Exhibit 4.2
WARRANT HOLDER: Scott Seligsohn
NUMBER OF WARRANT SHARES: 200,000
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND MAY NOT BE
DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED OR ENCUMBERED WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY TO SUCH PROPOSED SALE, PLEDGE, TRANSFER OR ENCUMBRANCE AND TO THE
PROPOSED ASSIGNEE, PLEDGEE OR TRANSFEREE.
No. WA96-124
UNIVERSAL DISPLAY CORPORATION
Common Stock Purchase Warrant
Universal Display Corporation, a Pennsylvania corporation, for
value received, hereby grants to the undersigned holder, its successors and
permitted assigns (collectively, the "Holder"), this right (the "Warrant"),
subject to the terms set forth below, to purchase at the purchase price per
share as defined in subsection 2.1 below (the "Purchase Price"), up to that
number of Shares (defined below) set forth above, subject to adjustment as
herein provided (such total number of Shares that may be purchased hereunder
being referred to herein as the "Warrant Shares").
1. Definitions. As used herein, the following terms, unless the context
otherwise requires, have the following respective meanings:
1.1. "Company" shall include Universal Display Corporation, a
Pennsylvania corporation, and, unless otherwise noted to the contrary, any
company which shall succeed to, by merger, consolidation or similar arrangement
of the Company's and assume the obligations of Universal Display Corporation
hereunder.
1.2. "Other Securities" refers to any stock (other than the Warrant
Shares) and other securities of the Company or any other person (corporate or
otherwise) that the Holder at any time shall be entitled to receive, or shall
have received, on the exercise of this Warrant, in lieu of or in addition to the
Warrant Shares, or which at any time shall be issuable or shall have been issued
in exchange for or in replacement of the Warrant Shares.
1.3. "Shares" means (a) the Company's Common Stock, as authorized on
the date of this Warrant and (b) if the class of securities described in (a)
shall cease to be issued and outstanding, securities of the same class issued in
exchange for or in respect of the securities described in (a) pursuant to a plan
of merger, consolidation, recapitalization or reorganization, the sale of
substantially all of the Company's assets or a similar transaction.
1.4. "Registrable Common Stock" means the number of shares of common
stock underlying the warrants issued hereunder. As to any particular Registrable
Common Stock, such securities will cease to be Registrable Common Stock when
they (a) have been effectively registered under the Securities Act of 1933, as
amended (the "Securities Act") and obtained or disposed of in accordance with
the registration statement covering them, (b) have been transferred pursuant to
Rule 144 under the Securities Act (or any similar provision then in force), or
(c) are no longer subject to restrictions under transfer pursuant to the
provisions of Rule 144(k) under the Securities Act.
1.5. "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement, including all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, expenses and
fees for listing the securities to be registered on exchanges on which similar
securities issued by the Company are then listed, and fees and disbursements of
counsel for the Company (but not of counsel to the Holder) and of all
independent certified public accountants, underwriters (other than Underwriting
Commissions) and other persons retained by the Company.
1.6. "Underwriting Commissions" means all underwriting discounts or
commissions relating to the sale of securities of the Company.
2. Exercise of Warrant.
2.1 Purchase Price. The Warrant may be exercised, subject to the terms
specified herein, at the purchase price of $4.125 per Warrant Share (the
"Purchase Price").
2.2 Exercise Period. The Warrant may be exercised (the "Exercise
Period") at any time for a period of ten years from April 25, 1996.
2.3 Vesting. The shares subject to this Warrant vest as follows: 50,000
shares immediately and 30,000 shares in the next five anniversary dates thereof,
provided that the Holder must be an employee or consultant of the Company on the
anniversary date, or such shares shall not be vested, although the shares
already vested shall remain for the term of the Warrant.
2.4 Exercise in Full. Subject to the limitations stated above, this
Warrant may be exercised in full at the option of the Holder by surrender of
this Warrant, with the form of subscription at the end hereof duly executed by
the Holder, to the Company at its principal office in the United States,
accompanied by payment, in cash or by certified or official bank check payable
to the order of the Company, in the amount obtained by multiplying the number of
Warrant Shares for which this Warrant may be exercised by the Purchase Price.
2.5 Partial Exercise. This Warrant may be exercised in part by
surrender of this Warrant in the manner and at the place provided in subsection
2.4 along with payment in the amount determined by multiplying (a) the number of
Warrant Shares designated by the Holder in the subscription at the end hereof by
(b) the Purchase Price. On any such partial exercise, the Company at its expense
will forthwith issue and deliver to or upon the order of the Holder a new
Warrant or Warrants of like tenor, in the name of the Holder or as the Holder
(upon payment by the Holder of any applicable transfer taxes) may request,
calling in the aggregate on the face or faces thereof for the number of Warrant
Shares for which such Warrant or Warrants may still be exercised.
