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Note:  Throughout this document, certain confidential material contained herein
has been omitted and has been separately filed with the Commission. Each place
where such an omission has been made is marked with an [***].
 
OLED TECHNOLOGY LICENSE AGREEMENT
 

THIS OLED TECHNOLOGY LICENSE AGREEMENT (this “Agreement”) is entered into
effective as of May 1, 2011 (the “Effective Date”), by and between Universal
Display Corporation (“Universal Display”), a corporation duly organized and
existing under and by virtue of the laws of Pennsylvania, U.S.A., having its
principal office at 375 Phillips Boulevard, Ewing, New Jersey 08618, U.S.A.; and
Pioneer Corporation (“Pioneer”), a corporation duly organized and existing under
and by virtue of the laws and regulations of Japan, having its office at  1-1,
Shin-ogura, Saiwa-ku, Kawasaki-shi, Kanagawa 212-0031, Japan.  Each of Universal
Display and Pioneer is referred to herein as a “Party,” and collectively as the
“Parties.”

 
BACKGROUND
 
WHEREAS, Universal Display has rights in certain patents and possesses certain
know-how concerning organic light emitting devices; and
 
WHEREAS, Pioneer desires to obtain license rights to practice under these
patents and to use this know-how on the terms and conditions set forth herein.
 
NOW, THEREFORE, intending to be legally bound, each of the Parties hereby agrees
as follows:
 
 
AGREEMENT
 
Article 1 Definitions
 
In addition to other terms defined elsewhere herein, the following terms shall
have their corresponding meanings when used in this Agreement.
 
1.1 “Affiliate” means an entity under the control of a Party, whether directly
or through one or more intermediaries.  For such purposes, “control” shall mean
the ownership of securities representing more than fifty percent (50%) of the
voting capital stock of the relevant entity, or of other interests having
majority voting rights with respect to the election of the board of directors or
similar governing authority of the relevant entity, or of any other power by
contract or in any other form which entitles the holder thereof to majority
voting rights with respect to management decisions of the relevant entity.
 
1.2 “Know-How” means unpatented technical information, data, specifications,
plans, drawings, designs, blueprints, formulae, processes and other similar
items of a trade secret or confidential nature.
 
1.3 “Licensed Product” means an OLED Light Source, or any portion thereof that
consists minimally of a Permitted OLED Device, or any product that incorporates
one or more of the foregoing, which item is (a) covered, in whole or in part, by
any Valid Claim(s) of a
 

 
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 Universal Display Patent; (b) manufactured using a process that is covered, in
whole or in part, by any Valid Claim of a Universal Display Patent; and/or (c)
manufactured using any of the Universal Display Know-How.
 
1.4 “Lighting” means a source of direct or indirect illumination, including, but
not limited to, a room, area or architectural lighting source, a backlight for
an LCD display or other consumer electronics product, or a source of
illumination for signage; provided, however, that the source of illumination
shall not itself be intended to display movable or changeable images or
information (e.g., a passive matrix or active matrix display).
 
1.5 “Net Sales Revenue”
 
1.5.1 For Licensed Products sold or leased by Pioneer or its Affiliates to
non-Affiliated third parties solely for monetary consideration, “Net Sales
Revenue” means the gross amount invoiced or received, whichever occurs sooner,
on account thereof, less the following where separately itemized on the customer
invoice for the Licensed Products: (a) taxes and duties actually collected and
remitted to the appropriate taxing authorities; (b) reasonable shipping and
insurance costs actually paid or accrued for such purpose; and (c) refunds or
credits actually given for returned or defective items.
 
1.5.2 For all other Licensed Products sold, leased or otherwise transferred by
Pioneer or its Affiliates, “Net Sales Revenue” means the greater of (a) or (b),
where (a) is the arm’s length transfer price recorded by Pioneer or its
Affiliate for such sale, lease or transfer; and (b) is the average selling price
at which Licensed Products of similar kind and quantity have been sold by
Pioneer or its Affiliates to non-Affiliated third parties during the same
calendar quarter, as calculated according to the preceding paragraph, or if no
such selling price is available, the fair market value of such Licensed
Products.  The arm’s length transfer pricing referred to in clause (a) shall
include all cost components fairly attributable to the Licensed Products being
sold, leased or otherwise transferred, and shall comply with the Japan National
Tax Agency guidelines and other applicable laws, rules and regulations.
 
1.5.3 If either Party presents reasonable evidence that the amount calculated as
set forth above does not fairly reflect the fair market value of a Licensed
Product (such as evidence that the industry-wide average sales price of
substantially similar products differs significantly from the price calculated
herein, or evidence that additional consideration is being received based on the
downstream sale or lease of a Licensed Product), the Parties shall in good faith
negotiate a more equitable method of calculating Net Sales Revenue with respect
to the Licensed Product in question.
 
1.6 “OLED” means a device consisting of two or more electrodes, at least one of
which is transparent, together with one or more chemical substances deposited
between these two electrodes, at least one of which is an organic or
organometallic material, which device emits light when a voltage is applied
across the electrodes.
 
1.7 “OLED Light Source” means a Permitted OLED Device, or a series of such
devices, which OLED device(s) are intended for use in Lighting applications,
together with the following elements: (a) encapsulation or packaging materials
or coatings for protection of the
 

 
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 OLED device(s); (b) optical elements, coatings or enhancements added to the
OLED device(s) for the purpose of affecting or modulating light output from the
OLED device(s); (c) connectors, contacts or similar components attached to the
OLED device(s) and designed to connect the OLED device(s) to an external power
source or supply and/or other elements of a lighting fixture; (d) a supporting
frame in direct contact with the OLED device(s) designed to stabilize or protect
the OLED device(s) during shipment, installation or usage; (e) thermal elements,
coatings, structures or enhancements attached to the OLED device(s) for purposes
of reducing, dispersing or modulating the temperature of the OLED device(s); (f)
control electronics or circuitry designed or utilized to adjust or correct light
emission from the OLED device(s); and (g) power conversion components designed
to allow the OLED device(s) to operate utilizing an external power source or
supply (the power source or supply itself is not part of the OLED Light
Source).  Two potential configurations of an OLED Light Source, by example only,
are set forth in Exhibit A attached hereto.
 
