[GRAPHIC OMITTED]
PPG Industries PPG Industries, Inc.
One XXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 XXX
Telephone (000) 000-0000
Fax
xxxxx@xxx.xxx
Xxxxxxx X. Xxxxx
Vice President, Optical Products
January 21, 2003
Xx. Xxxxxx X. Xxxxxxxx
President & Chief Operating Officer
Universal Display Corporation
000 Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
RE: UDC - PPG Development and License Agreement (October 1, 2000)-
Second Amendment
Dear Xx. Xxxxxxxx:
The purpose of this letter is to amend the above subject Agreement (the
"Agreement") to address the supply by PPG of OLED chemicals to UDC for
developmental and/or qualification purposes in facilities of UDC and UDC's
customers. This Second Amendment (this "Amendment") shall be effective on
January 1, 2003.
The following new or restated Articles are hereby incorporated into the
Agreement by this Amendment.
ARTICLE 1 - DEFINITIONS
1.25 "UDC Proprietary Materials for Chemicals" means all UDC Chemical
Patents,
UDC Chemical Know-How, and Developed Technology, as well as the Development
Chemical Specifications and the Product Specifications as such term is defined
under the Supply Agreement.
1.28 "Primary Development Chemicals" means [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.].
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1.29 "Ancillary Development Chemicals" means [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.].
1.30 "Development Chemicals" means Primary Development Chemicals and/or
Ancillary Development Chemicals.
1.31 "Development Chemical Specifications" means, with respect to each
Development Chemical supplied hereunder, the mutually agreed upon written
analytical specifications for such Development Chemical, and for its packaging,
storage and shipment. Such specifications may be amended by mutual written
agreement of the parties from time to time, it being understood by the parties
that, due to the nature of the development being conducted, these specifications
are likely to undergo significant revision from time to time.
ARTICLE 3A - DEVELOPMENT CHEMICALS
3A.1 General. PPG will supply Development Chemicals to UDC by
converting, upon the request of UDC, raw materials purchased by PPG into
Development Chemicals per the following:
3A.1.1 PPG will recommend to UDC in writing raw materials
purchases based upon UDC's Development Chemical forecasts. Upon written approval
by UDC, PPG will purchase those raw materials. These raw materials will be
maintained separate from other PPG raw materials and shall be used solely for
the production of Development Chemicals for UDC hereunder. UDC shall send all
Development Chemical forecasts and raw material purchase approvals to the
Operations Manager, Specialty Synthesis Group of PPG.
3A.1.2 PPG shall convert raw materials purchased under Section
3A.1.1 into Development Chemicals based upon written orders submitted by UDC to
PPG's Specialty Synthesis Group Customer Service representive. The delivery date
set forth in each conversion order shall take into account both the lead time
required to manufacture and qualify the Development Chemical and other demands
on PPG's capability to meet the order. PPG shall use commercially reasonable
efforts to minimize its conversion times for Development Chemicals, and to
supply all Development Chemicals to UDC by the requested date for completion set
forth in the order.
3A.1.3 Development Chemicals will be manufactured by PPG in
accordance with their corresponding Development Chemical Specifications in
effect at the time of the conversion order unless otherwise mutually agreed to
by the parties in writing.
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3A.1.4 PPG shall not be obligated to manufacture any single
Primary Development Chemical in excess of [The confidential material contained
herein has been omitted and has been separately filed with the Commission.] in
any consecutive three (3) month period, nor in excess of [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] in any calendar year. PPG shall also not be obligated to supply
in the aggregate Primary Development Chemicals in excess of [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] in any calendar year.
3A.1.5 PPG shall not be obligated to manufacture any single
Ancillary Development Chemical listed in Attachment A to this Amendment in
excess of [The confidential material contained herein has been omitted and has
been separately filed with the Commission.] in any consecutive three (3) month
period, nor in excess of [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] in any calendar
year. PPG shall also not be obligated to supply in the aggregate Ancillary
Development Chemicals in excess of [The confidential material contained herein
has been omitted and has been separately filed with the Commission.] in any
calendar year. Additional Ancillary Development Chemicals may be added to
Attachment A by mutual written agreement of the parties.
