ex10_2.htm


    COMMERCIAL
      SUPPLY AGREEMENT

    


    THIS
      COMMERCIAL SUPPLY AGREEMENT (this “Agreement”) is made and entered into as of
      the 23nd day of May, 2007 (the “Effective Date”), by and between
LG.Philips LCD Co., Ltd. (“LPL”), a corporation organized under
      the laws of the Republic of Korea with a place of business at 533, Hogae-dong,
      Dongan-gu, Anyang-shi, Gyongki-do 431-080, Republic of Korea.; and
Universal Display Corporation (“Universal Display”), a
      Pennsylvania corporation, with its principal place of business at 375 Phillips
      Blvd., Ewing, New Jersey 08618, U.S.A.

     

     

    BACKGROUND

     

    WHEREAS,
      Universal Display makes and sells certain materials for use in organic light
      emitting devices; and

     

    WHEREAS,
      LPL desires to purchase these materials from Universal Display on the terms
      and
      conditions set forth herein.

     

    NOW,
      THEREFORE, intending to be legally bound, LPL and Universal Display agree as
      follows:

     

    Article
      1  Terms
      of Sale; Orders and Forecasts

     

    1.1  General.  Universal
      Display will sell to LPL, and LPL will purchase from Universal Display, such
      of
      the OLED materials currently offered for commercial sale by Universal Display
      and specified on Exhibit A hereto (the “Product(s)”) as LPL may order from time
      to time.  Exhibit A shall be updated by the parties from time to time
      as LPL desires other OLED materials that Universal Display is offering for
      commercial sale, or as Universal Display ceases offering to sell certain of
      the
      OLED materials currently being sold to LPL hereunder.  Universal
      Display shall provide LPL with at least six (6) months’ prior written notice of
      its intention to discontinue offering for commercial sale any OLED material
      currently being sold to LPL hereunder.

     

    1.2  No
      Additional Terms.  Unless otherwise expressly agreed to in writing,
      Universal Display’s sale and LPL’s purchase of all Products hereunder shall be
      solely on the terms and conditions set forth herein.  Each party
      accepts these terms and conditions and no inconsistent or additional terms
      or
      conditions of any purchase order, acceptance, shipping instructions or other
      document submitted by either party shall apply other than those specified in
      Section 1.3 below.  All such other terms and conditions are hereby
      rejected and no separate notice of such rejection need be given by either
      party.

     

    1.3  Purchase
      Orders.  LPL shall place written orders with Universal Display for the
      Products (“Orders”) at least four (4) months in advance of the requested
      shipment date.  All Orders shall include (a) the date of the Order,
      (b) the identity and quantity of each Product ordered, (c) the requested date
      of
      shipment and (d) the shipping destination.  Promptly following the
      Effective Date, the parties shall agree upon LPL’s Order for the four (4) month
      period immediately thereafter.

     

    1.4  Forecasts.  LPL
      shall provide Universal Display, in writing, with rolling forecasts, on a
      calendar quarterly basis by the end of each quarter, of its expected
      requirements for each Product during the next twelve (12)
      months.  These forecasts shall be non-binding, except that Universal
      Display shall not be obligated to fill (though it shall use commercially
      reasonable efforts to fill) that portion of any Order for a Product which
      exceeds LPL’s twelve (12) month advance forecasted requirement for such Product
      by more than 25%.

     

    1.5  Title
      and
      Risk of Loss.  All Products shall be sold [The confidential material
      contained herein has been omitted and has been separately filed with the
      Commission.], Universal Display’s Product shipment facility in New Jersey,
      U.S.A.  LPL shall be responsible for all associated shipping and
      insurance charges, brokers’ fees and the like, and LPL will designate its
      preferred freight forwarder in the United States to handle all Product
      shipments.  In the absence of such designation, Universal Display will
      arrange for a freight forwarder to handle the shipment on LPL’s behalf and at
      LPL’s expense.

     

    1.6  Shipping
      Dates.  Universal Display will use commercially reasonable efforts to
      meet LPL’s requests for specific shipment dates.  Partial deliveries
      shall be accepted and paid for by LPL on the terms set forth
      herein.

     

    Article
      2  Inspection
      and Acceptance

     

    2.1  Qualification
      Testing by Universal Display.  Universal Display will conduct
      qualification testing of each production lot of Product before shipping any
      Product from such lot to LPL.  Such qualification testing shall be
      designed to ensure that the Product conforms to its corresponding specifications
      as attached hereto or otherwise agreed to by the parties in writing (the
“Product Specifications”).  Universal Display will not ship Product to
      LPL from any lot that does not meet the applicable Product
      Specifications.  With each Product shipment, Universal Display will
      submit to LPL a Certificate of Analysis indicating that such lot conforms to
      the
      applicable Product Specifications.

