Stock
	 	Perferred

Series E-B

Pro Forma

on an as

converted

basis of

$7.11
	 	Perferred

Series E-B Convertible Stock

Purchase Price
	 	Preferred

Series D Convertible Stock
	 	Preferred

Series D

Pro Forma

on an as

converted

basis of

current

market

$5.50
	 	Perferred

Series D Convertible Stock

Purchase Price
	 	Perferred

Series B

Convertible

Stock

	MidOcean Capital Partners SB, L.P.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	71,928	 	1,307,782	 	7,192,800	 	100,000
	Hewlett Packard (Convertible Note)+ Interest***	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Hewlett Packard	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	24,219
	Fleming US Discovery Fund III, L.P.	 	17,281	 	1,728,100	 	70,589	 	1,283,436	 	7,058,900	 	86,182	 	1,212,124	 	8,618,200	 	—	 	—	 	—	 	—
	Fleming US Discovery Offshore Fund III, L.P.	 	2,767	 	276,700	 	11,340	 	206,182	 	1,134,000	 	13,818	 	194,346	 	1,381,800	 	—	 	—	 	—	 	—
	Kingdon Offshore N.V.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	53,946	 	980,836	 	5,394,600	 	80,414
	Kingdon Partners, L.P.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	5,754	 	104,618	 	575,400	 	33,299
	Kingdon Associates, L.P.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	12,228	 	222,327	 	1,222,800	 	19,480
	Interwest Capital, Inc.	 	20,048	 	2,004,800	 	72,006	 	1,309,200	 	7,200,600	 	41,017	 	576,891	 	4,101,692	 	—	 	—	 	—	 	—
	Century America LLC	 	—	 	—	 	10,925	 	198,636	 	1,092,500	 	42,175	 	593,179	 	4,217,500	 	—	 	—	 	—	 	—
	JKB-Displaytech, LLC	 	—	 	—	 	10,925	 	198,636	 	1,092,500	 	20,330	 	285,935	 	2,033,000	 	—	 	—	 	—	 	—
	Birchfield, Kermit J.	 	—	 	—	 	—	 	—	 	—	 	10,603	 	149,128	 	1,060,300	 	—	 	—	 	—	 	—
	Birchfield, Guthrie K	 	—	 	—	 	—	 	—	 	—	 	513	 	7,215	 	51,300	 	—	 	—	 	—	 	—
	Thomas Weisel Partners	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Barton, Richard D	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Nissho	 	7,500	 	750,000	 	10,000	 	181,818	 	1,000,000	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Spenner, Bruce F	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Wright, Haviland	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Handschy, Mark A	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	5
	Lewis, Lloyd M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	D.A. Davidson	 	—	 	—	 	—	 	—	 	—	 	6,000	 	84,388	 	600,000	 	—	 	—	 	—	 	—
	Clough, George E	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	21
	DADCO Incorporated	 	—	 	—	 	—	 	—	 	—	 	5,000	 	70,323	 	500,000	 	—	 	—	 	—	 	—
	Wand, Michael D	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	75
	Cadwalader	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Walba, David M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	130
	Ellis, Beth L	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Clark, Noel	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	405
	Analysis Group Fund I, L.P.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	1,000	 	18,182	 	100,000	 	—
	Wieseler, Todd G.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Hokin, Richard	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Transamerica	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—

1

 

	Name
 
	 	Perferred Series B on an as converted basis of $7.11
	 	Perferred Series B Convertible Stock Purchase Price
	 	Common Stock
	 	Common Stock Purchase Price
	 	Total Shares Stock Issued**
	 	% of Total Shares Stock Issued
	 	No. of Warrants
	 	No. of Options Outstanding
	 	Exercise Amount
	 	Total Securities Owned**
	 	% of Total Securities Issued
	 	Investor Category

	MidOcean Capital Partners SB, L.P.	 	1,406,470	 	10,000,000	 	—	 	 	 	2,714,252	 	21.06	%	—	 	—	 	—	 	2,714,252	 	15.79	%	Outside Investor
	Hewlett Packard (Convertible Note)+ Interest***	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	—	 	—	 	2,566,818	 	14.93	%	Outside Investor
	Hewlett Packard	 	340,633	 	2,421,900	 	—	 	 	 	340,633	 	2.64	%	87	 	—	 	—	 	340,720	 	1.98	%	Outside Investor
	Fleming US Discovery Fund III, L.P.	 	—	 	—	 	—	 	 	 	2,512,841	 	19.49	%	—	 	—	 	—	 	2,512,841	 	14.62	%	Outside Investor
	Fleming US Discovery Offshore Fund III, L.P.	 	—	 	—	 	—	 	 	 	403,295	 	3.13	%	—	 	—	 	—	 	403,295	 	2.35	%	Outside Investor
	Kingdon Offshore N.V.	 	1,130,999	 	8,041,400	 	—	 	 	 	2,111,835	 	16.38	%	—	 	—	 	—	 	2,111,835	 	12.28	%	Outside Investor
	Kingdon Partners, L.P.	 	468,340	 	3,329,900	 	—	 	 	 	572,959	 	4.44	%	—	 	—	 	—	 	572,959	 	3.33	%	Outside Investor
	Kingdon Associates, L.P.	 	273,980	 	1,948,000	 	—	 	 	 	496,308	 	3.85	%	—	 	—	 	—	 	496,308	 	2.89	%	Outside Investor
	Interwest Capital, Inc.	 	—	 	—	 	—	 	 	 	1,906,139	 	14.79	%	—	 	—	 	—	 	1,906,139	 	11.09	%	Outside Investor
	Century America LLC	 	—	 	—	 	—	 	 	 	791,815	 	6.14	%	—	 	—	 	—	 	791,815	 	4.61	%	Outside Investor
	JKB-Displaytech, LLC	 	—	 	—	 	—	 	 	 	484,572	 	3.76	%	—	 	—	 	—	 	484,572	 	2.82	%	Outside Investor
	Birchfield, Kermit J.	 	—	 	—	 	—	 	 	 	149,128	 	1.16	%	—	 	20,000	 	258,750	 	169,128	 	0.98	%	Outside Investor
	Birchfield, Guthrie K	 	—	 	—	 	—	 	 	 	7,215	 	0.06	%	—	 	—	 	—	 	7,215	 	0.04	%	Outside Investor
	Thomas Weisel Partners	 	—	 	—	 	—	 	 	 	—	 	0.00	%	240,000	 	—	 	—	 	240,000	 	1.40	%	Outside Investor
	Barton, Richard D	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	191,500	 	1,053,250	 	191,500	 	1.11	%	Management
	Nissho	 	—	 	—	 	—	 	 	 	189,318	 	1.47	%	—	 	—	 	—	 	189,318	 	1.10	%	Outside Investor
	Spenner, Bruce F	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	170,000	 	935,000	 	170,000	 	0.99	%	Management
	Wright, Haviland	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	170,000	 	1,287,500	 	170,000	 	0.99	%	Employee, terminated
	Handschy, Mark A	 	70	 	500	 	—	 	 	 	70	 	0.00	%	—	 	148,010	 	812,911	 	148,080	 	0.86	%	Management
	Lewis, Lloyd M	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	88,500	 	486,750	 	88,500	 	0.51	%	Management
	D.A. Davidson	 	—	 	—	 	—	 	 	 	84,388	 	0.65	%	3,700	 	—	 	—	 	88,088	 	0.51	%	Outside Investor
	Clough, George E	 	295	 	2,100	 	—	 	 	 	295	 	0.00	%	—	 	79,583	 	527,708	 	79,879	 	0.46	%	Employee, terminated
	DADCO Incorporated	 	—	 	—	 	 	 	 	 	70,323	 	0.55	%	—	 	—	 	—	 	70,323	 	0.41	%	Outside Investor
	Wand, Michael D	 	1,055	 	7,500	 	—	 	 	 	1,055	 	0.01	%	—	 	68,000	 	538,375	 	69,055	 	0.40	%	Employee
	Cadwalader	 	—	 	—	 	—	 	 	 	—	 	0.00	%	34,091	 	—	 	—	 	34,091	 	0.20	%	Outside Investor
	Walba, David M	 	1,828	 	13,000	 	—	 	 	 	1,828	 	0.01	%	—	 	30,000	 	292,500	 	31,828	 	0.19	%	Founder
	Ellis, Beth L	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	30,000	 	255,000	 	30,000	 	0.17	%	Employee, terminated
	Clark, Noel	 	5,696	 	40,500	 	—	 	 	 	5,696	 	0.04	%	—	 	20,000	 	170,000	 	25,696	 	0.15	%	Founder
	Analysis Group Fund I, L.P.	 	—	 	—	 	—	 	 	 	18,182	 	0.14	%	—	 	—	 	—	 	18,182	 	0.11	%	Outside Investor
	Wieseler, Todd G.	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	18,000	 	99,000	 	18,000	 	0.10	%	Employee
	Hokin, Richard	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	17,500	 	221,250	 	17,500	 	0.10	%	Director
	Transamerica	 	—	 	—	 	—	 	 	 	—	 	0.00	%	16,667	 	—	 	—	 	16,667	 	0.10	%	Outside Investor

2

 

	Name
 
	 	Preferred

Series E-1

Stock
	 	Preferred

Series E-1 Stock

Purchase Price
	 	Preferred

Series E-D

Convertible Stock
	 	Preferred

Series E-D

Pro Forma

on an as

converted

basis of

$5.50
	 	Perferred

Series E-D Convertible Stock

Purchase Price
	 	Perferred

Series E-B Convertible Stock
	 	Perferred

Series E-B

Pro Forma

on an as

converted

basis of

$7.11
	 	Perferred

Series E-B Convertible Stock

Purchase Price
	 	Preferred

Series D Convertible Stock
	 	Preferred

Series D

Pro Forma

on an as

converted

basis of

current

market

$5.50
	 	Perferred

Series D Convertible Stock

Purchase Price
	 	Perferred

Series B

Convertible

Stock

	Meadows, Michael R	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	8
	Skaare, David K	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Reinhard, Steven	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Berliner, Christopher J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Thurmes, William N	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	10
	Taylor, James	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Parghi, Deven	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	O'Callaghan, Michael J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	8
	Swanson, Stanley R.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Gillette, William	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Huffman, William	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	O'Donnell, Patrick	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Jagemalm, Pontus A.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	McConahy, Brian	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Ferguson, Rachel	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Yee, Michael	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Walker, Christopher	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	More, Kundalika M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Dallas, James	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Larsen, Per	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Hollenbeck, Dave	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Low, Chin Chor	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	O'Neill, Matthew B	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Harmes, Benjamin L	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Lundie, Gregory P	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Koprowski, Brian C	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Abbott, Thomas D	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Prikyl, Ivan	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Yang, Su	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Vohra, Rohini T	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	10
	Lewis, Susan M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Vickery, Earle	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Elquest, Douglas K	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—

3

 

	Name
 
	 	Perferred Series B on an as converted basis of $7.11
	 	Perferred Series B Convertible Stock Purchase Price
	 	Common Stock
	 	Common Stock Purchase Price
	 	Total Shares Stock Issued**
	 	% of Total Shares Stock Issued
	 	No. of Warrants
	 	No. of Options Outstanding
	 	Exercise Amount
	 	Total Securities Owned**
	 	% of Total Securities Issued
	 	Investor Category

	Meadows, Michael R	 	113	 	800	 	—	 	 	 	113	 	0.00	%	—	 	15,010	 	81,411	 	15,123	 	0.09	%	Employee
	Skaare, David K	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	14,000	 	77,000	 	14,000	 	0.08	%	Employee
	Reinhard, Steven	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	13,000	 	71,500	 	13,000	 	0.08	%	Employee
	Berliner, Christopher J	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	12,000	 	66,000	 	12,000	 	0.07	%	Employee
	Thurmes, William N	 	141	 	1,000	 	—	 	 	 	141	 	0.00	%	—	 	11,597	 	62,640	 	11,738	 	0.07	%	Employee
	Taylor, James	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	11,521	 	63,366	 	11,521	 	0.07	%	Employee, terminated
	Parghi, Deven	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	11,500	 	63,250	 	11,500	 	0.07	%	Employee
	O'Callaghan, Michael J	 	113	 	800	 	—	 	 	 	113	 	0.00	%	—	 	11,011	 	59,412	 	11,124	 	0.06	%	Employee
	Swanson, Stanley R.	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	10,366	 	10,366	 	10,366	 	0.06	%	Consultant
	Gillette, William	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	10,000	 	55,000	 	10,000	 	0.06	%	Employee
	Huffman, William	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	10,000	 	55,000	 	10,000	 	0.06	%	Employee
	O'Donnell, Patrick	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	10,000	 	55,000	 	10,000	 	0.06	%	Employee
	Jagemalm, Pontus A.	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	9,250	 	50,875	 	9,250	 	0.05	%	Employee
	McConahy, Brian	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,750	 	48,125	 	8,750	 	0.05	%	Employee
	Ferguson, Rachel	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,500	 	46,750	 	8,500	 	0.05	%	Employee
	Yee, Michael	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,500	 	46,750	 	8,500	 	0.05	%	Employee
	Walker, Christopher	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,450	 	46,475	 	8,450	 	0.05	%	Employee
	More, Kundalika M	 	—	 	—	 	242	 	266	 	242	 	0.00	%	—	 	8,075	 	42,433	 	8,317	 	0.05	%	Employee
	Dallas, James	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,125	 	44,688	 	8,125	 	0.05	%	Employee
	Larsen, Per	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,125	 	44,688	 	8,125	 	0.05	%	Employee
	Hollenbeck, Dave	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,000	 	44,000	 	8,000	 	0.05	%	Employee
	Low, Chin Chor	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	8,000	 	44,000	 	8,000	 	0.05	%	Employee
	O'Neill, Matthew B	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	7,525	 	41,388	 	7,525	 	0.04	%	Employee
	Harmes, Benjamin L	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	7,500	 	41,250	 	7,500	 	0.04	%	Employee
	Lundie, Gregory P	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	7,500	 	41,250	 	7,500	 	0.04	%	Employee
	Koprowski, Brian C	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	7,375	 	40,563	 	7,375	 	0.04	%	Employee
	Abbott, Thomas D	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	7,188	 	88,047	 	7,188	 	0.04	%	Employee, terminated
	Prikyl, Ivan	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	7,000	 	38,500	 	7,000	 	0.04	%	Employee
	Yang, Su	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	6,875	 	37,813	 	6,875	 	0.04	%	Employee
	Vohra, Rohini T	 	141	 	1,000	 	—	 	 	 	141	 	0.00	%	—	 	6,605	 	35,184	 	6,746	 	0.04	%	Employee
	Lewis, Susan M	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	6,500	 	35,750	 	6,500	 	0.04	%	Employee
	Vickery, Earle	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	6,000	 	33,000	 	6,000	 	0.03	%	Employee
	Elquest, Douglas K	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	5,500	 	30,250	 	5,500	 	0.03	%	Employee

4

 

	Name
 
	 	Preferred

Series E-1

Stock
	 	Preferred

Series E-1 Stock

Purchase Price
	 	Preferred

Series E-D

Convertible Stock
	 	Preferred

Series E-D

Pro Forma

on an as

converted

basis of

$5.50
	 	Perferred

Series E-D Convertible Stock

Purchase Price
	 	Perferred

Series E-B Convertible Stock
	 	Perferred

Series E-B

Pro Forma

on an as

converted

basis of

$7.11
	 	Perferred

Series E-B Convertible Stock

Purchase Price
	 	Preferred

Series D Convertible Stock
	 	Preferred

Series D

Pro Forma

on an as

converted

basis of

current

market

$5.50
	 	Perferred

Series D Convertible Stock

Purchase Price
	 	Perferred

Series B

Convertible

Stock

	Stuart III, L (Terry)	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	390
	Dozier, Glenn	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Erskine, Keith	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Goranson, Pamela J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Xue, Jiuzhi	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	69
	Weinberger, David	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Shiba, Eitoku	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Jordan, Belinda	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Feddersen, Jody M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Keene, Julie	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Aikawa, Satoko	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Artigliere, Anthony	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Jernigan, Charles	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Current (Arno), Erin	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Cohn, Sarah J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Kostanecki, Andrew T.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Perlmutter, Stephen	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Diehl, Melissa	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Crandall, Charles	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	3
	Everets, John	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Winkleman, Steven L	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Drabik, Tim	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Cunningham, Jim D	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	134
	Her, Jin	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	McLean, Roger	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Sissom, Bradley	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	118
	Braun, Tim	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	117
	Meadows, Michael R & McCormick, Regina A	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	110
	Gaalema, Stephen	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Walba, David M & Geneson, Cassandra	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	105
	Tornga, Sondra	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	103
	Walba, Jeffrey H.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	90
	Chase, Holden	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	10
	Perry, Ann E.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	81