3. Delivery of Share Certificates on Exercise.
3.1 As soon as practicable after the exercise of this Warrant in full
or in part, the Company, at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the Holder, or as the Holder (upon payment by the Holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
fully paid and non-assessable Shares (or Other Securities) to which the Holder
shall be entitled on such exercise, plus, in lieu of any fractional share to
which the Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then-current market value of one full share, together with any
other stock or other securities and property (including cash, where applicable)
to which the Holder is entitled upon such exercise pursuant to Section 2 or
otherwise.
4. Covenants as to Shares.
4.1 Issuance of Shares upon Exercise. All Shares that may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be validly issued, fully paid and non-assessable and free from all taxes, liens
and charges with respect to the issue thereof. The Company will at all times
have authorized and reserved, free from preemptive rights, a sufficient number
of shares of common stock to provide for the exercise of the rights represented
by this Warrant.
4.2 Restrictions on Transfer. Holder represents to the Company that it
is acquiring the Warrant for its own investment account and without a view to
the subsequent public distribution of the Warrant or the Shares otherwise than
pursuant to an effective registration statement under the Securities Act. This
Warrant and each certificate for the Shares issued to the Holder and any
subsequent holder that have not been sold to the public pursuant to an effective
registration statement under the Securities Act or as to which the restrictions
on transfer have not been removed as hereinafter provided, shall bear a
restrictive legend reciting that the same have not been registered pursuant to
the Securities Act and may not be transferred in the absence of an effective
registration statement under the Securities Act. Each proposed transfer shall be
accompanied by a notice which shall describe the manner of the proposed transfer
and shall be accompanied by an opinion of counsel experienced in federal
securities laws matters and reasonably acceptable to the Company and its counsel
to the effect that the proposed transfer may be effected without registration
under the Securities Act, whereupon, the holder of such Warrant or Shares shall
be entitled to transfer such securities in accordance with the terms of its
notice and such opinion. Restrictions imposed under this Section 4 upon the
transferability of the Warrant or of the Shares shall cease when:
(a) a registration statement covering such Shares becomes
effective under the Securities Act and such Shares have been disposed of
pursuant to such effective registration statement, or
(b) the Company receives from the holder thereof an opinion of
counsel experienced in federal securities laws matters, which counsel shall be
reasonably acceptable to the Company, that such restrictions are no longer
required in order to insure compliance with the Securities Act.
When such restrictions terminate, the Company shall, or shall instruct the
warrant agent or transfer agent, if any, to issue new securities in the name of
the holder not bearing the legends required by this Section 4.
5. Adjustment for Reorganization; Consolidation or Merger.
5.1 Reorganization, Consolidation or Merger. If at any time or from
time to time, the Company shall (a) effect a plan of merger, consolidation,
recapitalization or reorganization or similar transaction with a corporation
(the "Acquiror") whereby the shareholders of the Company will exchange their
shares of the Company for the shares of the Acquiror, or (b) transfer all or
substantially all of its properties or assets to any other person (which along
with any transactions set forth in (a) hereof shall be an "Extraordinary
Transaction"), then, in each such case, the holder of this Warrant, on the
exercise hereof as provided in Section 2 at any time after the completion of any
Extraordinary Transaction, shall receive such Shares or Other Securities and
property (including cash) to which such holder would have been entitled in any
Extraordinary Transaction as if such holder had so exercised this Warrant
immediately prior thereto.
5.2 Dissolution. If the Company dissolves following the transfer of all
or substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered to the Holder
the stock and other securities and property (including cash, where applicable)
receivable by the Holder after the effective date of such dissolution pursuant
to this Section 5.
5.3 Continuation of Terms. Upon any Extraordinary Transaction, this
Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the securities, Shares and Other Securities and property
receivable on the exercise of this Warrant after the consummation of
reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, any Extraordinary Transaction
and shall be binding upon the party or parties to the Extraordinary Transaction
and their successors, including, in the case of any such transfer, the person
acquiring all or substantially all of the properties or assets of the Company,
whether or not such person shall have expressly assumed the terms of this
Warrant as provided in Section 7.
6. Adjustments for Other Events.
6.1 Changes in Capital Structure. If the Company shall (a) issue
additional shares as a dividend or other distribution on outstanding shares, (b)
subdivide its outstanding shares, or (c) combine its outstanding shares into a
smaller number of shares, then, in each such event, the Warrant Shares issuable
immediately prior to such event shall, simultaneously with the happening of such
event, be adjusted by multiplying the Warrant Shares by a fraction, the
numerator of which shall be the total number of Shares issued and outstanding
immediately after such event and the denominator of which shall be the total
number of Shares issued and outstanding immediately prior to such event, and the
product so obtained shall thereafter be the Warrant Shares then in effect. The
Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 6.
