SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
August 22, 2001 among Universal Display Corporation, a Pennsylvania corporation
(the "Company"), and the purchasers identified on the signature pages hereto
(each a "Purchaser" and collectively the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933 (the
"Securities Act"), the Company desires to issue and sell to the Purchasers, and
the Purchasers, severally and not jointly, desire to purchase from the Company,
securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in
this Agreement, the following terms have the meanings indicated:
"Actual Minimum" means, as of any date, the maximum aggregate
number of shares of Common Stock then issued or potentially issuable in
the future pursuant to the Transaction Documents, including any
Underlying Shares issuable upon exercise or conversion in full of all
Warrants and convertible Securities, assuming that (a) any previously
unconverted Notes or Shares are held until the fifth anniversary of the
Closing Date or, if earlier, until maturity, and all interest and
dividends thereon are paid in shares of Common Stock, and (b) the
Closing Price at all times on and after the date of determination
equals 100% of the actual Closing Price on the Trading Day immediately
prior to the date of determination.
"Affiliate" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with a Person, as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.
"Bankruptcy Event" means any of the following events: (a) the
Company or any Subsidiary commences a case or other proceeding under
any bankruptcy, reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction relating to the Company or any Subsidiary thereof; (b)
there is commenced against the Company or any Subsidiary any such case
or proceeding that is not dismissed within 60 days after commencement;
(c) the Company or any Subsidiary is adjudicated insolvent or bankrupt
or any order of relief or other order approving any such case or
proceeding is entered; (d) the Company or any Subsidiary suffers any
appointment of any custodian or the like for it or any substantial part
of its property that is not discharged or stayed within 60 days; (e)
the Company or any Subsidiary makes a general assignment for the
benefit of creditors; (f) the Company or any Subsidiary fails to pay,
or states that it is unable to pay or is unable to pay, its debts
generally as they become due; or (g) the Company or any Subsidiary, by
any act or failure to act, expressly indicates its consent to, approval
of or acquiescence in any of the foregoing or takes any corporate or
other action for the purpose of effecting any of the foregoing.
"Change of Control" means the occurrence of any of (i) an
acquisition after the date hereof by an individual or legal entity or
"group" (as described in Rule 13d-5(b)(1) promulgated under the
Exchange Act) of more than one-half of the voting rights or equity
interests in the Company, (ii) a replacement of more than one-half of
the members of the Company's board of directors that is not approved by
those individuals who are members of the board of directors on the date
hereof in one or a series of related transactions, (iii) a merger or
consolidation of the Company or any Subsidiary or a sale of all or
substantially all of the assets of the Company in one or a series of
related transactions, unless following such transaction or series of
transactions, the holders of the Company's securities prior to the
first such transaction continue to hold at least a majority of the
voting rights and equity interests in of the surviving entity or
acquirer of such assets, or (iv) the execution by the Company of an
agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (i), (ii) or (iii).
"Closing" means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.
"Closing Date" means the date of the Closing.
"Closing Price" means, for any date the VWAP for such date (or
the nearest preceding date) all as reported by Bloomberg L.P. or any
successor to its function for reporting VWAP.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par
value $.01 per share.
"Company Counsel" means Morgan, Lewis & Bockius LLP, counsel
to the Company.
"Conversion Shares Effective Date" means the date that a
Conversion Shares Registration Statement is declared effective by the
Commission.
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"Conversion Shares Registration Statement" means a
registration statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale by the Purchaser
of the Underlying Shares issuable upon conversion of the Shares and
exercise of the Warrants.
"Eligible Market" means the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"First Certificate of Designation" means a certificate of
designation of the Series C Preferred Stock, in the form of Exhibit A.
"First Shares" means an aggregate of 5,000 shares of Series C
Preferred Stock, which are being purchased by the Purchasers at the
Closing.
"First Warrants" means Common Stock purchase warrants in the
form of Exhibit H, to purchase an aggregate of 157,480 shares of Common
Stock.
"Motorola Agreement" means collectively the License Agreement
dated as of September 29, 2000 between the Company and Motorola, Inc.,
the Stock Purchase Warrant granted to Motorola, Inc. on September 29,
2000 and the Securities Purchase Agreement dated as of September 29,
2000 between the Company and Motorola, Inc.
"Note Shares Effective Date" means the date that a Note Shares
Registration Statement is declared effective by the Commission.
"Note Shares Registration Statement" means a registration
statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Purchasers of the Underlying
Shares issuable upon conversion of the Notes.
"Notes" means $15,000,000 in aggregate principal amount of
Convertible Promissory Notes due August 22, 2004 issued by the Company
to the Purchasers at Closing.
"Person" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
"PPG Agreement" means collectively, the Development and
License Agreement dated as of October 1, 2000 between the Company and
PPG Industries, Inc., as amended, and the Stock Purchase Warrant
granted to PPG Industries, Inc. on October 1, 2000.
"Purchaser Counsel" means Morse, Zelnick, Rose & Lander LLP,
counsel to the Purchasers.
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"Registration Rights Agreement" means the Registration Rights
Agreement, dated the Closing Date, among the Company and the
Purchasers, in the form of Exhibit C.
"Required Effectiveness Date" means the date on which the
Conversion Shares Registration Statement is required to become
effective pursuant to the Registration Rights Agreement.
"Required Minimum" means, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including
any Underlying Shares issuable upon exercise or conversion in full of
all Warrants and convertible Securities, assuming that (a) any
previously unconverted Notes and Shares are held until the fifth
anniversary of the Closing Date or, if earlier, until maturity, and all
interest and dividends thereon are paid in shares of Common Stock, and
(b) the Closing Price at all times on and after the date of
determination equals 50% of the actual Closing Price on the Trading Day
immediately prior to the date of determination.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Second Certificate of Designation" means a certificate of
designation of the Series D Preferred Stock in the form of Exhibit B
(as completed as contemplated therein).
"Second Shares" means an aggregate of 5,000 shares of Series D
Preferred Stock which are being purchased by the Purchasers on the
Second Closing Date.
"Second Warrants" means Common Stock purchase warrants in the
form of Exhibit I to purchase an aggregate of 157,480 shares of Common
Stock.
"Securities" means the Shares, Notes, Warrants and the
Underlying Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Series C Preferred Stock" means the Series C Convertible
Preferred Stock of the Company, having the rights and preferences set
forth in the First Certificate of Designation.