5

 

	Name
 
	 	Perferred Series B on an as converted basis of $7.11
	 	Perferred Series B Convertible Stock Purchase Price
	 	Common Stock
	 	Common Stock Purchase Price
	 	Total Shares Stock Issued**
	 	% of Total Shares Stock Issued
	 	No. of Warrants
	 	No. of Options Outstanding
	 	Exercise Amount
	 	Total Securities Owned**
	 	% of Total Securities Issued
	 	Investor Category

	Stuart III, L (Terry)	 	5,485	 	39,000	 	—	 	 	 	5,485	 	0.04	%	—	 	—	 	—	 	5,485	 	0.03	%	Employee, terminated
	Dozier, Glenn	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	5,000	 	33,000	 	5,000	 	0.03	%	Consultant
	Erskine, Keith	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	5,000	 	27,500	 	5,000	 	0.03	%	Employee
	Goranson, Pamela J	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	5,000	 	25,520	 	5,000	 	0.03	%	Employee
	Xue, Jiuzhi	 	970	 	6,900	 	—	 	 	 	970	 	0.01	%	—	 	4,000	 	34,000	 	4,970	 	0.03	%	Employee, terminated
	Weinberger, David	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,750	 	71,250	 	4,750	 	0.03	%	Consultant
	Shiba, Eitoku	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,500	 	24,750	 	4,500	 	0.03	%	Employee
	Jordan, Belinda	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,250	 	23,375	 	4,250	 	0.02	%	Employee
	Feddersen, Jody M	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,125	 	22,688	 	4,125	 	0.02	%	Employee
	Keene, Julie	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,100	 	20,570	 	4,100	 	0.02	%	Employee
	Aikawa, Satoko	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,000	 	22,000	 	4,000	 	0.02	%	Consultant
	Artigliere, Anthony	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,000	 	49,000	 	4,000	 	0.02	%	Employee, terminated
	Jernigan, Charles	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	4,000	 	22,000	 	4,000	 	0.02	%	Employee
	Current (Arno), Erin	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	3,750	 	20,625	 	3,750	 	0.02	%	Employee
	Cohn, Sarah J	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	3,125	 	17,188	 	3,125	 	0.02	%	Employee
	Kostanecki, Andrew T.	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	3,060	 	3,060	 	3,060	 	0.02	%	Consultant
	Perlmutter, Stephen	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	3,000	 	25,500	 	3,000	 	0.02	%	Employee, terminated
	Diehl, Melissa	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	2,750	 	15,125	 	2,750	 	0.02	%	Employee
	Crandall, Charles	 	42	 	300	 	—	 	 	 	42	 	0.00	%	—	 	2,250	 	19,125	 	2,292	 	0.01	%	Employee, terminated
	Everets, John	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	2,000	 	24,500	 	2,000	 	0.01	%	Consultant
	Winkleman, Steven L	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	2,000	 	17,000	 	2,000	 	0.01	%	Employee, terminated
	Drabik, Tim	 	—	 	—	 	—	 	—	 	 	 	0.00	%	—	 	1,889	 	1,889	 	1,889	 	0.01	%	Employee, terminated
	Cunningham, Jim D	 	1,885	 	13,400	 	—	 	 	 	1,885	 	0.01	%	—	 	—	 	—	 	1,885	 	0.01	%	Employee, terminated
	Her, Jin	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	1,778	 	1,778	 	1,778	 	0.01	%	Employee, terminated
	McLean, Roger	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	1,762	 	1,762	 	1,762	 	0.01	%	Consultant
	Sissom, Bradley	 	1,660	 	11,800	 	—	 	 	 	1,660	 	0.01	%	—	 	—	 	—	 	1,660	 	0.01	%	Employee, terminated
	Braun, Tim	 	1,646	 	11,700	 	—	 	 	 	1,646	 	0.01	%	—	 	—	 	—	 	1,646	 	0.01	%	Employee, terminated
	Meadows, Michael R & McCormick, Regina A	 	1,547	 	11,000	 	—	 	 	 	1,547	 	0.01	%	—	 	—	 	—	 	1,547	 	0.01	%	Employee
	Gaalema, Stephen	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	1,500	 	1,500	 	1,500	 	0.01	%	Consultant
	Walba, David M & Geneson, Cassandra	 	1,477	 	10,500	 	—	 	 	 	1,477	 	0.01	%	—	 	—	 	—	 	1,477	 	0.01	%	Founder
	Tornga, Sondra	 	1,449	 	10,300	 	—	 	 	 	1,449	 	0.01	%	—	 	—	 	—	 	1,449	 	0.01	%	Outside Investor
	Walba, Jeffrey H.	 	1,266	 	9,000	 	—	 	 	 	1,266	 	0.01	%	—	 	—	 	—	 	1,266	 	0.01	%	Founder
	Chase, Holden	 	141	 	1,000	 	—	 	 	 	141	 	0.00	%	—	 	1,042	 	8,854	 	1,182	 	0.01	%	Employee, terminated
	Perry, Ann E.	 	1,139	 	8,100	 	—	 	 	 	1,139	 	0.01	%	—	 	—	 	—	 	1,139	 	0.01	%	Employee, terminated

6

 

	Name
 
	 	Preferred

Series E-1

Stock
	 	Preferred

Series E-1 Stock

Purchase Price
	 	Preferred

Series E-D

Convertible Stock
	 	Preferred

Series E-D

Pro Forma

on an as

converted

basis of

$5.50
	 	Perferred

Series E-D Convertible Stock

Purchase Price
	 	Perferred

Series E-B Convertible Stock
	 	Perferred

Series E-B

Pro Forma

on an as

converted

basis of

$7.11
	 	Perferred

Series E-B Convertible Stock

Purchase Price
	 	Preferred

Series D Convertible Stock
	 	Preferred

Series D

Pro Forma

on an as

converted

basis of

current

market

$5.50
	 	Perferred

Series D Convertible Stock

Purchase Price
	 	Perferred

Series B

Convertible

Stock

	Eppner, Gerald A.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Lloyd, Susan M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	3
	Banas, David	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	8
	Poppe, Leszek	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	62
	Doroski, David	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	55
	Wand, Sherri	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	55
	Black Forest Engineering,	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Handschy, John R A & Pauline	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	50
	Handschy, Mark A & Vernon, Terri H	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	50
	Vernon, Leland H & Twila F	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	50
	Pattee, Alan M	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	12
	Zadow, Jerry	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Lahr, Heidi	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	44
	Goranson, Kelly J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Hartman, Gregory N	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Ward, David	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Sontag, Patricia E	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	27
	Pilz, Caren	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	25
	Pagano, Laura A	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	24
	Radzihovsky, Leo & Pao, Lucy	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	23
	Perry, James Elwood	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	20
	Giles, Nancy	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	17
	Arnett, Kenneth E	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	17
	McCurry, Ruth F	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	15
	Young, George C & Gail V	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	15
	O'Hara, E. Kieran & Clark, Evelyn	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	10
	University Technology Corporation	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	10
	Sherman, Christopher J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	9
	Cunningham, Jill D.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	7
	Li, Edith W.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	7
	Skelly, David W	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	7
	Dessau, Daniel & Kathryn	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	4
	Quinn, Norman J. III	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	4
	Lane, William Kerry	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—
	Hirmes, Helene	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	3
	Masterson, Hugh J	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	2
	Gross, Howard W.	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	1
	Wand, Anne-Michelle	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	1
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	 	 	47,596	 	4,759,600	 	185,785	 	3,377,909	 	18,578,500	 	225,638	 	3,173,528	 	22,563,792	 	144,856	 	2,633,745	 	14,485,600	 	260,051
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

7

 

	Name
 
	 	Perferred Series B on an as converted basis of $7.11
	 	Perferred Series B Convertible Stock Purchase Price
	 	Common Stock
	 	Common Stock Purchase Price
	 	Total Shares Stock Issued**
	 	% of Total Shares Stock Issued
	 	No. of Warrants
	 	No. of Options Outstanding
	 	Exercise Amount
	 	Total Securities Owned**
	 	% of Total Securities Issued
	 	Investor Category

	Eppner, Gerald A.	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	1,000	 	15,000	 	1,000	 	0.01	%	Consultant
	Lloyd, Susan M	 	42	 	300	 	—	 	 	 	42	 	0.00	%	—	 	896	 	7,615	 	938	 	0.01	%	Employee, terminated
	Banas, David	 	113	 	800	 	—	 	 	 	113	 	0.00	%	—	 	813	 	6,906	 	925	 	0.01	%	Employee, terminated
	Poppe, Leszek	 	872	 	6,200	 	—	 	 	 	872	 	0.01	%	—	 	—	 	—	 	872	 	0.01	%	Outside Investor
	Doroski, David	 	774	 	5,500	 	—	 	 	 	774	 	0.01	%	—	 	—	 	—	 	774	 	0.00	%	Employee, terminated
	Wand, Sherri	 	774	 	5,500	 	—	 	 	 	774	 	0.01	%	—	 	—	 	—	 	774	 	0.00	%	Outside Investor
	Black Forest Engineering,	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	750	 	750	 	750	 	0.00	%	Consultant
	Handschy, John R A & Pauline	 	703	 	5,000	 	—	 	 	 	703	 	0.01	%	—	 	—	 	—	 	703	 	0.00	%	Outside Investor
	Handschy, Mark A & Vernon, Terri H	 	703	 	5,000	 	—	 	 	 	703	 	0.01	%	—	 	—	 	—	 	703	 	0.00	%	Outside Investor
	Vernon, Leland H & Twila F	 	703	 	5,000	 	—	 	 	 	703	 	0.01	%	—	 	—	 	—	 	703	 	0.00	%	Outside Investor
	Pattee, Alan M	 	169	 	1,200	 	—	 	 	 	169	 	0.00	%	—	 	531	 	4,516	 	700	 	0.00	%	Employee, terminated
	Zadow, Jerry	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	679	 	679	 	679	 	0.00	%	Consultant
	Lahr, Heidi	 	619	 	4,400	 	—	 	 	 	619	 	0.00	%	—	 	—	 	—	 	619	 	0.00	%	Employee, terminated
	Goranson, Kelly J	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	500	 	4,250	 	500	 	0.00	%	Employee, terminated
	Hartman, Gregory N	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	500	 	4,250	 	500	 	0.00	%	Employee, terminated
	Ward, David	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	500	 	500	 	500	 	0.00	%	Consultant
	Sontag, Patricia E	 	380	 	2,700	 	—	 	 	 	380	 	0.00	%	—	 	—	 	—	 	380	 	0.00	%	Employee, terminated
	Pilz, Caren	 	352	 	2,500	 	—	 	 	 	352	 	0.00	%	—	 	—	 	—	 	352	 	0.00	%	Employee, terminated
	Pagano, Laura A	 	338	 	2,400	 	—	 	 	 	338	 	0.00	%	—	 	—	 	—	 	338	 	0.00	%	Outside Investor
	Radzihovsky, Leo & Pao, Lucy	 	323	 	2,300	 	—	 	 	 	323	 	0.00	%	—	 	—	 	—	 	323	 	0.00	%	Outside Investor
	Perry, James Elwood	 	281	 	2,000	 	—	 	 	 	281	 	0.00	%	—	 	—	 	—	 	281	 	0.00	%	Outside Investor
	Giles, Nancy	 	239	 	1,700	 	—	 	 	 	239	 	0.00	%	—	 	—	 	—	 	239	 	0.00	%	Outside Investor
	Arnett, Kenneth E	 	239	 	1,700	 	—	 	 	 	239	 	0.00	%	—	 	—	 	—	 	239	 	0.00	%	Outside Investor
	McCurry, Ruth F	 	211	 	1,500	 	—	 	 	 	211	 	0.00	%	—	 	—	 	—	 	211	 	0.00	%	Employee, terminated
	Young, George C & Gail V	 	211	 	1,500	 	—	 	 	 	211	 	0.00	%	—	 	—	 	—	 	211	 	0.00	%	Outside Investor
	O'Hara, E. Kieran & Clark, Evelyn	 	141	 	1,000	 	—	 	 	 	141	 	0.00	%	—	 	—	 	—	 	141	 	0.00	%	Outside Investor
	University Technology Corporation	 	141	 	1,000	 	—	 	 	 	141	 	0.00	%	—	 	—	 	—	 	141	 	0.00	%	Outside Investor
	Sherman, Christopher J	 	127	 	900	 	—	 	 	 	127	 	0.00	%	—	 	—	 	—	 	127	 	0.00	%	Outside Investor
	Cunningham, Jill D.	 	98	 	700	 	—	 	 	 	98	 	0.00	%	—	 	—	 	—	 	98	 	0.00	%	Employee, terminated
	Li, Edith W.	 	98	 	700	 	—	 	 	 	98	 	0.00	%	—	 	—	 	—	 	98	 	0.00	%	Outside Investor
	Skelly, David W	 	98	 	700	 	—	 	 	 	98	 	0.00	%	—	 	—	 	—	 	98	 	0.00	%	Outside Investor
	Dessau, Daniel & Kathryn	 	56	 	400	 	—	 	 	 	56	 	0.00	%	—	 	—	 	—	 	56	 	0.00	%	Outside Investor
	Quinn, Norman J. III	 	56	 	400	 	—	 	 	 	56	 	0.00	%	—	 	—	 	—	 	56	 	0.00	%	Outside Investor
	Lane, William Kerry	 	—	 	—	 	—	 	 	 	—	 	0.00	%	—	 	50	 	50	 	50	 	0.00	%	Consultant
	Hirmes, Helene	 	42	 	300	 	—	 	 	 	42	 	0.00	%	—	 	—	 	—	 	42	 	0.00	%	Outside Investor
	Masterson, Hugh J	 	28	 	200	 	—	 	 	 	28	 	0.00	%	—	 	—	 	—	 	28	 	0.00	%	Outside Investor
	Gross, Howard W.	 	14	 	100	 	—	 	 	 	14	 	0.00	%	—	 	—	 	—	 	14	 	0.00	%	Outside Investor
	Wand, Anne-Michelle	 	14	 	100	 	—	 	 	 	14	 	0.00	%	—	 	—	 	—	 	14	 	0.00	%	Outside Investor
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	 
	 	 	3,657,539	 	26,005,100	 	242	 	266	 	12,890,560	 	100.00	%	294,545	 	1,439,290	 	9,157,788	 	17,191,213	 	100.00	%	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	 

8

   Schedule 4.12(a)  

Displaytech Owned US Patents  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,633,301	 	RGB Illuminator with Calibration Via Single Detector Servo	 	10/14/03	 	5/17/19
	

6,580,078	
 	

Ferroelectric Liquid Crystal Infrared Chopper	
 	

6/17/03	
 	

4/6/21
	

6,570,550	
 	

Active Matrix Liquid Crystal Image Generator	
 	

5/27/03	
 	

12/22/14
	

6,569,504	
 	

Mesogenic Materials with Anomalous Birefringence Dispersion and	
 	

5/27/03	
 	

4/4/17
	

6,525,709	
 	

Miniature Display Apparatus and Method	
 	

2/25/03	
 	

10/17/17
	

6,507,330	
 	

DC-balanced and Non-DC-balanced Drive Schemes for Liquid Crystal Devices	
 	

1/14/03	
 	

9/1/19
	

6,426,783	
 	

Continuously Viewable DC-Field Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

