CONFIDENTIAL TREATMENT
PREVIOUSLY GRANTED
TECHNOLOGY PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 31st day of July, 1995, by and
between ALBEMARLE CORPORATION, a Virginia corporation having an office at 451
Florida Street, Baton Rouge, Louisiana 70801 (hereinafter "ALBEMARLE"), and MEMC
ELECTRONIC MATERIALS, INC., a Delaware corporation having offices at 501 Pearl
Drive (City of O'Fallon), P. O. Box 8, St. Peters, Missouri, 63376 (hereinafter
"MEMC"):
WITNESSETH
WHEREAS, ALBEMARLE has entered into an Asset Purchase Agreement to transfer
certain assets relating to the manufacture, use and sale of polysilicon and
other electronic materials;
WHEREAS, the Asset Purchase Agreement provides in Section 3.1 that
ALBEMARLE will assign technology and patent rights relating to the manufacture
of silane and silicon tetrafluoride;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
1.01 "Affiliate" shall have the same meaning as set forth in the Asset
Purchase Agreement.
1.02 "Closing Date" shall have the same meaning as set forth in the Asset
Purchase Agreement.
1.03 "Deemed Quantity" shall have the meaning set forth in Section 2.03(a)
of the Seller Technology License Agreement.
1.04 "Licensed Silane" means silane which is made by or with the use of, or
is used in accordance with an invention defined by one or more claims of the
Silane Patent Rights or is made using the Silane Manufacturing Technology.
1.05 "MEMC Pasadena" shall mean MEMC Pasadena Inc., a Delaware corporation
having offices at 3000 N. South Street, Pasadena, Texas, 77503.
1.06 "Polysilicon Manufacturing Technology" shall have the same meaning as
set forth in the Seller Technology License Agreement.
1.07 "Polysilicon Patent Rights" shall have the same meaning as set forth
in the Seller Technology License Agreement.
1.08 "Polysilicon Plant" shall have the same meaning as set forth in the
Seller Technology License Agreement.
1.09 "Silane Benchmark" shall mean [CONFIDENTIAL MATERIAL HAS BEEN DELETED
AND FILED SEPARATELY WITH SEC] metric tons of silane unless the combined
capacity of the Polysilicon Plant and any other polysilicon plant in connection
with which ALBEMARLE has been notified pursuant to Section 2.03 of the Seller
Technology License Agreement exceeds [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND
FILED SEPARATELY WITH SEC] metric tons of polysilicon per year, in which event
the "Silane Benchmark" shall mean the multiplication product of the combined
capacity of such plants and 1.5. For purposes of illustration, if the combined
capacity of such plants is [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] metric tons, the Silane Benchmark shall be [CONFIDENTIAL
MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] metric tons of silane
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC].
1.10 "Silane Manufacturing Technology" means all processes, trade secrets,
inventions, discoveries, improvements, know-how, and manufacturing, engineering,
research, development, and testing information and other technical information,
whether or not patentable, developed, used, currently in use, or currently
planned for use by ALBEMARLE in manufacturing silane by reacting sodium aluminum
hydride (NaA1H4) with silicon tetrafluoride (SiF4). The Silane Manufacturing
Technology shall not include information received by ALBEMARLE from third
parties under the secrecy agreements identified in Schedule I-A (attached to
Exhibit I - Seller Technology License Agreement) unless authorized by such
agreements or such agreements are assigned to MEMC.
1.11 "Silicon Tetrafluoride Manufacturing Technology" means all processes,
trade secrets, inventions, discoveries, improvements, know-how, and
manufacturing, engineering, research, development, and testing information and
other technical information, whether or not patentable, developed, used,
currently in use, or currently planned for use in manufacturing silicon
tetrafluoride (SiF4) at the facility in Uncle Sam, Louisiana, to the extent
owned by ALBEMARLE, which is prepared by reacting fluorosilicic acid (H2SiF6)
with sulfuric acid. The Silicon Tetrafluoride Manufacturing Technology shall not
include information received by ALBEMARLE from third parties under the secrecy
agreements identified in Schedule I-A (attached to Exhibit I - Seller Technology
License Agreement) unless disclosure to MEMC is authorized by such agreements or
such agreements are assigned to MEMC.