"Series D Preferred Stock" means the Series D Convertible
Preferred Stock of the Company having the rights and preferences set
forth in the Second Certificate of Designation.
"Shares" means the First Shares and the Second Shares.
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"Subsidiary" means any subsidiary of the Company that is
required to be listed in Schedule 3.1(a).
"Third Warrants" means Common Stock purchase warrants in the
form of Exhibit J to purchase an aggregate of 429,492 shares of Common
Stock.
"Trading Day" means (a) any day on which the Common Stock is
traded on its primary Trading Market, or (b) if the Common Stock is not
then listed or quoted on any national securities exchange, market or
trading or quotation facility, then a day on which trading occurs on
the New York Stock Exchange (or any successor thereto).
"Trading Market" means the NASDAQ National Market System or
any other national securities exchange, market or trading or quotation
facility on which the Common Stock is then listed or quoted.
"Transaction Documents" means this Agreement, the Securities,
the Registration Rights Agreement, the First Certificate of
Designation, the Second Certificate of Designation, the Transfer Agent
Instructions, and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
"Transfer Agent Instructions" means instructions to the
Company's transfer agent, in the form of Exhibit D.
"Underlying Shares" means the shares of Common Stock issuable
upon (i) conversion of the Shares, (ii) conversion of and upon payment
of interest on the Notes, (iii) upon exercise of the Warrants, and (iv)
in satisfaction of any other obligation of the Company to issue shares
of Common Stock pursuant to the Transaction Documents.
"Voting Agreement" means the Voting Agreement dated as of the
Closing Date among the Company and the Purchasers in the form of
Exhibit E.
"VWAP" means Volume Weighted Average Price of a share of
Common Stock as reported by Bloomberg L.P.
"Warrants" means the First Warrants the Second Warrants and
the Third Warrants.
ARTICLE II
PURCHASE AND SALE
2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to the Purchasers,
and the Purchasers shall, severally and not jointly, purchase from the Company,
the First Shares for an aggregate purchase price of $5,000,000, and the Notes
and the Warrants for an aggregate purchase price of $15,000,000. The Closing
shall take place at the offices of Purchaser Counsel upon the execution hereof,
or at such other location or time as the parties may agree.
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2.2 Closing Deliveries.
(a) At the Closing, the Company shall deliver or cause to be
delivered to each Purchaser the following:
(i) one or more stock certificates evidencing the number of
First Shares indicated below such Purchaser's name on the signature
page of this Agreement, registered in the name of such Purchaser;
(ii) Notes in the aggregate principal amount indicated below
such Purchaser's name on the signature page of this Agreement,
registered in the name of such Purchaser;
(iii) a First Warrant, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to
acquire the number of shares of Common Stock indicated below such
Purchaser's name on the signature page of this Agreement, on the terms
set forth therein;
(iv) a Second Warrant, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to
acquire the number of shares of Common Stock indicated below such
Purchaser's name on the signature page of this Agreement, on the terms
set forth therein;
(v) a Third Warrant, registered in the name of such Purchaser,
pursuant to which such Purchaser shall have the right to acquire the
number of shares of Common Stock indicated below such Purchaser's name
on the signature page of this Agreement, on the terms set forth
therein;
(vi) evidence that the First Certificate of Designation has
been filed on or prior to the Closing Date with the Secretary of State
(or other appropriate office) of Pennsylvania, in form and substance
mutually agreed to by the parties;
(vii) the legal opinion of Company Counsel, in the form of
Exhibit F, executed by such counsel and addressed and delivered to the
Purchasers;
(viii) a Registration Rights Agreement duly executed by the
Company;
(ix) Transfer Agent Instructions executed by the Company and
delivered to and acknowledged by American Stock Transfer & Trust
Company, the Company's transfer agent; and
(x) a Letter of Credit issued by First Union National Bank in
the form annexed hereto as Exhibit G, in an amount equal to the
principal amount of the Notes being issued to such Purchaser.
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(b) At the Closing, each Purchaser shall deliver or cause to
be delivered to the Company the following:
(i) the purchase price indicated below such Purchaser's name
on the signature page of this Agreement, in United States dollars and
in immediately available funds, by wire transfer to an account
designated in writing by the Company for such purpose;
(ii) a Registration Rights Agreement duly executed by such
Purchaser;
(iii) a Voting Agreement duly executed by such Purchaser; and
(iv) a properly executed Treasury Form W-8BEN,
2.3 Second Closing.
(a) Subject to the terms and conditions set forth in this
Agreement, the Company, on the one hand and the Purchasers, on the other hand
shall each have the right to deliver a written notice to the other (the "Second
Tranche Notice"), requiring each other to either sell or buy (severally, and not
jointly), as the case may be, the Second Shares. The Second Tranche Notice may
be delivered no earlier than the day following the Conversion Shares Effective
Date and (i) if delivered by the Company, no later than 111th day after the date
of this Agreement and (ii) if delivered by the Purchasers, no later than August
22, 2004. The closing of the sale of the Second Shares shall occur on the 14th
Trading Day following the giving of the Second Tranche Notice (the "Second
Closing Date"). The closing of the purchase and sale of the Second Tranche
Securities is referred to as the "Second Closing."
(b) At the Second Closing, the Company shall deliver or cause
to be delivered to each Purchaser the following:
(i) one or more stock certificates evidencing the number of
Second Shares indicated below such Purchaser's name on the signature
page of this Agreement, registered in the name of such Purchaser;
(ii) evidence that the Second Certificate of Designation has
been filed on or prior to the Closing Date with the Secretary of State
(or other appropriate office) of Pennsylvania, in form and substance
mutually agreed to by the parties; and
(iii) all other certificates and instruments required
hereunder to be delivered by the Company at or prior to the Second
Closing.
(c) At the Second Closing, each Purchaser shall deliver or
cause to be delivered to the Company the purchase price for Second Shares
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indicated below such Purchaser's name on the signature page to this Agreement,
in United States dollars and in immediately available funds, by wire transfer to
an account designated in writing by the Company for such purpose.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Purchasers:
(a) Subsidiaries. The Company has no subsidiaries other than
those listed in Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the
Company owns all of the capital stock of each Subsidiary free and clear of any
lien, charge, security interest, encumbrance, right of first refusal or other
restriction (collectively, "Liens"), and all the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.
(b) Organization and Qualification. Each of the Company and
the Subsidiaries is an entity duly incorporated or otherwise organized, validly
subsisting and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, (i)
render any material provision of any Transaction Document illegal, invalid or
unenforceable, (ii) have or result in a material adverse effect on the results
of operations, assets, prospects, business or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) materially and
adversely impair the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Documents (any of (i), (ii) or (iii), a
"Material Adverse Effect").
