OLED TECHNOLOGY LICENSE AND TECHNICAL ASSISTANCE AGREEMENT
Exhibit
10.2
THIS OLED
TECHNOLOGY LICENSE AND TECHNICAL ASSISTANCE AGREEMENT (this “Agreement”) is
entered into by and between Kyocera Corporation, a Japanese corporation with a
place of business ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ 612-8501, Japan
(“Kyocera”),
and Universal Display Corporation, a Pennsylvania corporation with a place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (“Universal
Display”).
BACKGROUND
WHEREAS,
Universal Display has rights in certain patents and possesses certain know-how
concerning Organic Light Emitting Devices; and
WHEREAS,
Kyocera desires to obtain license rights to practice under these patents and to
use this know-how on the terms and conditions set forth herein; and
WHEREAS,
Kyocera desires to have an option to make this Agreement effective on certain
conditions set forth herein.
NOW,
THEREFORE, intending to be legally bound, each of Kyocera and Universal Display
hereby agrees as follows:
AGREEMENT
Article
1 Definitions
In
addition to other terms defined elsewhere herein, the following terms shall have
their corresponding meanings when used this Agreement.
1.1 “Affiliate” means a
corporation, partnership, trust or other entity that directly or indirectly
(through one or more intermediates) controls, is controlled by or is under
common control with the party in question. For such purposes,
“control,” “controlled by” and “under common control with” shall mean the
ability to make, or participate meaningfully in the making of, business
decisions on behalf of the relevant entity and/or such party, as
applicable. “Control” shall be presumed where the party in question
owns fifty percent (50%) or more of the voting or other similar interests in the
relevant entity.
1.2 “Confidential Items”
shall have the meaning set forth in Section 7.2 below.
1.3 “Existing Universal Display
Patents” means all patents and patent applications owned by Universal
Display, or that Universal Display has the right to license to Kyocera
hereunder, which patents or patent applications specifically claim or cover an
OLED Module made by a Permitted Process, and which patents or patent
applications have already been filed anywhere in the world as of the Effective
Date, as well as its PCT patent application and all
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1.4 foreign
patent applications corresponding thereto, all issued, granted, allowed or
registered patents corresponding to such patent applications, and any
corresponding family member of that these patent applications, including
divisions, reissues, renewals, reexaminations, extensions, continuations, or
continuations-in-part thereof, including, but not limited to, the patents and
patent applications listed in Exhibit
A.
1.5 “Improvements” means
all inventions, discoveries, information and materials, patentable or
unpatentable, that are enhancements or improvements to, or modifications or
derivative works of, the Universal Display Technology.
1.6 “Joint Improvements”
means Improvements that are first conceived, developed or reduced to practice
during the Term jointly by personnel of Kyocera and Universal Display, or by
either of their personnel without any inventive contribution by the other
party’s personnel but based on their use of the other party’s Confidential
Items.
1.7 “Know-How” means
unpatented technical information, data, specifications, plans, drawings,
designs, blueprints, formulae, processes and other similar items of a trade
secret or confidential nature.
1.8 “Kyocera Improvements”
means Improvements that are first conceived, developed or reduced to practice
during the Term by personnel of Kyocera without any inventive contribution by
personnel of Universal Display or the use of any Universal Display Confidential
Items.
1.9 “Licensed Product”
means an OLED Module that is made using a Permitted Process, or any product or
part thereof that incorporates such an OLED Module, which OLED Module (a) is
covered, in whole or in part, by any Valid Claim(s) of a Universal Display
Patent; (b) is manufactured using a process that is covered, in whole or in
part, by any Valid Claim(s) of a Universal Display Patent; and/or (c) is
manufactured using any of the Universal Display Know-How.
1.10 “Lighting” means usage
for general illumination or as specialty lighting source, such as backlighting
for LCD displays and consumer electronics, aviation or automotive lighting, and
mood lighting in public or private buildings.
1.11 “Net Sales
Revenue”
1.11.1 For
Licensed Products that are OLED Modules sold to non-Affiliated third parties,
“Net Sales Revenue” means the gross amount invoiced or received, whichever
occurs sooner, on account thereof, less (a) applicable sales and other similar
taxes and customs clearance fees to the extent actually collected and remitted
to the appropriate taxing or customs authorities; (b) shipping charges to the
extent separately itemized on the customer invoice and actually paid to
third-party carriers; (c) insurance costs to the extent separately itemized on
the customer invoice and actually paid or accrued for such purpose; and (d)
refunds or credits actually given to third parties for returned or defective
items. [The confidential material contained herein has been omitted
and has been separately filed with the Commission.] If
the
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1.11.2 OLED
Module is sold or otherwise transferred for consideration other than solely
cash, “Net Sales Revenue” means the average selling price at which OLED Modules
of similar kind and quantity are being offered for sale to non-Affiliated third
parties at such time, or if no such selling price is available, the fair market
value of such OLED Modules. As used in this Section 1.10, the
“selling price” shall be the amount calculated according to the first two
sentences of this subsection.
1.11.3 For
Licensed Products that are OLED Modules sold or otherwise transferred to Kyocera
Affiliates, “Net Sales Revenue” means the transfer price utilized by Kyocera for
such intercompany sale or transfer, including all commissions and other amounts
payable in connection therewith, but less the various permitted deductions under
(a) through (d) of subsection 1.10.1 above to the extent such amounts are
actually included in the transfer price, as shown by appropriate invoices or
other similar documentation; provided, however, [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.]
