Exhibit 10.6
[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: Fifth Amendment of the DEVELOPMENT AND LICENSE AGREEMENT which was
entered into and effective October 1, 2000 by and between PPG
INDUSTRIES, INC. ("PPG"), and UNIVERSAL DISPLAY CORPORATION ("UDC"),
and previously amended March 2001, December 2002, January 2003 and
April 2003 (as amended, the "Development & License Agreement").
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Dear Xx. Xxxxxxxx:
The purpose of this letter is to amend the Development & License Agreement with
regard to the notice period for non-renewal of the Initial Term or a Renewal
Term and various matters regarding the Development Team and compensation, as set
forth herein. [The confidential material contained herein has been omitted and
has been separately filed with the Commission.]
Therefore, intending to be legally bound, PPG and UDC hereby agree to this Fifth
Amendment of the Development & License Agreement, effective on January 1, 2005.
Except as expressly set forth herein, all capitalized terms have the meanings
given in the Development & License Agreement. Except as expressly set forth
herein, the Development & License Agreement shall remain unchanged and shall
continue in full force and effect.
1. Article 3 of the Development & License Agreement is amended by adding a new
Article 3.7, as follows:
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 2
3.7 Notwithstanding anything to the contrary in this Agreement, for the
period from January 1, 2005 through December 31, 2005:
3.7.1 The Development Team shall report to [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.], who in turn shall report to the PPG Director, Optical Products
R&D. PPG shall provide at least [The confidential material contained herein has
been omitted and has been separately filed with the Commission.], but not more
than [The confidential material contained herein has been omitted and has been
separately filed with the Commission.], full-time chemists. PPG shall make
available the part-time services of [The confidential material contained herein
has been omitted and has been separately filed with the Commission.], subject to
UDC's approval.
3.7.2 Upon 90 days' prior written notice from UDC, PPG shall
reduce the Development Team staffing level from [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] to [The confidential material contained herein has been omitted and
has been separately filed with the Commission.] full-time chemists [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
2. Article 3A.3.2 of the Development Agreement is amended and restated as
follows:
3A.3.2 Notwithstanding anything to the contrary in this Agreement, for
the period from January 1, 2005 through December 31, 2005, PPG shall invoice UDC
for: (a) PPG's conversion costs to supply Primary Development Chemicals and
Ancillary Development Chemicals to UDC for reactor and/or purification unit time
as per Exhibit A of the Supply Agreement; (b) all analytical charges as
customarily billed by the analytical department (excluding Development Team
charges) to PPG's Optical Products business unit; and (c) in the event that PPG
enters into an agreement [The confidential material contained herein has been
omitted and has been separately filed with the Commission.] for the supply of
OLED materials to PPG which PPG converts into Development Chemicals supplied to
UDC hereunder, and in lieu of invoicing UDC for such costs under Article 3A.3.1,
PPG's out-of-pocket cost to purchase such OLED materials [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.]. PPG shall use reasonable efforts to minimize all of the costs
and charges under (a) through (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 3A.3.3 of the Development Agreement is amended and restated as
follows:
3A.3.3 (a) Costs set forth Article 3A.3.2(a) shall be reported to UDC
monthly and invoiced quarterly within [The confidential material contained
herein has been omitted and has been separately filed with the Commission.] days
following the close of each calendar quarter, with payment due [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] days from the date of the invoice. The form of payment 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 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 [The confidential material contained herein
has been omitted and has been separately filed with the Commission.] trading
days prior to the close of that calendar quarter (the "[The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] Day Average"); plus (ii) the difference between the invoice
price and the amount set forth in (a)(i) above. Notwithstanding the foregoing,
if the [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] 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.
(b) Costs set forth in Article 3A3.2(b) shall be invoiced quarterly
within [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] days following the end of each calendar
quarter with payment in cash due [The confidential material contained herein has
been omitted and has been separately filed with the Commission.] days from the
date of invoice.