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, except for
the Required Approvals or as expressly set forth in any Transaction Document.
Each of the Transaction Documents requiring execution by the Company has been
(or upon delivery will be) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
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(d) No Conflicts. The execution, delivery and performance of
this Agreement, the Notes, the Registration Right Agreement, the Warrants and
the Transfer Agent Instructions by the Company and the consummation by the
Company of the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of the Company's or any Subsidiary's
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) subject to obtaining the Required Approvals (as
defined below), conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. Neither the Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filings required under Section 4.8 and
the required filing of the First Certificate of Designation pursuant to Section
2.2 and the Second Certificate of Designation pursuant to Section 2.3, (ii) the
filing with the Commission of the Conversion Shares Registration Statement and
the Note Shares Registration Statement, (iii) the application(s) to each Trading
Market for the listing of the Underlying Shares for trading thereon in the time
and manner required thereby, (iv) applicable Blue Sky filings, (v) shareholder
approval under the circumstances contemplated by Sections 4.5(f) and 4.5(g)
hereof, and (vi) in all other cases where the failure to obtain such consent,
waiver, authorization or order, or to give such notice or make such filing or
registration could not have or result in, individually or in the aggregate, a
Material Adverse Effect (collectively, the "Required Approvals").
(f) Issuance of the Securities. The Securities (including the
Underlying Shares) are duly authorized and, when issued and paid for in
accordance with the Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens created by the
Company. The Company has reserved from its duly authorized capital stock a
number of shares of Common Stock to be issued upon conversion or exercise of the
Securities at least equal to the Required Minimum on the date hereof.
(g) Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock of the Company is set forth in
Schedule 3.1(g). Except as set forth in Schedule 3.1(g), no securities of the
Company are entitled to preemptive or similar rights, and no Person has any
right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction
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Documents. Except as a result of the purchase and sale of the Securities and
except as disclosed in Schedule 3.1(g), there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. Except as disclosed in Schedule
3.1(g), the issue and sale of the Securities (including the Underlying Shares)
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. To the knowledge of the Company,
except for the Purchasers or as disclosed in Schedule 3.1(g), no Person or group
of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under
the Exchange Act), or has the right to acquire, by agreement with or by
obligation binding upon the Company, beneficial ownership of in excess of 5% of
the outstanding Common Stock.
(h) SEC Reports; Financial Statements. The Company has filed
all reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials, together with all exhibits
thereto, being collectively referred to herein as the "SEC Reports" and,
together with the Schedules to this Agreement, the "Disclosure Materials") on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports complied in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved ("GAAP"), except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
All material agreements to which the Company or any Subsidiary is a party or to
which the property or assets of the Company or any Subsidiary are subject have
been filed as exhibits to the SEC Reports as required under the Exchange Act.
(i) Material Changes. Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically
disclosed in the Company's Annual Report filed with the SEC for the year ended
December 31, 2000 and any quarterly reports filed with the SEC for any period
thereafter, (i) there has been no event, occurrence or development that has had
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or that could result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock
option plans.
(j) Litigation. There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an "Action") which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision,
individually or in the aggregate, have or result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any
director or officer thereof, is or has within the last five years been the
subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty. The
Company does not have pending before the Commission any request for confidential
treatment of information, and the Company does not expect to make any such
request prior to the Required Effectiveness Date. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company. The SEC has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act. No strike, work stoppage, slow down or other material labor
problem exists or, to the knowledge of the Company, is threatened or imminent
with respect to any of the employees of the Company or the Subsidiaries.
(k) Compliance. Neither the Company nor any Subsidiary (i) is
in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any evidence of indebtedness, indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or
any of its properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as could not, individually or
in the aggregate, have or result in a Material Adverse Effect.
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(l) Regulatory Permits. The Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as described in the SEC Reports, except where the
failure to possess such permits could not, individually or in the aggregate,
have or result in a Material Adverse Effect ("Material Permits"), and neither
the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit.
(m) Title to Assets. The Company and the Subsidiaries have
good and marketable title in fee simple to all real property owned by them that
is material to the business of the Company and the Subsidiaries and owns or has
the right to use all personal property that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens, except
for Liens that do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance.
(n) Patents and Trademarks. The Company and the Subsidiaries
have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
other similar rights that are necessary or material for use in connection with
their respective businesses as described in the SEC Reports (collectively, the
"Intellectual Property Rights"). Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person.
To the knowledge of the Company, (i) all such Intellectual Property Rights are
enforceable and (ii) there is no existing infringement by another Person of any
of the Intellectual Property Rights.
(o) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.
(p) Transactions With Affiliates and Employees. Except as set
forth in SEC Reports, none of the officers or directors of the Company and, to
the knowledge of the Company, none of the employees of the Company is presently
a party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
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(q) Internal Accounting Controls. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(r) Solvency. Based on the financial condition of the Company
as of the Closing Date, (i) the Company's fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the
Company's existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company's assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt).
(s) Certain Fees. Except as disclosed in Schedule 3.1(s), no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.
(t) Private Placement. Neither the Company nor any Person
acting on the Company's behalf has sold or offered to sell or solicited any
offer to buy the Securities by means of any form of general solicitation or
advertising. Neither the Company nor any of its Affiliates nor any person acting
on the Company's behalf has, directly or indirectly, at any time within the past
six months, made any offer or sale of any security or solicitation of any offer
to buy any security under circumstances that would (i) eliminate the
availability of the exemption from registration under Regulation D under the
Securities Act in connection with the offer and sale of the Securities as
contemplated hereby (to the extent Regulation D applies thereto) or (ii) cause
the offering of the Securities pursuant to the Transaction Documents to be
integrated with prior offerings by the Company for purposes of any applicable
law, regulation or shareholder approval provisions, including without limitation
under the rules and regulations of any Trading Market. The Company is not, and
is not an Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(u) Form S-3 Eligibility. The Company is eligible to register
its Common Stock for resale by the holders thereof under Form S-3 promulgated
under the Securities Act.
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(v) Listing and Maintenance Requirements. The Company has not,
in the two years preceding the date hereof, received notice (written or oral)
from any Trading Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
(w) Registration Rights. Except as described in Schedule
3.1(w), the Company has not granted or agreed to grant to any Person any rights
(including "piggy-back" registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority that
have not been satisfied.