3A.1.6 PPG shall not sell or supply Development Chemicals to
persons other than UDC if, assuming such Development Chemicals were Products
under the Supply Agreement, PPG would be prohibited from selling them to such
persons under the terms of the Supply Agreement.
3A.2 Shipments and Specifications.
3A.2.1 Shipment of Development Chemical orders shall be to
UDC's facility in Ewing, New Jersey, unless otherwise mutually agreed to by the
parties in writing. All shipments shall be with PPG labels, shall use
mutually-agreed upon carriers and are f.o.b. PPG's Monroeville, Pennsylvania
facilty. No preprinted terms of any purchase order, confirmation or other
similar document exchanged by the parties with respect to any Development
Chemical shall have any effect, excepting only those terms governing quantity
and buyer's reference or administrative numbers.
3A.2.2 All Development Chemicals supplied by PPG hereunder
shall be manufactured, packaged, stored and shipped according to and in
compliance with their corresponding Development Chemical Specifications, and in
accordance with manufacturing practices as implemented by PPG with respect to
other, similar products manufactured by PPG for development purposes. The
parties shall endeavor to establish the Development Chemical Specifications in a
manner designed to ensure that the Development Chemicals are of high quality and
purity, are fit for use in connection with OLEDs, and can be manufactured for
commercial supply as Products under the Supply Agreement at a commercially
reasonable price. The parties will cooperate in good faith should either party
propose any changes to the Development Chemical Specifications. The parties will
also cooperate in good faith to control [The confidential material contained
herein has been omitted and has been separately filed with the Commission.]
costs for Development Chemicals supplied hereunder and to reduce such costs to
the fullest extent reasonably practicable in light of its corresponding
Development Chemical Specifications and required volumes.
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3A.3 Pricing and Payment Terms. PPG shall invoice UDC its raw materials
and conversion costs for all Development Chemicals as follows:
3A.3.1 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
3A.3.2 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
3A.3.3 Terms of payment shall be net 30 days from the date of
receipt of PPG's invoice. Upon request, PPG shall supply UDC with reasonable
supporting documentation for all amounts invoiced under this Section 3A.3.
3A.3.4 [The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
3A.4 Quality Control.
3A.4.1 Unless and until the parties otherwise agree in
writing, upon completing production of any batch of a Development Chemical
ordered hereunder, PPG shall make a batch sample available to UDC for testing in
order to verify that such batch complies with its corresponding Development
Chemical Specifications, and any failure to meet the Development Chemical
Specifications shall apply only to the batch affected. For each batch of any
Development Chemical produced by PPG hereunder, PPG shall maintain quality
control samples and records for a period of two (2) years following the date of
production. Such samples and records shall be available for review and testing
by UDC or its designees on reasonable advance notice and during normal business
hours.
3A.4.2 PPG shall inform UDC in writing of the occurrence or
expected occurrence of material events that might reasonably be expected to
affect the quality, quantity, cost or any other material aspect of any
Development Chemical manufactured hereunder, including, without limitation, any
changes in manufacturing conditions or quality control procedures relating to
the manufacture of the Development Chemical. PPG shall, upon UDC's request,
supply test data and/or samples of Development Chemicals produced hereunder to
UDC and otherwise reasonably cooperate with UDC, in order to permit UDC to
evaluate the possible effects of such events and verify that PPG will continue
to be able to supply the Development Chemical as required hereunder.
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3A.5 Regulatory Compliance; Health and Safety.
3A.5.1 PPG shall comply in all material respects with all
applicable domestic and foreign governmental requirements for, and where
required obtain or provide, all registrations, permits, notices, reports,
licenses, and supplier notifications with respect to its production, sale,
packaging and shipment of Development Chemicals hereunder.
