FORM 10-K/A
AMENDMENT NO. 2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number 1-13828
MEMC ELECTRONIC MATERIALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-1505767
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 PEARL DRIVE (CITY OF O'FALLON), ST. PETERS, MISSOURI 63376
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 279-5500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
$.01 par value Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant, based upon the closing price of such stock on December 4, 1998, as
reported by the New York Stock Exchange, was approximately $176.2 million.
The number of shares outstanding of the registrant's Common Stock as of
December 4, was 40,507,216 shares.
-----------------------------
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the registrant's Annual Report to Stockholders for the
fiscal year ended December 31, 1997 (Part I, Part II, and Part IV of the
original Form 10-K).
(2) Portions of the registrant's Notice of Annual Meeting of Stockholders
and Proxy Statement dated March 23, 1998 (Part III of the original Form 10-K).
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
3. Exhibits
See the Exhibit Index beginning at page 3 of this report. For a listing of
all management contracts and compensatory plans or arrangements required to be
filed as exhibits to this report, see the Exhibits listed under Exhibit nos.
10-n through 10-r and Exhibit nos. 10-aa, 10-oo, 10-pp, 10-xx, 10-yy, 10-ggg,
10-hhh, 10-iii, 10-nnn, 10-ooo, and 10-ppp of the Exhibit Index. The following
Exhibits listed in the Exhibit Index are filed with this report.
10-ll Seller Technology License Agreement dated as of July 31, 1995, among
Albemarle Corporation, the Company and MEMC Pasadena, Inc.
10-mm Technology Purchase Agreement dated as of July 31, 1995, among
Albemarle Corporation and the Company
10-nn Ground Lease Agreement dated as of July 31, 1995, between Albemarle
Corporation and MEMC Pasadena, Inc.
10-nn(1) Amendment to Ground Lease Agreement dated as of May 31, 1997, between
the Company, MEMC Pasadena, Inc., and Albemarle Corporation
10-nnn Consulting Agreement dated December 1, 1997, between the Company and
Dr. Robert M. Sandfort
4. Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
December 31, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ JAMES M. STOLZE
__________________________________
James M. Stolze
Executive Vice President and Chief
Financial Officer
Date: December 10, 1998
<PAGE>
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item
601 of Regulation S-K.
Exhibit
No. Description
_______ _____________________________________________________________________
2 Omitted -- Inapplicable
3(i) Restated Certificate of Incorporation of the Company (Incorporated by
reference to Exhibit 3-a of the Company's Form 10-Q for the Quarter
ended June 30, 1995)
3(ii) Restated By-laws of the Company (Incorporated by reference to Exhibit
3-b of the Company's Form 10-Q for the Quarter ended September 30,
1996)
4 Omitted-- Inapplicable
5 Omitted-- Inapplicable
9 Omitted-- Inapplicable
*10-a Shareholders Agreement dated May 24, 1994 among the Company and China
Steel Corporation ("China Steel"), China Development Corporation and
Chiao Tung Bank (Incorporated by reference to Exhibit 10(a) of
Amendment No. 4 to the Company's Form S-1 Registration Statement No.
33-92412)
*10-b Technology Cooperation Agreement dated October 26, 1994 between the
Company and Taisil Electronic Materials Corporation ("Taisil")
(Incorporated by reference to Exhibit 10-b of Amendment No. 4 to the
Company's Form S-1 Registration Statement No. 33-92412)
10-c Joint Venture Agreement dated August 28, 1990 among the Company,
Pohang Iron and Steel Company, Ltd. ("POSCO") and Samsung Electronics
Company, Ltd. ("Samsung") (Incorporated by reference to Exhibit 10-c
of Amendment No. 1 to the Company's Form S-1 Registration Statement
No. 33-92412)
10-d First Amendment to Joint Venture Agreement dated December 9, 1993
among the Company, POSCO and Samsung (Incorporated by reference to
Exhibit 10-d of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33-92412)
10-e Second Amendment to Joint Venture Agreement dated December 30, 1994
among the Company, POSCO and Samsung (Incorporated by reference to
Exhibit 10-e of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33-92412)
*10-f Technical Agreement dated December 19, 1990 between the Company and
POSCO Huls Company Limited ("PHC") (Incorporated by reference to
Exhibit 10-f of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33-92412)
*10-g Amendment to Technical Agreement dated as of January 1, 1995 between
the Company and PHC (Incorporated by reference to Exhibit 10-g of
Amendment No. 1 to the Company's Form S-1 Registration Statement No.
33-92412)
*10-h Shareholder's Agreement dated as of May 16, 1995 between the Company
and Texas Instruments Incorporated ("TI") (Incorporated by reference
to Exhibit 10-h of Amendment No. 4 to the Company's Form S-1
Registration Statement No. 33-92412)
*10-i TI Purchase Agreement dated as of June 30, 1995 between the Company,
MEMC Southwest Inc. ("MEMC Southwest") and TI (Incorporated by
reference to Exhibit 10-i of the Company's Form 10-Q for the Quarter
ended June 30, 1995)
*10-i(1) Amendment to TI Purchase Agreement dated as of June 5, 1997,
between MEMC Southwest Inc. and TI (Incorporated by reference to
Exhibit 10-i of the Company's Form 10-Q for the Quarter ended June 30,
1997)
10-j Lease Agreement Covering Silicon Wafer Operation Premises dated June
30, 1995 between TI and MEMC Southwest (Incorporated by reference to
Exhibit 10-j of the Company's Form 10-Q for the Quarter ended June 30,
1995)
10-j(1) Sublease Agreement covering Silicon Wafer Operation Premises dated
June 30, 1995 between TI and MEMC Southwest (Incorporated by reference
to Exhibit 10-j(1) of the Company's Form 10-Q for the Quarter ended
June 30, 1995)
*10-k Technology Transfer Agreement dated as of June 30, 1995 between the
Company, TI and MEMC Southwest (Incorporated by reference to Exhibit
10-k of the Company's Form 10-Q for the Quarter ended June 30, 1995)
10-l Registration Rights Agreement between the Company and Huls Corporation
(Incorporated by reference to Exhibit 10-l of the Company's Form 10-K
for the Year ended December 31, 1995)
10-m Form of Master Reserve Volume Agreement (Incorporated by reference to
Exhibit 10-m of the Company's Form 10-K for the Year ended December
31, 1995)
+10-n Employment Agreement between the Company and Dr. Robert M. Sandfort
(Incorporated by reference to Exhibit 10-q of the Company's Form 10-K
for the Year ended December 31, 1995)
+10-o Employment Agreement dated as of April 1, 1993 among Huls Belgium
S.A., the Company and Marcel Coinne (Incorporated by reference to
Exhibit 10-r of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33-92412)
+10-p MEMC Supplemental Executive Pension Plan 1997 Restatement
(Incorporated by reference to Exhibit 10-s of the Company's Form 10-Q
for the Quarter ended March 31, 1997)
+10-q MEMC Electronic Materials, Inc. 1995 Equity Incentive Plan as Amended
and Restated on March 18, 1997 (Incorporated by reference to Exhibit
10-t of the Company's Form 10-Q for the Quarter ended March 31, 1997)
+10-q(1) Form of Stock Option and Restricted Stock Agreement (Incorporated
by reference to Exhibit 10-t(1) of the Company's Form 10-K for the
Year ended December 31, 1995)
+10-q(2) Stock Option and Restricted Stock Agreement between the Company
and Dr. Robert M. Sandfort (Incorporated by reference to Exhibit
10-t(3) of the Company's Form 10-K for the Year ended December 31,
1995)
+10-r Annual Incentive Plan for Selected Key Employees of MEMC Electronic
Materials, Inc. and its Subsidiaries (Incorporated by reference to
Exhibit 10-u of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33-92412)
10-s Service Agreement dated January 1, 1995 between the Company and Huls
Corporation (Incorporated by reference to Exhibit 10-v of Amendment
No. 1 to the Company's Form S-1 Registration Statement No. 33-92412)
10-t Letter Agreement dated June 19, 1995 amending the Service Agreement
dated January 1, 1995 among the Company and Huls Corporation
(Incorporated by reference to Exhibit 10-w of the Company's Form 10-Q
for the Quarter ended June 30, 1995)
10-u Agency and Services Agreement dated January 1, 1995 between MEMC
Electronic Materials, SpA and Huls France S.A. (Incorporated by
reference to Exhibit 10-x of Amendment No. 1 to the Company's Form S-1
Registration Statement No. 33-92412)
10-v Agency and Services Agreement dated April 1, 1989 between MEMC
Electronic Materials, SpA and Huls (U.K.) Ltd. and the amendment
thereto dated November 20, 1991 (Incorporated by reference to Exhibit
10-y of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33- 92412)
10-w Service Agreement effective July 1, 1995 between MEMC Electronic
Materials, SpA and Huls AG (and English translation thereof)
(Incorporated by reference to Exhibit 10-z of the Company's Form 10-K
for the Year ended December 31, 1995)
10-x Sales Representative and Offer Agency Agreement dated November 7, 1991
between MEMC Electronic Materials, SpA and MEMC Electronic Materials,
Company (now MEMC Huls Korea Company) (Incorporated by reference to
Exhibit 10-aa of Amendment No. 1 to the Company's Form S-1
Registration Statement No. 33-92412)
*10-y Trichlorosilane Supply Agreement between MEMC Electronic Materials
SpA and Huls Silicone GmbH dated as of December 31, 1995 (Incorporated
by reference to Exhibit 10-bb of the Company's Form 10-K for the Year
ended December 31, 1995)
10-z Sales Representative and Offer Agency Agreement dated December 9, 1991
between the Company and MEMC Electronic Materials, Company (now MEMC
Huls Korea Company) (Incorporated by reference to Exhibit 10-cc of
Amendment No. 1 to the Company's Form S-1 Registration Statement No.
33-92412)
+10-aa Employment Agreement effective as of June 16, 1995 between the
Company and James M. Stolze (Incorporated by reference to Exhibit
10-ee of Amendment No. 1 to the Company's Form S-1 Registration
Statement No. 33-92412)
10-bb Note Agreement dated as of June 30, 1995 among MEMC Southwest Inc.,
Texas Instruments Incorporated and MEMC Electronic Materials, Inc.
(Incorporated by reference to Exhibit 10-gg of the Company's Form 10-K
for the Year ended December 31, 1995)
10-cc Credit Agreement dated as of July 10, 1995, between the Company and
Huls Corporation (Incorporated by reference to Exhibit 10-jj of the
Company's Form 10-Q for the Quarter ended June 30, 1995)
10-dd Credit Agreement dated as of July 10, 1995, between the Company and
Huls Corporation (Incorporated by reference to Exhibit 10-kk of the
Company's Form 10-Q for the Quarter ended June 30, 1995)
10-ee Credit Agreement dated as of July 10, 1995, between the Company and
Huls Corporation (Incorporated by reference to Exhibit 10-ll of the
Company's Form 10-Q for the Quarter ended June 30, 1995)
10-ff Credit Agreement dated as of July 10, 1995, between the Company and
Huls Corporation (Incorporated by reference to Exhibit 10-mm of the
Company's Form 10-Q for the Quarter ended June 30, 1995)
10-gg Credit Agreement dated as of July 10, 1995, between the Company and
Huls AG (Incorporated by reference to Exhibit 10-nn of the Company's
Form 10-Q for the Quarter ended June 30, 1995)
10-hh Credit Agreement dated as of July 10, 1995, between the Company and
Huls AG (Incorporated by reference to Exhibit 10-oo of the Company's
Form 10-Q for the Quarter ended June 30, 1995)
10-ii Revolving Credit Agreement dated as of July 10, 1995, between the
Company and Huls AG (Incorporated by reference to Exhibit 10-pp of the
Company's Form 10-Q for the Quarter ended June 30, 1995)
10-jj Reimbursement Agreement effective as of August 1, 1995 between the
Company and Huls AG (Incorporated by reference to Exhibit 10-rr of the
Company's Form 10-K for the Year ended December 31, 1995)
10-kk MEMC Technology License Agreement dated as of July 31, 1995, between
Albemarle Corporation and the Company (Incorporated by reference to
Exhibit 10-tt of the Company's Form 10-K for the Year ended December
31, 1995)
*10-ll Seller Technology License Agreement dated as of July 31, 1995, among
Albemarle Corporation, the Company, and MEMC Pasadena, Inc.
*10-mm Technology Purchase Agreement dated as of July 31, 1995, among
Albemarle Corporation and the Company
10-nn Ground Lease Agreement dated as of July 31, 1995, between Albemarle
Corporation and MEMC Pasadena, Inc.
10-nn(1) Amendment to Ground Lease Agreement dated as of May 31, 1997,
between the Company, MEMC Pasadena, Inc., and Albemarle Corporation
+10-oo Form of Stock Option and Performance Restricted Stock Agreement
(Incorporated by reference to Exhibit 10-yy of the Company's Form 10-K
for the Year ended December 31, 1995)
+10-pp Form of Stock Option Agreement (Incorporated by reference to Exhibit
10-zz of the Company's Form 10-K for the Year ended December 31, 1995)
10-qq Credit Agreement between the Company and Huls AG dated as of December
22, 1995 (Incorporated by reference to Exhibit 10-aaa of the Company's
Form 10-K for the Year ended December 31, 1995)
10-rr Credit Agreement between the Company and Huls AG dated as of December
22, 1995 (Incorporated by reference to Exhibit 10-bbb of the Company's
Form 10-K for the Year ended December 31, 1995)
10-ss Credit Agreement between the Company and Huls AG dated as of December
22, 1995 (Incorporated by reference to Exhibit 10-ccc of the Company's
Form 10-K for the Year ended December 31, 1995)
10-tt Credit Agreement between the Company and Huls AG dated as of December
22, 1995 (Incorporated by reference to Exhibit 10-ddd of the Company's
Form 10-K for the Year ended December 31, 1995)
10-uu Commitment Fee Agreement between the Company and Huls Corporation
dated as of July 10, 1995 (Incorporated by reference to Exhibit 10-eee
of the Company's Form 10-K for the Year ended December 31, 1995)
10-vv Commitment Fee Agreement between the Company and Huls Corporation
dated as of July 10, 1995 (Incorporated by reference to Exhibit 10-fff
of the Company's Form 10-K for the Year ended December 31, 1995)
10-ww Commitment Fee Agreement between the Company and Huls Corporation
dated as of July 10, 1995 (Incorporated by reference to Exhibit 10-ggg
of the Company's Form 10-K for the Year ended December 31, 1995)
+10-xx Employment Agreement dated September 3, 1996 between the Company and
Ludger H. Viefhues (Incorporated by reference to Exhibit 10-hhh of the
Company's Form 10-Q for the Quarter ended September 30, 1996)
+10-yy Stock Option Agreement dated as of September 1, 1996 between the
Company and Ludger H. Viefhues (Incorporated by reference to Exhibit
10-iii of the Company's Form 10-Q for the Quarter ended September 30,
1996)
*10-zz HSC/MEMC Agreement dated as of December 27, 1994 between the Company
and Hemlock Semiconductor Corporation ("Hemlock") (Incorporated by
reference to Exhibit *10-ggg of the Company's Form 10-Q for the
Quarter ended March 31, 1997)
*10-zz(1) Letter Amendment dated as of June 20, 1995 to the HSC/MEMC
Agreement between the Company and Hemlock (Incorporated by reference
to Exhibit *10-ggg(1) of the Company's Form 10-Q for the Quarter ended
March 31, 1997)
*10-zz(2) Letter Amendment dated as of November 8, 1996 to the HSC/MEMC
Agreement between the Company and Hemlock (Incorporated by reference
to Exhibit *10-ggg(2) of the Company's Form 10-Q for the Quarter ended
March 31, 1997)
*10-aaa Joint Venture Agreement dated as of December 20, 1996 between the
Company and Khazanah Nasional Berhad (Incorporated by reference to
Exhibit 10-hhh of the Company's Form 10-K for the Year ended December
31, 1996)
*10-bbb Technology Cooperation Agreement dated as of December 20, 1996 between
the Company and MEMC Kulim Electronic Materials, SDN BHD (Incorporated
by reference to Exhibit 10-iii of the Company's Form 10-K for the Year
ended December 31, 1996)
10-ccc Credit Agreement dated as of December 1, 1996 between the Company and
Huls AG (Incorporated by reference to Exhibit 10-jjj of the Company's
Form 10-K for the Year ended December 31, 1996)
10-ddd Credit Agreement dated as of December 1, 1996 between the Company and
Huls AG (Incorporated by reference to Exhibit 10-kkk of the Company's
Form 10-K for the Year ended December 31, 1996)
10-eee Credit Agreement dated as of April 1, 1996 between the Company and
Huls AG (Incorporated by reference to Exhibit 10-lll of the Company's
Form 10-K for the Year ended December 31, 1996)
10-fff Fourth Short-Term Loan Agreement dated as of March 31, 1996 between
the Company and Huls Corporation (Incorporated by reference to Exhibit
10-mmm of the Company's Form 10-K for the Year ended December 31,
1996)
+10-ggg Form of Stock Option and Performance Restricted Stock Agreement
(Incorporated by reference to Exhibit 10-nnn of the Company's Form
10-Q for the Quarter ended March 31, 1997)
+10-hhh Form of Stock Option Agreement (Incorporated by reference to
Exhibit 10-ooo of the Company's Form 10-Q for the Quarter ended March
31, 1997)
+10-iii Form of Stock Option Agreement (Nonemployee Directors)
(Incorporated by reference to Exhibit 10-ppp of the Company's Form
10-Q for the Quarter ended March 31, 1997)
10-jjj Five Year Credit Agreement dated as of June 26, 1997, between the
Company and Huls Corporation (Incorporated by reference to Exhibit
10-qqq of the Company's Form 10-Q for the Quarter ended June 30, 1997)
10-kkk Six Year Credit Agreement dated as of June 26, 1997, between the
Company and Huls Corporation (Incorporated by reference to Exhibit
10-rrr of the Company's Form 10-Q for the Quarter ended June 30, 1997)
10-lll Seven Year Credit Agreement dated as of June 26, 1997, between the
Company and Huls Corporation (Incorporated by reference to Exhibit
10-sss of the Company's Form 10-Q for the Quarter ended June 30, 1997)
10-mmm Eight Year Credit Agreement dated as of June 26, 1997, between the
Company and Huls Corporation (Incorporated by reference to Exhibit
10-ttt of the Company's Form 10-Q for the Quarter ended June 30, 1997)
+10-nnn Consulting Agreement dated December 1, 1997, between the Company
and Dr. Robert M. Sandfort
+10-ooo Separation Agreement, General Release and Covenant Not to Sue dated
December 31, 1997, between the Company and Tommy L. Cadwell
(Incorporated by reference to Exhibit 10-ooo of the Company's Form
10-K for the Year ended December 31, 1997)
+10-ppp Letter Agreement dated as of April 1, 1993, between the Company and
Ralph D. Hartung (Incorporated by reference to Exhibit 10-ppp of the
Company's Form 10-K for the Year ended December 31, 1997)
11 Omitted-- Inapplicable
12 Omitted-- Inapplicable
13 Pages 4 through 5 (the paragraphs contained in "To Our Stockholders"
under the section entitled "Looking Ahead"), pages 12 through 41
(excluding the "Report of Management" on page 40), and page 44 of the
Company's 1997 Annual Report (Incorporated by reference to Exhibit 13
of the Company's Form 10-K for the Year ended December 31, 1997)
16 Omitted -- Inapplicable
18 Omitted -- Inapplicable
21 Subsidiaries of the Company (Incorporated by reference to Exhibit 21
of the Company's Form 10-K for the Year ended December 31, 1997)
22 Omitted -- Inapplicable
23-a Consent of KPMG Peat Marwick LLP (Incorporated by reference to Exhibit
23-a of the Company's Form 10-K for the Year ended December 31, 1997)
23-b Consent of KPMG San Tong Corp. (Incorporated by reference to Exhibit
23-b of the Company's Form 10-K for the Year ended December 31, 1997)
23-c Consent of KPMG Peat Marwick (Incorporated by reference to Exhibit
23-c of the Company's Form 10-K for the Year ended December 31, 1997)
24 Powers of Attorney submitted by Dr. Erhard Meyer-Galow; Willem D.
Maris; Dr. Alfred Oberholz; Paul T. O'Brien; and Michael B. Smith
(Incorporated by reference to Exhibit 24 of the Company's Form 10-K
for the Year ended December 31, 1997)
27 Financial Data Schedule for the Fiscal Year Ended December 31, 1997
(filed electronically with the SEC only) (Incorporated by reference to
Exhibit 27 of the Company's Form 10-K for the Year ended December 31,
1997)
27-a Restated Financial Data Schedule for the Fiscal Year ended December
31, 1996 (filed electronically with the SEC only) (Incorporated by
reference to Exhibit 27-a of the Company's Form 10-K/A Amendment No. 1
for the Year ended December 31, 1997)
27-b Restated Financial Data Schedule for the Nine Months ended September
30, 1996 (filed electronically with the SEC only) (Incorporated by
reference to Exhibit 27-b of the Company's Form 10-K/A Amendment No. 1
for the Year ended December 31, 1997)
27-c Restated Financial Data Schedule for the Six Months ended June 30,
1996 (filed electronically with the SEC only) (Incorporated by
reference to Exhibit 27-c of the Company's Form 10-K/A Amendment No. 1
for the Year ended December 31, 1997)
99 Omitted -- Inapplicable
- -----------------
* Confidential treatment of certain portions of these documents has been
granted.