After any such event specified in this subsection 6.1, the original Purchase
Price shall continue to apply to any exercise of the Warrant, except that the
Purchase Price shall be adjusted in any such event by multiplying the Purchase
Price by a fraction the numerator of which shall be the total number of Shares
issued and outstanding immediately before such event and the denominator of
which shall be the total number of Shares issued and outstanding immediately
after such event, provided, however, the Warrant Shares shall not be issued at a
discount from the par value stated in the Company's Articles of Incorporation
(currently, $.0l par value per share). The Purchase Price as so adjusted, shall
be readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 6.
7. Notices of Record Date, etc. In the event of:
7.1 any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
7.2 any merger, consolidation or capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company
with or into any other person, or
7.3 any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (a) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, and (b) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of shares
(or Other Securities) shall be entitled to exchange their shares of (or Other
Securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 10
days prior to the date specified in such notice on which any such action is to
be taken.
8. Transfers.
8.1 The Warrant and the Warrant Shares are not transferable, in whole
or in part, without compliance with the Securities Act and any applicable state
securities laws.
8.2 Subject to subsection 8.1, this Warrant, or any portion hereof, may
be transferred by the Holder's execution and delivery of the form of assignment
attached hereto along with this Warrant. Any transferee shall be required, as a
condition to the assignment, to deliver all such documentation as the Company
deems appropriate. However, until such assignment and such other documentation
are presented to the Company at its principal offices in the United States, the
Company shall be entitled to treat the registered holder hereof as the absolute
owner hereof for all purposes.
8.3 Upon a transfer of this Warrant in accordance with this Section 8,
the Company, at its expense, will issue and deliver to or on the order of the
Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as
the Holder (on payment by the Holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face or faces thereof for the Warrant
Shares called for on the face or faces of the Warrant or Warrants so
surrendered. If this Warrant is divided into more than one Warrant, or if there
is more than one holder thereof, all references herein to "this Warrant" shall
be deemed to apply to the several Warrants, and all references to "the Holder"
shall be deemed to apply to the several Holders, except in either case to the
extent that the context indicates otherwise.
8.4 To the extent the Holder is a party to the Registration Rights
Agreement, the Warrants issued hereunder shall be subject to the transfer
restrictions and other provisions set forth therein.
9. Replacement of Warrants.
9.1 On receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of any Warrant and, in the case of
any such loss, theft or destruction of any Warrant, on delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company
or, in the case of any such mutilation, on surrender and cancellation of such
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
10. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register under
the Securities Act any of its common stock for sale to the public for cash in an
underwritten offering, and the registration form to be used would permit
inclusion thereto of the Registrable Common Stock (a "Piggyback Registration"),
the Company will give prompt written notice to the Holder and will include in
such Piggyback Registration, subject to the allocation provisions below, all
Registrable Common Stock with respect to which the Company has received from the
Holder a written request for inclusion within 20 days after the Company's
sending of such notice; provided however, that the Company shall not be required
to effect any registration of Registrable Common Stock if (i) registration is
effected by the Company on behalf of a shareholder exercising registration
rights that pursuant to the terms thereof prohibit the Holder's shares from
being included in such registration (a "Limited Demand Registration") or (ii)
the Registrable Common Stock was previously included in a Registration
Statement, whether an underwritten offering or otherwise.
(b) Piggyback Expenses. In a Piggyback Registration, the Company will
pay the Registration Expenses related to the sale of Registrable Common Stock by
the Holder, but the Holder will pay the Underwriting Commissions related to the
sale of such Registrable Common Stock; provided, however, that the Holder will
pay its pro rata share of Registration Expenses incurred by the Company in
connection with the registration if required to do so in connection with any
Blue Sky law clearance sought by the Company.
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company and the managing
underwriters advise the Company that in their opinion the number of securities
requested to be included in such registration exceeds the number that can be
sold in such offering at a price reasonably related to fair value, the Company
will allocate the securities to be included as follows: first, to the securities
the Company proposes to sell on its own behalf; and second, to the Registrable
Common Stock requested to be included in such registration by the Holder and to
securities of the Company requested to be included in such registration by any
other selling shareholder participating in the registration statement, pro rata
on the basis of the number of securities of the Company owned by all such
selling shareholders participating in the registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration is
initiated as an underwritten secondary registration on behalf of holders of the
Company's securities (other than pursuant to a Limited Demand Registration), and
the managing underwriters advise the Company that in their opinion the number of
securities requested to be included in such registration exceeds the number that
can be sold in such offering at a price reasonably related to fair value, the
Company will allocate the securities to be included as follows: first, to the
securities requested to be included by the holders initiating such registration;
second, to any securities requested to be included in such registration by the
Company; and third, to Registrable Common Stock requested to be included in such
registration by the Holder and to securities of the Company requested to be
included in such registration by any other selling shareholders participating in
the registration statement, pro rata on the basis of the number of securities of
the Company owned by all such selling shareholders participating in the
registration.