1.8 “Permitted OLED Device” means an OLED device in which all of the emissive
layer materials are deposited by vacuum thermal evaporation.
 
1.9 “Solution Processing Method” means a fabrication method whereby one or more
of the emissive layer materials in the OLED device are deposited while such
materials are in solution (otherwise known as a “wet” processing method).
 
1.10 “Term” means the term of this Agreement, as specified in Article 8 below.
 
1.11 “Universal Display Know-How” means Know-How of Universal Display relating
to the design or manufacture of an OLED Light Source, which Know-How has been or
is in the future provided to Pioneer under other agreements between the Parties.
 
1.12 “Universal Display Patents” means all patents and patent applications
pertaining to OLED Light Sources that are (1) issued, registered, granted,
allowed, published or filed in the world as of the Effective Date, or (2)
entitled to a priority date prior to the Effective Date, or (3) any divisions,
continuations, continuations-in-part, reexaminations, renewals, extensions or
reissues of (1) or (2) above, and which in the case of (1), (2) or (3) above,
Universal Display owns or has the right to license to Pioneer hereunder,
including, but not limited to, the issued, registered, granted, published, or
filed patents and patent applications listed in Exhibit C, together with such
future patents and patent applications as are specified in Section 2.3 below.
 
1.13 “Universal Display Technology” means the Universal Display Patents and the
Universal Display Know-How.
 
1.14 “Valid Claim” means a claim of an issued, registered, granted, allowed or
published patent or patent application, which claim has neither expired nor been
finally, following expiration of all rights of appeal, held unpatentable,
invalid or unenforceable by a court or other government agency of competent
jurisdiction.
 
1.15 “Service Part” means a Licensed Product supplied to a customer upon request
of the customer in return and as a replacement for a defective Licensed Product
previously sold to such customer, and provided that the defective Licensed
Product is replaced at no charge or without charging the customer more than the
cost to Pioneer of the replacement Licensed
 

 
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 Product.  As used herein, “defective” means that the Licensed Product being
replaced did not last for its expected useful life based on its published
specifications.
 
1.16 “Authorized Bank” means the Bank of Tokyo-Mitsubishi UFJ, Ltd., or such
other bank as the parties shall mutually agree upon in writing.
 
Article 2 License Rights
 
2.1 Grant of License to Pioneer.  Subject to the remaining provisions of this
Article 2, Universal Display hereby grants to Pioneer a worldwide,
royalty-bearing, non-exclusive and non-transferable (except in connection with a
permitted transfer of this Agreement as a whole) license, without rights to
sublicense, under the Universal Display Patents, and to use the Universal
Display Know-How, solely to manufacture, have manufactured (but only in
accordance with the following sentence), sell, offer for sale, lease, import,
use or otherwise dispose of Licensed Products.  Pioneer’s “have manufactured”
rights shall [***].  Should Pioneer wish to extend its “have manufactured”
rights for the manufacture of Permitted OLED Devices to others, [***].
 
2.2 Extension of License to Certain Affiliates.  Pioneer may extend the license
rights granted to Pioneer under Section 2.1 above to Tohoku Pioneer Corporation
(having its office at 4-3146-7 Hachimanpara, Yonezawa-shi, Yamagata 992-1128,
Japan) and to such other entities that are Affiliates of Pioneer, but only for
so long as such entities remain Affiliates of Pioneer, and excluding any
[***].  Should Pioneer wish to extend such license rights to others, [***].  Any
extension of license rights shall be pursuant to a written agreement between
Pioneer and the relevant Affiliate, which written agreement shall obligate the
Affiliate to abide by the scope of license and other applicable provisions of
this Agreement.  In addition to its other rights or remedies hereunder,
Universal Display shall be expressly identified in the written sublicense
agreement as a third-party beneficiary thereof, entitled to enforce the scope of
license and other applicable provisions of this Agreement directly against the
Affiliate.  Except for Tohoku Pioneer Corporation, Pioneer shall identify to
Universal Display in writing the name and business address of each Affiliate
prior to its entry into such written agreement with the Affiliate, and shall use
its best efforts to cause each such Affiliate abide by the scope of license and
other applicable provisions of this Agreement.
 
2.3 License Rights to Future Patents and Know-How.  To the extent it has the
right to do so, Universal Display will expand Pioneer’s license rights under
this Article 2 to include any additional patents, patent applications and
Know-How of Universal Display pertaining to OLED Light Sources that are owned by
or licensed to Universal Display and which are (1) issued, registered, granted,
allowed, published or filed or generated during the first five (5) years of the
Term, or (2) entitled to a priority date during the first five (5) years of the
Term, or (3) any divisions, continuations, continuations-in-part,
reexaminations, renewals, extensions or reissues of (1) or (2) above, but in the
case of (1), (2) or (3) above excluding any such patents, patent applications or
Know-How acquired by Universal Display through a merger, asset acquisition or
other similar transaction unless separately agreed by the Parties in
writing.  Universal Display shall periodically update Exhibit C to include any
such additional patents and patent applications that are issued, registered,
granted, allowed or published or filed.
 

 
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2.4 No Rights Respecting Certain OLED Chemicals.  Notwithstanding the foregoing,
Pioneer and its Affiliates are not authorized under this Agreement to sell or
offer for sale any Licensed Products made using any chemical substance used or
useful for the manufacture of OLEDs, the composition of matter of which is
covered by a Valid Claim of a patent owned or controlled by Universal Display (a
“Universal Display Proprietary OLED Chemical”), unless such Universal Display
Proprietary OLED Chemical was purchased directly from Universal
Display.  Pioneer and its Affiliates shall not make, or assist or encourage any
third party to make or supply to them, any chemical substance that they know, or
have reason to know, is a Universal Display Proprietary OLED Chemical.
 