(x) Application of Takeover Protections. The Company and its
Board of Directors have taken all necessary action, if any, in order to render
inapplicable any poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation the Company's issuance of the Securities and the Purchasers'
ownership of the Securities.
(y) Disclosure. Subject to the issuance of the press release
contemplated by Section 4.8(i), the Company confirms that neither it nor any
other Person acting on its behalf has as of the date of this Agreement provided
any of the Purchasers or their agents or counsel with any information that
constitutes or might constitute material non-public information. The Company
understands and confirms that the Purchasers will rely on the representation
contained in the immediately foregoing sentence in effecting transactions in
securities of the Company. All disclosure provided to the Purchasers regarding
the Company, its business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on behalf of the Company are
true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Company acknowledges and agrees that
no Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.2.
3.2 Representations and Warranties of the Purchasers. Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
to the Company as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. Each of this Agreement and the Registration Rights Agreement and the
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Voting Agreement has been duly executed by such Purchaser, and when delivered by
such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms.
(b) Investment Intent. Such Purchaser is acquiring the
Securities as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Securities or any part
thereof, without prejudice, however, to such Purchaser's right, subject to the
provisions of this Agreement and the Registration Rights Agreement, at all times
to sell or otherwise dispose of all or any part of such Securities pursuant to
an effective registration statement under the Securities Act or under an
exemption from such registration and in compliance with applicable federal and
state securities laws. Nothing contained herein shall be deemed a representation
or warranty by such Purchaser to hold Securities for any period of time. Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.
(c) Purchaser Status. At the time such Purchaser was offered
the Securities, it was, and at the date hereof it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act.
(d) Experience of such Purchaser. Such Purchaser, either alone
or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.
(e) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(f) Reliance. Such Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to it without registration under
the Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations and such Purchaser hereby consents to such
reliance.
(g) Sale of Securities. Such Purchaser understands that it may
not sell or otherwise dispose of any Securities except pursuant to an effective
registration statement (a "Subject Registration Statement") under the Securities
Act, and (ii) may only sell such Securities in accordance with the Plan of
Distribution set forth in the prospectus forming a part of the Subject
Registration Statement, and otherwise in compliance with the requirements of the
Act, including, but not limited to, the prospectus delivery requirements of the
Act.
15
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) Securities may only be disposed of pursuant to an
effective registration statement under the Securities Act, to the Company or
pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act, and in compliance with any
applicable state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or to the Company,
except as otherwise set forth herein, the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor, such counsel and the form and substance of which opinion shall be
reasonably satisfactory to the Company and Company counsel, to the effect that
such transfer does not require registration under the Securities Act.
Notwithstanding the foregoing, the Company hereby consents to and agrees to
register on the books of the Company and with any transfer agent for the
securities of the Company, without any such legal opinion, any transfer of
Securities by a Purchaser to an Affiliate of such Purchaser, provided that the
transferee certifies to the Company that it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes (subject to the qualifications hereof)
and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part in violation of the Securities Act. As a condition
of transfer, any such transferee shall agree in writing to be bound by the terms
of this Agreement and shall have the rights of a Purchaser under this Agreement
the Registration Rights Agreement and the Voting Agreement.
(b) The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of the following legend on the certificates
evidencing the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THEY ARE
CONVERTIBLE/EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT UNLESS, IN THE OPINION (WHICH SHALL
BE IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION) OF COUNSEL
SATISFACTORY TO THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
The shares of Common Stock issuable upon the conversion of the Shares or the
exercise of the Warrants shall not contain the legend set forth above nor any
other legend while a Conversion Shares Registration Statement is effective under
the Securities Act. On the Conversion Shares Effective Date, the Company shall
issue the letter attached to the Transfer Agent Instructions to the Company's
transfer agent with respect to the shares of Common Stock issuable upon the
16
conversion of the Shares or the exercise of the Warrants. The shares of Common
Stock issuable upon the conversion of the Notes shall not contain the legend set
forth above nor any other legend while a Note Shares Registration Statement is
effective under the Securities Act. On the Note Shares Effective Date, the
Company shall issue the letter attached to the Transfer Agent Instructions to
the Company's transfer agent with respect to the shares of Common Stock issuable
upon the conversion of the Notes. In addition, none of the Securities (including
the Underlying Shares) shall contain the legend set forth above nor any other
legend (i) following any sale of such Securities pursuant to Rule 144 or (ii) if
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the Staff of
the Commission). The Company agrees that at such time as such legend is no
longer required under this Section 4.1(b), it will, no later than four Trading
Days following the delivery by a Purchaser to the Company or the Company's
transfer agent of a certificate representing Securities (including Underlying
Shares) issued with a restrictive legend, deliver or cause to be delivered to
such Purchaser a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section or in the Registration
Rights Agreement.
(c) If the Company fails to deliver or cause to be delivered
to any Purchaser a certificate representing any Securities by the date on which
delivery of such certificate is required by any Transaction Document (the
"Delivery Date"), the Company shall pay to such Purchaser, in cash, as
liquidated damages and not as a penalty, $5,000 for each Trading Day after such
Delivery Date until such certificate is delivered. Nothing herein shall limit
such Purchaser's right to pursue actual damages for the Company's failure to
deliver certificates representing any Securities as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief. The exercise of any such rights
shall not prohibit a Purchaser from seeking to enforce damages pursuant to any
other provision of this Agreement or under applicable law.
(d) In addition to any other rights available to a Purchaser,
if the Company fails to deliver to such Purchaser a certificate representing
Common Stock by the Delivery Date, and if after such Delivery Date such
Purchaser purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by such Purchaser of the
shares that the Purchaser anticipated receiving from the Company (a "Buy-In"),
then the Company shall pay in cash to such Purchaser (in addition to any
remedies available to or elected by the such Purchaser ) the amount by which (x)
such Purchaser's total purchase price (including brokerage commissions, if any)
for the Common Stock so purchased exceeds (y) the product of (1) the lesser of
(A) the aggregate number of shares of Common Stock that such Purchaser
anticipated receiving from the conversion or exercise at issue or (B) the number
of shares of Common Stock so purchased, multiplied by (2) the conversion price
or exercise price, as the case may be, of the Common Stock on the date on which
the applicable notice of conversion or exercise, as the case may be, was given
(the "Notice Date"), in which event the number of shares of Common Stock that
would have been issued had the Company timely complied with its delivery
requirements shall not be so issued. For example, if such Purchaser purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In in
17
connection with an attempted conversion of Shares with respect to which the
conversion price of an Underlying Share on the applicable Notice Date multiplied
by the number of Underlying Shares was equal to $2,000 under clause (A) of the
immediately preceding sentence, the Company shall be required to pay such
Purchaser $9,000. Such Purchaser shall provide the Company written notice
indicating the amounts payable to the Purchaser in respect of the Buy-In.