7/30/02	
 	

2/18/18
	

6,413,448	
 	

Cyclohexyl- and Cyclohexynl-substituted Liquid Crystals with Low Birefringence	
 	

7/20/02	
 	

4/26/19
	

6,369,933	
 	

Optical Correlator Having Multiple Active Components Formed on a Single Integrated Circuit	
 	

4/9/02	
 	

12/18/19
	

6,359,723	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Crystal Image Generator	
 	

3/19/02	
 	

12/12/14
	

6,317,112	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

11/13/01	
 	

12/22/14
	

6,310,664	
 	

Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

10/30/01	
 	

2/18/18
	

6,247,037	
 	

Optical Correlator Having Multiple Active Components Formed on a Single Integrated Circuit	
 	

6/12/01	
 	

1/28/19
	

6,195,136	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

2/27/01	
 	

12/22/14
	

6,144,421	
 	

Continuously Viewable, DC-Field Balanced Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

11/7/00	
 	

2/18/18
	

6,139,771	
 	

Mesogenic Materials with Anomalous Birefringence Dispersion and High Second Order Susceptibility	
 	

10/31/00	
 	

4/4/17
	

6,100,945	
 	

Compensator Arrangements for a Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Display System	
 	

8/8/00	
 	

2/18/18
	

6,075,577	
 	

Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

6/13/00	
 	

2/18/18
	

 Restricted and Confidential
	 	 	 	 	 	 	 

1

 

	
6,038,005	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

3/14/00	
 	

12/22/14
	

6,025,890	
 	

Beam Splitter Element Including a Beam Splitting Layer and a Polarizing Layer for use in a Light Polarization Modulating Display System	
 	

2/15/00	
 	

2/20/18
	

6,016,173	
 	

Optics Arrangement Including a Compensator Cell and Static Wave Plate For a Continuously Viewable, Reflection Mode, Ferroelectric Liquid Crystal Spatial Light Modulating System	
 	

1/18/00	
 	

2/18/18
	

5,900,976	
 	

Display System including a Polarizing Beam Splitter	
 	

5/4/99	
 	

2/20/18
	

5,808,800	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

9/15/98	
 	

9/15/15
	

5,757,348	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

5/26/98	
 	

5/26/15
	

5,753,139	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein	
 	

5/19/98	
 	

5/19/15
	

5,748,164	
 	

Active Matrix Liquid Crystal Image Generator	
 	

5/5/98	
 	

5/5/15
	

5,694,147	
 	

Liquid Crystal Integrated Circuit Display Including an Arrangement for Maintaining the Liquid Crystal at a Controlled Temperature	
 	

12/2/97	
 	

4/14/15
	

5,626,792	
 	

High Birefringence Liquid Crystal Compounds	
 	

5/6/97	
 	

9/6/14
	

5,596,451(1)	
 	

Miniature Image Generator Including Optics Arrangement	
 	

1/21/97	
 	

1/30/15
	

5,585,036	
 	

Liquid Crystal Compounds Containing Chiral 2-Halo-2-Methyl Ether and Ester Tails	
 	

12/17/96	
 	

12/17/13
	

5,552,916	
 	

Diffractive Light Modulator	
 	

9/3/96	
 	

9/3/13
	

5,539,555(2)	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein	
 	

7/23/96	
 	

7/23/13
	

5,523,864	
 	

Analog Liquid Crystal Spatial Light Modulator Including an Internal Voltage Booster	
 	

6/4/96	
 	

1/26/14
	

5,500,748(3)	
 	

Liquid Crystal Spatial Light Modulator Including an Internal Voltage Booster	
 	

3/19/96	
 	

1/26/14
	

5,453,218	
 	

Liquid Crystal Compounds Containing Chiral 2-Halo-2 Methyl Alkoxy Tails	
 	

9/26/95	
 	

9/26/12
	

5,380,460	
 	

Ferroelectric Liquid Crystal Compounds Containing Chiral Haloalkoxy Tail Units and Compositions Containing Them	
 	

1/10/95	
 	

1/10/12
	

 Restricted and Confidential
	

 	
 	

 	
 	

 	
 	

 

2

 

	
RE 34,726	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

9/13/94	
 	

7/14/09
	

5,347,378	
 	

Fast Switching Color Filters for Frame-Sequential Video Using Ferroelectric Liquid Crystal Color-Selective Filters	
 	

9/13/94	
 	

9/13/11
	

5,271,864	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them	
 	

12/21/93	
 	

8/7/12
	

5,182,665	
 	

Diffractive Light Modulator	
 	

1/26/93	
 	

9/7/10
	

5,180,520(4)	
 	

Ferroelectric Liquid Crystal Compositions Containing Halogenated Cores and Chiral Halogenated Cores and Chiral Haloalkoxy Tail Units	
 	

1/19/93	
 	

1/19/10
	

5,178,791	
 	

Halogenated Diphenyldiacetylene Liquid Crystals	
 	

1/12/93	
 	

3/11/11
	

5,178,445(5)	
 	

Optically Addressed Spatial Light Modulator	
 	

1/12/93	
 	

1/12/10
	

5,167,855(4)	
 	

Ferroelectric Liquid Crystal Compositions Chiral Haloalkoxyl Tail Units	
 	

12/1/92	
 	

12/1/09
	

5,051,506	
 	

Ferroelectric Liquid Crystal Compounds Containing Chiral Haloalkoxy Tail Units and Compositions Containing Them	
 	

9/24/91	
 	

9/24/08
	

4,813,771	
 	

Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	
 	

3/21/89	
 	

10/15/07

	(1)
	jointly
owned by Displaytech, Inc. and Martin Shenker Optical Design, Inc.

	(2)
	jointly
owned by Displaytech, Inc. and Hoechst Aktiengesellschaft (with bilateral restrictions on field of use based on display size; Displaytech has exclusive right to
displays with an active area of 10 cm. or less in diameter, Hoechst has exclusive right to displays with an active area greater than 10 cm. in diameter)

	(3)
	jointly
owned by Displaytech, Inc. and Stephen D. Gaalema

	(4)
	owned
solely by Displaytech, Inc.; assignee data on patent cover sheet is incorrect

	(5)
	jointly
owned by Displaytech, Inc. and University of Colorado Foundation (assignment not recorded at PTO 
Restricted and Confidential  

3

 

Displaytech Owned Foreign Patents  

	Country
 
	 	Patent No.
	 	Title
	 	Issue Date
	 	Expires

	Canada	 	2,087,592	 	Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	 	4/16/02	 	7/22/11
	

Canada	
 	

2,088,934	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

6/3/03	
 	

2/8/13
	

Germany	
 	

69109680	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

Japan	
 	

2868774	
 	

Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	
 	

12/25/98	
 	

10/14/08
	

Japan	
 	

3124772	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

10/27/00	
 	

7/22/11
	

Korea	
 	

184,242	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

12/17/98	
 	

7/22/11
	

Korea	
 	

261,354	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

4/18/00	
 	

2/6/13
	

Korea	
 	

283,163	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them	
 	

12/6/00	
 	

8/6/13
	

Sweden	
 	

0 540 648	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

Sweden	
 	

515 705	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

9/24/01	
 	

2/5/13
	

United Kingdom	
 	

0 540 648	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

United Kingdom	
 	

2 263 982	
 	

Ferroelectric Liquid Crystals	
 	

2/28/96	
 	

1/29/13

Restricted and Confidential  

4

 

Displaytech Owned Pending US Patent Applications  

	App. No.
 
	 	Title
	 	Date Filed

	 	 	[*****]	 	 
	

09/718,843	
 	

Multi-State Light Modulator with Non-Zero Response Time and Linear Gray Scale	
 	

11/22/00
	

09/754,033	
 	

Alkyl Silane Liquid Crystal Compounds	
 	

1/3/01
	

09/753,749	
 	

Liquid Crystal Compounds Having a Silane Tail with a Perfluoroalkyl Terminal Portion	
 	

1/3/01
	

09/754,034	
 	

Liquid Crystalline Materials Containing Perfluoroalkyl and Alkenyl Tails	
 	

1/3/01
	

09/854,181	
 	

Partially Fluorinated Liquid Crystal Materials	
 	

5/11/01
	

09/885,862	
 	

Bookshelf Liquid Crystal Materials and Devices	
 	

6/20/01
	

 	
 	

[*****]	
 	

 
	

 	
 	

[*****]	
 	

 
	

 	
 	

[*****]	
 	

 
	

09/992,097	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

11/5/01
	

09/989,976	
 	

Dual Mode Near-Eye and Projection Display System	
 	

11/20/01
	

 	
 	

[*****]	
 	

 
	

10/067,516	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

2/4/02
	

 	
 	

[*****]	
 	

 
	

 	
 	

[*****]	
 	

 
	

 	
 	

[*****]	
 	

 
	

 	
 	

[*****]	
 	

 

Restricted and Confidential  

5

 

Displaytech Owned Pending Foreign Patent Applications  

	Date Filed
 
	 	App. No.
	 	Country
	 	Title

	2/05/93	 	9300375-4	 	China	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

2/05/93	
 	

43 03 335.0	
 	

Germany	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

2/08/93	
 	

5-20412	
 	

Japan	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

2/08/93	
 	

2003-37499	
 	

Japan	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

8/04/93	
 	

5-193688	
 	

Japan	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them
	

12/14/95	
 	

95943444.0	
 	

Europe	
 	

Active Matrix Liquid Crystal Image Generator
	

2/17/99	
 	

10-2000-7008981	
 	

Korea	
 	

Image Generating System
	

11/20/01	
 	

01995158.1	
 	

Europe	
 	

Dual Mode Near-Eye and Projection Display System
	

11/20/01	
 	

2002-544703	
 	

Japan	
 	

Dual Mode Near-Eye and Projection Display System

Restricted and Confidential  

6

 

License Agreements  

	1)
	Company
has various rights to the following patents pursuant to an agreement with Clark and Lagerwall: 

	Country
 
	 	Patent No.
	 	Title
	 	Issue Date
	 	Expires

	United States	 	RE 34,942	 	Surface Stabilized Ferroelectric Liquid Crystal Devices with Means for Aligning LC molecules at Omega (Alpha) from Normal to the Means	 	5/16/95	 	6/20/06
	

United States	
 	

RE 34,949	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices	
 	

5/23/95	
 	

9/25/07
	

United States	
 	

RE 34,950	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Means for Aligning LC Molecules at Omega(alpha) from Normal to the Means	
 	

5/23/95	
 	

3/21/06
	

United States	
 	

RE 34,966	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with LC Molecules Aligned at Angle Omega (Alpha) from Normal to Substrates	
 	

6/13/95	
 	

1/7/03
	

United States	
 	

RE 34,967	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Plural Orientation States of Different Colors or Separated by Domain Walls	
 	

6/13/95	
 	

7/13/10
	

United States	
 	

RE 34,973	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Total Reflection in One State and Transmission in Another State	
 	

6/20/95	
 	

1/28/09
	

United States	
 	

5,555,111	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Dielectric Torques Greater Than Ferroelectric Torques	
 	

9/10/96	
 	

3/21/06
	

United States	
 	

5,555,117	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices	
 	

9/10/96	
 	

9/10/13

Restricted and Confidential  

7

 
	2)
	Company is a party to that certain "Technology License and Industrial Research Agreement" with University Research Corporation effective as of May 1,
1994, which amended and superceded that certain "Technology Licensing and Industrial Research Agreement" between the parties dated May 1, 1990. On August 28, 2003 the University Research
Corporation sent Company a letter indicating its intent to terminate the agreement. Pursuant to the terms of the agreement, certain license rights to various patents (including those identified below)
would continue. The University Research Corporation has requested that Company amend certain termination provisions of the agreement that currently grant Company rights to certain specified future
technology. Company and University Research Corporation are continuing to discuss appropriate consideration to be given to Company in the event Company approves such amendment. 

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	5,168,381	 	Smectic Liquid Crystal Devices Using SSFLC and Electroclinic Effect Based Cells	 	12/1/92	 	12/1/09
	

5,178,793	
 	

Ferroelectric Liquid Crystal Compounds and Compositions	
 	

1/12/93	
 	

1/12/10
	

5,543,078	
 	

Ferroelectric Liquid Crystals for Nonlinear Optics Applications	
 	

8/6/96	
 	

8/6/13
	

5,596,434	
 	

Self-Assembled Monolayers for Liquid Crystal Alignment	
 	

1/21/97	
 	

1/21/14
	

5,637,256	
 	

Ferroelectric Liquid Crystals for Nonlinear Optics Applications	
 	

6/10/97	
 	

6/10/14
	

5,658,493	
 	

Ferroelectric Liquid Crystals for Nonlinear Optics Applications	
 	

8/19/97	
 	

8/19/14

Restricted and Confidential  

8

 
	3)
	Company has various rights to the following patents pursuant to an agreement with Georgia Tech Research Corp: 

US Patents  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,141,072	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays	 	10/31/00	 	4/2/18
	

6,469,761	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays	
 	

10/22/02	
 	

4/2/18

Foreign Patent Applications  

	Priority Date
 
	 	App. No.
	 	Country
	 	Title

	

4/3/98	
 	

10-542913	
 	

Japan	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays
	

4/3/98	
 	

98915254.1	
 	

Europe	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays
	

4/3/98	
 	

2,285,924	
 	

Canada	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays

Restricted and Confidential  

9

 
	4)
	Company is a party to that certain "Winding-Up of Alliance, Production and Marketing Framework" agreement with Agilent Technologies, Inc.
(formerly Hewlett-Packard Company) effective November 15, 1999 and amended April 26, 2002 that amends and supercedes that certain "Alliance, Production and Marketing Framework Agreement"
effective January 31, 1999 between the parties and that certain "Second Side Letter Agreement" effective February 2, 1999 between the parties. Pursuant to the terms of the amended
agreement, Company and Agilent have granted each other various intellectual property rights. Company has certain license rights to various patents (including those identified below): 

Licensed Patent Registrations  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,249,269	 	Analog Pixel Driver Circuit for an Electro-Optical Material-Based Display Device	 	6/19/01	 	4/30/18
	

6,329,974	
 	

Electro-Optical Material-Based Display Device Having Analog Pixel Drivers	
 	

12/11/01	
 	

4/30/18

Licensed US Patent Applications  

Title  

[*****]

Light
Sensitive Issues: Guard Ring and Metal Layer 

The
Company believes that certain patents have issued that fall under the Agreement as pre-existing intellectual property of Agilent including the following: 

        6,586,283
to Corcoran et al (photocurrent) 

        6,169,505
to Nishimura et al (multichannel DAC) 

        6,249,269
& 6,329,974 to Blalock, Gaddis et al (comparator pixel) 

In
addition, the Company believes that the following patents relate to technology that arose during the Alliance and that was incorporated into Alliance products: 

        6,282,029
to Ma et al (ORCA-style illuminator) 

        6,330,099
to Sojourner (Apron/Skirt isolation). 

Restricted and Confidential  

10

 
	5)
	Company is a party to that certain "Joint Venture Agreement" with Inphase Technologies. Pursuant to the agreement, Company and Inphase will attempt to research
and develop technologies related to holographic data storage under a grant from the National Institute of Standards and Technology. Company and Inphase have granted each other licenses to certain of
each's existing technology. Company and Inphase have granted each other and the government licenses to certain of the technology developed under this agreement. The agreement effects the assignment,
between the parties, of certain intellectual property. The agreement also places certain obligations on Company and Inphase with respect to the filing and prosecution of patents.

