OLED PATENT LICENSE AGREEMENT

Article 1       Definitions

       1.1     “ Affiliate ” means a corporation, partnership, trust or other entity that directly or indirectly (through one or more intermediates) controls, is controlled by or is under common control with the party in question. For such purposes, “control,” “controlled by” and “under common control with” shall mean the ability to make, or participate meaningfully in the making of, business decisions on behalf of the relevant entity and/or such party, as applicable. “Control” shall be presumed where the party in question owns fifty percent (50%) or more of the voting or other similar interests in the relevant entity.

       1.2     “ Licensed Product ” means an OLED Display Module made using a Permitted Process, or any product or part thereof that incorporates such an OLED Display Module, which OLED Display Module (a) is covered, in whole or in part, by any Valid Claim(s) of a Universal Display Patent; and/or (b) is manufactured using a process that is covered, in whole or in part, by any Valid Claim(s) of a Universal Display Patent.

       1.3     “ Net Sales Revenue ”

                  1.3.1     For Licensed Products sold to third parties for solely cash consideration, “Net Sales Revenue” means gross amounts invoiced or received, whichever occurs sooner, on account of sales of such Licensed Products (the “ Gross Invoice Price ”), less:

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                  (a)     applicable sales taxes, excise taxes, customs duties paid, absorbed or otherwise imposed, and other similar taxes, but in each case only to the extent actually collected and remitted to the appropriate taxing authorities;

                  (b)     shipping and transportation charges to the extent separately itemized on the customer invoice and actually paid to third-party carriers;

                  (c)     insurance costs to the extent separately itemized on the customer invoice and actually paid or accrued for such purpose;

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

                  (e)     refunds or credits actually given to third parties for returned or defective Licensed Products;

                  (f)     amounts actually paid or credited on account of retroactive volume discounts or price adjustments, but only to the extent reasonable and customary for products of such nature; and

                  1.3.2     For Licensed Products sold to third parties for other than solely cash consideration, and for Licensed Products otherwise disposed of or used as consumable goods, “Net Sales Revenue” means the standard or list selling price at which Licensed Products of similar kind and quantity are being offered for sale to non-Affiliated third parties at such time, or if no such selling price is available, the fair market value of such Licensed Products.

                  1.3.3     For a Licensed Product that incorporates one or more OLED Display Modules, “Net Sales Revenue” would include only that portion of the amount specified in subsection 1.3.1 or 1.3.2 above which is fairly attributable to the OLED Display Module(s) incorporated in such Licensed Product. If sufficient information is available, such portion shall be calculated by multiplying the Gross Invoice Price or the standard or list selling price of the Licensed Product by the “Module Share Ratio.” If appropriate data is available, the “Module Share Ratio” shall equal the fraction A/B, where A is the standard or list selling price at which OLED Display Module(s) of similar kind and quantity are separately being offered for sale by Samsung SDI or the relevant Permitted Sublicensee at that time, and B is the standard or list selling price at which the entire Licensed Product is being offered for sale by Samsung SDI or the relevant Permitted Sublicensee at that time. Otherwise, the “Module Share Ratio” shall equal the fraction C/D, where C is the fully-loaded production cost for the OLED Display Module(s) incorporated in such Licensed Product and D is the fully-loaded production cost for the entire Licensed Product, with the fully-loaded production cost in each case being determined in accordance with Exhibit C hereto and such recognized accounting principles as are fairly and consistently applied by Samsung SDI or the relevant Permitted Sublicensee in the general course of its business.

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

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                  1.3.5     If either party presents reasonable evidence that the amount calculated as set forth above does not fairly reflect the value of the applicable Licensed Product (such as evidence that the industry-wide average sales price of substantially similar products differs significantly from the price calculated herein), the parties shall in good faith negotiate a more equitable method of calculating Net Sales Revenue with respect to such Licensed Product.

       1.4     “ OLED ” or “ Organic Light Emitting Device ” means a device consisting of two 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.

       1.5     “ OLED Display Module ” means a device designed for use in flat panel display applications (which expressly exclude lighting applications), which device consists of (a) an OLED, a Rigid Glass Substrate supporting the OLED, an active matrix backplane, encapsulation components and such filters, polarizers and other display optics as may be used to enhance or modify the color, contrast or other visual properties of the device (collectively, an “ Active Matrix OLED Panel ”); and (b) [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

       1.6     “ Permitted Processes ” means [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

       1.7     “ Permitted Sublicensees ” means, unless otherwise separately agreed by the parties in writing, entities in which Samsung SDI has an ownership or other similar controlling interest of [The confidential material contained herein has been omitted and has been separately filed with the Commission.]. Such entities shall be Permitted Sublicensees only for so long as they continue to satisfy the foregoing requirements.

