TERMINATION, AMENDMENT AND LICENSE AGREEMENT
THIS TERMINATION, AMENDMENT AND LICENSE AGREEMENT (this "Agreement") is made as
of this 19th day of July 2000, by and among Universal Display Corporation
("UDC"), a Pennsylvania corporation, XX-XX, Inc. ("XX-XX"), a New Jersey
Corporation, Xx. Xxxxxxxx X. Ban ("Dr. Ban"), an individual residing in the
State of New Jersey, and The Trustees of Princeton University ("Princeton"), a
not for profit educational institution duly organized and existing under the
laws of the State of New Jersey.
BACKGROUND
A. On April 10, 0000, XX-XX entered into an option agreement with Princeton (the
"Option Agreement'), pursuant to which Princeton granted XX-XX options to obtain
certain license rights with respect to the patents and patent applications
described in Exhibit A attached hereto and any patents issued with respect
thereto (the "Option Patent Rights").
B. On October 9, 1997, UDC entered into a license agreement with the University
of Southern California ("USC") and Princeton (the "Princeton License
Agreement"), pursuant to which Princeton and USC granted UDC certain license
rights with respect to the patents and patent applications described therein
(the "UDC Patent Rights").
NOW THEREFORE, in consideration of the mutual covenants and promises set forth
herein and in the Princeton License Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound hereby, agree as follows:
1. Princeton and XX-XX hereby terminate the Option Agreement, effective
immediately. Princeton and XX-XX acknowledge and agree that this termination
will void any right or claim that XX-XX has or may have to obtain any license
rights from Princeton with respect to the Option Patent Rights. To the extent
either of them may have any remaining rights in or to the Option Patent Rights,
XX-XX and Dr. Ban hereby assign, transfer and convey to Princeton all of their
worldwide right, title and interest in and to the Option Patent Rights.
2. Princeton, on its own behalf and on behalf of USC as permitted under the
Interinstitutional Agreement between Princeton and USC dates as of October 9,
1997, and UDC hereby amend the Princeton License Agreement to include the Option
Patent Rights within the UDC Patent Rights. Except as specifically modified by
this Agreement, all of the provisions of the Princeton License Agreement are
hereby ratified and confirmed to be and shall remain in full force and effect.
3. In partial consideration of its termination of the Option Agreement, UDC
hereby grants to XX-XX a worldwide, royalty-free, non-exclusive,
non-transferable and non-sublicensable license under the Option Patent Rights,
to make and use (but not to sell, lease or otherwise distribute to others)
equipment for the production of products and devices through an organic vapor
phase deposition process, and to make, use, sell, offer for sale and otherwise
distribute products and devices produced using such equipment, but in each case
excluding opto-electronic products and devices (collectively, "Opto-Electronic
Products"). For purposes of this Agreement, "Opto-Electronic Products" shall
include, but not limited to, organic light emitting devices, organic solar
cells, organic thin film transistors, organic lasers and organic photodetectors,
but shall exclude fiber optic communications products and devices that are not
competitive with products or devices licensed, sold or otherwise distributed
presently or in the future by UDC, its affiliates (including, but not limited
to, Global Photonic Energy Corporation) and their respective licensees and
sublicensees. XX-XX acknowledges that its license rights to the Option Patent
Rights are derivative of UDC's license rights to the Option Patent Rights under
the Princeton License Agreement, and, therefore, that PD-LD's license rights to
the Option Patent Rights are subject to the provisions of the Princeton License
Agreement applicable thereto. UDC DISCLAIMS ANY AND ALL REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE OPTION PATENT RIGHTS,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF TITLE,
NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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4. In further consideration of its termination of the Option Agreement, UDC
hereby agrees to pay XX-XX the consideration specified in Exhibit B attached
hereto, said consideration to be paid on the terms and conditions set forth
therein.
5. This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, administrators, executors, personal
representatives, spouse, family members, affiliates, successors and permitted
assigns.
6. The validity, construction and performance of this Agreement shall be
governed by and interpreted in accordance with the laws of the State of New
Jersey, without regard to choice of law provisions.