	6)
	Company
is a party to that certain "Manufacturing Agreement" dated December 10, 1998 with Miyota Co., Ltd. as amended from time to time. Pursuant to the agreement Company
and Miyota have granted each other various licenses to certain existing and future developed technology. The agreement also effects the assignment, between the parties, of certain future developed
intellectual property. 
Restricted and Confidential  

11

 

Displaytech Owned Trademark Registrations and Applications  

	Country
 
	 	Registration No.
	 	Trademark
	 	Registration Date
	 	Renewal Date

	United States	 	2,164,479	 	CHRONOCOLOR®	 	6/9/98	 	6/9/08
	

European Union	
 	

1032499	
 	

DISPLAYTECH®	
 	

7/26/01	
 	

12/31/08
	

Japan	
 	

4416882	
 	

DISPLAYTECH®	
 	

9/14/00	
 	

9/14/10
	

United States	
 	

2,337,454	
 	

DISPLAYTECH®	
 	

1/11/00	
 	

1/11/10
	

United States	
 	

2,444,452	
 	

DESIGN (Stylized Displaytech Red Block)	
 	

4/17/01	
 	

4/17/11
	

United States	
 	

2,546,134	
 	

FLCD®	
 	

3/12/02	
 	

3/12/12
	

European Union	
 	

1032564	
 	

LIGHTCASTER®	
 	

3/30/00	
 	

12/31/08
	

Japan	
 	

4412349	
 	

LIGHTCASTER®	
 	

8/25/00	
 	

8/25/10
	

Korea	
 	

462068	
 	

LIGHTCASTER®	
 	

12/29/99	
 	

12/29/09
	

United States	
 	

2,283,078	
 	

LIGHTCASTER®	
 	

10/5/99	
 	

10/5/09

Restricted and Confidential  

12

QuickLinks

DISPLAYTECH, INC. NOTE PURCHASE AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.6  

        [*****] = Certain
confidential information contained in this document, marked with brackets, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 

STOCK PURCHASE AGREEMENT    
    

        THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated effective as of March 24, 2004, by and among Displaytech, Inc., a Colorado corporation (the
"Company") and the purchasers set forth on Schedule 1 hereto (each referred to as
"Purchaser" and collectively as "Purchasers"). 

W I T N E S S E T H: 

        WHEREAS,
the Company desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, shares of the Company's Series E-1 Senior
Preferred Stock, par value $.001 per share (the "Series E-1 Preferred Stock"), which at the Closing (as defined below) will be
immediately exchanged for shares of the Company's Series F Convertible Preferred Stock, par value $.001 per share (the "Series F Preferred
Stock") on a one-for-one basis pursuant to the terms of the Series E Exchange Agreement, and, if applicable, shares of the Company's
Series G Convertible Preferred Stock, par value $.001 per share (the "Series G Preferred Stock"), upon the terms and provisions
hereinafter set forth. 

        NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows: 

SECTION 1. SALE AND PURCHASE OF PREFERRED STOCK  

        1.1    Purchase of Shares.    The Company agrees to sell to the Purchasers and, subject to the terms and conditions
hereof and in reliance upon the representations and warranties of the Company contained herein or made pursuant hereto, the Purchasers severally agree to purchase from the Company at the Closing, the
number of shares of Series E-1 Preferred Stock and Series G Preferred Stock set forth opposite each Purchaser's name on  Schedule 1 hereto. The shares of Series E-1 Preferred Stock
and Series G Preferred Stock being acquired under this
Agreement are referred to herein collectively as the "Shares." 

        1.2    Purchase Price.    The aggregate purchase price to be paid to the Company by each Purchaser for that portion of
the Shares to be purchased by such Purchaser pursuant to this Agreement shall be the amount set forth opposite such Purchaser's name on  Schedule 1 hereto. 

SECTION 2. CLOSING  

        2.1    Closing.    Subject to the terms and conditions hereof, the initial closing of the purchase and sale of the
Shares to be purchased by the Purchasers (the "Closing") will take place at the offices of Faegre & Benson LLP, 3200 Wells Fargo Center, 1700
Lincoln Street, Denver, Colorado at 10:00 A.M., Mountain Standard Time, on the date hereof, or such other time and date as shall be mutually agreed to by the Company and the Purchasers (such
time and date are herein referred to as the "Closing Date"). 

        2.2    Closing Deliveries.    Subject to the terms and conditions hereof, at the Closing (i) the Company will
deliver to each Purchaser a certificate registered in the respective Purchaser's name (or the name of its nominee, if any, as specified on  Schedule 1 hereto) evidencing the number of Shares set
forth opposite each Purchaser's name on  Schedule 1 and (ii) substantially simultaneously with the Purchaser's receipt thereof, each Purchaser shall deliver to the Company a
certified or official bank check (or wire transfer) in an amount equal to the aggregate purchase price (as specified in Section 1.2 

 

hereof)
for the Shares to be purchased by such Purchaser payable to the order of the Company in federal or other immediately available funds. 

SECTION 3. DEFINITIONS  

        3.1   For
purposes of this Agreement, the following definitions shall apply (such definitions to be equally applicable to both the singular and plural forms of the terms
defined): 

        "Affiliate", when used with respect to any Person, means (i) if such Person is a corporation, any officer or director thereof and
any Person which is, directly or indirectly, the beneficial owner (by itself or as part of any group) of more than five percent (5%) of any class of any equity security (within the meaning of the
Exchange Act) thereof, and, if such beneficial owner is a partnership, any general partner thereof, or if such beneficial owner is a corporation, any Person controlling, controlled by or under common
control with such beneficial owner, or any officer or director of such beneficial owner or of any corporation occupying any such control relationship, (ii) if such Person is a partnership, any
general or limited partner thereof, and (iii) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person. For purposes of this
definition, "control" (including the correlative terms "controlling", "controlled by" and "under common control with"), with respect to any Person, shall mean possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. The holding of Shares and the
rights under this Agreement or under the Certificates of Designation or the Shareholders Agreement, shall not in and of itself cause a Purchaser to be deemed to be an "Affiliate" of the Company. 

        "Benefit Plan" means, as of the Closing Date, any Plan, existing at the Closing Date or prior thereto, established or to which
contributions have at any time been made by the Company, or any predecessor of any of the foregoing, or under which any employee, former employee or director of the Company or any beneficiary thereof
is covered, is eligible for coverage or has benefit rights. 

        "Board" or "Board of Directors" means with respect to any Person which is a corporation, a
business trust or other entity, the board of directors or other group, however designated, which is charged with legal responsibility for the management of such Person, or any committee of such board
of directors or group, however designated, which is authorized to exercise the power of such board or group in respect of the matter in question. 

        "Capital Stock" means any class of capital stock of the Company authorized by its articles of incorporation, as amended. 

        "Capitalized Lease" means any lease to which the Company is party as lessee, or by which it is bound, under which it leases any property
(personal or mixed) from any lessor other than the Company, and which either is required to be capitalized in accordance with generally accepted accounting principles consistently applied, or, even if
not so required to be capitalized, shall have (or have had), at the time first entered into, an initial term of greater than three (3) years (including leases of shorter duration which are or
were extendible to a total term greater than three (3) years at the option of the lessor). 

        "Certificates of Designation" means the Certificate of Designation and Determination of Preferences of the Series E-1
Senior Preferred Stock, the Certificate of Designation and Determination of Preferences of the Series F Convertible Preferred Stock, the Certificate of Designation and Determination of
Preferences of the Series G Convertible Preferred Stock, the Certificate of Designation and Determination of Preferences of the Series E-D Convertible Preferred Stock, the
Certificate of Designation and Determination of Preferences of the Series E-B Convertible Preferred Stock, the Amended and Restated Certificate of Designation and 

2

 

Determination
of Preferences of the Series D Convertible Preferred Stock and the Amended and Restated Certificate of Designation and Determination of Preferences of the Series B
Convertible Preferred Stock. 

        "Closing" has the meaning set forth in Section 2.1 hereof. 

        "Closing Date" has the meaning set forth in Section 2.1 hereof. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Commission" means the Securities and Exchange Commission and any other similar or successor agency of the federal government
administering the Securities Act or the Exchange Act. 

        "Common Stock" means the Company's Common Stock, par value $.001 per share, and shall also include any common stock of the Company
hereafter authorized and any Capital Stock of the Company of any other class hereafter authorized which is not preferred as to dividends or assets over any other class of Capital Stock of the Company
or which has ordinary voting power for the election of directors of the Company. 

        "Consolidated" or "consolidated", when used with reference to any financial term in this
Agreement, means the aggregate for the Company and any of its majority-owned subsidiaries of the amounts signified by such term for all such Persons, with intercompany items eliminated, and, with
respect to net worth, after eliminating the portion of net worth properly attributable to minority interests, if any, in the capital of any such Person (other than in the capital of the Company) and
otherwise as determined in accordance with generally accepted accounting principles consistently applied (except as otherwise expressly provided herein). 

        "Convertible Securities" means any warrants, options or other rights to acquire shares of Capital Stock (whether upon exercise,
conversion, exchange or otherwise). 

        "Disclosure Material" has the meaning set forth in Section 4.6(a) hereof. 

        "Environmental Laws" means all federal, state, local, foreign, civil and criminal laws, statutes, ordinances, orders, codes, rules,
policies, and regulations and common law relating to the protection of the environment and human health or relating to the handling, use, generation, treatment, storage, transportation or disposal of
Hazardous Materials, including but not limited to the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. § 9601 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et
seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
§ 1801 et seq.; The Occupational Safety and Health Act, 29 U.S.C. § 651; the Federal Insecticide, Fungicide and Rodenticide Act,
7 U.S.C. § 136y et seq.; and the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et
seq., all as may be amended or superseded from time to time, and all common law claims relating to the same. 

        "Environmental Lien" has the meaning set forth in Section 4.16(f) hereof. 

        "Environmental Permits" means all permits, licenses, approvals, authorizations or consents required by any Governmental Authority under
any applicable Environmental Law and includes any and all orders, consent orders or binding agreements issued or entered into by a Governmental Authority under any applicable Environmental Law. 

        "ERISA" means Employee Retirement Income Security Act of 1974, as amended. 

        "ERISA Affiliate" means each "person" (as defined in Section 3(9) of ERISA) which is under "common control" with the Company
(within the meaning of Section 414(b), (c), (m) or (o) of the Code). 

3

 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules, regulations and interpretations thereunder. 

        "Governmental Authority" means any federal, state, or local governmental agency or authority (including regulatory authority) having
jurisdiction over the Company or any of its respective assets or businesses. 

        "Hazardous Materials" means any petroleum, petroleum hydrocarbons, petroleum waste or petroleum products, underground storage tanks,
asbestos or asbestos-containing materials, pesticides, lead and lead-containing materials, urea formaldehyde insulation and polychlorinated biphenyls (PCBs), ionizing and
non-ionizing radiation including radon and electromagnetic frequency radiation; and any chemicals, materials, substances or wastes in any amount or concentration which are "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants" or words of similar import, under any
applicable Environmental Law. 

        "Indebtedness" means, with respect to any Person, without duplication, (a) all liabilities of such Person for borrowed money or for
the deferred purchase price of property or services, excluding, any (i) trade account payables arising in the ordinary course of business and (ii) other accrued current liabilities
incurred in the ordinary course of business, including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit, banker's acceptance or
other similar credit transaction; (b) all obligations of such Person evidenced by bonds, debentures or other similar instruments; (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the ordinary course of business; (d) all obligations of such Person under any
Capitalized Leases; (e) all Indebtedness referred to in the preceding clauses of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon property (including, without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such Indebtedness (the amount of such obligation being deemed to be the lesser of the value of such property or asset or the
amount of the obligation so secured); (f) all guarantees of Indebtedness referred to in this definition by such Person; and (g) all obligations under or in respect of currency agreements
(other than the provisions in the Miyota Co. Ltd. Agreement, dated December 10, 1998, as amended, related to currency exchange rates) and interest rate protection obligations of such
Person. 

        "Intellectual Property" has the meaning set forth in Section 4.12(a) hereof. 

        "Intellectual Property Licenses" has the meaning set forth in Section 4.12(a) hereof. 

        "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, or preference, priority or other security
interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of
the foregoing, any assignment or other conveyance of any right to receive income and any assignment of receivables with recourse against the assignor), any filing of a financing statement as debtor
under the Uniform Commercial Code or any similar statute and any agreement to give or make any of the foregoing; provided that the term "Lien" shall not
include Permitted Liens. 

        "Patents and Applications" has the meaning set forth in Section 4.12(c) hereof. 

        "Pension Plan" means any "employee pension benefit plan" as defined in Section 3(2) of ERISA. 

4

 

        "Permitted Lien" means (i) any Lien for Taxes, governmental charges or levies not yet due or delinquent or being contested in good
faith by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles, (ii) any imperfections of title, easements,
rights of way or similar Liens, zoning laws or land use restrictions as normally exist with respect to property similar in character to the property affected thereby and which individually or in the
aggregate with other such Liens, zoning laws or land use restrictions do not materially impair the value or marketability of the property subject to such Liens, zoning laws or land use restrictions or
interfere with the use of such property in the conduct of the business of the Company and which do not secure obligations for money borrowed, (iii) Liens imposed by any law, such as mechanic's,
materialman's, landlord's, warehouseman's and carrier's Liens, securing obligations incurred in the ordinary course of business which are not yet overdue or which are being diligently contested in
good faith by appropriate proceedings and, with respect to such obligations which are being contested, for which the Company has set aside adequate reserves, if appropriate, and (iv) any Lien
resulting from purchase by the Company of goods in the ordinary course of business as to which Liens are not filed of record. 

        "Person" or "person" means an individual, partnership, corporation, trust, unincorporated
organization, joint venture, government or agency, political subdivision thereof, or any other entity of any kind. 

        "Plan" means any bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation day or dependent care, legal services, cafeteria, life, health, accident, disability, workmen's
compensation or other insurance, severance, separation or other employee benefit plan, practice, policy or arrangement of any kind, whether written or oral, or whether for the benefit of a single
individual or more than one individual including, but not limited to, any "employee benefit plan" within the meaning of Section 3(3) of ERISA. 

        "Preferred Stock" means any class of the capital stock of the Company (whether or not convertible into any other class of such capital
stock) which has any right, whether absolute or contingent, to receive dividends or other distributions of the assets of the Company (including, without limitation, amounts payable in the event of the
voluntary or involuntary liquidation, dissolution or winding-up of such corporation), which right is superior to the rights of another class of the capital stock of the Company. "Preferred
Stock" includes, without limitation, the Series B Preferred Stock, the Series D Preferred Stock, the Series E-B Preferred Stock, the Series E-D
Preferred Stock, the Series E-1 Preferred Stock, the Series F Preferred Stock and the Series G Preferred Stock. 

        "Purchaser" and "Purchasers" each has the meaning set forth in the Preamble of this
Agreement. 

        "Securities Act" means the Securities Act of 1933, as amended, and the rules, regulations and interpretations thereunder. 

        "Series B Exchange Agreement" means the Agreement of Tender, Exchange and Transmittal of Series B Stock in the form attached
hereto as Exhibit A. 

        "Series B Preferred Stock" means the Company's Series B Convertible Preferred Stock, par value $.001 per share. 

        "Series D Exchange Agreement" means the Agreement of Tender, Exchange and Transmittal of Series D Stock in the form attached
hereto as Exhibit B. 

        "Series D Preferred Stock" means the Company's Series D Convertible Preferred Stock, par value $.001 per share. 

5

 

        "Series E Exchange Agreement" means the Agreement of Tender, Exchange and Transmittal of Series E-1 Stock in the
form attached hereto as Exhibit C. 

        "Series E-1 Preferred Stock" has the meaning set forth in the recitals hereto. 

        "Series E-B Preferred Stock" means the Company's Series E-B Convertible Preferred Stock, par value
$.001 per share. 

        "Series E-D Preferred Stock" means the Company's Series E-D Convertible Preferred Stock, par value
$.001 per share. 

        "Series F Preferred Stock" has the meaning set forth in the recitals hereto. 

        "Series G Preferred Stock" has the meaning set forth in the recitals hereto. 

        "Shares" has the meaning set forth in Section 1.1 hereof. In the event that any Shares are sold in a public offering pursuant to a
registration statement under Section 5 of the Securities Act, then the transferees of such Shares shall not be entitled to any benefits under this Agreement with respect to such Shares and such
Shares shall no longer be considered to be "Shares" for purposes of any consent or waiver provision of this Agreement. 

        "Stock Incentive Plans" means any stock plan or stock option plan authorized by the Company's Board of Directors prior to the date hereof
and/or as permitted by the terms and conditions of this Agreement. 

        "Subscription Agreement" means any Subscription Agreement and Letter of Investment Intent entered into by a Purchaser. 