     

    2.2  Acceptance
      Testing of Samples by LPL.

     

    2.2.1  Universal
      Display will provide LPL with a [The confidential material contained herein
      has
      been omitted and has been separately filed with the Commission.] test sample
      from the production lot(s) from which the Product will be supplied; provided,
      however, that no such sample shall be sent from production lot(s) for which
      LPL
      has already received a test sample.  This test sample shall be sent to
      LPL as far in advance of the requested shipping date as is reasonably
      practicable, up to one (1) month in advance.  The test sample shall be
      in addition to the ordered quantity of Product [The confidential material
      contained herein has been omitted and has been separately filed with the
      Commission.].

     

    2.2.2  Within
      two (2) weeks following its receipt of a test sample as specified above, LPL
      will conduct an acceptance test to confirm that the sample conforms to its
      corresponding Product Specifications.  At the conclusion of such two
      (2) week period, LPL will inform Universal Display in writing as to whether
      or
      not the test sample passed this acceptance test.  Unless otherwise
      expressly agreed to by the parties, Universal Display shall endeavor to fill
      all
      Orders using only Product from production lots for which LPL has informed
      Universal Display in writing that the test sample has passed the acceptance
      test, such written notice not to be unreasonably withheld or
      delayed.  LPL understands and acknowledges that any delay in so
      informing Universal Display may result in a corresponding delay in the shipping
      date, since shipments may not be initiated until up to one (1) week after
      Universal Display receives LPL’s written notice of acceptance.  LPL
      also understands and acknowledges that Orders may be filled in advance of
      receiving such written notice of acceptance if Universal Display deems it
      reasonably necessary to initiate shipments in order to meet LPL’s requested
      shipping dates.

     

    2.2.3  If
      the
      test sample does not pass LPL’s acceptance test, the parties shall promptly and
      in good faith discuss and attempt to determine why this has occurred and to
      implement procedures to prevent its recurrence.  At the same time,
      Universal Display will in good faith endeavor to fill the Order in a timely
      manner by shipping to LPL Product from one or more production lots for which
      the
      test samples have already passed LPL’s acceptance test.  Should there
      be insufficient material from such production lots for Universal Display to
      fill
      the Order, Universal Display will promptly provide LPL with a test sample from
      one or more other production lots for which no test samples have previously
      been
      sent and the process above shall be repeated until sufficient material to fill
      the Order has been identified.  Should this prevent Universal Display
      from filling the Order by the requested shipping date or within a reasonable
      period of time thereafter (said period not to exceed sixty (60) days), LPL
      shall
      have the right to cancel the Order and exercise such other rights or remedies
      as
      may be available to it, subject to the express limitations set forth in this
      Agreement.

     

    2.3  Shipping
      Inspection by Universal Display.  Universal Display will conduct a
      final visual inspection of all Products before shipping such Products to
      LPL.  Universal Display will not ship to LPL any Product that does not
      pass such visual inspection.

     

    2.4  Receiving
      Inspection by LPL.  Upon receipt of each Product shipment, LPL will
      inspect such shipment for any shortage or other defects.  LPL will
      provide Universal Display with written notice of any shortage or defect promptly
      following LPL’s receipt of the shipment, which notice shall specify in
      reasonable detail the manner in which the shipment is short or
      defective.  In the absence of Universal Display receiving written
      notification to the contrary within thirty (30) days following LPL’s receipt of
      the shipment, LPL shall be deemed to have accepted the shipment without
      reservation on the date of receipt.  LPL’s sole remedy and Universal
      Display’s entire responsibility with respect to any Product shipment that is
      identified by LPL and confirmed by Universal Display to be short or otherwise
      defective shall be limited to Universal Display promptly making up the shortage
      or replacing the defective Product, all at no additional cost to LPL except
      where the shortage or defect arises through no fault of Universal Display after
      risk of loss for the Product shipment has passed to LPL.  In the event
      that the shortage or defect is determined to have arisen after risk of loss
      has
      passed to LPL, Universal Display will use commercially reasonable efforts to
      assist LPL in making any claims against the carrier with respect
      thereto.

     

    2.5  Other
      Procedures.  The parties may agree on more detailed inspection,
      certification and testing procedures in order to supplement the foregoing
      provisions of this Article 2.  The parties may also agree to eliminate
      or curtail the procedure regarding the shipment and acceptance testing of test
      samples, in which event acceptance testing will occur in connection with the
      receiving inspection of each Product shipment outlined above.  All
      modifications to the procedures in this Article 2 must be agreed to in writing
      (including confirmed email correspondence) by an authorized representative
      of
      each party.