7. A waiver by any party of a breach or violation of any provision of this
Agreement will not constitute or be construed as a waiver of any subsequent
breach or violation of that provision or as a waiver of any breach or violation
of any other provision in this Agreement.
8. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become a binding
agreement when one or more counterparts have been signed by each party and
delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Agreement to become effective as of the date first set forth
above.
UNIVERSAL DISPLAY CORPORATION XX-XX, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xx. Xxxxxxxx X. Ban
---------------------- -----------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xx. Xxxxxxxx X. Ban
Title: President & Chief Executive Officer Title: President
THE TRUSTEES OF PRINCETON UNIVERSITY /s/ Xxxxxxxx X. Ban
--------------------
Xx. Xxxxxxxx X. Ban
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Associate Xxxxxxx
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Exhibit A
Option Patent Rights
[The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
A-1
Exhibit B
Additional Consideration
UDC shall pay to XX-XX all royalties received by UDC from Aixtron AG
(less any royalties payable by UDC to Princeton and any taxes or other
governmental charges imposed on UDC) on account the sale or lease of equipment
by Aixtron AG for the production of products and devices through an organic
vapor phase deposition process, but excluding any such royalties or other
amounts attributable, in whole or in part, to sales or leasing of equipment for
the production of Opto-Electronic Products.
UDC shall issue 50,000 shares (the "Shares") of its unregistered common
stock, par value $.01 per share, to XX-XX in the manner described and subject to
the conditions and restrictions set forth in this Exhibit B.
XX-XX hereby represents and warrants to UDC, and agrees, as follows:
1. Accredited Investor. It is an "accredited investor" within the meaning of
Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as
presently in effect.
2. Investment Experience. It believes that it has received all the information
it considers necessary or appropriate to enable it to decide whether to purchase
the Shares. It has had an opportunity to become aware of UDC's business
properties and prospects and its affairs and financial condition, has had an
opportunity to ask questions and receive answers, review documents and gather
information about UDC and has acquired sufficient information about UDC to reach
an informed and knowledgeable decision to acquire the Shares. It has such
business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Shares and can
bear the economic risk of its investment. It also represents that it has not
been organized for the purpose of acquiring the Shares being purchased
hereunder.
3. Investment Intent. It is purchasing the Shares for investment for its own
account only, not as a nominee or agent, and not with a view to, or for resale
in connection with, any "distribution" of any part thereof within the meaning of
the Securities Act of 1933, as amended (the "Act"). It has no present intention
of selling, granting any participation in, or otherwise distributing the Shares,
except in compliance with the Act or pursuant to an available exemption
thereunder. By executing this Agreement, it further represents that it does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or any third person, with
respect to any of the Shares.
4. Restricted Shares. It understands that the Shares it is purchasing are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being purchased 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 Act only in limited
circumstances. In the absence of an effective registration statement covering
the Shares or an available exemption from registration under the Act, the Shares
must be held indefinitely. It is familiar with Rule 144 under the Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
Each of the parties to this Agreement further agrees as follows:
1. Restrictions on Transfer. It is hereby agreed that XX-XX shall not make any
disposition of all or any portion of the securities purchased hereunder unless
and until the transferee has agreed in writing for the benefit of UDC to be
bound by this Exhibit B, or (a) there is then in effect a registration statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement, or (b) XX-XX shall have notified
UDC of the proposed disposition and that there is an available exemption from
registration, and, if requested by UDC, shall have furnished UDC with an opinion
of counsel, reasonably satisfactory to UDC, that such disposition will not
require registration of any Shares under the Act. It is agreed that UDC will not
require opinions of counsel for transactions made pursuant to Rule 144 except in
unusual circumstances. Notwithstanding the provisions of clauses (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer to an Affiliate of the transferor. "Affiliate" means any entity
directly or indirectly controlling, controlled by or under common control with
such entity.