4.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Securities (including the Underlying Shares) will result in
dilution of the outstanding shares of Common Stock, which dilution may be
substantial under certain market conditions. The Company further acknowledges
that subject to obtaining all required shareholder approvals, if any, its
obligation to issue the Securities (including the Underlying Shares) pursuant to
the Transaction Documents is unconditional and absolute, regardless of the
effect of any such dilution.
4.3 Furnishing of Information. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any such Person, the Company shall deliver to
such Person a written certification of a duly authorized officer as to whether
it has complied with the preceding sentence. As long as any Purchaser owns
Securities, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Purchasers and make publicly available
in accordance with paragraph (c) of Rule 144 such information as is required for
the Purchasers to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities may
reasonably request, all to the extent required from time to time to enable such
Person to sell such Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144.
4.4 Integration. Except for the sale of the Securities to the
Purchasers as contemplated herein the Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market.
4.5 Reservation and Listing of Securities.
(a) The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full
under the Transaction Documents.
(b) If, on any date, the number of authorized but unissued
(and otherwise unreserved) shares of Common Stock (the "Remaining Authorized
Shares") is less than 125% of (i) the Actual Minimum on such date, minus (ii)
the number of shares of Common Stock previously issued pursuant to the
Transaction Documents, then the Board of Directors of the Company shall use its
best efforts to amend the Company's certificate or articles of incorporation to
18
increase the number of authorized but unissued shares of Common Stock to at
least the Required Minimum at such time (minus the number of shares of Common
Stock previously issued pursuant to the Transaction Documents), as soon as
possible and in any event not later than the 65th day after such date; provided
that the Company will not be required at any time to authorize a number of
shares of Common Stock greater than the maximum remaining number of shares of
Common Stock that could possibly be issued after such time pursuant to the
Transaction Documents.
(c) If, at the time any Purchaser requests an exercise or
conversion of any Securities, the Actual Minimum minus the number of shares of
Common Stock previously issued pursuant to the Transaction Documents exceeds the
Remaining Authorized Shares, then the Company shall issue to the Purchaser
requesting such exercise or conversion a number of Underlying Shares equal to
such Purchaser's pro-rata portion of the Remaining Authorized Shares (based on
such Purchaser's share of the aggregate purchase price paid hereunder and
considering any Underlying Shares previously issued to such Purchaser), and the
remainder of the Underlying Shares issuable in connection with such exercise or
conversion shall constitute "Excess Shares" pursuant to Section 4.5(g) below.
(d) The Company shall (i) in the time and manner required by
each Trading Market, prepare and file with such Trading Market an additional
shares listing application covering a number of shares of Common Stock at least
equal to the greater of (A) the Required Minimum on the Closing Date and (B) the
Required Minimum on the date of such application, (ii) take all steps necessary
to cause such shares of Common Stock to be approved for listing on each Trading
Market as soon as possible thereafter, (iii) provide to the Purchasers evidence
of such listing, and (iv) maintain the listing of such Common Stock on each such
Trading Market or another Eligible Market.
(e) If, on any date, the number of shares of Common Stock
previously listed on a Trading Market is less than 125% of the Actual Minimum on
such date, then the Company shall take the necessary actions to list on such
Trading Market, as soon as reasonably possible, a number of shares of Common
Stock at least equal to the Required Minimum on such date; provided that the
Company will not be required at any time to list a number of shares of Common
Stock greater than the maximum number of shares of Common Stock that could
possibly be issued pursuant to the Transaction Documents.
(f) If any Trading Market is an Eligible Market, then the
maximum number of shares of Common Stock that the Company may issue pursuant to
the Transaction Documents at an effective purchase price less than the "Market
Value" (as defined in Nasdaq Marketplace Rule 4200(a)(20)) of a share of Common
Stock on the Trading Day immediately preceding the Closing Date (the "Market
Value") equals 3,409,245 shares (the "Issuable Maximum"), unless the Company
obtains shareholder approval in accordance with the rules and regulations of
such Trading Market. If, at the time any Purchaser requests an exercise or
conversion of any Securities, the Actual Minimum (excluding any shares issued or
issuable at an effective purchase price in excess of the Market Value on the
Trading Day immediately preceding the Closing Date) exceeds the Issuable Maximum
(and if the Company has not have previously obtained the required shareholder
approval), then the Company shall issue to the Purchaser requesting such
19
exercise or conversion a number of Underlying Shares of Common Stock equal to
such Purchaser's pro-rata portion of the Issuable Maximum (based on such
Purchaser's share of the aggregate purchase price paid hereunder and considering
any Underlying Shares previously issued to such Purchaser), and the remainder of
the Underlying Shares issuable in connection with such exercise or conversion
shall constitute "Excess Shares" pursuant to Section 4.5(g) below.
(g) Any Purchaser whose receipt of Excess Shares upon exercise
or conversion of Securities is restricted based on the number of Remaining
Authorized Shares or the Issuable Maximum shall have the option, by notice to
the Company, to require the Company to either: (i) use its best efforts to
obtain the required shareholder approval necessary to permit the issuance of
such Excess Shares as soon as is possible, but in any event not later than the
65th day after such notice, or (ii) within five Trading Days after such notice,
pay cash to such Purchaser, as liquidated damages and not as a penalty, in an
amount equal to the number of Excess Shares times the average Closing Price over
the five Trading Days immediately prior to the date of such notice or, if
greater, the five Trading Days immediately prior to the date of payment (the
"Cash Amount"). If the exercising or converting Purchaser elects the first
option under the preceding sentence and the Company fails to obtain the required
shareholder approval on or prior to the 65th day after such notice, then within
three Trading Days after such 65th day, the Company shall pay the Cash Amount to
such Purchaser, as liquidated damages and not as penalty.