       1.8     “ Phosphorescent Material ” means an organometallic or other organic material that, when used in the emissive layer of an OLED, emits radiation from a triplet excited state or enhances the emission of radiation through phosphorescent sensitization.

       1.9     “ Rigid Glass Substrate ” means a silicate-containing inorganic material of sufficient thickness to support an OLED, which material fractures or substantially and irreversibly deforms upon being bent to a radius of curvature of 50 cm or less, and which material expressly excludes, without limitation, plastic or metal foil.

       1.10     “ Universal Display Patents ” means all patents, the design patents and the utility models (a) issued/registered in the world as of the Effective Date; or (b) issued/registered during the Term of this Agreement from the patent applications filed before or during the Term of this Agreement pursuant to Section 2.2 below, which Universal Display owns (it being understood that any ownership transfer of such patents shall be subject to the license rights granted to Samsung SDI hereunder), or has the right to license from third parties such as Princeton University, the University of Southern California (“ USC ”) and Motorola, Inc. (“ Motorola ”) subject to Section 2.5 during the Term of this Agreement, including, but not limited to, the issued/registered patents in Exhibit A .

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       1.11     “ Valid Claim ” means a claim of an issued/registered and unexpired patent, which claim has not been finally held unpatentable, invalid or unenforceable by a court or other government agency of competent jurisdiction.

Article 2       License Rights

       2.1      Grant of License to Samsung SDI . Subject to the remaining provisions of this Article 2, Universal Display hereby grants to Samsung SDI a worldwide, royalty-bearing, non-exclusive and non-transferable (except in connection with a permitted transfer of this Agreement as a whole) license under the Universal Display Patents, solely to manufacture, have manufactured by its Permitted Sublicensees, sell, offer for sale, use and import Licensed Products. Samsung SDI shall be permitted to grant sublicenses of the foregoing license rights solely to its Permitted Sublicensees, provided that (a) each such sublicense shall be pursuant to a written agreement between Samsung SDI and the Permitted Sublicensee, which written agreement shall obligate the Permitted Sublicensee to abide by the scope of license and other provisions of this Agreement that are applicable to Permitted Sublicensees; (b) 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 Permitted Sublicensee; (c) Samsung SDI shall identify the name and business address of each such Permitted Sublicensee to Universal Display in writing promptly following its entry into a written sublicense agreement with the Permitted Sublicensee; and (d) Samsung SDI shall use its best efforts to cause each Permitted Sublicensee abide by the scope of license and other applicable provisions of this Agreement.

       2.2      License Rights to Future Patents . To the extent it has the right to do so, Samsung SDI’s license rights under Section 2.1 above will be expanded to include additional patents owned by or licensed to Universal Display that are issued during the Term, to the extent such patents would cover Samsung SDI’s manufacture or sale of OLED Display Modules through Permitted Processes as contemplated hereunder, but excluding any such patents acquired by Universal Display through a merger, asset acquisition or other similar transaction unless separately agreed in writing. Universal Display shall periodically update Exhibit A to include any such additional patents that are issued.

       2.3      No Right to Make OLED Materials . Except as may otherwise be expressly agreed to by the parties in writing, nothing in this Agreement shall be construed as authorizing or otherwise permitting Samsung SDI or its Permitted Sublicensees, or any third parties claiming through them, to practice under any Universal Display Patents for purposes of manufacturing Phosphorescent Materials or other OLED materials, or having Phosphorescent Materials or other OLED materials manufactured for them or on their behalf.

       2.4      No Right to Make OLED Manufacturing Equipment . Except as may otherwise be expressly agreed to by the parties in writing, nothing in this Agreement shall be construed as authorizing or otherwise permitting Samsung SDI or its Permitted Sublicensees, or any third parties claiming through them, to practice under any Universal Display Patents for purposes of manufacturing equipment or machinery used to produce an OLED, whether through Permitted Processes or otherwise.

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       2.5      Acknowledgement of Derivative Rights and Covenant to Samsung SDI . Samsung SDI acknowledges that certain of the Universal Display Patents are licensed by Universal Display from Princeton University, the University of Southern California (“ USC ”) and Motorola, Inc. (“ Motorola ”), and, therefore, that Samsung SDI’s license rights under this Agreement with respect to such Universal Display Patents are subject to the reserved rights of and obligations to such third parties under their license agreements with Universal Display. Samsung SDI 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 Samsung SDI 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 Samsung SDI’s exercise of license rights granted by Universal Display hereunder; and (b) no additional consideration shall be owed by Samsung SDI to such third-party licensors or the U.S. Government on account of Samsung SDI’s practice under the Universal Display Patents as contemplated hereunder. 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 such Universal Display Patents. Universal Display has provided Samsung SDI with copies (which have been reasonably redacted by Universal Display to avoid disclosing confidential information not relevant to this Agreement) of such of Universal Display’s agreements with such third party licensors and of the applicable portions its relevant contracts with or awards from the U.S. Government.