1.12 "Silane Patent Rights" means the patents listed in Schedule PAT-1
attached hereto and made a part hereof, including all continuations and
continuation-in-part patents, divisionals, reissues and reexamined patents
derived from those listed.
1.13 "Sodium Aluminum Hydride Manufacturing Technology" shall have the same
meaning as set forth in the Seller Technology License Agreement.
1.14 "Sodium Aluminum Hydride Patent Rights" shall have the same meaning as
set forth in the Seller Technology License Agreement.
1.15 "Security Agreement" shall have the same meaning as in the Asset
Purchase Agreement.
1.16 "Event of Default" shall have the same meaning as in the Security
Agreement.
ARTICLE 2 - ASSIGNMENT
2.01 ALBEMARLE, for valuable consideration, the receipt of which is hereby
acknowledged, does hereby sell, assign, transfer, convey and set over unto MEMC
its entire right, title and interest in and to the Silane Manufacturing
Technology and Silicon Tetrafluoride Manufacturing Technology, together with any
rights of action for unauthorized use of the Silane Manufacturing Technology and
Silicon Tetrafluoride Technology occurring on or after the Closing Date, the
same to be held and enjoyed by MEMC for its own use and behalf, and for the use
and behalf of its successors, assigns or other legal representatives. If an
Event of Default occurs and is continuing, ALBEMARLE shall have the right to
terminate and revoke all rights granted pursuant to this Section 2.01 upon
written notice to MEMC and MEMC Pasadena and, in such event, MEMC and MEMC
Pasadena shall cease any further use of the technology and patent rights
assigned under this Section 2.01 and shall, at the request of ALBEMARLE, convey
their rights in such technology and patent rights back to ALBEMARLE and shall
execute such documents as may be necessary to record the reconveyed rights, any
expenses connected with such reconveyance and recording to be borne by
ALBEMARLE.
2.02 ALBEMARLE, for valuable consideration, the receipt of which is hereby
acknowledged, does hereby sell, assign, transfer and set over unto MEMC the
entire right, title and interest in and to the Silane Patent Rights, the same to
be held and enjoyed by MEMC for its own use and behalf, and for the use and
behalf of its successors, assigns, or other legal representatives, to the end of
the terms thereof, together with all claims for profits and damages by reason of
infringement of said Patents occurring on or after the Closing Date, including
the right to sue for and collect the same for its own use and behalf, and for
the use and behalf of its successors, assigns, or other legal representatives.
To enable MEMC to record its interest therein, ALBEMARLE shall additionally
execute the recordable assignment which is attached hereto as Schedule R-A and
other recordable forms of the Assignment as MEMC may reasonably request. If an
Event of Default occurs and is continuing, ALBEMARLE shall have the right to
terminate and revoke all rights granted pursuant to this Section 2.02 upon
written notice to MEMC and MEMC Pasadena and, in such event, MEMC and MEMC
Pasadena shall cease any further use of the technology and patent rights
assigned under this Section 2.02 and shall, at the request of ALBEMARLE, convey
their rights in such technology and patent rights back to ALBEMARLE and shall
execute such documents as may be necessary to record the reconveyance rights,
any expenses connected with such reconveyance and recording to be borne by
ALBEMARLE.
2.03 This Assignment does not include rights of action for unauthorized use
of the Silane Manufacturing Technology, Silicon Tetrafluoride Manufacturing
Technology and Silane Patent Rights occurring prior to the Closing Date which
rights are retained by the assignor hereunder.
2.04 ALBEMARLE makes no representations or warranties with respect to
technology and patent rights assigned hereunder other than the representations
and warranties set forth in Section 4.28 of the Asset Purchase Agreement.
2.05 MEMC agrees to provide ALBEMARLE with prompt notice in writing prior
to or upon taking any of the following actions:
(a) in any calendar year producing more than [CONFIDENTIAL MATERIAL HAS
BEEN DELETED AND FILED SEPARATELY WITH SEC] metric tons of silane in
the Polysilicon Plant (notice being required in each such year when
production exceeds such quantity unless the capacity of the plant was
expanded and for which notice was given pursuant to subpart (c) of
this section 2.05),
(b) granting any right to a third party to use the Silane Manufacturing
Technology, Silicon Tetrafluoride Manufacturing Technology and Silane
Patent Rights to manufacture silane, or
(c) expanding the capacity of the Polysilicon Plant beyond that required
to produce [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] metric tons of silane, or building a new silane
plant to manufacture silane using the Silane Patent Rights or the
Silane Manufacturing Technology.
