AMENDMENT NUMBER 1 TO THE
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DEVELOPMENT AND LICENSE AGREEMENT
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THIS AMENDMENT NUMBER 1 TO THE DEVELOPMENT AND LICENSE AGREEMENT (this
"Amendment") is entered into and effective as of this 7th day of March, 2001
(the "Effective Date") by and between PPG INDUSTRIES, INC., a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania,
U.S.A., having its principal place of business at Xxx XXX Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000 ("PPG"), and UNIVERSAL DISPLAY CORPORATION, a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania,
U.S.A., having a principal place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx,
Xxx Xxxxxx 00000 ("UDC").
WHEREAS:
1. PPG and UDC entered into that certain Development and
License Agreement as of October 1, 2000 (the "Agreement");
2. PPG and UDC now believe it is in their respective best
interests to amend the Original Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE 1 - DEFINITIONS
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Whenever used in this Agreement, unless otherwise defined herein,
capitalized terms shall have the meanings as defined in this Article 1 of the
Agreement. As used herein, the singular includes the plural and vice versa.
ARTICLE 2 - AMENDMENT AND RESTATEMENT OF
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SECTION 1.4, ARTICLES 10 AND 11
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Section 1.4 , and Articles 10 and 11 of the Agreement are amended and
restated in their entirety to read as follows:
1.4 "Average Price" means the lesser of: the following ninety
(90) calendar day average prices (each an "Average Closing Price")
(a) Twenty Dollars and Twenty-Four Cents ($20.24), which is
the Average Closing Price per share of UDC Common Stock for the ninety
(90) calendar days ending on the business day prior to the execution of
this Agreement; or
(b) with respect to any shares of UDC Common Stock required to
be issued to PPG on any date pursuant to this Agreement (in each case,
an "Issuance Date"),
(1) if the Average Closing Price for the ninety (90)
calendar days prior to such Issuance Date (or, if later, the effective
date of the Registration Statement, as defined in Section
11.2.1, relating to any such shares, as listed in the Nasdaq National
Market listing of The Wall Street Journal, is less than [The
confidential material contained herein has been omitted and has been
separately filed with the Commission.] then, such Average Closing
Price ending on the Issuance Date or the effective date of the
Registration Statement, as applicable; or
(2) if such Average Closing Price as calculated in clause
(b)(1), above, is less than [The confidential material contained herein
has been omitted and has been separately filed with the Commission.],
then, the Average Closing Price shall be deemed to be [The confidential
material contained herein has been omitted and has been separately
filed with the Commission.];
provided further that such prices shall be appropriately adjusted in the event
of any dividend, stock split, combination of other similar recapitalization
affecting UDC Common Stock since the date of execution of this Agreement, the
Issuance Date or the effective date of the Registration Statement, as the case
may be.
ARTICLE 10 - UDC COMMON STOCK AND WARRANTS
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10.1 Initial Period Payments.
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10.1.1 Attached hereto as Schedule 10.1 is the parties'
agreed-upon written calculation of PPG Estimated Expenses for the period from
the [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] (the "Initial Period") based on
expenditures to be made by PPG during that period. On the date of execution of
this Agreement, UDC will deliver to PPG (i) such number of duly authorized,
validly issued, fully paid and non-assessable shares of UDC Common Stock as is
equal to the quotient of (a) the PPG Estimated Expenses for the Initial Period
divided by (b) the Average Price (the "Initial Period Shares"), and (ii) a [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] term promissory note for the amount of the Initial
Period PPG Estimated Expenses, secured by an interest in all Developed
Technology, which promissory note shall (a) if upon its maturity, the
Registration Statement has not been declared and maintained effective, be
automatically payable in cash for the principal amount thereof plus interest
calculated at [The confidential material contained herein has been omitted and
has been separately filed with the Commission.] per annum (based on a year of
365 days), compounded daily, and, upon receipt of such cash payment, the Initial
Period Shares shall be returned to UDC and cancelled, or (b) if upon or before
its maturity, the Registration Statement has been declared and maintained
effective, be automatically deemed to have been paid through the issuance of the
Initial Period Shares to PPG, on the date the Registration Statement has become
so effective and the promissory note shall thereupon be cancelled.
10.1.2 During the Initial Period, PPG will notify UDC of any
anticipated increase in the amounts set forth in the Initial Period PPG
Estimated Expenses. UDC will either approve or deny in writing such anticipated
increase and UDC will be deemed to accept any changes in the Statement of Work
and/or a Work Plan resulting from such approval or denial. PPG will not exceed
the amounts set forth in the Initial Period PPG Estimated Expenses without the
prior written consent of UDC.