2.4.1 Pioneer shall obtain written warranties from its third-party suppliers of
OLED chemicals used to manufacture Licensed Products (each, a “Third-Party
Supplied Chemical”), which warranties shall indicate that the third parties are
authorized to make and supply the Third-Party Supplied Chemical to Pioneer for
Pioneer’s intended usage thereof.  If Pioneer begins using a Third-Party
Supplied Chemical for the manufacture of Licensed Products after having obtained
the foregoing warranties and without knowing or having reason to know that the
material is a Universal Display Proprietary OLED Chemical, and then Pioneer
subsequently learns that the Third-Party Supplied Chemical is or might
reasonably be a Universal Display Proprietary OLED Chemical, Pioneer shall
promptly notify Universal Display thereof in writing, and the parties shall
promptly discuss the matter.  If need be, Pioneer and Universal Display shall
cooperate to determine whether the Third-Party Supplied Chemical is in fact a
Universal Display Proprietary OLED Chemical.
 
2.4.2 If the Third-Party Supplied Chemical is a Universal Display Proprietary
OLED Chemical, the parties shall use good faith efforts to promptly transition
to Universal Display supplying Pioneer with the Universal Display Proprietary
OLED Chemical, or with an alternative material offered by Universal Display that
has comparable performance characteristics, for Pioneer’s continued manufacture
of Licensed Products.  If Universal Display is unable to supply Pioneer with
such a material, the parties shall [***].
 
2.4.3 Nothing herein shall limit any rights or remedies that Universal Display
may have against any person or entity that is the manufacturer or supplier to
Pioneer of any Universal Display Proprietary OLED Chemical.  Moreover, subject
to its compliance with the procedure outlined above, Universal Display reserves
the right to seek monetary compensation or other relief on account of Pioneer’s
unauthorized importation or usage of any Universal Display Proprietary OLED
Chemical.
 
2.5 No Rights Respecting Certain OLED Manufacturing Equipment.  Notwithstanding
the foregoing, Pioneer and its Affiliates are not authorized under this
Agreement to sell or offer for sale any Licensed Products made using any
manufacturing equipment or machinery used or useful for the manufacture of OLEDs
by organic vapor phase deposition (OVPD) or organic vapor jet printing (OVJP)
processes, the design or construction of which is covered by a Valid Claim of a
patent owned or controlled by Universal Display (“Universal Display Proprietary
OLED Equipment”), unless such Universal Display Proprietary OLED Equipment was
purchased from an authorized Universal Display equipment vendor.  Pioneer and
its Affiliates shall not make, or assist or encourage any unauthorized third
party to
 

 
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 make or supply to them, any equipment or machinery that they know, or have
reason to know, is Universal Display Proprietary OLED Equipment.
 
2.6 Acknowledgement of Derivative Rights.  Pioneer acknowledges that certain of
the Universal Display Technology is licensed by Universal Display from the
Trustees of Princeton University (“Princeton”), the University of Southern
California (“USC”), and the University of Michigan (“Michigan”) and, therefore,
that Pioneer’s license rights under this Agreement with respect to such
Universal Display Technology are subject to the reserved rights of and
obligations to such third parties under their license agreement with Universal
Display.  Pioneer further acknowledges that the U.S. Government has certain
reserved rights with respect to those Universal Display Patents claiming
inventions that were first conceived or reduced to practice under contracts
between the U.S. Government and Universal Display or its licensors.  Universal
Display hereby covenants to Pioneer that: (a) Universal Display shall comply in
all material respects with the terms of its license agreements with such
third-party licensors and its contracts with or awards from the U.S. Government
as in either case are relevant to Pioneer’s exercise of the license rights
granted by Universal Display hereunder; and (b) no additional consideration
shall be owed by Pioneer to such third-party licensors or the U.S. Government on
account of Pioneer’s exercise of such license rights.  Nothing herein shall be
construed as limiting or restricting the reserved rights of or obligations to
Universal Display’s third-party licensors or the U.S. Government with respect to
the Universal Display Technology.  Upon Pioneer’s request, Universal Display
will provide Pioneer with copies (which may be reasonably redacted by Universal
Display to avoid disclosing confidential information not relevant to this
Agreement) of such of Universal Display’s agreements with these third-party
licensors and of the applicable portions its relevant contracts with or awards
from the U.S. Government.  Even if Universal Display’s license agreement with
Princeton, USC and Michigan is terminated, that license agreement enables
Pioneer, as a sublicensee of Universal Display, to become a direct licensee of
Princeton, USC and Michigan under the conditions specified therein.  Universal
Display warrants to Pioneer that for the license rights granted hereunder, the
total payments by Pioneer and its Affiliates as such a direct licensee, as a
sublicensee of one of the licensors of Universal Display (if any), and/or as a
licensee of Universal Display, shall not exceed the amounts due to Universal
Display hereunder.
 
2.7 Business Consolidations.  Should Pioneer or its Affiliates acquire the
existing OLED business of any third party, the license rights granted to Pioneer
under this Agreement shall not extend to any then-current products of such third
party’s OLED business unless expressly agreed to by Universal Display in
writing.  In addition, if the OLED business of the third party is not fully
integrated into Pioneer’s or its Affiliates’ OLED business, the license rights
granted to Pioneer under this Agreement shall not extend to any future products
of the third party’s OLED business unless expressly agreed to by Universal
Display in writing.  Should Universal Display have already entered into a
similar license agreement with the third party at the time of such acquisition,
there shall be no reduction in the payment or other obligations of Pioneer under
this Agreement as they pertain to products of Pioneer’s or its Affiliates’ OLED
business, or of such third party under its similar license agreement as they
pertain to products of the third party’s OLED business, unless expressly agreed
to by Universal Display in writing.
 
2.8 Reservation of Rights.  Except for the license rights expressly granted to
Pioneer under this Article 2, all rights to practice under the Universal Display
Patents and to use the
 

 
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 Universal Display Know-How are reserved unto Universal Display and its
licensors.  No implied rights or licenses to practice under any patents or to
utilize any unpatented inventions, Know-How or technical information of
Universal Display are granted to Pioneer or its Affiliates hereunder.
 