1.11.4 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
1.11.5 For
Licensed Products that are not themselves OLED Modules, but that incorporate one
or more OLED Modules (e.g., a display component that includes items in addition
to those specified under the OLED Module definition), which Licensed Products
are sold or otherwise transferred to third parties, “Net Sales Revenue” would be
calculated in the same manner as for OLED Modules according to subsection 1.10.1
or 1.10.2 or 1.10.3 above, whichever is applicable, except that “Net Sales
Revenue” would only include that portion of the sales or transfer price which is
fairly attributable to the OLED Module(s) incorporated in such Licensed
Products. [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] Any
applicable deductions and commissions from the selling price of the Licensed
Product per subsection 1.10.1 above shall also be limited to only those portions
of such deductions and commissions which are fairly attributable to the OLED
Module(s) incorporated in such Licensed Products. [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.]
1.11.6 If either
party presents reasonable evidence that the amount calculated as set forth above
does not fairly reflect the fair market value of any OLED Modules being sold or
otherwise transferred (such as evidence that the industry-wide average sales
price of substantially similar products differs significantly from the price
calculated herein), the parties shall in good faith negotiate a more equitable
method of calculating Net Sales Revenue with respect to such OLED
Modules.
1.12 “OLED” or “Organic Light Emitting
Device” means a device
consisting of two or more electrodes, at least one of which is transparent,
together with one or more chemical substances deposited between these two
electrodes, at least one of which is an organic or organometallic material,
which device emits light when a voltage is applied across the
electrodes.
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1.13 “OLED Module” means a
device designed for use in active matrix flat panel OLED display applications
(which expressly exclude applications for Signage and Lighting), which device
has (1) an OLED, a Permitted Substrate supporting the OLED, an active matrix
backplane, encapsulation components, such filters, polarizers and other display
optics as may be used to enhance or modify the color, contrast or other visual
properties of the device (collectively, an “Active Matrix OLED
Panel”); and (2) [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
1.14 “Permitted Processes”
means a deposition process wherein the Phosphorescent Material in the OLED
emissive layer is deposited through “dry” processing methods, such as vacuum
thermal evaporation, but excluding [The confidential material contained herein
has been omitted and has been separately filed with the
Commission.].
1.15 “Permitted
Substrate” means (a) a
silicate-containing inorganic material of sufficient thickness to support an
OLED, which material fractures or substantially and irreversibly deforms upon
being bent to a radius of curvature of 50 cm or less, and/or (b) [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
1.16 “Phosphorescent
Material” means an organometallic or other organic material that, when
used in the emissive layer of an OLED, emits radiation from a triplet excited
state or enhances the emission of radiation through phosphorescent
sensitization.
1.17 “Signage” means usage
for advertising or in informational products, such as billboards, exit signs and
digital clocks or watches, wherein the product emits light to produce
predetermined images or shapes such as numbers, letters or
pictures.
1.18 “Term” shall have the
meaning set forth in Section 9.1 below.
1.19 “Universal Display
Know-How” means all Know-How of Universal Display relating to the
practice of inventions claimed in the Universal Display Patents, which Know-How
may be included in Confidential Items of Universal Display.
1.20 “Universal Display
Improvements” means Improvements that are first conceived, developed or
reduced to practice during the Term by personnel of Universal Display without
any inventive contribution by personnel of Kyocera or the use of any Kyocera
Confidential Items.
1.21 “Universal Display
Patents” means all Existing Universal Display Patents.
1.22 “Universal Display
Technology” means the Universal Display Patents and the Universal Display
Know-How.
1.23 “Valid Claim” means a
claim of a Universal Display Patent, which claim has neither expired nor been
finally held unpatentable, invalid or unenforceable by a court or other
government agency of competent jurisdiction.
1.24 “Effective Date” shall
have the meaning set forth in Article 11 below.
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1.25 License
Rights
1.26 Grant of License to
Kyocera. Subject to the remaining provisions of this Article
2, Universal Display hereby grants to Kyocera a worldwide, royalty-bearing,
non-exclusive and non-transferable (except in connection with a permitted
transfer or assignment of this Agreement as a whole) license, without rights to
sublicense, under the Universal Display Patents, and to use the Universal
Display Know-How, solely to manufacture (but not have manufactured), sell, offer
for sale, use, export, import and otherwise dispose of Licensed
Products.
1.27 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
1.28 Permitted
Sublicensees. Kyocera shall be permitted to grant sublicenses
of the foregoing license rights under Sections 2.1 and 2.2 above solely to its
Permitted Sublicensees, provided that (a) each such sublicense shall be pursuant
to a written agreement between Kyocera and the Permitted Sublicensee, which
written agreement shall obligate the Permitted Sublicensee to abide by the scope
of license and other provisions of this Agreement that are applicable to
Permitted Sublicensees; (b) in addition to its other rights or remedies
hereunder, Universal Display shall be expressly identified in the written
sublicense agreement as a third-party beneficiary thereof, entitled to enforce
the scope of license and other applicable provisions of this Agreement directly
against the Permitted Sublicensee; (c) Kyocera shall identify the name and
business address of each such Permitted Sublicensee to Universal Display in
writing promptly following its entry into a written sublicense agreement with
the Permitted Sublicensee; and (d) Kyocera shall use its best efforts to cause
each Permitted Sublicensee abide by the scope of license and other applicable
provisions of this Agreement. As used herein, “Permitted
Sublicensees” shall be limited to direct or indirect wholly-owned subsidiaries
of Kyocera or its parent corporation, which entities do not have, and are not
Affiliates of entities (other than Kyocera) that have, their own OLED
programs. Such entities shall be Permitted Sublicensees only for so
long as they continue to satisfy the foregoing requirements.
