UNIVERSAL DISPLAY
CORPORATION(TM)
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 #2 TO THE SUPPLY AGREEMENT
------------------------------------------
Dear Xxxx,
The Supply Agreement between PPG Industries, Inc. ("PPG") and Universal Display
Corporation ("UDC") entered into and effective October 1, 2000, as amended (the
"Supply Agreement") contains provisions with specific reference to December 31,
2005.
Based on recent discussions, the parties desire to amend certain provisions of
the Supply Agreement, and to enter into certain additional agreements as more
fully described below. Accordingly, the parties hereby agree as follows:
1. All references to "December 31, 2005" in the Supply Agreement (as amended
in the First Amendment to the Supply Agreement) are hereby changed to
"March 31, 2006." The reference to "PPG's 2005 cumulative out-of-pocket
environment, health and safety costs" in Section 5.1.1(b) of the Supply
Agreement is amended to include 2005 and the first calendar quarter of
2006.
2. In each instance where the Supply 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:
(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 Section 5.3(a) of the
existing Supply 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.
Xx. Xxxxxxx X. Xxxxx
PPG Industies, Inc.
March 30, 2005
Page 2
(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 Supply
Agreement.
3. 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 Supply 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 Development and License Agreement
entered into and effective as of October 1, 2000 by and between PPG and
UDC, as amended (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.
Xx. Xxxxxxx X. Xxxxx
PPG Industies, Inc.
March 30, 2005
Page 3
4. 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..
5. This letter agreement, together with the D&L Agreement and the Supply
Agreement, 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 Supply Agreement shall remain in full force and effect.
[Remainder of page intentionally left blank.]
Xx. Xxxxxxx X. Xxxxx
PPG Industies, 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,
UNIVERSAL DISPLAY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
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 Xxxxx
---------------------------
Name: Xxxxxxx Xxxxx
---------------------------
Title: V.P. Optical Products
---------------------------