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10.1.3 On or before [The confidential material contained
herein has been omitted and has been separately filed with the Commission.], PPG
will provide to UDC PPG's written calculation of PPG Actual Expenses for the
Initial Period. If PPG Actual Expenses are greater than PPG Estimated Expenses
for the Initial Period, then, on or before [The confidential material contained
herein has been omitted and has been separately filed with the Commission.], UDC
will (i) execute an amendment to the secured promissory note described in
Section 10.1 to increase the principal amount thereof for the difference between
PPG Actual Expenses and PPG Estimated Expenses for such Initial Period, and (ii)
deliver to PPG the number of shares of UDC Common Stock as is equal to (a) the
difference between PPG Actual Expenses and PPG Estimated Expenses for such
Initial Period divided by (b) the Average Price, which shares shall be deemed to
be added to the Initial Period Shares. If PPG Actual Expenses are less than PPG
Estimated Expenses for the Initial Period, then, on or before [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.], PPG will deliver to UDC, at its election, either (i) cash
equal to the difference between PPG Actual Expenses and PPG Estimated Expenses
for such Initial Period or (ii) the number of shares of UDC Common Stock as is
equal to (A) the difference between PPG Actual Expenses and PPG Estimated
Expenses for such Initial Period divided by (B) the Average Price.
10.1.4 On [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] UDC will deliver to
PPG a warrant substantially in the form of Exhibit D hereto (a "Warrant")
evidencing PPG's right to purchase, for [The confidential material contained
herein has been omitted and has been separately filed with the Commission.]
period and on the terms and conditions set forth in the Warrant, the number of
shares of UDC Stock as is equal to the aggregate number of shares of UDC Stock
issued to PPG for the Initial Period under Sections 10.1.1 and 10.1.3.
10.2 Subsequent Annual Payments.
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On [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] and each [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] thereafter during the Initial Term, UDC will provide to PPG a
proposed Statement of Work setting forth its anticipated requirements for the
period from [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] of the subsequent calendar year
through [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] of such calendar year (each a
"Subsequent Period"). For the purposes of this Agreement, the Initial Period and
each Subsequent Period are sometimes referred to as "Period."
10.2.1 Following receipt of each proposed Statement of Work,
on [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] and each [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] thereafter during the Initial Term, PPG will provide to UDC PPG's
written calculation of PPG Estimated Expense for the Subsequent Period covered
by the proposed Statement of Work. Within [The confidential material contained
herein has been omitted and has been separately filed with the Commission.] days
of UDC's receipt from PPG of the calculation of PPG Estimated Expenses, UDC
shall either approve or reject such calculation of PPG Estimated Expenses by
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written notice to PPG. If UDC rejects PPG's calculation of PPG Estimated
Expenses and provides its written reasons therefor, UDC and PPG, through their
President and Vice-President, Specialty Chemicals, respectively, shall work
together to establish a mutually acceptable estimate before [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] of the year prior to which such shares may be earned. Upon the
parties' agreement of a mutually acceptable Statement of Work and PPG Estimated
Expenses therefor, the Statement of Work shall constitute an agreed-upon
Statement of Work for such Subsequent Period. On the first business day
immediately following [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] of the calendar year
to which an agreed-upon Statement of Work relates, UDC will deliver to PPG such
number of duly authorized, validly issued fully paid and non-assessable shares
of UDC Common Stock as is equal to the quotient of (a) the PPG Estimated
Expenses for the period covered by an agreed-upon Statement of Work divided by
(b) the Average Price; provided further that if the Registration Statement with
respect to such shares, in the case of the shares required to be delivered to
PPG pursuant to this Section 10.2.1 or Section 10.3.1, is not effective on the
date the shares are required to be delivered, then UDC will deliver to PPG such
additional number of shares upon the effective dates of such Registration
Statements (each a "Registration Date") as may be necessary to reflect the
re-calculation of the Average Price on the Registration Dates as set forth in
clause (b) of Section 1.4. Notwithstanding the foregoing sentence, for the first
annual period beginning on [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] following the
execution of this Agreement, in addition to delivering the shares of UDC Common
Stock provided in the foregoing sentence, which shares shall be deemed to be
added to the Initial Period Shares, UDC will execute an amendment to the secured
promissory note described in Section 10.1, to increase the principal amount
thereof for [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] of such period PPG Estimated
Expenses. In the event that on such date as UDC will deliver to PPG shares of
UDC Common Stock or on the Registration Date, the average closing price per
share of UDC Common Stock for the ninety (90) calendar days prior to such date,
as listed in the NASDAQ National Market listing of The Wall Street Journal, is
less than [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] of the price set forth in clause (a)
of Section 1.4, then, in addition to UDC delivering to PPG shares of UDC Common
Stock as set forth above, UDC shall deliver to PPG cash in an amount equal to
the difference between (i) the aggregate value of UDC Common Stock deliverable
to PPG if the Average Price had been adjusted to the actual average closing
price for the ninety (90) calendar days prior to such date as listed in the
NASDAQ National Market listing of The Wall Street Journal and (ii) the aggregate
value of UDC Common Stock actually delivered to PPG pursuant to the terms of
this Agreement.
10.2.2 During each Subsequent Period, PPG will notify UDC of
any anticipated increase in the amounts set forth in the relevant Subsequent
Period Estimated Expenses. UDC will either approve or deny such anticipated
increase and UDC will be deemed to accept any changes in the Statement of Work
resulting from such approval or denial. PPG will not exceed the amounts set
forth in the applicable Annual Estimate without the prior written consent of
UDC. PPG shall deliver to UDC, within thirty (30) days following the end of each
calendar quarter, a summary of actual expenses incurred for such quarter.
