UNIVERSAL DISPLAY
CORPORATION(TM)
[GRAPHIC OMITTED]
March 30, 2005
VIA FACSIMILE AND OVERNIGHT MAIL
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Vice President - Optical Products
PPG Industries, Inc.
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RE: AMENDMENT #6 TO THE DEVELOPMENT AND LICENSE AGREEMENT
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Dear ▇▇▇▇,
According to Section 13.1 of the Development and License Agreement entered into
and effective as of October 1, 2000 by and between PPG Industries, Inc. ("PPG")
and Universal Display Corporation ("UDC"), as amended (the "D&L Agreement"), the
term of the D&L Agreement is automatically extended for an additional twelve
(12) months unless either party provides the other with at least nine (9)
months' prior written notice of non-renewal. The scheduled date of expiration is
currently December 31, 2005. Thus, under its current terms the D&L Agreement
will renew for calendar year 2006 unless either party provides the other with
written notice to the contrary on or before March 31, 2005.
Based on recent discussions, the parties desire to amend certain provisions of
the D&L Agreement, and to enter into certain additional agreements as more fully
described below. Accordingly, the parties hereby agree as follows:
1. The term of the D&L Agreement is hereby extended for an additional three
(3) months, through March 31, 2006, or until such earlier time as the
parties may otherwise agree in writing. The date by which either party must
provide the other with written notice in order to avoid automatic extension
of the D&L Agreement for an additional twelve (12) months is hereby
extended until June 30, 2005. Further, all references to "December 31,
2005" in the D&L Agreement (as amended in the Fifth Amendment to the D&L
Agreement) are hereby changed to "March 31, 2006."
2. Sections 10.10.1 and 10.10.2 of the D&L Agreement are hereby amended to
provide, respectively, that a new budget for the Development Team shall be
agreed by the parties for the first calendar quarter of 2006, and that UDC
shall pay PPG for PPG's Actual Expenses for that period multiplied by 1.93.
3. In each instance where the D&L Agreement provides for UDC to deliver shares
of UDC common stock, $0.01 par value, to PPG, or that UDC shall have the
option to deliver shares of common stock to PPG, UDC hereby agrees to
deliver any shares of common stock that it is obligated or elects to
deliver as follows:
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PPG Industries, Inc.
March 30, 2005
Page 2
(a) Shares in payment for work performed during each of the first and
third calendar quarters of 2005, and during the first calendar quarter
of 2006, shall be delivered within 15 days following UDC's receipt of
PPG's invoice for such work in accordance with the terms of Sections
3A.3.3(a) and 10.10.3 of the existing D&L Agreement.
(b) Any shares in payment for work to be performed during the second
calendar quarter of 2005 shall be delivered in advance, together with
the shares deliverable in accordance with clause (a) above for work
performed during the first calendar quarter of 2005, based on the
agreed-upon budgeted value of work expected to be performed during the
second quarter and which is payable in shares (the "Budgeted Shares
Value"). The Ten Day Average price used to determine the number of
shares deliverable pursuant to the preceding sentence shall be the
same price used to determine the number of shares deliverable with
respect to work performed during the first calendar quarter of 2005.
(c) Should the actual value of the work performed during the second
calendar quarter of 2005 and which is payable in shares (the "Actual
Shares Value") differ from the Budgeted Shares Value for the second
calendar quarter, the dollar amount of such difference shall be
determined. With respect to any such difference:
(i) if such difference reflects an excess of the Actual Shares Value
over the Budgeted Shares Value, the additional shares deliverable
on account thereof shall be delivered following the third
calendar quarter of 2005, together with the shares deliverable in
accordance with clause (a) above for work performed during the
third calendar quarter. The Ten Day Average price used to
determine the number of shares deliverable pursuant to the
preceding sentence shall be the same as that used to determine
the number of shares to be delivered for work performed during
the third calendar quarter; or
(ii) if such difference reflects an excess of the Budgeted Shares
Value over the Actual Shares Value, the dollar amount of such
excess shall be deducted from the value of the work performed in
the third calendar quarter of 2005 and which is payable in shares
prior to determining the number of shares deliverable in
accordance with clause (a) above for work performed during the
third calendar quarter. There shall be no return or repurchase of
any excess shares issued in advance for work to be performed
during the second quarter of 2005 according to clause (b) above.