2.06 In partial consideration for the rights granted herein, for each
kilogram of Licensed Silane which is manufactured in a calendar year at the
Polysilicon Plant or another plant owned by MEMC, MEMC PASADENA or an Affiliate,
successor, licensee or assign of any of them in excess of the Silane Benchmark
and which is sold or otherwise transferred by any of them during the fifteen
(15) year period immediately following the Closing Date, Albemarle shall receive
a royalty of [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH
SEC]. The obligation to pay royalties to Albemarle pursuant to this Section 2.06
shall terminate fifteen years from the Closing Date. All royalties due Albemarle
pursuant to this Section 2.06 shall be paid to Albemarle within thirty (30) days
following the close of the calendar quarter in which the sale of the
royalty-bearing product occurred.
2.07 If at any one or more times MEMC or MEMC PASADENA (or either of their
Affiliate(s), successor(s), licensee(s) or assign(s)) transfers any of the
Silane Patent Rights, Silane Manufacturing Technology or Silicon Tetrafluoride
Manufacturing Technology by way of license, sale or otherwise, to any third
party within fifteen years of the Closing Date, then ALBEMARLE shall be paid by
MEMC for each such transaction the cash equivalent of one-half of any value
(whether such value is in terms of cash compensation, supply or barter of
product or technology, cross licensing of technology or any other value of any
kind) received by or to be received by MEMC or MEMC PASADENA (or either of their
Affiliate(s), successor(s), licensee(s) or assign(s)) within fifteen years of
the Closing Date for the transfer or the licensing of such patent rights or
technology, such one-half share (in its cash equivalent) to be paid to ALBEMARLE
within thirty (30) days from the receipt by MEMC or MEMC PASADENA (or either of
their Affiliate(s), successor(s), licensee(s) or assign(s)) of such cash or such
other value (whether such value is in terms of supply or barter of product or
technology, cross licensing of technology or any other value of any kind).
Notwithstanding the foregoing, in the event such a third party pays value for
such a transfer of rights, some of which is paid within fifteen years and some
of which is paid more than fifteen years after the Closing Date, ALBEMARLE and
MEMC shall, upon the request of either party, negotiate in good faith such that
ALBEMARLE and MEMC shall receive a fair and equitable portion (in cash
equivalent) of the value paid, taking into account the extent to which the
timing of the value paid by the third party corresponds to the timing of the
value received by the third party. In conducting such negotiations, the parties
shall use in their consideration the premise that ALBEMARLE is 50% owner of the
Silane Patent Rights, Silane Manufacturing Technology and Silicon Tetrafluoride
Manufacturing Technology and that it is contemplated by ALBEMARLE and MEMC that
the Polysilicon Patent Rights, Polysilicon Manufacturing Technology, Sodium
Aluminum Hydride Patent Rights, Sodium Aluminum Hydride Manufacturing
Technology, Silane Patent Rights, Silane Manufacturing Technology and Silicon
Tetrafluoride Manufacturing Technology were valued, as of the Closing Date,
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC]. MEMC and
ALBEMARLE agree to use such contemplated value as a basis for their
negotiations, provided, however, that if ALBEMARLE or MEMC can demonstrate in
good faith that such contemplated value is not the actual value at the time of
such negotiations, then that party may address that issue as part of the
negotiations. Failing agreement upon a mutually acceptable portion to be paid to
ALBEMARLE, then MEMC and ALBEMARLE shall submit the matter to arbitration in
accordance with the provisions of Section 4.04.
ARTICLE 3 - NOTICES
Any notice provided for herein to be given in writing shall be by
registered or certified mail addressed or by facsimile to the respective parties
at their addresses set forth below or at such other address or addresses as such
parties may from time to time designate in written notice to the other:
ALBEMARLE:
Albemarle Corporation
451 Florida Street
Baton Rouge, Louisiana 70801
Attention: Law Department
MEMC:
MEMC Electronic Materials, Inc.