       2.6      Patents on Samsung SDI Improvements . Samsung SDI hereby covenants not to assert or assist third-parties in asserting, and Samsung SDI shall ensure that its Permitted Sublicensees do not to assert or assist third-parties in asserting, any of its or their patents claiming improvements, modifications or enhancements to the inventions described in the Universal Display Patents (“ Samsung SDI Improvements ”) against Universal Display or its Affiliates [The confidential material contained herein has been omitted and has been separately filed with the Commission.]. Samsung SDI shall, and shall cause its Permitted Sublicensees to, condition each assignment or exclusive license of any patent claiming a Samsung SDI Improvement on the assignee or licensee agreeing to covenant the same to Universal Display in writing.

       2.7      Reservation of Rights . Except for the license rights expressly granted to Samsung SDI under this Article 2, all rights to practice under the Universal Display Patents are reserved unto Universal Display and its licensors. Except for the express covenants of Samsung SDI and its Permitted Sublicensees under this Article 2, all rights to practice under any patents claiming Samsung SDI Improvements are reserved unto Samsung SDI and its Permitted Sublicensees. No implied rights or licenses to practice under any patents or to utilize any unpatented inventions, know-how or technical information of either party are granted to the other party hereunder.

Article 3       Patent Matters

       3.1      Patent Validity . To the extent permitted by law, Samsung SDI shall not, and shall ensure that its Permitted Sublicensees do not, challenge or assist others in challenging the validity or enforceability of any of the Universal Display Patents or their counterpart foreign patent applications. Should Samsung SDI or any of its Permitted Sublicensees so challenge or assist others in challenging any of the Universal Display Patents, Samsung SDI shall reimburse Universal Display for all attorneys’ fees, costs and out-of-pocket expenses incurred by Universal Display in resisting or opposing such challenge in the event the challenge is fully or substantially unsuccessful. The foregoing shall be in addition to, and not in lieu of, any other remedies that may be available, at law or equity, including an action for the recovery of damages.

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Article 4       Consideration

       4.1      License Fees . In partial consideration of the license rights granted by Universal Display hereunder, Samsung SDI shall pay to Universal Display the license fees specified in Exhibit B hereto. Said license fees are due and payable on the date(s) specified in Exhibit B hereto. Except as may otherwise be specified in Exhibit B hereto, all license fees shall be non-refundable and shall be in addition to any royalties payable hereunder.

       4.2      Running Royalties . In further consideration of the license rights granted by Universal Display hereunder, Samsung SDI shall pay to Universal Display running royalties at the rates specified in Exhibit B hereto on account of Net Sales Revenues from Samsung SDI’s or its Permitted Sublicensees’ sales of Licensed Products, or their other disposition or usage of Licensed Products as consumable goods, as set forth in subsections 4.2.1 and 4.2.2 below. No multiple royalties shall be due because any Licensed Product, or its manufacture, sale or other disposition or use, is or may be covered by more than one Universal Display Patent licensed to Samsung SDI hereunder.

                  4.2.3      Acknowledgement . Both parties acknowledge and agree that the royalty rates and the methods by which they are to be calculated and paid have been determined through arms length negotiations between the parties and that such rates and methods are reasonable and appropriate notwithstanding whether and to what extent any of the Universal Display Patents have been issued or have expired in any particular country in which Licensed Products are made, sold or used.

       4.3      Royalty Reports . Within sixty (60) days following the end of each [The confidential material contained herein has been omitted and has been separately filed with the Commission.] during the Term (and, if the Term ends in the middle of a [The confidential material contained herein has been omitted and has been separately filed with the Commission.], within sixty (60) days following the end of the Term), Samsung SDI 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 or otherwise disposed of or used as consumable goods during such [The confidential material contained herein has been omitted and has been separately filed with the Commission.] by Samsung SDI or its Permitted Sublicensees; (b) gross amounts invoiced or received on account of Samsung SDI’s or its Permitted Sublicensees’ sales or other disposition or usage of such Licensed Products; and (c) Samsung SDI’s reasonably detailed calculation of the royalties due and owing to Universal Display on account of such sales or other disposition or usage of Licensed Products. [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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       4.4      Payment of Royalties . Within sixty (60) days following the end of each [