2,012,500 Shares
UNIVERSAL DISPLAY CORPORATION
Shares of Common Stock
($.01 par value)
PLACEMENT AGENT AGREEMENT
▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
UNIVERSAL DISPLAY CORPORATION, a Pennsylvania corporation (the
"Company"), proposes to sell to the Purchasers, pursuant to the terms of this
Placement Agent Agreement (this "Agreement") and Subscription Agreements in the
form of Exhibit A attached hereto (the "Subscription Agreements") entered into
with the Purchasers identified therein (each a "Purchaser" and, collectively,
the "Purchasers"), an aggregate of 2,012,500 shares of Common Stock, $.01 par
value (the "Common Stock"), of the Company. The aggregate of 2,012,500 shares so
proposed to be sold is hereinafter referred to as the "Stock." The Company
hereby confirms its agreement with ▇▇ ▇▇▇▇▇ Securities Corporation ("▇▇ ▇▇▇▇▇")
as follows (certain terms used herein are defined in Section 13 hereof):
1. AGREEMENT TO ACT AS PLACEMENT AGENT; PLACEMENT OF SECURITIES. On the basis of
the representations, warranties and agreements of the Company herein contained,
and subject to all the terms and conditions of this Agreement:
(a) The Company hereby authorizes ▇▇ ▇▇▇▇▇ to act as its exclusive
agent (in such capacity, the "Placement Agent") to solicit offers for
the purchase of all or part of the Stock from the Company in connection
with the proposed offering of the Stock (the "Offering"). Prior to the
earlier of (i) the date on which this Agreement is terminated and (ii)
the date on which the Offering is consummated, the Company shall not,
without the prior consent of the Placement Agent, solicit or accept
offers to purchase Stock (other than pursuant to the exercise of
options or warrants to purchase shares of Common Stock that are
outstanding at the date hereof) otherwise than through the Placement
Agent.
(b) The Placement Agent agrees, as agent of the Company, to use its
best commercially practicable efforts to solicit offers to purchase the
Stock from the Company on the terms and subject to the conditions set
forth in the Base Prospectus (as defined below) and the Prospectus
Supplement (as defined below). The Placement Agent shall use its best
commercially practicable efforts to assist the Company in obtaining
performance by each Purchaser whose offer to purchase Stock has been
solicited by the Placement Agent and accepted by the Company (each a
"Purchaser" and, collectively, the "Purchasers"), but the Placement
Agent shall not, except as otherwise provided in this Agreement, be
obligated to disclose the identity of any potential purchaser or have
any liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement
Agent be obligated to purchase any Stock for its own account and, in
soliciting purchases of Stock, the Placement Agent shall act solely as
the Company's agent and not as principal. Notwithstanding the foregoing
and except as otherwise provided in Section 1(c), it is understood and
agreed that the Placement Agent (or its affiliates) may, solely at its
discretion and without any obligation to do so, purchase Stock as
principal so long as the fact that the Placement Agent (or its
affiliate) is a Purchaser is disclosed to the Company and the Company
approves such purchase of Stock in accordance with Section 1(c).
(c) Subject to the provisions of this Section 1, offers for the
purchase of Stock may be solicited by the Placement Agent as agent for
the Company at such times and in such amounts as the Placement Agent
deems advisable. The Placement Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Stock received
by it as agent of the Company. The Company shall have the sole right to
accept offers to purchase the Stock and may reject any such offer, in
whole or in part. The Placement Agent shall have the right, in its
discretion reasonably exercised, without notice to the Company, to
reject any offer to purchase Stock received by it, in whole or in part,
and any such rejection shall not be deemed a breach of its agreement
contained herein.
(d) The purchases of the Stock by the Purchasers shall be evidenced by
the execution of the Subscription Agreements.
(e) As compensation for services rendered, on the Closing Date (as
defined below) the Company shall pay to the Placement Agent by wire
transfer of immediately available funds to an account or accounts
designated by the Placement Agent, an amount equal to six percent (6%)
of the gross proceeds received by the Company from the sale of the
Stock. In addition, on the Closing Date (as defined below) the Company
will issue to ▇▇ ▇▇▇▇▇ a warrant (the "Placement Agent's Warrant"), in
the form of Exhibit B attached hereto, to purchase up to the number of
shares of Common Stock equal to two and one-half percent (2.5%) of the
aggregate number of shares of Stock sold in the Offering. The Placement
Agent's Warrant will not be exercisable for one year following the date
on which it is issued, will have a term of five years and will be
exercisable at a price per share equal to the price to the public of
the Stock in the Offering. The shares of Common Stock issuable to ▇▇
▇▇▇▇▇ upon exercise of the Placement Agent's Warrant are referred to
herein as the "Warrant Stock."
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(f) No Stock which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold
by the Company, until such Stock shall have been delivered to the
Purchaser thereof against payment by such Purchaser. If the Company
shall default in its obligations to deliver Stock to a Purchaser whose
offer it has accepted, and from which it has received payment for such
Stock, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim or damage arising from or as a result
of such default by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARY. The Company
and its subsidiary represent and warrant to, and agree with, the Placement Agent
and the Purchasers that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (Registration File No. 333-88950),
which became effective as of July 10, 2002, for the registration under
the Securities Act of the Stock for the transactions described therein,
including the Offering. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies in all other material respects with said Rule. The Company
will file with the Commission pursuant to Rule 424(b) under the
Securities Act, a supplement to the form of prospectus included in such
registration statement relating to the Offering and has advised the
Placement Agent of all further information (financial and other) with
respect to the Company to be set forth in such supplement. Such
registration statement, including the exhibits thereto, as amended at
the date of this Agreement, is hereinafter called the "Registration
Statement;" such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the "Base Prospectus;" and
the supplemented form of prospectus, in the form in which it will be
filed with the Commission pursuant to Rule 424(b) under the Securities
Act and the rules and regulations of the Commission promulgated
thereunder (the "Rules and Regulations") (including the Base Prospectus
as so supplemented) is hereinafter called the "Prospectus Supplement."
Any reference herein to the Registration Statement, the Base Prospectus
or the Prospectus Supplement shall be deemed to refer to and include
the documents incorporated by reference therein (the "Incorporated
Documents") pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or
before the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be; and any
reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the
filing by the Company of any document under the Exchange Act after the
date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, on or before the Closing
Date (as defined below), incorporated or deemed to be incorporated
therein by reference. All references in this Agreement to financial
statements and schedules and other information which is "contained,"
"included," "described," "set forth" or "stated" in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all
other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration
Statement, the Base Prospectus or the Prospectus Supplement, as the
case may be. No stop order suspending the effectiveness of the
Registration Statement or the use of the Base Prospectus or the
Prospectus Supplement has been issued, and no proceeding for any such
purpose is pending or has been initiated or, to the Company's
knowledge, is threatened by the Commission.