Article 3 Patent Matters, Attribution and Samples
 
3.1 Patent Validity.  During the Term, Pioneer shall not, and shall ensure that
its Affiliates do not, challenge or oppose, or assist others in challenging or
opposing, in whole or in part, the issuance, validity, scope or enforceability
of any of the Universal Display Patents, nor shall Pioneer initiate or continue,
or assist others in initiating or continuing, proceedings to have any of the
Universal Display Patents cancelled or invalidated, in whole or in part, except
that the foregoing shall not apply to the extent such prohibitions are contrary
to law or regulation in the relevant patent jurisdiction.  If Pioneer or any of
its Affiliates challenges, opposes or seeks to invalidate or cancel, in whole or
in part, any of the Universal Display Patents, or assists others in challenging,
opposing or seeking to invalidate or cancel, in whole or in part, any of the
Universal Display Patents, and if the action or proceeding is fully or
substantially unsuccessful, then Pioneer shall reimburse Universal Display,
promptly on demand, for all attorneys’ fees, costs and out-of-pocket expenses
reasonably incurred by Universal Display or its licensors of the Universal
Display Patents in resisting or responding to such action or proceeding.  The
foregoing shall be in addition to, and not in lieu of, any other rights or
remedies that may be available to Universal Display, at law or equity,
including, without limitation, actions for injunctive relief and the recovery of
damages.
 
3.2 Patent Marking.  Upon Universal Display’s request, Pioneer shall apply or
cause to be applied to all Licensed Products, or to their packaging, such
reasonable markings or notices of the Universal Display Patents as may be
requested in writing by Universal Display in order to reasonably protect
Universal Display’s rights and interests therein under the laws of the countries
in which such Licensed Products are or are likely to be marketed, sold or used;
provided however, that Pioneer shall be required to apply such markings or
notices to the products or their packaging only to the extent that Pioneer
applies or would be likely to apply similar markings or notices of Pioneer’s own
patents to the products or their packaging in order to protect Pioneer’s rights
and interests therein under laws of the relevant countries.
 
3.3 Non-Use of Certain Names.  Pioneer shall not, and shall ensure that its
Affiliates do not, use the names of Princeton, USC or Michigan in connection
with any products, promotion or advertising without the prior consent of
Princeton, USC or Michigan, as applicable, except to the extent reasonably
required by law.  Notwithstanding the foregoing sentence, Pioneer may state that
its license rights hereunder are derivative of rights granted by Princeton, USC
and Michigan to Universal Display under the license agreement among them.
 
3.4 Samples.  Except for extraordinarily expensive Licensed Products, upon
Universal Display’s written request and at no additional cost to Universal
Display, Pioneer shall supply Universal Display with [***] samples of each type
of Licensed Product that Pioneer or its Affiliates offer for sale to third
parties, provided however, that such sample of Licensed Product shall not
include those which are custom products subject to confidentiality obligations
under agreement between Pioneer or its Affiliates and any third
parties.  Universal Display shall limit
 

 
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 its requests for such samples to a reasonable number of different Licensed
Products and Pioneer shall supply such samples promptly following Pioneer’s or
its Affiliates’ first sale of the Licensed Product to a third party.  Universal
Display agrees to use such samples only (a) to verify compliance with the terms
of this Agreement, and (b) for promotional purposes such as in displays at
shareholder meetings, industry conferences or other similar venues (with
appropriate attribution being given to Pioneer or its Affiliates).
 
3.5 Amendments to the Universal Display Patents.  To the extent applicable law
requires Universal Display to obtain Pioneer’s approval for amendments to the
specifications of any Universal Display Patent licensed hereunder, Pioneer shall
promptly approve all such reasonable amendments proposed by Universal Display.
 
Article 4 Consideration
 
4.1 License Fees.  In partial consideration of the license rights granted by
Universal Display hereunder, Pioneer shall pay to Universal Display the license
fees specified in Exhibit B hereto.  Said license fees are due and payable by
the date(s) specified in Exhibit B hereto.  All such fees are non-refundable and
shall be in addition to, and not applied to reduce, any royalties payable
hereunder.
 
4.2 Royalties.  In further consideration of the license rights granted by
Universal Display hereunder, Pioneer shall pay to Universal Display running
royalties at the rates specified in Exhibit B hereto on account of Net Sales
Revenue from Pioneer’s or its Affliates’ worldwide sales or other disposition of
Licensed Products.  No multiple royalties shall be due because any Licensed
Product, or its manufacture, sale, other disposition or usage, is or may be
covered by more than one Universal Display Patent licensed to Pioneer
hereunder.  Both Parties acknowledge and agree that the royalty rates and the
methods by which they are to be calculated and paid hereunder have been
determined through arms length negotiations between the Parties, and that such
rates and methods have been agreed upon because they are mutually convenient,
reasonable and appropriate notwithstanding whether and to what extent any of the
Universal Display Patents have been issued, granted, allowed or registered, or
have expired, in any particular country in which Licensed Products are made,
sold or used, or whether the Universal Display Patents encompass each and every
feature of any particular Licensed Product.  It is acknowledged and agreed
between the parties that the rates and the methods specified in Exhibit B hereto
are determined by considering the prices of OLED chemicals separately supplied
by Universal Display for the manufacture of Licensed Products, as discussed and
agreed in parallel with this Agreement.
 
4.3 Royalty Reports.  Within forty-five (45) days following the end of each
calendar quarter during the Term (and if the Term ends in the middle of a
calendar quarter, within forty-five (45) days following the end of the Term),
Pioneer shall submit to Universal Display a written report, in English, that
includes the following information (each, a “Royalty Report”): (a) a description
of all Licensed Products sold, leased or otherwise disposed of by Pioneer or its
Affiliates during such calendar quarter, including the number and type of each
Licensed Product sold and the countries of destination or sale; (b) gross
amounts invoiced or received on account of such sales or other disposition of
Licensed Products; and (c) Pioneer’s reasonably detailed
 

 
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 calculation of the royalties due and owing to Universal Display on account of
such sales or other disposition of Licensed Products.
 