4.6 Conversion and Exercise Procedures. The Transfer Agent
Instructions and Conversion Notice, as defined in the First Certificate of
Designation, the Second Certificate of Designation and the Notes, set forth the
totality of the procedures required to with respect to the conversion of the
Shares and the Notes. The Transfer Agent Instructions and Form of Election to
Purchase under the Warrants set forth the totality of the procedures with
respect to the exercise of the Warrants. No additional legal opinion or other
information or instructions shall be necessary to enable the Purchasers to
convert their Shares and Notes or exercise their Warrants. The Company shall
honor conversions of the Shares and Notes and exercises of the Warrants and
shall deliver Underlying Shares in accordance with the terms, conditions and
time periods set forth in the Transaction Documents.
4.7 Subsequent Placements.
(a) From the date hereof until 90 Trading Days after the
Effective Date, the Company will not, directly or indirectly, offer, sell, grant
any option to purchase, or otherwise dispose of (or announce any offer, sale,
grant or any option to purchase or other disposition of) any of its or the
Subsidiaries' equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at
any time during its life and under any circumstances, convertible into or
exchangeable for Common Stock (any such offer, sale, grant, disposition or
announcement being referred to as a "Subsequent Placement").
(b) The Company will not, directly or indirectly, effect any
Subsequent Placement from the date hereof until 240 days after the Effective
Date, unless (i) the Company delivers to each of the Purchasers a written notice
(the "Subsequent Placement Notice") of its intention to effect such Subsequent
Placement, which Subsequent Placement Notice shall describe in reasonable detail
20
the proposed terms of such Subsequent Placement, the amount of proceeds intended
to be raised thereunder, the Person with whom such Subsequent Placement is
proposed to be effected, and attached to which shall be a term sheet or similar
document relating thereto and (ii) such Purchaser shall not have notified the
Company by 6:30 p.m. (New York City time) on the tenth Trading Day after its
receipt of the Subsequent Placement Notice of its willingness to provide (or to
cause its designee to provide), subject to completion of mutually acceptable
documentation, financing to the Company on the same terms set forth in the
Subsequent Placement Notice. If the Purchasers shall fail to so notify the
Company of their willingness to participate in the full Subsequent Placement,
the Company may effect such Subsequent Placement on the terms and to one or more
of the Persons set forth in the Subsequent Placement Notice; provided that the
Company must provide the Purchasers with a second Subsequent Placement Notice,
and the Purchasers will again have the right of first refusal set forth above in
this paragraph (b), if the Subsequent Placement subject to the initial
Subsequent Placement Notice is not consummated for any reason on the terms set
forth in such Subsequent Placement Notice within 40 days after the date of the
initial Subsequent Placement Notice with the one or more of the Persons
identified in the Subsequent Placement Notice. If the Purchasers indicate a
willingness to provide financing in excess of the amount set forth in the
Subsequent Placement Notice, then each Purchaser will be entitled to provide
financing pursuant to such Subsequent Placement Notice up to an amount equal to
such Purchaser's pro rata portion of the aggregate purchase price paid for the
Securities under this Agreement, but the Company shall not be required to accept
financing from the Purchasers in an amount in excess of the amount set forth in
the Subsequent Placement Notice.
(c) Except for (i) Registrable Securities, as defined in the
Registration Rights Agreement, and (ii) shares of Common Stock issuable upon
exercise of any currently outstanding warrants and upon conversion of any
currently outstanding convertible securities of the Company, in each case
disclosed in Schedule 3.1(g) or pursuant to the anti-dilution provisions
contained in any such derivative securities, but not with respect to any
amendment or modification thereto, the Company shall not, until 90 Trading Days
after the Conversion Shares Effective Date, without the prior written consent of
the Purchasers, file a registration statement with the Commission with respect
to any securities of the Company or the Subsidiaries other than a registration
statement on Form S-8.
(d) The 90 Trading Day period set forth in the foregoing
paragraphs of this Section 4.7 shall be extended for (i) the number of Trading
Days during such periods in which trading in the Common Stock is suspended by
any Trading Market, and (ii) the number of Trading Days after the Effective Date
during which (A) the Conversion Shares Registration Statement is not effective
or (B) the prospectus included in the Conversion Shares Registration Statement
may not be used by the holders thereof for the resale of Registrable Securities
thereunder.
(e) The restrictions contained in paragraphs (a) and (b) of
this Section 4.7 shall not apply to (i) the granting of options to employees,
officers and directors of the Company pursuant to any stock option plan duly
adopted by the Company or to the issuance of Common Stock upon exercise of such
options or (ii) the issuance of any securities under the Motorola Agreement, the
PPG Agreement or the issuance of Common Stock upon the exercise or conversion of
any such securities, (iii) up to 1,000,000 shares of Common Stock issued in
21
connection with any contractual strategic alliances approved by the Company's
Board of Directors, and (iv) any securities issuable upon the exercise or
conversion of, or pursuant to the anti-dilution provisions contained within, any
option, restricted stock awards, preferred stock or warrants outstanding on the
date hereof (but not to the extent amended hereafter), all of which are set
forth on Schedule 3.1(g) hereto.
4.8 Securities Laws Disclosure; Publicity. The Company shall (i)
on the Closing Date, issue a press release acceptable to the Purchasers
disclosing the transactions contemplated hereby, (ii) within ten Trading Days
after the Closing Date, file with the Commission a Report on Form 8-K disclosing
the transactions contemplated hereby, and (iii) timely file with the Commission
a Form D promulgated under the Securities Act with respect to the transactions
contemplated hereby and provide a copy thereof to the Purchasers promptly after
the filing thereof. The Company shall, at least two Trading Days prior to the
filing or dissemination of any disclosure required by this paragraph, provide a
copy thereof to the Purchasers for their review. The Company and the Purchasers
shall consult with each other in issuing any press releases or otherwise making
public statements or filings and other communications with the Commission or any
regulatory agency or Trading Market with respect to the transactions
contemplated hereby, and neither party shall issue any such press release or
otherwise make any such public statement, filing or other communication without
the prior consent of the other, except if such disclosure is required by law, in
which case the disclosing party shall promptly provide the other party with
prior notice of such public statement, filing or other communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except to the extent such disclosure (but not any
disclosure as to the controlling Persons thereof) is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure.
4.9 Use of Proceeds. The Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes and not for
the satisfaction of any portion of the Company's debt (other than payment of
trade payables and accrued expenses in the ordinary course of the Company's
business and prior practices), to redeem any Company equity or equity-equivalent
securities or to settle any outstanding litigation.