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10.3 Reconciliation, Warrant.
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10.3.1 On or before [The confidential material contained
herein has been omitted and has been separately filed with the Commission.] and
each [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] thereafter during the Initial Term, PPG
will provide to UDC PPG's written calculation of PPG Actual Expenses for the
immediately preceding Period.
(a) If PPG Actual Expenses are greater than PPG
Estimated Expenses for such Period, then, on or before [The
confidential material contained herein has been omitted and
has been separately filed with the Commission.], UDC will
deliver to PPG the number of shares of UDC Common Stock as is
equal to (i) the difference between, for such Period, PPG
Actual Expenses and PPG Estimated Expenses divided by (ii) the
Average Price; provided that if the Registration Statement
with respect to such shares required to be delivered to PPG
pursuant to Section 10.2.1 or this Section 10.3.1, is not
effective on the date the shares are required to be delivered,
then UDC will deliver to PPG such additional number of shares
upon the Registration Dates as may be necessary to reflect the
re-calculation of the Average Price on the Registration Dates
as set forth in clause (b) of Section 1.4.
(b) If PPG Actual Expenses are less than PPG
Estimated Expenses, then on or before [The confidential
material contained herein has been omitted and has been
separately filed with the Commission.], PPG will deliver to
UDC, at its election (i) cash equal to the difference between,
for such Period, PPG Estimated Expenses and PPG Actual
Expenses or (ii) such number of shares of UDC Common Stock as
is equal to (A) the difference between PPG Estimated Expenses
and PPG Actual Expenses for such period divided by (B) the
Average Price.
10.3.2 On [The confidential material contained herein has been
omitted and has been separately filed with the Commission.], and on each [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] thereafter during the Initial Term, UDC will also
deliver to PPG a Warrant, in the form of Exhibit D, evidencing PPG's right to
purchase, on the terms and conditions set forth in the warrant, such number of
shares of UDC Stock as is equal to the aggregate number of shares of UDC Stock
issued to PPG for the immediately preceding Period under Sections 10.2.1 and
10.3.1(a); provided that, if (i) the Registration Statement with respect to any
shares issued to PPG for the immediately preceding period is not effective upon
such [The confidential material contained herein has been omitted and has been
separately filed with the Commission.], and (ii) upon the effective date of the
Registration Statement UDC is required to deliver additional shares to PPG
pursuant to the terms of Section 10.3.1(a), then UDC will deliver an additional
Warrant, in the form of Exhibit D, evidencing PPG's right to purchase such
additional number of shares of UDC Stock as is equal to the number of additional
shares required to be delivered to PPG pursuant to the terms of Section
10.3.1(a).
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10.4 Representations of PPG.
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10.4.1 Purchase Entirely for Own Account. The Securities to be
received by PPG pursuant to this Agreement will be acquired for investment for
PPG's own account, not as a nominee or agent, and not with a view to the resale
or distribution of any part thereof that would violate any applicable federal
securities laws, and PPG has no immediate intention of selling, granting any
participation in, or otherwise distributing the same except to the extent the
same are included in the Registration Statement (as hereinafter defined). By
executing this Agreement, PPG further represents that PPG does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Securities. PPG represents that it has full power and
authority to enter into this Agreement.
10.4.2 Accredited Status. PPG is an "accredited investor"
within the meaning of Commission Rule 501 of Regulation D, as presently in
effect.
10.4.3 Restricted Securities. PPG understands that the
Securities it is receiving are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from UDC in a
transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the 1933 Act, only in certain limited circumstances. In this connection, PPG
represents that it is familiar with Commission Rule 144, as presently in effect,
and understands the resale limitations imposed thereby and by the 1933 Act.
10.4.4 Legends. It is understood that the certificates
evidencing the Securities of UDC which may be issued pursuant to this Agreement
may bear one or all of the following legends:
"These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold,
offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the
securities under such Act or an opinion of counsel
satisfactory to the Corporation that such registration is not
required or unless sold pursuant to Rule 144 of such Act."
and any legend required by any applicable state securities laws. To the extent
that such legends are no longer applicable, UDC shall cause its transfer agent
to remove the legends upon request by PPG.
10.5 Certain Covenants of UDC.
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10.5.1 Reservation of Shares. UDC shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of
shares of UDC Common Stock to provide for the Warrant Shares. UDC shall not
reduce the number of shares of UDC Common Stock reserved for issuance of the
Warrant Shares without the consent of PPG. If at any time the number of shares
of Common Stock authorized and reserved for issuance is below the number of
Warrant Shares, UDC will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without
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limitation, calling a special meeting of shareholders to authorize additional
shares to meet UDC's obligations under this Section 10.5.1, in the case of an
insufficient number of authorized shares, and using its commercially reasonable
efforts to obtain shareholder approval of an increase in such authorized number
of shares.
10.5.2 Listing. UDC shall promptly secure the listing of the
UDC Common Shares upon The Nasdaq SmallCap Market, The Nasdaq National Market or
such other national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance). So long as PPG owns any of the Securities, UDC shall maintain, so
long as any other shares of UDC Common Stock shall be so listed, such listing of
all Common Shares, and shall comply in all respects with UDC's reporting, filing
and other obligations under the bylaws or rules of the National Association of
Securities Dealers and such exchanges, as applicable.