     

    Article
      3  Health
      and the Environment

     

    3.1  Health
      and Safety.  Universal Display will furnish LPL with a Material Safety
      Data Sheet (an “MSDS”) for each Product where required by applicable
      law.  LPL shall use these MSDS’s to familiarize itself with any known
      hazards associated with the Products, their storage, handling and use, and
      the
      containers in which they are shipped.  LPL shall make available the
      MSDS for each Product to all those required by law to receive access to
      them.  In addition, LPL shall appropriately inform and train its
      employees and other personnel as to the hazards identified in the MSDS for
      each
      Product and any other hazards discovered by LPL through its use of such
      Product.

     

    3.2  Waste
      Management.  LPL shall properly manage and dispose of all wastes
      and/or residues resulting from its use of the Product in accordance with its
      corresponding MSDS and all applicable laws and regulations.

     

    Article
      4  Intellectual
      Property Matters

     

    4.1  Permitted
      Uses of the Product.  LPL acknowledges that Universal Display is
      selling the Product to LPL solely for use by LPL to manufacture (but not have
      manufactured) by vacuum thermal evaporation deposition processes only, sell,
      offer for sale and import active matrix flat panel OLED displays on rigid glass
      substrates (“Permitted Displays”).  Accordingly, LPL may not sell or
      otherwise distribute the Product to any person or entity, or use the Product,
      or
      permit or assist others to use the Product, for any other
      purposes.  Subject to LPL’s right to make and sell Permitted Displays,
      no rights are granted to LPL under any patents or other intellectual property
      owned or controlled by Universal Display.  For clarification, LPL is
      not licensed under any of Universal Display’s top emission or other OLED
      patents, except those phosphorescence patents specifically implied in use of
      the
      Product purchased hereunder to make and sell Permitted
      Displays.  Moreover, LPL is not licensed to make or sell Permitted
      Displays incorporating third-party phosphorescent emitters, as this would
      require a separate license from Universal Display under its phosphorescence
      patents.  LPL acknowledges that the pricing charged by Universal
      Display for Product sold under this Agreement is based on LPL’s agreement to use
      such Product only for the manufacture of Permitted Displays, and that such
      pricing would not otherwise have been offered to LPL.

     

    4.2  Third-Party
      Patents.  LPL acknowledges that it may be required to obtain rights
      under one or more third-party patents in order to make and sell Permitted
      Displays, or to use chemicals other than the Product in such displays, and
      that
      LPL shall be solely responsible for determining the rights it is required to
      obtain and for obtaining all such rights.  LPL may request reasonable
      assistance from Universal Display in ascertaining and obtaining rights to the
      same.

     

    4.3  Analysis
      and Evaluation of the Product.  LPL shall not reverse engineer the
      Product, or analyze the Product to determine their chemical compositions,
      structures or methods of manufacture, or for any other purposes not expressly
      approved in writing by Universal Display, nor shall LPL permit or assist others
      to perform the foregoing activities.  In addition, LPL shall not
      publish or otherwise disclose to third parties any test results or other
      information or data regarding LPL’s evaluation of the Product without Universal
      Display’s prior written consent.  The foregoing shall not restrict LPL
      from conducting its standard performance testing of Permitted
      Displays.

     

    4.4  Technical
      Advice.  LPL is responsible for making its own inquiry and
      investigation into, and based thereon forming an independent judgment
      concerning, the Products and their suitability for the uses intended by
      LPL.  LPL shall not assert any claim against Universal Display or hold
      Universal Display liable in any manner with respect to any information or
      designs furnished (or failed to be furnished) by Universal Display including,
      without limitation, technical advice or recommendations.  However, the
      foregoing shall not apply to technical advice or recommendations made by
      Universal Display that are, to the best of Universal Display’s knowledge at the
      time made or given, substantially false, misleading or inaccurate.

     

    4.5  Export
      Control.  Each party shall comply with all obligations under
      applicable law to control access to technical data under the U.S. Export Laws
      and Regulations, or any foreign counterparts thereof, and shall adhere to such
      laws and regulations in handling and disclosing any technical information
      provided or received by it under this Agreement in relation to any
      Product.

     

    Article
      5  Pricing
      and Payments

     

    5.1  Product
      Pricing.  Pricing for the Product during the term of this Agreement
      shall be as set forth on in Exhibit A hereto.  Every six (6) months
      during the term of this Agreement, Universal Display and LPL shall in good
      faith
      review and discuss such pricing based on LPL’s volume of purchases and
      usage.  Any price change will not be effective unless confirmed by
      both parties in writing.  Orders issued prior to any confirmed price
      change shall remain at the original price unless agreed in writing by the
      parties.