(d) Procedures for the fourth calendar quarter of 2005 shall be the same
as those set forth in clauses (b) and (c) above, except that all
references to the second quarter of 2005 shall be deemed to refer to
the fourth quarter of 2005, and all references to the third quarter of
2005 shall be deemed to refer to the first quarter of 2006.
(e) This letter agreement shall not affect the cash portion of any
payments due to PPG for work during any period, which shall remain due
and payable in accordance with the terms of the existing D&L
Agreement.
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PPG Industries, Inc.
March 30, 2005
Page 3
4. Within 30 days following the date any shares are delivered to PPG as set
forth above, UDC shall cause a resale registration statement on Form S-3 to
be filed with the U.S. Securities and Exchange Commission (the "SEC")
registering such shares for resale by PPG and also registering for resale
by PPG any shares that were previously issued to PPG under the D&L
Agreement but which have not yet been so registered. UDC further shall use
its reasonable best efforts to cause such registration statement to be
declared effective by the SEC as promptly as is practicable, but in any
event within 120 days following the filing date thereof. Except as
expressly modified in this letter agreement, each party agrees to comply
with the requirements of Articles 10 and 11 of the D&L Agreement,
including, without limitation, Section 11.7.1 thereof, as such requirements
pertain to all shares issued to PPG either before or after the date hereof
that have not been registered for resale pursuant to an effective
registration statement on Form S-3, and such shares shall be deemed to be
Registrable Securities within the meaning of the D&L Agreement until such
time that such shares may be resold by PPG pursuant to an effective
registration statement on Form S-3. For purposes of this letter agreement
and Sections 11.7.1 and 11.7.3 of the D&L Agreement, the term "Average
Price" shall mean, for any month, the average closing price for UDC Common
Stock, as set forth in the NASDAQ National Market listing of The Wall
Street Journal, for the ten trading days prior to the close of the calendar
quarter immediately preceding such month. If a Registration Statement has
not been declared effective within 120 days of the date of its filing, then
UDC shall pay liquidated damages to PPG to the same extent that UDC would
be obligated to do so pursuant to Section 11.7.3 of the D&L Agreement if
the Registration Statement related to Group B Registrable Securities or
Group C Registrable Securities.
5. Notwithstanding the foregoing, if, after consultation with representatives
of UDC and the SEC, PPG concludes in good faith, based on the advice of
PPG's internal or external legal counsel, that it is not probable that the
resale registration statements on Form S-3 required to be filed pursuant to
the immediately preceding paragraph will be declared effective by the SEC
if filed, UDC and PPG shall promptly and in good faith negotiate a further
amendment to the D&L Agreement in order to increase the likelihood that the
shares then-held by or subsequently issued to PPG may be registered for
resale pursuant to one or more effective registration statements on Form
S-3.
6. This letter agreement, together with the D&L Agreement and that certain
Supply Agreement entered into and effective as of October 1, 2000, by and
between PPG and UDC, each as previously amended and as further amended on
the date hereof, sets forth the entire agreement of the parties with
respect to the subject matter contained herein and therein and supersedes
any and all prior or contemporaneous agreements between the parties with
respect to such subject matter. Except as expressly set forth herein, the
terms of the existing D&L Agreement shall remain in full force and effect.
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PPG Industries, Inc.
March 30, 2005
Page 4
Please confirm PPG's agreement to the same by having its authorized
representative sign a copy of this letter in the space provided below and
returning that copy to us.
Should you have any questions, please let me know.
Regards,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
UNIVERSAL DISPLAY CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Operating Officer
AGREED TO ON BEHALF OF PPG INDUSTRIES, INC. THIS 30TH DAY OF MARCH, 2005.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: V.P. Optical Products
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