3A.5.2 PPG shall be responsible for preparing and delivering
to UDC Material Safety Data Sheets for Development Chemicals supplied hereunder,
as may be required under the Occupational Safety and Health Act, regulations
promulgated thereunder and any similar state "right-to-know" laws that are
currently in force or that may be enacted in the future. UDC shall be
responsible for delivering such Material Safety Data Sheets to those persons to
whom UDC sells or otherwise supplies the Development Chemicals. PPG shall update
such Material Safety Data Sheets as necessary to comply with all material legal
requirements, and shall promptly provide UDC with such updated Material Safety
Data Sheets, which UDC shall deliver to those persons to whom UDC sells or
otherwise supplies the Development Chemicals. PPG shall be listed as the
emergency contact on all container labels and Material Safety Data Sheets, and
shall be responsible for emergency response in the case of any emergencies or
other incidents involving the Development Chemicals supplied hereunder.
ARTICLE 4 - TECHNOLOGY LICENSES
4.1 UDC hereby grants to PPG, during the term of this Agreement and
subject to the terms and conditions set forth herein, a worldwide, royalty-free,
non-exclusive, non-transferable (except as permitted under Section 15.2 below)
license, with the right to sublicense under Section 4.4, to practice under any
and all UDC Chemical Patents, and to use, improve, enhance and modify any and
all unpatented UDC Proprietary Materials for Chemicals, for the sole and limited
purpose of performing PPG's obligations under Article 3 and Article 3A above,
and as required by the Development Program as contemplated hereunder. UDC shall
disclose UDC Chemical Know-How to PPG as is necessary in connection with PPG's
performance under the Development Program.
ARTICLE 5 - DEVELOPED TECHNOLOGY AND OTHER IMPROVEMENTS
5.3 All right, title and interest in patentable and unpatentable
process or equipment improvements, inventions and other discoveries arising from
work performed under this Agreement that are not Developed Technology
(collectively, "Development Discoveries") shall be vested solely in the party
making such Development Discovery if the Development Discovery is made solely by
such party or such party's employees, or jointly in both parties (with each
party having an undivided interest therein without any obligation of accounting
to the other) if the Development Discovery is made jointly by both parties or
both of their employees. Notwithstanding the foregoing sentence, all
improvements to or modifications of any Development Chemicals that are both (i)
conceived, created, made or reduced to practice by PPG personnel assigned to
manufacture such Development Chemicals for UDC hereunder as a direct result of
their performing such manufacturing activities, and (ii) Development Chemicals,
compositions of matter for Development Chemicals, synthetic pathways (including
purification) for the manufacture of Development Chemicals, and/or associated
analytical characterization techniques for Development Chemicals, together with
all associated patent and other intellectual property rights, (collectively,
"UDC Improvements") shall be and remain the sole and exclusive property of UDC
and PPG hereby assigns and transfers to UDC all of PPG's right, title and
interest therein. Upon UDC's request, PPG shall execute and deliver to UDC such
assignments and other instruments and take such other actions as may be
necessary or reasonably requested by UDC, so that UDC may protect and defend its
rights in and to such UDC Improvements. UDC hereby grants to PPG a license to
practice under any and all Patents and other intellectual property rights
claiming UDC Improvements, the scope of such license being identical to that
granted to PPG with respect to Developed Technology under Section 4.2 of this
Agreement. Nothing herein shall grant UDC any intellectual property rights to
any improvements or modifications for manufacturing commercial quantities of
OLED Chemicals for supply to UDC under the Supply Agreement.
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ARTICLE 7 - WARRANTIES AND LIMITATIONS OF LIABILITY
7.6 UDC represents and warrants that it does not now, and will not
during the Term of this Agreement use or resell any Development Chemical
delivered under this Agreement to UDC Licensees or other customers for purposes
other than developmental and qualification purposes, without PPG's prior written
consent.
If you agree to the above Amendment, please execute the two enclosed originals
and return one to me.
Very truly yours,
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
ACKNOWLEDGED AND AGREED TO:
Universal Display Corporation.
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By: /s/ Xxxxxx X. Xxxxxxxx
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Print Name: Xxxxxx Xxxxxxxx
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Title: President
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