+ These Exhibits constitute all management contracts, compensatory plans and
arrangements required to be filed as an Exhibit to this form pursuant to
Item 14(c) of this report.
CONFIDENTIAL TREATMENT
PREVIOUSLY GRANTED
SELLER TECHNOLOGY LICENSE 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"), 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"), and MEMC PASADENA, INC., a Delaware corporation having offices at 3000
N. South Street, Pasadena, Texas, 77503 (hereinafter "MEMC PASADENA"):
WITNESSETH
WHEREAS, ALBEMARLE has entered into an Asset Purchase Agreement dated July
31, 1995 with MEMC;
WHEREAS, the Asset Purchase Agreement provides in Section 3.1 that
ALBEMARLE shall license certain technology and patent rights relating to the
manufacture of polysilicon and sodium aluminum hydride;
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 "Polysilicon Patent Rights" shall mean the patents listed in Schedule
PAT-3 attached hereto and made a part hereof, including all continuations and
continuation-in-part patents, divisionals, reissues and reexamined patents
derived from those listed.
1.02 "Polysilicon Manufacturing Technology" shall mean all processes, trade
secrets, inventions, discoveries, improvements, know-how, 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 for or in connection with manufacturing
polysilicon from silane. Polysilicon Manufacturing Technology shall not include
information received by ALBEMARLE from third parties under the secrecy
agreements which are identified on Schedule I-A unless authorized by such
agreements or such agreements are assigned to MEMC.
1.03 "Sodium Aluminum Hydride Manufacturing Technology" shall mean 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
sodium aluminum hydride. The Sodium Aluminum Hydride Technology shall not
include information received by ALBEMARLE from third parties under the secrecy
agreements which are identified on Schedule I-A unless authorized by such
agreements or such agreements are assigned to MEMC.
1.04 "Sodium Aluminum Hydride Patent Rights" shall mean the patents listed
in Schedule PAT-2 attached hereto and made a part hereof, including all
continuations and continuation-in-part patents, divisionals, reissues and
reexamined patents derived from those listed.
1.05 "Licensed Product" shall mean Polysilicon which embodies, is made by
or with the use of, or is used in accordance with, an invention defined by one
or more claims of the Polysilicon Patent Rights or is made using the Polysilicon
Manufacturing Technology.
1.06 "Affiliate" shall have the same meaning as set forth in the Asset
Purchase Agreement.
1.07 "Polysilicon Plant" shall mean the polysilicon plant located in
Pasadena, Texas and transferred by ALBEMARLE to MEMC on the Closing Date
including any expansions or increases in the capacity thereof however made or
any polysilicon plant which replaces such polysilicon plant.
1.08 "Net Present Value" of a royalty payment which is due Albemarle
pursuant to Section 2.04(a) shall be defined by the following formula:
Net Present Value = R + ([CONFIDENTIAL MATERIAL HAS BEEN DELETED AND
FILED SEPARATELY WITH SEC])n
where R is the amount of the royalty payment for which the determination is
being made; n is an integer denoting the number of months following with Start
Date to the end of the month in which the royalty is paid. By way of
illustration, if a royalty is paid August 13, 1996, and the Start Date is August
31, 1995, the value of n is 12.
1.09 "Polysilicon" shall collectively mean polysilicon which meets the
specifications required for the preparation of semiconductor silicon and
polysilicon which meets the specifications required for the preparation of
semiconductor silicon and which, in addition, has been upgraded by
dehydrogenation. "Polysilicon" shall not include polysilicon which is unsuitable
for the manufacture of semiconductor grade silicon wafers.
1.10 "Closing Date" shall have the same meaning as set forth in the Asset
Purchase Agreement.
1.11 "Deemed Quantity" shall have the meaning set forth in Section 2.03(a)
of this Agreement.
1.12 "Silane Manufacturing Technology" shall have the same meaning as set
forth in the Technology Purchase Agreement.
1.13 "Silane Patent Rights" shall have the same meaning as set forth in the
Technology Purchase Agreement.
1.14 "Silicon Tetrafluoride Manufacturing Technology" shall have the same
meaning as set forth in the Technology Purchase 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.
1.17 "Deemed Royalty Value" shall mean [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] multiplied by a fraction (X/Y) wherein
the numerator "X" is the Implicit Price Deflator index for Gross Domestic
Product published in the Survey of Current Business (U.S. Department of
Commerce, Economics and Statistics Administration, Bureau of Economic Analysis)
at Table 7.13 as published on the Start Date and the denominator "Y" is the
Implicit Price Deflator (as defined above) for July 31, 1995.
1.18 "Start Date" is the first to occur of the following dates; a) the date
on which funds are first appropriated by MEMC or MEMC Pasadena for any expansion
or other capacity modification of the Polysilicon Plant, or b) the date
royalties first become due pursuant to subpart (a) of Section 2.04.
ARTICLE 2 - GRANTS AND COMPENSATION
2.01 Subject to the terms and conditions set forth in this Agreement,
ALBEMARLE grants to MEMC and MEMC accepts, a perpetual, worldwide,
royalty-bearing as set forth in Sections 2.04, 2.05 and 2.07, exclusive (even as
against ALBEMARLE), and irrevocable right and license, which right and license
MEMC may extend to its Affiliates, to use the Polysilicon Manufacturing
Technology and to make, have made, use and sell the subject matter claimed in
the Polysilicon Patent Rights for any purpose, including the right to assign to
and sublicense others. Subject to the terms and conditions set forth in this
Agreement, MEMC hereby grants to MEMC PASADENA and MEMC PASADENA accepts, a
royalty-free and irrevocable right and license, which right and license MEMC
PASADENA may extend to its Affiliates, under the Polysilicon Patent Rights and
the Polysilicon Manufacturing Technology to make, have made, use and sell
Licensed Product at the Polysilicon Plant. If an Event of Default occurs and is
continuing, ALBEMARLE shall have the right to terminate all rights and licenses
under 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 licensed under this Section 2.01.
2.02 Subject to the terms and conditions set forth in this Agreement,
ALBEMARLE grants to MEMC and MEMC accepts, a perpetual, worldwide,
royalty-bearing as set forth in Sections 2.04, 2.05 and 2.07, exclusive (even as
against ALBEMARLE), and irrevocable right and license, which right and license
MEMC may extend to its Affiliates, under the Sodium Aluminum Hydride
Manufacturing Technology and the Sodium Aluminum Hydride Patent Rights,
including the right to sublicense others, to make, have made, and use sodium
aluminum hydride to make, have made, use and sell silane and to make, have made,
use and sell sodium aluminum fluoride. No right or license is granted to use
sodium aluminum hydride manufactured under license for any other purpose.
Subject to the terms and conditions set forth in this Agreement, MEMC grants to
MEMC PASADENA and MEMC PASADENA accepts a royalty-free, irrevocable right and
license, which right and license MEMC PASADENA may extend to its Affiliates,
under the Sodium Aluminum Hydride Manufacturing Technology and the Sodium
Aluminum Hydride Patent Rights, to make, have made, and use sodium aluminum
hydride to make, have made, use and sell silane and to make, have made, use and
sell sodium aluminum fluoride at the Polysilicon Plant. If an Event of Default
occurs and is continuing, ALBEMARLE shall have the right to terminate all rights
and licenses under 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 licensed under this Section 2.02.
2.03 MEMC agrees to promptly provide ALBEMARLE with notice in writing prior
to or upon taking any of the following actions:
(a) making more than [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] metric tons of Polysilicon in the Polysilicon
Plant in any calendar year ("Deemed Quantity") (notice being required
in each such year when production exceeds the Deemed Quantity, or
(b) granting any right to a third party to use the Polysilicon Patent
Rights and/or Polysilicon Manufacturing Technology to manufacture
polysilicon, or
(c) increasing the capacity of the Polysilicon Plant beyond the Deemed
Quantity by expansion, debottlenecking or other means, or
(d) building a plant for the manufacture of polysilicon for a purpose
other than to replace the capacity of the polysilicon plant located in
Pasadena, Texas and transferred by ALBEMARLE to MEMC on the Closing
Date.
2.04 In partial consideration for the rights granted herein, Albemarle
shall receive a royalty for sales of Licensed Product manufactured at the
Polysilicon Plant during the fifteen (15) year period immediately following the
Closing Date as set forth below:
(a) for each kilogram of Licensed Product sold by MEMC PASADENA
to its Affiliates and to third parties in a calendar year in excess of
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC]
metric tons but not in excess of [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] metric tons, Albemarle shall
receive a royalty of [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC], and
(b) for each kilogram of Licensed Product sold in a calendar year
in excess of [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] metric tons, Albemarle shall receive a royalty to
be determined by MEMC and Albemarle pursuant to a good faith
negotiation as described in Section 2.06.
The obligation to pay royalties to Albemarle pursuant to subpart (a) of this
Section 2.04 shall terminate fifteen years from the Closing Date or when the Net
Present Value of all royalties paid to Albemarle pursuant to subpart (a) of this
Section 2.04 is equal to the Deemed Royalty Value, whichever is the first to
occur. The obligation to pay royalties to Albemarle pursuant to subpart (b) of
this Section 2.04 shall terminate fifteen years from the Closing Date. All
royalties due Albemarle pursuant to this Section 2.04 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.
2.05 If at any one or more times during the fifteen (15) year period
immediately following the Closing Date, MEMC, MEMC PASADENA or any Affiliate of
MEMC or MEMC PASADENA manufactures Licensed Product at a plant other than the
Polysilicon Plant, Albemarle, in addition to any royalties which may be required
by Section 2.04 for Licensed Product manufactured at the Polysilicon Plant,
shall receive a royalty for the making, using or selling of Licensed Product
manufactured at each such new plant within the fifteen (15) year period
immediately following the Closing Date, the royalty to be determined by MEMC and
Albemarle pursuant to a good faith negotiation as described in Section 2.07.
2.06 In conducting negotiations required by Section 2.04(b) or Section
2.05, the parties shall use in their consideration the premise that ALBEMARLE is
50% owner of the Polysilicon Patent Rights, Polysilicon Manufacturing
Technology, Sodium Aluminum Hydride Patent Rights and Sodium Aluminum Hydride
Manufacturing Technology and further 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
royalty to be paid to ALBEMARLE in the event of the occurrence of acts as
described in 2.04(b) or 2.05, then MEMC and ALBEMARLE shall submit the matter to
arbitration in accordance with the provisions of Section 8.05.
2.07 If at any one or more times MEMC or MEMC PASADENA (or any of their
Affiliate(s), successor(s), licensee(s) or assign(s)) transfers any of the
Polysilicon Patent Rights, the Polysilicon Manufacturing Technology, the Sodium
Aluminum Hydride Patent Rights and/or the Sodium Aluminum Hydride 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 or MEMC
PASADENA 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 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 Polysilicon Patent Rights,
Polysilicon Manufacturing Technology, Sodium Aluminum Hydride Patent Rights, and
Sodium Aluminum Hydride 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 8.05.
ARTICLE 3 - MAINTENANCE OF PATENTS
3.01 MEMC shall pay all taxes, fees or other expenditures, and take any
other measures that MEMC believes necessary (in its sole discretion) to
prosecute, issue or maintain the Polysilicon Patent Rights.
3.02 ALBEMARLE, in its discretion, shall pay all taxes, fees or other
expenditures and take any other measures necessary to prosecute, issue or
maintain the Sodium Aluminum Hydride Patent Rights.
3.03 If ALBEMARLE, in its discretion, determines it will not proceed with
any act or take any measure required under 3.02, to obtain or maintain any of
the licensed patent rights relating to sodium aluminum hydride, ALBEMARLE shall
provide timely notice of such decision to MEMC and shall, at the request of
MEMC, assign to MEMC the sodium aluminum hydride patent involved in time for
MEMC to undertake any such act or measure.
ARTICLE 4 - CONFIDENTIALITY
4.01 ALBEMARLE shall refrain from disclosing the Polysilicon Manufacturing
Technology.
4.02 Notwithstanding the foregoing, ALBEMARLE is not under any obligation
of confidentiality with respect to any technical information that is part of the
Polysilicon Manufacturing Technology that:
(a) at the time of disclosure is generally available to the public or
thereafter becomes generally available to the public by publication or
otherwise not arising through an act or omission of ALBEMARLE, or
(b) is independently made available to ALBEMARLE as a matter of right by a
third party, or
(c) is required by a court or government agency to be disclosed, provided
that ALBEMARLE gives MEMC at least thirty (30) days' notice of such
requirement so that MEMC will have an opportunity to oppose such
requirement.
For the purpose of the provisions of this paragraph 4.02, technical information
within the Polysilicon Manufacturing Technology shall not be deemed to be
generally available to the public or independently received by ALBEMARLE merely
because it may be embraced by a more general disclosure, or derived from
combinations of disclosures, generally available to the public or independently
made available to ALBEMARLE.
4.03 MEMC shall refrain from disclosing the Sodium Aluminum Hydride
Manufacturing Technology except pursuant to a confidentiality agreement no less
restrictive than the terms of this Agreement.
4.04 Notwithstanding the foregoing, MEMC is not under any obligation of
confidentiality with respect to any technical information that is part of the
Sodium Aluminum Hydride Manufacturing Technology that:
(a) At the time of disclosure is generally available to the public or
thereafter becomes generally available to the public by publication or
otherwise not arising through an act or omission of MEMC, or
(b) MEMC can show was in its possession prior to the time of the
disclosure hereunder and was not acquired directly or indirectly from
ALBEMARLE, or
(c) is independently made available to MEMC as a matter of right by a
third party, or
(d) is required by a court or government agency to be disclosed, provided
that MEMC gives ALBEMARLE at least thirty (30) days notice of such
requirement so that ALBEMARLE will have an opportunity to oppose such
requirement.
For the purpose of the provision of this paragraph 4.04, technical information
within the Sodium Aluminum Hydride Manufacturing Technology shall not be deemed
to be generally available to the public or in the possession of MEMC merely
because it may be embraced by a more general disclosure, or derived from
combinations of disclosures, generally available to the public or in the
possession of MEMC.
ARTICLE 5 - TERMINATION
This Agreement shall terminate upon the expiration of the last to expire of
all patents listed in Schedules PAT-2 and PAT-3 attached hereto, except that the
licenses of Polysilicon Manufacturing Technology and Sodium Aluminum Hydride
Manufacturing Technology granted in Article 2 and the confidentiality
obligations of Article 4 shall survive such termination.
ARTICLE 6 - OPTION TO ASSIGN
At any time, for and in consideration of the sum of One Dollar ($1.00),
upon notice by MEMC, ALBEMARLE agrees to sell, assign, transfer and set over
unto MEMC the entire right, title and interest of ALBEMARLE in and to the
Polysilicon Manufacturing Technology and the Polysilicon Patent Rights. Any such
assignment shall have no effect on the obligations of Article 2 (licenses and
royalty payments) or the obligations of the Security Agreement. If an Event of
Default occurs and is continuing, ALBEMARLE shall have the right to request
reassignment to ALBEMARLE of all rights assigned under this Section, and
promptly following such request, MEMC and MEMC Pasadena shall cease any further
use of the technology and patent rights assigned under this section and will
also reassign all such patent and technology rights to ALBEMARLE and will also
execute such assignment documents in recordable form as are necessary in the
opinion of ALBEMARLE to record the reassignment.
ARTICLE 7 - 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 8 - GENERAL
8.01 This Agreement, the Technology Purchase Agreement, the Security
Agreement and the Asset Purchase 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.
8.02 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.
8.03 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.
8.04 The licenses granted pursuant to paragraph 2.01 may be assigned or
transferred in any manner by MEMC without the consent of ALBEMARLE provided that
ALBEMARLE is notified of the assignment and the assignee agrees to assume the
obligations set forth in paragraphs 2.03, 2.04, 2.05, 2.06 and 2.07. The
licenses granted pursuant to paragraph 2.02 may be assigned to the successor in
interest of MEMC in the business to which such licenses pertain. ALBEMARLE can
assign any or all of its rights under this Agreement at any time without the
consent of MEMC.
8.05 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 confirmation and enforcement.
8.06 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 WITNESS WHEREOF, the parties by their duly authorized representatives
have executed this Agreement 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
MEMC PASADENA, INC.