4.10 Reimbursement by Company. If any Purchaser or any Affiliate,
officer, director, partner, controlling person, employee or agent of a Purchaser
(a "Purchaser Related Person") becomes involved in any capacity in any action,
proceeding or investigation brought by or against any Person in connection with
or as a result of the transactions contemplated by the Transaction Documents,
the Company will reimburse such Purchaser or Purchaser Related Person for its
reasonable legal and other expenses (including the costs of any investigation,
preparation and travel) incurred in connection therewith, as such expenses are
incurred, except to the extent that any such action, proceeding or investigation
is due primarily on account of any Purchaser's or Purchaser Related Person's
gross negligence or willful misconduct. In addition, the Company shall indemnify
and hold harmless each Purchaser and Purchaser Related Person from and against
any and all losses, claims, damages, liabilities, costs and expenses (including
reasonable legal costs and reasonable costs of investigation, preparation and
22
travel) (collectively, "Losses"), as incurred, arising out of or relating to any
breach by the Company of any of the representations, warranties or covenants
made by the Company in this Agreement or any other Transaction Document, or any
allegation by a third party that, if true, would constitute such a breach,
excluding only Losses that result from such Purchaser's or Purchaser Related
Person's gross negligence or willful misconduct. The reimbursement and
indemnification obligations of the Company under this paragraph shall survive
any termination of this Agreement until the 180th day following the day on which
no Shares are outstanding, no amount is due on the Notes and the Purchasers do
not own any Underlying Shares (the "End Indemnity Day"), and shall be in
addition to any liability that the Company may otherwise have, and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of the Purchasers and any such Purchaser Related
Persons. The Company also agrees that neither the Purchasers nor any Purchaser
Related Persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company in connection with or as a result
of the transactions contemplated by the Transaction Documents, except to the
extent that any losses, claims, damages, liabilities or expenses incurred by the
Company result from the gross negligence or willful misconduct of the applicable
Purchaser or Purchaser Related Person in connection with such transactions. If
the Company breaches its obligations under any Transaction Document, then, in
addition to any other liabilities the Company may have under any Transaction
Document or applicable law, the Company shall pay or reimburse the Purchasers on
demand for all costs of collection and enforcement (including reasonable
attorneys fees and expenses).
4.11 Reimbursement by Purchasers. Each Purchaser, severally and not
jointly, shall indemnify and hold harmless the Company or any Affiliate,
officer, director, controlling person, employee or agent of the Company (a
"Company Related Person") from and against any and all Losses, as incurred,
arising out of or relating to any breach by such Purchaser of any of the
representations, warranties or covenants made by such Purchaser in this
Agreement or any other Transaction Document, or any allegation by a third party
that, if true, would constitute such a breach, excluding only Losses that result
from the Company's or Company Related Person's gross negligence or willful
misconduct. The reimbursement and indemnification obligations of the Purchasers
under this paragraph shall survive any termination of this Agreement until the
End Indemnity Day, and shall be in addition to any liability that such Purchaser
may otherwise have, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company and any
Company Related Persons. If a Purchaser breaches its obligations under any
Transaction Document, then, in addition to any other liabilities such Purchaser
may have under any Transaction Document or applicable law, such Purchaser shall
pay or reimburse the Company on demand for all costs of collection and
enforcement (including reasonable attorneys fees and expenses).
4.12 Shareholders Rights Plan. In the event that a shareholders
rights plan is adopted by the Company, no claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any such plan or in any way could be deemed to trigger the provisions of such
plan solely by virtue of receiving Securities under the Transaction Documents.
23
4.13 Covenant Not to Disclose Material Non-Public Information. The
Company covenants and agrees that it shall refrain from disclosing, and shall
cause its officers, directors, employees and agents to refrain from disclosing,
any material non-public information to the Purchasers, in the absence of a
confidentiality agreement executed by the Purchasers.
4.14 Voting. During the period in which it owns Securities, each
Purchaser agrees to abide by the terms of the Voting Agreement.
4.15 Sale of Securities. Each Purchaser, for itself only, hereby
covenants and agrees with the Company that it (i) will not sell or otherwise
dispose of the shares of Common Stock to be delivered to it upon conversion of
the Shares or the Notes or upon exercise of any of the Warrants (the "Delivered
Shares") except pursuant to an effective registration statement (an "Effective
Registration Statement") under the Securities Act, (ii) will sell the Delivered
Shares only in accordance with the Plan of Distribution set forth in the
prospectus forming a part of the Effective Registration Statement (the
"Prospectus"), (iii) will comply with the requirements of the Securities Act
when selling or otherwise disposing of the Delivered Shares, including, but not
limited to, the prospectus delivery requirements of the Securities Act, and (iv)
will not sell or otherwise dispose of, and will return immediately to the
Company for the purpose of placing a restrictive legend thereon, the Delivered
Shares (and any certificates representing the Delivered Shares, if applicable)
upon notice from the Company that the Prospectus may not be used for the sale of
the Delivered Shares.
ARTICLE V
CONDITIONS
5.1 Conditions Precedent to the Obligations of the Purchasers.
The obligation of each Purchaser to acquire Securities at the Closing is subject
to the satisfaction or waiver by such Purchaser, at or before the Closing, of
each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
on and as of such date;
(b) Performance. The Company shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by it at or prior to the Closing;
(c) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents; and
(d) No Suspensions of Trading in Common Stock; Listing.
Trading in the Common Stock shall not have been suspended by the Commission or
24
any Trading Market (except for any suspensions of trading of not more than one
Trading Day solely to permit dissemination of material information regarding the
Company) at any time since the date of execution of this Agreement, and the
Common Stock shall have been at all times since such date listed for trading on
an Eligible Market.
5.2 Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell Securities at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Purchasers contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made on and as of such date;
(b) Performance. The Purchasers shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Purchasers at or prior to the Closing;
(c) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents;
5.3 Conditions Precedent to the Obligation of the Purchasers at
the Second Closing. The obligation of each Purchaser to acquire the Second
Shares at the Second Closing is subject to the satisfaction or waiver by such
Purchaser, at or before the Second Closing Date, of each of the following
conditions:
(a) First Closing. The Closing shall have occurred, and each
of the conditions set forth in Section 5.1 shall be satisfied at the time of the
Second Closing (and, for such purpose, references in Section 5.1 to the
"Closing" shall be deemed to refer to the Second Closing);
(b) Conversion Shares Registration Statement. The Conversion
Shares Registration Statement shall have remained effective at all times since
its Effective Date, not subject to any actual or threatened stop order or
suspension by any regulatory authority;
(c) Change of Control. No Change of Control of the Company
shall have occurred.