501 Pearl Drive (City of O'Fallon)
Post Office Box 8
St. Peters, Missouri 63376
Phone: (314) 279-5000
Facsimile: (314) 279-5158
Attention: Vice President, Technology
ARTICLE 4 - GENERAL
4.01 This Agreement, the Seller Technology License Agreement, the Asset
Purchase Agreement and the MEMC Technology License Agreement set forth the
entire agreement and understanding of the parties with respect to the subject
matter hereof. No representation, promise, inducement or statement of intention
relating to the subject matter contemplated by this Agreement has been made by
any party which is not set forth in this Agreement or in the documents referred
to herein.
4.02 This Agreement may be amended, superseded or canceled only by a
writing specifically referring to this Agreement and signed by the duly
authorized representative of both parties.
4.03 This Agreement shall be governed by the law of the State of Texas,
excluding the conflicts of laws provisions thereof to the extent such laws would
dictate application of the laws of another jurisdiction.
4.04 For any matter which is designated in this Agreement as being subject
to arbitration, the parties shall, unless agreed otherwise, submit any disputes
for settlement and determination by arbitration under the then-current
Commercial Arbitration rules of the American Arbitration Association. The panel
for such arbitration shall consist of three (3) arbitrators, each of whom shall
be attorneys with at least ten (10) years of experience before the Bar of any
state in commercial matters. The arbitration shall be held in Houston, Texas.
The costs and expenses of the arbitration shall be shared as determined by the
arbitration panel. Discovery will be allowed both parties before the arbitration
hearing in accord with the Federal Rules of Civil Procedure and the hearing
shall be conducted consistent with the Federal Rules of Evidence. The decision
and award of the panel shall be in writing with reasons provided and shall be
final and binding. The award so rendered may be entered in any court having
jurisdiction thereof for confirmation and enforcement.
4.05 Each party agrees to execute or cause to be executed any documents
reasonably required to grant or otherwise perfect the rights purported to be
granted herein, provided, however, that neither party shall be required by this
section to enter into any transaction with a third party. Any out-of-pocket
expenses incurred under this Section shall be reimbursed by the party requesting
such services.
IN TESTIMONY WHEREOF, MEMC and ALBEMARLE have caused this instrument to be
signed by their duly authorized representatives, and ALBEMARLE has caused its
corporate seal to be hereto affixed on the date first written above.
ALBEMARLE CORPORATION
By: /s/ Thomas Avant
----------------------------------------
Title: Senior Vice President, Finance
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ John DeLuca
----------------------------------------
Title: Corporate Vice President
Schedule 1-A
Name Type
Ahmet Baysar Secrecy - Production high purity silicon in
fluidized bed using microwaves
M. P. Dudukovic Consulting/Secrecy - Field of chemical
engineering; discussions re fluid bed model
for silane decomposition
M. P. Dudukovic Consulting - Multiphase reactors
M. P. Dudukovic Consulting - Silicon Crystal Pulling
M. P. Dudukovic Consulting/Secrecy - Field of chemical
engineering; discussions re fluid bed model
for silane decomposition
Donald C. Freshwater Consulting/Secrecy - manufacturing poly-
silicon
L. J. Giling Consulting - semiconductor materials
L. J. Giling Consulting - semiconductor materials
L. J. Giling Consulting - one year extension re MOCVD
agreement
L. J. Giling Consulting - semiconductor materials and
MOCVD