1.29 Non-Assert of Universal
Display Patents. In addition to the licenses granted
hereabove, Universal Display agrees that it shall not assert, nor cause or
permit any of its Affiliates to assert, any Universal Display Patent against
Kyocera, its Affiliates, or their customers based solely on (1) Kyocera’s or its
Affiliates’ manufacture of any Licensed Products made prior to [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.]; or (2) the past, present or future import, export, use,
operation, lease, offer to sell, sale or other disposition of any Licensed
Products made by Kyocera or its Affiliates prior to [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.]. Universal Display further agrees that it shall not
assert, nor cause or permit any of its Affiliates to assert, any Universal
Display Patent against Kyocera, its Affiliates, or their customers based solely
on Kyocera’s or its Affiliates’ sale or other disposition or use of any Licensed
Product made after [The confidential material contained herein has been omitted
and has been separately filed with the Commission.], provided that Kyocera has
paid, or is committed to pay, a royalty to Universal Display hereunder on
account of such sale or other disposition.
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1.30 No Rights Respecting OLED
Chemicals. Nothing in this Agreement shall be construed as
authorizing or otherwise permitting Kyocera, or any third party claiming through
Kyocera, to practice under any Universal Display Patents, or to use any
Universal Display Know-How, for purposes of manufacturing Phosphorescent
Materials or other OLED chemicals, or having Phosphorescent Materials or other
OLED chemicals manufactured for Kyocera or on Kyocera’s
behalf. Kyocera shall not manufacture Licensed Products hereunder
using any Phosphorescent Materials or other OLED chemicals that Kyocera knows or
has reason to know are being made for or sold to Kyocera without appropriate
license rights having been obtained from Universal Display.
1.31 No Rights Respecting OLED
Manufacturing Equipment. Nothing in this Agreement shall be
construed as authorizing or otherwise permitting Kyocera, or any third party
claiming through Kyocera, to practice under any Universal Display Patents, or to
use any Universal Display Know-How, for purposes of selling to any third party,
or enabling its Affiliates or others to sell to any third party, any
manufacturing equipment or machinery used to produce an OLED (i.e., internal use
of such equipment or machinery within the scope of the license rights granted
above is permitted).
1.32 Acknowledgement of
Derivative Rights. Kyocera acknowledges that certain of the
Universal Display Patents and the Universal Display Know-How is licensed by
Universal Display from the Trustees of Princeton University (“Princeton”), the
University of Southern California (“USC”), the University
of Michigan (“Michigan”) and
Motorola, Inc. (“Motorola”), and,
therefore, that Kyocera’s license rights under this Agreement with respect to
such Universal Display Patents and Universal Display Know-How are subject to the
reserved rights of and obligations to such third parties under their license
agreements with Universal Display. Kyocera further acknowledges that
the U.S. Government has certain reserved rights with respect to those Universal
Display Patents claiming inventions that were first conceived or reduced to
practice under contracts between the U.S. Government and Universal Display or
its licensors. Universal Display hereby covenants to Kyocera that:
(a) Universal Display shall comply in all material respects with the terms of
its license agreements with such third-party licensors and its contracts with or
awards from the U.S. Government as in either case are relevant to Kyocera’s
exercise of license rights granted by Universal Display hereunder; and (b) no
additional consideration shall be owed by Kyocera to such third-party licensors
or the U.S. Government on account of Kyocera’s practice under the Universal
Display Patents or use of the Universal Display Know-How as contemplated
hereunder. Nothing herein shall be construed as limiting or
restricting the reserved rights of or obligations to Universal Display’s
third-party licensors or the U.S. Government with respect to such Universal
Display Patents and Universal Display Know-How. Upon Kyocera’s
request, Universal Display will provided Kyocera with copies (which may be
reasonably redacted by Universal Display to avoid disclosing confidential
information not relevant to this Agreement) of such of Universal Display’s
agreements with such third-party licensors and of the applicable portions its
relevant contracts with or awards from the U.S. Government.
1.33 Reservation of
Rights. Except for the license rights expressly granted to
Kyocera under this Article 2, all rights to practice under the Universal Display
Patents and to use the Universal Display Know-How are reserved unto Universal
Display and its licensors. All rights
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1.34 to
practice under any patents claiming Kyocera Improvements are reserved unto
Kyocera. No implied rights or licenses to practice under any patents
or to utilize any unpatented inventions, Know-How or technical information of
either party are granted to the other party hereunder.
Article
2 Technical
Assistance and Improvements
2.1 Acknowledgement of Previous
Technical Assistance. Both parties acknowledge and agree that
Universal Display has been providing Kyocera with technical assistance to enable
Kyocera to understand and utilize the Universal Display Technology since the
parties entered into an Evaluation Agreement effective as of March 1,
2006. Such technical assistance has taken the form of [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
2.2 Commitment to Provide Future
Technical Assistance. To the extent it has the right to do so,
Universal Display shall continue to provide Kyocera with such technical
assistance as Universal Display determines, or as Kyocera reasonably indicates,
would be useful in connection with Kyocera’s design, manufacture and/or sale of
Licensed Products as permitted hereunder. This technical assistance
shall continue in such manner as it has previously been provided by Universal
Display, as described in greater detail in Section 3.1 above, and shall also
include facility visits as described in greater detail in Section 3.3
below.
2.3 Facility
Visits. Upon Kyocera’s request, Universal Display shall permit
a reasonable number of personnel of Kyocera to visit and receive reasonable
technical assistance at Universal Display’s OLED facility in Ewing, New
Jersey. The scope and frequency of such activities shall be as
mutually determined by the parties in good faith. All Kyocera
personnel visiting Universal Display’s facility in Ewing, New Jersey shall be
required to abide by Universal Display’s then-standard policies for
visitors.
2.4 Ownership of
Improvements. As between the parties, all Universal Display
Improvements, including any patents thereon or copyrights therein, shall be
owned solely by Universal Display, and all Kyocera Improvements, including any
patents thereon or copyrights therein, shall be owned solely by
Kyocera. As between the parties, all Joint Improvements, including
any patents thereon or copyrights therein, shall be owned jointly by both
parties, with neither party having any obligation of accounting to the other in
relation to its practice, use or other exploitation thereof. Each
party shall promptly disclose to the other, in writing, any Joint Improvement
with respect to which such party desires to file a patent application, but
otherwise no disclosure of Joint Improvements is required. Promptly
following any such disclosure, the parties shall in good faith discuss and agree
upon procedures respecting the filing and prosecution of such patent application
and the maintenance and enforcement of any patents issued thereon.