By: /s/ John DeLuca
-------------------------------------------
Title: President
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE PAT-3
POLYSILICON PATENT RIGHTS
<S> <C> <C> <C> <C> <C> <C>
CASE COUNTRY STATUS APPN. FILING PATENT ISSUE
NUMBER NUMBER DATE NUMBER DATE
- ---------------------------------------------------------------------------------------------------
EM-5522-A USA ISSUED 105.867 10/08/87 4.857.173 08/15/89
EM-5461-B USA ISSUED 059.562 06/08/87 4.806.317 02/21/89
EM-5461-D USA ISSUED 221.657 07/20/88 5.059.410 10/22/91
EM-5461-F USA ISSUED 426.846 10/26/89 5.202.099 04/13/93
EM-5461-H USA ISSUED 892.698 05/28/92 5.205.998 04/27/93
EM-5461 CANAD GRANTED 514.570 07/24/86 1.323.339 10/19/93
EM-5461 JAPAN GRANTED 181827/86 08/01/86 1859201 07/27/94
EM-5266 USA ISSUED 796.190 11/08/85 4.691.866 09/08/87
EM-5266 JAPAN GRANTED 162208/87 06/29/87 1794186 10/14/93
EM-5512-A USA ISSUED 004.116 01/16/87 4.820.587 04/11/89
EM-5512-B USA ISSUED 114.453 10/28/87 7.784.840 11/15/88
EM-5512-C USA ISSUED 290.584 12/27/88 4.883.687 11/28/89
EM-5512+ CANAD GRANTED 544.103 98/10/87 1.294.755 01/28/92
EM-5512+ JAPAN PUBLISHED 208030/87 08/21/87
EM-5512+ EPO GRANTED 87-307464.5 08/24/87 0 258 027 08/19/92
EM-5512+ TAIWN GRANTED 76-105096 08/29/87 NI 32354 09/01/89
EM-5512+ BELGM GRANTED 87-307464-5 08/24/87 0258027 08/19/92
EM-5512+ FRANC GRANTED 87-307464-5 08/24/87 0258027 08/19/92
EM-5512+ GERWE GRANTED 87-307464-5 08/24/87 P3781223.8 08/19/92
EM-5512+ ITALY GRANTED 87-307464-5 08/24/87 0258027 08/19/92
EM-5512+ UNIKN GRANTED 87-307464-5 08/24/87 0258027 08/19/92
EM-5543 USA ISSUED 088.145 08/21/87 4.748.052 05/31/88
EM-5543-A USA ISSUED 165.187 03/07/88 4.868.013 09/19/89
EM-5543 CANAD GRANTED 575.224 08/19/88 1.303.816 06/23/92
EM-5543 JAPAN PUBLISHED 204839/88 08/19/88
EM-5543 KORSO PUBLISHED 10576/1988 08/20/88
EM-5543 TAIWN GRANTED 77105585 08/12/88 35307 03/26/90
EM-5543 EPO GRANTED 88-113076.9 08/11/88 0303973 01/27/93
EM-5543 BELGM GRANTED 88-113076.9 08/11/88 0303973 01/27/93
EM-5543 FRANC GRANTED 88-113076.9 08/11/88 0303973 01/27/93
EM-5543 GERWE GRANTED 88-113076.9 08/11/88 P3877857.2 01/27/93
EM-5543 ITALY GRANTED 88-113076.9 08/11/88 0303973 01/27/93
EM-5543 UNIKN GRANTED 88-113076.9 08/11/88 0303973 01/27/93
EM-5704 USA ISSUED 126.203 11/27/87 4.789.596 12/06/88
EM-5704-B USA ISSUED 212.286 06/27/88 4.952.425 08/28/90
EM-5704-C USA ISSUED 212.231 06/27/88 4.851.297 07/25/89
EM-5704 CANAD GRANTED 584.183 11/25/88 1.309.308 10/27/92
EM-5704 JAPAN PUBLISHED 296409/88 11/25/88
EM-5704 KORSO PUBLISHED 88-15662 11/26/88
EM-5704 TAIWN GRANTED 77108649 12/12/88 N147709 09/26/91
EM-5704 EPO GRANTED 88-119601.8 11/24/88 0318008 06/22/94
EM-5704 EPO PUBLISHED 92-105047.2 03/24/92
EM-5704 BELGM GRANTED 88-119601.8 11/24/88 0318008 06/22/94
EM-5704 FRANC GRANTED 88-119601.8 11/24/88 0318008 06/22/94
EM-5704 GERWE GRANTED 88-119601.8 11/24/88 P38503573 06/22/94
EM-5704 ITALY GRANTED 88-119601.8 11/24/88 0318008 06/22/94
EM-5704 UNIKN GRANTED 88-119601.8 11/24/88 0318008 06/22/94
EM-5705-A USA ISSUED 791.882 11/13/91 5,242.671 09/07/93
EM-5705-B USA ISSUED 053.527 04/26/93 5.326.547 07/05/94
EM-5705 CANAD PENDING 612.125 09/20/89
EM-5705 JAPAN PUBLISHED 262279/89 10/09/89
EM-5705 KORSO GRANTED 14577/1989 10/11/89 69463 01/05/94
EM-5705 EPO GRANTED 89-1179624 09/28/89 0363742 06/09/93
EM-5705 FRANC GRANTED 89-1179624 09/28/89 0363742 06/09/93
EM-5705 GERWE GRANTED 89-117962.4 09/28/89 P68907001. 06/09/93
EM-5705 ITALY GRANTED 89-117962.4 09/28/89 0363742 06/09/93
EM-5705 UNIKN GRANTED 89-117962.4 09/28/89 0363742 06/09/93
EM-5712 USA ISSUED 092,638 09/03/87 4,871,524 10/03/89
EM-5712 CANAD GRANTED 574,472 08/11/88 1,289,454 09/24/91
EM-5712 JAPAN PUBLISHED 218691/88 09/02/88
EM-5712 KORSO PUBLISHED 11398/1988 09/03/88
EM-5712 TAIWN GRANTED 77105745 08/19/88 NI43359 04/09/91
EM-5712 EPO GRANTED 88-113730.1 08/23/88 0305867 06/26/91
EM-5712 BELGM GRANTED 88-113730.1 08/23/88 0305867 06/26/91
EM-5712 FRANC GRANTED 88-113730.1 08/23/88 0305867 06/26/91
EM-5712 GERWE GRANTED 88-113730.1 08/23/88 P3863411.2 06/26/91
EM-5712 ITALY GRANTED 88-113730.1 08/23/88 0305867 06/26/91
EM-5712 UNIKN GRANTED 88-113730.1 08/23/88 0305867 06/26/91
EM-6074 USA ISSUED 457,310 12/26/89 4,970,891 11/20/90
EM-6512 USA ISSUED 865,972 04/09/92 5,260,538 11/09/93
EM-6535 USA ISSUED 963,814 10/20/92 5,322,670 06/21/94
EM-6541 USA ISSUED 963,661 10/20/92 5,405,658 04/11/95
EM-6541 JAPAN PENDING US93/09545 10/06/93
EM-6541 CANAD PENDING US93/09545 10/06/93
EM-6553 USA ISSUED 957,319 10/06/92 5,358,603 10/25/94
EM-6536-B USA ISSUED 179,410 01/10/94 5,419,462 05/30/95
EM-6536 JAPAN PENDING 246135/93 09/07/93
EM-6541-A USA PENDING 401,371 03/09/95
</TABLE>
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE PAT-2
SODIUM ALUMINUM HYDRIDE PATENT RIGHTS
<S> <C> <C> <C> <C> <C> <C>
CASE COUNTRY STATUS APPN. FILING PATENT ISSUE
NUMBER NUMBER DATE NUMBER DATE
- ----------------------------------------------------------------------------------------------------
EM-5065 USA ISSUED 496.474 05/20/83 4.456.584 06/26/84
EM-5065 CANAD GRANTED 452.120 04/16/84 1.203.673 04/29/86
EM-5065 TAIWN GRANTED 7.311.538 04/18/84 NI-24629 07/25/86
EM-5065 EPO GRANTED 84-105704.5 05/18/84 0129079 11/11/87
EM-5065 FRANC GRANTED 84-105704.5 05/18/84 0129079 11/11/87
EM-5065 GERWE GRANTED 84-105704.5 05/18/84 P3467334.2 11/11/87
EM-5065 ITALY GRANTED 84-105704.5 05/18/84 0129079 11/11/87
EM-5065 HOLLN GRANTED 84-105704.5 05/18/84 0129079 11/11/87
EM-5065 UNIKN GRANTED 84-105704.5 05/18/84 0129079 11/11/87
EM-5129 USA ISSUED 450.032 12/15/82 4.528.176 07/09/85
EM-5129+ CANAD GRANTED 443.198 12/13/83 1.200.365 02/11/86
EM-5129+ TAIWN GRANTED 73-10012 01/05/84 NI-24621 07/25/86
EM-5129+ EPO GRANTED 83-3076425 12/15/83 0112175 03/29/89
EM-5129+ FRANC GRANTED 83-3076425 12/15/83 0112175 03/29/89
EM-5129+ GERWE GRANTED 83-3076425 12/15/83 P3379500.2 03/29/89
EM-5129+ ITALY GRANTED 83-3076425 12/15/83 0112175 03/29/89
EM-5129+ HOLLN GRANTED 83-3076425 12/15/83 0112175 03/29/89
EM-5129+ UNIKN GRANTED 83-3076425 12/15/83 0112175 03/29/89
EM-5159 USA ISSUED 557.206 12/02/83 4.512966 04/23/85
</TABLE>
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
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
Schedule PAT -1
Silane Patent Rights
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
GROUND LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT ("Lease") is made by and between ALBEMARLE
CORPORATION, a Virginia corporation, with offices located at 451 Florida Street,
Baton Rouge, Louisiana 70801 ("Lessor") and MEMC PASADENA, INC., a Delaware
corporation, with offices located at 3000 N. South Street, Pasadena, TX 77503
("Lessee") and is effective as of this 31st day of July, 1995.
W I T N E S S E T H:
WHEREAS:
A. Lessor is the owner in fee simple of a parcel of real estate containing
approximately 477 acres in Pasadena, Texas, as more fully described in Exhibit
A-1 hereto, and as depicted on Exhibit A-2 hereto (the "Pasadena Plant").
B. Lessee desires to lease from Lessor a portion of the Pasadena Plant,
which portion contains approximately 12.3 acres as described in Exhibit B-1, and
as depicted on Exhibit B-2 (collectively, the "Land"). As used herein, the term
"Land" refers to the real property only, and not to any improvements thereon
from time to time during the term hereof.
C. Lessor desires to lease the Land to Lessee pursuant to the terms
contained herein.
D. Lessor and Lessee have entered into that certain Operating Agreement of
even date herewith (the "Operating Agreement") with respect to Albemarle's
operation of the Electronic Materials Facility (as defined in the Operating
Agreement), such Operating Agreement to be for a period of up to five (5) years
after the Closing Date and a Utilities and Services Agreement of even date
herewith (the "Utilities and Services Agreement") with respect to the supply of
Utilities and Services (as defined in the Utilities and Services Agreement)
after termination of the Operating Agreement.
NOW, THEREFORE, in consideration of the premises and the rents and the
mutual covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1
<PAGE>
SECTION 1.
DEMISE, DESCRIPTION, USE OF THE LAND AND TERM
1.1 Demise, Description and Use. Lessor leases to Lessee and Lessee rents
from Lessor, for the purposes described below and for no other purpose, the
surface of the Land. This Lease is a surface lease only, and Lessee is granted
no rights of any kind to any oil and gas or other mineral contained under the
surface of the Land, such rights being expressly reserved to Lessor. The Land
may only be used as follows:
A. The Land may be used for the production of such granular polysilicon,
silane, sodium aluminum hydride, sodium aluminum fluoride and sodium
ethyl silicate products and such other products as may be permitted by
the Operating Agreement (collectively the "Permitted Products") and
Lessee's general activities in association with the production of the
Permitted Products.
B. In the event Lessee desires to use the Land for the manufacture of
silicon derivatives (whether in commercial quantities or not) other
than the Permitted Products ("Other Products"), Lessee shall so advise
Lessor in writing not less than three (3) months prior to the
anticipated commencement of production of the Other Products, and
Lessee and Lessor shall meet an discuss in good faith the proposed
manufacture of the Other Products by Lessee on the Land. Lessor's
prior written consent shall be required prior to the manufacture of
Other Products on the Land, which consent shall not be unreasonably
withheld or delayed.
C. The Land may not be used for any other reason, nor may Lessee produce,
manufacture, store or process at the Land any products, chemicals,
substances or materials of any kind (except as a raw material,
processing material, byproduct or waste of the products permitted to
be produced pursuant to (A) or (B)) except with the prior written
consent of Lessor, which may or may not grant such a request in its
sole discretion.
1.2 Term. The initial term of this Lease ("Initial Term") shall commence
upon the Commencement Date (as hereinafter defined) and shall terminate on the
day which is one day prior to the 35th anniversary of the Commencement Date,
unless sooner terminated as herein provided. The Initial Term shall be extended
automatically for four (4) additional five (5) year periods (an "Extension
Term") unless Lessee shall have given Lessor written notice on non-renewal at
least 12 months prior to the end of the Initial Term or any subsequent Extension
Term (the Initial Term and any Extension Term are referred to as the "Lease
Term"). The last day of the Lease Term is called the Termination Date. If at any
time during the term of this Lease and prior to the Termination Date, Lessee
permanently ceases or suspends for a period in excess of two years the
2
<PAGE>
production in commercial quantities of Permitted Products and Other Products on
the Land, then upon written notice by Lessor to Lessee, this Lease shall be
terminated ("Early Termination Date") and at the Early Termination Date all of
the provisions regarding termination of this Lease shall become immediately
applicable, and all of Lessee's right and interest in and to the Land shall
terminate.
1.3 Commencement Date. The Commencement Date shall be the Closing Date as
defined in that certain Asset Purchase Agreement among Lessee, MEMC Electronic
Materials Company, Inc. and Lessor of even date herewith.
SECTION 2.
RENT, TAXES AND UTILITIES
2.1 Rent. Lessee covenants and agrees to pay Lessor the amount of One and
No/100ths Dollar ($1.00) per year of the Lease Term representing rent ("Rent").
Rent shall be payable on the Commencement Date and on each annual anniversary of
the Commencement Date throughout the Lease Term.
2.2 Taxes. During the Lease Term, Lessee shall pay when due all real estate
taxes, installments of special assessments, sewer rental, rates and charges,
transit taxes, state or local governmental charges, whether general, special,
ordinary or extraordinary, which shall now or hereafter be assessed against the
Land (collectively, "Taxes"). Lessor shall be obligated to pay the portion, if
any, of any bill for Taxes applicable to the period prior to the Commencement
Date and to the period after the expiration or earlier termination of the Lease
Term. In the event that the Land is not currently separately assessed as a
distinct parcel of real property, then Lessor and Lessee shall cooperate in good
faith to take all reasonable steps necessary to cause the Land to be separately
assessed for Taxes. Until the Land has been separately assessed for Taxes,
Lessor and Lessee agree to negotiate in good faith to determine an allocation of
Taxes attributable to the Land based upon the relative fair market value of the
Land as compared to the larger parcel of real property on which the applicable
tax bill pertains. In the event that Lessor and Lessee fail to agree upon such
allocation, then the matter shall be resolved by arbitration in accordance with
the provisions of Article 28.04 of the Operating Agreement. Upon written request
of Lessor, Lessee shall deliver to Lessor proof of payment of all Taxes. In the
event that Lessee fails to pay any such Taxes when due, Lessor may, but shall
not be obligated to, pay such Taxes, in which event, Lessee shall be obligated
to immediately reimburse Lessor for such sums paid by Lessor, plus interest on
such sums from the date paid by Lessor until payment is made by Lessee to Lessor
at a rate equal to five (5%) percent per annum above the Prime Rate, or at the
maximum legal rate, whichever is lower. For purposes of this Lease, the term
"Prime Rate" shall mean the base rate of interest charged on corporate loans at
large U.S. money center commercial banks as reported in The Wall Street Journal,
Midwest Edition, under the heading "Money Rates."
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2.3 Contest of Taxes. In the event that Lessee makes a request of Lessor,
Lessor may, at Lessee's expense, contest by legal proceeding, or in such other
manner as may be reasonably specified by Lessee, the validity or amount of any
Taxes or the assessed value of the Land. In the event that Lessor fails to do so
after a request has been made by Lessee, then Lessee shall have the right to
contest by legal proceeding, or in such other manner as may be reasonably
determined by Lessee, the validity or amount of any Taxes or the assessed value
of the Land. Lessee may conduct said contest in name of Lessor, if necessary.
Prior to any such contest by legal proceeding or other action, Lessee shall
deposit with Lessor an amount equal to the Taxes levied by the taxing authority.
If the contest by legal proceeding or other action is successful, then Lessor
shall immediately return to Lessee the portion of such deposit which is not owed
as Taxes. Lessor shall, within fifteen (15) days after learning of any increase
of change in the assessment or the rate of Taxes, advise Lessee in writing
thereof and Lessee shall, within ten (10) days of the receipt of said notice
from Lessor, advise Lessor in writing in the event Lessee elects to contest said
change. Lessor agrees that it will, at Lessee's expense, provide reasonable
cooperation to Lessee in connection with such contest. Any contest conducted by
Lessee hereunder shall be at Lessee's expense, and, in the event that any
penalties, interest or late charges become payable with respect to the Taxes as
a result of such contest, Lessee shall pay the same or shall reimburse Lessor
therefor.
2.4 Utilities. Lessee shall be responsible for the payment of all
utilities, including, without limitation, water, gas and electricity for the
Land. Notwithstanding the above, in the event of any conflict between the terms
of this paragraph and the terms of the Operating Agreement or the Utilities and
Services Agreement, the terms of said Operating Agreement or Utilities and
Services Agreement shall control.
2.5 Triple Net Lease. Except as otherwise specifically provided herein,
this Lease is intended by the parties to be interpreted for all purposes as a
triple net lease.
SECTION 3.
TITLE, QUIET ENJOYMENT AND POSSESSION
3.1 Title and Quiet Enjoyment. Lessor represents and warrants to Lessee
that Lessor has good and marketable legal title to the Land, subject to those
liens, mortgage, charges, pledges, easements, encumbrances and imperfections of
title of record. Lessor has full power and authority to enter into and perform
this Lease, and Lessee shall have quiet and peaceable possession of the demised
premises during the Lease Term. This Lease is subject to existing easements and
rights of way, if any, including pipeline(s), utilities (including firewater and
other connections of Lessor), and any government restrictions.
3.2 Possession. Lessor covenants that it will deliver to Lessee possession
of the Land at the Commencement Date. No rents or other charges shall accrue or
be payable by Lessee during any period prior to such tender.
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SECTION 4.
CONDITION AND IMPROVEMENT OF PREMISES
4.1 Condition. Other than the warranties of title, quiet enjoyment and
possession as provided above, or as otherwise set forth in the Asset Purchase
Agreement, the Operating Agreement or the Utilities and Services Agreement,
Lessor provides the Land to Lessee "as-is" and "where-is", without any warranty
of any kind, including any warranty of merchantability or fitness for any
particular purpose.
4.2 Compliance. During the term of this Lease, each of Lessor and Lessee
shall comply with all applicable statutes, ordinances, rules, orders,
regulations and requirements (including but not limited to matters relating to
the environment) of the Federal, State and municipal governments and of any of
their departments or bureaus (hereinafter "Laws") affecting the Land. Lessee
shall at all times operate and maintain the Land so as not to cause a nuisance
or be a hazard to safety or the environment. Lessee agrees to defend, indemnify
and hold Lessor, its successor and assigns and their officers, directors,
employees and representatives from and against any non-compliance by Lessee with
Laws and Lessee's obligations under this Section.
4.3 Improvements. Lessee shall have the right at any time during the Lease
Term, at its sole cost and expense, to demolish, rebuild, repair or construct
any Improvement(s) (as hereinafter defined) on the Land as well as any
preliminary work required to effect such Improvements, provided that same is in
compliance with all Laws and the terms of this Lease. During the Lease Term, all
Improvements shall be deemed the property of Lessee. Upon the termination of the
Lease Term, Lessee shall, unless Lessor directs otherwise, remove from the Land
all above ground structures, improvements and foundations, whether or not
installed, erected or placed on the Land by Lessee. If Lessee fails to remove
all such structures, improvements and foundations or other property which
currently exist or which it may have installed, erected or placed upon the Land,
Lessor may remove same at Lessee's cost and expense or retain such without
compensation to Lessee. For purposes of this Lease, an "Improvement" is any
valuable addition or amelioration to the Land intended to enhance its value,
beauty, utility or to adapt it for a specific purpose, including, but not
limited to, structures, streets, sidewalks, sewers, utilities and landscaping,
both above ground and below.
4.4 Easements.
4.4.1 Reciprocal Easement. Lessor and Lessee hereby covenant and agree that
they will enter into a legally valid, binding and recorded reciprocal easement
agreement (substantially in the form attached hereto as Exhibit C) whereby the
parties will grant to each other easements for pedestrians and vehicular access
over the Pasadena Plant and the Land respectively for the parties' respective
licensees' and the parties' invitees' mutual use and benefit. Said easement
shall be entered into as of the Commencement Date.
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4.4.2 Lessee Utility Easement. Lessee covenants and agrees that, at the
request of Lessor, Lessee shall promptly execute and deliver a legally valid,
binding and recordable easement agreement (which shall be for the full term of
the Lease (or such longer period as Lessee shall have an interest in the Land))
(substantially in the form attached hereto as Exhibit D) whereby Lessee provides
one or more easements to Lessor over, across, upon, in or under, as the case may
be, a certain portion or portions of the Land to be agreed upon in good faith
between the parties to enable Lessor to obtain, install, operate, maintain,
repair and replace utilities, including, without limitation, electricity, gas,
telephone, sewage and water from the applicable providers to service the
Pasadena Plant, and to repair fences, it being the intent that the location of
such easements shall be in the most convenient place for the provision of such
utilities to the extent reasonably practicable, while providing the least
inconvenience to Lessee. Lessee shall also provide Lessor, its agents and
contractors, access across other parts of the Land for the purpose of ingress
and egress to said easement locations.
4.4.3 Lessor Utility Easement. Lessor covenants and agrees that, at the
request of Lessee, Lessor shall promptly execute and deliver a legally valid,
binding and recordable easement agreement (which shall be for the full term of
the Lease (or such longer period as Lessee shall have an interest in the Land))
(substantially in the form attached hereto as Exhibit D) whereby Lessor provides
one or more easements to Lessee over, across, upon, in or under, as the case may
be, a certain portion or portions of the Pasadena Plant to be agreed upon in
good faith between the parties to enable Lessee to obtain, install, operate,
maintain, repair and replace utilities, including, without limitation,
electricity, gas, telephone, sewage and water from the applicable providers to
service the Land, and to repair fences, it being the intent that the location of
such easements shall be in the most convenient place for the provision of such
utilities to the extent reasonably practicable, while providing the least
inconvenience to Lessor. Lessor shall also provide Lessee, its agents and
contractors, access across other parts of the Pasadena Plant for the purpose of
ingress and egress to said easement locations.