L. J. Giling Consulting - metal organic chemical vapor
deposition (MOCVD) of III-V compounds
James L. Kuester Secrecy - Production high purity silicon in
fluidized bed using microwaves
F. F. Lange Consulting - polysilicon and silicon
carbide ceramics
David C. Look Consulting - semiconductor materials
Robert C. Wright Secrecy - covering consultations re Ethyl's
polysilicon project
Frederick A. Zenz Consulting - Polysilicon manufacturing
Schedule PAT -1
Silane Patent Rights
Case Appn. Filing Patent Issue
Number Country Status Number Date Number Date
- ---------------------------------------------------------------------------------------------------------
EM-4978 USA Issued 353,491 03/01/82 4,395,389 07/26/83
EM-4978+ Italy Granted 19839A/83 03/01/83 1,161,630 03/18/87
EM-4978+ Taiwan Granted 7,210,785 03/16/83 NI-20745 10/13/84
EM-4978+ Japan Granted 501471/83 02/28/83 1585827 10/31/90
EM-4978+ Gerwe Granted P3334297.0 02/28/83 3334297 11/30/89
EM-5155 USA Issued 566,279 12/28/83 4,532,120 07/30/85
EM-5155 Canad Granted 479,345 04/17/85 1,224,013 07/14/87
EM-5155 Japan Granted 141426/85 06/28/85 1,531,608 11/24/89
EM-5155 EPO Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Austr Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Belgm Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Franc Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Gerwe Granted 85-302974.2 04/26/85 P3668323.6 02/22/89
EM-5155 Italy Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Lxmb Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Holln Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Swedn Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Switz Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5155 Unikn Granted 85-302974.2 04/26/85 0198971 02/22/89
EM-5340 USA Issued 609,812 05/14/84 4,554,141 11/19/85
EM-5128-A USA Issued 701,947 02/15/85 4,632,816 12/30/86
EM-5128 Canad Granted 443,087 12/12/83 1,225,230 08/11/87
EM-5128 Taiwn Granted 72-14531 12/29/83 NI-24699 07/31/86
EM-5128 EPO Granted 83-307568.2 12/13/83 0112151 01/20/88
EM-5128 Japan Granted 500492/84 12/12/83 1,518,057 09/07/89
EM-5128 Franc Granted 83-307568.2 12/13/83 0112151 01/20/88
EM-5128 Gerwe Granted 83-307568.2 12/13/83 P3375386.5 01/20/88
EM-5128 Italy Granted 83-307568.2 12/13/83 0112151 01/20/88
EM-5128 Holln Granted 83-307568.2 12/13/83 0112151 01/20/88
EM-5128 Unikn Granted 83-307568.2 12/13/83 0112151 01/20/88
EM-5563 USA Issued 075,367 07/20/87 4,847,061 07/11/89
EM-5563 Canad Granted 572,426 07/19/88 1,303,817 06/23/92
EM-5563 Japan Published 178294/88 07/19/88
EM-5563 Korso Published 9081/1988 07/20/88
EM-5563 Taiwn Granted 77105191 07/28/88 NI49794 11/25/92
EM-5563 EPO Granted 88-111068.8 07/11/88 0300320 10/06/93
EM-5563 Belgm Granted 88-111068.8 07/11/88 0300320 10/06/93
EM-5563 Franc Granted 88-111068.8 07/11/88 0300320 10/06/93
EM-5563 Gerwe Granted 88-111068.8 07/11/88 P3884702.7 10/06/93
EM-5563 Italy Granted 88-111068.8 07/11/88 0300320 10/06/93
EM-5563 Unikn Granted 88-111068.8 07/11/88 0300320 10/06/93
EM-5563-A USA Issued 296,484 01/12/89 5,075,092 12/24/91
EM-5563-A Canad Pending 2,007,271 01/05/90
EM-5563-A Japan Published 2660/90 01/11/90
EM-5563-A Korso Published 90-283 01/11/90
EM-5563-A Taiwn Granted 79100909 02/07/90 NI48341 06/01/91
EM-5563-A EPO Granted 89-124115.0 12/28/89 0377900 06/30/93
EM-5563-A Franc Granted 89-124115.0 12/28/89 0377900 06/30/93
EM-5563-A Gerwe Granted 89-124115.0 12/28/89 P68907401 06/30/92
EM-5563-A Italy Granted 89-124115.0 12/28/89 0377900 06/30/93
EM-5563-A Unikn Granted 89-124115.0 12/28/89 0377900 06/30/93
EM-6158-A USA Issued 723,785 07/01/91 5,206,004 04/27/93
EM-6517 USA Issued 859,146 03/27/92 5,211,931 05/18/93
EM-6517 Japan Pending 517442/93 11/22/93
EM-6157-A USA Issued 873,461 04/24/92 5,290,342 03/01/94