        "Subsidiary", with respect to any Person, means any corporation, association or other entity of which more than 50% of the total voting
power of shares of stock or other equity interests (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is, at the time as of which
any determination is being made, owned or controlled, directly or indirectly, by such Person or one or more of its Subsidiaries, or both. The term
"Subsidiary" when used herein without reference to any particular Person, means a Subsidiary of the Company. 

        "Tax Returns" means any returns, reports or statements (including any information returns) required to be filed for purposes of a
particular Tax. 

        "Taxes" means all federal, state, local or foreign net or gross income, gross receipts, net proceeds, sales, use,  ad valorem, value added, franchise, bank shares,
withholding, payroll, employment, excise, property, alternative or add-on minimum,
environmental or other taxes, assessments, duties, fees, levies or other governmental charges of any nature whatsoever, whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto. 

        "Taxing Authority" means any governmental agency, board, bureau, body, department or authority of any United States federal, state or
local jurisdiction, or any foreign jurisdiction, having or purporting to exercise jurisdiction with respect to any Tax. 

        "Transaction Documents" means this Agreement, the Series B Exchange Agreement, the Series D Exchange Agreement and the
Series E Exchange Agreement. 

        "Transferees" shall mean any transferee of the Shares from a Purchaser. Transferees shall not include a transferee of the Shares sold in a
public offering pursuant to a registration statement under the Securities Act. 

6

 

        3.2   For
all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: 

        (a)   the
words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision; 

        (b)   all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles consistently applied
(except as otherwise provided herein); 

        (c)   any
uses of the masculine, feminine or neuter gender shall also be deemed to include any other gender, as appropriate; 

        (d)   all
references herein to actions by the Company, such as "create", "sell", "transfer", "dispose of", etc., mean such action whether voluntary or involuntary, by
operation of law or otherwise; and 

        (e)   the
exhibits and schedules to this Agreement shall be deemed a part of this Agreement. 

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY  

        The Company represents and warrants to the Purchasers as follows as of the date hereof, except as set forth in the schedules attached hereto: 

        4.1    Corporate Existence, Power and Authority.    

        (a)   The
Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Company is duly qualified,
licensed and authorized to do business and is in good standing in each jurisdiction in which it owns or leases any property or in which the conduct of its business requires it to so qualify or be so
licensed, except for such jurisdictions where the failure to so qualify or be so licensed would not have a material adverse effect on the Company's assets, properties, liabilities, business, affairs,
results of operations, condition (financial or otherwise) or prospects. 

        (b)   No
proceeding has been commenced looking toward the dissolution or merger of the Company or the amendment of its articles of incorporation. 

        (c)   The
Company has all requisite power, authority (corporate and other) and legal right to own or to hold under lease and to operate the properties it owns or holds and to
conduct its business as now being conducted. 

        (d)   The
Company has all requisite power, authority (corporate and other) and legal right to execute, deliver, enter into, and consummate the transactions contemplated by and
perform its obligations under each of the Transaction Documents, including, without limitation, the issuance by the Company of the Shares as contemplated herein. The Company has duly executed and
delivered each of the Transaction Documents. Each of the Transaction Documents constitutes the legal, valid and binding obligations of
the Company enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to the rights of creditors generally or
under general principles of equity. 

        4.2    Capital Stock.    

        (a)   Schedule 4.2(a) hereto correctly and completely lists (i) the authorized Capital Stock of the Company
(Common Stock and Preferred Stock), (ii) the number of designated shares of Preferred Stock in each series or class after giving effect to the Certificates of Designation and
(iii) before giving effect to the issuance of Shares on the Closing Date, as contemplated by this Agreement, the number of shares outstanding in each series or class. All of such outstanding 

7

 

shares
are, and on the Closing Date the Shares will be, duly authorized, validly issued and outstanding, fully paid and non-assessable. Except as provided in the Certificates of
Designation or in Schedule 4.2(a), none of the shares of the Company's Capital Stock which will be outstanding at the Closing (x) were or
will be subject to preemptive rights when issued or (y) provide the holders thereof with any preemptive rights with respect to any issuances of Capital Stock. 

        (b)   Except
as referred to in Schedule 4.2(b), there are no outstanding options, warrants, subscriptions, rights,
convertible securities or other agreements or plans under which the Company may become obligated to issue, sell or transfer shares of its Capital Stock or other securities. 

        (c)   Except
as set forth in Schedule 4.2(c), there are no voting agreements, voting trusts, proxies or other agreements
or understandings with respect to the voting of any Capital Stock of the Company of which the Company is a party, except as provided herein and in the Certificates of Designation. 

        (d)   Except
as set forth in Schedule 4.2(d) and except for anti-dilution protections in the Certificates of
Designation and other agreements the Company is a party to providing for adjustments for stock splits, dividends, combinations, reclassifications and the like, there are no anti-dilution
protections or other adjustment provisions in existence with respect to any Capital Stock of the Company. 

        (e)   Each
Certificate of Designation has been duly adopted by the Company and is fully effective as an amendment to the Company's articles of incorporation. The Shares will
have all of the rights, priorities and terms set forth in the applicable Certificate of Designation. 

        (f)    To
the knowledge of the Company, Schedule 4.2(f) hereto correctly and completely lists the names of those persons
who beneficially own, directly or indirectly, more than 5% (calculated in accordance with Rule 13d-3 under the Exchange Act) of the Company's outstanding Capital Stock. 

        4.3    Subsidiaries.    The Company has two wholly-owned Subsidiaries, Displaytech International, Inc., a
Colorado corporation, and Displaytech Asia-Pacific K.K., a Japanese corporation. 

        4.4    Business.    The Company is engaged in the business of designing, developing, manufacturing and marketing
Ferroelectric Liquid Crystal microdisplays used to provide superior image quality in electronic devices such as digital still camera and camcorder viewfinders. 

        4.5    No Defaults or Conflicts.    

        (a)   Except
as provided in Schedule 4.5(a), the Company is not in violation or default in any material respect (and is
not in default in any respect regarding any Indebtedness) under any indenture, agreement or instrument to which it is a party or by which it or its properties may be bound. The Company is not in
default in any material respect under any material order, writ, injunction, judgment or decree of any court or other governmental authority or arbitrator(s). 

        (b)   The
execution, delivery and performance by the Company of each of the Transaction Documents and any of the transactions contemplated thereby (including, without
limitation, the issuance of the Shares as contemplated herein) do not and will not (i) violate or conflict with, with or without the giving of notice or the passage of time or both, any
provision of (A) the articles of incorporation or bylaws of the Company, (B) any law, rule, regulation or order of any federal, state, county, municipal or other Governmental Authority,
(C) any judgment, writ, injunction, decree, award or other action of any court or Governmental Authority or arbitrator(s), or (D) any agreement, indenture or other instrument applicable
to the Company or any of its respective properties, (ii) result in the creation of any Lien upon any of the Company's properties, assets or revenues, except as provided in the Certificates of
Designation, (iii) require the consent, waiver, approval, order or authorization of, or declaration, registration, qualification or filing with, any 

8

 

Person
(whether or not a Governmental Authority and including, without limitation, any shareholder approval) (other than any necessary approvals which have been obtained prior to the Closing Date), or
(iv) cause antidilution clauses of any outstanding securities to become operative or give rise to any preemptive rights (except as contemplated by Section 4.2(d)). No provision of any
item referred to in the preceding clause (i) materially adversely affects the assets, properties, liabilities, business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Company on a consolidated basis or the ability of the Company to perform its obligations under this Agreement, the Certificates of Designation, or any of the transactions contemplated
hereby or thereby. 

        4.6    Disclosure Materials; Other Information.    

        (a)   The
Company has previously furnished to the Purchasers or their counsel the materials described on Schedule 4.6(a)
hereto (the "Disclosure Material"). The audited and unaudited financial statements referred to or contained in the materials referred to on  Schedule 4.6(a) fairly present the consolidated financial condition of the Company as of the respective dates thereof in all material respects
and the consolidated results of the operations of the Company for such periods and have been prepared in accordance with generally accepted accounting principles consistently applied, except that any
such unaudited statements may omit notes and may be subject to normal recurring adjustments and year-end adjustments. 

        (b)   Since
December 31, 2003, (i) the business of the Company has been conducted in the ordinary course and (ii) there has been no material adverse
change in the assets, properties, liabilities, business, affairs, results of operations, condition (financial or otherwise) or prospects of the Company on a consolidated basis. As of the Closing Date
and as of the date hereof, there are no material liabilities of the Company which would be required to be provided for in a consolidated balance sheet of the Company as of any such date prepared in
accordance with generally accepted accounting principles consistently applied, other than liabilities provided for in the financial statements referred to in Section 4.6(a). 

        (c)   There
are no material liabilities, contingent or otherwise, of the Company that have not been disclosed in the financial statements referred to in Section 4.6(a)
or otherwise disclosed in the schedules hereto. 

        4.7    Litigation.    Except as set forth on Schedule 4.7,
there is no action, suit, proceeding, investigation or claim pending or, to the knowledge of the Company, threatened in law, equity or otherwise before any court, administrative agency or arbitrator
which (i) questions the validity of this Agreement, the Certificates of Designation or the Shares or any action taken or to be taken pursuant hereto or thereto, (ii) might adversely
affect the right, title or interest of any Purchaser to the Shares or (iii) might result in a material adverse change in the assets, properties, liabilities, business, affairs, results of
operations, condition (financial or otherwise) or prospects of the Company on a consolidated basis. 

        4.8    Taxes.    The Company has duly and timely filed all material Tax Returns required to be filed by it, and each
such Tax Return correctly and completely reflects, in all material respects, the Tax liability and all other information required to be reported thereon. The Company has paid or caused to be paid all
material Taxes (whether or not reflected on such Tax Returns) that are due and payable. The provision for Taxes due by the Company in the most recent financial statement included in the Disclosure
Material is sufficient for all material unpaid Taxes, being current Taxes not yet due and payable, of the Company, as of the end of the period covered by such financial statement, and as of the
Closing Date, such provision, as adjusted for the passage of time through the Closing Date, will be sufficient for the then-accrued and unpaid Taxes not yet due and payable of the Company.
No Tax Returns of the Company have ever been audited by any Taxing Authority, there is no dispute concerning any Tax liability of the Company either threatened, claimed or raised by any Taxing 

9

   
Authority, and the Company does not expect any Taxing Authority to assess additional Taxes against or in respect of it for any past period. The Company has withheld and paid, or, if not yet due for
payment, set aside in accounts for such purposes, all Taxes required to have been withheld in connection with amounts paid or owing to any employee, creditor, independent contractor or other third
party. Other than stamp taxes, the Company has no liability for Taxes of any Person other than the Company (i) as a transferee or successor, (ii) by contract, or (iii) otherwise. 

        4.9    ERISA.    

        (a)   All
Benefit Plans are listed in Schedule 4.9(a), and copies of all documentation relating to such Benefit Plans
have been delivered to or made available for review by the Purchasers (including copies of written Benefit Plans, written descriptions of oral Benefit Plans, summary plan descriptions, trust
agreements, the three most recent annual returns, employee communications, and IRS determination letters). 

        (b)   Each
Benefit Plan has at all times been maintained and administered in all material respects in accordance with its terms and with the requirements of all applicable
law, including ERISA and the Code, and each Benefit Plan intended to qualify under Section 401(a) of the Code has at all times since its adoption been so qualified, and each trust which forms a
part of any such plan has at all times since its adoption been tax-exempt under Section 501(a) of the Code. 

        (c)   No
Benefit Plan has incurred any "accumulated funding deficiency" within the meaning of Section 302 of ERISA or Section 412 of the Code, and the "amount of
unfunded benefit liabilities" within the meaning of Section 4001(a)(18) of ERISA does not exceed zero with respect to any Benefit Plan subject to Title IV of ERISA. 

        (d)   No
"reportable event" (within the meaning of Section 4043 of ERISA) has occurred with respect to any Benefit Plan or any Plan maintained by an ERISA Affiliate
since the effective date of said Section 4043 for which notice is not waived under the regulations issued pursuant to said Section 4043. 

        (e)   No
Benefit Plan is a multiemployer plan within the meaning of Section 3(37) of ERISA. 

        (f)    No
direct, contingent or secondary liability has been incurred or is expected to be incurred by the Company under Title IV of ERISA to any party with respect to any
Benefit Plan, or with respect to any other Plan presently or heretofore maintained or contributed to by any ERISA Affiliate. 

        (g)   Neither
the Company nor any ERISA Affiliate has incurred any liability for any tax imposed under Section 4971 through 4980B of the Code or civil liability under
Section 502(i) or (l) of ERISA. 

        (h)   No
benefit under any Benefit Plan, including, without limitation, any severance or parachute payment plan or agreement, will be established or become accelerated, vested
or payable by reason of any transaction contemplated under this Agreement. 

        (i)    No
Benefit Plan provides health or death benefit coverage beyond the termination of an employee's employment, except as required by Part 6 of Subtitle B of Title
I of ERISA or Section 4980B of the Code or any State laws requiring continuation of benefits coverage following termination of employment. 

        (j)    No
suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of plan activities and any other claim which could not reasonably be
expected to result in a material liability or expense to the Company) has been brought or, to the knowledge of the Company, threatened against or with respect to any Benefit Plan and there are no
facts or circumstances known to the Company that could reasonably be expected to give rise to any such suit, action or other litigation. 

10

 

        (k)   All
contributions to Benefit Plans that were required to be made under such Benefit Plans have been made, and all benefits accrued under any unfunded Benefit Plan have
been paid, accrued or otherwise adequately reserved in accordance with generally accepted accounting principles, all of which accruals under unfunded Benefit Plans are as disclosed in  Schedule 4.9(k), and the Company has performed all material obligations required to be performed under all Benefit Plans. 

        (l)    The
execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby
(including, without limitation, the offer, issue and sale by the Company, and the purchase by any Purchaser of the Shares) will not involve any "prohibited transaction" within the meaning of ERISA or
the Code with respect to any Benefit Plan. 

        4.10    Legal Compliance.    

        (a)   The
Company has complied with all applicable laws, rules, regulations, orders, licenses, judgments, writs, injunctions, decrees or demands, except to the extent that
failure to so comply would not materially adversely affect the assets, properties, liabilities, business affairs, results of operations or financial condition of the Company on a consolidated basis. 

        (b)   There
are no adverse orders, judgments, writs, injunctions, decrees, or demands of any court or administrative body, domestic or foreign, or of any governmental agency
or instrumentality, domestic or foreign, outstanding against the Company. 

        4.11    Offering of Securities.    Subject in part to the truth and accuracy of each Purchaser's representations set
forth in Section 5 of this Agreement and each of their applicable Subscription Agreements, the offer, sale and issuance of the Shares, as contemplated by this Agreement are, and will be as of
the Closing, exempt from the registration requirements of the Securities Act and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the
loss of such exemption. 

        4.12    Intellectual Property and Other Rights.    

        (a)   (i)    Except
as set forth on Schedule 4.12(a), the Company owns, or has the right to use, all United
States and foreign patents, trademarks, service marks, trade names, computer software and programs, technology, know-how and processes, and registered copyrights, and any applications for
any of the foregoing of any kind which is used in its business (collectively, the "Intellectual Property").  Schedule 4.12(a) hereto contains a true,
correct and complete list of all registered trademarks and service marks, all reserved trade names, all
registered copyrights and all filed patent applications and issued patents that are material to the Company's business or are otherwise necessary for the conduct of its business as heretofore
conducted and as currently proposed to be conducted and all licenses, permits, consents, approvals or agreements that in any way affect the rights of the Company to any of its Intellectual Property or
any trade secret material (the "Intellectual Property Licenses"). 

         (ii)  Subject
to the limitations set forth in the Intellectual Property Licenses, except as otherwise set forth in any exceptions listed under  Schedule 4.12(a), the Company has all right, title and interest in
all of the Intellectual Property, free and clear of all Liens. The Company
owns or has the exclusive or non-exclusive right to use all Intellectual Property or trade secrets necessary to conduct its business as now being conducted. The Company owns or possesses
sufficient licenses, permits, consents, approvals or other rights to use all Intellectual Property covered by its patents or patent applications necessary to conduct its business as now being
conducted and as currently proposed to be conducted. 

        (iii)  The
Company has at all times maintained reasonable procedures to protect and has enforced all of its Intellectual Property and trade secrets. 