4.4.4 Compliance with Rules and Regulations. While on the property of the
other party, Lessor and Lessee agree to cause all persons utilizing any
easements (including, without limitation, Lessor's and Lessee's employees,
customers, invitees and contractors) to obey fully all rules and regulations of
the other party, including but not limited to rules and regulations relating to
safety, security and vehicle operation.
4.5 Fencing. Lessee, at its expense, will at Lessor's request erect a fence
along the perimeter of the Land, and as described in and depicted on Exhibit
B-2. Lessor shall permit Lessee and its agents and contractors access over the
Pasadena Plant to the extent reasonably necessary or convenient in connection
with the ongoing maintenance, repair and replacement of said fence. Except as
otherwise agreed to by the parties in writing, Lessee shall at all times be
responsible for furnishing its own security for its personnel and property and
Lessor shall not provide any security services to Lessee.
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SECTION 5.
NO ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
5.1 Lessee may not encumber by mortgage, deed of trust or otherwise,
Lessee's leasehold interest and estate in the Land.
SECTION 6.
ASSIGNMENT AND SUBLETTING
6.1 Assignment. Lessee shall have the right to assign this Lease together
with all of the rights of the Lessee hereunder only to a successor in interest
to substantially all of Lessee's polysilicon manufacturing business carried out
on the Land. Otherwise, Lessee may not assign this Lease without the prior
written consent of Lessor, and any attempted assignment will be null and void.
Lessee shall give Lessor notice of any intended assignment of this Lease not
less than thirty (30) days prior to the proposed effective date of such
assignment. In the event that any proposed assignee of Lessee is a competitor of
products manufactured by Lessor, Ethyl Corporation or the successors to either
of their products produced at the Pasadena Plant, or becomes an affiliate or
merged with a competitor of products manufactured by Lessor, Ethyl Corporation
or the successors to either of their products produced at the Pasadena Plant,
then, as a condition of such assignment or subleasing, Lessor shall have the
right to require such assignee or sublessee and its representatives to agree to
reasonable obligations of confidentiality and non-use with respect to any
proprietary information of Lessor, Ethyl Corporation, or the successors to
either of their products produced at the Pasadena Plant, as the case may be, of
which it or they may become aware of at the Pasadena Plant.
6.2 Sublet. Lessee shall not sublet the Land, this Lease, or any portion
thereof, at any time, without the prior written consent of Lessor.
6.3 Lessor Restriction. Lessor is hereby prohibited from assigning this
Lease or agreeing to assign this Lease to or with any other party (other than to
any successor in interest to Lessor's equitable interest in the Land, and
pursuant to which assignment shall be mandatory upon Lessor, and which Lessor
shall obtain an assumption, in writing, from such successor of the terms and
provisions of this Lease) and any attempt to do so shall be deemed null and
void. In the event that any proposed assignee of Lessor is a competitor of
products manufactured by Lessee or its successor on the Land, or becomes an
affiliate of or merged with a competitor of products manufactured by Lessee or
its successor on the Land, then, as a condition of such assignment or
subleasing, Lessee shall have the right to require such assignee or sublessee
and its representatives to agree to reasonable obligations of confidentiality
and non-use with respect to any proprietary information of Lessee or its
successor for products produced on the Land, or of which it or they may become
aware of at the Land.
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SECTION 7.
DAMAGE AND DESTRUCTION, INDEMNIFICATION, INSURANCE
7.1 Damage or Destruction of Improvements. If at any time during the Lease
Term Improvements which are erected upon the Land are damaged or destroyed,
Lessee shall not be obligated to repair or replace any damaged or destroyed
Improvements.
7.2 Cooperation. Lessor and Lessee agree to cooperate with each other in
good faith to develop methods to minimize exposure for claims from employees,
subcontractors and invitees.
7.3 Liability Insurance. Lessor and Lessee shall each (at their own cost)
obtain comprehensive general liability coverage of not less than $5,000,000, as
part of its insurance coverage for the Pasadena Plant and the Land,
respectively, and shall name the other party as an additional insured. The
parties shall provide each other with certification of such insurance upon
written request. This minimum coverage shall be adjusted for inflation during
the Lease Term.
7.4 Waiver of Subrogation. Whenever any loss, cost, damage or expense
resulting from public liability or any other casualty is incurred by either of
the parties to this Lease in connection with the Pasadena Plant or the Land and
such party is then covered in whole or in part by insurance with respect to such
loss, cost, damage or expense, said covered party hereby releases the other
party of any and all liability to the extent of any amount recovered by reason
of such insurance and waives any right of subrogation, which might otherwise
exist in or accrue to any person on account thereof, provided that such release
of liability and waiver of right of subrogation shall not be operative in any
case where the effect thereof is to invalidate such insurance coverage.
SECTION 8.
REPAIRS AND MAINTENANCE
8.1 Maintenance and Repair. Except as provided in Section 7.1 to the
contrary, during the term of this Lease, the Land and all buildings and
Improvements thereon shall be kept by Lessee in a safe, clean and serviceable,
and environmentally sound condition and in a good state of repair (all
maintenance is to be at Lessee's sole cost and expense). Except as provided in
Section 7.1 to the contrary, Lessee will keep the Land, the buildings and the
Improvements (including sidewalks, roads and driveways) in general conformance
with the condition of the Pasadena Plant. Except to the extent otherwise
provided herein or in any other agreement between Lessor and Lessee, Lessor
shall not be required to maintain, repair or rebuild, or to make any
alterations, replacements or renewals of any nature or description to the
Improvements, whether ordinary or extraordinary, structural or non-structural,
foreseen or unforeseen.
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8.2 No Mechanic's Liens. Lessee shall not permit any mechanic's or
materialmen's liens (herein collectively called "mechanic's liens") to be filed
against the Land by reason of services or material supplied or claimed to have
been supplied. If any such mechanic's liens shall at any time be filed, Lessee
shall cause the same to be discharged of record within thirty (30) days after
the recording thereof or diligently contest same and if judgment is rendered,
pay such judgment. If Lessee shall fail to discharge such mechanic's liens upon
such judgment, then, in addition to any other right or remedy, Lessor party may,
but shall not be obligated to, discharge the lien, after reasonable
investigation as to its validity. All amounts expended by Lessor to contest or
discharge such lien, or both, shall be subject to immediate reimbursement by
Lessee on demand, and shall be subject to interest until paid at the rate of
five percent (5%) plus the Prime Rate, or the maximum legal rate, whichever is
less.
SECTION 9.
CONDEMNATION
9.1 Taking of Whole. If the whole of the Land shall be taken, condemned or
acquired by deed in lieu thereof by any competent authority or if such a portion
of the Land shall be so taken or acquired that as a result thereof the balance
cannot, in Lessee's opinion, be used for Lessee's intended use, then in either
of such events, the Lease Term shall terminate upon, at Lessee's election,
either (i) commencement of the condemnation action or notice thereof, or (ii)
delivery of possession to the condemning authority. In either case, all rental
and other sums payable shall hereunder be prorated to such date.
9.2 Partial Taking. If only a part of the Land shall be so taken, condemned
or acquired, and as a result thereof the balance of the Land can, in Lessee's
opinion, be used for Lessee's intended use, then this Lease shall not terminate,
and rental to be paid from the date of such taking until the end of the Lease
Term shall be reduced in proportion to the square footage taken, condemned or
acquired.
9.3 Apportionment. In the event of the occurrence of either a taking of the
whole pursuant to Section 9.1 or a partial taking pursuant to Section 9.2, then
any award from the condemning authority for the taking of the Land shall be paid
to Lessor and any awarded from the condemning authority for the taking of the
Improvements shall be paid to Lessee.
SECTION 10.
REMEDIES FOR DEFAULT
10.1 Lessor's Remedies. If the Rent or any other payments due hereunder,
including Taxes, is not paid when same becomes due and payable and such monetary
default shall continue for thirty (30) days or more (after written notice of
such default by Lessor), or if default shall be made in the observance or
performance of any of the other mutual covenants or conditions in this Lease
which Lessee is required to observe and perform and such nonmonetary default
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shall continue for sixty (60) days or more after written notice to Lessee (under
such default cannot be cured within said 60 days and Lessee diligently pursues
said cure), Lessor may treat the occurrence of any one or more of the foregoing
events as a breach of this Lease, and thereupon at its option may, with any
additional notice required by law, Lessor may terminate this Lease and the term
created hereby, in which event Lessee shall surrender the Land and shall, unless
Lessor directs otherwise, remove all of Lessee's equipment, inventories,
supplies and other personal property within a reasonable time period.
10.2 Lessor's and Lessee's Remedies. Lessor and Lessee shall have any and
all remedies afforded by law and equity against the other, including specific
performance and offset, in the event that Lessor or Lessee, as the case may be,
defaults under any of the covenants, conditions or agreements contained in this
Lease.
10.3 Expenses of Enforcement. Anything herein to the contrary
notwithstanding, with regard to any controversy between Lessor and Lessee
respecting this Lease or acts or omissions done or suffered to be done pursuant
hereto, or any claims or action arising thereunder, the prevailing party shall
be entitled to recover, in addition to all damages and costs which would
otherwise be recoverable, all reasonable expenses, including fees of counsel,
incurred by such prevailing party in connection with such controversy, claim or
action, irrespective of whether such claim is liquidated, or whether such
controversy, claim or action is prosecuted to a final judgment.
10.4 Right of Parties to Perform. If Lessee, as the case may be, shall
default in the performance of any covenant on its part to be performed herein or
shall breach any representation or warranty given herein and shall fail to
remedy such default or breach with reasonable dispatch after the Lessor shall
have notified Lessee in writing of such default or breach, Lessor, without being
obligated to do so and without thereby waiving such default or breach, may taken
such action as is reasonable and appropriate to cure such default or breach.
Lessor's reasonable expenditures and costs in connection therewith shall be at
Lessee's expense and shall be payable as additional rent within thirty (30) days
after demand therefor is made by Lessor.
10.5 Remedies Cumulative. All remedies herein conferred upon parties shall
be cumulative and no one remedy shall be exclusive of any other remedy conferred
herein or by law.
SECTION 11.
MISCELLANEOUS
11.1 Entire Agreement. This Lease and the Exhibits attached hereto and
forming a part hereof set forth all the covenants, promises, agreements,
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conditions and understandings between Lessor and Lessee concerning the Land, and
there are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than as herein set forth, except as
herein otherwise provided. No subsequent alteration, amendment, change or
addition to the Lease shall be binding upon Lessor or Lessee unless reduced to
writing and signed by them.
11.2 Binding Effect. The terms, agreements, covenants and conditions
contained in this Lease are binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
11.4 Notices. Any notice, demand, request or other instrument which may be
or is required to be given under this Lease shall be in writing and be delivered
in person, sent by private (including U.S. Postage Service) overnight courier,
postage prepaid and shall be addressed as follows:
If to Lessor:
Albemarle Corporation
451 Florida Street
Baton Rouge, Louisiana 70801
Attention: Vice President, Manufacturing
with a copy to:
Albemarle Corporation
451 Florida Street
Baton Rouge, Louisiana 70801
Attention: Law Department
If to Lessee:
MEMC Pasadena, Inc.
c/o MEMC Electronic Materials, Inc.
501 Pearl Drive, P.O. Box 8
St. Peters, MO 63376
Attention: President-MEMC Pasadena, Inc.
copy to:
MEMC Pasadena Site Manager
3000 N. South Street
Pasadena, TX
Attention: MEMC Site Coordinator
or at such other address as Lessee or Lessor shall designate by written notice
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to the other. Any such notice, demand, request or other instrument shall be
deemed to have been given in the case of personal delivery or overnight courier
on the date of actual receipt of delivery or refusal of delivery and in the case
of United States certified mail three (3) days after deposit with the United
States Postal Service.
11.4 Captions and Section Numbers. The captions, section numbers, article
numbers, and table of contents appearing in or attached to this Lease are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or intent of such sections or articles of this Lease nor
in any way affect this Lease.
11.5 Partial Invalidity. If any term, covenant or condition of this Lease
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Lease, or the application of
such term, covenant or condition to persons or circumstances, other than those
as to which it is held invalid or unenforceable, shall not be affected thereby
and each term, covenant or condition of this Lease shall be valid and enforced
to the fullest extent permitted by law.
11.6 Insolvency. If Lessee or Guarantor (as defined in Section 12 below)
makes an assignment for the benefit of its creditor(s), or attachment or
garnishment proceedings are commenced, or a receiver is appointed over any
property of Lessee or Guarantor, or proceedings are instituted by or against
Lessee or Guarantor hereto under the Bankruptcy Code, then Lessor may terminate
this Agreement effective upon the date of such assignment, commencement,
appointment of institution or proceedings.
11.7 Construction of Lease. The language in all parts of Lease shall in all
cases be construed as a whole according to its fair meaning.
11.8 Governing Law. This Lease shall be construed and governed by the
internal laws and decisions of the State of Texas.
11.9 Memorandum. Lessee has the right to record a memorandum of this Lease
with a legal description of the Land with the county recorder or other
applicable governmental authority with reference to the Lease and any other
terms Lessee so determines.
11.10 Option to Terminate. Lessee shall have the right to terminate this
Lease upon (i) delivering written notice to Lessor of its intent to do so, and
(ii) paying to Lessor a termination fee equal to the amount of Rent due for the
remainder of the Lease Term and any payments then due or accrued, including
Taxes, up to the date of termination. Lessee shall be relieved from any further
liability for rent from the effective date of termination, provided that this
will not release Lessee from liability for occurrences prior to the effective
date of termination, Lessee's obligations with respect to return of the Land to
Lessor in the condition specified by this Lease or Lessee's violation of any
laws or governmental regulations (including without limitation, environmental
laws and regulations) during the Lease.
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SECTION 12.
GUARANTY
12.1 Guaranty. MEMC Electronic Materials, Inc., parent company of Lessor,
absolutely, unconditionally and irrevocably the obligations of Lessor pursuant
to this Lease, and as such, is a contracting party to this Lease.
LESSOR: LESSEE:
ALBEMARLE CORPORATION MEMC PASADENA, INC.
By: /s/ Thomas A. Aron By: /s/ John De Luca
------------------------------- ------------------------------
Its: Senior Vice President Its: President
Subscribed before me this 31st day Subscribed before me this 31st day
of July 1995 of July 1995
/s/ Laura Pearson /s/ Laura Pearson
- ---------------------------------- ----------------------------------
Notary Public Notary Public
My commission expires: 6/20/96 My commission expires: 6/20/96
----------- ------------
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ John De Luca
-------------------------------
Its:
Subscribed before me this 31st day
of July 1995
/s/ Laura Pearson
----------------------------------
Notary Public
My commission expires: 6/20/96
------------
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EXHIBIT A-1
METES AND BOUND DESCRIPTION
477.4217 ACRES OF LAND
LOCATED IN THE
THOMAS EARLE SURVEY, A-18 AND THE
JAMES SEYMOUR SURVEY, A-698
HARRIS COUNTY, TEXAS
BEING 477.4217 acres of land located in the Thomas Earle Survey, Abstract
No. 18 and the James Seymour Survey, Abstract No. 698, Harris County, Texas,
same being a portion of that certain 682.3105 acre tract (called to contain
683.1599 acres) comprised of five tracts conveyed to Ethyl Corporation by the
following instruments:
1) 397 acres by instrument recorded in Volume 2176, Page 283 of the Deed
Records of Harris County, Texas;
2) Residue of 7.283 acres (Ethyl Road, an 80 foot wide private road) by
instrument recorded in Volume 2176, Page 287 of said Deed Records;
3) 25.317 acres comprised of Parcel 1 containing 24.235 acres and Parcel
2 containing 1.082 acres by instrument recorded under County Clerk's
File (C.C.F.) No. G466418 of the Official Public Records of Real
Property, Harris County, Texas (O.P.R.R.P.H.C.T.);
4) 181.536 acres by instrument recorded under C.C.F. No. K602614 of the
O.P.R.R.P.H.C.T.;
5) 72.039 acres by instrument recorded under C.C.F. No. M789119 of the
O.P.R.R.P.H.C.T.;
said 477.4217 acre tract being comprised of two separate tracts more
particularly described by metes and bounds as follows:
TRACT A
COMMENCING at said City of Houston Monument No. 5856-1603;
THENCE N 02(degree) 32' 14" W, a distance of 1505.42 feet to a 1/2-inch iron rod
found marking the northeast corner of said 72.0239 acre tract in the southerly
right-of-way line of the Port Terminal Railroad (based on a width of 100 feet),
same being the northwest corner of said 7.283 acre tract, same also being the
northeast corner and PLACE OF BEGINNING of the herein described tract (Monument
No. 72, X=3,216,867.54 feet and Y=707,138.33 feet);
THENCE S 01(degree) 46' 48" E, along the common line between said 72.0239 acre
tract and said 7.283 acre tract, a distance of 774.92 feet to a 5/8-inch rod
with aluminum disk set for the southeast corner of the herein described tract
(Monument No. 81, X=3,216,891.62 feet and Y=706,363.78 feet);
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THENCE N 65(degree) 03' 13" W, a distance of 1,239.09 feet to a 5/8-inch iron
rod with aluminum disk set for the southwest corner of the herein described
tract (Monument No. 80, X=3,215,768.13 feet and Y=706,886.40 feet);
THENCE N 19(degree) 01' 41" W, a distance of 961.76 feet to a 5/8-inch iron rod
with aluminum disk set in the southerly right-of-way line of said Port Terminal
Railroad, same being the northwest corner of the herein described tract
(Monument No. 79, X=3,215,454.57 feet and Y=707,795.60 feet);
THENCE S 65(degree) 03' 13" E, along the southerly right-of-way line of said
Port Terminal Railroad, a distance of 1558.37 feet to the PLACE OF BEGINNING and
containing 22.2245 acres of land.