10.5.3 Reports Under 1934 Act. With a view to making available
to PPG the benefits of Rule 144 and any successor or other rule or regulation of
the Commission that may at any time permit PPG to sell the shares of UDC Common
Stock issuable pursuant to this Agreement to the public without registration,
UDC agrees to: (a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times; (b) file with the
Commission in a timely manner all reports and other documents required of UDC
under the 1933 Act and the 1934 Act; and (c) furnish to PPG, so long as PPG owns
any Shares, forthwith upon request (i) a written statement by UDC that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the 1934
Act, (ii) a copy of the most recent annual or quarterly report of UDC and such
other reports and documents so filed by UDC, and (iii) such other information as
may be reasonably requested in availing PPG of any rule or regulation of the
Commission which permits the selling of any Shares without registration.
10.6 Certain Sales.
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10.6.1 Short Sales. During the term of this Agreement, PPG and
its affiliates agree not to engage in, or encourage any third party from
engaging in, "short sales" (as such term is defined in Rule 3b-3 of the 0000
Xxx) of UDC's securities.
10.6.2 Prohibited Sales During Certain Periods. During the
ninety (90) calendar day period prior to and including [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] of each calendar year during the Initial Term (each a "PPG
Restricted Period"), PPG shall not offer, sell or contract to sell shares of UDC
Common Stock received hereunder or any securities convertible into or
exchangeable or exercisable for any share of UDC Common Stock, to the extent
that such sale would exceed, on any one (1) day during such PPG Restricted
Period, [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] of the average daily trading volume
of shares of UDC Common Stock for the ninety (90) calendar day period
immediately preceding the PPG Restricted Period (the "PPG Volume Limit");
provided however that the PPG Volume Limit shall not apply to any private
placement of shares of UDC Common Stock by PPG. During each PPG Restricted
Period, PPG shall not enter into any swap or hedge arrangement that transfers,
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in whole or in part, any of the economic consequences of ownership of shares of
UDC Common Stock in excess of the PPG Volume Limit, or publicly disclose the
intention to make any offer, sale or contract to sell or to enter into any swap
or hedge in excess of the PPG Volume Limit.
10.7 PPG Representation on UDC Board. If, at any time during the term
of this Agreement, PPG's ownership of UDC Common Stock equals or exceeds [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] of the total number of issued and outstanding shares
of UDC Common Stock, then PPG shall be entitled to designate one (1) individual
for election to UDC's Board of Directors and UDC shall use all commercially
reasonable efforts to cause such designee to be elected to UDC's Board of
Directors within thirty (30) days of PPG's designation, including but not
limited to recommending such designee for election, causing any shares for which
UDC has or can control voting rights with respect thereto to be voted in favor
of such designee, causing broker votes to be cast in favor of such designee and
amending its articles of incorporation and/or by-laws and/or adopting any
resolutions for increasing the number of directors on the UDC Board, if
necessary to accommodate the designee. If, at any time during the term of this
Agreement, PPG's ownership of UDC Common Stock equals or exceeds [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] of the total number of issued and outstanding shared
of UDC Common Stock, then PPG shall be entitled to designate one quarter of the
total members of UDC's Board of Directors, with any fraction rounded up to the
nearest whole number and UDC shall use all commercially reasonable efforts to
cause such designees to be elected to UDC's Board of Directors within thirty
(30) days of PPG's designation, all as set forth in the preceding sentence. UDC
will support PPG's acquisition of up to twenty-five percent (25%) of UDC's
Common Stock, either through open market purchases or UDC treasury shares, at
UDC's discretion.
10.8 [The confidential material contained herein has been omitted and
has been separately filed with the Commission.]
10.8.2 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
10.8.3 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
10.8.4 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
10.9 Acquisition Transactions. If all or substantially all of the
assets of UDC, or any material portion of the OLED assets of UDC are acquired by
a third party during the Initial Term or any extension thereof, or if the
shareholders of UDC approve a merger, consolidation, share exchange, division or
other disposition as a result of which the shareholders of UDC immediately prior
to the transaction will not own a majority of the voting power of the surviving
or resulting corporation or any corporation which acquires the stock of UDC, or
if UDC assigns or transfers this Agreement to a third party, then either PPG or
UDC shall, within [The confidential material contained herein has been omitted
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and has been separately filed with the Commission.] days following such event,
have the right to terminate this Agreement, in which case UDC will distribute to
PPG the Acquisition Amount of UDC Common Stock and a warrant evidencing PPG's
right to purchase the Acquisition Amount of UDC Common Stock on the terms and
conditions set forth in the Warrant attached hereto as Exhibit E. The
"Acquisition Amount" shall be calculated by multiplying the most recent PPG
Estimated Expenses (as calculated pursuant to Section 10.2.2), or the PPG
Estimated Expenses for the Initial Period (as calculated pursuant to Section
10.2.1) if it is the most recent estimate provided pursuant to this Agreement,
by the number of years (and any fraction thereof) remaining in the Initial Term.