4.4 Payment of Royalties.  Within forty-five (45) days following the end of each
calendar quarter during the Term (and if the Term ends in the middle of a
calendar quarter, within forty-five (45) days following the end of the Term),
Pioneer shall pay directly to Universal Display the royalties due and payable
with respect to Licensed Products sold, leased or otherwise disposed of during
such calendar quarter.
 
Article 5 Payment Terms; Audit Rights
 
5.1 Payments.  All amounts due to Universal Display hereunder shall be paid in
U.S. Dollars by wire transfer to a bank designated by Universal Display in
writing, or by such other means as the Parties may agree in writing.  Universal
Display’s current wire instructions are as follows:
 
[***]

Each payment shall be fully earned when due and nonrefundable once made.  All
payments due hereunder shall be made without set-off, deduction or credit for
any amount owed (or alleged to be owed) by Universal Display to Pioneer or any
of its Affiliates.  Without limiting its other rights or remedies on account of
any late payment, Universal Display may require Pioneer to pay interest on any
late payments at a per annum rate equal to the Prime Rate as published by the
Authorized Bank at the close of business on the date that payment was due (or,
if such date is not a business day, at the close of business on the immediately
preceding business day), plus [***] percent [***].
 
5.2 Payment Authorization and Associated Charges.  Pioneer shall secure all
authorizations required for payment of all amounts due to Universal Display
hereunder, and shall bear any transfer fees, taxes and any other charges
associated therewith.  If Pioneer believes that any income taxes imposed by any
national, provincial or local government of relevant countries on amount payable
to Universal Display hereunder need to be withheld, Pioneer shall provide
Universal Display with prompt written notice thereof.  Thereupon, the Parties
shall cooperate in good faith and use their best efforts to promptly file for
and obtain appropriate governmental exemptions that would eliminate the
requirement for Pioneer to withhold such taxes.  If, notwithstanding these
efforts, tax withholding is nonetheless required, Pioneer may make the
appropriate withholding from amounts payable to Universal Display hereunder, and
Pioneer shall then promptly pay the withheld amounts to the appropriate tax
authorities.  Promptly upon making each such tax payment, Pioneer shall obtain
and forward to Universal Display the official tax receipt(s) issued by the
relevant government to support Universal Display’s claim to applicable tax
credits or refunds.
 
5.3 Currency Conversion and Restriction.  All royalties due hereunder based on
Licensed Products sold or otherwise disposed of by Pioneer or its Affiliates
outside of the United States shall be payable in U.S. Dollars at the rate of
exchange for the currency of the country in which such sales or usage occurs,
which rate shall be the wire transfer selling rate of the designated currency as
officially quoted for payment of currency transactions by the Authorized
 

 
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 Bank at the close of business on the last business day of the period for which
royalties are due.  All royalties shall be paid to Universal Display without
deduction of currency exchange fees or other similar amounts.  If at any time
the legal restrictions of countries outside of the United States prevent Pioneer
from paying Universal Display any amounts due hereunder, or otherwise upon
Universal Display’s written instruction, Universal Display may direct Pioneer to
make all or any portion of these payments to Universal Display’s accounts
established at banks or depositories in one or more countries other than the
United States.
 
5.4 Records; Audit.  Pioneer shall keep, and shall require its Affiliates to
keep, accurate and complete records relating to all Licensed Products until the
three (3) year anniversary of the date of payment of royalties with respect to
such Licensed Products.  An independent certified public accountant selected by
Universal Display and approved by Pioneer (such approval not to be unreasonably
withheld) shall have the right to audit such records as are reasonably necessary
in order to verify Pioneer’s and its Affiliates’ compliance with their license
obligations under Article 2 and their payment under Articles 4 and 5
above.  Universal Display shall give reasonable advance notice of any such audit
to Pioneer, and such audit shall be conducted during Pioneer’s or the
Affiliates’ normal business hours and in a manner that does not cause
unreasonable disruption to the conduct of their business.  The results of any
such audit shall be deemed a Confidential Item of Pioneer and shall not be
disclosed by Universal Display except as may be necessary for Universal Display
to enforce its rights and interests hereunder.  If the audit reveals that
Pioneer has underpaid any royalties due to Universal Display, Pioneer shall
immediately pay to Universal Display all unpaid royalties, plus interest on the
unpaid amounts from the date payment was initially due at the rate specified in
Section 5.1 above.  Universal Display shall be responsible for paying the fees
and expenses charged by the accountant for conducting any audit hereunder;
provided, however, that if the unpaid royalties exceed [***] percent [***] of
the total royalties that should have been paid by Pioneer during the audited
period, Pioneer shall promptly reimburse Universal Display for the reasonable
fees and expenses charged by such accountant.  Nothing herein shall limit any
other rights or remedies available to Universal Display on account of Pioneer’s
underpayment of royalties or other breach of its obligations under this
Agreement.
 
Article 6 Confidentiality and Publicity
 
6.1 Obligations of Confidentiality and Non-Use.  Each Party (“Recipient”) shall
handle and maintain all Confidential Items of the other party (“Discloser”) in
accordance with the following terms and conditions:
 
6.1.1 Recipient shall not publish, disclose or otherwise disseminate any
Confidential Items of Discloser, except to such of Recipient’s employees who
have a “need to know” them to accomplish the purposes of this
Agreement.  Recipient may disclose Confidential Items of Discloser to
Recipient’s Affiliates who are directly involved in implementing this Agreement,
provided such Affiliates are bound by the terms and conditions of the Agreement,
or terms and conditions substantially similar thereto.
 
6.1.2 Recipient shall use reasonable safeguards to prevent any unauthorized
access to or disclosure of Confidential Items of Discloser.  As used herein,
“reasonable safeguards” means all safeguards that a reasonable person would take
to protect the Confidential
 

 
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Item in question, which safeguards shall be no less than the safeguards
Recipient takes to protect its own confidential or proprietary items of a
similar nature.
 
6.1.3 Recipient may copy Confidential Items of Discloser only as is reasonably
necessary for Recipient to accomplish the purposes of this Agreement.
 