TRACT B
COMMENCING at said City of Houston Monument No. 5856-1603;
THENCE N 48(degree) 11' 05" E, a distance of 1562.77 feet to a concrete
monument (broken) found marking the southeast corner of said 181.536 acre tract
in the curved northerly right-of-way line of said Port Terminal Railroad, same
being the southwest corner of the residue of 525.997 acres of land conveyed to
Georgia-Pacific Chemicals, Inc. by instrument recorded under C.C.F. No. J838887
of the O.P.R.R.P.H.C.T., same also being the most southerly southeast corner and
PLACE OF BEGINNING of the herein described tract (Monument No. 31,
X=3,218,098.92 feet and Y=706,676.33 feet);
THENCE in a northwesterly direction along said curved northerly right-of-way
line concave to the north, having a radius of 5671.65 feet, a central angle of
00(degree) 43' 55", an Arc Length of 72.45 feet and a Long Chord which bears N
65(degree) 25' 10" W, 72.45 feet to a 5/8-inch iron rod found marking the end of
said curve (Monument No. 32, X=3,218,033.04 feet and Y=706,706.46 feet);
THENCE N 65(degree) 03' 13" W, along the northerly right-of-way of said Port
Terminal Railroad, a distance of 1,222.19 feet to a concrete monument with
aluminum disk set for a southwest corner of the herein described tract (Monument
No. 33, X=3,216,924.87 feet and Y=707,221.95 feet), same being the beginning of
a non-tangent curve to the left;
THENCE running concentric with and 9 feet easterly and northeasterly of the
easterly and northeasterly edge of a plant road named Ethyl Street, in a
northwesterly direction along said curve to the left having a Radius of 460.00
feet, a Central Angle of 66(degree) 24' 10", an Arc Length of 533.12 feet and a
Long Chord which bears N 31(degree) 22' 02" W, 503.78 feet to a 5/8-inch iron
rod with aluminum disk set for the end of said curve (Monument No. 34,
X=3,216,662.65 feet and Y=707,652.10 feet);
THENCE N 64(degree) 34' 07" W, parallel with and 9 feet northerly of the
northerly edge of said plant road, a distance of 348.62 feet to a 5/8-inch iron
rod with aluminum disk set for the beginning of a curve to the right (Monument
No. 35, X=3,216,347.81 feet and Y=707,801.81 feet);
2
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THENCE running concentric with and 9 feet northeasterly of the northeasterly
edge of said plant road, in a northwesterly direction along said curve having a
Radius of 550.00 feet, a Central Angle of 37(degree) 09' 30", an Arc Length of
356.69 feet and a Long Chord which bears N 45(degree) 59' 22" W, 350.48 feet to
a 5/8-inch iron rod with aluminum disk set for the end of said curve (Monument
No. 36, X=3,216,095.74 feet and Y=708,045.31 feet);
THENCE N 27(degree) 24' 37" W, parallel with and 9 feet easterly of the easterly
edge of said plant road, a distance of 160.04 feet to an aluminum disk set on a
concrete slab for the beginning of a curve to the right (Monument No. 37,
X=3,216,022.07 feet and Y=708,187.38 feet);
THENCE running concentric with and 9 feet easterly of the easterly edge of said
plant road, in a northwesterly direction along said curve having a Radius of
650.00 feet, a Central Angle of 24(degree) 44' 17", an Arc Length of 280.64 feet
and a Long Chord which bears N 15(degree) 02' 29" W, 278.47 feet to a 5/8-inch
iron rod with aluminum disk set for the end of said curve (Monument No. 38,
X=3,215,949.80 feet and Y=708,456.31 feet);
THENCE N 02(degree) 40' 20" W, parallel with and 9 feet westerly of the
centerline of a railroad spur, a distance of 1694.37 to a 5/8-inch iron rod with
aluminum disk set for an angle point (Monument No. 39, X=3,215,870.80 feet and
Y=710,148.84 feet);
THENCE N 01(degree) 55' 46" W, parallel with and 9 feet easterly of the east
edge of said plant road, a distance of 467.28 feet to a concrete monument with
aluminum disk set for an angle point (Monument No. 40, X=3,215,855.07 feet and
Y=710,615.85 feet);
THENCE N 06(degree) 22' 22" E, a distance of 225.29 feet to a 5/8-inch iron rod
with aluminum disk set for an angle point (Monument No. 41, X=3,215,880.08 feet
and Y=710,839.75 feet);
THENCE N 02(degree) 40' 20" W, a distance of 746.68 feet to a 5/8-inch iron rod
with aluminum disk set for a corner (Monument No. 42, X=3,215,845.26 feet and
Y=711,585.61 feet);
THENCE S 87(degree) 19' 40" W, along the south edge of a plant road named Eighth
Street, a distance of 281.05 feet to a 5/8-inch iron rod with aluminum disk set
for a corner (Monument No. 43, X=3,215,564.52 feet and Y=711,572.51 feet);
THENCE S 02(degree) 40' 20" E, a distance of 72.23 feet to a 5/8-inch rod with
aluminum disk set for a corner (Monument No. 44, X=3,215,567.89 feet and
Y=711,500.35);
THENCE S 87(degree) 19' 40" W, a distance of 82.62 feet to an aluminum disk set
in the centerline expansion joint of a plant road named Center Street (Monument
No. 45, X=3,215,485.36 feet and Y=711,496.50 feet);
3
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THENCE S 02(degree) 42' 38" E, along said centerline expansion joint, a distance
of 220.13 feet to an aluminum disk set for corner (Monument No. 46,
X=3,215,495.77 feet and Y=711,276.62 feet);
THENCE S 87(degree) 19' 40" W, a distance of 190.95 feet to a 5/8-inch iron rod
with aluminum disk set for a corner (Monument No. 47, X=3,215,305.02 feet and
Y=711,267.72 feet);
THENCE N 02(degree) 40' 20" W, a distance of 118.97 feet to a 5/8-inch iron rod
with aluminum disk set for a corner (Monument No. 48, X=3,215,299.48 feet and
Y=711,386.55 feet);
THENCE S 87(degree) 19' 40" W, a distance of 541.15 feet to concrete monument
with aluminum disk set for a corner (Monument No. 49, X=3,214,758.91 feet and
Y=711,361.32 feet);
THENCE S 00(degree) 08' 23" W, parallel with and 10 feet east of the east edge
of a plant road named South Avenue, a distance of 100.00 feet to a concrete
monument with aluminum disk set for a corner (Monument No. 50, X=3,214,758.67
feet and Y=711,261.32 feet);
THENCE S 02(degree) 40' 20" E, parallel with and 10 feet east of the east edge
of said plant road, a distance of 3111.20 feet to a concrete monument with
aluminum disk set in the curved northerly right-of-way line of the Port Terminal
Railroad, same being a southerly line of said 397 acre tract, same also being a
southeast corner of the herein described tract (Monument No. 51, X=3,214,903.72
feet and Y=708,153.51 feet);
THENCE in a northwesterly direction along said curved northerly right-of-way
line concave to the south, having a Radius of 2922.90 feet, a Central Angle of
07(degree) 28' 04", an Arc Length of 380.96 feet and a Long Chord which bears N
72(degree) 58' 43" W, 380.69 feet to a concrete monument with aluminum disk set
for a southwest corner of the herein described tract (Monument No. 52,
X=3,214,539.71 feet and Y=708,264.95 feet), same being a southwest corner of
said 397 acre tract, same also being a southeast corner of the residue of
338.561 acres of land (Tract A) conveyed to Phillips Chemical Company by
instrument recorded under C.C.F. No. H204648 of the O.P.R.R.P.H.C.T., said
338.561 acres of land being described by instrument recorded in Volume 5410,
Page 69 of said Deed Records;
THENCE N 27(degree) 34' 49" W, along a common line between said 397 acre tract
and said Phillips tract, a distance of 565.25 feet to a concrete monument with
aluminum disk set for a southwest corner of the herein described tract (Monument
No. 53, X=3,214,278.01 feet and Y=708,765.96 feet0;
THENCE N 02(degree) 38' 19" W, along a common line between said 397 acre tract
and said Phillips tract, a distance of 3026.42 feet to a concrete monument found
marking a northwest corner of said 397 acre tract, same being a northwest corner
of the herein described tract, same also being an interior corner of said
Phillips tract, (Monument No. 54, X=3,214,138.67 feet and Y=711,789.17 feet);
4
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THENCE N 87(degree) 23' 41" E, along a common line between said 397 acre tract
and the residue of said 338.561 acre tract, a distance of 606.70 feet to a
concrete monument with aluminum disk set for an interior corner of the herein
described tract (Monument No. 55, X=3,214,744.75 feet and Y=711,816.75 feet),
same being an interior corner of said 397 acre trace, same also being a
southeast corner of said Phillips tract;
THENCE N 02(degree) 37' 19" W, along a common line between said 397 acre tract
and said Phillips tract, a distance of 1072.80 feet to a concrete monument with
aluminum disk set for corner (Monument No. 56, X=3,214,695.67 feet and
Y=712,888.43 feet), same being the south corner of said 25.317 acre tract in a
west line of said 397 acre tract, same also being in the east line of said
Phillips tract;
THENCE N 16(degree) 42' 00" W, a distance of 162.00 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 57, X=3,214,649.12 feet and
Y=713,043.60 feet), same being at an angle point in the common line between said
25.317 acre tract and said Phillips tract;
THENCE N 42(degree) 11' 19" W, a distance of 166.40 feet to a concrete monument
with a 2" aluminum disk found marked PC CO INT COR TR-2 (Monument No. 58,
X=3,214,537.37 feet and Y=713,166.89 feet), same being at an angle point in the
common line between said 25.317 acre tract and said Phillips tract;
THENCE N 56(degree) 20' 13" W, a distance of 228.00 feet to a concrete monument
with aluminum disk set for corner (Monument No. 59, X=3,214,347.60 feet and
Y=713,293.27 feet), same being at an angle point in common line between said
25.317 acrea tract of and said Phillips tract;
THENCE S 87(degree) 22' 41" W, a distance of 145.01 feet to a concrete monument
with a 2-inch aluminum disk found marked PC SW COR TR-2 marking a southwest
corner of said 25.317 acre tract, same being an interior corner of said Phillips
tract (Monument No. 60, X=3,214,202.74 and Y=713,286.64 feet);
THENCE N 12(degree) 54' 19" W, running thru a dredged boat slip along a common
line between said 25.317 acre tract and said Phillips tract, a distance of
2099.13 feet to the northwest corner of said 25.317 acre tract located within
the Houston Ship Channel, same being the northeast corner of said Phillips
tract;
THENCE S 81(degree) 51' 19" E, a distance of 343.20 feet;
THENCE N 57(degree)04' 14" E, a distance of 203.77 feet to the northeast corner
of said 25.317 acre tract located within the Houston Ship Channel;
THENCE S 12(degree) 54' 19" E, along the east line of said 25.317 acre tract, a
distance of 171.55 feet to its intersection with the southerly waters edge of
the Houston Ship Channel, same being the most northerly northwest corner of said
397 acre tract;
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THENCE N 87(degree) 21' 54" E, along the southerly waters edge of the Houston
Ship Channel a distance of 29.44 feet to a northeast corner of the herein
described tract;
THENCE S 13(degree) 07' 30" E, at 8.77 feet pass a concrete monument with
aluminum disk set for reference (Monument No. 22, X=3,214,314.41 feet and
Y=715,220.48 feet), at 85.72 feet pass a 5/8-inch iron rod with aluminum disk
set on top of a levee for reference (Monument No. 21, X=3,214,331.88 feet and
Y=715,145.55 feet), continuing the same course running parallel with and
approximately 8 feet westerly of the westerly edge of a plant road named South
Street, a total distance of 760.97 to a concrete monument with aluminum disk set
for corner (Monument No. 20, X=3,214,485.22 feet and Y=714,487.93 feet);
THENCE N 87(degree) 19' 40" E, parallel with and approximately 9 feet south of
the south edge of a plant road named Second Street, a distance of 1220.65 feet
to a 5/8-inch iron rod with aluminum disk set for corner (Monument No. 19,
X=3,215,704.54 feet and Y=714,544.84 feet);
THENCE S 02(degree) 40' 20" E, a distance of 344.71 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 18, X=3,215,720.61 feet and
Y=714,200.51 feet);
THENCE S 87(degree) 19' 40" W, a distance of 349.13 feet to an aluminum disk set
for corner (Monument No. 17, X=3,215,371.86 feet and Y=714,184.23 feet);
THENCE S 02(degree) 40' 20" E, parallel with and one foot east of the east edge
of Center Street, a distance of 555.75 feet to an aluminum disk set for corner
(Monument No. 16, X=3,215,397.77 feet and Y=713,629.09 feet);
THENCE N 87(degree) 19' 40" E, parallel with and one foot north of the north
edge of a plant road named Third Street, a distance of 399.13 feet to a 5/8-inch
iron rod with aluminum disk set for corner (Monument No. 15, X=3,215,796.47 feet
and Y=713,647.69 feet);
THENCE S 02(degree) 38' 28" E, a distance of 233.50 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 14, X=3,215,807.23 feet and
Y=713,414.44 feet);
THENCE N 87(degree) 21' 32" E, a distance of 58.56 feet to a point for corner;
THENCE S 02(degree) 38' 28" E, at 210.78 feet pass a 5/8-inch iron rod with
aluminum disk set for reference (Monument No. 13, X=3,215,875.43 feet and
Y=713,206.59 feet), continuing the same course a total distance of 212.78 feet
to a point for corner;
THENCE N 87(degree) 21' 32" E, a distance of 56.07 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 12, X=3,215,931.53 feet and
Y=713,207.17 feet);
THENCE N 02(degree) 38' 28" W, a distance of 43.23 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 11, X=3,215,929.54 feet and
Y=713,250.36 feet);
6
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THENCE S 87(degree) 21' 32" W, a distance of 26.00 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 10, X=3,215,903.57 and
Y=713,249.16 feet);
THENCE N 00(degree) 04' 01" E, a distance of 537.69 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 9, X=3,215,904.20 and
Y=713,786.85 feet);
THENCE N 83(degree) 24' 45" E, a distance of 214.81 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 8, X=3,216,117.59 and
Y=713,811.49 feet);
THENCE N 52(degree) 48' 48" E, a distance of 168.99 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 7, X=3,216,252.22 and
Y=713,913.63 feet);
THENCE N 01(degree)30' 38" W, a distance of 179.83 feet to an "X" cut in the
east handrail of a metal walkway for corner;
THENCE N 88(degree) 07' 20" W, at 184.39 feet pass a 5/8-inch iron rod with
aluminum disk set for reference (Monument No. 6, X=3,216,063.19 and Y=714,099.44
feet), continuing the same course a total distance of 442.63 feet to a 5/8-inch
iron rod with aluminum disk set for corner (Monument No. 5, X=3,215,805.08 feet
and Y=714,107.90 feet);
THENCE N 02(degree) 43' 37" W, a distance of 263.97 feet to a 5/8-inch iron rod
with aluminum disk set for corner (Monument No. 4, X=3,215,792.52 and
Y=714,371.57 feet);
THENCE N 87(degree) 16' 23" E, a distance of 87.68 feet to a 5/8-inch iron rod
with aluminum disk set for corner in the west edge of a plant road (Monument No.
3, X=3,215,880.10 and Y=714,375.74 feet);
THENCE N 02(degree) 43' 37" W, a distance of 133.35 feet to an aluminum disk set
for corner in the west edge of a plant road (Monument No. 2, X=3,215,873.76 and
Y=714,508.94 feet);
THENCE 70(degree)21' 47" E, a distance of 308.79 feet to a 5/8-inch iron rod set
at the base of the northerly face of a concrete wall;
THENCE N 43(degree)05' 57" W, along the northerly face of said concrete wall, a
distance of 158.72 feet to a 5/8-inch iron rod set for corner;
THENCE N 58(degree)16' 37" W, along the northerly face of said concrete wall, a
distance of 118.61 feet to a 5/8-inch iron rod set for corner;
THENCE N 64(degree)49' 09" W, along the northerly face of said concrete wall, a
distance of 210.85 feet to a 5/8-inch iron rod set for corner;
THENCE N 24(degree) 39' 30" E, at 45.72 feet pass a 5/8-inch iron rod with
aluminum disk set for reference (Monument No. 1, X=3,215,783.52 and Y=714,922.24
feet), continuing the same course a total distance of 66.16 feet to a point for
corner on the northerly edge of a bulkhead, same being the southerly waters edge
of the Houston Ship Channel;
7
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THENCE in a southeasterly direction along the northerly edge of a concrete
bulkhead, same being the southerly waters edge of the Houston Ship Channel the
following courses and distances:
S 64(degree) 53' 24" E, a distance of 271.78 feet;
S 44(degree) 59' 16" E, a distance of 250.83 feet;
S 67(degree) 02' 59" E, a distance of 155.04 feet to the end of said
concrete bulkhead;
THENCE in an easterly and southeasterly direction along the southerly
waters edge of the Houston Ship Channel the following courses and
distances:
N 86(degree) 12' 39" E, a distance of 80.97 feet;
S 67(degree) 10' 23" E, a distance of 145.11 feet;
S 40(degree) 39' 22" E, a distance of 191.89 feet;
S 15(degree) 29' 08" E, a distance of 135.54 feet;
S 02(degree) 27' 21" E, a distance of 288.40 feet;
S 30(degree) 20' 53" E, a distance of 147.21 feet;
S 07(degree) 09' 56" W, a distance of 72.95 feet to a point on existing
steel pilings;
THENCE along said steel pilings, same being the southerly waters edge of
the Houston Ship Channel the following courses and distances:
S 46(degree) 40' 38" E, a distance of 105.21 feet to an angle point of said
steel pilings;
N 27(degree) 41' 15" E, a distance of 104.27 feet to an angle point of said
steel pilings;
THENCE in an easterly direction along the southerly waters edge of the Houston
Ship Channel the following courses and distances:
S 78(degree) 39' 32" E, a distance of 66.00 feet;
S 76(degree) 13' 06" E, a distance of 851.45 feet;
N 83(degree) 16' 48" E, a distance of 77.20 feet;
N 71(degree) 23' 44" E, a distance of 34.08 feet;
S 51(degree) 01' 35" E, a distance of 14.22 feet to the northeast corner of
said 181.536 acre tract, same being the northwest corner of the residue of
said Georgia-Pacific Chemicals, Inc. 525.997 acre tract;
THENCE S 12(degree) 48' 29" W, along the common line between said
Georgia-Pacific tract and said 181.536 acre tract, at 118.60 feet pass a
5/8-inch iron rod with aluminum disk set for reference (Monument No. 61,
X=3,217,922.00 feet and Y=713,472.56 feet), continuing the same course a total
distance of 375.33 feet to a 5/8-inch iron rod with aluminum disk set for corner
(Monument No. 62, X=3,217,865.08 feet and Y=713,222.23 feet);
8
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THENCE S 26(degree) 22' 53" E, along said common line, a distance of 170.82 feet
to a 5/8-inch iron rod found for corner (Monument No. 63, X=3,217,940.99 feet
and Y=713,069.20 feet);
THENCE S 01(degree) 06' 08" E, along said common line, a distance of 534.12 feet
to a 5/8-inch iron rod with aluminum disk set for corner (Monument No. 64,
X=3,217,951.26 and Y=712,535.18 feet);
THENCE S 02(degree) 17' 45" E, along said common line, a distance of 676.82 feet
to a 5/8-inch iron rod with aluminum disk set for corner (Monument No. 65,
X=3,217,978.37 and Y=711,858.91 feet);
THENCE S 01(degree) 35' 39" E, along said common line, a distance of 1568.72
feet to a 5/8-inch iron rod with aluminum disk set for corner (Monument No. 66,
X=3,218,022.01 and Y=710,290.80 feet);
THENCE S 01(degree) 48' 33" E, along said common line a distance of 3305.54 feet
to a concrete monument with aluminum disk set for corner (Monument No. 67,
X=3,218,126.38 and Y=707,986.90 feet);
THENCE S 89(degree) 25' 33" W, along said common line, a distance of 1.99 feet
to a concrete monument with aluminum disk set for corner (Monument No. 68,
X=3,218,124.39 and Y=706,986.88 feet);
THENCE S 00(degree) 26' 38" E, along said common line a distance of 94.27 feet
to a concrete monument found corner (Monument No. 69, X=3,218,125.12 and
Y=706,892.62 feet);
THENCE S 03(degree) 22' 51" E, along said common line a distance of 142.19 feet
to a concrete monument found for corner (Monument No. 70, X=3,218,133.50 and
Y=706,750.68 feet);
THENCE S 24(degree)56' 32" W, along said common line a distance of 82.00 feet to
the PLACE OF BEGINNING and containing 477.1219 acres of land.
SAVE AND EXCEPT the following described tract of land;
COMMENCING at said City of Houston Monument No. 5856-1603;
THENCE N 02(degree) 07' 38" W, a distance of 6,085.09 feet to an aluminum disk
set in an existing plant road for the northeast corner and PLACE OF BEGINNING of
the herein described tract (Monument No. 23, X=3,216,708.33 feet and
Y=711,715.27 feet);
THENCE S 01(degree) 13' 42" E, a distance of 782.09 feet to an aluminum disk set
in said plant road for a southeast corner of the herein described tract
(Monument No. 24, X=3,216,725.09 and Y=710,933.36 feet);
THENCE S 89(degree) 00' 37" W, a distance of 264.09 feet to a concrete monument
with aluminum disk set for an interior corner of the herein described tract
(Monument No. 25, X=3,216,461.04 feet and Y=710,928.80 feet);
9
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THENCE S 02(degree) 43' 45" E, a distance of 1485.73 feet to a concrete monument
with aluminum disk set for the most southerly southeast corner of the herein
described tract (Monument No. 26, X=3,216,531.78 and Y=709,444.75 feet);
THENCE S 86(degree) 48' 37" W, a distance of 351.13 feet to a concrete monument
with aluminum disk set for the southwest corner of the herein described tract in
the west edge of a gravel road (Monument No. 27, X=3,216,181.20 and Y=709,425.21
feet);
THENCE N 02(degree) 36' 27" W, along the west edge of said gravel road and its
northerly projection, a distance of 2116.53 feet to a concrete monument with
aluminum disk set for the most westerly northwest corner of the herein described
tract (Monument No. 28, X=3,216,084.91 and Y=711,539.55 feet);
THENCE N 83(degree) 30' 41" E, a distance of 344.41 feet to a 5/8-inch iron rod
with aluminum disk set for an interior corner of the herein described tract
(Monument No. 29, X=3,216,427.11 and Y=711,578.47 feet);
THENCE N 04(degree) 22' 22" W, a distance of 118.38 feet to a 5/8-inch iron rod
with aluminum disk set for the most northerly northwest corner of the herein
described tract in the southerly edge of an existing plant road (Monument No.