     

    5.2  Invoicing.  Universal
      Display shall invoice LPL for all Products at the time of
      shipment.  All invoices are due and payable within [The confidential
      material contained herein has been omitted and has been separately filed with
      the Commission.] following the date of invoice and shipment to
      LPL.  If LPL fails or refuses to timely pay any amounts not then being
      disputed by LPL in good faith, Universal Display may (a) require that LPL pay
      for future shipments in advance or by letter of credit or other similar means,
      and/or (b) suspend delivery of further shipments of Product until LPL pays
      such
      undisputed amounts in full.  The foregoing shall not limit any other
      rights or remedies available to Universal Display for non-payment or late
      payment of amounts due hereunder.

     

    5.3  Sales
      and
      Other Similar Taxes.  Any sales, use or value-added taxes, customs or
      import duties or other governmental charges, transfer fees or assessments based
      on the sale, shipment, import, export and/or use of the Product sold hereunder
      (other than taxes based upon Universal Display’s net income), whether imposed by
      any local, state, Federal or foreign government or taxing authority, [The
      confidential material contained herein has been omitted and has been separately
      filed with the Commission.].  To the extent Universal Display is
      responsible by law for the collection of such amounts, they shall be separately
      stated on Universal Display’s invoices for such Product and, upon collection,
      remitted by Universal Display to the appropriate taxing authority.

     

    5.4  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:

     

    [The
      confidential material contained herein has been omitted and has been separately
      filed with the Commission.]

    


    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 LPL or any of its affiliates.  Universal Display may
      require LPL to pay interest on any amounts not paid when due at a per annum
      rate
      equal to the Prime Rate as published in The Wall Street Journal on the
      date of payment plus [The confidential material contained herein has been
      omitted and has been separately filed with the Commission.].

     

    5.5  Payment
      Authorization and Withholding Taxes.  LPL shall secure all
      authorizations required for payment of all amounts due to Universal Display
      hereunder and shall bear all transfer fees, taxes and other charges associated
      therewith.  If necessary, the parties shall in good faith endeavor to
      file for and obtain an exemption from the withholding of any taxes on amounts
      payable to Universal Display hereunder.

     

    Article
      6  Confidentiality

     

    6.1  Obligations
      of Confidentiality and Non-Use.  Each party (the “Recipient”) shall
      handle and maintain all Confidential Information of the other party in
      accordance with the following terms and conditions:

     

    6.1.1  Recipient
      shall not publish, disclose or otherwise disseminate any Confidential
      Information of the other party, except to such of Recipient’s employees and
      agents who have a “need to know” it to accomplish the purposes of this
      Agreement, and then only if such persons previously have agreed in writing
      to
      handle and maintain such Confidential Information in accordance with the
      provisions of this Agreement or provisions substantially similar
      thereto.  Disclosure or dissemination of Confidential Information of
      the other party to additional persons or entities requires the prior written
      approval of such other party.

     

    6.1.2  Recipient
      shall maintain all Confidential Information of the other party in a safe and
      secure place with reasonable safeguards to prevent any unauthorized access
      to or
      disclosure of such Confidential Information.  As used herein,
“reasonable safeguards” means all safeguards that a reasonable person would take
      to protect the Confidential Information 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
      shall not utilize, reproduce or otherwise exploit any Confidential Information
      of the other party, or permit or assist others to utilize, reproduce or
      otherwise exploit such Confidential Information, except as is reasonably
      necessary to accomplish the purposes of this Agreement.

     

    6.1.4  Promptly
      upon learning of any unauthorized use or disclosure of any Confidential
      Information of the other party, Recipient shall provide the other party with
      written notice thereof and take such other steps as are reasonably requested
      by
      the other party in order to limit the effects of such use or disclosure and/or
      prevent any further unauthorized use or disclosure of such Confidential
      Information.

     

    6.1.5  Promptly
      upon the expiration or sooner termination of this Agreement, Recipient shall
      return to the other party, destroy and/or delete from Recipient’s records and
      computer systems all Confidential Information of the other party according
      to
      the other party’s instruction, including any copies or portions thereof, in
      Recipient’s possession or control; provided, however, that Recipient may retain
      one copy of documents incorporating Confidential Information for archival
      purposes only.  Within thirty (30) days following the other party’s
      written request, Recipient shall provide the other party with a certificate
      of
      Recipient’s compliance with the foregoing requirements.

     

    6.2  Survival
      of Obligations. The obligations of confidentiality contained in this Agreement
      shall survive the expiration or termination of this Agreement, whether due
      to
      expiry of the term or for any other reason, for a period of five (5) years
      from
      the date of expiration or termination.

     

    6.3  Definition
      of Confidential Information.  As used herein, “Confidential
      Information” of a party means information pertaining to this Agreement, which
      information relates to such party’s or its licensors’ or suppliers’
technologies, materials, research programs, operations and/or financial or
      business condition (including, without limitation, know-how, data, drawings,
      designs, specifications, formulations, processes, methods, equipment, software
      and pricing information), and which information is (a) disclosed in writing
      and
      marked as “Confidential”, “Proprietary” or with similar words at the time of
      disclosure; or (b) orally 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 Information” of a party shall not include any information
      that:

     

    6.3.1  is
      approved by such party in writing for release by Recipient without
      restriction;

     

    6.3.2  Recipient
      can demonstrate by written records was previously known to Recipient other
      than
      through a prior disclosure by such party or any third party with an obligation
      of confidentiality to such party;

     

    6.3.3  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;

     

    6.3.4  is
      obtained by Recipient in good faith from a third party without the violation
      of
      any obligation of confidentiality to such party by either Recipient or the
      third
      party; or

     

    6.3.5  is
      independently developed by or on behalf of Recipient without the benefit of
      such
      party’s Confidential Information, as shown by competent written
      records.

     

    6.4  Disclosure
      Required by Law.  This Agreement shall not restrict Recipient from
      disclosing any Confidential Information of the other party to the extent
      required by applicable law, or by the order of any court or government agency;
      provided, however, that Recipient shall afford the other party prompt notice
      of
      such law or order, so that the other party may interpose an objection to such
      disclosure or take whatever other actions the other party deems appropriate
      to
      protect such Confidential Information, and provided further that Recipient
      shall
      use all reasonable efforts to limit such disclosure to only that Confidential
      Information which is required to be disclosed and to ensure that the person
      or
      entity to whom such Confidential Information is disclosed agrees to keep it
      confidential.

     

    6.5  Responsibility
      for Personnel.  Recipient shall be responsible for the acts or
      omissions of any persons or entities receiving Confidential Information of
      the
      other party 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.

     

    6.6  Confidentiality
      of this Agreement.  The terms of this Agreement and its existence
      shall be deemed Confidential Information 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 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, it being understood that Universal Display
      will
      need to issue a press release within four (4) business days following the
      Effective Date so as to coincide with its filing with the U.S. Securities and
      Exchange Commission of a Current Report on Form 8-K.  However, it is
      expressly understood and agreed that no such release or public disclosure shall
      disclose any information about LPL’s expected or intended OLED product launch
      strategy, or whether any such OLED product will utilize any Product sold to
      LPL
      hereunder, without LPL’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.

     

    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
      Product Warranty by Universal Display.  Universal Display additionally
      represents and warrants to LPL that all Products will comply with their
      corresponding Product Specifications for a period of [The confidential material
      contained herein has been omitted and has been separately filed with the
      Commission.], provided that LPL maintains the Product consistent with good
      general handling and storage practices and any supplemental instructions
      provided by Universal Display.  All claims of any breach of the
      foregoing warranty must be provided to Universal Display in writing during
      the
      warranty period or they shall be deemed waived by LPL.  In the event
      of a breach of the foregoing warranty, Universal Display shall, at LPL’s option,
      (a) promptly replace any Product that are not in compliance with the warranty
      at
      Universal Display’s sole expense; or (b) accept return of such Product and
      reimburse all the fees that LPL paid Universal Display on account
      thereof.

     

    7.3  Further
      Infringement Warranty by Universal Display.  Universal Display
      warrants to LPL that, to the best of Universal Display’s knowledge, the Products
      do not infringe the valid patent rights of any third party.  If LPL is
      unable to use any Product because the Product itself is held by a court of
      competent jurisdiction to infringe the patent or other intellectual property
      rights of any unaffiliated third party, Universal Display shall accept return
      of
      any quantities of such Product no longer reasonably useful to LPL on account
      thereof and reimburse all fees that LPL paid Universal Display on account
      thereof.  The foregoing shall be in addition to any indemnification
      obligation of Universal Display under Article 8 below.

     

    7.4  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 EACH PARTY.  In particular,
      Universal Display makes no representations or warranties that LPL will be able
      to make any specific use of the Product without obtaining additional license
      rights from third parties. IN NO EVENT SHALL UNIVERSAL DISPLAY’S LIABILITY FOR
      ANY BREACH OR ALLEGED BREACH OF REPRESENTATION OR WARRANTY UNDER THIS AGREEMENT
      EXCEED [The confidential material contained herein has been omitted and has
      been
      separately filed with the Commission.].

     

    7.5  Limitation
      on Certain Damages.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
      OTHER, WHETHER AS A RESULT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE)
      OR
      OTHERWISE, FOR ANY SPECIAL OR PUNITIVE DAMAGES ARISING UNDER OR IN CONNECTION
      WITH A BREACH OR ALLEGED BREACH OF THIS AGREEMENT.  The foregoing
      limitation shall not limit either party’s liability to the other party for: (a)
      any claims of bodily injury or damage to tangible property resulting from such
      party’s negligence or willful misconduct, (b) any unauthorized practice under
      the other party’s patents or use of the other party’s proprietary materials or
      information; or (c) any breach of the provisions of Article 6 respecting
      Confidential Information.

     

    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 the parties and are intended to be
      independent of any exclusive remedies available under this Agreement, including
      any failure of such remedies to achieve their essential purpose.

     

    Article
      8  Indemnification

     

    8.1  Indemnification
      by Universal Display.  In accordance with Section 8.2 below, Universal
      Display shall, at its responsibilities and expenses, defend any claim or action
      including but not limited to suits, complains and any disputes brought against
      LPL and/or its officers, directors, suppliers, employees, agents and
      representatives (each, a “LPL Indemnified Person”), to the extent such claim or
      action concerns[The confidential material contained herein has been omitted
      and
      has been separately filed with the Commission.].  In addition,
      Universal Display shall indemnify and hold harmless the LPL Indemnified Persons
      from and against any damages, fees and expenses (including reasonable attorneys’
fees) payable by any of them to third parties in connection with such claim
      or
      action.  The foregoing indemnity shall not apply to any third-party
      infringement claims relating to LPL’s specific usage of the Product in an OLED
      device, which claims shall be the responsibility of LPL.

     

    8.2  Indemnification
      Procedures.  With respect to any claim or action for which
      indemnification may be sought from a party under this Article 8, the person
      or
      entity seeking indemnification (the “Claimant”) shall promptly notify the
      indemnifying party in writing, specifying the nature of the claim or action
      and,
      to the extent known, the total monetary amount sought or other such relief
      as is
      sought therein.  The Claimant shall reasonably cooperate with the
      indemnifying party, at the indemnifying party’s expense, in connection with the
      indemnifying party’s defense and/or settlement of the claim or
      action.  The indemnifying party shall keep the Claimant reasonably
      informed of the progress of its defense and settlement of the claim or
      action.  The indemnifying party shall not settle the claim or action
      on the Claimant’s behalf without first obtaining the Claimant’s written
      approval, which approval shall not be unreasonably withheld or
      delayed.  In the event that the indemnifying party fails to notify the
      Claimant of the indemnifying party’s intention to take any action within 20
      calendar days after receipt of a notice of any claim or action, or fails to
      proceed in good faith with the resolution of such claim or action, the Claimant
      may, at its option, send written notice to the indemnifying party indicating
      the
      Claimant’s intention to (i) defend the claim or action itself and/or (ii) enter
      into any good faith settlement negotiations with the third party.  If
      the indemnifying party does not respond within 20 calendar days thereafter,
      then, with a prior notice to the indemnifying party and subject to the remainder
      of this paragraph, the Claimant may proceed to defend and/or attempt to settle
      the claim or action, and the indemnifying party will reimburse the Claimant
      on
      demand all reasonable costs and expenses incurred by the Claimant in defending
      and/or settling the claim or action, including the settlement amount, and any
      reasonable attorneys’ and consultants’ fees and costs. Also, the indemnifying
      party shall provide the Claimant, at the indemnifying party’s expense, with
      reasonable assistance necessary for the defense or settlement of such claim
      or
      action.  The Claimant may not settle any claim or action for which
      indemnification is sought hereunder without the indemnifying party’s written
      approval, which approval shall not be unreasonably withheld or
      delayed.  Except as may be required by law, each party agrees not to
      publicize any settlement without first obtaining the other party’s written
      permission.

     

    Article
      9  Term
      and Termination

     

    9.1  Term.  Unless
      otherwise extended by mutual written agreement of the parties, the term of
      this
      Agreement shall commence on the Effective Date and shall continue until the
      sooner of June 30, 2008, or the date on which this Agreement is terminated
      as
      permitted hereunder.

     

    9.2  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.

     

    9.3  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.  In
      addition, either party may terminate this Agreement on written notice to the
      other party in the event of a change in control of such other party, whether
      by
      merger, acquisition or otherwise; provided, however, that such notice of
      termination must be given within sixty (60) days following such party’s receipt
      of notice of such merger or acquisition.

     

    9.4  Survival.  The
      following provisions of this Agreement shall survive the expiration or earlier
      termination of this Agreement:  any confidentiality obligations of
      each party; any warranty and indemnification obligations of each party; any
      payment obligations of LPL with respect to Product received or for which Orders
      have been placed prior to the date of such expiration or earlier termination;
      any intellectual property rights obligations and restrictions imposed on either
      party; any obligations of either party respecting taxes or tax withholding;
      the
      provisions respecting non-assignment, equitable relief and choice of law; and
      any other provisions necessary to interpret the respective rights and
      obligations of the parties hereunder.

     

    Article
      10  Miscellaneous

     

    10.1  Independent
      Contractors.  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 contractor, 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.

     

    10.2  Force
      Majeure.  Neither party shall be in breach of this Agreement for any
      failure of performance caused by an event beyond its reasonable control and
      not
      due to its fault or negligence.  In the event that such a force
      majeure event occurs, the party unable to perform shall promptly notify the
      other party of such non-performance and its expected duration.  In
      addition, such party shall in good faith maintain such partial performance
      of
      this Agreement as is reasonably possible, shall use all reasonable efforts
      to
      overcome the cause of nonperformance and shall resume full performance as soon
      as is reasonably possible. If the non-performance caused by the force majeure
      conditions are not cured within sixty (60) days of the force majeure event,
      then
      either party may immediately terminate this Agreement.

     

    10.3  Non-Assignment.  This
      Agreement and the rights and obligations of the parties hereunder shall not
      be
      assigned or transferred by either party without the prior written consent of
      the
      other party, except that either party may assign or transfer this Agreement,
      in
      its entirety and on written notice to the other, to a successor in interest
      to
      all or substantially all of such party’s business to which this Agreement
      relates, whether by merger, acquisition or otherwise, subject in any such case
      to the other party’s right of termination under Section 9.3
      above.  Notwithstanding the foregoing, LPL may not assign or transfer
      this Agreement to a third party with whom Universal Display is then-engaged
      in
      litigation or other formal adversarial or dispute resolution proceedings
      respecting any Universal Display products or technologies.  Should LPL
      assign or transfer this Agreement, whether by merger, acquisition or otherwise,
      to a third party with an existing OLED business, or should LPL acquire the
      existing OLED business of any third party, this Agreement shall not be utilized
      for the benefit of such third party’s OLED business unless expressly agreed to
      by Universal Display in writing.  Moreover, should Universal Display
      have already entered into a similar agreement with the third party at the time
      of such assignment, transfer or acquisition, there shall be no reduction of
      the
      payment or other obligations of LPL under this Agreement as they pertain to
      LPL’s OLED business, or of such third party under its similar agreement as they
      pertain to such third party’s OLED business, unless expressly agreed to by
      Universal Display in writing.  Nothing herein shall confer any rights
      upon any person other than the parties hereto and their respective successors
      and permitted assigns.

     

    10.4  Equitable
      Relief.  In the event of a party’s actual or reasonably anticipated
      use of the other party’s proprietary materials (including, in the case of
      Universal Display, the Product) in an unauthorized manner, infringement of
      the
      other party’s patents, or breach of the provisions of Article 7 respecting
      Confidential Information of the other party, such other party shall be entitled
      to injunctive or other equitable relief restraining such activity, without
      the
      necessity of proving actual damages or posting any bond or other
      security.  Such relief shall be in addition to, and not in lieu of,
      any other remedies that may be available, at law or equity, including, without
      limitation, an action for the recovery of damages.

     

    10.5  Choice
      of
      Law; Dispute Resolution.  This Agreement shall be governed and
      construed by the laws of the State of New York, U.S.A., without reference to
      conflict of law principles.  Prior to terminating this agreement or
      initiating any action or request for arbitration, the parties shall make good
      faith efforts to attempt to amicably settle all disputes, controversies, or
      differences which may arise between parties hereto, out of or in relation to
      or
      in connection with this Agreement or breach thereof.  In the event
      that the amicable settlement is not reached within 30 days after the disputes
      first arise, such disputes may, at the request of either party, be submitted
      to
      the International Chamber of Commerce (“ICC”) and shall be finally settled
      through binding arbitration under the Rules of Arbitration of the
      ICC.  The seat of the arbitration shall be in Seoul, Republic of Korea
      if LPL requests arbitration, and New York, New York, U.S.A. if Universal Display
      requests arbitration, and the language of arbitral proceedings shall be in
      the
      English language, and the award rendered by arbitrators shall be final and
      binding upon the parties hereto.  Unless agreed to by both parties in
      writing, the foregoing shall not apply to disputes pertaining to breaches of
      confidentiality, the infringement of patents or other intellectual property
      rights, or unauthorized uses of the Products.  Moreover, nothing
      herein shall prevent either party from seeking or obtaining temporary or
      permanent injunctive relief of any nature at any time.

     

    10.6  Notices.  All
      notices and other communications under this Agreement shall be in writing and
      hand delivered or sent by facsimile or e-mail transmission with confirmation
      of
      receipt, commercial overnight courier with written verification of receipt,
      or
      certified or registered mail, postage prepaid and return receipt requested;
      provided, however, that all notices concerning any dispute or any alleged breach
      or termination of this Agreement, in whole or in part, must be sent by overnight
      courier or certified or registered mail.  Such notices and other
      communications shall be effective when received if hand delivered, when sent
      if
      sent by confirmed facsimile or e-mail transmission, on the next business day
      of
      the recipient when sent by overnight courier, or five (5) business days after
      deposit in the mail when sent by certified or registered mail.  All
      notices and other communications shall be directed to the parties at their
      respective addresses as set forth below, or to such other address(es) as either
      party shall provide to the other in a notice given in accordance
      herewith.

     

    All
      Orders and any other notices respecting the Product, to:

    


    Universal
      Display
      Corporation                                                                                     LG.
      Philips LCD Co., Ltd.

    375
      Phillips
      Boulevard                                                                                     642-3,
      Jinpyoung-dong, Gumi-city

    Ewing,
      New
      Jersey  08618                                                                                     Gyungsangbuk-do,
      Korea

    Attn:
      Janice
      Mahon                                                                           Attn:
      Seokjong Lee

    Fax
      No.:
      (609)
      671-0995                                                                                     Fax
      No.: (054) 478-1115

    Tel
      No.:
      (609) 671-0980
      x206                                                                                     Tel
      No.: (054) 478-1161

    E-mail:
      jkmahon@universaldisplay.com                                                                                                E-mail:
      sjonglee@lgphilips-lcd.com

    


    All
      other
      notices and communications:

    


    [same
      as
      above]                                                                                     [same
      as above]

    Attn:
      Steven V.
      Abramson                                                                                     Attn:
      Seokjong Lee

    Fax
      No.:
      (609)
      671-0995                                                                                     Fax
      No.: (054) 478-1115

    Tel
      No.:
      (609) 671-0980
      x207                                                                                     Tel
      No.: (054) 478-1161

    E-mail:
      abramson@universaldisplay.com                                                                                                E-mail:
      sjonglee@lgphilips-lcd.com

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.7  Amendments;
      No Waivers.  No modification of or addition to this Agreement shall be
      effective unless it is in writing and signed by an authorized representative
      of
      each of the parties hereto.  The failure of either party to assert any
      right hereunder, or to insist upon compliance with any term or condition herein,
      will not constitute a waiver of that right or excuse any subsequent
      nonperformance of any such term or condition, or of any other term or condition,
      by the other party.

     

    10.8  Severability.  In
      view of the possibility that one or more of the provisions of this Agreement
      may
      subsequently be declared invalid or unenforceable by court or administrative
      decision, the parties hereto agree that invalidity or unenforceability of any
      of
      the provisions shall not in any way affect the validity or enforceability of
      any
      other provisions of this Agreement, except where the invalidated or
      unenforceable provisions comprise an integral part of, or are otherwise clearly
      inseparable from, such other provisions.

     

    10.9  Entire
      Agreement.  This Agreement contains the entire agreement between the
      parties with respect to the subject matter hereof, and neither party shall
      have
      any obligation with respect thereto, express or implied by law, except as set
      forth herein or therein.

     

    10.10  Counterparts.  This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which taken together shall constitute
      one
      and the same instrument.

     

    
       

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their duly authorized representatives:

    


     

    LG.Philips
      LCD Co.,
      Ltd.                                                                           Universal
      Display Corporation

     

    


     

    


     

    By:               /s/
      In Jae
      Chung                                                  By:               /s/
      Steven V. Abramson

     

    


     

    Name:                                                                In
      Jae ChungName:Steven V. Abramson

     

    


     

    Title:               Executive
      Vice
      President                                                             Title:President

     

    


     

    Date:               May
      23,
      2007                                                  Date:               May
      23, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Exhibit
      A

    


    Products
      and Product Pricing

    


    


    [The
      confidential material contained herein has been omitted and has been separately
      filed with the Commission.]