(c) Costs set forth in Article 3A.3.2(c) shall be invoiced quarterly
within [The confidential material contained herein has been omitted and has been
separately filed with the Commission.] days following the end of each calendar
quarter with payment in cash due [The confidential material contained herein has
been omitted and has been separately filed with the Commission.] days from the
date of invoice.
(d) Costs set forth in Articles 3A3.2(b) and (c) shall be combined by
PPG on the same invoice.
4. Article 10 of the Development Agreement is amended by adding a new Article
10.10, as follows:
10.10 Notwithstanding anything to the contrary in this Agreement, for
the period from January 1, 2005 through December 31, 2005:
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 4
10.10.1 The approved 2005 Development Team budget as agreed to
by the parties is attached as Schedule 10.10.1. All work to be performed by [The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] shall be approved in writing by UDC. The billing
rates for services provided by these individuals shall be [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.].
10.10.2 UDC shall pay for services performed under the
approved Development Team budget for each calendar quarter [The confidential
material contained herein has been omitted and has been separately filed with
the Commission.]. Except as otherwise expressly set forth herein, PPG Actual
Expenses for each calendar quarter shall be determined in a manner consistent
with past practices under this Agreement. In addition, PPG shall provide UDC
with such reports and other supporting documentation as UDC may reasonably
request in connection with monitoring the PPG Actual Expenses for each calendar
quarter.
10.10.3 Within [The confidential material contained herein has
been omitted and has been separately filed with the Commission.] days following
the close of each calendar quarter, PPG shall invoice UDC for the combined
amounts set forth in Articles 10.10.1 and 10.10.2 above for that calendar
quarter. Within [The confidential material contained herein has been omitted and
has been separately filed with the Commission.] days following the date of the
invoice, UDC shall deliver to PPG the number of duly authorized, validly issued
fully paid and non-assessable shares of UDC Common Stock as is the quotient of
(a) such combined amounts divided by (b) the [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] Day Average. In the event that the [The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] Day Average is less than [The confidential material contained
herein has been omitted and has been separately filed with the Commission.],
then UDC shall deliver to PPG cash in an amount equal to the aggregate value of
UDC Common Stock deliverable to PPG under the first sentence of this Article
10.10.3.
10.10.4 Notwithstanding anything in the Agreement to the
contrary, no Warrants shall be issued for the services rendered by PPG during
the period of January 1, 2005 through December 31, 2005.
5. Article 13.1 of the Development Agreement is amended and restated as follows:
13.1 The initial term (the "Initial Term") of this Agreement
shall be from the Effective Date through December 31, 2005. Thereafter, the term
of this Agreement shall be extended automatically for additional 12 month
periods (each, a "Renewal Term") unless and until either party provides the
other with at least 9 months' prior written notice that this Agreement shall
expire at the end of the Initial Term or the upcoming Renewal Term, as
applicable.
Xxxxxx X. Xxxxxxxx, President UDC/PPG CONFIDENTIAL
Universal Display Corporation
December 22, 2004
Page 5
6. This Amendment takes effect only on the condition that the parties execute
the First Amendment of the Supply Agreement of even date herewith.
7. To the extent of any inconsistency between the terms of the Development
Agreement and the terms of this Amendment, the terms of this Amendment shall
prevail.
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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Exhibit 10.6
SCHEDULE 10.10.1
DEVELOPMENT TEAM BUDGET
2005
BUDGET
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SALARY & BENEFITS $976,000
EMPLOYEE EXPENSES $20,000
ANALYTICAL COST $234,000
MATERIAL & LAB SUPPLY COST $270,000
RESEARCH OVERHEAD & DEPRECIATION $378,000
PATENT EXPENSES @ UDC REQUEST $0
TOTAL $1,878,000
Budget Basis:
o Six PhD or BS Chemists
o Three Technicians (BS Chemists)
o One UDC PhD - One month (analytical and material & lab cost only)
o Salary & Benefits - Based on projected 2005 salaries and benefit charge.
o Analytical Cost - Based on 2004 recent history
o Material & Lab Supply Cost - Based on 2004 history
o Travel Cost - Based on 2004 history
o No UDC Requested Patent Help
Xxxxx Xxxxxxxxx
November 16, 2004
