[GRAPHIC OMITTED]
PPG INDUSTRIES PPG Industries, Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000 XXX
Telephone (000) 000-0000
Fax (000) 000-0000
xxxxx@xxx.xxx
XXXXXXX X. XXXXX
Vice President, Optical Products
December 22,2004 UDC/PPG CONFIDENTIAL
Xx. Xxxxxx X. Xxxxxxxx
President
Universal Display Corporation
000 Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
RE: First Amendment of the SUPPLY AGREEMENT which was entered into and
effective October 1, 2000 by and between PPG INDUSTRIES, INC. ("PPG"),
and UNIVERSAL DISPLAY CORPORATION ("UDC") ("Supply Agreement")
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Dear Xx. Xxxxxxxx:
The purpose of this letter is to amend the Supply Agreement, as set forth
herein. It is the intention of the parties to negotiate and execute, on or
before [The confidential material contained herein has been omitted and has been
separately filed with the Commission.], a new OLED Services Agreement for the
period 2006 through [The confidential material contained herein has been omitted
and has been separately filed with the Commission.], which will supercede both
the Supply Agreement and the Development and License Agreement entered into by
the parties effective as of October 1, 2000, as amended ("Development & License
Agreement"). The parties desire to amend the Supply Agreement in order to
provide additional time in which to negotiate the new OLED Services Agreement.
Therefore, intending to be legally bound, PPG and UDC hereby agree to this First
Amendment of the Supply Agreement, effective on January 1, 2005. Except as
expressly set forth herein, all capitalized terms have the meanings given in the
Supply Agreement. Except as expressly set forth herein, the Supply Agreement
shall remain unchanged and shall continue in full force and effect.
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 2
1. Article 1.4 of the Supply Agreement is amended and restated as follows:
1.4 "Cost Margin Percentage" means 60%.
2. Article 5 of the Supply Agreement is amended by adding new Article
5.1.1, as follows:
5.1.1 Notwithstanding anything to the contrary in this Agreement, PPG
shall submit invoices to UDC for:
(a) Costs associated with PPG's development, as requested by UDC,
of processes to produce OLED materials for the supply of
Developmental Chemicals under the Development & License
Agreement and/or Products under this Agreement ("Process
Development Charge") as specified in Schedule 5.1.1 attached
hereto and incorporated by reference herein. Charges for such
costs shall be reported to UDC monthly and invoiced quarterly,
within 15 days of the close of the calendar quarter;
(b) The portion, if any, of PPG's 2005 cumulative out-of-pocket
environment, health and safety costs required for the
production and shipment of OLED materials, including without
limitation out-of-pocket costs for product environmental,
health and safety testing and TSCA registration and
registration for importation into foreign countries, that
exceeds $20,000. PPG shall notify UDC in advance of the
expected costs of undertaking these activities. Invoices for
such costs shall be submitted to UDC within 15 days following
the close of each calendar month beginning with the calendar
month in which such cumulative costs first exceed $20,000 and;
(c) All analytical costs not otherwise invoiced under Article
3A.3.2(b) of the Development & License Agreement (excluding
Development Team charges) and not otherwise included in
amounts invoiced under the Development & License Agreement or
this Agreement for the supply of either Development Chemicals
or Products, at charges customarily billed to PPG's Optical
Products business unit. Invoices for such costs shall be
submitted to UDC within 15 days following the close of each
calendar month.
(d) PPG shall use reasonable efforts to minimize the costs and
charges described in Articles 5.1.1 (a)-(c) above without
reducing the quality of services and materials provided to
UDC. In addition, PPG shall provide UDC with such reports and
other supporting documentation as UDC may reasonably request
in connection with monitoring such costs and charges and PPG's
efforts to reduce the same.
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 3
3. Article 5 of the Supply Agreement is amended by deleting Article 5.3
and replacing it with the following new Article 5.3:
5.3 Notwithstanding anything to the contrary in this Agreement, for the
period from January 1, 2005 through December 31, 2005, UDC's form of payment for
invoices under this Agreement shall be as follows:
(a) Payment form for invoices set forth in Article 5.1.1(a) shall
be 100% in cash, or at UDC's option, a combination of cash and
stock calculated as follows: (A) the number of duly
authorized, validly issued fully paid and non-assessable
shares of UDC Common Stock (as defined in the Development &
License Agreement) as is the quotient of (i) an amount
representing up to 50% of the invoice price divided by (ii)
the average closing price for UDC Common Stock, as set forth
in the NASDAQ National market listing of The Wall Street
Journal, for the 10 trading days prior to the close of that
calendar quarter (the "Ten Day Average"); plus (ii) the
difference between the invoice price and the amount set forth
in (A)(i) above. Notwithstanding the foregoing, if Ten Day
Average is less than [The confidential material contained
herein has been omitted and has been separately filed with the
Commission.], then the form of payment shall be 100% in cash.
Payment shall be due 15 days following the date of the invoice
whether such payment is in cash or a combination of cash and
UDC Common Stock.
(b) Payment terms for invoices set forth in Article 5.1.1(b) - (c)
shall be net 30 days from the date of invoice in cash. Costs
set forth in Article 5.1.1(b)-(c) shall be combined by PPG on
the same invoice.
4. In the event that PPG enters into an agreement with Albemarle
Corporation for the supply of crude OLED materials to PPG for
conversion into Products supplied hereunder, PPG shall invoice UDC for
PPG's out-of-pocket cost to purchase such OLED materials multiplied by
[The confidential material contained herein has been omitted and has
been separately filed with the Commission.]. Should PPG & UDC not enter
into a new OLED Services Agreement prior to [The confidential material
contained herein has been omitted and has been separately filed with
the Commission.], and effective as of January 1, 2006, then the
multiplier shall be [The confidential material contained herein has
been omitted and has been separately filed with the Commission.]
instead of [The confidential material contained herein has been omitted
and has been separately filed with the Commission.] as stated above.
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 4
5. This Amendment takes effect only on the condition that the parties
execute the Fifth Amendment of the Development & License Agreement of
even date herewith.
6. To the extent of any inconsistency between the terms of the Supply
Agreement and the terms of this Amendment, the terms of this Amendment
shall prevail.
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 5
If UDC agrees to the foregoing, please have its authorized representative
execute the two enclosed originals of this Amendment and return one to me.
Very truly yours,
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
On behalf of PPG Industries, Inc.
ACKNOWLEDGED AND AGREED TO:
On behalf of Universal Display Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: President
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Date: Dec. 28, 2004
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SCHEDULE 5.1.1
PROCESS DEVELOPMENT BILLING RATE
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Job Classification Billing Rate $ per Hour
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Sr. PhD Chemist [The confidential material contained herein has been
omitted and has been separately filed with the
Commission.]
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PhD Chemist [The confidential material contained herein has been
omitted and has been separately filed with the
Commission.]
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MS Chemist [The confidential material contained herein has been
omitted and has been separately filed with the
Commission.]
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BS Chemist [The confidential material contained herein has been
omitted and has been separately filed with the
Commission.]
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