2.5 Further
Assurances. Upon either party’s written request, the other
party shall execute and deliver to the requesting party all instruments and
other documents relating to Joint Improvements, and shall take such other
actions as may be necessary or reasonably requested, so that the requesting
party may secure, protect or enforce its rights therein.
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2.6 Export
Control. Each party shall comply with all obligations under
applicable law to control access to technical data under the U.S. Export Laws
and Regulations, or any foreign counterparts thereof, and shall adhere to such
laws and regulations in handling and disclosing any technical information
provided or received by it under this Agreement.
Article
3 Patent
Matters, Attribution and Samples
3.1 Patent
Validity. To the extent permitted by law, Kyocera shall not,
and shall use its best efforts to ensure that its Affiliates do not, challenge
or oppose, or assist others in challenging or opposing, the issuance, validity
or enforceability of any of the Universal Display Patents. Should
Kyocera or any of its Affiliates so challenge or oppose, or assist others in
challenging or opposing, any of the Universal Display Patents, Kyocera shall
reimburse Universal Display for all attorneys’ fees, costs and out-of-pocket
expenses incurred by Universal Display in resisting and responding to such
challenge or opposition in the event the challenge or opposition is fully or
substantially unsuccessful. The foregoing shall be in addition to,
and not in lieu of, any other remedies that may be available, at law or equity,
including an action for the recovery of damages.
3.2 Patent
Marking. Upon Universal Display’s request and without
incurring any excessive additional expense, Kyocera shall apply or cause to be
applied to all Licensed Products as sold or otherwise distributed by Kyocera, or
at Kyocera’s option to the packaging for such Licensed Products, [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] in order to fully protect their rights and interests
therein under the laws of the countries in which such Licensed Products are or
are likely to be marketed, sold or used.
3.3 Attribution. With
respect to any Licensed Product that would, but for the license granted
hereunder, infringe the [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] patents being
sublicensed to Kyocera, Kyocera shall, upon Universal Display’s request and
without incurring any excessive additional expense, ensure that all such
Licensed Products are marked on an exposed surface with such of the following
notices as are requested in writing [The confidential material contained herein
has been omitted and has been separately filed with the
Commission.] When such a notice would not be reasonably and
customarily applied to the Licensed Products, it shall instead appear
prominently on the packaging for the Licensed Products as sold or otherwise
distributed by Kyocera, or in data sheets or other literature accompanying such
Licensed Products.
3.4 Non-Use of Certain
Names. Kyocera shall not use the names of Princeton, USC or
Michigan in connection with any products, promotion or advertising without the
prior consent of Princeton, USC or Michigan, as applicable, except to the extent
reasonably required by law. Notwithstanding the foregoing sentence,
Kyocera may state that its license rights hereunder are derivative of rights
granted by Princeton, USC and Michigan to Universal Display under the license
agreement among them.
3.5 Samples. Upon
Universal Display’s request [The confidential material contained herein has been
omitted and has been separately filed with the Commission.], Kyocera
shall
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3.6 supply
Universal Display with a minimum of two (2) samples of each Licensed Product
that Kyocera or its Affiliates offer for sale to third
parties. Universal Display shall limit its requests for such samples
to a reasonable number of Licensed Products and Kyocera shall supply such
samples promptly following the Licensed Product being released for public
sale. Universal Display agrees to use such samples only (a) to verify
compliance by Kyocera with the terms of the license grant hereunder, and (b) for
promotional purposes such as in displays at shareholder meetings, industry
conferences or other similar venues.
Article
4 Consideration
4.1 Upfront
Fees. In partial consideration of the license rights granted
and technical assistance provided and to be provided by Universal Display
hereunder, Kyocera shall pay to Universal Display the upfront fees specified in
Exhibit B
hereto. Said upfront fees are due and payable on the date(s)
specified in Exhibit
B hereto. All such fees are non-refundable and shall be in
addition to any running royalties payable hereunder, except as may otherwise be
expressly stated in Exhibit
B.
4.2 Royalties. In
further consideration of the license rights granted by Universal Display
hereunder, Kyocera shall pay to Universal Display running royalties at the rates
specified in Exhibit
B hereto on account of Net Sales Revenue from Kyocera’s and its
Affiliates’ sales or other disposition or usage of Licensed Products, as set
forth in subsections 5.2.1 through 5.2.3 below.
4.2.1 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
4.2.2 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
4.2.3 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
4.2.4 Both
parties acknowledge and agree that the royalty rates and the methods by which
they are to be calculated and paid have been determined through arms length
negotiations between the parties and that such rates and methods are reasonable
and appropriate notwithstanding whether and to what extent any of the Universal
Display Patents have been issued, granted, allowed or registered, or have
expired, in any particular country in which Licensed Products are made, sold or
used.
4.2.5 No
multiple royalties shall be due because any Licensed Product, or its
manufacture, sale, other disposition or usage, is or may be covered by more than
one Universal Display Patent licensed to Kyocera hereunder.