30, X=3,216,418.09 and Y=711,696.51 feet);
THENCE N 86(degree) 18' 02" E, a distance of 290.84 feet to the PLACE OF
BEGINNING and containing 21.9247 acres of land, leaving a net area of 455.1972
acres. The combined area of the above described TRACT A (22.2245 acres) and
TRACT B (455.1972 acres) is 477.4217 acres of land.
NOTE: Bearings recited above are referenced to the Texas State Plane Coordinate
System, South Central Zone, based on City of Houston Monuments No. 5856-1603 and
5856-1202.
/s/ Carrol L. Smith
- -------------------------------
Carroll L. Smith
R.P.L.S. No. 4181
Date: April 7, 1994
Dwg. No.: EC-2036D-8001
UEE Job No.: 2036
10
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EXHIBIT B-1
METES AND BOUNDS DESCRIPTION
12,2947 ACRES OF LAND LOCATED IN THE THOMAS EARLE SURVEY,
ABSTRACT NO. 18, HARRIS COUNTY, TEXAS
BEING 12.2947 acres (535,557 square feet) of land located in the Thomas Earle
Survey, Abstract No. 18, Harris County, Texas, same being out of that certain
447,4217 acre tract of land conveyed to the Albemarle Corporation as per an
instrument recorded under County Clerk's File No. R143010 (Film Code No.
###-##-####) of the Official Public Records of Real Property of Harris County,
Texas, said 12.2947 acres tract of land being more particularly described by
metes and bounds as follows:
COMMENCING at City of Houston Monument No. 5856-1603 (X=3,216,934.19 feet and
Y=705,634.38 feet);
THENCE North 15(degree) 18' 06" West , a distance of 9,128.97 feet to a railroad
spike set for the northwest corner and PLACE OF BEGINNING of the herein
described tract (X=3,214,525.04 feet and Y=714,439.72 feet);
THENCE North 87(degree)30' 34" East , a distance of 562.70 feet to a railroad
spike set for a corner of the herein described tract;
THENCE South 86(degree)21' 18" East , a distance of 94.34 feet to a railroad
spike set for a corner of the herein described tract;
THENCE South 02(degree)20' 51" East , a distance of 206.50 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE North 87(degree)30' 25" East , a distance of 79.68 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE North 02(degree)20' 51" East , a distance of 52.20 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE North 87(degree)41' 11" East , a distance of 51.39 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE South 02(degree)30' 43" East , a distance of 425.70 feet to a concrete
nail set for a corner of the herein described tract;
THENCE South 87(degree)39' 28" West , a distance of 49.74 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE North 02(degree)57' 30" East , a distance of 27.82 feet to a 60 penny
nail set for a corner of the herein described tract;
1
<PAGE>
THENCE South 87(degree)43'38" West , a distance of 30.14 feet to a 60 penny nail
set for a corner of the herein described tract;
THENCE South 02(degree)06' 16" East , a distance of 31.02 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE South 87(degree)37' 16" West , a distance of 41.81 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE South 02(degree)28' 12" East , a distance of 181.81 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE South 89(degree)09' 26" West , a distance of 43.03 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE South 02(degree)14' 07" East , a distance of 41.14 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE South 87(degree)51' 55" West , a distance of 428.10 feet to 1/2 inch iron
rod set for a corner of the herein described tract;
THENCE South 02(degree)09' 05" East , a distance of 72.60 feet to a `+' scribed
in concrete for a corner of the herein described tract;
THENCE South 02(degree)09' 35" East , a distance of 106.04 feet to a `+' scribed
in concrete for a corner of the herein described tract;
THENCE South 02(degree)09' 45" East , a distance of 120.98 feet to a `+' scribed
in concrete for a corner of the herein described tract;
THENCE South 14(degree)33' 35" West, a distance of 113.17 feet to a `+' scribed
in concrete for a corner of the herein described tract;
THENCE South 03(degree)03' 58" East, a distance of 126.64 feet to a1/2inch iron
rod set for a corner of the herein described tract;
THENCE South 86(degree)18' 50" West, a distance of 27.95 feet to a1/2inch iron
rod set for a corner of the herein described tract;
THENCE North 02(degree)46' 14" West, a distance of 130.12 feet to a `+' scribed
in concrete for a corner of the herein described tract;
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<PAGE>
THENCE North 14(degree)02' 35" East, a distance of 114.20 feet to a `+' scribed
in concrete for a corner of the herein described tract;
THENCE North 02(degree)10' 10" West, a distance of 322.62 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE North 18(degree)33' 02" West, a distance of 216.50 feet to a 60 penny
nail set for a corner of the herein described tract;
THENCE North 12(degree)52' 40" West, a distance of 602.95 feet to the PLACE OF
BEGINNING, containing 12.2947 acres (535,557 square feet) of land.
/s/ Robert A. Marlowe
-------------------------------------
Robert A. Marlowe
Registered Professional Land Surveyor
Texas Registration No. 4218
3
<PAGE>
EXHIBIT C TO GROUND LEASE AGREEMENT
EASEMENT AGREEMENT
This Easement Agreement is dated July 31, 1995 and is between ALBEMARLE
CORPORATION, a Virginia corporation, having an office at 451 Florida Street,
Baton Rouge, LA 70801 ("Grantor"), and MEMC PASADENA, INC., a Delaware
corporation, having an office at 3000 N. South Street, Pasadena, TX 77503
("Grantee").
WHEREAS:
A. Grantor is the owner of a trace of land described on Exhibit A attached
hereto and made a part hereof ("Parcel 1"); and
B. Grantee is the lessee of a tract of land described on Exhibit A ("Parcel
2").
C. In connection with that certain Ground Lease Agreement dated July 31,
1995 by and between Grantor and Grantee, Grantor has agreed to grant to Grantee
an easement over, under and across that part of Parcel 1 described as the
"Easement" on Exhibit A (the "Easement") for the purposes described herein and
subject to the provisions hereof.
NOW THEREFORE, in consideration of $1.00 and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
following grants, agreement, covenants and restrictions are made:
1. GRANT OF EASEMENT. Grantor hereby grants to Grantee, its successor and
assigns, as an easement appurtenant to Parcel 2, a perpetual easement over,
under and across the Easement for the purposes of gaining pedestrian and
vehicular access from public roads to Parcel 2. This Easement shall run with the
land described as Parcel 2 and shall be binding upon and inure to the benefit of
Grantee, its successors and assigns and all persons and entities claiming by,
through or under any of them.
2. GRANTOR'S USE OF EASEMENT. Grantor's use of the Easement is not
exclusive. Grantor reserves the right to make or permit any use of the Easement
that does not unreasonably interfere with Grantee's use of the Easement.
3. GRANTEE'S USE OF EASEMENT. Grantee covenants that the Easement will be
used only for the purposes described in paragraph 1 above.
4. MAINTENANCE AND REPAIR.
4.1 Grantor shall maintain and repair the Easement. If Grantee is not
already reimbursing Grantor pursuant to the Operating Agreement of even
date between Grantor and Grantee for such costs and expenses, Grantee shall
reimburse
1
<PAGE>
Grantor for Grantee's fair share of all of the actual costs and expenses
incurred by Grantee in maintaining and repairing the Easement, including
but not limited to manpower, administration, equipment and materials. This
reimbursement shall be Grantee's fair share of such actual cost to Grantor
for such costs and expenses calculated in accordance with Grantor's then
current internal Pasadena Plant accounting practices and procedures
("Reimbursable Costs"). Grantor and Grantee will use their best efforts to
reach agreement on the calculation of Grantee's fair share of the costs and
expenses. The application of such accounting practices shall not favor
Grantor or Grantee. Any charge for salaried and hourly employees used by
Grantor in maintenance or repair of the Easement shall include Grantor's
expenditures or accruals for all of Grantor's costs and expenses associated
with its employees, including, but not limited to, benefit and pension
programs, and for taxes, workers' compensation insurance, vacations,
holidays, and unavoidable absences. When employees are used on a part-time
basis to perform maintenance and repair, charges for their expenses shall
be apportioned according to the time spent. In the event Grantor and
Grantee are unable after reasonable effort to reach agreement on Grantee's
fair share of the cost and expenses, then either Grantor or Grantee may
submit the matter to arbitration in the same manner as set forth in Section
28.04 of the Operating Agreement.
4.2 Grantor shall submit to Grantee quarterly (or monthly at Grantor's
option) its invoice for Grantee's fair share of the costs and expenses
outlined in Section 4.1 during the prior quarter (month). Such invoice
shall be due and payable without discount ten (10) days after receipt of
the invoice.
Invoices shall be faxed to:
MEMC Pasadena, Inc.
c/o MEMC Electronic Materials, Inc.
501 Pearl Drive
P.O. Box 8
St. Peters, MO 63376
Attention: MEMC Pasadena Accountant (Greg Bouquet)
Fax: 314-279-5163
Tel.: 314-279-5229
Payments will be made to the address specified on the invoice. Any
delinquent or overdue invoices shall be subject to a finance charge of one
percent (1%) per month, or the maximum rate allowed by law, whichever is
less.
4.3 Grantor shall maintain good and sufficient records to support the
costs and expenses invoiced hereunder. All records maintained by Grantor
relating to the costs and expenses incurred pursuant to this section shall
be made available for review by Grantee's representative during normal
hours of business if Grantee has a reasonable basis to question the
accuracy of the costs and
2
<PAGE>
expenses invoiced by Grantor hereunder. Grantee may request, and Grantor
shall provide, detail information supporting, and explanation of, specific
charges at any time.
4.4 In the event that there is a disagreement between the parties on
any item or items included in an invoice or as revealed in a review as
provided for in Section 4.3, the parties shall meet and in good faith use
their reasonable efforts to resolve the disagreement as promptly as
possible and prior to the issuance of the next invoice. Payments of
invoices shall not be delayed in whole or in part, however, because of any
such agreement between the parties and proper adjustments shall be made
when the disagreement is resolved. In no event shall Grantee be entitled
to, nor will it set off any claims Grantee or its affiliates might have
against Grantor against Grantee's fair share of the costs and expenses
invoiced pursuant to this Section.
5. WARRANTIES OF TITLE. Grantor warrants that it has good title to the
Easement, subject only to those liens, mortgage, charges, pledges, easements,
encumbrances and imperfections of record, and that the grant of this easement
has been duly authorized by all necessary corporate action.
6. CONSTRUCTION. The rule of strict construction does not apply to this
grant of easement. This grant shall be given a reasonable construction so that
the intention of the parties to confer a commercially usable right of access to
Parcel 2 to Grantee, its successor and assigns, is carried out.
7. NOTICES. All notices and other communications in connection with this
Agreement shall be in writing and any notice or communication hereunder shall be
deemed delivered to the address thereof on the earlier of: (a) three days after
deposit in any main or branch United States Post Office, certified or registered
mail, postage prepaid, (b) one day after deposit with any nationally recognized
courier server, with charges prepaid, or (c) when hand delivered, in any case
address to the parties, respectively, as follows:
For notices to Grantor:
Albemarle Corporation
451 Florida Street
Baton Rouge, LA 70801
Attention: Vice President, Manufacturing
3
<PAGE>
with a copy to:
Albemarle Corporation
451 Florida Street
Baton Rouge, LA 70801
Attention: Law Department
For notices to Grantee:
MEMC Pasadena, Inc.
c/o MEMC Electronic Materials, Inc.
501 Pearl Drive
P.O. Box 8
St. Peters, MO 63376
Attention: President-MEMC Pasadena, Inc.
By notice complying with the requirements of this paragraph, each party
shall have the right to change the address for all future notices and other
communications to such party; provided, however, that no notice of change of
address or addresses shall be effective until actually received.
8. RELEASE OF EASEMENT. Grantee may herein terminate this instrument by
recording a release in recordable form with directions for delivery of same to
Grantor, its successors or assigns, at Grantor's past address given pursuant
hereto, whereupon all rights duties and liabilities hereby created shall
terminate. This Easement shall automatically terminate in the event of
termination or expiration of the Ground Lease of even date between Grantor and
Grantee, whereupon Grantor may record such termination or expiration as of
public record.
9. GOVERNING LAW; COMPLETE AGREEMENT. This Agreement is entered into and
shall be construed and governed in all respects under the laws of the State of
Texas. This Agreement sets forth the entire agreement of the parties with
respect to the subject matter hereof.
10. GUARANTY. MEMC Electronic Materials, Inc., parent company of Grantee,
absolutely, unconditionally and irrevocably guarantees the obligations of
Grantee, its successors and assigns, pursuant to this Agreement, and as such, is
a contracting party to this Agreement.
11. INSOLVENCY. If Grantee or MEMC Electronic Materials, Inc. makes an
assignment for the benefits of its creditor(s), or attachment or garnishment
proceedings are commenced, or a receiver is appointed over any property of
Grantee or MEMC Electronic Materials, Inc. is appointed over any property of
Grantee or MEMC Electronic Materials, Inc., or proceedings are instituted by or
4
<PAGE>
against Grantee or MEMC Electronic Materials, inc. under the bankruptcy Code,
then Grantor may terminate this Agreement effective upon the date of such
assignment, commencement, appointment of institution or proceedings.
IN WITNESS WHEREOF, the parties hereto have executed or have caused this
instrument to be executed by their proper officers duly authorized to execute
the same, as of the day and year first above written.
GRANTOR: GRANTEE:
ALBEMARLE CORPORATION MEMC PASADENA, INC.
By: By:
Its: Its:
Sworn and subscribed before me Sworn and subscribed before me
this 31st day of July, 1995 this31st day of July, 1995
- ----------------------------------- -----------------------------------
Notary Public Notary Public
My commission expires: My commission expires:
5
<PAGE>
EXHIBIT A
This Exhibit A shall be substituted for promptly following Closing by a map
to be prepared by Grantor depicting Parcel 1 and Parcel 2.
Exhibit A will show that an approximately 30(degree) wide easement (or such
normally associated with the width of N. South Street) is granted by Grantor to
Grantee along N. South Street through Parcel 1 (which is Grantor's Pasadena
Plant site) from the point N. South Street ceases to be a public road until the
point where N. South Street intersects the closest point of Parcel 2 (which is
the land as defined in the Ground Lease Agreement). In the event N. South Street
ends prior to intersecting Parcel 2, then the easement shall continue in the
most direct route to the closest point of Parcel 2.
6
<PAGE>
EXHIBIT D TO GROUND LEASE AGREEMENT
EASEMENT AGREEMENT
This Easement Agreement is dated , 1995 and is between MEMC
Pasadena, Inc. or Albemarle Corporation (as the case may be), a
corporation, having an office at ("Grantor"), and
MEMC Pasadena Inc. or Albemarle Corporation (as the case may be), a
corporation, having an office at ("Grantee).
WHEREAS:
A. Grantor is the owner of a tract of land described on Exhibit A attached
hereto and made a part hereof ("Parcel A"); and
B. Grantee is the lessee of a tract of land described on Exhibit A ("Parcel
B"); and
C. In connection with that certain Ground Lease Agreement dated July 31,
1995 by and between Grantor and Grantee, Grantor has agreed to grant to Grantee
a legally valid, binding and recordable perpetual easement whereby the Grantor
provides one or more easements to Grantee over, across, upon, in or under, as
the case may be, a certain portion or potions of Parcel A to be agreed upon in
good faith between the parties to enable Grantor to obtain, install, operate,
maintain, repair and replace utilities, including, without limitation,
electricity, gas, telephone, sewage and water from he applicable producers to
service Parcel B, and to repair fences, it being the intent that the location of
such easements shall be in the most convenient place for the provision of such
utilities to the extent reasonably practicable, while providing the least
inconvenience to Grantor.
NOW THEREFORE, in consideration of $1.00 and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
following grants, agreement, covenants and restrictions are made:
1. GRANT OF EASEMENT. Grantor hereby grants to Grantee, its successors and
assigns, as an easement appurtenant to Parcel 2, a perpetual easement over,
under and across the Easement for the purposes of
- -----------------------------------------------------
- -----------------------------------------------------------------------------
______________________________________ ("Easement"). This Easement shall run
with the land described as Parcel 2 and shall be binding upon and inure to the
benefit of Grantee, its successors and assigns and all persons and entities
claiming by, through or under any of them.
<PAGE>
2. GRANTOR'S USE OF EASEMENT. Grantor's use of the Easement is not
exclusive. Grantor reserves the right to make or permit any use of the Easement
that does not unreasonably interfere with Grantee's use of the Easement.
3. GRANTEE'S USE OF EASEMENT. Grantee covenants that the Easement will be
used only for the purposes described in paragraph 1 above.
4. MAINTENANCE AND REPAIR.
4.1 Grantor shall maintain and repair the Easement. Grantee shall reimburse
Grantor for Grantee's fair share of all of the actual costs and expenses
incurred by Grantee in maintaining and repairing the Easement, including,
but not limited to manpower, administration, equipment and materials. This
reimbursement shall be Grantee's fair share of such additional cost to
Grantor for such costs and expenses calculated in accordance with Grantor's
then current internal Pasadena Plant or MEMC Plant accounting practices and
procedures ("Reimbursable Costs"). Grantor and Grantee will use their best
efforts to reach agreement on the calculation of Grantee's fair share of
the costs and expenses. The application of such accounting practices shall
not favor Grantor or Grantee. Any charge for salaried and hourly employees
used by Grantor in maintenance or repair of the Easement shall include
Grantor's expenditures or accruals for all of Grantor's costs and expenses
associated with its employees, including, but not limited to, benefit and
pension programs, and for taxes, workers' compensation insurance,
vacations, holidays, and unavoidable absences. When employees are used on a
part-time basis to perform maintenance and repair, charges for their
expenses shall be apportioned according to the time spent. In the event
Grantor and Grantee are unable after reasonable effort to reach agreement
on Grantee's fair share of the cost and expenses, then either Grantor or
Grantee may submit the matter to arbitration in the same manner as set
forth in Section 28.04 of the Operating Agreement.
4.2 Grantor shall submit to Grantee quarterly (or monthly at Grantor's
option) its invoice for Grantee's fair share of the costs and expenses
outlined in Section 4.1 during the prior quarter (month). Such invoice
shall be due and payable without discount ten (10) days after receipt of
the invoice.
Invoices shall be faxed to:
---------------------------
---------------------------
---------------------------
Attention: Accounts Payable
Payments will be made to the address specified on the invoice. Any
delinquent or overdue invoices shall be subject to a finance charge of one
percent (1%) per month, or the maximum rate allowed by law, whichever is
less.
2
<PAGE>
4.3 Grantor shall maintain good and sufficient records to support the costs
and expenses invoiced hereunder. All records maintained by Grantor relating
to the costs and expenses incurred pursuant to this section shall be made
available for review by Grantee's representative during normal hours of
business if Grantee has a reasonable basis to question the accuracy of the
costs and expenses invoiced by Grantor hereunder. Grantee may request, and
Grantor shall provide, detail information supporting, and explanation of,
specific charges at any time.
4.4 In the event that there is a disagreement between the parties on any
item or items included in an invoice or as revealed in a review as provided
for n Section 4.3, the parties shall meet and in good faith use their
reasonable efforts to resolve the disagreement as promptly as possible and
prior to the issuance of the next invoice. Payments of invoices shall not
be delayed in whole or in part, however, because of any such agreement
between the parties and proper adjustments shall be made when the
disagreement is resolved. In no event shall Grantee be entitled to, nor
will it set off any claims Grantee or its affiliates might have against
Grantor against Grantee's fair share of the costs and expenses invoiced
pursuant to this Section.
5. WARRANTIES OF TITLE. Grantor warrants that it has good title to the
Easement, subject only to those liens, mortgage, charges, pledges, easements,
encumbrances and imperfections of record, and that the grant of this easement
has been duly authorized by all necessary corporate action.
6. CONSTRUCTION. The rule of strict construction does not apply to this
grant of easement. This grant shall be given a reasonable construction so that
the intention of the parties to confer a commercial usable easement for Grantee,
its successors and assigns, is carried out.