6.1.4 Recipient shall not utilize or exploit any Confidential Items of
Discloser, or permit or assist others to utilize or exploit such Confidential
Items, except as is reasonably necessary to accomplish the purposes of this
Agreement.
 
6.1.5 Recipient shall not publish or otherwise disclose to third parties, or
reference or include in any patent application or other similar filing, any test
results or other information or data derived from Recipient’s evaluation of any
Confidential Items of Discloser without Discloser’s prior written consent.
 
6.1.6 Promptly upon learning of any unauthorized use or disclosure of any
Confidential Item of Discloser, Recipient shall provide Discloser with written
notice thereof and take such other steps as are reasonably requested by
Discloser in order to limit the effects of such use or disclosure and/or prevent
any further unauthorized use or disclosure of any Confidential Items of
Discloser.
 
6.1.7 Promptly upon Discloser’s written request, Recipient shall return to
Discloser, destroy and/or delete from Recipient’s records and computer systems
all Confidential Items of Discloser, including any copies or portions thereof,
in Recipient’s possession or control; provided, however, that Recipient may
retain one copy of documents incorporating such Confidential Items for archival
purposes only.  Within thirty (30) days following Discloser’s written request,
Recipient shall provide Discloser with a certificate of Recipient’s compliance
with the foregoing requirements.
 
6.2 Definition of Confidential Items.  As used herein, "Confidential Items" of
Discloser include all information and materials, in written, oral, visual or
other tangible form, relating to Discloser’s technologies, compounds, devices,
research programs, operations, business relationships and/or financial or
business condition (including, without limitation, know-how, data, drawings,
designs, specifications, formulations, processes, methods, equipment, software
and pricing information) that are (a) disclosed in writing or other tangible
form and marked as “Confidential”, “Proprietary” or with similar words at the
time of disclosure, or (b) orally or visually disclosed and identified as
confidential or proprietary at the time of disclosure and confirmed as such in
writing within thirty (30) days thereafter.  Notwithstanding the foregoing,
“Confidential Items” of Discloser shall not include any information that:
 
6.2.1 is approved by Discloser in writing for release by Recipient without
restriction;
 
6.2.2 Recipient can demonstrate by written records was previously known to
Recipient other than through a prior disclosure by Discloser or any third party
with an obligation of confidentiality to Discloser;
 
 
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6.2.3 is publicly known as of the date of this Agreement, or becomes public
knowledge subsequent thereto, through no act or omission of Recipient or any
third party receiving such information from or through Recipient;
 
6.2.4 is obtained by Recipient in good faith from a third party without the
violation of any obligation of confidentiality to Discloser by either Recipient
or the third party; or
 
6.2.5 is independently developed by or on behalf of Recipient without the
benefit of Discloser’s Confidential Items, as shown by competent written
records.
 
6.3 Disclosure Required by Law.  This Agreement shall not restrict Recipient
from disclosing any Confidential Items of Discloser to the extent required by
applicable law, or by the order of any court or government agency; provided,
however, that Recipient shall afford Discloser prompt notice of such law or
order, so that Discloser may interpose an objection to such disclosure or take
whatever other actions Discloser deems appropriate to protect such Confidential
Items, and provided further that Recipient shall use all reasonable efforts to
limit such disclosure to only those Confidential Items that are required to be
disclosed and to ensure that the person or entity to whom such Confidential
Items are disclosed agrees to keep them confidential.
 
6.4 Responsibility for Personnel.  Recipient shall be responsible for the acts
or omissions of its employees and Affiliates receiving Confidential Items of
Discloser from or through Recipient to the extent such acts or omissions, if
performed or not performed by Recipient, would constitute violations of this
Agreement by Recipient.
 
6.5 Confidentiality of this Agreement.  The terms of this Agreement shall be
deemed Confidential Items of each Party and treated as such by both
Parties.  Notwithstanding the foregoing sentence, either Party may disclose in
its public filings such of the terms of this Agreement as are reasonably
required for such Party to comply with applicable securities laws and
regulations, including, without limitation, by filing appropriate reports with
applicable securities agencies or commissions and/or by filing an appropriately
redacted copy of this Agreement in connection therewith.  In addition, either
Party may issue a press release or other public announcement describing the
general nature of this Agreement, or the Parties may agree to issue such a
release or announcement jointly; provided, however, that no such release or
announcement shall disclose any information about Pioneer’s or its Affiliates’
product launch strategy without Pioneer’s prior written consent.  Subject to the
foregoing provisions of this paragraph, any such public disclosure of the
specific financial terms or other provisions of this Agreement, or any other
information regarding the relationship between the Parties hereunder, shall
require the other Party’s prior written consent.
 
6.6 Trading in Securities.  If information disclosed under this Agreement is
material non-public information about a Party or its Affiliates, then the other
Party agrees not to, and to cause its Affiliates not to, trade in the securities
of the first Party or its Affiliates, or in the securities of any appropriate or
relevant third party, until such time as no violation of the applicable
securities laws would result from such securities trading.
 
 
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6.7 Universal Display’s Licensors.  Notwithstanding the foregoing, Universal
Display shall have the right to provide an unredacted copy of this Agreement,
along with copies of all Royalty Reports, to each of Princeton, USC and
Michigan; provided that in such case Universal Display shall first have caused
such third-party licensors to agree in writing to handle and maintain such items
in accordance with the provisions of this Article 6, or provisions substantially
similar thereto.
 
6.8 Other Collaborative Efforts.  Upon request and subject to the obligations of
confidentiality set forth herein, each Party shall use good faith efforts to
reasonably feature the name and logo, technologies and products of the other in
its public promotions respecting the Licensed Products, such as at industry
conferences or in other similar venues.
 
Article 7 Representations and Warranties; Disclaimers and Limitations of
Liability
 
7.1 Warranties by Both Parties.  Each Party represents and warrants to the other
that such Party has the right, power and authority to enter into this Agreement
and to perform its obligations hereunder, and that such performance will not
violate any other agreement or understanding by which such Party is bound.
 
