CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.06
OPTION AGREEMENT
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This Agreement is effective on the date last subscribed below, and is by
and between A&R Materials, Inc., with offices at San Jose, California
(hereinafter referred to as "A&R") and YALE UNIVERSITY with offices at New
Haven, Connecticut (hereinafter referred to as "Yale").
WHEREAS, Professor T.P. Ma in the Yale University Department of Electrical
Engineering is conducting research on and has discovered increased conductivity
and electron mobility in istopically enriched semiconductor materials (the
"Invention"); and
WHEREAS, a patent application for the Invention was filed on 16 November
1990 with the serial number 615,425; and
WHEREAS, A&R wishes to examine the business opportunities presented by this
Invention; and
WHEREAS, A&R or an affiliate may wish to obtain a world-wide exclusive
license to the Invention and to all patents issuing from it and from other
applications claiming priority on the basis of its filing date (the "Patent
Rights");
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
Section I Option
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1.1 Yale hereby grants to A&R, for the term of this agreement, an exclusive
option to an exclusive, world-wide license to make, have made, use, sell and
practice the Invention pursuant to the Patent Rights, such license to be on such
reasonable terms and conditions, including reasonable royalties, as the parties
may agree. If A&R decides to exercise this option, it shall so notify Yale in
writing within the term of this agreement. Thereafter, Yale and A&R shall within
ninety (90) days negotiate in good faith a license agreement. Provided that the
terms of said Licensing Agreement shall be no less favorable to A&R than those
contained in the following two tables:
i) LICENSEE shall pay to YALE Earned Royalties on Net Sales according to
the following schedule:
Net Sales Royalty Rate
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[CONFIDENTIAL]
ii) In addition, LICENSEE shall pay to YALE Sublicense Income according
to the following schedule:
Sublicensee Sublicense Income
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[CONFIDENTIAL]
where "Investor" is a company that funded A&R to acquire /28/Si to provide
to YALE and a "Non-investor" is a company which did not fund A&R to acquire
/28/Si to provide to YALE as contemplated in 4.1 below.
Section II Term
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2.1 This Agreement shall expire eighteen (18) months after its signing by both
parties. This option will be extendible for an additional six (6) months if
agreed in writing by both parties.
Section III Evaluation
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3.1 During the term of this Agreement, A&R will evaluate the feasibility of the
commercial development of the Invention.
Section IV Payment
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4.1 As consideration of the option hereby, A&R shall provide Yale istopically
and chemically pure rod and wafer specimens of single crystal silicon suitable
for measurement of thermal conductivity and electron mobility. The parties
agree that the isotopic enrichment should exceed 99% /28/Si and have less than 1
part per million total chemical impurities. A&R will make all reasonable
efforts to reduce these chemical impurities to levels approaching industry
standard purity. A&R shall provide Yale with a full accounting of the costs it
has incurred in securing said isotopically and chemically pure silicon crystals,
and shall be reimbursed for one-half (1/2) of said amount but only by deduction
from royalty payments due Yale from A&R under the Licensing Agreement
contemplated herein. To cover this reimbursement, royalty payments due Yale
shall be reduced by no more than one-half (1/2) in any given Royalty Year until
the full amount is paid.
Section V Miscellaneous
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5.1 Notices. All notices shall be mailed via certified mail, return receipt
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requested, or shall be given by fax, telegraph, telex or cable, confirmed by
letter mailed as provided above, addressed as follows, or to such other address
as may be designated from time to time by notice given in the manner provided in
this Section:
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If to Yale: If to A&R:
Yale University Xxxxx X. Xxxxxxxxx
Director President & CEO
Office of Cooperative Research A&R Materials, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000 0000 Xxxxxxxx Xxx., Xxxxx X
Xxx Xxxxx, XX 00000 Xxx Xxxx, XX 00000
FAX: 000-000-0000 FAX: 000-000-0000
Notices shall be deemed given as of the date sent.
5.2 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Connecticut.
5.3 Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.
5.4 Headings. Paragraph headings are inserted herein for convenience of
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reference only and do not form a part of this Agreement, and no construction or
inference shall be derived therefrom.
5.5 Entire Agreement. This Agreement and the instruments, documents and other
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agreements referred to herein or signed concurrently set forth the entire
agreement and understanding of the parties regarding the subject matter.
5.6 Counterparts. This Agreement may be executed simultaneously in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.7 Amendment; Waiver; etc. This Agreement may be amended, modified,
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superseded or canceled, and any of the terms hereof may be waived, only by a
written instrument executed by each party hereto or, in the case of waiver, by
the party or parties waiving compliance. The delay or failure of any party at
any time or times to require performance of any provision hereof shall in no
manner affect the rights at a later time to enforce the same. No waiver by any
party of any condition or of the breach of any term contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such condition or
of the breach of such term or any other term of this Agreement.
5.8 No Third Party Beneficiaries. No person not a party to this Agreement,
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including any employee of any party to this Agreement, shall have or acquire any
rights by reason of this Agreement, nor shall any party hereto have any
obligations or liabilities to such other Person by reason of this Agreement.
Nothing contained in this Agreement shall be deemed to constitute the parties
partners with each other or any Person.
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5.9 Assignment and Successors. This Agreement may not be assigned by either
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party hereto, except that A&R may assign this Agreement and the rights and
interests of A&R hereunder, in whole or in part, to any of its Affiliates, any
purchaser of all or substantially all of its assets or to any successor
corporation resulting from any merger or consolidation of A&R with or into such
corporation.
5.10 Severability and Survival. If any provision of this Agreement is or
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becomes invalid or is ruled invalid by any court of competent jurisdiction or is
deemed unenforceable, it is the intention of the parties that the remainder of
the Agreement shall not be affected.
5.11 Representations. Yale represents that it has the right to enter into this
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Agreement, and that there are no other agreements which conflict with this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
YALE UNIVERSITY A&R MATERIALS, INC.
By: ___________________________ By: ____________________________
Typed Name: ___________________ Typed Name: ____________________
Its: _________________________ Its: ___________________________
Date: _________________________ Date: __________________________
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