(e) Selection of Underwriters. The selection of the lead underwriter or
underwriters and all other decisions regarding the underwriting arrangements for
the offering will be made solely by the Company, subject to the rights, if any,
of the holders initiating a registration if the registration is under subsection
(d).
(f) Holdback Agreements. Holder hereby agrees that if so requested by
the Company or any representative of the underwriters in connection with the
initial public offering of the Company or any other registration of any
securities of the Company under the Act in which the Holder is given the
opportunity to participate pursuant to this Agreement, the Holder shall not sell
or otherwise transfer securities of the Company registered hereunder during the
120-day period following the effective date of a registration statement of the
Company filed under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such 120 day period.
(g) Indemnification.
(i) In connection with any registration statement in which the
Holder is participating, the Company will indemnify, to the extent permitted by
law, Holder, its officers and directors, and each person who controls such
holder (within the meaning of the Securities Act), against all losses, claims,
damages, liabilities and expenses arising out of or resulting from any untrue or
alleged untrue statement of material fact contained in such registration
statement, prospectus or preliminary prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to the
Company by or on behalf of the Holder or such other indemnified party expressly
for use therein or by the failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished the underwriters with a sufficient number of copies of the
same.
(ii) In connection with any registration statement in which
the Holder is participating, the Holder will furnish to the Company in writing
such information as is reasonably requested by the Company for use in any such
registration statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its directors and officers and each person who controls the
Company (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact or any omission or alleged omission of a material
fact required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is contained in information so furnished in writing by the Holder
specifically for use in preparing the registration statement.
(iii) Any person entitled to indemnification hereunder will
(a) give prompt notice (and in all events within 30 days) to the indemnifying
party of any claim with respect to which it seeks indemnification and (b) unless
a conflict of interest exists with respect to such claim that prohibits the
parties from using counsel selected by the indemnifying party, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled, or elects not, to assume the defense of
a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim.
(h) Participation in Underwritten Registrations. The Holder may not
participate in any registration hereunder unless such holder (i) agrees to sell
such holder's securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements under
subsection (e), and (ii) completes and executes all questionnaires, powers of
attorney, custody agreements, indemnities, underwriting agreements and other
documents required under the terms of such underwriting arrangements.
(i) Subsequent Registration Rights. The Holder acknowledges that, from
and after the date of this Warrant, the Company may enter into agreements with
any holder or prospective holder of any securities of the Company that would
allow such holders or prospective holders to include such securities in any
registration, whether such registration is pursuant to a demand registration or
a piggyback registration.
11. Notices.
11.1 All notices required hereunder shall be deemed to have been given
and shall be effective only when personally delivered or sent by Federal
Express, DHL or other express delivery service or by certified or registered
mail to the address of the Company's principal office in the United States as
follows:
Universal Display Corporation
Three Bala Plaza, East
Suite 104
Bala Cynwyd, PA 19004
in the case of any notice to the Company, and until changed by notice to the
Company, to the address of the Holder set forth above in the case of any notice
to the Holder.
12. Miscellaneous.
12.1 This Warrant and any term hereof may be changed, waived,
discharged or terminated, other than on expiration, only by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Warrant shall be construed and enforced
in accordance with and governed by the laws of the Commonwealth of Pennsylvania.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision. This Warrant embodies the entire
agreement and understanding between the Company and the other parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Steven V. Abramson
----------------------------------
Steven V. Abramson, President
Date: April 25, 1996
--------------------------------
ACCEPTED:
/s/ Scott Seligsohn
- -------------------------
Holder Signature
2/28/97
- -------------------------
Date
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO ________________________________:
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise such Warrant for, and to purchase thereunder, __________
Shares (as defined in the Warrant Agreement governing the attached Warrant) and
herewith makes payment of $___________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to
_____________________, whose address is ___________________________________.
Dated: ___________________________ ________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
________________________________________
________________________________________
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________________ the right represented by the attached
Warrant to purchase _____________ Shares (as defined in the Warrant Agreement
governing the attached Warrant) to which the within Warrant relates, and
appoints __________________________ Attorney to transfer such right on the books
of ____________________________ with full power of substitution in the premises.
Dated: ________________________________ _________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
_________________________________
_________________________________
(Address)
Signed in the presence of:
__________________________________