ARTICLE 11 - REGISTRATION RIGHTS
11.1 Definitions. For the purposes of this Article 11:
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"Group A Registrable Securities" means the parties good faith
estimate of the number of shares of UDC Common Stock issuable to PPG
(including shares issuable upon exercise of the Warrants) between the
Effective Date and December 31, 2002.
"Group B Registrable Securities" means the parties good faith
estimate of the number of shares of UDC Common Stock issuable to PPG
(including shares issuable upon exercise of the Warrants) between
January 1, 2003 and December 31, 2004.
"Group C Registrable Securities" means the parties good faith
estimate of the number of shares of UDC Common Stock issuable to PPG
(including shares issuable upon exercise of the Warrants) between
January 1, 2005 and December 31, 2005.
"Registrable Securities" means, collectively, Group A
Registrable Securities, Group B Registrable Securities and Group C
Registrable Securities.
11.2 Registration Rights With Respect to the Securities.
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11.2.1 UDC agrees that it will prepare and file with the
Commission one or more registration statements (on Form S-3, or other
appropriate form of registration statement) under the 1933 Act (each a
"Registration Statement"), together with such state law qualifications and other
compliances with applicable law, at the sole expense of UDC, in respect of PPG,
so as to permit a public offering and resale of the Registrable Securities under
the 1933 Act by PPG. UDC shall use its commercially reasonable efforts to cause
each Registration Statement to become effective as promptly as possible after
the filing thereof and within five (5) days after Commission clearance. UDC will
within such five (5) days request acceleration of effectiveness.
11.2.2 The parties acknowledge that UDC has filed with the
Commission a Registration Statement with respect to Group A Registrable
Securities. UDC shall file with the Commission a Registration Statement with
respect to Group B Registrable Securities on or before October 1, 2002. UDC
shall file with the Commission a Registration Statement with respect to Group C
Registrable Securities on or before October 1, 2004.
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11.2.3 UDC will maintain each Registration Statement or any
post-effective amendment filed under this Article 11 hereof effective under the
1933 Act until the earlier of (i) the date that none of the Registrable
Securities covered by such Registration Statement are or may become issued and
outstanding, (ii) the date that all of the Registrable Securities covered by
such Registration Statement have been sold pursuant to such Registration
Statement, (iii) the date the holders thereof receive an opinion of counsel to
UDC, which counsel shall be reasonably acceptable to PPG, that the Registrable
Securities covered by such Registration Statement may be sold under the
provisions of Rule 144 without limitation as to volume or a requirement of
"brokers transactions," (iv) all Registrable Securities covered by such
Registration Statement have been otherwise transferred to persons who may trade
such shares without restriction under the 1933 Act, and UDC has delivered a new
certificate or other evidence of ownership for such Registrable Securities not
bearing a restrictive legend, or (v) all Registrable Securities covered by such
Registration Statement may be sold without any time, volume or manner
limitations pursuant to Rule 144(k) or any similar provision then in effect
under the 1933 Act in the opinion of counsel to UDC, provided such counsel is
reasonably acceptable to PPG. If, under Commission rules or policies of the
Commission staff, any of the Registrable Securities for any reason cannot be
included in a Registration Statement initially filed by UDC and must be included
in a separate registration statement, UDC shall file all such additional
registration statements as may be needed to permit PPG to offer and resell to
the public all of the Registrable Securities, and the term "Registration
Statement" shall for purposes of this Agreement be deemed to include all such
additional registration statements.
11.2.4 All fees, disbursements and out-of-pocket expenses and
costs incurred by UDC in connection with the preparation and filing of each
Registration Statement under this Article 11 and in complying with applicable
federal and state securities laws (including, without limitation, all attorneys'
and accountants' fees of UDC), shall be borne by UDC. PPG shall bear the cost of
underwriting and/or brokerage discounts, fees and commissions, if any,
applicable to its sale of the Securities being registered and the fees and
expenses of its counsel. PPG and its counsel shall have a reasonable period, of
not less than five (5) business days for each Registration Statement filed
hereunder and for each amendment or subsequently filed Registration Statement,
to review the proposed Registration Statement or any amendment thereto, prior to
filing with the Commission, and UDC shall provide PPG with copies of any comment
letters received from the Commission and each written response thereto with
respect thereto within two (2) business days of receipt or sending thereof. UDC
shall make reasonably available for inspection by PPG, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by PPG or any such underwriter
all relevant financial and other records, pertinent corporate documents and
properties of UDC and its subsidiaries, and cause UDC's officers, directors and
employees to supply all information reasonably requested by such PPG or any such
underwriter, attorney, accountant or agent in connection with each Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by UDC, in good faith, as confidential, proprietary or
containing any material non-public information shall be kept confidential by PPG
and any such underwriter, attorney, accountant or agent (pursuant to an
appropriate confidentiality agreement in the case of any such PPG or agent),
unless such disclosure is made pursuant to judicial process in a court
proceeding (after first giving UDC an opportunity promptly to seek a protective
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order or otherwise limit the scope of the information sought to be disclosed) or
is required by law, or such records, information or documents become available
to the public generally or through a third party not in violation of an
accompanying obligation of confidentiality; and provided further that, if the
foregoing inspection and information gathering would otherwise disrupt UDC's
conduct of its business, such inspection and information gathering shall, to the
maximum extent possible, be coordinated on behalf of PPG and the other parties
entitled thereto by one firm of counsel designated by and on behalf of the
majority in interest of PPG and other parties. To the extent necessary, UDC
shall qualify any of the Registrable Securities for sale in such states as such
PPG reasonably designates except that UDC shall not be required to qualify in
any state which will require an escrow relating to UDC and/or the sellers of
Registrable Securities, or which will require UDC to qualify to do business in
such state or require UDC to file therein any general consent to service of
process. UDC at its expense will supply PPG with copies of each Registration
Statement and the prospectus included therein and other related documents in
such quantities as may be reasonably requested by PPG.
