10.	RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON UNIVERSITY, UNIVERSITY OF SOUTHERN CALIFORNIA AND THE UNIVERSITY OF MICHIGAN:

The Company has long-standing relationships with Princeton University (Princeton) and the University of Southern California (USC), dating back to 1994, for the conduct of research relating to the Company’s OLED and other organic thin-film technologies and materials. This research had been performed at Princeton under the direction of Professor Stephen R. Forrest and at USC under the direction of Professor Mark E. Thompson.

Under an Amended License Agreement entered into in 1997 by the Company, Princeton and USC (as amended, the 1997 Amended License Agreement), Princeton and USC granted the Company worldwide, exclusive license rights, with rights to sublicense, to make, have made, use, lease and/or sell products and to practice processes based on patent applications and issued patents arising out of research performed by Princeton and USC for the Company. Under the 1997 Amended License Agreement, the Company pays Princeton royalties of 3% of the net sales price for licensed products it sells or 3% of the revenues the Company receives from its sublicensees for their sale of licensed products. The Company recorded royalty expense in connection with this agreement of $11.1 million, $11.8 million and $7.0 million for the years ended December 31, 2020, 2019 and 2018, respectively.

In 2006, Professor Forrest transferred from Princeton to the University of Michigan (Michigan) and the Company amended the 1997 Amended License Agreement to include Michigan as a party to that agreement. Also in connection with the transfer, the Company entered into a sponsored research agreement with USC under which the Company continues to fund organic electronics research being conducted by Professors Forrest and Thompson (the 2006 Research Agreement). Work by Professor Forrest is being funded through a subcontract between USC and Michigan. The 2006 Research Agreement extends through April 2023 with an option to further extend for an additional two years.

The Company makes payments under the 2006 Research Agreement to USC on a quarterly basis as actual expenses are incurred. As of December 31, 2020, the Company was obligated to pay USC up to $6.9 million for work to be performed during the remaining extended term. The Company recorded research and development expense in connection with work performed under the 2006 Research Agreement of $1.2 million, $997,000 and $1.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.