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(b) The Registration Statement, as amended to date, contains all
exhibits and schedules as required by the Securities Act. Each of the
Registration Statement and any post-effective amendment thereto, at the
time it became effective, complied in all material respects with the
Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable,
will 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. The Base Prospectus and the
Prospectus Supplement, as of its respective date, comply in all
material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations. The Base Prospectus and the
Prospectus Supplement, taken as a whole, as amended or supplemented,
will not contain as of the date of the Prospectus Supplement and the
Closing Date, any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange
Act and the applicable rules and regulations promulgated thereunder,
and none of such documents, when they were filed with the Commission,
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the Base
Prospectus or Prospectus Supplement prior to the consummation of the
Offering, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act and the applicable rules and regulations promulgated thereunder, as
applicable, and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, the Company makes no
representations or warranties as to information, if any, contained in
or omitted from the Prospectus Supplement or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Placement
Agent specifically for use in the Registration Statement or the
Prospectus Supplement. No post-effective amendment to the Registration
Statement reflecting any facts or events arising after the date of this
Agreement and prior to the Closing Date which represent, individually
or in the aggregate, a fundamental change in the information set forth
therein is required to be filed with the Commission.
4
(c) The Company has delivered, or will as promptly as practicable
deliver, to the Placement Agent complete conformed copies of the
Registration Statement and of each consent and certificate of experts
filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits) and the Base Prospectus and the Prospectus
Supplement, as amended or supplemented, in such quantities and at such
places as the Placement Agent reasonably requests. The Company has not
distributed and will not distribute, prior to the completion of the
distribution of the Stock, any offering material in connection with the
offering and sale of the Stock other than the Base Prospectus and the
Prospectus Supplement or the Registration Statement and copies of the
documents incorporated by reference therein.
(d) The Company and its subsidiary have been duly organized and are
validly existing as corporations or other legal entities in good
standing (or the equivalent thereof, if any) under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing (or the equivalent thereof, if any)
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the
failure to be so qualified and in good standing or have such power or
authority would not have, singularly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and its
subsidiary taken as a whole (a "Material Adverse Effect").
(e) The Stock to be issued and sold by the Company hereunder has been
duly and validly authorized and, when issued and delivered against
payment therefor as provided herein, will be duly and validly issued,
fully paid and nonassessable and free of any preemptive or similar
rights (except those that have been waived by the holder thereof) and
will conform to the description thereof contained in the Base
Prospectus and the Prospectus Supplement.
(f) The Company has an authorized capitalization as set forth in the
Base Prospectus and the Prospectus Supplement, all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Base Prospectus and
the Prospectus Supplement and, except as set forth in the Base
Prospectus and the Prospectus Supplement, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares
of capital stock of, or ownership interests in, the Company are
outstanding.
5
(g) All the outstanding shares of capital stock of the subsidiary of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the Base
Prospectus and the Prospectus Supplement, are owned directly by the
Company, free and clear of any claim, lien, encumbrance, security
interest, restriction upon voting or transfer or any other claim of any
third party.
(h) The Company has the full right, power and authority to enter into
this Agreement and each of the Subscription Agreements and to perform
and to discharge its obligations hereunder and thereunder; and each of
this Agreement and each of the Subscription Agreements has been duly
authorized, executed and delivered by the Company, and constitutes a
valid and binding obligation of the Company enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles, and except to
the extent that the indemnification and contribution provisions of
Section 7 hereof may be limited by federal or state securities laws and
public policy considerations in respect thereof.
(i) The Company has the full right, power and authority to enter into
the Placement Agent's Warrant and to perform and discharge its
obligations thereunder. The Placement Agent's Warrant has been duly and
validly authorized by the Company and upon delivery to the Placement
Agent upon the Closing Date will be duly issued and constitute a legal,
valid and binding obligation of the Company. The Warrant Stock has been
duly authorized and reserved for issuance upon the exercise of the
Placement Agent's Warrant and when issued in accordance with the terms
of the Placement Agent's Warrant upon payment of the exercise price
therefor will be validly issued, fully paid and nonassessable.
(j) The execution, delivery and performance of this Agreement and the
Placement Agent's Warrant by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
its subsidiary is a party or by which the Company or its subsidiary is
bound or to which any of the property or assets of the Company or its
subsidiary is subject, except for such breach, violation or default
which would not reasonably be likely to have a Material Adverse Effect,
nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or its subsidiary or any material
violation of any statute, law, rule or regulation or any judgment,
order or decree of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiary or any of their
properties or assets.
(k) There is no franchise, contract, lease, instrument or other
document of a character required by the Securities Act or the Rules and
Regulations to be described in the Base Prospectus and the Prospectus
Supplement, or to be filed as an exhibit to the Registration Statement,
which is not described or filed as required; and all statements
summarizing any such franchises, contracts, leases, instruments or
other documents or legal matters contained in the Registration
Statement are accurate and complete in all material respects.
6
(l) All existing minute books of the Company and its subsidiary,
including all existing records of all meetings and actions of the board
of directors (including, Audit, Compensation and Nomination/Corporate
Governance Committees) and stockholders of the Company through the date
of the latest meeting and action (collectively, the "Corporate
Records") have been made available to the Placement Agent and counsel
for the Placement Agent. All such Corporate Records are complete and
accurately reflect, in all material respects, all transactions referred
to in such Corporate Records. There are no material transactions,
agreements or other actions that have been consummated by the Company
that are not properly approved and/or recorded in the Corporate
Records.
(m) No consent, approval, authorization, filing with or order of or
registration with, any court or governmental agency or body is required
in connection with the transactions contemplated herein or in the
Placement Agent's Warrant, except such as have been obtained or made
under the Securities Act or the Exchange Act and such as may be
required under the securities, or blue sky, laws of any jurisdiction in
connection with the offer and sale of the Stock and the Warrant Stock
by the Company in the manner contemplated herein and in the Base
Prospectus and the Prospectus Supplement.
(n) Except as described in the Base Prospectus or the Prospectus
Supplement, no person or entity has the right to require registration
of shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such right or
who have been given proper notice and have failed to exercise such
right within the time or times required under the terms and conditions
of such right, and except as described in the Base Prospectus or the
Prospectus Supplement, the Company is not required under the terms and
conditions of any existing agreement to which the Company is a party or
otherwise bound to file any registration statement for the registration
of any securities of any person or register any such securities
pursuant to any other registration statement filed by the Company under
the Securities Act for a period of at least 180 days after the date
hereof.
(o) The financial statements with the related notes and schedules of
the Company included in the Base Prospectus, the Prospectus Supplement
or the Registration Statement, present fairly the financial condition,
results of operations and cash flows of the Company as of the dates and
for the periods indicated, comply as to form with the applicable
accounting requirements of the Securities Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(p) Except as set forth in the Base Prospectus and the Prospectus
Supplement, there is no legal or governmental proceeding pending to
which the Company or its subsidiary is a party or of which any property
or assets of the Company or its subsidiary is the subject which,
singularly or in the aggregate, if determined adversely to the Company
or its subsidiary, would be likely to have a Material Adverse Effect or
would prevent or adversely affect the ability of the Company to perform
its obligations under this Agreement or the Placement Agent's Warrant;
and to the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
7
(q) The Company and its subsidiary have good and marketable title in
fee simple to, or have valid rights to lease or otherwise use, all
items of real or personal property which are material to the business
of the Company and its subsidiary taken as a whole, in each case free
and clear of all liens, encumbrances, claims and defects that would be
likely to result in a Material Adverse Effect.
(r) Neither the Company nor its subsidiary is (i) in violation of any
provision of its charter or bylaws, (ii) is in default in any respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant, or condition of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is
a party or by which it is bound or to which any of its property or
assets is subject, or (iii) is in violation in any respect of any
statute, law, rule, regulation, ordinance, judgment, order or decree of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company, its
subsidiary or any of its properties, as applicable, except, with
respect to clauses (ii) and (iii), any violations or defaults which,
singularly or in the aggregate, would not have a Material Adverse
Effect.
(s) Except as described in the Base Prospectus or the Prospectus
Supplement, the contracts described in the Company's regular reports on
Forms 10-K, 10-Q, and 8-K as filed by the Company with the Commission
or incorporated by reference therein that are material to the Company
are in full force and effect on the date hereof, and neither the
Company nor, to the Company's knowledge, any other party to such
contracts is in breach of or default under any of such contracts which
would have a Material Adverse Effect.
(t) No labor problem or dispute with the employees of the Company
exists or, to the Company's knowledge, is threatened or imminent, which
would be likely to have a Material Adverse Effect. The Company is not
aware that any key employee or significant group of employees of the
Company or any subsidiary plans to terminate employment with the
Company or any such subsidiary.
(u) Each of the Company and its subsidiary has fulfilled its
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of
the Company and its subsidiary are eligible to participate and each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. No "prohibited transaction" (as defined in Section 406
of ERISA, or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) has occurred with respect to
any employee benefit plan which would be likely to have a Material
Adverse Effect. The Company and its subsidiary have not incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA. Each "pension plan" (as defined in ERISA)
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which could cause the loss of such qualification.
8
(v) The Company and its subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as the Company reasonably believes are prudent and
customary in the businesses in which they are engaged; all policies of
insurance and fidelity or surety bonds insuring the Company and its
subsidiary and their businesses, assets, employees, officers and
directors are in full force and effect; the Company and its subsidiary
are in compliance with the terms of such policies and instruments in
all material respects; and there are no claims by the Company or its
subsidiary under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation
of rights clause; neither the Company nor its subsidiary has been
refused any insurance coverage sought or applied for; and neither the
Company nor its subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have
a Material Adverse Effect, except as set forth in the Base Prospectus
or the Prospectus Supplement.
(w) Each of the Company and its subsidiary has made all filings,
applications and submissions required by, and possesses all approvals,
licenses, certificates, certifications, clearances, consents,
exemptions, orders, permits and other authorizations required to be
issued by, the appropriate federal, state or foreign regulatory
authorities in order for the Company and the subsidiary to conduct
their businesses (collectively, "Permits"), except for such Permits
which the failure to obtain would not have a Material Adverse Effect,
and is in compliance in all material respects with the terms and
conditions of all such Permits; all of such Permits held by the Company
and its subsidiary are valid and in full force and effect; there is no
pending or, to the knowledge of the Company, threatened action, suit,
claim or proceeding which may cause any such Permit to be limited,
revoked, cancelled, suspended, modified or not renewed and neither the
Company nor its subsidiary has received any notice of proceedings
relating to the limitation, revocation, cancellation, suspension,
modification or non-renewal of any such Permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus.
9
(x) KPMG LLP, who have certified certain financial statements of the
Company and delivered their report with respect to the audited
consolidated financial statements and schedules included in the Base
Prospectus, the Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, are independent public accountants
with respect to the Company within the meaning of the Securities Act
and the Rules and Regulations.
(y) The Company and its subsidiary have filed all foreign, federal,
state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure
so to file would not have a Material Adverse Effect, except as set
forth in the Base Prospectus and the Prospectus Supplement) and has
paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith or as would not have a
Material Adverse Effect, except as set forth in the Base Prospectus and
the Prospectus Supplement.
(z) There is and has been no failure on the part of the Company or any
of the Company's directors or officers, in their capacities as such, to
comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402
related to loans and Sections 302 and 906 related to certifications.
(aa) The Company and its subsidiary maintain a system of internal
accounting controls that the Company reasonably believes are sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability of assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(bb) Neither the Company nor its subsidiary nor any of their officers
or directors, or to the Company's knowledge, any of their affiliates
(as such term is defined in Rule 405 under the Securities Act), has
taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(cc) Each of the Company and its subsidiary (i) is in compliance in all
material respects with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) has
received and is in compliance in all material respects with all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) has not received
notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated by the Base Prospectus and the Prospectus Supplement.
The Company has not been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
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(dd) To the extent appropriate in the ordinary course of its business,
the Company periodically reviews the effect of Environmental Laws on
the business, operations and properties of the Company and its
subsidiary, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated costs
and liabilities would not, singly or in the aggregate, have a Material
Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated by
the Base Prospectus or the Prospectus Supplement.
(ee) The Company and its subsidiary own, possess, license or have other
rights to use all foreign and domestic patents, patent applications,
trade and service marks, trade and service ▇▇▇▇ registrations, trade
names, copyrights, licenses, inventions, trade secrets, technology,
Internet domain names, know-how and other intellectual property
(collectively, the "Intellectual Property") material to the conduct of
the Company's business as now conducted or as proposed in the Base
Prospectus or the Prospectus Supplement to be conducted. Except as set
forth in the Base Prospectus and the Prospectus Supplement, (a) there
are no rights of third parties to any such Intellectual Property; (b)
to the Company's knowledge, there is no infringement by third parties
of any such Intellectual Property; (c) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the Company's and its subsidiary's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (d) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
such Intellectual Property; (e) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company and its subsidiary infringe or otherwise
violate any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other
fact which would form a reasonable basis for any such claim; (f) to the
Company's knowledge, there is no third-party U.S. patent or published
U.S. patent application which contains claims for which an Interference
Proceeding could be commenced against any patent or patent application
described in the Base Prospectus or the Prospectus Supplement as being
owned by or licensed to the Company; and (g) the Company and its
subsidiary have taken all steps reasonably determined by the Company to
be necessary to perfect its ownership of the Intellectual Property.
11
(ff) The Company has established and administers compliance practices
applicable to the Company, to assist the Company and the directors,
officers and employees of the Company in complying with applicable
regulatory guidelines (which, for the purposes of this Section 2(ff),
shall not be deemed to include the guidelines of the Commission).
(gg) Neither the Company nor its subsidiary has failed to file with the
applicable regulatory authorities any material required filing,
declaration, listing, registration, report or submission; all such
filings, declarations, listings, registrations, reports or submissions
were in compliance in all material respects with applicable laws when
filed and no deficiencies have been asserted by any applicable
regulatory authority (which, for the purposes of this Section 2(gg),
shall not be deemed to include the Commission) with respect to any such
filings, declarations, listings, registrations, reports or submissions.
(hh) No relationship, direct or indirect, exists between or among the
Company on the one hand and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand which is
required to be described in the Base Prospectus and the Prospectus
Supplement and which is not so described.
(ii) Neither the Company nor its subsidiary is or, after giving effect
to the offering and sale of the Stock and the application of the
proceeds thereof as described in the Base Prospectus and the Prospectus
Supplement, will become an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(jj) The Company meets the pre-1992 eligibility requirements for the
use of a Registration Statement on Form S-3 in connection with the
Offering(s) contemplated thereby and hereby (the pre-1992 eligibility
requirements for the use of the Registration Statement on Form S-3
include (i) having a non-affiliate, public common equity float of at
least $150 million or a non-affiliate, public common equity float of at
least $100 million and annual trading volume of at least three million
shares and (ii) having been subject to the Exchange Act reporting
requirements for a period of 36 months).
(kk) Neither the Company nor its subsidiary is a party to any contract,
agreement or understanding with any person that would give rise to a
valid claim against the Company or the Placement Agent for a brokerage
commission, finder's fee or like payment in connection with the
offering and sale of the Stock.
12
(ll) Neither the Company nor its subsidiary has sustained, since the
date of the latest audited financial statements included in the Base
Prospectus, the Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, any material loss or interference
with its business from fire, explosion, flood, terrorist act or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in or contemplated by the Base Prospectus and the
Prospectus Supplement; and, since such date, there has not been any
change in the capital stock or long-term debt of the Company or any
Material Adverse Effect, or any development involving a prospective
Material Adverse Effect, otherwise than as set forth or contemplated by
the Base Prospectus and the Prospectus Supplement.
Any certificate signed by any officer of the Company and delivered to
the Placement Agent or counsel for the Placement Agent in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company and its subsidiary, as to the matters covered thereby, to the Placement
Agent and the Purchasers.
3. THE CLOSING. The time and date of closing and delivery of the documents
required to be delivered to the Placement Agent pursuant to Section 6 hereof
shall be at 10:00 A.M., New York time, on August 28, 2003 (the "Closing Date")
at the office of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Placement
Agent and the Purchasers:
(a) (i) to make no further amendment or supplement prior to the Closing
Date to the Registration Statement or any amendment or supplement to
the Prospectus Supplement, which shall be reasonably disapproved by the
Placement Agent in good faith promptly after reasonable notice thereof;
(ii) for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Stock, to advise the
Placement Agent promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus Supplement or any
amended Prospectus Supplement has been filed and to furnish the
Placement Agent with copies thereof; (iii) to use its best commercially
practicable efforts to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 15 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus Supplement and
for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Stock; (iv) to advise the Placement
Agent, promptly after it receives notices thereof, (x) of any request
by the Commission to amend the Registration Statement or to amend or
supplement the Prospectus Supplement or for additional information
relating thereto and (y) of the issuance by the Commission, of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order directed at any
Incorporated Document or any amendment or supplement thereto or any
order preventing or suspending the use of the Base Prospectus or the
Prospectus Supplement or any amendment or supplement thereto, of the
suspension of the qualification of the Stock for offering or sale in
any jurisdiction, of the institution or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus
Supplement or for additional information relating thereto; and, (v) in
the event of the issuance of any stop order or of any order preventing
or suspending the use of the Base Prospectus or Prospectus Supplement
or suspending any such qualification, promptly to use its best
commercially practicable efforts to obtain the withdrawal of such
order.
13
(b) To comply with the Securities Act and the Exchange Act, and the
Rules and Regulations thereunder, so as to permit the completion of the
distribution of the Stock as contemplated in this Agreement and the
Prospectus Supplement. If during the period in which a prospectus is
required by law to be delivered by a Placement Agent or a dealer in
connection with the distribution of Stock contemplated by the
Prospectus Supplement, any event shall occur as a result of which, in
the judgment of the Company or in the reasonable opinion of the
Placement Agent or counsel for the Placement Agent, it becomes
necessary to amend or supplement the Prospectus Supplement in order to
make the statements therein, in the light of the circumstances existing
at the time the Prospectus Supplement is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement
the Prospectus Supplement to comply with any law, the Company promptly
will prepare and file with the Commission, and furnish at its own
expense to the Placement Agent and to such dealers, an appropriate
amendment to the Registration Statement or supplement to the Prospectus
Supplement so that the Prospectus Supplement as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus Supplement will
comply with such law. Before amending the Registration Statement or
supplementing the Base Prospectus in connection with the Offering, the
Company will furnish the Placement Agent with a copy of such proposed
amendment or supplement and will not file such amendment or supplement
to which the Placement Agent reasonably objects.
(c) To furnish promptly to the Placement Agent and to counsel for the
Placement Agent, upon request, a copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed
therewith.
(d) To deliver promptly to the Placement Agent such number of the
following documents as the Placement Agent shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits), (ii) the Base Prospectus, (iii) the Prospectus Supplement
(not later than 10:00 A.M., New York time, on the second Business Day
following the execution and delivery of this Agreement) and any
amendment or supplement thereto (not later than 10:00 A.M., New York
City time, on the Business Day following the date of such amendment or
supplement); and (iv) any document incorporated by reference in the
Base Prospectus or Prospectus Supplement. The Company will pay the
expenses of printing or other production of all documents relating to
the Offering.
14
(e) To make generally available to its stockholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company,
Rule 158).
(f) To promptly take from time to time such actions as the Placement
Agent may reasonably request to qualify the Stock for offering and sale
under the securities, or blue sky, laws of such jurisdictions as the
Placement Agent may designate and to continue such qualifications in
effect for so long as required for the distribution of the Stock and
will pay the fee, if any, of the National Association of Securities
Dealers, Inc. ("NASD") in connection with its review of the Offering.
The Company shall not be obligated to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified, to submit to
taxation in any jurisdiction or to file a general consent to service of
process in any jurisdiction.
(g) Not to directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for
Common Stock for a period of 90 days from the date of the Prospectus
Supplement without the prior written consent of ▇▇ ▇▇▇▇▇, other than
the Company's sale of the Stock and the issuance of the Placement
Agent's Warrant hereunder and the issuance of shares or options to
purchase shares pursuant to qualified stock option plans, currently
outstanding options, warrants or rights. The Company will cause each of
its executive officers and directors and the stockholders listed on
Exhibit C hereto to furnish to the Placement Agent, prior to the
Closing Date, a letter, substantially in the form of Exhibit D hereto,
pursuant to which each such person shall agree not to directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock for a
period of 90 days from the date of the Prospectus Supplement, without
the prior written consent of ▇▇ ▇▇▇▇▇.
(h) Prior to the Closing Date, to furnish to the Placement Agent, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing
or incorporated by reference in the Base Prospectus, the Prospectus
Supplement or the Registration Statement.
(i) Prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine
oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Placement Agent is notified), without the prior written consent of the
Placement Agent, unless in the judgment of the Company and its counsel,
and after notification to the Placement Agent, such press release or
communication is required by law.
15
(j) To apply the net proceeds from the sale of the Stock as set forth
in the Prospectus Supplement under the heading "Use of Proceeds". (k)
To engage and maintain, at its expense, a registrar and transfer agent
for the Stock.
(l) To supply the Placement Agent with copies of all correspondence to
and from, and all documents issued to and by, the Commission in
connection with the registration of the Stock under the Securities Act.
5. PAYMENT OF EXPENSES. The Company agrees with the Placement Agent to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock to the Purchasers and any taxes payable in that
connection; (b) the costs incident to the Registration of the Stock under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, Base Prospectus and Prospectus
Supplement and any amendments and exhibits thereto or any document incorporated
by reference therein, and the costs of printing, reproducing and distributing,
this Agreement by mail, telex or other means of communication; (d) the fees and
expenses (including related reasonable fees and actual out-of-pocket expenses of
counsel for the Placement Agent) incurred in connection with filings, if any,
made with the NASD; (e) any applicable listing or other fees; (f) the fees and
expenses of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 4(f) and of preparing, printing and
distributing Blue Sky Memoranda (including related reasonable fees and actual
out-of-pocket expenses of counsel to the Placement Agent); (g) all fees and
expenses of the registrar and transfer agent of the Stock; and (h) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement (including, without limitation, the fees and expenses of
the Company's counsel and the Company's independent accountants); provided that,
except as otherwise provided in this Section 5 and in Section 9, the Placement
Agent shall pay its own costs and expenses, including the fees and expenses of
its counsel.
6. CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENT AND THE SALE OF THE
STOCK. The obligations of the Placement Agent and the closing of the sale of the
Stock hereunder are subject to the accuracy, when made and on the Closing Date,
of the representations and warranties on the part of the Company and its
subsidiary contained herein, to the accuracy of the statements of the Company
and its subsidiary made in any certificates pursuant to the provisions hereof,
to the performance by the Company and its subsidiary in all material respects to
the extent not otherwise qualified by materiality, and in all respects to the
extent qualified by materiality, of their obligations hereunder, and to each of
the following additional terms and conditions:
16
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the
Prospectus Supplement or otherwise) shall have been complied with to
the reasonable satisfaction of the Placement Agent. Any filings
required to be made by the Company in accordance with Section 4(a)
shall have been timely filed with the Commission.
(b) The Placement Agent shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration
Statement, the Base Prospectus or the Prospectus Supplement or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of counsel for the Placement Agent, is material
or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock,
the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel for the Placement Agent, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(d) ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP shall have furnished to the Placement
Agent, such counsel's written opinion, as counsel for the Company,
addressed to the Placement Agent and the Purchasers and dated the
Closing Date in form and substance reasonably satisfactory to the
Placement Agent, to the effect that:
(i) the Company and its subsidiary are validly
existing as corporations in good standing or subsisting, as
the case may be, under the laws of their respective
jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in
the respective jurisdictions listed on Exhibit E hereto, and
have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which
they are engaged as described in the Base Prospectus and the
Prospectus Supplement, except where the failure to so qualify
or have such power or authority would not have, singularly or
in the aggregate, a Material Adverse Effect;
(ii) the Company has the authorized capitalization as
set forth in the Base Prospectus as supplemented by the
Prospectus Supplement, and the Stock when issued and delivered
to and paid for by the purchasers thereof as contemplated by
this Agreement, will be duly and validly authorized and
issued, fully paid and non-assessable and will conform to the
description thereof contained in the Base Prospectus as
supplemented by the Prospectus Supplement;
17
(iii) to the knowledge of such counsel, all the
outstanding shares of capital stock of the subsidiary of the
Company are, except to the extent set forth in the Base
Prospectus and the Prospectus Supplement, owned directly by
the Company, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any
other claim of any third party;
(iv) other than such rights as have been waived by
the holders thereof, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's charter or by laws or any agreement or other
instrument known to such counsel;
(v) this Agreement, the Placement Agent's Warrant and
the Subscription Agreements have been duly authorized,
executed and delivered by the Company;
(vi) the execution, delivery and performance of this
Agreement, the Placement Agent's Warrant and the Subscription
Agreements by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby will not
conflict in any material respect with or result in a material
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed
as an exhibit to the Registration Statement or to any of the
Incorporated Documents to which the Company or its subsidiary
is a party or by which the Company or its subsidiary is bound
or to which any of the property or assets of the Company or
its subsidiary is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or its subsidiary or any statute, law, rule or
regulation or, to the knowledge of such counsel, any judgment,
order or decree of any court or governmental agency or body
having jurisdiction over the Company or its subsidiary or any
of their properties or assets;
(vii) the Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Prospectus Supplement was filed
with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion
on the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued
and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(viii) except for the registration of the Stock and
the Warrant Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock and the Warrant Stock, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby;
18
(ix) to such counsel's knowledge no person or entity
has the right to require registration of shares of Common
Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement, the completion
of the Offering or otherwise, except for persons and entities
who have expressly waived such right or who have been given
proper notice and have failed to exercise such right within
the time or times required under the terms and conditions of
such right;
(x) the statements in the Base Prospectus and the
Prospectus Supplement (other than the financial statements and
related schedules and other financial and statistical data
contained therein, as to which such counsel need express no
opinion) under the headings "Our Company," "Recent
Developments," "Risk Factors," "Securities Offered by this
Prospectus" and "Plan of Distribution," Item 15 of Part II of
the Registration Statement, and in the Company's Annual Report
on Form 10-K for the year ended December 31, 2002 under Item
1, "Business," to the extent that they constitute summaries of
matters of law or regulation or legal conclusions, have been
reviewed by such counsel and fairly present the matters
described therein in all material respects;
(xi) to such counsel's knowledge and other than as
set forth in the Base Prospectus and the Prospectus
Supplement, there are no legal or governmental proceedings
pending to which the Company or its subsidiary is a party or
of which any property or asset of the Company or its
subsidiary is the subject which, singularly or in the
aggregate, if determined adversely to the Company or its
subsidiary, would prevent or adversely affect the ability of
the Company to perform its obligations under this Agreement;
and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(xii) The descriptions of the following contracts of
the Company (other than the financial statements and related
schedules and other financial and statistical data contained
therein, as to which we express no opinion) contained in the
Base Prospectus, Prospectus Supplement or the Registration
Statement or in the Incorporated Documents are accurate in all
material respects and fairly present the information shown:
(i) the 1997 Sponsored Research Agreement between the Company
and Princeton University, as amended, (ii) the 1997 Amended
License Agreement between the Company, Princeton University
and the University of Southern California, as amended, (iii)
the License Agreement between the Company and Motorola, Inc.,
dated as of September 29, 2000, (iv) the Development and
License Agreement dated as of October 1, 2000 by and between
PPG Industries, Inc. and the Company, as amended, and the
related Supply Agreement between PPG Industries, Inc. and the
Company, also dated October 1, 2000 (v) the Development and
License Agreement, dated July 19, 2000, between Aixtron AG and
the Company, (vi) the Securities Purchase Agreement, dated as
of August 22, 2001, among the Company, Pine Ridge Financial
Inc. and Strong River Investments, Inc., as amended, (vii) the
Voting Agreement, dated as of August 22, 2002, among the
Company, Pine Ridge Financial Inc. and Strong River
Investments, Inc., as amended, (viii) the Convertible
Promissory Note, dated as of August 22, 2001, payable to the
order of Pine Ridge Financial Inc. and (ix) the Convertible
Promissory Note, dated as of August 22, 2001, payable to the
order of Strong River Investments, Inc.
19
(xiii) the Registration Statement, as of its
effective date, the Base Prospectus, as of its date and the
Prospectus Supplement, as of its date, and any further
amendments or supplements thereto, as of their respective
dates, made by the Company prior to the Closing Date (other
than the financial statements and related schedules and other
financial and statistical data contained therein, as to which
such counsel need express no opinion) complied as to form in
all material respects with the requirements of the Securities
Act and the Rules and Regulations, and the Incorporated
Documents and any further amendment or supplement to any such
incorporated document made by the Company prior to the Closing
Date (other than the financial statements and related
schedules and other financial and statistical data contained
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder; and
(xiv) neither the Company nor its subsidiary is, or
after giving effect to the offering and sale of the Stock and
the application of the proceeds thereof as described in the
Base Prospectus and the Prospectus Supplement, will be, an
"investment company" as defined in the Investment Company Act
of 1940, as amended.
Such counsel shall also have furnished to the Placement Agent
a written statement, addressed to the Placement Agent and the
Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement and the Base Prospectus, (y)
such counsel participated in conferences with officers and other
representatives of the Company and the auditors of the Company in
connection with the preparation of the Registration Statement and the
Base Prospectus, and conferences with the Placement Agent and its
counsel, and the auditors, officers and other representatives of the
Company, in connection with the preparation of the Prospectus
Supplement and (z) although such counsel need not pass upon or assume
responsibility for the accuracy, completeness or fairness of the
statements included in the Registration Statement, the Base Prospectus
or the Prospectus Supplement (and such counsel may rely as to
materiality to a large extent upon discussions with and opinions of the
officers and other representatives of the Company) nothing has come to
the attention of such counsel to cause such counsel to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Base Prospectus and the
Prospectus Supplement, taken together, as of the date of the Prospectus
Supplement and the date of such statement, contained or contain any
untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading; it being understood that such counsel
need express no opinion as to the financial statements and related
schedules or other financial or statistical data contained in the
Registration Statement, the Base Prospectus or the Prospectus
Supplement.
20
(e) The Placement Agent shall have received from ▇▇▇▇▇ Raysman
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, such opinion or opinions, dated the
Closing Date and addressed to the Placement Agent, with respect to the
issuance and sale of the Stock, the Registration Statement, the Base
Prospectus, the Prospectus Supplement (together with any supplement
thereto) and other related matters as the Placement Agent may
reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Placement Agent and the
Purchasers a certificate, dated the Closing Date, executed by its
Chairman of the Board, Chief Executive Officer, Chief Operating Officer
or a Vice President and its Chief Financial Officer stating that (i)
such officers have examined the Registration Statement, the Base
Prospectus and the Prospectus Supplement and, in their opinion, the
Registration Statement as of its effective date and the Prospectus
Supplement (taken together with the Base Prospectus), as of the date of
the Prospectus Supplement and the date of such certificate, did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading (in the case of the
Prospectus Supplement, taken together with the Base Prospectus, in
light of the circumstances in which such statements were made), (ii)
since the effective date of the Registration Statement no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement, the Base Prospectus or the Prospectus
Supplement and which has not been so set forth, (iii) to their
knowledge after reasonable investigation, as of the Closing Date, the
representations and warranties of the Company and its subsidiary in
this Agreement are true and correct and the Company and its subsidiary
have complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, and (iv) subsequent to the date of the most recent financial
statements included or incorporated by reference in the Base Prospectus
and the Prospectus Supplement, there has been no material adverse
change in the financial position or results of operation of the Company
and its subsidiary, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiary taken as a whole, except as set forth in the Base
Prospectus and the Prospectus Supplement.
21
(g) At the time of the execution of this Agreement, the Placement Agent
shall have received from KPMG LLP a letter, addressed to the Placement
Agent and the Purchasers and dated such date, in form and substance
reasonably satisfactory to the Placement Agent (i) confirming that they
are independent certified public accountants with respect to the
Company within the meaning of the Securities Act and the Rules and
Regulations and (ii) stating the conclusions and findings of such firm
with respect to the financial statements and certain financial
information contained or incorporated by reference in the Base
Prospectus and the Prospectus Supplement.
(h) On the Closing Date, the Placement Agent shall have received a
letter (the "bring-down letter") from KPMG LLP addressed to the
Placement Agent and dated the Closing Date confirming, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Base Prospectus and the
Prospectus Supplement as of a date not more than three Business Days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by its letter delivered to the Placement Agent
concurrently with the execution of this Agreement pursuant to Section
6(g).
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Base Prospectus and the
Prospectus Supplement any loss or interference with its business from
fire, explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in or
contemplated by the Base Prospectus and the Prospectus Supplement, and
(ii) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity, results of operations or
prospects of the Company and its subsidiaries, otherwise than as set
forth in or contemplated by the Base Prospectus and the Prospectus
Supplement, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Placement Agent, so material
and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner
contemplated by the Base Prospectus and the Prospectus Supplement.
22
(j) The Stock and Warrant Stock shall have been listed and authorized
for trading on the Nasdaq National Market, and satisfactory evidence of
such actions shall have been provided to the Placement Agent.
(k) At the Execution Time, the Company shall have furnished to the
Placement Agent a letter substantially in the form of Exhibit D hereto
from each executive officer and director of the Company and the
stockholders listed on Exhibit C hereto.
(l) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq National Market or
the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum or
maximum prices or maximum ranges for prices shall have been established
on any such exchange or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities or a material disruption has occurred in
commercial banking or securities settlement or clearance services in
the United States, (iii) the United States shall have become engaged in
hostilities in which it is not currently engaged or the subject of an
act of terrorism, there shall have been an escalation in existing
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the sole judgment of the Placement
Agent, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated by
the Base Prospectus and the Prospectus Supplement.
(m) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Stock; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Stock.
(n) The Company shall have prepared and filed with the Commission a
Current Report on Form 8-K with respect to the Offering, including as
an exhibit thereto the Placement Agent Agreement and any other
documents relating thereto.
(o) The Company shall have entered into Subscription Agreements with
each of the Purchasers and such agreements shall be in full force and
effect.
23
(p) The Company shall have issued and delivered the Placement Agent's
Warrant to ▇▇ ▇▇▇▇▇.
(q) Prior to the Closing Date, the Company shall have furnished to ▇▇
▇▇▇▇▇ such further information, certificates and documents as ▇▇ ▇▇▇▇▇
may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Placement Agent.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Placement Agent,
its officers, employees, representatives and agents and each person, if
any, who controls the Placement Agent within the meaning of the
Securities Act (collectively the "Placement Agent Indemnified Parties"
and each a "Placement Agent Indemnified Party") against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof, to which that Placement Agent Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Base Prospectus, the Registration Statement or the
Prospectus Supplement or in any amendment or supplement thereto, (ii)
the omission or alleged omission to state in the Base Prospectus, the
Registration Statement or the Prospectus Supplement or in any amendment
or supplement thereto a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any
act or failure to act, or any alleged act or failure to act, by the
Placement Agent in connection with, or relating in any manner to, the
Stock or the Offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii)
above; (provided that the Company shall not be liable in the case of
any matter covered by this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such act or failure to act undertaken or omitted to be taken
by such Placement Agent through its gross negligence or willful
misconduct) and shall reimburse each Placement Agent Indemnified Party
promptly upon demand for any legal or other expenses reasonably
incurred by that Placement Agent Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing
as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of or is based upon (i) an untrue statement or alleged untrue
statement in or omission or alleged omission from the Base Prospectus,
the Registration Statement or the Prospectus Supplement or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through the Placement Agent
specifically for use therein, which information the parties hereto
agree is limited to the Placement Agent's Information (as defined in
Section 15). This indemnity agreement is not exclusive and will be in
addition to any liability, which the Company might otherwise have and
shall not limit any rights or remedies which may otherwise be available
at law or in equity to each Placement Agent Indemnified Party.
24
(b) The Placement Agent shall indemnify and hold harmless the Company
its officers, employees, representatives and agents, each of its
directors and each person, if any, who controls the Company within the
meaning of the Securities Act (collectively the "Company Indemnified
Parties" and each a "Company Indemnified Party") against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company Indemnified Parties may become subject,
under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Base Prospectus, the Registration Statement or the
Prospectus Supplement or in any amendment or supplement thereto, (ii)
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, but with respect to each of clause (i) and this
clause (ii) only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the
Company through the Placement Agent specifically for use therein, or
(iii) any act or failure to act, or any alleged act or failure to act,
by the Placement Agent in connection with, or relating in any manner
to, the Stock or the Offering contemplated hereby to the extent that it
is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such act or failure to act undertaken or omitted to be taken
by such Placement Agent through its gross negligence or willful
misconduct, and shall reimburse the Company Indemnified Parties
promptly upon demand for any legal or other expenses reasonably
incurred by such parties in connection with investigating or preparing
to defend or defending against or appearing as third party witness in
connection with any such loss, claim, damage, liability or action as
such expenses are incurred; provided that the parties hereto hereby
agree that such written information provided by the Placement Agent
consists solely of the Placement Agent's Information. This indemnity
agreement is not exclusive and will be in addition to any liability,
which the Placement Agent and the Purchasers might otherwise have and
shall not limit any rights or remedies which may otherwise be available
at law or in equity to the Company Indemnified Parties. Notwithstanding
the provisions of this Section 7(b), in no event shall any indemnity
under this Section 7(b) exceed the total compensation received by the
Placement Agent in accordance with Section 1(e).
25
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that any 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 be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action in a reasonably prompt manner and
employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall
not, 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
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm
shall be designated in writing by the Placement Agent, if the
indemnified parties under this Section 7 consist of any Placement Agent
Indemnified Party, or by the Company if the indemnified parties under
this Section 7 consist of any Company Indemnified Parties. Each
indemnified party, as a condition of the indemnity agreements contained
in Sections 7(a) and 7(b) shall use all reasonable efforts to cooperate
with the indemnifying party in the defense of any such action or claim.