7. NOTICES. All notices and other communications in connection with this
Agreement shall be in writing and any notice or communication hereunder shall be
deemed delivered to the addresses thereof on the earlier of: (a) three days
after deposit in any main or branch United States Post Office, certified or
registered mail, postage prepaid, (b) one day after deposit with any nationally
recognized courier server, with charges prepaid, or (c) when hand delivered, in
any case address to the parties, respectively, as follows:
For notices to Grantor:
---------------------------
---------------------------
---------------------------
Attention:
3
<PAGE>
with a copy to:
---------------------------
---------------------------
---------------------------
Attention:
For Notices to Grantee:
---------------------------
---------------------------
---------------------------
with a copy to:
---------------------------
---------------------------
---------------------------
Attention:
By notice complying with the requirements of this paragraph, each party
shall have the right to change the address for all future notices and other
communications to such party; provided, however, that no notice of change of
address or addresses shall be effective until actually received.
8. RELEASE OF EASEMENT. Grantee may herein terminate this instrument by
recording a release in recordable form with directions for delivery of same to
Grantor, its successors or assigns, at Grantor's last address given pursuant
hereto, whereupon all rights, duties and liabilities hereby created shall
terminate.
9. GOVERNING LAW; COMPLETE AGREEMENT. This Agreement is entered into and
shall be construed and governed in all respects under the laws of the State of
Texas. This Agreement sets forth the entire agreement of the parties with
respect to the subject matter hereof.
10. INSOLVENCY. If Grantee makes an assignment for the benefit of its
creditor(s), or attachment or garnishment proceedings are commenced, or a
receiver is appointed over any property of Grantee, or proceedings are
instituted by or against Grantee hereto under the bankruptcy code, then Grantor
may terminate this Agreement effective upon the date of such assignment,
commencement, appointment or institution of proceedings.
IN WITNESS WHEREOF, the parties hereto have executed or have caused this
instrument to be executed by their proper officers duly authorized to execute
the same, as of the day and year first above written.
4
<PAGE>
GRANTOR: GRANTEE:
ALBEMARLE CORPORATION MEMC PASADENA, INC.
By: By:
Its: Its:
Subscribed before me this st day Subscribed before me this st day
--- ---
of , of ,
----------- -------- ----------- -------
- ---------------------------------- ----------------------------------
Notary Public Notary Public
My commission expires: My commission expires:
----------- ------------
5
<PAGE>
EXHIBIT A
To be attached. Map of Pasadena Plant Setting Forth Outline of Electronic
Materials Facility and Easement.
AMENDMENT TO
GROUND LEASE AGREEMENT
THIS AMENDMENT TO GROUND LEASE AGREEMENT amends, effective as of May 31,
1997 (the "Amendment Date"), that certain Ground Lease Agreement ("Lease") dated
July 15, 1995 by and between ALBEMARLE CORPORATION ("Lessor") and MEMC PASADENA,
INC. ("Lessee").
Lessor and Lessee hereby agree as follows:
1. As of the Amendment Date, the real property described in the attached
Exhibits B-1(A) and B-2(A) is added to the definition of "Land". The
addition of such real property does not, however, change any of the
terms of the Ground Lease Agreement, including the Initial Term or any
Extension Term.
2. As of the Amendment Date, Section 2.1 is revised to read as follows:
"Rent. Lessee hereby tenders to Lessor and Lessor hereby accepts
from Lessee the sum of $ 143,383.00, which constitutes paid up
rent for the duration of the Lease Term for the approximately
15.8692 acres comprising the Land. This consists of $50.00 per
acre for the 12.3 acres originally leased to Lessee as of the
Commencement Date and $40,000 per acre for the approximately
3.5692 acres which have been added to the Land pursuant to this
Amendment No. 1 to the Lease."
3. As to the 3.5692 acres which have been added to the Land pursuant to
this Amendment No. 1 to the Lease, Lessee will not build any permanent
improvements within five (5) feet of the northern property line of
Tract 2 (as shown in Exhibit B-1(A)). If Lessee decides to fence this
northern property line, then Lessee will, at its own cost and expense,
remove any and all improvements (whether permitted or otherwise) that
Lessee has made within this five (5) foot setback and any fence
constructed by Lessee will be constructed outside of this five (5)
foot setback.
4. All other terms and conditions of the Lease remain unchanged.
MEMC PASADENA, INC. ALBEMARLE CORPORATION
By: /s/ William R. Cooke By: /s/ Thomas G. Avant
___________________________________ ____________________________________
Title: President & COO Title: Senior Vice President
Date: 6/19/97 Date: 7/9/97
<PAGE>
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ Charles W. Cook, Jr.
___________________________________
Title: Corporate Vice President
Date: 4 June 97
<PAGE>
Exhibit B-1(A)
TRACT ONE - 0.8420 ACRES
COMMENCING at City of Houston Monument No. 5856 - 1603 (X=3,216,934.19 feet and
Y = 705,634.38 feet);
THENCE North 15 degree 11' 08" West, a distance of 9,145.34 feet to a railroad
spike set for the northwest corner and PLACE OF BEGINNING of the herein
described tract (X=3,214.538.60 feet and Y=714,460.39 feet);
THENCE North 87 degree 19' 42" East , a distance of 548.35 feet to a railroad
spike set for a corner of the herein described tract;
THENCE South 78 degree 16' 37" East , a distance of 96.86 feet to a 1/2 inch
iron rod set for a corner of the herein described tract;
THENCE North 87 degree 22' 58" East , a distance of 119.13 feet to a 1/2 inch
iron rod set for a corner of the herein described tract;
THENCE South 07 degree 40' 01" East , a distance of 127.05 feet to a 1/2 inch
iron rod set for a corner of the herein described tract;
THENCE South 02 degree 41'44" East , a distance of 33.81 feet to a concrete nail
set for a corner of the herein described tract;
THENCE South 87 degree 30' 46" West , a distance of 51.39 feet to a 1/2 inch
iron rod found for a corner of the herein described tract;
THENCE South 02 degree 59' 13" East, a distance of 52.20 feet to a 1/3 inch iron
rod found for a corner of the herein described tract;
THENCE South 87 degree 19' 52" West , a distance of 79.68 feet to a 1/2 inch
iron rod found for a corner of the herein described tract;
THENCE North 02 degree 31' 12" West , a distance of 206.51 feet to a 1/2 inch
iron rod found for a corner of the herein described tract;
THENCE North 86 degree 32' 10" West, generally along the north line of a 12.2947
acre tract leased to MEMC Pasadena, Inc., a distance of 94.34 feet to a railroad
spike found for a corner of the herein described tract;
THENCE South 87 degree 20' 18" West , continuing generally along the north line
of a 12.2947 acre tract leased to MEMC Pasadena, Inc., a distance of 562.70 feet
to a railroad spike found for the northwest corner of the said 12.2947 acre
tract and the most westerly southwest corner of the herein described tract;
THENCE North 12 degree 58' 31" West, a distance of 2.23 feet to a 1/2 inch iron
rod set for a cut-back corner of the herein described tract;
THENCE North 37 degree 07' 06" East, a distance of 16.54 feet to the PLACE OF
BEGINNING of TRACT ONE, containing 0.8420 acres (36,676 square feet) of land.
<PAGE>
Exhibit B-2(A)
TRACT TWO - 2.7272 ACRES
COMMENCING at City of Houston Monument No. 5856-1603 (X=3,216.934.19 feet and Y=
705,634.38 feet);
THENCE North 11 degree 58' 05" West , a distance of 8,241.39 feet to a railroad
spike set for the northwest corner and PLACE OF BEGINNING of the herein
described tract (X=3,215,225.19 feet and Y=713,696.63 feet);
THENCE South 02 degree 38' 27" East, a distance of 294.79 feet to a 1/2 inch
iron rod set for a corner of the herein described tract;
THENCE South 87 degree 22' 58" West, a distance of 386.61 feet to a 1/2 inch
iron rod set for a corner of the herein described tract;
THENCE North 02 degree 37' 02" West, a distance of 46.00 feet to a 1/2 inch iron
rod set for a corner of the herein described tract;
THENCE South 87 degree 22' 58" West, a distance of 85.78 feet to a 1/2 inch iron
rod set for a corner of the herein described tract;
THENCE North 02 degree 19' 57" West, a distance of 33.61 feet to a + scribed in
concrete set for a corner of the herein described tract;
THENCE North 02 degree 19' 47" West, a distance of 106.04 feet to a + scribed in
concrete for a corner of the herein described tract;
THENCE North 02 degree 19' 17" West, a distance of 72.60 feet to a 1/2 inch iron
rod found for a corner of the herein described tract;
THENCE North 87 degree 50' 10" East, a distance of 428.10 feet to a 1/2 inch
iron rod round for a corner of the herein described tract;
THENCE North 02 degree 24' 25" West, a distance of 41.14 feet to a chain link
fence corn post for a corner of the herein described tract;
THENCE North 88 degree 59' 08" East, a distance of 43.03 feet to the PLACE OF
BEGINNING of TRACT TWO, containing 2.7272 acres (118,796 square feet) of land.
CONSULTING AGREEMENT
AS ADVISOR TO
CHIEF EXECUTIVE OFFICER
This Consulting Agreement ("Agreement") is made as dated below, by and
between Dr. Robert M. Sandfort ("Dr. Sandfort") and MEMC Electronic Materials,
Inc. ("MEMC"). Dr. Sandfort and MEMC have mutually agreed to end Dr. Sandfort's
employment with MEMC, so that Dr. Sandfort may pursue other interests and become
a consulting advisor to MEMC's CEO. Dr. Sandfort has been employed as President
and Chief Operating Officer of MEMC. Dr. Sandfort also serves as a Director on
the MEMC Board of Directors. In order to resolve any and all matters arising out
of the employment relationship and its termination, and in order to insure a
smooth transition of Dr. Sandfort's job duties and to continue to take advantage
of Dr. Sandfort's skills and experience, the parties have entered into this
Agreement. The parties agree as follows:
1. Dr. Sandfort will voluntarily retire and resign his employment with MEMC
effective December 1, 1997 ("Termination Date"). Dr. Sandfort will receive all
regular compensation due for services rendered as an MEMC employee through
November 30, 1997 on the next regular pay date. In addition, Dr. Sandfort will
receive payment for all accrued but unused vacation time in the amount of
$47,525.60, payable on December 15, 1997. Dr. Sandfort (or his designated
beneficiary, if he should die before the scheduled payment date) also shall
receive compensation due him pursuant to the Employment Agreement dated May 1,
1995 between Dr. Sandfort and MEMC (the "Employment Agreement") in the aggregate
amount of $561,666.67, payable as follows: $28,083.33 payable on December 15,
1997; $337,000.00 payable on January 2, 1998; and $196,583.34 payable on January
4, 1999. The Employment Agreement, which is attached as Exhibit A and
incorporated by reference herein, shall be deemed to be amended by all
provisions of this Agreement that are inconsistent therewith. Capitalized terms
used herein but not defined herein shall have the meanings assigned in the
Employment Agreement. "Agreement" shall mean this Consulting Agreement unless
the context otherwise requires.
2. For a one-year period beginning with the day after Dr. Sandfort's
Termination Date ("Consulting Period"), Dr. Sandfort agrees to make himself
reasonably available for consultation with MEMC either by phone or in person as
reasonably requested by MEMC on such matters as MEMC may reasonably request.
During the Consulting Period Dr. Sandfort shall be considered a consulting
advisor to MEMC's CEO. Dr. Sandfort shall be free to perform services for others
when not performing under this Agreement; provided, that nothing in this
Agreement will eliminate or modify in any way the confidentiality and
non-competition restrictions placed upon Dr. Sandfort by Paragraphs 5.1 and 5.2
of the Employment Agreement, which paragraphs are incorporated by reference
herein and shall be effective as of the Termination Date, except that (a) such
paragraphs shall be interpreted solely with reference to the definition of
"Competitive Work" set forth in the Confidentiality Agreement dated as of March
31, 1989 (the "Confidentiality Agreement"), which is incorporated by reference
in the Employment Agreement; and (b) the written consent of MEMC described in
the first paragraph of the section of the Confidentiality Agreement entitled
"Competitive Activity" shall not be unreasonably withheld and shall be deemed to
have been given if Dr. Sandfort has received no response from MEMC as of the
14th day after Dr. Sandfort has furnished the written evidence required
thereunder to MEMC.
3. The parties agree that during the Consulting Period, the parties'
relationship will be that of a client and an independent contractor. During this
period Dr. Sandfort will not be considered an agent or employee of MEMC and
therefore will not necessarily be entitled to any of the benefits MEMC provides
its employees, including but not limited to health, worker's compensation and
pension or profit sharing plans; except that nothing contained herein shall
deprive Dr. Sandfort of any benefits to which he is entitled under Section 3.1.1
of the Employment Agreement, under any plan providing benefits during retirement
if and when Dr. Sandfort elects to begin receiving retirement income, and any
other benefits that may be specifically provided under this Consulting
Agreement. Nothing in this Agreement shall adversely affect Dr. Sandfort's
rights with respect to any vested profit sharing or pension monies, if any; Dr.
Sandfort's right to begin receiving retirement income, if he is eligible under
the terms of any plan, at any time before, during, or after the Consulting
Period; or Dr. Sandfort's rights under any other plan for which he may be
eligible or any law, including without limitation the Consolidated Omnibus
Reconciliation Act of 1986 ("COBRA").
4. In consideration of Dr. Sandfort's consulting services and other
promises herein, on January 2, 1998, MEMC will pay to Dr. Sandfort (or his
designated beneficiary, if he should die before January 2, 1998) a lump sum in
the amount of $539,751.00. In addition, Dr. Sandfort will be paid an hourly rate
of $250 for each hour and fraction thereof which he spends providing consulting
services, with a minimum of two hours for each telephone consultation and four
hours for each requested consultation in person. In addition, Dr. Sandfort will
be reimbursed for all reasonable expenses incurred as a result of his performing
consulting services. To the extent that Dr. Sandfort requires administrative
support to perform his consulting duties, these will be provided by MEMC;
provided that, it is expressly understood that MEMC will not be responsible for
providing Dr. Sandfort with office facilities at any MEMC location. Dr. Sandfort
expressly acknowledges that the monies paid hereunder are over and above
anything which MEMC may owe him for his services prior to the termination of his
employment and represents additional pay and benefits to which Dr. Sandfort
would not normally be entitled at the end of his employment.
If Dr. Sandfort is required to travel in order to provide consulting
services to MEMC, MEMC shall provide travel insurance in an amount not less than
that for which Dr. Sandfort was eligible during the month prior to the
Termination Date.
5. The parties also agree as follows:
(a) MEMC shall take or cause to be taken all actions necessary such that:
(1) all stock options previously awarded to Dr. Sandfort under any
plan of MEMC ("Options") that have not vested shall vest as of
the Termination Date;
(2) if at any time in the future MEMC issues Options to replace
Options granted as of the same date as any Options that then
remain outstanding, the effect of which is to lower the exercise
price under the Options being replaced, MEMC shall issue Options
to replace outstanding Options on the same terms as such other
Options, subject to Subsection 5(a)(3) and subject to the
execution of such documents as MEMC reasonably requires to assure
compliance with the securities laws.
(3) Dr. Sandfort shall have all rights under the Equity Incentive
Plan or Long Term Incentive Plan, as the case may be, to pay any
Option exercise price in shares of stock or through a cashless
exercise procedure, as well as the right to elect to pay in
shares of stock all or a part of any amount required to be
withheld to satisfy income tax liability in connection with the
exercise of any Option (unless such election would subject him to
liability under Section 16(b) of the Securities Exchange Act of
1934, as amended);
(4) Dr. Sandfort shall be allowed to exercise all Options (including
any replacement options) until the tenth anniversary of the date
on which each Option was granted; and
(5) all shares of restricted stock previously awarded to Dr. Sandfort
under any plan of MEMC ("Restricted Stock") that have not vested
shall vest as of the Termination Date, and all remaining
restrictions on such Restricted Stock shall lapse as of the
Termination Date.
(b) The six (6) month prior irrevocable election requirement of the
Supplemental Executive Pension Plan shall be waived. As payment in
full for all amounts due him from the Supplemental Executive Pension
Plan, Dr. Sandfort (or his designated beneficiary, if he should die
before the scheduled payment date) shall receive 120 monthly
installment payments as follows:
(1) $10,588.11 each month in 1998;
(2) $10,764.58 each month in 1999;
(3) $10,946.24 each month in 2000;
(4) $11,133.88 each month in 2001;
(5) $11,328.73 each month in 2002;
(6) $11,532.64 each month in 2003;
(7) $11,748.88 each month in 2004;
(8) $11,983.86 each month in 2005;
(9) $12,253.50 each month in 2006; and
(10) $12,621.10 each month in 2007.
(c) Dr. Sandfort (or his designated beneficiary, if he should die before
the scheduled payment date) also shall receive as retirement income in
addition to amounts due him from the Supplemental Executive Pension
Plan, 120 monthly installment payments as follows
(1) $11,644.68 each month in 1998;
(2) $11,838.76 each month in 1999;
(3) $12,038.54 each month in 2000;
(4) $12,244.91 each month in 2001;
(5) $12,459.20 each month in 2002;
(6) $12,683.47 each month in 2003;
(7) $12,921.28 each month in 2004;
(8) $13,179.71 each month in 2005;
(9) $13,476.25 each month in 2006; and
(10) $13,880.54 each month in 2007.
(d) MEMC shall advance to Dr. Sandfort as an interest free loan an amount
equal to 47.05% of the gross income realized by Dr. Sandfort for
federal income tax purposes resulting from the vesting of MEMC
Restricted Stock on December 1, 1997, which loan shall be advanced in
sufficient time to fund the required tax withholding on such income.
Such loan shall be repaid in full no later than January 2, 2003. In
addition, on April 15 after each year during the period December 1,
1997 through December 31, 2002, MEMC shall pay Dr. Sandfort an amount
equal to 47.05% of the amount of imputed interest reported by MEMC to
Dr. Sandfort for federal income tax purposes for the immediately
preceding year.
(e) MEMC shall deposit $2,661,282.29 in the MEMC Electronic Materials,
Inc. Supplemental Executive Pension Plan Trust in January, 1998 to
provide a source of payment of the amounts due Dr. Sandfort under
Subsections 5(b) and 5(c) above.
6. Dr. Sandfort agrees to release MEMC and its past and present
shareholders, officers, directors, agents, employees, representatives,
attorneys, successors and assigns, and affiliated or related companies (Released
Parties), from any and all claims made, to be made, or which might have been
made as a consequence of Dr. Sandfort's employment with MEMC or arising out of
the termination of said employment relationship other than the breach of any
provision of this Agreement by MEMC. This release specifically applies to, but
is not limited to, any and all claims for back pay, front pay, sick pay,
bonuses, or any other form of compensation or benefits not expressly preserved
herein, claims of wrongful or retaliatory discharge, and any and all other
claims arising under federal, state, or local law, known or unknown, which exist
as of the date of the execution of this Agreement, whether such claims arise
under either common law (whether sounding in tort or contract) or under
constitution, statute or ordinance, including by way of illustration Title VII
of the Civil Rights Act of 1954, as amended, 42 U.S.C. Section 2000(e), et seq.;
the Missouri Human Rights Act, as amended, and the Americans With Disabilities
Act, 42 U.S.C. Section 12101, et seq., the Age Discrimination in Employment Act
of 1967, 29 U.S.C. Section 621, et seq.
7. Dr. Sandfort agrees never to institute, directly or indirectly, any
action or proceeding of any kind against any Released Party, on account of any
matters over which he has waived his rights in this Agreement.
8. MEMC hereby releases Dr. Sandfort and his heirs, personal
representatives, successors, and assigns from any and all claims of every nature
and description, whether known or unknown, prior to the date hereof. This does
not release Dr. Sandfort from any claim which may be made as a consequence of
the future breach by Dr. Sandfort of any provision of this Agreement.
9. MEMC agrees never to institute, directly or indirectly, any action or
proceeding of any kind against Dr. Sandfort, on account of any matters over
which MEMC has waived its rights in this Agreement.
10. Within seven (7) days following Dr. Sandfort's Termination Date, he
shall return to MEMC any and all property of MEMC which he may have in his
possession or control, if any, including, but not limited to any financial
records or reports, memoranda, and all other documents, recordings, tapes,
disks, etc., whether written or electronic, and without retaining any copies
thereof, except that he may retain copies of those documents that may be helpful
to him in preparing an updated resume. Upon completion of the Consulting Period,
he shall also return all MEMC property with which he may be provided, without
retaining copies.