4.2.6 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
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4.2.7 Royalty
Reports. Within sixty (60) days following the end of each [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] during the Term (and if the Term ends in the middle
of a [The confidential material contained herein has been omitted and has been
separately filed with the Commission.], within sixty (60) days following the end
of the Term), Kyocera shall submit to Universal Display a written report, in
English, that includes the following information (each, a “Royalty Report”): (a)
a description of all Licensed Products sold or otherwise disposed of or used
during such [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] by Kyocera or its Affiliates; (b)
gross amounts invoiced or received on account of Kyocera’s or its Affiliates’
sales, other disposition or usage of such Licensed Products; (c) Kyocera’s
reasonably detailed calculation of the royalties due and owing to Universal
Display on account of such sales, other disposition or usage of Licensed
Products; and (d) such other information as Universal Display may reasonably
request of Kyocera which is pertinent to a royalty accounting
hereunder. [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
4.3 Payment of
Royalties. Within sixty (60) days following the end of each
[The confidential material contained herein has been omitted and has been
separately filed with the Commission.] during the Term (and if the Term ends in
the middle of a [The confidential material contained herein has been omitted and
has been separately filed with the Commission.], within sixty (60) days
following the end of the Term), Kyocera shall pay directly to Universal Display
the royalties due and payable with respect to Licensed Products sold or
otherwise disposed of or used during such [The confidential material contained
herein has been omitted and has been separately filed with the Commission.] by
Kyocera or its Affiliates. [The confidential material contained
herein has been omitted and has been separately filed with the
Commission.]
4.4 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
4.5 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
Article
5 Payment
Terms; Audit Rights
5.1 Payments. All
amounts due to Universal Display hereunder shall be paid in U.S. Dollars by wire
transfer to a bank designated by Universal Display in writing, or by such other
means as the parties may agree in writing. Universal Display’s
current wire instructions are as follows:
[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
Each
payment shall be fully earned when due and nonrefundable once
made. All payments due hereunder shall be made without set-off,
deduction or credit for any amount owed (or alleged to be owed) by Universal
Display to Kyocera or any of its Affiliates. Without limiting its
other rights or remedies on account of any late payment, Universal Display may
require Kyocera to pay
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interest
on any late payments. [The confidential material contained herein has
been omitted and has been separately filed with the Commission.]
5.2 Payment Authorization and
Associated Charges. Kyocera shall secure all authorizations
required for payment of all amounts due to Universal Display hereunder and shall
bear all transfer fees, taxes and other charges associated
therewith. If Kyocera believes that any income taxes imposed by any
national, provincial or local government of relevant countries on amount payable
to Universal Display hereunder will need to be withheld, Kyocera shall provide
Universal Display with prompt written notice thereof. Thereupon, the
parties will cooperate in good faith and use their reasonable best efforts to
promptly file for and obtain appropriate governmental exemptions that would
eliminate the requirement for Kyocera to withhold such taxes. If,
notwithstanding these efforts, tax withholding is nonetheless required, [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.].
5.3 Currency Conversion and
Restriction. All royalties due hereunder based on Licensed
Products sold or otherwise disposed of or used as consumable goods by Kyocera or
its Affiliates outside of the United States shall be payable in U.S. Dollars at
the rate of exchange for the currency of the country in which such sales or
usage occurs, [The confidential material contained herein has been omitted and
has been separately filed with the Commission.] in Japan quoted by an authorized
foreign exchange bank on the last business day of the [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] for which payment is being made. All royalties shall be
paid to Universal Display without deduction of currency exchange fees or other
similar amounts. If at any time the legal restrictions of a country
outside of the United States prevent Kyocera from paying Universal Display any
amounts due hereunder, Universal Display may direct Kyocera to make such payment
to Universal Display’s account in a bank or other depository of such
country.
5.4 Records; Audit and
Inspection. Kyocera shall, and shall require its Affiliates
to, keep accurate and complete financial and technical records with respect to
the Licensed Products they manufacture, sell or use for three (3) years
thereafter, as well as with respect to the royalties payable to Universal
Display hereunder. During the Term and for two (2) years thereafter,
an independent certified public accountant selected by Universal Display and
approved by Kyocera (such approval not to be unreasonably withheld), together
with such technical support staff as such accountant reasonably deems necessary
and approved by Kyocera (such approval not to be unreasonably withheld), shall
have the right to audit such records and inspect such of Kyocera’s and its
Affiliates’ materials, equipment and manufacturing processes as are reasonably
necessary in order to verify Kyocera’s payment of all royalties due
hereunder. Universal Display shall give reasonable advance notice of
any such audit or inspection to Kyocera, and such audit or inspection shall be
conducted during Kyocera’s or its Affiliates’ normal business hours and in a
manner that does not cause unreasonable disruption to Kyocera’s or its
Affiliates’ conduct of their business. The results of any such audit
or inspection shall be deemed a Confidential Item of Kyocera and shall not be
disclosed by Universal Display except as may be necessary for Universal Display
to enforce its rights hereunder. If the audit or inspection reveals
that Kyocera has underpaid any royalties due to Universal Display, Kyocera shall
immediately pay to Universal Display all unpaid royalties, plus interest on the
unpaid amounts from the date
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5.5 payment
was initially due. [The confidential material contained herein has
been omitted and has been separately filed with the
Commission.] Universal Display shall be responsible for paying the
fees and expenses charged by the accountant for conducting any audit or
inspection hereunder; provided, however, that if the unpaid royalties exceed
[The confidential material contained herein has been omitted and has been
separately filed with the Commission.] of the total royalties that should have
been paid by Kyocera during the audited period, Kyocera shall promptly reimburse
Universal Display for the reasonable fees and expenses charged by such
accountant.
Article
6 Confidentiality
and Publicity
6.1 Obligations of
Confidentiality and Non-Use. Each party (the “Recipient”) shall
handle and maintain all Confidential Items of the other party in accordance with
the following terms and conditions:
6.1.1 Recipient
shall not publish, disclose or otherwise disseminate any Confidential Items of
the other party, except to such of Recipient’s employees and agents (and, in the
case of Kyocera, to the employees and agents of its Affiliates) who have a “need
to know” it to accomplish the purposes of this Agreement, and then only if such
persons previously have had an obligation to handle and maintain such
Confidential Items in accordance with the provisions of this Agreement or
provisions substantially similar thereto. Disclosure or dissemination
of Confidential Items of the other party to additional persons or entities
requires the prior written approval of such other party.
