Common use of SCHEDULE OF EXCEPTIONS Clause in Contracts

SCHEDULE OF EXCEPTIONS. The following is a list of schedules and exceptions to the representations and warranties made by Displaytech, Inc. (the "Company") in that certain Second Amendment to Note Purchase Agreement (the "Agreement") dated February , 2003 between the Company and Hewlett-Packard 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) 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) Common Stock 242 Series B Convertible Preferred Stock 260,051 Series D Convertible Preferred Stock 154,856 Series E-1 Senior Preferred Stock 40,096 Series E-2 Senior Preferred Stock 0 Series E-B Convertible Preferred Stock 225,638 Series E-D Convertible Preferred Stock 175,785 Schedule 4.2(a)—(1) 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) None Schedule 4.2(b) 740,000 Issuance of Options under the 1988 Incentive Stock Option Plan 2,699,022 Issuance of Options under the 1998 Stock Incentive Plan 309,765 Warrants Outstanding 3,657,539 Conversion of the Series B Convertible Preferred Stock 5,251,019 Conversion of the Series D Convertible Preferred Stock 3,173,530 Conversion of the Series E-B Convertible Preferred Stock 3,196,091 Conversion of the Series E-D Convertible Preferred Stock Exception §4.2(c) 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) 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) 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ and J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇. to the Company's Board of Directors. Schedule 4.2(f)

SCHEDULE OF EXCEPTIONS. The following is a list of schedules and exceptions to the representations and warranties made by Displaytech, Inc. (the "Company") in that certain Second Amendment to Note Purchase Agreement (the "Agreement") dated February , 2003 between the Company and Hewlett-Packard 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 Common Stock 242 Series B Convertible Preferred Stock 260,051 Series D Convertible Preferred Stock 154,856 Series E-1 Senior Preferred Stock 40,096 Series E-2 Senior Preferred Stock 0 Series E-B Convertible Preferred Stock 225,638 Series E-D Convertible Preferred Stock 175,785 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 309,765 Warrants Outstanding 3,657,539 Conversion of the Series B Convertible Preferred Stock 5,251,019 Conversion of the Series D Convertible Preferred Stock 3,173,530 Conversion of the Series E-B Convertible Preferred Stock 3,196,091 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ and J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇. to the Company's Board of Directors. Schedule 4.2(f)) Anti-dilution protections in effect under various Agreements: