Document:

<PAGE>

                                VOTING AGREEMENT

         VOTING AGREEMENT dated as of August 22, 2001 between Universal Display
Corporation, a Pennsylvania corporation ("UDC") and the persons listed on
Schedule A hereto (collectively, the "Stockholders").

         WHEREAS, the Stockholders and UDC have entered into a Securities
Purchase Agreement (as the same may be amended or supplemented, the "Purchase
Agreement") pursuant to which the Stockholders: (i) acquired First Shares and
Notes convertible into, and Warrants exercisable for, shares of UDC's Common
Stock; and (ii) may subsequently acquire Second Shares convertible into shares
of UDC's Common Stock;

         WHEREAS, the First Shares and Second Shares are collectively referred
to herein as the "Preferred Stock";

         WHEREAS, each Stockholder is the record and beneficial owner of the
Preferred Stock, Notes and Warrants set forth opposite such Stockholder's name
on Schedule A hereto (such securities, as they may be adjusted by stock
dividend, stock split, recapitalization, combination or exchange of shares,
merger, consolidation, reorganization or other change or transaction of or by
UDC, together with securities that may be issued after the date hereof to such
Stockholder upon conversion of the Preferred Stock or Notes or exercise of the
Warrants are collectively referred to herein as the "Securities"); and

         WHEREAS, as a condition to its willingness to enter into the Purchase
Agreement, UDC has requested that the Stockholders enter into this Agreement;

         NOW, THEREFORE, to induce UDC to enter into, and in consideration of it
entering into, the Purchase Agreement, and in consideration of the premises and
the representations, warranties and agreements contained herein, the parties
agree as follows:

         1.       Capitalized Terms. Capitalized terms used herein that are not
defined shall have the meanings set forth in the Purchase Agreement.

         2.       Covenants of the Stockholders. Each Stockholder, severally and
not jointly, agrees as follows:

                  (a) Except as otherwise required by law, such Stockholder
shall not (i) enter into any voting arrangement, whether by proxy, voting
agreement, voting trust, power-of-attorney or otherwise, with respect to the
Securities, or (ii) take any other action that would in any way restrict, limit
or interfere with the performance of its obligations hereunder or the
transactions contemplated hereby.

                  (b) Within three Trading Days after requested to do so in
writing by UDC, such Stockholder shall certify in writing to UDC the number and
type of Securities that such Stockholder owns, beneficially or of record, as of
the date indicated in UDC's written request.

<PAGE>

         3.       Grant of Irrevocable Proxy Coupled with an Interest;
Appointment of Proxy.

                  (a) Each Stockholder hereby irrevocably grants to, and
appoints, any individuals who shall be designated by UDC, and each of them, such
Stockholder's proxy and attorney-in-fact (with full power of substitution), for
and in the name, place and stead of such Stockholder, to vote all of such
Stockholder's Securities, or grant a consent or approval in respect of such
Securities, at any meeting of Stockholders of UDC or at any adjournment thereof
or in any other circumstances upon which their vote, consent or other approval
is sought (including by written consent).

                  (b) Each Stockholder represents that he/it has not given any
proxies in respect of such Stockholder's Securities.

                  (c) Each Stockholder hereby affirms that the proxy set forth
in this Section 3 is coupled with an interest and is irrevocable. Such
irrevocable proxy shall be valid with respect each Security until such Security
is sold, transferred or otherwise disposed of by the Stockholder to a
non-Affiliate.

                  (d) Such Stockholder hereby ratifies and confirms all that
such irrevocable proxy may lawfully do or cause to be done by virtue hereof.
Such irrevocable proxy is executed and intended to be irrevocable in accordance
with the provisions of Section 1759 of the Pennsylvania Business Corporation Law
of 1988, as amended.

                  (e) Notwithstanding anything to the contrary that may be
contained herein the proxy granted hereunder shall not apply to those items for
which a separate vote of the holders of the Preferred Stock are required as set
forth in Section 11 of the First Certificate of Designation and Section 11 of
the Second Certificate of Designation.

         4.       Representations and Warranties of the Stockholders. Each
Stockholder hereby, severally and not jointly, represents and warrants to UDC as
follows:

                  (a) The Stockholder has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Stockholder. This Agreement has been duly executed and
delivered by the Stockholder and, assuming this Agreement constitutes a valid
and binding obligation of UDC, constitutes a valid and binding obligation of the
Stockholders enforceable against the Stockholder in accordance with its terms.

                  (b) The Stockholder's Securities and the certificates
representing such Securities are now, and at all times during the term hereof
will be, held by such Stockholder, or by a nominee or custodian for the benefit
of such Stockholder, and the Stockholder has good and marketable title to such
Securities, free and clear of any liens, proxies, voting trusts or agreements,
understandings or arrangements (other than this Agreement). None of the
Securities is subject to any voting trust, proxy or other agreement, arrangement
or restriction with respect to the voting or disposition of such Securities,
except as contemplated by this Agreement.

                                        2
<PAGE>

                  (c) The Stockholder understands and acknowledges that UDC is
entering into, the Purchase Agreement in reliance upon the Stockholder's
execution and delivery of this Agreement.

         5.       Representations and Warranties of UDC. UDC hereby represents
and warrants to the Stockholders as follows:

                  (a) UDC has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by UDC and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of UDC. This
Agreement has been duly executed and delivered by UDC and, assuming this
Agreement constitutes a valid and binding obligation of the Stockholders,
constitutes a valid and binding obligation of UDC enforceable in accordance with
its terms.

         6.       Further Assurances. Each Stockholder will inform each broker
(or other record holder) holding any Securities for its account of the existence
and terms of this Agreement, and shall instruct each such broker (or other
record holder) in writing to deliver all shareholder solicitation and proxy
materials (including proxies) relating to such Securities to the attention of
the Chief Executive Officer of UDC at Universal Display Corporation, 375
Phillips Boulevard, Ewing, NJ 08618. Each Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents and other instruments as UDC may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement and to vest the power to vote such Stockholder's Securities as
contemplated by Section 3. Each Stockholder further agrees that it shall not
pledge, hypothecate or otherwise encumber the Securities unless each Person to
which any of such Securities, or any interest in any of such Securities, are or
may be pledged shall have: (a) executed a counterpart of this Agreement and a
proxy substantially similar to that set forth in Section 3 hereof (with such
modifications as UDC may reasonably request) and (b) agreed to hold such
Securities (or interest in such Securities) subject to all of the terms and
provisions of this Agreement. UDC agrees to use reasonable efforts to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements that may be imposed with respect to the transactions contemplated
by this Agreement.

         7.       Termination. Upon a sale of Securities by a Stockholder to a
non-Affiliate, such Securities shall no longer be subject to the terms of this
Agreement and shall be deemed excluded from the definition of "Securities" as
used herein.

         8.       Assignment; Binding Effect. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

                                        3
<PAGE>

         9.       General Provisions.

                  (a) Except as otherwise set forth in the Purchase Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense.

                  (b) This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.

                  (c) Any notice, demand, or communication required or permitted
to be given by any provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if (i) personally delivered, (ii)
mailed by registered or certified first-class mail, prepaid with return receipt
requested, (iii) sent by a nationally recognized overnight courier service, to
the recipient at the address below indicated or (iv) delivered by facsimile
which is confirmed in writing by sending a copy of such facsimile to the
recipient thereof pursuant to clause (i) or (iii) above:

                  If to UDC:

                           Universal Display Corporation
                           375 Phillips Boulevard
                           Ewing, NJ  08618
                           Attention: Sidney Rosenblatt
                                      Chief Financial Officer
                           Telefax:   609-671-0995

         with a copy to:

                           Morgan, Lewis & Bockius, LLP
                           1701 Market Street
                           Philadelphia, PA 19103
                           Attention: Stephen M. Goodman, Esq.
                           Telefax:   877-432-9652

         If to any Stockholder, to:

                                    Strong River Investments, Inc.
                                    c/o Icaza, Gonzalez-Ruiz & Aleman (BVI) Ltd.
                                    Vanterpool Plaza, 2nd Floor, Wickhams Cay I
                                    Road Town, Tortola, British Virgin Islands
                                    Facsimile No.: 212-651-9010
                                    Telephone No.: 212-651-9002
                                    Attn:  Danny Golan

                                    and

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<PAGE>

                                    Strong River Investments, Inc.
                                    c/o Icaza, Gonzalez-Ruiz & Aleman (BVI) Ltd.
                                    Vanterpool Plaza, 2nd Floor, Wickhams Cay I
                                    Road Town, Tortola, British Virgin Islands
                                    Facsimile No.: 212-651-9010
                                    Telephone No.: 212-651-9002
                                    Attn:  Danny Golan

         With a copy to:            Morse, Zelnick, Rose & Lander, LLP
                                    450 Park Avenue
                                    New York, New York 10022
                                    Attention:  George Lander, Esq.
                                    Facsimile No.: 212-838-9190

or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.

                  (d) When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained m this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Wherever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".

                  (e) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

                  (f) This Agreement (including the documents and instruments
referred to herein) (i) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.

                  (g) This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
any applicable conflicts of law.

          10.     Remedies. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto waives any right to trial by
jury with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.

                                        5
<PAGE>

         EACH STOCKHOLDER AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR
PROCEEDING ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA AND AGREES TO VENUE IN SUCH COURTS. EACH STOCKHOLDER HEREBY
APPOINTS THE SECRETARY OF UDC AS ITS AGENT FOR SERVICE OF PROCESS FOR PURPOSES
OF THE FOREGOING SENTENCE ONLY. EACH PARTY HERETO WAIVES ANY RIGHT TO JURY TRIAL
IN CONNECTION WITH ANY SUCH SUIT OR PROCEEDING.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

                                        6
<PAGE>

         IN WITNESS WHEREOF, each of UDC and each Stockholder have caused this
Agreement to be signed by its respective officer thereunto duly authorized, all
as of the date first written above.

                                            UNIVERSAL DISPLAY CORPORATION

                                        By:      /s/ Sidney D. Rosenblatt
                                                 ------------------------
                                                 Name:  Sidney D. Rosenblatt
                                                 Title: Chief Financial Officer

                                        PINE RIDGE FINANCIAL INC.

                                        By:      /s/ Kenneth L. Henderson
                                                 ------------------------
                                                 Name:  Kenneth L. Henderson
                                                 Title: Attorney-in-fact

                                        STRONG RIVER INVESTMENTS, INC.

                                        By:      /s/ Kenneth L. Henderson
                                                 ------------------------
                                                 Name:  Kenneth L. Henderson
                                                 Title: Attorney-in-fact

<PAGE>

                                   Schedule A
<TABLE>
<CAPTION>
                                                                     Number and Class of Securities
       Name and Address of Stockholders                                 Held by such Stockholder
       --------------------------------                                 ------------------------
<S>                                                             <C>
Pine Ridge Financial Inc.                                       2,500 shares of Preferred Stock
c/o Icaza, Gonzalez-Ruiz & Aleman (BVI) Ltd.
Vanterpool Plaza, 2nd Floor, Wickhams Cay I                     Note in the original principal amount of $7,500,000
Road Town, Tortola, British Virgin Islands
                                                                Warrants to purchase an aggregate 372,226 shares of
                                                                Common Stock

Strong River Investments, Inc.                                  2,500 shares of Preferred Stock
c/o Icaza, Gonzalez-Ruiz & Aleman (BVI) Ltd.
Vanterpool Plaza, 2nd Floor, Wickhams Cay I                     Note in the original principal amount of $7,500,000
Road Town, Tortola, British Virgin Islands
                                                                Warrants to purchase an aggregate 372,226 shares of
                                                                Common Stock
</TABLE><PAGE>
                                PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT (this "Agreement") is made this 22nd day of
August, 2001 by UDC, INC., a New Jersey corporation (the "Pledgor") in favor of
FIRST UNION NATIONAL BANK, a national banking association (in its capacity as
issuer of two standby letters of credit (the "Letters of Credit") under the
Letter of Credit Agreements defined below, the "Pledgee"). For good and valuable
consideration, and intending to be legally bound hereby:

         1. Pledge. Pledgor hereby assigns, pledges and grants to Pledgee a
security interest in the cash, instruments, financial assets, investment
property and securities, and all documents relative thereto, of Pledgor now
owned by or standing in the name of Pledgor or in which Pledgor has a legal or
beneficial interest, which are at any time deposited in Account No. [XXXXX] (the
"Account") in the name of Pledgor at First Union National Bank, acting not in
its capacity as Bank, but in its capacity as custodian (the "Custodian"), as
further described in the Control Agreement (the "Control Agreement") dated of
even date herewith by and among Pledgor, Pledgee and Custodian (which, together
with all additions thereto, rollovers, substitutions or exchanges therefor,
security entitlements and proceeds thereof (including cash and non-cash
proceeds) and distributions thereon, shall be referred to collectively herein as
the "Collateral"), as collateral security for the payment and performance of all
indebtedness, liability and obligations of Pledgor to Pledgee, whether for
reimbursement obligations under the Letter of Credit Agreements, principal,
interest, fees, expenses or otherwise, now existing or hereafter created or
arising under the two Applications and Agreements for Irrevocable Standby Letter
of Credit dated of even date herewith submitted by Pledgor to Pledgee (the
"Letter of Credit Agreements"), and any other documents, agreements and
instruments executed thereunder or in connection therewith including without
limitation this Agreement and the Control Agreement (herein collectively the
"Obligations," with such agreements, documents and instruments evidencing and
documenting the Obligations being herein referred to collectively as the
"Documents"), all on the terms and conditions set forth herein.

         2. Representations and Warranties. Pledgor represents and warrants
that:

            (a) to the extent any Collateral consists of securities, Pledgor has
good title to such securities free and clear of all liens and encumbrances
except the security interest created hereby;

            (b) as of the date of this Agreement, the fair market value of the
Collateral is no less than Fifteen Million Dollars ($15,000,000);

            (c) Pledgor has delivered to Pledgee all stock certificates,
promissory notes, bonds, debentures or other instruments or documents
representing or evidencing the Collateral, and this Pledge Agreement and such
powers have been duly and validly executed and are binding and enforceable
against Pledgor in accordance with their terms; and

            (d) the pledge of the Collateral in accordance with the terms hereof
creates a valid and perfected first priority security interest in the Collateral
securing payment of the Obligations.

<PAGE>

         3. No Approval. No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the pledge by Pledgor of any of the Collateral pursuant
to this Agreement or for the execution, delivery or performance of this
Agreement by Pledgor or (ii) for the exercise by Pledgee of the voting or other
rights provided for in this Agreement or the remedies in respect of any of the
Collateral pursuant to this Agreement (except as may be required in connection
with such disposition by laws affecting the offering and sale of securities
generally).

         4. Undertakings. Pledgor hereby agrees:

            (a) not to sell or otherwise dispose of, or grant any option with
respect to, any of the Collateral;

            (b) not to create or permit to exist any lien, security interest, or
other charge or encumbrance upon or with respect to any of the Collateral,
except the security interest under this Agreement;

            (c) to maintain the fair market value of the Collateral at an amount
no less than one hundred percent (100%) of the face amount of the Letters of
Credit, subject to reduction from time to time pursuant to the terms of the
Letter of Credit Agreements;

            (d) subject to Section 5 below, to retain all earnings and interest
paid on the Collateral in the Account as additional Collateral for the
Obligations; and

            (e) take all actions (and execute and deliver from time to time all
instruments and documents) necessary or appropriate or requested by Pledgee, to
continue the validity, enforceability and perfected status of the pledge of
Collateral hereunder.

         5. Interest. So long as Pledgor is in full compliance with the terms
hereof and no Event of Default has occurred and is continuing, Pledgor shall be
entitled to receive and retain interest payments for the Collateral pledged
hereunder.

         6. No Notice of Exclusive Control. So long as: (i) Pledgee has not
delivered a Notice of Exclusive Control (as defined in the Control Agreement) to
the Custodian and (ii) Pledgor is in full compliance with the terms hereof,
Pledgor may exercise all voting rights, if any, pertaining to the Collateral for
any purpose not inconsistent with the terms hereof or of the Obligations or
Documents. In the event any Collateral has been transferred into the name of
Pledgee or a nominee or nominees of Pledgee prior to an Event of Default,
Pledgee or its nominee will execute and deliver upon request of Pledgor an
appropriate proxy in order to permit Pledgor to vote, if applicable, the same.

         7. Draw on Account; Reduction of Account.

            (a) Draw on Account. Upon receipt by Pledgee of a draw certificate
on a Letter of Credit, the Pledgee shall be reimbursed automatically from the
Account for such amounts drawn. The Pledgee shall have the right to obtain such
amount from the Account by notice to the Custodian under the Control Agreement.

                                       2
<PAGE>

            (b) Reduction of Account. The Pledgee agrees to notify the Custodian
to release funds from the Account to Pledgor upon Pledgee's receipt of a
reduction certificate under a Letter of Credit in the amount of such reduction
certificate.

            (c) Notice of Termination of Security Interest. The Pledgee agrees
to notify the Custodian promptly of Pledgee's termination of its security
interest in the Account and in any other Collateral.

         8. Definition of Event of Default. Each of the following shall
constitute an "Event of Default":

            (a) Nonpayment; Nonperformance. The failure of Pledgor to
immediately reimburse the Pledgee for any draw on a Letter of Credit or to
timely perform the other Obligations under this Agreement or any other Document.

            (b) Cessation; Bankruptcy. The dissolution of, termination of
existence of, loss of good standing status by, appointment of a receiver for,
assignment for the benefit of creditors of, or commencement of any bankruptcy or
insolvency proceeding by or against Pledgor or Universal Display Corporation, a
Pennsylvania corporation.

         9. No Liability. Pledgee shall be under no obligation to take any
actions and shall have no liability (except for gross negligence or willful
misconduct) with respect to the preservation or protection of the pledged
Collateral or any underlying interests represented thereby as against any prior
or other parties. In the event Pledgor requests that Pledgee take or omit to
take action(s) with respect to the Collateral, Pledgee may refuse so to do with
impunity if Pledgor does not, upon request of Pledgee, post sufficient,
creditworthy indemnities with Pledgee which, in Pledgee's sole discretion, are
sufficient to hold it harmless from any possible liability of any kind in
connection therewith.

         10. Extensions; Modifications. Pledgor and Pledgee may, without
affecting Pledgee's rights in the pledged Collateral and without a
contemporaneous confirmation of or amendment to this Agreement, grant any
extensions, releases or other modifications of any kind respecting the
Documents, Obligations and any collateral security therefor. Pledgor hereby
waives any rights it has at equity or in law to require Pledgee to apply any
rights of marshalling or other equitable doctrines in the circumstances.

         11. Notice of Exclusive Control. After the delivery to the Custodian of
a Notice of Exclusive Control:

             (a) Pledgee may transfer or cause to be transferred any of the
pledged Collateral into its own or a nominee's or nominees' names;

             (b) Pledgor shall take any action necessary or required or
requested by Pledgee, in order to allow Pledgee fully to enforce the pledge of
the Collateral hereunder and realize thereon to the fullest possible extent,
including but not limited to the filing of any claims with any court, liquidator
or trustee, custodian, receiver or other like person or party;

                                       3
<PAGE>
             (c) Pledgee shall have all the rights and remedies granted or
available to it hereunder, under the Uniform Commercial Code as in effect from
time to time in Pennsylvania, under any other statute or the common law, or
under any of the Documents, including the right to sell the Collateral or any
portion thereof at one or more public or private sales upon ten (10) days'
written notice and to bid thereat or purchase any part or all thereof in its own
or a nominee's or nominees' names, free and clear of any equity of redemption;
and to apply the net proceeds of the sale, after deduction for any expenses of
sale, including the payment of all Pledgee's reasonable attorneys' fees in
connection with the Obligations and the sale, to the payment of the Obligations
in any manner or order which Pledgee in its sole discretion may elect, without
further notice to or consent of Pledgor and without regard to any equitable
principles of marshalling or other like equitable doctrines; and

             (d) Pledgee may increase, in its sole discretion, but shall not be
required to do so, the Obligations by making additional advances, issuing
additional letters of credit or incurring expenses for the account of Pledgor
deemed appropriate or desirable by Pledgee in order to protect, enhance or
preserve the Collateral or any other property it holds as security for the
Obligations.

         12. Sale of Securities.

             (a) Pledgor recognizes that Pledgee may be unable to effect a sale
to the public of all or part of the Collateral which constitutes securities by
reason of certain prohibitions or restrictions in the federal or state
securities laws and regulations (herein collectively called the "Securities
Laws"), or the provisions of other federal and state laws, regulations or
rulings, but may be compelled to resort to one or more sales to a restricted
group of purchasers who will be required to agree to acquire such securities for
their own account, for investment and not with a view to the further
distribution or resale thereof without restriction. Pledgor agrees that any
sale(s) so made may be at prices and on other terms less favorable to Pledgor
than if such securities were sold to the public, and that Pledgee has no
obligation to delay sale of such securities for period(s) of time necessary to
permit the issuer thereof to register securities for sale to the public under
any of the Securities Laws. Pledgor agrees that negotiated sales, whether for
cash or credit, made under the foregoing circumstances shall not be deemed for
that reason not to have been made in a commercially reasonable manner. Pledgor
shall cooperate with Pledgee and, to the extent it is able, shall satisfy any
requirements under the Securities Laws applicable to the sale or transfer of
securities by Pledgee.

             (b) In connection with any sale or disposition of the Collateral,
Pledgee is authorized to comply with any limitation or restriction as it may be
advised by its counsel is necessary or desirable in order to avoid any violation
of applicable law or to obtain any required approval of the purchaser(s) by any
governmental regulatory body or officer and it is agreed that such compliance
shall not result in such sale being considered not to have been made in a
commercially reasonable manner nor shall Pledgee be liable or accountable by
reason of the fact that the proceeds obtained at such sale(s) are less than
might otherwise have been obtained.

             (c) Pledgee may elect to obtain the advice of any independent
nationally-known investment banking firm, which is a member firm of the New York
Stock Exchange, with respect to the method and manner of sale or other
disposition of any of the Collateral, the best price reasonably obtainable

                                       4
<PAGE>

therefor, the consideration of cash and/or credit terms, or any other details
concerning such sale or disposition. Pledgee, in its sole discretion, may elect
to sell on such credit terms which it deems reasonable.

         13. Expenses. Pledgor will pay Pledgee the amount of any reasonable
expenses including counsel fees and expenses incurred by Pledgee in connection
with (i) the administration of this Agreement, (ii) the custody, preservation,
sale or collection or realization of the Collateral, (iii) the exercise or
enforcement of Pledgee's rights hereunder, or (iv) the failure of Pledgor to
perform hereunder.

         14. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their successors and
assigns and shall be governed as to its validity, interpretation and effect by
the laws of the Commonwealth of Pennsylvania, without reference to
conflicts-of-law or choice-of-law provisions; and any terms used herein which
are defined in the Uniform Commercial Code as enacted in Pennsylvania shall have
the meanings therein set forth.

         15. Waivers. If either party shall waive any rights or remedies arising
hereunder or under any applicable law, such waiver shall not be deemed to be a
waiver upon the later occurrence or recurrence of any of said events. No delay
by any party in the exercise of any right or remedy shall under any
circumstances constitute or be deemed to be a waiver, express or implied, of the
same and no course of dealing between the parties hereto shall constitute a
waiver of any party's rights or remedies.

         16. Attorney-in-fact. Pledgor hereby irrevocably appoints Pledgee as
its attorney-in-fact to execute, deliver and record, if appropriate, from time
to time any instruments or documents in connection with the Collateral, in
Pledgor or Pledgee's names.

         17. Entire Understanding. This Agreement represents the entire
understanding of the parties with respect to the subject matter and no
modification or change herein shall be effective unless contained in a writing
signed by the parties hereto.

         IN WITNESS WHEREOF, the undersigned has executed this Agreement on the
date first set forth above.

                                    PLEDGOR:

                                    UDC, INC.

                                    By:   /s/ Sidney Rosenblatt
                                          ----------------------
                                    Name: Sidney Rosenblatt
                                    Title: CFO

                                       5

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