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2. Restrictive Legend. Each certificate representing Shares shall bear
substantially the following legends (in addition to any legends required under
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SHARES UNDER SUCH
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF
SUCH ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS
THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER
RESTRICTIONS SET FORTH IN A TERMINATION, AMENDMENT AND LICENSE
AGREEMENT DATED JULY 19, 2000 (A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY).
Notwithstanding the above, XX-XX (or any authorized subsequent holder of the
Shares) may request that UDC remove any such legend from the certificate(s)
evidencing the Shares or issue to XX-XX (or to such holder) new certificate(s)
therefor that are free of such legend if, with such request, UDC shall have
received an opinion of counsel, which opinion is reasonably satisfactory to UDC,
to the effect that any transfer by XX-XX (or said holder) of the Shares will not
violate the securities laws of the United States or any applicable state laws.
3. Piggyback Registration.
3.1 If UDC at any time proposes to register any of its equity or
debt securities in connection with an offering under the Act (other than a
registration on Form S-4 or S-8 or any successor or similar forms thereto),
whether or not for sale for its own account, it will give 30 days prior written
notice to XX-XX (or any authorized subsequent holder of Shares) of its intention
to do so, describing such securities and specifying the form and manner and the
other relevant facts involved in such proposed registration (including, without
limitation, (x) the identity of the managing underwriter, if any, and whether
such offering will be pursuant to a "best efforts" or "firm commitment"
underwriting and (y) the price (net of any underwriting commissions, discounts
and the like) at which the securities are reasonably expected to be sold). Upon
the written request of XX-XX (or any authorized subsequent holder of Shares)
delivered to UDC within 30 calendar days after the receipt of any such notice
(which request shall specify the Shares intended to be included in the
registration), UDC will use its best efforts to effect the registration under
the Act of all of the Shares that UDC has been so requested to register;
provided, however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, UDC shall
determine for any reason not to register such securities, UDC may, at its
election, give written notice of such determination to XX-XX (or any authorized
subsequent holder of Shares) and thereupon UDC shall be relieved of its
obligation to register any Shares in connection with such registration (but not
from its obligation to pay the Registration Expenses (as defined below) in
connection therewith).
(ii) If XX-XX (or any authorized subsequent holder of Shares)
requests some or all of its Shares to be included in UDC's registration, then
XX-XX (or any authorized subsequent holder of Shares) must sell that portion of
its Shares on the same terms and conditions as apply to UDC or other securities
holders whose securities are being registered.
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3.2 In the event the registration relates to an underwritten
offering, if the managing underwriter advises UDC that, in its opinion, the
number of securities proposed to be included in such registration should be
limited due to market conditions, or not to include any selling shareholders,
then UDC will include in such registration (i) first, the securities UDC
proposes to sell, and (ii) second, the number of securities requested to be
included in such registration pursuant to piggyback registration rights that, in
the opinion of such managing underwriter, can be sold, such amount to be
allocated pro rata among all such requesting holders on the basis of the
relative number of securities each such holder has requested to be included in
such registration.
3.3 In connection with any underwritten offering with respect to
which XX-XX (or any authorized subsequent holder of Shares) shall have requested
registration pursuant to this Section 3, UDC shall have the right to select the
managing underwriter, if any, with respect to the offering.
3.4 In the event UDC is obligated to file a Registration Statement
on Form S-3 or any other form pursuant to a contract or agreement, which
contract or agreement provides that no other selling shareholders shall be
included in such Registration Statement, then XX-XX shall have no rights to have
any of the Shares registered through such Registration Statement.
4. About Registration.
4.1 UDC shall pay all Registration Expenses (as defined below) in
connection with any registration, qualification or compliance hereunder, and
XX-XX shall pay all Selling Expenses (as defined below) relating to the Shares
resold by XX-XX. "Registration Expenses" shall mean all expenses, except for
Selling Expenses, incurred by UDC in complying with the registration provisions
of this Agreement, including, without limitation, all registration,
qualification and filing fees, printing expenses, transfer agent fees, escrow
fees, fees and disbursements of counsel for UDC, blue sky fees and expenses and
the expense of any audits incident to or required by any such registration.