6.1.2 Recipient
shall maintain all Confidential Items of the other party in a safe and secure
place with reasonable safeguards to prevent any unauthorized access to or
disclosure of such Confidential Items. As used herein, “reasonable
safeguards” means all safeguards that a reasonable person would take to protect
the Confidential Item in question, which safeguards shall be no less than the
safeguards Recipient takes to protect its own confidential or proprietary items
of a similar nature.
6.1.3 Recipient
may copy Confidential Items of the other party only as is reasonably necessary
for Recipient to accomplish the purposes of this Agreement. Copying
or reproduction of Confidential Items except as permitted herein is strictly
prohibited.
6.1.4 Recipient
shall not utilize or exploit any Confidential Items of the other party, or
permit or assist others to utilize or exploit such Confidential Items, except as
is reasonably necessary to accomplish the purposes of this
Agreement. Reverse engineering, disassembly or other methods designed
to derive the composition, structure, method of manufacture or purity of
Confidential Items is strictly prohibited.
6.1.5 Recipient
shall not publish or otherwise disclose to third parties, including by
referencing or including in any patent application, any test results or other
information or data regarding Recipient’s evaluation or use of any Confidential
Items of the other party without the other party’s prior written
consent.
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6.1.6 Promptly
upon learning of any unauthorized use or disclosure of any Confidential Item of
the other party, Recipient shall provide the other party with written notice
thereof and take such other steps as are reasonably requested by the other party
in order to limit the effects of such use or disclosure and/or prevent any
further unauthorized use or disclosure of such Confidential Item.
6.1.7 Promptly
upon the expiration or sooner termination of this Agreement, Recipient shall
return to the other party, destroy and/or delete from Recipient’s records and
computer systems all Confidential Items of the other party, including any copies
or portions thereof, in Recipient’s possession or control; provided, however,
that Recipient may retain one copy of documents incorporating Confidential Items
for archival purposes only if permitted by the other party. Within
thirty (30) days following the other party’s written request, Recipient shall
provide the other party with a certificate of Recipient’s compliance with the
foregoing requirements.
6.2 Definition of Confidential
Items. As used
herein, “Confidential
Items” of a party are all trade secret, proprietary and confidential
information and materials, in written, oral or electronic form, relating to such
party’s or its licensors’, suppliers’ or business partners’ technologies,
compounds, research programs, operations and/or financial or business condition
(including, without limitation, know-how, data, drawings, designs,
specifications, formulations, processes, methods, equipment, software and
pricing information) that is (a) disclosed in writing and marked as
“Confidential”, “Proprietary” or with similar words at the time of disclosure,
or (b) orally disclosed and identified as confidential or proprietary at the
time of disclosure and confirmed as such in writing within thirty (30) days
thereafter. Notwithstanding the foregoing, “Confidential Items” of a
party shall not include any information or materials that:
6.2.1 are
approved by such party in writing for release by Recipient without
restriction;
6.2.2 Recipient
can demonstrate by written records were previously known to Recipient other than
through a prior disclosure by such party or any third party with an obligation
of confidentiality to such party;
6.2.3 are
publicly known as of the date of this Agreement, or become public knowledge
subsequent thereto, through no act or omission of Recipient or any third party
receiving such items from or through Recipient;
6.2.4 are
obtained by Recipient in good faith from a third party without the violation of
any obligation of confidentiality to such party by either Recipient or the third
party; or
6.2.5 are
independently developed by or on behalf of Recipient without the benefit of such
party’s Confidential Items, as shown by competent written records.
6.3 Disclosure Required by
Law. This Agreement shall not restrict Recipient from
disclosing any Confidential Items of the other party to the extent required by
applicable law, or
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6.4 by the
order of any court or government agency; provided, however, that Recipient shall
afford the other party prompt notice of such law or order, so that the other
party may interpose an objection to such disclosure or take whatever other
actions the other party deems appropriate to protect such Confidential Items,
and provided further that Recipient shall use all reasonable efforts to limit
such disclosure to only those Confidential Items that are required to be
disclosed and to ensure that the person or entity to whom such Confidential
Items are disclosed agrees to keep them confidential.
6.5 Responsibility for
Personnel. Recipient shall be responsible for the acts or
omissions of any persons or entities receiving Confidential Items of the other
party from or through Recipient to the extent such acts or omissions, if
performed or not performed by Recipient, would constitute violations of this
Agreement by Recipient.
6.6 Universal Display’s
Licensors. Notwithstanding the foregoing, Universal Display
shall have the right to provide an unredacted copy of this Agreement, along with
copies of all Royalty Reports, to each of Princeton, USC, Michigan and Motorola;
provided that in such case Universal Display shall cause such third-party
licensors to have first agreed in writing to handle and maintain such items in
accordance with the provisions of this Article 7, or provisions substantially
similar thereto, and deliver one copy of such written agreement to
Kyocera.
6.7 Confidentiality of this
Agreement. The terms of this Agreement and its existence shall
be deemed Confidential Items of each party and treated as such by both parties
unless otherwise stipulated in this Agreement. Notwithstanding the
foregoing sentence, either party may disclose in its public filings such of the
terms of this Agreement as are reasonably required for such party to comply with
applicable securities laws and regulations, including, without limitation, by
filing an appropriately redacted copy of this Agreement in connection
therewith. In addition, either party may issue a press release or
other public announcement describing the general nature of this Agreement upon
prior agreement, or the parties may agree to issue such a release or
announcement jointly. However, it is expressly understood and agreed
that no such release or public disclosure shall disclose any information about
Kyocera’s expected or intended product launch strategy without Kyocera’s prior
written consent. Subject to the foregoing provisions of this
paragraph, any such public disclosure of the specific financial terms or other
provisions of this Agreement, or any other information regarding the
relationship between the parties hereunder, shall require the other party’s
prior written consent.
