[LOGO OMITTED]
March 30, 2005
VIA FACSIMILE AND OVERNIGHT MAIL
Xx. Xxxxxxx X. Xxxxx
Vice President - Optical Products
PPG Industries, Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
RE: AMENDMENT #6 TO THE DEVELOPMENT AND LICENSE AGREEMENT
Dear Xxxx,
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 [The confidential
material contained herein has been omitted and has been separately filed
with the Commission.].
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
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(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 [The confidential material contained herein has
been omitted and has been separately filed with the Commission.] 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 [The confidential
material contained herein has been omitted and has been separately filed
with the Commission.] 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 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] 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 [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] 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 [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] 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 [The
confidential material contained herein has been omitted and has been
separately filed with the Commission.]trading days prior to the close of
the calendar quarter immediately preceding such month. If a Registration
Statement has not been declared effective within [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] 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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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/ Xxxxxx X. Xxxxxxxx
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UNIVERSAL DISPLAY CORPORATION
By: Xxxxxx X. Xxxxxxxx
--------------------------
President and Chief Operating Officer
AGREED TO ON BEHALF OF PPG INDUSTRIES, INC. THIS 30TH DAY OF MARCH, 2005.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: V.P. Optical Products
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