"Selling Expenses" shall mean all selling commissions, underwriting fees and
stock transfer taxes applicable specifically to the Shares and all fees and
disbursements of counsel for XX-XX.
4.2 In the case of any registration filed by UDC pursuant to these
registration provisions, UDC will use its best efforts to: (i) prepare and file
with the SEC such amendments and supplements to the registration statement and
the prospectus used in connection with the registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of the Shares; (ii) cause such registration statement to become
effective and keep such registration statement effective until XX-XX has
completed the distribution of all of its Shares; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as XX-XX from time to time may reasonably request;
(iv) cause all such Shares registered as described herein to be listed on each
securities exchange and quoted on each quotation service on which similar
securities issued by UDC are then, or contemporaneous with the effectiveness of
the registration statement will be, listed or quoted; (v) provide a transfer
agent and registrar for all Shares registered pursuant to the registration
statement and a CUSIP number for all such Shares; (vi) comply with all
applicable rules and regulations of the SEC; and (vii) file the documents
required of UDC and otherwise use its best efforts to maintain requisite blue
sky clearance in (A) all jurisdictions in which any of the Shares are originally
sold and (B) all other states specified in writing by XX-XX, provided as to
clause (B), however, that UDC shall not be required to qualify to do business or
consent to service of process in any state in which it is not now so qualified
or has not so consented.
4.3 XX-XX shall furnish to UDC such information regarding XX-XX
and the distribution proposed by XX-XX as UDC may reasonably request in writing
and as shall be reasonably required in connection with any registration,
qualification or compliance described herein. XX-XX shall represent that such
information is true and complete.
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4.4 UDC shall submit to the SEC, within five business days after
UDC learns that no review of a particular registration statement will be made by
the staff of the SEC or that the staff of the SEC has no further comments on
such registration statement, as the case may be, a request for acceleration of
effectiveness of such registration statement to a time and date not later than
48 hours after the submission of such request. UDC shall notify XX-XX of the
effectiveness of the registration statement on the date that it is declared
effective by the SEC. UDC represents and warrants to XX-XX that (a) any
registration statement (including any amendments or supplements thereto and
prospectuses contained therein), at the time it is first filed with the SEC, at
the time it is ordered effective by the SEC and at all times during which it is
required to be effective hereunder (and each such amendment and supplement at
the time it is filed with the SEC and at all times during which it is available
for use in connection with the offer and sale of the Shares) shall not contain
any 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) each prospectus, at the time the related registration
statement is declared effective by the SEC and at all times that such prospectus
is required by this Agreement be available for use by XX-XX, shall not contain
any 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 in which they were made, not misleading.
4.5 UDC will furnish to XX-XX one copy of each letter written by
or on behalf of UDC to the SEC or the staff of the SEC and each item of
correspondence from the SEC or the staff of the SEC relating to any registration
statement pertaining to the Shares (other than any portion of any such letter or
item which contains information for which UDC has sought confidential
treatment), each of which UDC hereby determines to be confidential information
and which XX-XX hereby agrees to keep confidential.
4.6 As promptly as practicable after becoming aware of such event
or circumstance, UDC will notify XX-XX of the occurrence of any event or
circumstance of which UDC has knowledge as a result of which the prospectus
relating to any registration statement pertaining to the Shares, 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, in light of the circumstances under which they were made, not
misleading, and use reasonable efforts promptly to prepare a supplement or
amendment to such registration statement and the related prospectus to correct
such untrue statement or omission.
4.7 As promptly as practicable after becoming aware of such event,
UDC will notify XX-XX of the issuance by the SEC of any stop order or other
suspension of effectiveness of any registration statement pertaining to the
Shares at the earliest practicable time.
4.8 UDC will permit XX-XX and counsel designated by XX-XX, at
PD-LD's sole expense, to review and have a reasonable opportunity to comment on
such registration statement and all amendments and supplements thereto at least
two business days (or such shorter period as may reasonably be specified by UDC)
prior to their filing with the SEC.