7.2 Further Warranty by Universal Display.  Universal Display additionally
represents and warrants to Pioneer that Universal Display owns or has sufficient
rights in the Universal Display Technology to grant the license rights granted
to Pioneer hereunder.  If Universal Display assigns one or more of the Universal
Display Patents to a third party(ies), Universal Display shall ensure that the
assignment of such Universal Display Patents is subject to the license rights
granted to Pioneer hereunder without additional cost to Pioneer (other than the
obligation to pay amounts due and owing hereunder) for the rest of the Term of
this Agreement.  If a patent or patent application is jointly owned by Universal
Display and a third party(ies) in relation to OLED Light Source but not included
in the Universal Display Patents because Universal Display does not have a right
to grant a license for such patent or patent application, Universal Display
warrants that it shall not assert its right in and to such patent or patent
application against Pioneer or its Affiliates on account of their authorized
practice of the license rights granted hereunder during the Term of this
Agreement, or against their customers on account of their purchase of Licensed
Products manufactured and sold by Pioneer or its Affiliates as authorized
hereunder.
 
7.3 Disclaimer of Additional Warranties.  ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
NON-INFRINGEMENT, VALIDITY, QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED BY UNIVERSAL DISPLAY.  In
particular, Universal Display makes no representation or warranty that Pioneer
or its Affiliates will be able to manufacture, sell or use any Licensed Products
without obtaining additional license rights from third parties.
 
7.4 Required Disclaimer of Princeton, USC and Michigan.  PRINCETON, USC AND
MICHIGAN MAKE NO REPRESENTATIONS AND WARRANTIES AS TO THE PATENTABILITY AND/OR
DISCOVERIES INVOLVED IN ANY OF THE UNIVERSAL DISPLAY PATENTS LICENSED
HEREUNDER.  PRINCETON, USC AND MICHIGAN
 
 
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MAKE NO REPRESENTATION AS TO PATENTS NOW HELD OR WHICH WILL BE HELD BY OTHERS IN
ANY FIELD AND/OR FOR ANY PARTICULAR PURPOSE.  PRINCETON, USC AND MICHIGAN MAKE
NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
 
7.5 Limitation on Certain Damages.  IN NO EVENT SHALL UNIVERSAL DISPLAY BE
LIABLE TO PIONEER, OR TO ANY THIRD PARTY CLAIMING THROUGH PIONEER OR ITS
AFFILIATES, WHETHER AS A RESULT OF BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES ARISING UNDER OR IN CONNECTION WITH A BREACH OR ALLEGED
BREACH OF THIS AGREEMENT.  The foregoing shall not limit Universal Display’s
liability for any breach of the provisions of Article 6 respecting Confidential
Items of Pioneer and its Affiliates.
 
7.6 Essential Part of the Bargain.  The Parties acknowledge that the disclaimers
and limitations of liability set forth in this Article 7 reflect a deliberate
and bargained for allocation of risks between them and are intended to be
independent of any exclusive remedies available under this Agreement, including
any failure of such a remedy to achieve its essential purpose.
 
Article 8 Term and Termination
 
8.1 Term.  The term of this Agreement shall commence on the Effective Date
(i.e., May 1, 2011) and shall continue, unless terminated sooner as permitted
hereunder, until the cumulative Net Sales Revenue for Licensed Product sold,
leased or otherwise disposed of reaches [***] Japanese Yen.  If Pioneer wishes
to extend the term of this Agreement thereafter, both Parties shall discuss in
good faith the terms and conditions of any such extension; provided, however,
that neither Party shall have any right or obligation to enter into such an
extension unless expressly agreed in writing.  In addition, [***]; provided,
however, that neither party shall have any right or obligation to enter into
such a license unless expressly agreed in writing.
 
8.2 Termination for Breach.  Either Party may terminate this Agreement on
written notice to the other Party if the other Party materially breaches any of
its obligations under this Agreement and fails to cure such breach within sixty
(60) days following written notice thereof by the terminating Party.
 
8.3 Termination for Challenge of Patents.  Universal Display may terminate this
Agreement on written notice to Pioneer if Pioneer or any of its Affiliates
asserts or assists another in asserting (including through the use of a “dummy”
person or entity), before any court, patent office or other governmental agency,
that any of the Universal Display Patents are invalid or unenforceable, should
be cancelled or invalidated in whole or in part, or should otherwise not be
granted, allowed or issued in whole or in part.
 
8.4 Termination for Change in Control.  Universal Display may terminate this
Agreement on written notice to Pioneer if Pioneer undergoes a Change in
Control.  A “Change in Control” of Pioneer shall be deemed to have occurred if
there is a change in ownership of securities representing more than [***]
percent [***] of the voting capital stock of Pioneer, or of other interests
having majority voting rights with respect to the election of the board of
directors
 
 
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or similar governing authority of Pioneer, or of any other power by contract or
in any other form which entitles the holder thereof to majority voting rights
with respect to management decisions of Pioneer.
 
8.5 Other Termination.  Either Party may terminate this Agreement on written
notice to the other Party if the other Party permanently ceases conducting
business in the normal course, becomes insolvent or is adjudicated bankrupt,
makes a general assignment for the benefit of its creditors, admits in writing
its inability to pay its debts as they become due, permits the appointment of a
receiver for its business or assets, or initiates or becomes the subject of any
bankruptcy or insolvency proceedings which proceedings, if initiated
involuntarily, are not dismissed with sixty (60) days thereafter.
 
8.6 Survival.  The following provisions of this Agreement shall survive the
expiration or termination of this Agreement:  (a) any payment or reporting
obligations of Pioneer respecting the sale or other disposition of Licensed
Products occurring prior to the date of such expiration or termination; (b) for
three (3) years, any audit rights of Universal Display with respect to such
Licensed Products; (c) for five (5) years, the provisions of Articles 6; and (d)
the provisions of Article 7.  Any termination of this Agreement shall be in
addition to, and not in lieu of, any other rights or remedies that may be
available to a Party under this Agreement, at law or in equity.
 