Subject to the provisions of Section 7(d) below, no indemnifying party
shall be liable for any settlement, compromise or the consent to the
entry of judgment in connection with any such action effected without
its written consent (which consent shall not be unreasonably withheld),
but if settled with its written consent or if there be a final judgment
for the plaintiff in any such action other than a judgment entered with
the consent of such indemnified party, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
26
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for reasonable fees
and actual out-of-pocket expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature
contemplated by this Section 7 effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by
such indemnifying party of the request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Placement Agent on the
other from the offering of the Stock or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Placement Agent on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Placement Agent on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company bears to the total compensation received by the Placement
Agent with respect to the Stock purchased under this Agreement. 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 the Company on the one hand or the Placement
Agent on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission; provided that the parties hereto
agree that the written information furnished to the Company by the
Placement Agent for use in the Prospectus Supplement consists solely of
the Placement Agent's Information. The Company and the Placement Agent
agree that it would not be just and equitable if contributions pursuant
to this Section 7(e) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 7(e) shall be deemed to include, for purposes of this Section
7(e), 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
7(e), the Placement Agent shall not be required to contribute any
amount in excess of the amount by which the total price at which the
Stock was offered and sold to the public less the amount of any damages
which such Placement Agent has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
27
8. TERMINATION. This Agreement may be terminated by the Placement Agent in its
absolute discretion by notice given to the Company if, at any time after the
execution and delivery of this Agreement and prior to the Closing Date: (a) in
the judgment of the Placement Agent there shall have occurred any Material
Adverse Effect; or (b) any of the events described in Sections 6(i) or 6(l) have
occurred, and such event singly or together with any other event, makes it, in
the Placement Agent's judgment, impracticable or inadvisable to market the Stock
in the manner and on the terms contemplated in the Base Prospectus and the
Prospectus Supplement. Any termination pursuant to this Section 8 shall be
without liability on the part of any party hereto to any other party except that
the provisions of Sections 5, 7 and 9 shall at all times be effective and shall
survive such termination.
9. REIMBURSEMENT OF PLACEMENT AGENT'S EXPENSES. If the sale of the Stock
provided for herein is not consummated because any condition to the obligations
of the Placement Agent and the Purchasers set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 8 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Placement Agent, the Company will reimburse the Placement Agent
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by the Placement Agent
in connection with this Agreement and the proposed purchase and sale of the
Stock and, upon demand, the Company shall pay the full amount thereof to ▇▇
▇▇▇▇▇.
10. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Placement Agent, the Purchasers,
the Company, and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person other than
the persons mentioned in the preceding sentence any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Placement Agent Indemnified Parties, and
the indemnities of the Placement Agent shall also be for the benefit of the
Company Indemnified Parties. It is understood that the Placement Agent's
responsibility to the Company is solely contractual in nature and the Placement
Agent does not owe the Company, or any other party, any fiduciary duty as a
result of this Agreement.
28
11. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the Placement Agent, as set forth in this
Agreement and in that certain letter agreement, dated August 5, 2003 between the
Company and the Placement Agent (the "Engagement Letter"), or made by them
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Placement Agent, the
Company, or any person controlling any of them and shall survive delivery of and
payment for the Stock. To the extent that any provision of the Engagement Letter
conflicts with the terms of this Agreement, the terms of this Agreement shall
govern.
12. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Placement Agent, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇ ▇▇▇▇▇ Securities Corporation,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to: ▇▇▇▇▇ Raysman
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Universal Display Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
13. DEFINITIONS OF CERTAIN TERMS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Business Day" shall mean any day other than a Saturday, a
Sunday, a legal holiday, a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City
or any day on which the Nasdaq National Market is not open for trading.
"Effective Date" shall mean each date and time that the
Registration Statement (and any post-effective amendment or amendments
thereto) became or becomes effective.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Interference Proceeding" shall have the meaning set forth in
35 U.S.C.ss.135.
"To the Company's knowledge" shall mean that which the
officers listed on Exhibit F attached hereto or directors of the
Company know or should have known using the exercise of reasonable due
diligence in the course of performing their duties on behalf of the
Company.
For purposes of Section 2(d) of this Agreement, the term
"prospects" shall mean the prospects of the Company as described in or
contemplated by the Registration Statement, the Base Prospectus or the
Prospectus Supplement.
29
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. PLACEMENT AGENT'S INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agent's Information
consists solely of the statements concerning the Placement Agent contained in
the first paragraph under the heading "Plan of Distribution" in the Prospectus
Supplement.
16. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
17. GENERAL. Except as set forth in Section 11, this Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include
one another. The section headings in this Agreement are for the convenience of
the parties only and will not affect the construction or interpretation of this
Agreement. This Agreement may be amended or modified, and the observance of any
term of this Agreement may be waived, only by a writing signed by the Company
and the Placement Agent.
18. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
30
If the foregoing is in accordance with your understanding of the
agreement between the Company and the Placement Agent, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
UNIVERSAL DISPLAY CORPORATION
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
Accepted as of
the date first above written:
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
31
Exhibit A
Form of Subscription Agreement
32
Exhibit B
Form of Placement Agent's Warrant
33
Exhibit C
Stockholders Subject to Lock-Up Agreements
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (1)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (1)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (2)
-------------------------
(1) In their individual capacities and in their capacities as trustees of
certain trusts.
(2) Solely in his capacity as trustee of certain trusts.
34
Exhibit D
Form of Lock-Up Agreement
35
Exhibit E
Jurisdictions
Universal Display Corporation
Domicile: Pennsylvania
Foreign Qualification: New Jersey
UDC, Inc.
Domicile: New Jersey
Foreign Qualification: Idaho, Pennsylvania
36
Exhibit F
Officers
--------------------------------------- ---------------------------------------
Name Title
--------------------------------------- ---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Chairman of the Board and Chief
Executive Officer
--------------------------------------- ---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ President and Chief Operating Officer
--------------------------------------- ---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Executive Vice President, Chief
Financial Officer, Secretary and
Treasurer
--------------------------------------- ---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President and Chief Technical
Officer
--------------------------------------- ---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President and General Counsel
--------------------------------------- ---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Vice President, Intellectual Property
--------------------------------------- ---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ Vice President, Strategic Product
Development
--------------------------------------- ---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President, Technology
Commercialization
--------------------------------------- ---------------------------------------
37