11.2.5 If UDC delivers to PPG a certificate signed by UDC's
President and Chief Operating Officer and Chief Financial Officer to the effect
that (i) UDC is aware of nonpublic information concerning UDC that has not been
disclosed in a Registration Statement either by incorporation of 1934 Act
filings by UDC or by information included directly in such Registration
Statement, and (ii) in the good faith judgment of UDC, the disclosure of such
information in such Registration Statement may have a material adverse effect on
the business, operations, properties, assets, prospects or condition (financial
or otherwise) of UDC, then, PPG agrees not to effect any sales of Registrable
Securities pursuant to such Registration Statement until such time as PPG (a) is
advised in writing by UDC that the use of the applicable prospectus contained in
such Registration Statement may be resumed, (b) has received copies of a
supplemental or amended prospectus, if applicable, and (c) has received copies
of any additional or supplemental filings, if any, which are incorporated or
deemed to be incorporated by reference in such prospectus. UDC agrees to, at the
request of PPG, prepare any supplement or amendment to the applicable prospectus
or to make any additional or supplemental filings so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain any untrue statement of material fact or omit to state any fact
necessary to make the statements therein not misleading.
11.3 PPG's Obligations.
-----------------
11.3.1 Cooperation with Company. PPG will cooperate with UDC
in all respects in connection with this Article 11, including timely supplying
all information reasonably requested by UDC (which shall include all information
regarding PPG and proposed manner of sale of the Registrable Securities required
to be disclosed in a Registration Statement) and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Registrable Securities.
11.3.2 "Market Stand-Off" Agreement. Unless otherwise
consented to in writing by the managing underwriter, PPG shall not effect any
public sale or distribution of equity securities of UDC or any securities
convertible into or exchangeable or exercisable for such securities during the
seven days prior to and the 90 days after any underwritten registration (except
11
as part of such underwritten registration) if PPG participates in such
registration. UDC may impose stop-transfer instructions with respect to the
shares of Common Stock subject to the foregoing restriction until the end of any
such period.
11.4 Registration Procedures. In addition to the requirements of
Section 11.2, UDC shall (except as otherwise expressly provided in this
Agreement), as expeditiously as possible, subject to PPG's compliance with
Section 11.3.1:
(a) prepare and file with the Commission such
amendments and supplements to each Registration Statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to
comply with the provisions of the 1933 Act with respect to the
sale or other disposition of all securities covered by such
Registration Statement (including prospectus supplements with
respect to the sales of securities from time to time in
connection with a registration statement pursuant to Rule 415
promulgated under the 0000 Xxx) and (ii) take all lawful
action such that each of (A) each Registration Statement and
any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, not misleading and
(B) the Prospectus forming part of each Registration
Statement, and any amendment or supplement thereto, does not
at any time during the period set forth in Section 11.2.3
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) prior to the filing with the Commission of any
Registration Statement (including any amendments thereto) and
the distribution or delivery of any prospectus (including any
supplements thereto), (i) provide draft copies thereof to PPG
and reflect in such documents all such comments as PPG (and
its counsel) reasonably may propose and (ii) furnish to PPG
such numbers of copies of a prospectus including a preliminary
prospectus or any amendment or supplement to any prospectus,
as applicable, in conformity with the requirements of the 1933
Act, and such other documents, as PPG may reasonably request
in order to facilitate the public sale or other disposition of
the securities owned by PPG.
(c) to the extent necessary, register and qualify the
Securities covered by a Registration Statement under
applicable state securities laws, and do any and all other
acts and things which may be reasonably necessary or advisable
to enable PPG to consummate the public sale or other
disposition in such jurisdictions within the United States of
America of the securities owned by such PPG, except that UDC
shall not be required to qualify in any state which will
require an escrow relating to UDC and/or the sellers of
Registrable Securities, or which will require UDC to qualify
to do business in such state or require UDC to file therein
any general consent to service of process.
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(d) subject to the provisions of Section 11.2.5
hereof, notify PPG at any time when a prospectus relating
thereto covered by a Registration Statement is required to be
delivered under the 1933 Act, of the happening of any event of
which it has knowledge as a result of which the prospectus
included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing, and UDC shall
prepare and file a curative amendment or 1934 Act filing
deemed incorporated in such Registration Statement under
applicable provisions of this Article 11 as quickly as
commercially possible.