4.9 To the extent not prohibited by applicable law, UDC will
indemnify and hold harmless XX-XX against any claims to which it may become
subject under the Act or otherwise, insofar as such claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the transactions contemplated by the registration
rights portion of this Agreement. Subject to those limitations on legal counsel
set forth in Section 4.11, UDC shall reimburse XX-XX promptly as such expenses
are incurred and are due and payable, for any documented reasonable legal fees
or other documented and reasonable expenses incurred by it in connection with
investigating or defending any such claim. Notwithstanding anything to the
contrary contained herein, the indemnification contained in this Section 4.9
shall not apply to (i) a claim arising out of or based upon information relating
to XX-XX furnished in writing to UDC by XX-XX expressly for use in connection
with the preparation of any registration statement or any amendment thereof or
supplement thereto; (ii) any claim arising out of or based on any statement or
omission in any prospectus, which statement or omission was corrected in any
subsequent prospectus that was delivered to XX-XX prior to the pertinent sale or
sales of Shares by XX-XX; and (iii) amounts paid in settlement of any claim if
such settlement is effected without the prior written consent of UDC.
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4.10 To the extent not prohibited by applicable law, XX-XX will
indemnify and hold harmless UDC against any claims to which it may become
subject under the Act or otherwise, insofar as such claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which Shares were
registered under the Act pursuant to this Agreement, 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. Subject to those
limitations on legal counsel set forth in Section 4.11, XX-XX shall reimburse
UDC promptly as such expenses are incurred and are due and payable, for any
documented reasonable legal fees or other documented and reasonable expenses
incurred by it in connection with investigating or defending any such claim.
Notwithstanding anything contrary contained herein, the indemnification
contained in this Section 4.10 shall only apply if and to the extent that the
claim arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to XX-XX furnished in writing to UDC by
XX-XX specifically for use in such registration statement or prospectus (and not
corrected prior to the event giving rise to such claim for indemnification), and
shall not apply to any amounts paid in settlement of any claim if such
settlement is effected without the prior consent of XX-XX.
4.11 Promptly after receipt by either party (the "Indemnified
Party") of notice of the commencement of any action (including any governmental
action) that may fall within the scope of indemnification available to such
party hereunder, such party shall deliver to other party (the "Indemnifying
Party") a notice of the commencement thereof and the Indemnifying Party shall
have the right to participate in and, to the extent the Indemnifying Party so
desires, to assume control of the defense thereof with counsel reasonably
satisfactory to the Indemnified Party; provided, however, that the Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
to be paid by the Indemnifying Party if, in the reasonable opinion of counsel
retained by the Indemnifying Party, the representation by such counsel of both
parties would be inappropriate due to actual or potential differing interests
between the parties, in which case the Indemnifying Party shall not be
responsible for more than one such separate counsel, and one local counsel in
each jurisdiction in which an action is pending, for the Indemnified Party. The
failure to deliver notice to the Indemnifying Party within a reasonable time of
the commencement of any such action shall not relieve the Indemnifying Party of
any liability to the Indemnified Party under Section 4.9 or Section 4.10, as
applicable, except to the extent that the Indemnifying Party is prejudiced in
its ability to defend such action. The indemnification required by Section 4.9
or Section 4.10, as applicable, shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
4.12 To the extent any indemnification by the Indemnifying Party
as set forth in Section 4.9 or Section 4.10, as applicable, is applicable by its
terms but is prohibited or limited by law, the Indemnifying Party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 4.9 or Section 4.10, as applicable, to the
fullest extent permitted by law. In determining the amount of contribution to
which the Indemnified Party is entitled, there shall be considered the relative
fault of each party, the parties' relative knowledge of and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission and any other
equitable considerations appropriate under the circumstances; provided, however,
that (a) no contribution shall be made under circumstances where the maker would
not have been liable for indemnification under the fault standards set forth in
Section 4.9 or Section 4.10, as applicable, and (b) no person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any other person or entity who was not
guilty of such fraudulent misrepresentation.
4.13 The indemnification and contribution provided in Sections 4.9
through 4.12 shall be in addition to any other rights and remedies available at
law or in equity.
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