Exhibit 10.7
WARRANT HOLDER: SIDNEY D. ROSENBLATT
NUMBER OF WARRANT SHARES: 100,000
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. WA98-137
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 Section 2.1 below (the "Purchase Price"), up to that number
of Shares (defined below) set forth on the signature page of the Subscription
Agreement attached hereto (the "Signature Page"), 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
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
Shares, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of 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 "Act") and obtained or disposed of in accordance with the
registration statement covering them, (b) have been transferred pursuant to Rule
144 under the 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 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 Shareholder) 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 $6.38 per 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 2, 1998.
2.3 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 Shares for which this Warrant may be exercised by the Purchase Price.
2.4 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 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
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 Warrants for its own investment account and
without a view to the subsequent public distribution of the Warrants or
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Shares otherwise than pursuant to an effective registration statement under the
Securities Act. Each Warrant and each certificate for 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, the holder thereof
shall give written notice to the Company of its intention to effect such
transfer. Each such notice 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 Registrable Common Stock
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 Warrants or of Shares shall cease when:
(a) a registration statement covering such Shares becomes
effective under the Securities Act, 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 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 parent corporation of
the Acquiror, or (b) transfer all or substantially all of its properties or
assets to any other person, under any plan or arrangement contemplating the
dissolution of the Company (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 Shares
immediately prior to such
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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 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 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 Warrants are not transferable, in whole or in part,
without compliance with the Securities Act of 1933, as amended (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
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
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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 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 Shareholder 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 Shareholder'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 Shareholder, but the Shareholder 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
Shareholder 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 Shareholder 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.
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(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
Section 2(d).
(f) Holdback Agreements. Shareholder 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 Shareholder is given the
opportunity to participate pursuant to this Agreement, the Shareholder 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 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 Shareholder is participating, the Company will indemnify, to the extent
permitted by law, Shareholder, its officers and directors, and each person who
controls such holder (within the meaning of the 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 Shareholder 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 Shareholder is participating, the Shareholder 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 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 Shareholder
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 Shareholder 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 Section 2(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 Shareholder acknowledges
that, from and after the date of this Agreement, 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.
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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 and Chief Operating Officer
Date: April 2, 1998
ACCEPTED:
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Holder Signature
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Date
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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:
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(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
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(Address)
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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:
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(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
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-------------------------------------
(Address)
Signed in the presence of:
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