6.8 [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
Article
7 Representations
and Warranties; Disclaimers and Limitations of Liability
7.1 Warranties by Both
Parties. Each party represents and warrants to the other that
such party has the right, power and authority to enter into this Agreement and
to perform its obligations hereunder, and that such performance will not violate
any other agreement or understanding by which such party is bound.
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7.2 Further Warranty by
Universal Display. Universal Display additionally represents
and warrants to Kyocera that Universal Display owns or has sufficient rights in
the Universal Display Technology to grant the licenses granted to Kyocera
hereunder. [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
7.3 Further Warranty by
Kyocera. Kyocera additionally represents and warrants to Universal
Display that [The confidential material contained herein has been omitted
and has been separately filed with the Commission.] the pricing attributable
OLED Module components is calculated in a manner similar to that used to
calculate the pricing for non-OLED Module components.
7.4 Disclaimer of Additional
Warranties. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT,
VALIDITY, QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, ARE HEREBY DISCLAIMED BY EACH PARTY. In particular,
Universal Display makes no representations or warranties that Kyocera will be
able to manufacture, sell or use any Licensed Products without obtaining
additional license rights from third parties, and Kyocera shall be solely
responsible for determining the rights it is required to obtain and for
obtaining all such rights.
7.5 Required Disclaimer of
Princeton, USC and Michigan. PRINCETON, USC AND MICHIGAN MAKE
NO REPRESENTATIONS AND WARRANTIES AS TO THE PATENTABILITY AND/OR DISCOVERIES
INVOLVED IN ANY OF THE UNIVERSAL DISPLAY PATENTS LICENSED
HEREUNDER. PRINCETON, USC AND MICHIGAN MAKE NO REPRESENTATION AS TO
PATENTS NOW HELD OR WHICH WILL BE HELD BY OTHERS IN ANY FIELD AND/OR FOR ANY
PARTICULAR PURPOSE. PRINCETON, USC AND MICHIGAN MAKE NO EXPRESS OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7.6 Limitation on Certain
Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER, WHETHER AS A RESULT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES ARISING UNDER OR IN CONNECTION WITH A BREACH OR ALLEGED BREACH OF THIS
AGREEMENT. The foregoing limitation shall not limit either party’s
liability to the other party for: (a) any claims of bodily injury or damage to
tangible property resulting from such party’s gross negligence or willful
misconduct; (b) a breach of the provisions of Article 10.11 respecting the
business continuity of Kyocera; (c) any unauthorized use of the other party’s
materials or technology; (d) any infringement of the other party’s patents; or
(e) any breach of the provisions of Article 7 respecting the other party’s
Confidential Items.
7.7 Essential Part of the
Bargain. The parties acknowledge that the disclaimers and
limitations of liability set forth in this Article 8 reflect a deliberate and
bargained for allocation of risks between them and are intended to be
independent of any exclusive remedies available under this Agreement, including
any failure of such a remedy to achieve its essential purpose.
Universal
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7.8 Term and
Termination
7.9 Term. The
term of this Agreement (the “Term”) shall commence
on the Effective Date and shall continue, unless terminated sooner as permitted
hereunder, until the latter of the date of expiration of the last to expire of
the Universal Display Patents. Unless otherwise expressly agreed in
writing by the parties, all licenses granted under this Agreement shall expire
immediately upon any termination of this Agreement.
7.10 Termination for
Breach. Either party may terminate this Agreement on written
notice to the other party if the other party materially breaches any of its
obligations under this Agreement and fails to cure such breach within a
reasonable period, not more than sixty (60) days, following written notice
thereof by the terminating party. Both parties agree to consult in
good faith with each other prior to issuing any such notice of termination in
order to determine whether there is a course of action beyond termination that
is acceptable to both parties.
7.11 Termination for Challenge of
Patents. Universal Display may [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] on written notice if Kyocera or any of its Affiliates asserts or
assists another in asserting, before any court, patent office or other
governmental agency, that any of the Universal Display Patents are invalid or
unenforceable, or should not be issued, granted, allowed or registered, and such
action or assistance is not fully terminated within sixty (60) days following
written notice thereof from Universal Display to Kyocera. [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
7.12 Other
Termination. Either party may terminate this Agreement on
written notice to the other party if the other party permanently ceases
conducting business in the normal course, becomes insolvent or is adjudicated
bankrupt, makes a general assignment for the benefit of its creditors, admits in
writing its inability to pay its debts as they become due, permits the
appointment of a receiver for its business or assets, or initiates or becomes
the subject of any bankruptcy or insolvency proceedings which proceedings, if
initiated involuntarily, are not dismissed with ninety (90) days
thereafter.
7.13 Survival. The
following provisions of this Agreement shall survive the expiration or earlier
termination of this Agreement: (a) Sections 2.2-2.5, 3.3-3.5 and 4.1,
and Articles 6 through 10; (b) any payment or reporting obligations of Kyocera
respecting the sale or other disposition or usage of Licensed Products occurring
prior to or in connection with such expiration or termination; and (c) any other
provisions necessary to interpret the respective rights and obligations of the
parties hereunder. Any termination of this Agreement shall be in
addition to, and not in lieu of, any other remedies that may be available, at
law or equity, including an action for the recovery of damages.
Article
8 Miscellaneous
8.1 Independent
Contractors. This Agreement is not intended by the parties to
constitute, create, give effect to, or otherwise recognize a joint venture,
partnership, or formal business organization of any kind. Each party
hereto shall act as an independent contractor, and
Universal
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8.2 neither
shall act as an agent of the other for any purpose. Neither party has
the authority to assume or create any obligation, express or implied, on behalf
of the other.