(e) as promptly as practicable after becoming aware
of such event, notify PPG who holds Securities being sold (or,
in the event of an underwritten offering, the managing
underwriters) of the issuance by the Commission or any state
authority of any stop order or other suspension of the
effectiveness of a Registration Statement at the earliest
possible time and take all lawful action to effect the
withdrawal, recission or removal of such stop order or other
suspension.
(f) cooperate with PPG to facilitate the timely
preparation and delivery of certificates for the Securities to
be offered pursuant to a Registration Statement and enable
such certificates for the Securities to be in such
denominations or amounts, as the case may be, as PPG
reasonably may request and registered in such names as PPG may
request; and, within three (3) business days after a
Registration Statement which includes Securities is declared
effective by the Commission, deliver and cause legal counsel
selected by UDC to deliver to the transfer agent for the
Securities (with copies to PPG whose Securities are included
in such Registration Statement) an appropriate instruction
and, to the extent necessary, an opinion of such counsel.
(g) take all such other lawful actions reasonably
necessary to expedite and facilitate the disposition by PPG of
the Securities in accordance with the intended methods
therefor provided in the prospectus which are customary for
issuers to perform under the circumstances.
(h) in the event of an underwritten offering elected
by PPG, promptly include or incorporate in a Prospectus
supplement or post-effective amendment to a Registration
Statement such information as the managers reasonably agree
should be included therein and to which UDC does not
reasonably object and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after it is notified of the matters to be included
or incorporated in such Prospectus supplement or
post-effective amendment; and enter into and perform its
obligations as UDC under an underwriting agreement, in usual
and customary form, with the managing underwriter of such
offering.
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(i) cause all Securities registered pursuant
hereunder to be listed timely on each securities exchange or
quotation system on which similar securities issued by UDC are
then listed.
(j) use its best efforts to furnish, at the request
of PPG, on the date that such Securities are delivered to the
underwriters for sale in connection with a registration
pursuant to this Article 11, if such securities are being sold
through underwriters (i) an opinion, dated such date, of the
counsel representing UDC for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to PPG and (ii) a letter dated
such date, from the independent certified public accountants
of UDC, in form and substance as is customarily given by
independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters,
if any, and to PPG.
(k) maintain a transfer agent and CUSIP number for
its Common Stock.
11.5 Rank. UDC shall not be precluded from granting registration rights
to other persons, provided that no such grant shall interfere with or purport to
delay or subordinate any of PPG's rights under this Agreement.
11.6 Indemnification.
---------------
11.6.1 UDC agrees to indemnify, defend and hold harmless PPG,
and any underwriter (as defined in the 0000 Xxx) for PPG, and each person, if
any, who controls PPG or underwriter within the meaning of the 1933 Act or 1934
Act ("Selling Person") against any losses, claims, damages or liabilities, joint
or several (which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all reasonable
attorneys' fees), to which the Selling Person may become subject, under the 1933
Act, the 1934 Act, any state securities law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in a Registration Statement, or any related preliminary
prospectus, final prospectus or amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or are based upon any violation or
alleged violation by UDC of the 1933 Act, 1934 Act, or any state securities law,
or any rules or regulations of governmental agencies promulgated thereunder;
provided, however, that UDC will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to UDC by the Selling Person, specifically for use
in the preparation thereof. This Section shall not inure to the benefit of any
Selling Person with respect to any person asserting such loss, claim, damage or
liability who purchased the Securities which are the subject thereof if, and to
the extent such loss or other claim arises from the fact or alleged fact that,
14
the Selling Person failed to send or give (in violation of the 1933 Act or the
rules and regulations promulgated thereunder) a copy of the prospectus contained
in such Registration Statement to such person at or prior to time required under
the 1933 Act, where the Selling Person was obligated to do so under the 1933 Act
or the rules and regulations promulgated thereunder. This indemnity agreement
will be in addition to any liability which UDC may otherwise have.
11.6.2 Each Selling Person, severally and not jointly, agrees
that it will indemnify and hold harmless UDC, and each officer, director of UDC
or person, if any, who controls UDC within the meaning of the 1933 Act, against
any losses, claims, damages or liabilities (which shall, for all purposes of
this Agreement, include, but not be limited to, all reasonable costs of defense
and investigation and all reasonable attorneys' fees) to which UDC or any such
officer, director or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in a Registration Statement, or
any related preliminary prospectus, final prospectus or amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to UDC by such Selling Person,
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Selling Person may otherwise have.
Notwithstanding anything to the contrary herein, the Selling Person shall not be
liable under this Section for any amount in excess of the net proceeds to such
Selling Person as a result of the sale of Securities pursuant to such
Registration Statement.