11. The provisions of this Agreement governed by state law will be governed
by Missouri law, exclusive of any rules that would apply to another state's
substantive rules of law or equity, or which would in any way impair the
enforceability of the arbitration provision described in paragraph 18 below.
12. This Agreement shall be binding upon, and shall inure to the benefit of
MEMC and Dr. Sandfort and their respective heirs, executors, administrators,
legal representatives, successors and assigns; and MEMC affirmatively will
require any successor to all or any portion of the business and/or assets of
MEMC that includes the obligations to which MEMC is bound under this Agreement,
whether succession is direct or indirect and without regard to the manner by
which it is effected, including without limitation purchase, merger, and
consolidation, expressly to assume and perform this Agreement in the same manner
and to the same extent that MEMC would be required to perform it if no such
succession had taken place. As used in this Agreement, "MEMC" shall include any
such successor.
13. Dr. Sandfort agrees not to reapply for employment with MEMC at any
time.
14. The parties agree that in the event either party breaches any of the
provisions of this Agreement, either party shall be entitled to any and all
equitable remedies provided by law. Moreover, if a party prevails in any
litigation or arbitration related to a breach of this Agreement, the prevailing
party shall be entitled to the reimbursement of reasonable attorney's fees,
expenses and court costs incurred in such litigation or arbitration.
15. The parties mutually agree that the terms of this Agreement are
strictly confidential. They will not be discussed or otherwise disclosed to
third parties. However, the parties expressly understand that nothing herein
prohibits the divulging or reporting of anything related to this Agreement as
required by law, regulation, governmental authority or similar body, or as
required in the written opinion of counsel to comply with applicable laws,
including securities laws and regulations or stock exchange requirements, it
being expressly acknowledged and agreed that this Agreement and all amendments,
attachments and exhibits thereto shall be filed with the Securities and Exchange
Commission ("the SEC") and furnished to parties requesting copies of exhibits to
filings with the SEC. The parties further acknowledge that employees of MEMC may
learn of the terms of this Agreement in the ordinary course of business and that
Dr. Sandfort's spouse, attorneys, accountants and advisors may also learn of its
terms. However, the parties will undertake to advise such persons as discussed
in the foregoing sentence that they are not to disclose or otherwise divulge the
terms of this Agreement.
16. Dr. Sandfort expressly acknowledges that he has been advised to consult
with an attorney of his choice regarding his execution of this document, that he
has been told that he has twenty-one (21) days from his date of receipt of the
final version of this Agreement to either accept or reject its terms, and that
if he executes this Agreement, he shall have the right to revoke his acceptance
by notifying MEMC, in writing, within seven (7) days of his execution, of his
revocation.
17. Dr. Sandfort shall remain a member of the Board as a non-employee
Director of MEMC, until such time as he is removed or is reappointed, provided
that he shall resign from the Board forty-five (45) days prior to the 1998
annual meeting unless requested in writing not to do so. Dr. Sandfort shall
receive fees and other compensation, if any, as a non-employee Director of MEMC
at the same level as determined for MEMC's other non-employee Directors, payable
during such time as Dr. Sandfort continues to serve as a member of the Board.
18. Any disputes between the parties to this Agreement shall be settled by
arbitration in St. Louis, Missouri, before a single arbitrator in accordance
with the Commercial Arbitration Rules under the American Arbitration
Association, provided that discovery shall be permitted in accordance with the
Federal Rules of Civil Procedure. The decision of such arbitration shall be
final and conclusive on the parties, and judgment upon such decision may be
entered in any court having jurisdiction thereof.
19. If a court of competent jurisdiction determines that any provision
contained in this Agreement, or any part thereof, cannot for any reason be
enforced, the parties agree that such determination shall not affect or
invalidate the remainder of this Agreement.
20. MEMC makes no representations and is not responsible with respect to
the income tax and securities law consequences to Dr. Sandfort resulting from
this Agreement and the compensation and benefits payable pursuant thereto. All
amounts payable pursuant to this Agreement are subject to federal and state tax
withholding as required by applicable law from time to time.
21. Dr. Sandfort may designate a beneficiary or beneficiaries
(contingently, consecutively, or successively) of a death benefit, if any,
payable under this Agreement and, from time to time, may change his designated
beneficiary. A beneficiary may be a trust. A beneficiary designation shall be
made in writing and delivered to MEMC while Dr. Sandfort is alive. If there is
no designated beneficiary surviving at the death of Dr. Sandfort, payment of any
death benefit shall be made to his surviving spouse, and if he has no surviving
spouse, to his estate.
22. Sandfort hereby agrees now and at any time in the future to refrain
from making any comments or statements to the press, the employees of MEMC or
any individual or entity with whom MEMC has a business relationship or others,
(i) which would be likely to adversely affect the conduct of the business of
MEMC or any of its affiliates, or any of their plans or prospects, or their
business reputations, or the business reputations of any of their
representatives or members of their respective boards of directors, or (ii)
which would disparage in any way or cast in a negative light MEMC or any of its
affiliates, or any of their respective directors, officers, agents or employees.
MEMC hereby agrees now and at any time in the future to refrain from making any
comments or statements to the press or any individual or entity with whom
Sandfort has a business relationship or others, (i) which would be likely to
adversely affect the business reputation of Sandfort, or (ii) which would
disparage in any way or cast in a negative light Sandfort.
23. The parties acknowledge that each has read this Agreement consisting of
9 pages, 23 sections, and the attached exhibits and fully understand same. Dr.
Sandfort also acknowledges that he agrees to all of the terms and conditions of
this Agreement and that he does so of his own free will and without coercion and
that he has had an opportunity to review this document with an attorney of his
choice. MEMC represents that it has the corporate authority to enter this
Agreement and has taken or will take all steps necessary to carry out its terms
and conditions. The parties agree that no representation or promise inconsistent
with or additional to the terms of this Agreement have been made, that this
Agreement includes all referenced Exhibits and is the full and complete
agreement of the parties, and that this Agreement may not be modified, changed,
or added to except in writing signed by all parties.
THE PARTIES ACKNOWLEDGE THAT THE INSTANT AGREEMENT CONTAINS A BINDING AND
ENFORCEABLE ARBITRATION PROVISION.
SO AGREED: MEMC ELECTRONIC MATERIALS, INC.
/s/ Robert M. Sandfort By: /s/ Ludger H. Viefhues
- ------------------------- ------------------------
Robert M. Sandfort, Ph.D. Title: CEO
Date: December 1, 1997 Date: December 1, 1997
------------------ -----------------------
<PAGE>
Exhibit A
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of May 1, 1995 (the "Agreement"), between
MEMC ELECTRONIC MATERIALS, INC. of St. Peters, Missouri, a Delaware corporation
("MEMC"), and Dr. Robert M. Sandfort (the "Executive").
WHEREAS, MEMC desires to employ the Executive and to assure itself of the
continued services of the Executive and the availability of his advise, counsel
and leadership for the term of employment provided for in this Agreement; and
WHEREAS, the Executive desires to accept such employment and enter into
this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. Term.
Subject to Sections 3, 4 and 5 below, the term of the Executive's
employment under this Agreement shall commence on the effective date of the
Registration Statement on Form S-1 in connection with the initial public
offering (the "IPO") "hereinafter, the "IPO date") of securities of MEMC and
shall terminate on the first day of the month following the fourth anniversary
of the IPO Date (the "Term"). During the Term, the Executive will devote his
full business time to his duties as President and Chief Operating Officer
("COO") of MEMC. In such capacity, the Executive agrees to serve MEMC faithfully
and to the best of his ability under the direction of the Board of Directors of
MEMC (the "Board"). The Executive also agrees to serve, if elected or appointed,
at no compensation in addition to that provided for in this Agreement, in the
position of officer or director of any affiliate of MEMC.
2. Compensation and Benefits.
2.1. Compensation. In consideration of the Executive's agreement to be
employed by MEMC under the terms and provision of this Agreement, MEMC shall
provide the Executive with the compensation arrangements listed on the attached
Schedule 1; provided, however, that the grants of options and restricted stock
described therein shall be subject to the consummation by MEMC of the IPO. The
Executive's compensation as described in Schedule 1 shall be reviewed by the
Board, based upon the Executive's performance and then current titles and
responsibilities, not less often than annually. The Executive's base salary may
be increased, but not decreased, based on his performance and upon the Board's
view of the appropriate base salary for the titles and responsibilities assigned
to the Executive from time to time. Compensation of the Executive is primarily a
function of company performance and individual performance and could, in any
given year, be higher or lower than that of other COOs in comparable positions.
But it is the intent that MEMC's compensation opportunity be structured to
afford comparable pay given comparable performance by the Executive and MEMC. In
addition to any increases effected as a result of such review, the Board at any
time may in its sole discretion increase the Executive's base salary.
Compensation will include but not be limited to: (a) base salary; (b) annual
incentives; (c) grants of options, restricted stock or other awards under an
omnibus equity incentive plan (the "Equity Incentive Plan") to be adopted by
MEMC prior to consummation of the IPO; and (d) participation in any long term
incentive plan established by MEMC.
2.2. Pension Benefits. The Executive shall continue to be entitled to
participate in the MEMC Pension Plan for Salaried Employees (the "MEMC Pension
Plan").
2.3. Other Employee Benefits. The Executive shall be entitled to continue
to participate as a vested employee in any welfare plans of MEMC, including, but
not limited to, medical, dental, life insurance, and disability income, and
perquisites to which an employee of comparable or lesser grade level in MEMC is
entitled.
3. Termination Payments.
3.1. Termination Without Cause.
3.1.1. General. Subject to Section 5 below, if MEMC terminates the
Executive's employment without Cause (as defined below) prior to the expiration
of the Term, (i) MEMC shall be obligated to pay the Executive his then current
base salary for the balance of the Term (the "Severance Period") in accordance
with MEMC's payroll practices, (ii) all unvested options granted under the
Equity Incentive Plan shall vest and all restrictions on awards granted under
the Equity Incentive Plan shall lapse and (iii) the Executive shall be allowed
to exercise all stock options granted under the Equity Incentive Plan until the
earlier of (A) the later of (x) one year following the date of termination and
(y) the first day of the month following the fourth anniversary of the IPO Date
and (B) the expiration of the term of the stock option; provided, however, that
the Executive may exercise any incentive stock options until three months
following the date of termination (or, if earlier, until expiration of the term
of such incentive stock options). In addition, in the event of termination
without Cause, the then current year annual incentive will be paid at such level
and at such time as payment is made to MEMC's other executives under the
applicable bonus plan. The Executive shall have no further right to receive any
other compensation or benefits after such termination or resignation of
employment, except as determined in accordance with the terms of the employee
benefit plans or programs of MEMC or as provided in Section 2.2 above.
3.1.2. Conditions Applicable to the Severance Period. If, during the
Severance Period, the Executive breaches his obligations under Section 5 of this
Agreement, MEMC may, upon written notice to the Executive, terminate the
Severance Period and cease to make any further payments or provide any benefits
described in Section 3.1.1. except as determined in accordance with the terms of
the employee benefit plans or programs of MEMC as provided for in Section 2.2
above.
3.1.3. Death During Severance Period. In the event of the Executive's death
during the Severance Period, payments of the severance amounts under this
Section 3 shall continue to be made during the remainder of the Severance Period
to the beneficiary designated in writing for this purpose by the Executive or,
if no such beneficiary is specifically designated, to the Executive's estate.
3.1.4. Date of Termination. The date of termination of employment without
Cause shall be the date specified in a written notice of termination to the
Executive (which date shall be coincident with or subsequent to the date of such
notice).
3.2. Termination for Cause: Resignation by the Executive.
3.2.1. General. If, prior to the expiration of the Term, the Executive's
employment is terminated by MEMC for Cause, or the Executive resigns from his
employment hereunder, the Executive shall be entitled to payment of his base
salary as then in effect through and including the date of termination or
resignation. The Executive shall have no further right to receive any other
compensation or benefits after such termination or resignation of employment,
except as determined in accordance with the terms of the employee benefit plans
or programs of MEMC or as provided in Section 2.2 above.
3.2.2. Date of Termination. Subject to the proviso to Section 3.3, the date
of termination for Cause shall be the date specified in a written notice of
termination to the Executive. The date of resignation shall be the date
specified in the written notice of resignation from the Executive to MEMC (which
date shall be coincident with or subsequent to the date of such notice) or, if
no date is specified therein, 10 business days after receipt by MEMC of written
notice of resignation from the Executive.
3.3. Cause. Termination for "Cause" shall mean termination of the
Executive's employment because of:
(i) any act or omission that constitutes a material breach by the
Executive of any of his material obligations under this Agreement (other
than by reason of his death or Permanent Disability (as defined below));
(ii) the continued failure or refusal of the Executive to perform the
material duties required of him as an employee of MEMC (other than by
reason of his death or Permanent Disability);
(iii) any willful material violation by the Executive of any law or
regulation applicable to the business of MEMC or any of its subsidiaries,
or the Executive's conviction of a felony, or any willful perpetration by
the Executive of a common law fraud; or
(iv) any other willful misconduct by the Executive which is materially
injurious to the financial condition or business reputation of, or is
otherwise materially injurious to, MEMC or any of its subsidiaries or
affiliates;
provided, however, that if any such Cause relates to the Executive's obligations
under this Agreement and (x) is susceptible to cure and (y) does not constitute
a repetition of such Cause, MEMC shall not terminate the Executive's employment
hereunder unless MEMC first gives the Executive notice of its intention to
terminate and of the grounds for such termination, and the Executive has not,
within 10 business days following receipt of the notice, cured such Cause, or in
the event such Cause is not susceptible to cure within such 10 business day
period, the Executive has not taken all reasonable steps within such 10 business
day period to cure such Cause as promptly as practicable thereafter.
4. Death or Disability.
In the event of termination of the Executive's employment by reason of
death or Permanent Disability (as hereinafter defined), the Executive (or his
estate, as applicable) shall be entitled to base salary and benefits determined
under Section 2 hereof through the date of death or, in the case of Permanent
Disability, through the later of the date of termination or the date (not later
than one year following the date of termination) on which the Executive
commences to receive disability benefits (including a pro rata annual incentive
for the year of death or disability at the maximum opportunity level). For 50%
of the restricted stock held by the Executive on the date of the termination of
his employment, all restrictions will immediately lapse. The remaining
restricted stock and options outstanding will continue to vest in accordance
with Schedule 1 as if his employment has not terminated. Other benefits shall be
determined in accordance with the benefit plans maintained by MEMC, including,
without limitation, the Equity Incentive Plan and any Long Term Incentive Plan,
and MEMC shall have no further obligation hereunder. For purposes of this
Agreement, "Permanent Disability" means a physical or mental disability or
infirmity of the Executive that prevents the normal performance of substantially
all his duties as an employee of MEMC, which disability or infirmity shall
exist, or in the opinion of an independent physician is reasonably likely to
exist, for any continuous period of 180 days.
5. Restrictive Covenants.
5.1 Non-Compete: Confidentiality. For the period extending through the
later of (i) April 1, 2000 and (ii) two years following the date of termination
of the Executive's employment with MEMC or its affiliates, the Executive will
not accept employment nor engage in business, directly or indirectly, as a sole
proprietor, member of a partnership, stockholder or investor (other than a
stockholder or investor owning not more than a 5% interest), officer or director
of a corporation, or as an employee, associate, consultant or agent for any
person, partnership, corporation or other business organization or entity other
than MEMC or any of its subsidiaries which competes with MEMC without the
express written consent of MEMC. In addition, the terms of the confidentiality
agreement dated March, 1989 between MEMC and the Executive are incorporated
herein by reference. Notwithstanding anything contained in this Section 5 to the
contrary, the period of applicability of this Section 5 shall be extended an
additional day for each day on which the Executive is in breach of this Section
5.
5.2 Injunctive Relief. Without intending to limit the remedies available to
the parties hereto, the parties acknowledge that a breach of any of the
covenants contained in this Section 5 may result in material and irreparable
injury to MEMC for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, MEMC shall be entitled to seek a temporary
restraining order and/or a preliminary or permanent injunction restraining the
Executive from engaging in activities prohibited by this Section 5 or such other
relief as may be required specifically to enforce any of the covenants in this
Section 5. If, for any reason, it is held that the restrictions under this
Section 5 are not reasonable or that consideration therefor is inadequate, such
restrictions shall be interpreted or modified to include as much of the duration
and scope identified in this Section 5 as will render such restrictions valid
and enforceable.
6. Successors. MEMC will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of MEMC to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that MEMC would be required
to perform it if no such succession had taken place. As used in this Agreement,
"MEMC" shall mean MEMC as defined above and any successor to its business and/or
assets which by reason hereof assumes and agrees to perform this Agreement by
operation of law, or otherwise.
7. Miscellaneous.
7.1 Severability. Each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
7.2 Disputes. Any disputes between the parties to this Agreement shall be
settled by arbitration in St. Louis, Missouri under the auspices of, and in
accordance with the rules of, the American Arbitration Association. The decision
in such arbitration shall be final and conclusive on the parties and judgment
upon such decision may be entered in any court having jurisdiction thereof.
7.3 Entire Agreement: Amendment.
(i) Except as expressly set forth herein, this Agreement represents
the entire agreement of the parties concerning the subject matter hereof
and shall supersede any and all previous contracts, arrangements or
understandings between MEMC and the Executive.
(ii) This Agreement may be amended at any time by mutual written
agreement of the parties hereto.
7.4 Withholding. The payment of any amount pursuant to this Agreement shall
be subject to applicable withholding and payroll taxes, and such other
deductions as may be required under MEMC's employee benefit plans, if any.
7.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
The parties have executed this Agreement as of the day and year first above
written.
MEMC Electronic Materials, Inc.
/s/ Robert M. Sandfort By: /s/ Ludger H. Viefhues
- -------------------------------- -----------------------------------
Robert M. Sandfort Chairman of the Board
[ ]
<PAGE>
Schedule 1
Current Compensation Program
o Annual Base Salary - USD $310,000 per annum
o 1995 Incentive Program Target Incentive Opportunity as a percent of base
salary - Annual Incentive Target/Maximum Opportunity; 30%/66%
o Grants of Stock Options and Performance Contingent Vesting Restricted Stock
in connection with the IPO
o Participation in any Long Term Incentive Plan (expected to be established
by MEMC on or after January 1, 1996)
STOCK OPTIONS RESTRICTED STOCK
- ----------------------- ------------------------------
72,364 Options at IPO price which 24,000 shares of Restricted
vest at the rate of 25% per year, Stock which vest 100% (i.e.,
such that 100% vesting will occur on all forfeiture restrictions
the fourth anniversary of the IPO lapse) on the fourth anniver-
Date. (1) ("Ratable Vesting Options") sary of the IPO Date.
("Performance Vesting
Restricted Stock"). However,
if, at any time during the
first 3 years, the common
stock share appreciation is
greater than 55% from the
IPO price, 50% of the
Performance Vesting
Restricted Stock will become
fully vested. If such share
72,364 Options at IPO price which appreciation is greater than
vest 100% on the fourth anniversary 100%, then all Performance
of the IPO Date. ("Cliff Vesting Vesting Restricted Stock will
Options") become fully vested.
24,000 shares of Restricted
Stock which vest 100% on fourth
anniversary of the IPO Date.
("Cliff Vesting Restricted
Stock")
- ---------------
(1) The number of shares representing .171% of outstanding stock on a fully
diluted basis is assumed to be 72,364 shares. If the IPO results in a
different number of shares equaling .171% of outstanding stock on a fully
diluted basis, the Executive shall receive, for each of the Ratable Vesting
and Cliff Vesting Option grants, the greater of 72,364 shares or .171% of
outstanding stock on a fully diluted basis. The number of both Ratable
Vesting and Cliff Vesting Restricted Stock shares referenced granted to the
Executive will also be determined in this manner.
Performance Vesting Restricted Stock, Cliff Vesting Options, and Cliff Vesting
Restricted Stock will be forfeited and cancelled, if the employment of the
Executive is terminated for Cause or due to his option to retire prior to the
fourth anniversary of the IPO Date.