11

 

        (iv)  The
consummation of the transactions contemplated under this Agreement will not alter, adversely affect or impair the rights of the Company to any of the Intellectual
Property, any trade secret material to it, or under any of the Intellectual Property Licenses. 

        (b)   (i)    No
claim with respect to the Intellectual Property, any trade secret material to the Company, or any Intellectual Property License which would adversely
affect the ability of the Company to conduct its business as presently conducted is currently pending or, to the knowledge of the Company, has been asserted, or overtly threatened by any Person, nor
does the Company know of any grounds for any claim against the Company, (A) to the effect that any material operation or activity of the Company presently occurring, including,  inter alia, the
manufacture, use or sale of any product, device, instrument, or other material made or used according to the patents or patent
applications included in the Intellectual Property or Intellectual Property Licenses, infringes or misappropriates any valid United States or foreign copyright, patent, trademark, service mark or
trade secret; (B) to the effect that any other Person infringes on the Intellectual Property or misappropriates any trade secret or know-how or other proprietary rights material to
the Company; (C) challenging the ownership, validity or effectiveness of any of the Intellectual Property or trade secret material of the Company; or (D) challenging the license of the
Company or other legally enforceable right under, any Intellectual Property or the Intellectual Property Licenses. 

         (ii)  The
Company is not aware of any presently existing valid United States or foreign patents or any patent applications which if issued as patents would be infringed by
any activity contemplated by the Company. 

        (c)   The
United States and foreign patents and patent applications owned by the Company listed in Schedule 4.12(a)
hereto (the "Patents and Applications") as part of the Intellectual Property have been filed on behalf of the Company as named therein, are being
diligently pursued by the Company and, to the Company's knowledge, have been properly prepared. To the Company's knowledge, there are no defects in any of the Patents and Applications that would cause
any of them to be held invalid or unenforceable. 

        4.13    Key Employees.    The Company has good relationships with its employees and has not had and does not expect
any substantial labor problems. The Company has no knowledge as to any intentions of any key employee or any group of employees to leave the employ of the Company. The employees of the Company are not
and have never been represented by any labor union, and no collective bargaining agreement is binding and in force against the Company or currently being negotiated by the Company. 

        4.14    Properties.    The Company does not and has never owned any real property. Other than the Permitted Liens, the
Company has good and marketable title to each of its other properties other than leased properties, all of which are disclosed on Schedule 4.14
hereto. Certain real property used by the Company in the conduct of its business is held under lease (as identified on Schedule 4.14 hereto), and
the Company is not aware of any pending or threatened claim or action by any lessor of any such property to terminate any such lease. All such leases are valid and in full force and effect, and none
of such leases is in default. None of the properties owned or leased by the Company is subject to any Liens which could materially and adversely affect the assets, properties, liabilities, business,
affairs, results of operations, condition (financial or otherwise) or prospects of the Company on a consolidated basis. 

        4.15    Suppliers and Customers.    

        (a)   The
Company has adequate sources of supply for its business as currently conducted and as proposed to be conducted. The Company has good relationships with all of its
material sources of supply of goods and services and does not anticipate any material problem with any such material sources of supply. 

12

 

        (b)   Except
as set forth on Schedule 4.15(b), the Company has no knowledge that the customer base of the Company might
materially decrease. 

        4.16    Environmental Compliance.    

        (a)   Except
as set forth on Schedule 4.16(a), there is no Hazardous Material on, about, under or in, any property, real
or personal, in which the Company has or has formerly had any interest in an amount or concentration which could constitute a violation that would result in a liability in excess of $75,000 or
otherwise result in a liability in excess of $75,000 to the Company under any applicable Environmental Law. 

        (b)   There
is no (and has not been any) off-site use, handling, storage or disposal or, except as set forth on  Schedule 4.16(b), on-site use, handling, storage or disposal of Hazardous Material at or from any
locations currently or formerly
owned, leased, operated or occupied by the Company as a result of which use, handling, storage or disposal the Company could incur a material liability or obligation under any applicable Environmental
Law. 

        (c)   Except
as set forth on Schedule 4.16(a), the Company has not received any verbal or written notice, citation,
subpoena, summons, complaint or other correspondence or communication from any person with respect to the presence of any non-indigenous Hazardous Material upon, into, beneath, or
emanating from or affecting any of the real property (including improvements) currently or formerly owned or occupied by the Company that could result in a liability to the Company in excess of
$75,000 under any applicable Environmental Law. 

        (d)   Except
as set forth on Schedule 4.16(a), there has been no intentional or unintentional, gradual or sudden,
release, disposal or discharge by the Company or, to the Company's knowledge, by others, upon, into or beneath the real property (including improvements) currently or formerly owned or occupied by the
Company that has caused or is causing soil or groundwater contamination which, under applicable Environmental Laws could require investigation or remediation or could otherwise create a material
liability or obligation on the part of the Company under any applicable Environmental Law. 

        (e)   The
Company is in material compliance with all applicable Environmental Laws, has received all required Environmental Permits and is in material compliance with the
terms and conditions of all Environmental Permits. 

        (f)    To
the best knowledge of the Company, after reasonable inquiry, there are no Liens arising under or pursuant to any Environmental Law
("Environmental Liens") relating to any real property (including improvements thereon) currently owned by the Company. 

        (g)   There
are no (i) underground storage tanks, (ii) polychlorinated biphenyl containing equipment or (iii) asbestos-containing materials at any site
currently owned, operated or leased by the Company, except in compliance with all applicable Environmental Laws. 

        4.17    No Burdensome Agreements.    To the knowledge of the Company, the Company is not a party to any contract or
agreement with any Affiliate of the Company, the terms of which are less favorable to the Company than those which might have been obtained, at the time such contract or agreement was entered into,
from a person who was not such an Affiliate. 

        4.18    Indebtedness.    Schedule 4.18 hereto sets forth
(i) the amount of all Indebtedness of the Company outstanding as of January 31, 2003 (and there is no additional material amount of Indebtedness of the Company outstanding other than as
set forth on such Schedule 4.18), (ii) any Lien with respect to such Indebtedness and (iii) a description of each instrument or
agreement governing such Indebtedness. The Company has made available to the Purchasers a complete and correct copy of each such instrument or agreement (including all amendments, supplements or
modifications thereto). Except as otherwise set forth in Schedule 4.5(a), no material default exists with respect to or under any 

13

 

such
Indebtedness or any instrument or agreement relating thereto and no event or circumstance exists with respect thereto that (with notice or the lapse of time or both) could give rise to such a
default. 

        4.19    Use of Proceeds.    The Company will use the net proceeds realized from the sale of the Shares to fund future
development opportunities, for working capital purposes and for such other purposes as necessary or advisable in the sole judgment of the Company's Board of Directors. 

        4.20    Brokers.    No broker, finder or investment banker or other party is entitled to any brokerage, finder's or
other similar fee or commission in connection with the Transaction Documents. Any such fees and commissions shall be the sole responsibility of the Company and in no circumstance shall the Purchasers
have any liability therefor. 

        4.21    Insurance.    

        (a)   Schedule 4.21(a) contains a list and description of all insurance policies maintained by or on behalf of the
Company on its assets, operations, properties and personnel. Such insurance is of the kind, covering such risks and in such amounts and with such deductibles and exclusions, as are consistent with
those maintained by businesses similarly situated to the Company and are, in the opinion of the Company, reasonable for the business, assets and properties of the Company. All such policies are in
full force and effect. 

        (b)   The
Company has not received any notice of cancellation or termination with respect to any material insurance policy thereof and there are no pending disputes or
controversies between the Company, on the one hand, and the carrier of any such insurance policy, on the other. 

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS  

        The
Purchasers represent and warrant, severally and not jointly, to the Company as follows: 

        5.1    Corporate Power and Authority.    Each Purchaser has all requisite power, authority and legal right to execute,
deliver, enter into, and consummate the transactions contemplated by and perform its obligations under each of the Transaction Documents and the applicable Subscription Agreement. The execution,
delivery and performance of each of the Transaction Documents and its applicable Subscription Agreement by each Purchaser has been duly authorized by all required corporate and other actions. Each
Purchaser has duly executed and delivered each of the Transaction Documents and its Subscription Agreement, and each of the Transaction Documents and the applicable Subscription Agreement constitutes
the legal, valid and binding obligations of each Purchaser enforceable against each Purchaser in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to the rights of creditors generally or under general principles of equity. 

        5.2    Investment Intent.    Each Purchaser is capable of evaluating the risk of its investment in the Shares being
purchased by it hereunder and is able to bear the economic risk of such investment. Each Purchaser is purchasing the Shares to be purchased by it for its own account for investment and not with a
present view to any distribution thereof in violation of applicable securities laws; provided, however,
that each Purchaser may transfer record and/or beneficial ownership of the Shares to one or more Affiliates, officers or employees of Affiliates or investment funds managed by Affiliates of such
Purchaser, in all cases in compliance with federal securities laws. It is understood that the disposition of each Purchaser's property shall at all times be within such Purchaser's control. If the
Purchasers should in the future decide to dispose of any of their Shares, it is understood that each Purchaser may do so only in compliance with the Securities Act, applicable state and federal
securities laws, this Agreement and the other agreements and documents contemplated herein, or pursuant to an applicable exemption therefrom. Each Purchaser is an "accredited investor" as defined in
Rule 501(a) under the Securities Act. 

14

 

        5.3    Brokers.    No broker, finder, or investment banker or other party is entitled to any brokerage, finder's or
other similar fee or commission in connection with the Transaction Documents, based upon arrangements made by or on behalf of each Purchaser or any of its Affiliates. 

SECTION 6. PURCHASER COVENANTS  

        6.1    Restrictions on Transfer.    Each Purchaser agrees that it shall not sell or otherwise dispose of any Shares
unless such Shares have been registered under the Securities Act and, to the extent required, under any applicable state securities laws, or pursuant to an applicable exemption from such registration
requirements. The Company may endorse on all certificates representing Shares a legend stating or referring to such transfer restrictions and those as set forth in Section 6.2;  provided, that no
such legend shall be endorsed on any Share certificates that, when issued, are no longer subject to the restrictions of this
Section 6. Each Purchaser shall provide the Company with an opinion of its counsel stating that the transfer of such Shares is in compliance with all federal securities laws or an applicable
exemption therefrom. The Company shall not unreasonably delay the transfer of such Shares. 

        6.2    "Market Stand-Off" Agreement.    Each Purchaser hereby agrees that it will not, without the prior
written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company's initial public offering ("IPO") and ending on the date specified
by the Company and the managing underwriter (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares or any such securities are then owned by the Purchaser or are thereafter acquired) held immediately prior to the effectiveness of the registration statement for such offering, or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 6.2 shall
not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the Purchasers if all officers, directors and greater than 5% shareholders
of the Company enter into similar agreements. The underwriters in connection with the Company's IPO are intended third-party beneficiaries of this Section 6.2 and shall have the right, power
and authority to enforce the provisions hereof as though they were a party hereto. Each Purchaser further agrees to execute such agreements as may be reasonably requested by the underwriters in the
Company's IPO that are consistent with this Section 6.2 or that are necessary to give further effect thereto. 

        In
order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the shares of Capital Stock held by each Purchaser (and the
shares or securities of every other person subject to the foregoing restriction) until the end of such period. 

SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATIONS  

        The
obligations of each Purchaser to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise
waived: 

        7.1    Representations and Warranties.    The representations and warranties of the Company contained in
Section 2 shall be true and correct in all material respects on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of
the Closing. 

15

 

        7.2    Performance.    The Company shall have performed and complied with all covenants, agreements, obligations and
conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 

        7.3    Transaction Documents.    The Company and each Purchaser (other than the Purchaser relying upon this condition
to excuse such Purchaser's performance hereunder) shall have executed and delivered each of the Transaction Documents. 

        7.4    Compliance Certificate.    An officer of the Company shall deliver to the Purchasers at the Closing a
certificate certifying that the conditions specified in Sections 7.1 and 7.2 have been fulfilled. 

SECTION 8. CONDITIONS TO COMPANY'S OBLIGATIONS  

        The
obligations of the Company to each Purchaser under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise
waived: 

        8.1    Representations and Warranties.    The representations and warranties of each Purchaser contained in
Section 5 and under each applicable Subscription Agreement shall be true and correct in all material respects on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing. 

        8.2    Performance.    All covenants, agreements and conditions contained in this Agreement to be performed by the
Purchasers on or prior to the Closing shall have been performed or complied with in all material respects. 

        8.3    Transaction Documents.    Each Purchaser shall have executed and delivered each of the Transaction Documents to
the Company. 

        8.4    Qualifications.    All authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Stock pursuant to this Agreement shall be obtained and effective as of the
Closing. 

SECTION 9. MISCELLANEOUS  

        9.1    Survival.    Unless otherwise set forth in this Agreement, the warranties, representations and covenants of the
Company and the Purchasers contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement. 

        9.2    Transfer; Successors and Assigns.    The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 

        9.3    Governing Law.    This Agreement and all acts and transactions pursuant hereto and the rights and obligations
of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Colorado, without giving effect to principles of conflicts of law. 

        9.4    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument. 

        9.5    Notices.    All notices, requests, demands, consents and other communications hereunder shall be in writing and
shall be delivered by hand or shall be sent by facsimile (confirmed by registered, certified or overnight mail or courier, postage and delivery charges prepaid), (i) if to the Company, to
Displaytech, Inc., 2602 Clover Basin Drive, Longmont, CO 80503-7603, Attention: Richard D. Barton, 

16

 

Facsimile:
(303) 772-2193, or (ii) if to the Purchasers, at the address indicated on Schedule 1 hereto, or at such
other address as a party may from time to time designate as its address in writing to the other party to this Agreement. Whenever any notice is required to be given hereunder, such notice shall be
deemed given and such requirement satisfied only when such notice is delivered or, if sent by telex or telecopier, when received. 

        9.6    Fees and Expenses.    Each of the parties shall pay all of its own fees and expenses incurred in connection
with the negotiation, execution, delivery and performance of this Agreement. 

        9.7    Attorney's Fees.    If any action at law or in equity (including arbitration) is necessary to enforce or
interpret the terms of any of the Transaction Documents, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled. 

        9.8    Amendments and Waivers.    Any term of this Agreement may be amended or waived only with the written consent of
the Company and the holders of at least a majority of the Common Stock issued or issuable upon conversion of the shares of Series F Preferred Stock and the shares of Series G Preferred
Stock. Any amendment or waiver effected in accordance with this Section 9.8 shall be binding upon the Purchasers and each transferee of the Shares (or the Common Stock issuable upon conversion
thereof), each future holder of all such securities, and the Company. 

        9.9    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law,
the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms. 

        9.10    Delays or Omissions.    No delay or omission to exercise any right, power or remedy accruing to any party
under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting
party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this Agreement or by law or in equity or otherwise afforded to any party, shall be cumulative and not alternative. 

        9.11    Entire Agreement.    This Agreement, together with the other Transaction Documents, constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto
are expressly canceled. 

        9.12    Exculpation Among Purchasers.    Each Purchaser acknowledges that it is not relying upon any person, firm or
corporation, other than the Company and its officers and directors, in making its investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or omitted to be taken by
any of them in connection with the purchase of the Shares. 

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

17

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 

	 	 	COMPANY:
	

 	
 	
DISPLAYTECH, INC.
	

 	
 	

By:	
 	

/s/  RICHARD D. BARTON      

	 	 	 	 	Name:	 	Richard D. Barton
	 	 	 	 	Title:	 	Chief Executive Officer
	

 	
 	
PURCHASERS:
	

 	
 	
ANALYSIS GROUP FUND I, L.P.
	

 	
 	

By:	
 	

/s/  NORMAN W. GORIN      

	 	 	 	 	Name:	 	Norman W. Gorin
	 	 	 	 	Title:	 	Chief Financial Officer
	

 	
 	

/s/  MARK A. HANDSCHY      
MARK A. HANDSCHY, individually
	

 	
 	

/s/  MICHAEL J. O'CALLAGHAN      
MICHAEL J. O'CALLAGHAN, individually

SCHEDULE 1  

	Name and Address of Purchase
 
	 	Shares of

Series E-1

Preferred

stock at $100

per share
	 	Shares of

Series G

Preferred

Stock at $100

per Share
	 	Aggregate

Purchase

Price

	Analysis Group Fund I, L.P.