11.6.3 Promptly after receipt by an indemnified party under
this Article 11 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Article 11, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party except to the extent of actual prejudice demonstrated by the indemnifying
party. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, assume the defense
thereof, subject to the provisions herein stated and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Article 11 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
15
defense of the action with counsel reasonably satisfactory to the indemnified
party; provided that if the indemnified party is the Selling Person, the fees
and expenses of such counsel shall be at the expense of the indemnifying party
if (i) the employment of such counsel has been specifically authorized in
writing by the indemnifying party, or (ii) the named parties to any such action
(including any impleaded parties) include both the Selling Person and the
indemnifying party and the Selling Person shall have been advised by such
counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses which
may be available to the Selling Person (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of the
Selling Person, it being understood, however, that the indemnifying party shall,
in connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable only for the reasonable fees and
expenses of one separate firm of attorneys for the Selling Person, which firm
shall be designated in writing by the Selling Person). No settlement of any
action against an indemnified party shall be made without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld. All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section and all reasonable attorneys' fees and expenses) shall be paid to the
indemnified party, as incurred, within ten (10) business days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder; provided, that the indemnifying party may require such indemnified
party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such indemnified party is not entitled to
indemnification hereunder).
11.6.4 In order to provide for just and equitable contribution
under the 1933 Act in any case in which (i) the indemnified party makes a claim
for indemnification pursuant to Section 11.6 hereof but is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that the express provisions of Section 11.6 hereof provide for
indemnification in such case, or (ii) contribution under the 1933 Act may be
required on the part of any indemnified party, then UDC and the applicable
Selling Person shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by UDC on the one hand or the applicable Selling
Person on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
UDC and the Selling Person agree that it would not be just and equitable if
contribution pursuant to this Section were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable
considerations referred to in this Article 11. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Article 11 shall be deemed
16
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 11.6.4, in no case shall any
Selling Person be liable or responsible for any amount in excess of the net
proceeds received by such Selling Person from the offering of Registrable
Securities and UDC shall be liable and responsible for any amount in excess of
such proceeds. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
11.6.5 Notwithstanding any other provision of this Article 11,
in no event shall (i) PPG be required to undertake liability to any person under
this Article 11 for any amounts in excess of the dollar amount of the net
proceeds to be received by such PPG from the sale of such PPG's Securities
(after deducting any fees, discounts and commissions applicable thereto)
pursuant to any Registration Statement under which such Securities are to be
registered under the 1933 Act and (ii) any underwriter be required to undertake
liability to any person hereunder for any amounts in excess of the aggregate
discount, commission or other compensation payable to such underwriter with
respect to the Securities underwritten by it and distributed pursuant to such
Registration Statement.
11.7 Liquidated Damages. The parties hereto agree that PPG will suffer
damages if UDC fails to fulfill its obligations under Article 11, and that it
would not be feasible to ascertain the extent of such damages. Accordingly:
11.7.1 if a Registration Statement is not filed within [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] days of the date on which a Registration Statement
shall be filed pursuant to Section 11.2.2, UDC will be obligated to pay
liquidated damages to PPG [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] for each month or
portion thereof during which such Registration Statement has not been filed
after such [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] day period;
11.7.2 if the Registration Statement with respect to the Group
A Registrable Securities has not been declared effective within the earlier of
(a) [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] days of the date of its filing or (b)
[The confidential material contained herein has been omitted and has been
separately filed with the Commission.] days of the execution of this
Agreement, then UDC will be obligated to pay liquidated damages to PPG [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] for each month or portion thereof during which such
Registration Statement has not been declared effective after such [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] day period;
11.7.3 if a Registration Statement with respect to the Group B
Registrable Securities or Group C Registration Securities has not been declared
effective within [The confidential material contained herein has been omitted
and has been separately filed with the Commission.] days of the date of its
filing, then UDC will be obligated to pay liquidated damages to PPG [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] for each month or portion thereof during which such
Registration Statement has not been declared effective after such [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] day period; and
11.7.4 if the Registration Statement with respect to the Group
A Registrable Securities has not been declared effective within the earlier of
(a) [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] days of the date of its filing or (ii)
[The confidential material contained herein has been omitted and has been
separately filed with the Commission.] days of the execution of this Agreement,
provided such delay is not
17
due solely to the fault of PPG to comply with its obligations under Section
11.3, then [The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
Notwithstanding anything to the contrary in this Section 11.7, UDC
shall not be required to pay liquidated damages to PPG if PPG failed to comply
with its obligations under Section 11.3.
ARTICLE 3 - MISCELLANEOUS
-------------------------
3.1 Except as provided above, the Agreement shall continue in full
force and effect without modification.
3.2 This Amendment may be executed in two or more counterparts all of
which shall constitute one and the same instrument. Each such copy shall be
deemed an original, and it shall not be necessary in making proof of this
Amendment to produce or account for more than one such counterpart. This
Amendment shall be deemed executed by the parties when any one or more
counterparts hereof, individually or taken together, bears the signatures of
each of the parties hereto. This Amendment , once executed by a party, may be
delivered to the other party by facsimile transmission of a copy thereof that
bears the signature of the party so delivering it.
[Signature Page Follows]
18
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
UNIVERSAL DISPLAY CORPORATION PPG INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxx
----------------------- --------------------------
NAME: Xxxxxx X. Xxxxxxxx NAME: Xxxxxx X. Xxx
-------------------- --------------------------
TITLE: President TITLE: Director, Commercial Development
------------------- --------------------------------
DATE: March 7, 2001 DATE: March 7, 2001
-------------------- --------------------------
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