(d) Conversion and Exercise Obligations. The Company shall
have delivered Underlying Shares upon conversion or exercise of the Securities,
if any, in accordance with the Transaction Documents;
(e) Certificate of Designation Filed. The Second Certificate
of Designation shall have been filed.
25
(f) Reservation of Shares. No approval of the shareholders of
the Company shall be required, under the rules of a Trading Market or otherwise,
in order to issue the Actual Minimum number of shares of Common Stock (including
the Second Shares and any Underlying Shares issuable upon conversion or exercise
thereof).
The parties agree that, if one or more of the conditions set forth in this
Section is not satisfied, each Purchaser shall have the right, in its sole
discretion, to purchase at the Second Closing all, any portion or none of the
Second Shares otherwise to have been purchased by it.
ARTICLE VI
MISCELLANEOUS
6.1 Fees and Expenses. At the Closing, the Company shall reimburse
the Purchasers for their legal fees and expenses incurred in connection with the
preparation and negotiation of the Transaction Documents by paying to the
Purchasers, in proportion to their respective purchase prices (or, at the
Purchasers' election, directly to Purchaser Counsel), an aggregate of $50,000.
At the Second Closing, the Company shall reimburse the Purchasers for 50% of
their legal fees and expenses incurred in connection with the preparation and
negotiation of the documents related to the Second Closing by paying to the
Purchasers, in proportion to their respective purchase prices (or, at the
Purchasers' election, directly to Purchaser Counsel), up to an aggregate of
$5,000. In lieu of the payments required by the immediately preceding sentence,
the Purchasers may retain the amount of such payments instead of delivering such
amounts to the Company at the Closing and the Second Closing. Except as
expressly set forth in the Transaction Documents to the contrary, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all transfer agent fees, stamp taxes and other taxes and
duties levied in connection with the issuance of the Securities.
6.2 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
6.3 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, or (c) the Trading Day
26
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service. The address for such notices and communications shall be as
follows:
If to the Company: Universal Display Corporation
375 Phillips Boulevard
Ewing, New Jersey 08618
Fax No.: 609-671-0995
Attn: Sidney Rosenblatt
With a copy to: Morgan, Lewis & Bockius, LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
Fax No.(877) 432-9652
Attn: Stephen M. Goodman, Esq.
If to a Purchaser: To the address set forth under such
Purchaser's name on the signature
pages hereof;
With a copy to: Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, N.Y. 10022
Att'n: George Lander, Esq.
Fax No.: 212-838-9190
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
6.4 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each of the Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.
6.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
6.6 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
27
hereunder without the prior written consent of the Purchasers. Any Purchaser may
assign its rights under this Agreement and the Registration Rights Agreement to
any Person to whom such Purchaser assigns or transfers any Securities.
6.7 No Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Purchaser Related Person and each Company
Related Person is an intended third party beneficiary of Section 4.10 and may
enforce the provisions of such Section directly against the Company or the
Purchasers, as the case may be.
6.8 Governing Law. The corporate laws of the Commonwealth of
Pennsylvania shall govern all issues concerning the relative rights of the
Company and its stockholders. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
6.9 Survival. The representations and warranties set forth in
Article III of this Agreement shall survive the Closing for a period of two
years and the Second Closing for a period of two years. All other
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery, exercise and/or conversion of the
Securities, as applicable until the End Indemnity Day.
6.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
6.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
28
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
6.12 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
6.13 Usury. To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by any
Purchaser in order to enforce any right or remedy under any Transaction
Document. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total
liability of the Company under the Transaction Documents for payments in the
nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the "Maximum Rate"), and, without limiting the foregoing, in no
event shall any rate of interest or default interest, or both of them, when
aggregated with any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such Maximum Rate. It is
agreed that if the maximum contract rate of interest allowed by law and
applicable to the Transaction Documents is increased or decreased by statute or
any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate of interest
applicable to the Transaction Documents from the effective date forward, unless
such application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling
such excess to be at such Purchaser's election.
29
6.14 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOWS]
30
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Sidney D. Rosenblatt
--------------------------------
Name: Sidney D. Rosenblatt
Title: Chief Financial Officer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
STRONG RIVER INVESTMENTS, INC.
By: /s/ Kenneth L. Henderson
--------------------------
Name: Kenneth L. Henderson
Title: Attorney-in-fact
First Closing:
-------------
Purchase Price: $10,000,000
Number of Shares of Series C Preferred
Stock to be acquired: 2,500
Face Amount of Notes to be acquired: $7,500,000
Warrant Shares subject to First Warrant: 78,740
Warrant Shares subject to Second Warrant: 78,740
Warrant Shares subject to Third Warrant: 214,746
Second Closing:
--------------
Purchase Price: $2,500,000
[Number of Shares of Series D Preferred
Stock to be acquired]: 2,500
Address for Notice:
Strong River Investments, Inc.
c/o Icaza, Gonzalez-Ruiz & Aleman (BVI) Ltd.
Vanterpool Plaza, 2nd Floor, Wickhams Cay I
Road Town, Tortola, British Virgin Islands
Facsimile No.: 212-651-9010
Telephone No.: 212-651-9002
Attn: Danny Golan
With a copy to: Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10022
Attention: George Lander, Esq.
Facsimile No.: 212-838-9190
PINE RIDGE FINANCIAL INC.
By: /s/ Kenneth L. Henderson
---------------------------
Name: Kenneth L. Henderson
Title: Attorney-in-fact
First Closing:
-------------
Purchase Price: $10,000,000
Number of Shares of Series C Preferred
Stock to be acquired: 2,500
Face Amount of Notes to be acquired: $7,500,000
Warrant Shares subject to First Warrant: 78,740
Warrant Shares subject to Second Warrant: 78,740
Warrant Shares subject to Third Warrant: 214,746
Second Closing:
--------------
Purchase Price: $2,500,000
[Number of Shares of Series D Preferred
Stock to be acquired]: 2,500
Address for Notice:
Pine Ridge Financial Inc.
c/o Icaza, Gonzalez-Ruiz & Aleman (BVI) Ltd.
Vanterpool Plaza, 2nd Floor, Wickhams Cay I
Road Town, Tortola, British Virgin Islands
Facsimile No.: 212-651-9010
Telephone No.: 212-651-9002
Attn: Danny Golan
With a copy to: Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10022
Attention: George Lander, Esq.
Facsimile No.: 212-838-9190