8.7 Service Parts Supplied After the Term.  Notwithstanding Section 8.1 above,
Universal Display agrees that Pioneer may manufacture and supply Service Parts
upon the request by its customers after the termination of this Agreement,
provided that Pioneer shall pay the running royalties as stated in Section 4.2
and submit Royalty Reports as stated in Section 4.3 for such Service Parts, and
Universal Display’s audit rights under Section 5.4 shall apply with respect to
such Service Parts.
 
Article 9 Miscellaneous
 
9.1 Independence.  This Agreement is not intended by the Parties to constitute,
create, give effect to, or otherwise recognize a joint venture, partnership, or
formal business organization of any kind.  Each Party hereto shall act as an
independent entity, and neither shall act as an agent of the other for any
purpose.  Neither Party has the authority to assume or create any obligation,
express or implied, on behalf of the other.
 
9.2 Notices.  Any notices pertaining to the administration of this Agreement or
any breach, alleged breach or termination thereof shall be in writing and shall
be deemed effectively given upon receipt of such notices by the recipient.  Such
notices shall be given by personal delivery, certified mail with postage prepaid
and return receipt requested, or prepaid delivery using an international private
courier, to each Party at its address set forth below; provided, however, that
the Parties may agree to exchange information by confirmed email or facsimile
correspondence in lieu of the methods described above.  Either Party may change
its address for such notices at any time by means of a notice given in the
manner provided in this paragraph.
 
 
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All Royalty Reports and any other financial notices, to:

Universal Display Corporation
 
Pioneer Corporation
375 Phillips Boulevard
 
1-1, Shin-ogura, Saiwa-ku, Kawasaki-shi
Ewing, New Jersey  08618
 
Kanagawa 212-0031, Japan
Attn: [***]
 
Attn: [***]
Fax No.: [***]
 
Fax No.: [***]
Tel No.:[***]
 
Tel No.:[***]
E-mail: [***]
 
E-mail: [***]

All other notices and communications:

[same as above]
 
[same as above]
Attn: [***]
 
Attn: [***]
Fax No.: [***]
 
Fax No.: [***]
Tel No.:[***]
 
Tel No.:[***]
E-mail: [***]
 
E-mail: [***]

9.3 Non-Assignment.  Pioneer may not assign or transfer any of its rights or
delegate any of its obligations hereunder, by application of law or otherwise,
without the prior written consent of Universal Display.  Universal Display may
assign or transfer this Agreement, in its entirety and on written notice to
Pioneer, to a successor in interest to all or substantially all of Universal
Display’s business or assets to which this Agreement relates.  Any attempted
assignment, transfer or delegation in violation of this paragraph shall be null
and void and without force and effect.  Nothing herein shall confer any rights
upon any person other than the Parties hereto and their respective permitted
successors and assigns.
 
9.4 Equitable Relief.  In the event of Pioneer’s actual or reasonably
anticipated infringement of the Universal Display Patents, or unauthorized use
of the Universal Display Know-How, Universal Display may seek to obtain such
injunctions, order and decrees as may be necessary to restrain the infringement
or unauthorized use, without the necessity of proving actual damages and without
posting any bond or other security.  Such relief shall be in addition to, and
not in lieu of, any other rights or remedies available to Universal Display
under this Agreement, at law or in equity.
 
9.5 Choice of Law.  This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, U.S.A.,
without respect to its rules on the conflict of laws.  Any law or regulation
providing that the language of a contract shall be construed against the drafter
shall also not apply.
 
9.6 Severability.  In the event that any clause in this Agreement is found
invalid according to laws or governmental regulations, such a clause shall not
affect the validity of the remainder of this Agreement.  The invalid clause
shall then be replaced, upon mutual written consent between the parties hereto,
by such a valid provision as, in its effect, corresponds or comes closest to the
effect of the invalid provision.
 
9.7 No Waivers.  The failure of either Party to enforce, or any delay in
enforcing, any right, power or remedy that such Party may have under this
Agreement shall not constitute a waiver of any such right, power or remedy, or
release the other Party from any of its obligations under this Agreement, except
by a written document signed by the Party against whom such waiver or release is
sought to be enforced.
 
9.8 Entire Agreement; Amendments.  This Agreement constitutes the entire
understanding and agreement of the Parties respecting the subject matter hereof
and, except for the NDA, supersedes any and all prior agreements, arrangements
or understandings between the Parties, whether written or oral, relating
thereto.  This Agreement may not be amended or supplemented in any way except by
a written document signed by both of the Parties.
 
9.9 Counterparts.  This Agreement may be executed by the Parties hereto in
separate counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
 

 
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IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives.

Pioneer Corporation
 
Universal Display Corporation
                   
By:
 /s/ Susumu Kotani
 
By:
 /s/ Steven V. Abramson
         
Name:
 Susumu Kotani
 
Name:
 Steven Abramson
         
Title:
 President
 
Title:
 President and CEO
         
Date:
 Sep. 27, 2011
 
Date:
 Sept 5, 2011

 
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Exhibit A

OLED Light Source

Two Potential Configurations (by example only)

[***]

 
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Exhibit B

License Fees and Royalty Rates

License Fees:

US$[***], payable within thirty (30) days after contract execution by the
parties hereto and Universal Display delivers to Pioneer the appropriate
withholding tax documents required by Section 5.2; and

US$[***], payable within thirty (30) days after May 1, 2012.

Royalty Rates:

[***] for all Licensed Products; provided, however, that

(1)  
if the Licensed Product does not include every element of an OLED Light Source,
this royalty rate shall be adjusted so that the overall royalty payment to
Universal Display is the same as it would have been if the Licensed Product sold
or otherwise disposed of had consisted of a complete OLED Light Source; and

(2)  
if the Licensed Product includes components in addition to those of an OLED
Light Source, the Net Sales Revenue on which royalties are payable shall exclude
the portion of such revenue attributable to the additional components.

Notwithstanding (1) and (2) above, the parties have agreed that for a Licensed
Product which is an OLED Light Source minus [***], the adjusted royalty rate
during the term of this Agreement shall be [***].  It is also agreed between the
parties that for a Licensed Product which is an OLED Light Source minus [***],
the royalty rate during the term of this Agreement shall be [***].

 
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Exhibit C

Universal Display Patents

To be provided separately.

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