111 Huntington Ave., 10th FL

Boston, MA 02199	 	176	 	44	 	$	22,000
	Mark A. Handschy

3230 11th Street

Boulder, CO 80304	 	52	 	13	 	$	6,500
	Michael J. O'Callaghan

964 W. Maple Court

Louisville, CO 80027	 	52	 	13	 	$	6,500

SCHEDULES  

        The following is a list of schedules and exceptions to certain of the representations and warranties made by Displaytech, Inc. (the "Company") in that
certain Stock Purchase Agreement (the "Agreement"), dated March 24, 2004, among the Company (collectively, the "Purchasers"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Agreement. All descriptions of agreements or other matters appearing herein are summary in nature and are qualified by reference to the complete documents. 

        Nothing
in this Schedule shall constitute an admission of any liability or obligation of the Company to any third party, an admission against the Company's interests or an acknowledgment
that any matter disclosed in this Schedule is required to be disclosed (particularly where such disclosure is required in accordance with a materiality standard or as not in the ordinary course of
business). 

        The
information contained in this Schedule is confidential and proprietary information of the Company. 

Schedule 4.2(a) - (i)  

Authorized capital stock of the Company:  

	Common Stock	 	25,000,000
	Preferred Stock	 	5,000,000

Schedule 4.2(a) - (ii)  

Number of designated shares in each Series or Class:  

	Series B Convertible Preferred Stock	 	750,000
	Series D Convertible Preferred Stock	 	510,000
	Series E-B Convertible Preferred Stock	 	500,000
	Series E-D Convertible Preferred Stock	 	510,000
	Series E-l Senior Preferred Stock	 	600,000
	Series E-2 Senior Preferred Stock	 	400,000
	Series F Convertible Preferred Stock	 	200,000
	Series G Convertible Preferred Stock	 	200,000

Schedule 4.2(a) - (iii)  

Number of shares outstanding in each Series or Class immediately prior to the issuance of shares on Closing Date:  

	Common Stock	 	17
	Series B Convertible Preferred Stock	 	260,051
	Series D Convertible Preferred Stock	 	144,856
	Series E-1 Senior Preferred Stock	 	0
	Series E-2 Senior Preferred Stock	 	0
	Series E-B Convertible Preferred Stock	 	225,638
	Series E-D Convertible Preferred Stock	 	185,785
	Series F Convertible Preferred Stock	 	78,548
	Series G Convertible Preferred Stock	 	15,160

Schedule 4.2(a) - (x)  

Shares of capital stock outstanding at Closing which were subject to preemptive rights when issued:  

        None. 

Schedule 4.2(a) - (y)  

Shares of capital stock outstanding at Closing which provide the holders thereof preemptive rights:  

        None. 

Schedule 4.2(b)  

        The Company has reserved 740,000 Shares of Common Stock for issuance under its 1988 Incentive Stock Option Plan. 

        The
Company has reserved 18,667,321 Shares of Common Stock for issuance under its 1998 Stock Incentive Plan. 

        Warrants
to purchase 289,242 Shares of Common Stock. 

        All
subscriptions to purchase stock pursuant to the Agreement. 

        Consultants
to the Company have been granted options to purchase a total of 26,374 common shares that have not been issued under an existing Plan and which have not been reserved by the
Company. 

Schedule 4.2(c)  

Other Agreements regarding voting of stock:  

        On January 1, 1992 certain employees signed an Employee Stock Purchase and Restriction Agreement that obligated the employees to vote any shares purchased
pursuant to stock options granted under the Company's 1988 Incentive Stock Option Plan in favor of any merger or sale of the Company approved by the Company's Board of Directors. These agreements were
later amended on March 31, 1995 to require the employees to vote their option shares in favor of the election of Richard Hokin and J. Kermit Birchfield, Jr. to the Company's Board of Directors. 

        Series G
Shareholders' Rights Agreement, dated March 3, 2004. 

Schedule 4.2(d)  

Anti-dilution protections in effect under various Agreements:  

        None other than adjustments for stock splits, dividends, recapitalizations and similar events under the Company's 1998 Stock Incentive Plan (and related optoin
agreements), 1988 Incentive Stock Plan (and related optoin agreements), all outstanding warrants issued by the Company, the HP Note and all of the Certificates of Designations for the Company's
Preferred Stock. 

Schedule 4.2(f)  

Owners of 5% or more of outstanding Capital Stock:  

	InterWest Capital, Inc.*

Century America LLC*

JKB-Displaytech LLC*

Guthrie Birchfield*

J. Kermit Birchfield, Jr.*	 	

Combined
	Fleming US Discovery Fund III, L.P.**

Fleming US Discovery Offshore Fund III, LP**	 	

Combined

	*
	Combined

	**
	Combined

Schedule 4.5(a) - (b)  

 Defaults or Conflicts:  

        Section 8.1(b) of that certain Note Purchase Agreement (as amended, the "HP Agreement"), dated as of February 12, 1999, by and between the Company
and Hewlett-Packard Company ("HP"), as amended by Amendment No. 1 to Note Purchase Agreement, dated as of February 19, 1999 and by the Second Amendment to Note Purchase Agreement, dated
as of February 11, 2003, permits the Company to borrow certain amounts of unsecured subordinate indebtedness so long as the notice and other requirements set forth in Section 8.1(b) are
complied with. The Company has not complied with such requirements with respect to the issuance of certain Convertible Promissory Notes of the Company on December 31, 2003. In addition, in the
event of such a default, the Company would be in default under that certain Loan and Security Agreement, dated April 4, 2003, between Silicon Valley Bank and the Company (the "SVB Agreement"). 

        Stock
Purchase Agreement among the Company and certain Investors, dated as of February 11, 2003. 

        Certificate
of Designation and Determination of Preferences of the Series E-1 Senior Preferred Stock. 

        Certificate
of Designation and Determination of Preferences of the Series G Senior Preferred Stock. 

Schedule 4.6(a)  

Disclosure Materials previously provided:  

	1.
	Audited
financial statements of the Company at December 31, 2001.

	2.
	Audited
financial statements of the Company at December 31, 2002.

	3.
	Unaudited
financial statements of the Company at December 31, 2003.

	4.
	Unaudited
financial statements of the Company at January 31, 2004.

	5.
	Capitalization
table of the Company at March 3, 2004.

	6.
	Summary
of Proposed Terms of Series G Preferred Stock Financing and Exchange of Series E-1 Senior Preferred Stock for Series F
Convertible Preferred Stock.

	7.
	Certificate
of Designation and Determination of Preferences of the Series G Convertible Preferred Stock.

	8.
	Certificate
of Designation and Determination of Preferences of the Series F Convertible Preferred Stock.

	9.
	Certificate
of Designation and Determination of Preferences of the Series E- Senior Preferred Stock.

	10.
	Series G
Shareholders' Rights Agreement, dated March 3, 2004.

	11.
	Agreement
of Tender, Exchange and Transmittal of Series E-1 Stock.

	12.
	Agreement
of Tender, Exchange and Transmittal of Series B Stock.

	13.
	Agreement
of Tender, Exchange and Transmittal of Series D Stock.

	14.
	Confidential
Business Plan. 

Schedule 4.7  

        The Company has received notice from a former employee that he intends to pursue legal action against the Company because of the dilution to his ownership
resulting from the issuance of the 

Series F
Preferred Stock and Series G Preferred Stock to certain controlling shareholders of the Company. 

Schedule 4.9(a)  

List of Benefit Plans:  

Medical
insurance, administered by Humana Insurance Co.

Dental insurance provided by MetLife

Vision Service Plan

Life Insurance provided by GE Financial Assurance Co.

Disability Insurance provided by GE Financial Assurance Co.

Displaytech, Inc. Profit Sharing and 401(k) Plan 

Schedule 4.9(k)  

Accruals under Unfunded Benefit Plans:  

        None. 

Schedule 4.12(a)  

List of Intellectual Property:  

        See attached. 

Schedule §4.12(a)(iii)  

Statement re suspected infringement:  

        Displaytech suspects several companies affiliated with [*****] particularly [*****] are developing products that
may infringe the Company's patents and patents licensed from Noel Clark and Sven Lagerwall. However, because the companies are headquartered in [*****] and are not producing
commercial quantities of products, Displaytech has not initiated formal infringement action. 

        Displaytech
is also aware that [*****] has developed a laboratory display panel that is suspected of infringing the patents licensed from Noel Clark and Sven
Lagerwall, and possibly, some of Displaytech's patents. The [*****] researchers contacted Noel Clark and inquired about licensing. Professor Clark responded to the
[*****] researchers that any discussion about intellectual property would have to include Displaytech. Displaytech has met with the [*****] researchers
and notified them of Displaytech's intellectual property rights in this area. 

Schedule §4.12(b)(i)  

Statement re grounds for claim against Company of patent infringement:  

        Displaytech has had discussions with a current supplier of FLC chemical components to obtain a license to a patent of unknown validity and which may cover FLC
components that are useful in Displaytech's products. Discussions with the supplier for such license ceased without the issuance of such license. As a result, Displaytech began purchasing FLC
chemicals components from an alternative supplier, and has proceeded on the assumption that there is an implied license for the FLC chemical components it buys and uses. 

Schedule §4.12(b)(ii)  

Statement re third party patent applications:  

        Displaytech is aware of a third party foreign patent application that may cover a component that had been considered for a projection product. Displaytech already
has an issued United States patent and pending foreign patent applications on this same technology. If this patent application continues to 

be
prosecuted through the United States Patent and Trademark Office with the same claims as the foreign patent application, it may provoke an interference proceeding with Displaytech's issued United
States patent. 

Schedule 4.14  

Leased Property:  

        The Company leases approximately 30,000 square feet of office and manufacturing space from Pratt Land LLC located at 2602 Clover Basin Drive,
Longmont, CO. 

        The
Company leases office space in Tokyo, Japan at the Yurakucho Business Center. The material terms of the lease are as follows: 

	Landlord:	 	Mitsubishi Estate Co., Ltd.
	Address:	 	Business Center Yurakucho

11F Yurakucho Bldg.

1-10-1 Yurakucho, Chiyoda-ku

Tokyo 100-0006, Japan
	Lease Amount:	 	472,500 yen monthly
	Term:	 	Month to month renewal

Schedule 4.15(b)  

        None. 

Schedule 4.16(a)  

        None. 

Schedule 4.16(b)  

        None. 

Schedule 4.18  

List the amount of all Indebtedness, any Lien with respect thereto, and a description of the agreement therefore:  

	EQUIPMENT LEASES WITH FOLLOWING LESSORS
 
	 	MONTHLY RENTAL
	 	LIABILITY @2/29/04

	Wells Fargo Financial (formerly Conseco Finance) pursuant to that certain Lease Agreement, dated July 7, 2000, by and between Conseco Vendor Services Corporation and Displaytech, Inc.	 	1,922.36	 	$	28,387
	 	 	
	 	

	 	TOTAL	 	1,922,36	 	$	28,387
	 	 	
	 	

	
OTHER INDEBTEDNESS
 
	
 	

 
	
 	

LIABILITY @2/29/04

	Amended and Restated Convertible Note, dated February 11, 2003 payable to HP as well as the HP Agreement	 	$	14,342,500
	

Amkor Technology Letter Agreement, dated June 11, 2002	
 	
$	

210,713
	

Miyota (payables under that certain Manufacturing Agreement, dated December 10, 1998, by and between Displaytech, Inc. and Miyota Co., Ltd., as amended	
 	
$	

280,335
	

Silicon Valley Bank pursuant to the SVB Loan Agreement and related documents (including, but not limited to, the Negative Pledge Agreement, dated April 4, 2003, by and between the Company and Silicon Valley Bank	
 	
$	

384,497
	

 	
 	

 	
 	

	 	
 TOTAL	
 	
$	

15,218,045
	

 	
 	

 	
 	

Liens:  

	1.
	UCC-1
Financing Statement

Filed: CO Secretary of State—7/28/2000—Reception No. 20002068604

Secured Party: Conseco Finance Vendor Services Corp.

Collateral: Specific equipment (Computer/telephone)

	2.
	UCC-1
Financing Statement

Filed: CO Secretary of State—3/21/2002—Reception No. 20022030043

Secured Party: Transamerica Technology Finance Corporation, successor in interest to Transamerica Business Credit Corporation

Collateral: Filed as evidence of equipment lease only (specific equipment)

The indebtedness relating to the foregoing lien has been paid in full and the Company expects that a UCC-3 termination statement will be filed

	3.
	UCC-1
Financing Statement

Filed: CO Secretary of State—6/14/2002—Reception No. 20022063462

Secured Party: Silicon Valley Bank

Collateral: Purchased accounts receivable of account debtors Miyota Co. Ltd. and Nissho Electronics

	4.
	UCC-1
Financing Statement

Filed: CO Secretary of State—4/08/2003—Reception No. 20032036771

Secured Party: Silicon Valley Bank

Collateral: Goods and equipment, inventory, contract rights, general intangibles, accounts, documents, etc. 

	5.
	UCC-1
Financing Statement

Filed: CO Secretary of State—4/9/2003—Reception No. 20032037894

Secured Party: Silicon Valley Bank

Collateral: Goods and equipment, inventory, contract rights, general intangibles, copyright rights and applications, etc. 

Schedule 4.21(a)  

List all the Company's insurance policies:  

        Commercial general liability insurance provided by The Hartford: 

Personal
Property

Business Income and Extra Expense

Accounts Receivable

Original Information Property

Hired and Non-owned Autos

General Liability

Products Completed Operations

Personal & Advertising Injury

Manufacturer's Errors and Omissions Liability

Crime Coverage, Employee Dishonesty

Commercial Catastrophe Liability

Worker's Compensation 

        Policies
provided through AIG American International Companies: 

Directors,
Officers and Private Company Liability Insurance

Employee Benefit Plan Fiduciary Liability Insurance 

        Life
Insurance/Individual provided by Sun Life of Canada for: 

Mark
Handschy (Chief Scientist) 

SCHEDULE 4.12(a)  

Displaytech Owned US Patents  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,703,082	 	Bookshelf Liquid Crystal Materials and Devices	 	3/9/04	 	 
	

6,690,499	
 	

Multi-State Light Modulator With Non-Zero Response Time and Linear Gray Scale	
 	

2/10/04	
 	

 
	

6,633,301	
 	

RGB Illuminator with Calibration Via Single Detector Servo	
 	

10/14/03	
 	

5/17/19
	

6,580,078	
 	

Ferroelectric Liquid Crystal Infrared Chopper	
 	

6/17/03	
 	

4/6/21
	

6,570,550	
 	

Active Matrix Liquid Crystal Image Generator	
 	

5/27/03	
 	

12/22/14
	

6,569,504	
 	

Mesogenic Materials with Anomalous Birefringence Dispersion and	
 	

5/27/03	
 	

4/4/17
	

6,525,709	
 	

Miniature Display Apparatus and Method	
 	

2/25/03	
 	

10/17/17
	

6,507,330	
 	

DC-balanced and Non-DC-balanced Drive Schemes for Liquid Crystal Devices	
 	

1/14/03	
 	

9/1/19
	

6,426,783	
 	

Continuously Viewable DC-Field Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

7/30/02	
 	

2/18/18
	

6,413,448	
 	

Cyclohexyl- and Cyclohexynl-substituted Liquid Crystals with Low Birefringence	
 	

7/20/02	
 	

4/26/19
	

6,369,933	
 	

Optical Correlator Having Multiple Active Components Formed on a Single Integrated Circuit	
 	

4/9/02	
 	

12/18/19
	

6,359,723	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Crystal Image Generator	
 	

3/19/02	
 	

12/12/14
	

6,317,112	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

11/13/01	
 	

12/22/14
	

6,310,664	
 	

Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

10/30/01	
 	

2/18/18
	

6,247,037	
 	

Optical Correlator Having Multiple Active Components Formed on a Single Integrated Circuit	
 	