8.3 Force
Majeure. Neither party shall be in breach of this Agreement
for any failure of performance caused by an event beyond its reasonable control
and not due to its fault or negligence, but excluding any failure to pay
monetary amounts due and owing. In the event that such a force
majeure event occurs, the party unable to perform shall promptly notify the
other party of such non-performance and its expected duration. In
addition, such party shall in good faith maintain such partial performance of
this Agreement as is reasonably possible, shall use all reasonable efforts to
overcome the cause of nonperformance and shall resume full performance as soon
as is reasonably possible.
8.4 Notices. Any
disclosures or notices required or permitted hereunder shall be in writing and
shall be deemed effectively given upon receipt of such disclosures or notices by
the receiving party. Such disclosure or notices shall be given by
personal delivery, certified mail with postage prepaid and return receipt
requested, or prepaid delivery using a recognized private courier, to each party
at its address set forth below. Either party may change its address
for such notices at any time by means of a notice given in the manner provided
in this paragraph.
All
Royalty Reports and any other financial notices, to:
|
Universal
Display Corporation
|
Kyocera
Corporation
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇
|
|
|
▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
|
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇
|
|
|
▇▇▇▇▇▇▇-▇▇,
▇▇▇▇▇ ▇▇▇-▇▇▇▇,
▇▇▇▇▇
|
[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
All other
notices and communications:
[same as
above] [same
as above]
[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
8.5 Non-Assignment. This
Agreement and the rights and obligations of the parties hereunder shall not be
assigned or transferred by either party without the prior written consent of the
other party, except that either party may assign or transfer this Agreement, in
its entirety and on written notice to the other, to a successor in interest to
all or substantially all of such party’s business to which this Agreement
relates, whether by merger, acquisition or otherwise. Notwithstanding
the foregoing, Kyocera may not assign or transfer this Agreement to a third
party with whom Universal Display is then-engaged in litigation or other formal
adversarial or dispute resolution proceedings respecting the Universal Display
Patents. Should Kyocera assign or transfer this Agreement, whether by
merger, acquisition or otherwise, to a third party with an existing OLED
business, or should Kyocera acquire the existing OLED business of any third
party, the license rights granted to Kyocera under this Agreement shall not
extend to any current or future products of such third party’s OLED business
unless expressly agreed to by Universal
Universal
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8.6 Display
in writing. Moreover, should Universal Display have already entered
into a similar license agreement with the third party at the time of such
assignment, transfer or acquisition, there shall be no reduction of the payment
or other obligations of Kyocera under this Agreement as they pertain to products
of Kyocera’s OLED business, or of such third party under its similar license
agreement as they pertain to products of the third party’s OLED business, unless
expressly agreed to by Universal Display in writing. Nothing herein
shall confer any rights upon any person other than the parties hereto and their
respective successors and permitted assigns.
8.7 Equitable
Relief. In the event of a party’s actual or reasonably
anticipated infringement of the other party’s patents, unauthorized use of the
other party’s proprietary materials or information; or breach of the provisions
of Article 7 respecting the other party’s Confidential Items, the other party
may seek to obtain such injunctions, order and decrees as may be necessary to
restrain such activity, without the necessity of proving actual damages and
without posting any bond or other security. Such injunctive relief
shall be in addition to any other rights or remedies available to the other
party under this Agreement, at law or in equity.
8.8 Choice of
Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New Jersey, U.S.A.,
without respect to its rules on the conflict of laws.
8.9 Severability. In
the event that any term of this Agreement is held to be invalid, illegal, or
unenforceable, such invalidity, illegality, or unenforceability shall not affect
any other portion of this Agreement, and there shall be deemed substituted for
such term other term(s) that are permitted by applicable law and that will most
fully realize the intent of the parties as expressed in this
Agreement.
8.10 No
Waivers. The failure of either party to enforce, or any delay
in enforcing, any right, power or remedy that such party may have under this
Agreement shall not constitute a waiver of any such right, power or remedy, or
release the other party from any obligations under this Agreement, except by a
written document signed by the party against whom such waiver or release is
sought to be enforced.
8.11 Entire Agreement;
Amendments. This Agreement constitutes the entire
understanding and agreement of the parties respecting the subject matter hereof
and supersedes any and all prior agreements, arrangements or understandings
between the parties, whether written or oral, relating thereto. This
Agreement may not be amended or supplemented in any way except by a written
document signed by both parties.
8.12 Counterparts. This
Agreement may be executed by the parties hereto in separate counterparts, each
of shall be deemed an original, but all of which together shall constitute one
and the same instrument.
8.13 Business
Continuity. In order to facilitate Kyocera’s business
continuity, Universal Display shall not assign, transfer or otherwise dispose of
its interest in any Universal Display Patents licensed hereunder, even by
merger, acquisition or otherwise, without first obtaining
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8.14 from the
assignee, transferee or other person or entity obtaining such interest, a
written acknowledgment of the obligations of Universal Display and rights of
Kyocera under this Agreement, and a written agreement to assume and abide by the
terms and conditions of this Agreement.
Article
9 Effective
Date
Except
for the provisions of this Article 11, this Agreement shall become effective
only when Kyocera gives a written notice to Universal Display on or before
December 31, 2008, [The confidential material contained herein has been omitted
and has been separately filed with the Commission.]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized representatives:
| Kyocera Corporation | Universal Display Corporation | |
|
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
|
Title: Executive Officer
|
Title: President
|
|
|
General Manager, Corporate Display Group
|
||
|
Date: July 23, 2008
|
Date: July 28, 2008
|
|
Universal
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Exhibit
A
Universal
Display Patents
[Separately
attached hereto.]
Universal
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Exhibit
B
Fees
and Royalty Rates
Upfront
Fee: [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
The
Upfront Fee shall be paid to Universal Display within thirty (30) days following
the Effective Date of the Agreement.
[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
Running Royalty
Rate:
[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
Universal
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