6/12/01	
 	

1/28/19
	

6,195,136	
 	

Optics Arrangements including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

2/27/01	
 	

12/22/14
	

6,144,421	
 	

Continuously Viewable, DC-Field Balanced Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

11/7/00	
 	

2/18/18
	

6,139,771	
 	

Mesogenic Materials with Anomalous Birefringence Dispersion and High Second Order Susceptibility	
 	

10/31/00	
 	

4/4/17
	

6,100,945	
 	

Compensator Arrangements for a Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Display System	
 	

8/8/00	
 	

2/18/18
	

6,075,577	
 	

Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

6/13/00	
 	

2/18/18
	

6,038,005	
 	

Optics Arrangerrants Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

3/14/00	
 	

12/22/14
	 	 	 	 	 	 	 

	

6,025,890	
 	

Beam Splitter Element Including a Beam Splitting Layer and a Polarizing Layer for use in a Light Polarization Modulating Display System	
 	

2/15/00	
 	

2/20/18
	

6,016,173	
 	

Optics Arrangement Including a Compensator Cell and Static Wave Plate For a Continuously Viewable, Reflection Mode, Ferroelectric Liquid Crystal Spatial Light Modulating System	
 	

1/18/00	
 	

2/18/18
	

5,900,976	
 	

Display System including a Polarizing Beam Splitter	
 	

5/4/99	
 	

2/20/18
	

5,808,800	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

9/15/98	
 	

9/15/15
	

5,757,348	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

5/26/98	
 	

5/26/15
	

5,753,139	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein	
 	

5/19/98	
 	

5/19/15
	

5,748,164	
 	

Active Matrix Liquid Crystal Image Generator	
 	

5/5/98	
 	

5/5/15
	

5,694,147	
 	

Liquid Crystal Integrated Circuit Display Including an Arrangement for Maintaining the Liquid Crystal at a Controlled Temperature	
 	

12/2/97	
 	

4/14/15
	

5,626,792	
 	

High Birefringence Liquid Crystal Compounds	
 	

5/6/97	
 	

9/6/14
	

5,596,451	
(1)	

Miniature Image Generator Including Optics Arrangement	
 	

1/21/97	
 	

1/30/15
	

5,585,036	
 	

Liquid Crystal Compounds Containing Chiral 2-Halo-2-Methyl Ether and Ester Tails	
 	

12/17/96	
 	

12/17/13
	

5,552,916	
 	

Diffractive Light Modulator	
 	

9/3/96	
 	

9/3/13
	

5,539,555	
(2)	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein	
 	

7/23/96	
 	

7/23/13
	

5,523,864	
 	

Analog Liquid Crystal Spatial Light Modulator including an Internal Voltage Booster	
 	

6/4/96	
 	

1/26/14
	

5,500,748	
(3)	

Liquid Crystal Spatial Light Modulator Including an Internal Voltage Booster	
 	

3/19/96	
 	

1/26/14
	

5,453,218	
 	

Liquid Crystal Compounds Containing Chiral 2-Halo-2 Methyl Alkoxy Tails	
 	

9/26/95	
 	

9/26/12
	

5,380,460	
 	

Ferroelectric Liquid Crystal Compounds Containing Chiral Haloalkoxy Tail Units and Compositions Containing Them	
 	

1/10/95	
 	

1/10/12
	

RE 34,726	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

9/13/94	
 	

7/14/09
	

5,347,378	
 	

Fast Switching Color Filters for Frame-Sequential Video Using Ferroelectric Liquid Crystal Color-Selective Filters	
 	

9/13/94	
 	

9/13/11
	

5,271,864	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them	
 	

12/21/93	
 	

8/7/12
	

5,182,665	
 	

Diffractive Light Modulator	
 	

1/26/93	
 	

9/7/10
	 	 	 	 	 	 	 

	

5,180,520	
(4)	

Ferroelectric Liquid Crystal Compositions Containing Halogenated Cores and Chiral Halogenated Cores and Chiral Haloalkoxy Tail Units	
 	

1/19/93	
 	

1/19/10
	

5,178,791	
 	

Halogenated Diphenyldiacetylene Liquid Crystals	
 	

1/12/93	
 	

3/11/11
	

5,178,445	
(5)	

Optically Addressed Spatial Light Modulator	
 	

1/12/93	
 	

1/12/10
	

5,167,855	
(4)	

Ferroelectric Liquid Crystal Compositions Chiral Haloalkoxyl Tail Units	
 	

12/1/92	
 	

12/1/09
	

5,051,506	
 	

Ferroelectric Liquid Crystal Compounds Containing Chiral Haloalkoxy Tail Units and Compositions Containing Them	
 	

9/24/91	
 	

9/24/08
	

4,813,771	
 	

Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	
 	

3/21/89	
 	

10/15/07

        1—jointly
owned by Displaytech, Inc. and Martin Shenker Optical Design, Inc. 

        2—jointly
owned by Displaytech, Inc. and Hoechst Aktiengesellschaft (with bilateral restrictions on field of use based on display size; Displaytech has exclusive right
to displays with an active area of 10 cm. or less in diameter, Hoechst has exclusive right to displays with an active area greater than 10 cm. in diameter) 

        3—jointly
owned by Displaytech, Inc. and Stephen D. Gaalema 

        4—owned
solely by Displaytech, Inc.; assignee data on patent cover sheet is incorrect 

        5—jointly
owned by Displaytech, Inc. and University of Colorado Foundation (assignment not recorded at PTO 

SCHEDULE 4.12(a)  

Displaytech Owned Foreign Patents  

	Country
 
	 	Patent No.
	 	Title
	 	Issue Date
	 	Expires

	Canada	 	2,087,592	 	Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	 	4/16/02	 	7/22/11
	

Canada	
 	

2,088,934	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

6/3/03	
 	

2/8/13
	

Germany	
 	

69109680	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

Japan	
 	

2868774	
 	

Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	
 	

12/25/98	
 	

10/14/08
	

Japan	
 	

3124772	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

10/27/00	
 	

7/22/11
	

Korea	
 	

184,242	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

12/17/98	
 	

7/22/11
	

Korea	
 	

261,354	
 	

High Contrast Distorted Helix Effect Etectro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

4/18/00	
 	

2/6/13
	

Korea	
 	

283,163	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them	
 	

12/6/00	
 	

8/6/13
	

Sweden	
 	

0 540 648	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

Sweden	
 	

515 705	
 	

High Contrast Distorted Helix Effect Eleclro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

9/24/01	
 	

2/5/13
	

United Kingdom	
 	

0 540 648	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

United Kingdom	
 	

2 263 982	
 	

Ferroelectric Liquid Crystals	
 	

2/28/96	
 	

1/29/13

Displaytech Owned Pending US Patent Applications  

	App. No.
 
	 	Title
	 	Date Filed

	[*****]	 	 	 	 
	

09/754,033	
 	

Alkyl Silane Liquid Crystal Compounds	
 	

1/3/01
	

09/753,749	
 	

Liquid Crystal Compounds Having a Silane Tail with a Perfluoroalkyl Terminal Portion	
 	

1/3/01
	

09/754,034	
 	

Liquid Crystalline Materials Containing Perfluoroalkyl and Alkenyl Tails	
 	

1/3/01
	

09/854,181	
 	

Partially Fluorinated Liquid Crystal Materials	
 	

5/11/01
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

09/992,097	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

11/5/01
	

09/989,976	
 	

Dual Mode Near-Eye and Projection Display System	
 	

11/20/01
	

[*****]	
 	

 	
 	

 
	

10/067,516	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

2/4/02
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 
	

[*****]	
 	

 	
 	

 

Displaytech Owned Pending Foreign Patent Applications  

	Date Filed
 
	 	App. No.
	 	Country
	 	Title

	2/05/93	 	9300375-4	 	China	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

2/05/93	
 	

43 03 335.0	
 	

Germany	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

2/08/93	
 	

5-20412	
 	

Japan	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

2/08/93	
 	

2003-37499	
 	

Japan	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	

8/04/93	
 	

5-193688	
 	

Japan	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them
	

12/14/95	
 	

95943444.0	
 	

Europe	
 	

Active Matrix Liquid Crystal Image Generator
	

2/17/99	
 	

10-2000-7008981	
 	

Korea	
 	

Image Generating System
	

11/20/01	
 	

01995158.1	
 	

Europe	
 	

Dual Mode Near-Eye and Projection Display System
	

11/20/01	
 	

2002-544703	
 	

Japan	
 	

Dual Mode Near-Eye and Projection Display System

License Agreements  

	1)
	Company
has various rights to the following patents pursuant to an agreement with Clark and Lagerwall: 

	Country
 
	 	Patent No.
	 	Title
	 	Issue Date
	 	Expires

	United States	 	RE 34,942	 	Surface Stabilized Ferroelectric Liquid Crystal Devices with Means for Aligning LC molecules at Omega (Alpha) from Normal to the Means	 	5/16/95	 	6/20/06
	

United States	
 	

RE 34,949	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices	
 	

5/23/95	
 	

9/25/07
	

United States	
 	

RE 34,950	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Means for Aligning LC Molecules at Omega(alpha) from Normal to the Means	
 	

5/23/95	
 	

3/21/06
	

United States	
 	

RE 34,966	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with LC Molecules Aligned at Angle Omega (Alpha) from Normal to Substrates	
 	

6/13/95	
 	

1/7/03
	

United States	
 	

RE 34,967	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Plural Orientation States of Different Colors or Separated by Domain Walls	
 	

6/13/95	
 	

7/13/10
	

United States	
 	

RE 34,973	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Total Reflection in One State and Transmission in Another State	
 	

6/20/95	
 	

1/28/09
	

United States	
 	

5,555,111	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Dielectric Torques Greater Than Ferroelectric Torques	
 	

9/10/96	
 	

3/21/06
	

United States	
 	

5,555,117	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices	
 	

9/10/96	
 	

9/10/13

	2)
	Company
is a party to that certain "Technology License and Industrial Research Agreement" with University Research Corporation effective as of May 1, 1994, which amended and
superceded that certain "Technology Licensing and Industrial Research Agreement" between the parties dated May 1, 1990. On August 28, 2003 the University Research Corporation sent
Company a letter indicating its intent to terminate the agreement. Pursuant to the terms of the agreement, certain license rights to various patents (including those identified below) would continue.
The University Research Corporation has requested that Company amend certain termination provisions of the agreement that currently grant Company rights to certain specified future technology. Company
and University Research Corporation are continuing to discuss appropriate consideration to be given to Company in the event Company approves such amendment. 

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	5,168,381	 	Smectic Liquid Crystal Devices Using SSFLC and Electroclinic Effect Based Cells	 	12/1/92	 	12/1/09
	

5,178,793	
 	

Ferroelectric Liquid Crystal Compounds and Compositions	
 	

1/12/93	
 	

1/12/10
	

5,543,078	
 	

Ferroelectric Liquid Crystals for Nonlinear Optics Applications	
 	

8/6/96	
 	

8/6/13
	

5,596,434	
 	

Self-Assembled Monolayers for Liquid Crystal Alignment	
 	

1/21/97	
 	

1/21/14
	

5,637,256	
 	

Ferroelectric Liquid Crystals for Nonlinear Optics Applications	
 	

6/10/97	
 	

6/10/14
	

5,658,493	
 	

Ferroelectric Liquid Crystals for Nonlinear Optics Applications	
 	

8/19/97	
 	

8/19/14

	3)
	Company
has various rights to the following patents pursuant to an agreement with Georgia Tech Research Corp: 

US Patents  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,141,072	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays	 	10/31/00	 	4/2/18
	

6,469,761	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays	
 	

10/22/02	
 	

4/2/18

Foreign Patent Applications  

	Priority Date
 
	 	App. No.
	 	Country
	 	Title

	4/3/98	 	10-542913	 	Japan	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays
	

4/3/98	
 	

98915254.1	
 	

Europe	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays
	

4/3/98	
 	

2,285,924	
 	

Canada	
 	

System and Method for Efficient Manufacturing of Liquid Crystal Displays

	4)
	Company
is a party to that certain "Winding-Up of Alliance, Production and Marketing Framework" agreement with Agilent Technologies, Inc. (formerly Hewlett-Packard
Company) effective November 15, 1999 and amended April 26, 2002 that amends and supercedes that certain "Alliance, Production and Marketing Framework Agreement" effective
January 31, 1999 between the parties and that certain "Second Side Letter Agreement" effective February 2, 1999 between the parties. Pursuant to the terms of the amended agreement,
Company and Agilent have granted each other various intellectual property rights. Company has certain license rights to various patents (including those identified below): 

Licensed Patent Registrations  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,249,269	 	Analog Pixel Driver Circuit for an Electro-Optical Material-Based Display Device	 	6/19/01	 	4/30/18
	

6,329,974	
 	

Electro-Optical Material-Based Display Device Having Analog Pixel Drivers	
 	

12/11/01	
 	

4/30/18

Licensed US Patent Applications  

Title  

        [*****] 

        Light
Sensitive Issues: Guard Ring and Metal Layer 

        The
Company believes that certain patents have issued that fall under the Agreement as pre-existing intellectual property of Agilent including the following: 

6,586,283
to Corcoran et al (photocurrent)

6,169,505 to Nishimura et al (multichannel DAC)

6,249,269 & 6,329,974 to Blalock, Gaddis et al (comparator pixel) 

        In
addition, the Company believes that the following patents relate to technology that arose during the Alliance and that was incorporated into Alliance products: 

6,282,029
to Ma et al (ORCA-style illuminator)

6,330,099 to Sojourner (Apron/Skirt isolation). 

	5)
	Company
is a party to that certain "Joint Venture Agreement" with Inphase Technologies. Pursuant to the agreement, Company and Inphase will attempt to research and develop technologies
related to holographic data storage under a grant from the National Institute of Standards and Technology. Company and Inphase have granted each other licenses to certain of each's existing
technology. Company and Inphase have granted each other and the government licenses to certain of the technology developed under this agreement. The agreement effects the assignment, between the
parties, of certain intellectual property. The agreement also places certain obligations on Company and Inphase with respect to the filing and prosecution of patents.

	6)
	Company
is a party to that certain "Manufacturing Agreement" dated December 10, 1998 with Miyota Co., Ltd. as amended from time to time. Pursuant to the agreement, the
Company and Miyota have granted each other various licenses to certain existing and future developed technology. The agreement also effects the assignment, between the parties, of certain future
developed intellectual property. 

Displaytech Owned Trademark Registrations and Applications  

	Country
 
	 	Registration No.
	 	Trademark
	 	Registration Date
	 	Renewal Date

	United States	 	2,164,479	 	CHRONOCOLOR®	 	6/9/98	 	6/9/08
	

European Union	
 	

1032499	
 	

DISPLAYTECH®	
 	

7/26/01	
 	

12/31/08
	

Japan	
 	

4416882	
 	

DISPLAYTECH®	
 	

9/14/00	
 	

9/14/10
	

United States	
 	

2,337,454	
 	

DISPLAYTECH®	
 	

1/11/00	
 	

1/11/10
	

United States	
 	

2,444,452	
 	

DESIGN

(Stylized Displaytech Red Block)	
 	

4/17/01	
 	

4/17/11
	

United States	
 	

2,546,134	
 	

FLCD®	
 	

3/12/02	
 	

3/12/12
	

European Union	
 	

1032564	
 	

LIGHTCASTER®	
 	

3/30/00	
 	

12/31/08
	

Japan	
 	

4412349	
 	

LIGHTCASTER®	
 	

8/25/00	
 	

8/25/10
	

Korea	
 	

462068	
 	

LIGHTCASTER®	
 	

12/29/99	
 	

12/29/09
	

United States	
 	

2,283,078	
 	

LIGHTCASTER®	
 	

10/5/99	
 	

10/5/09

EXHIBIT A

Series B Exchange Agreement  

        [Separately filed as Exhibit 10.7 to this registration statement.] 

EXHIBIT B

Series D Exchange Agreement  

        [Separately filed as Exhibit 10.7 to this registration statement.] 

EXHIBIT C

Series E Exchange Agreement  

        [Separately filed as Exhibit 10.7 to this registration statement.] 

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