Exhibit 10.11
ELECTROGLAS, INC.
JOINT DEVELOPMENT AGREEMENT
This Joint Development Agreement (the "Agreement") is entered into at Santa
Clara, California as of June 18, 1999 (the "Effective Date") between
ELECTROGLAS, INC. a Delaware corporation ("Electroglas"), and CASCADE MICROTECH,
INC., an Oregon corporation ("Cascade"), and is as follows:
RECITALS
A. Electroglas produces and sells a fully automatic prober (the "Prober")
used in the production process by semiconductor fabrication plants.
Cascade sells parametric probers to advanced research and development
laboratories for semiconductor companies in the development of improved
manufacturing technologies.
B. Cascade has certain low leakage, low noise parametric probing
technology related to chucks, cabling, and shielding more particularly
set forth in Exhibit A hereto (the "Technology") and including: (1) all
related patented technology, process techniques, and know how developed
by Cascade prior to and throughout the term of this Agreement; and (2)
all related non patentable modifications, adjustments or enhancements
that Cascade makes, during the term of the license agreement currently
contemplated by the parties, to either purchased components or the
Technology. The Technology excludes technology related to probes and
probe cards.
C. The parties can substantially enhance the performance of the Prober in
parametric applications by integrating the Technology into the Prober
to create two probers meeting the specifications (the "Specifications")
set forth in Exhibit B hereto (collectively the "Parametric Probers "
and individually, as set forth in the Specifications, "Parametric
Prober One" and "Parametric Prober Two").
D. Electroglas seeks to develop the Parametric Probers and license the
Technology to enable it to sell products which exceed the performance
criteria of Electroglas's competitors to silicon wafer fabrication
plants with a view to meeting anticipated increased performance
criteria necessary to support increasing complexity in silicon wafer
manufacturing. Additionally, Electroglas seeks to enhance its revenue
and profitability by manufacturing Parametric Probers for the research
and development laboratory, wafer production, and process integration
markets.
E. Cascade seeks to develop the Parametric Probers and license the
Technology to give Cascade an outlet for the Technology without having
to design, develop, and manufacture
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its own prober for sale in the production market, and to enable Cascade
to focus on further enhancing the Technology and other areas specific
to Cascade's sales in the engineering laboratory and process
integration markets. Additionally, Cascade seeks to enhance its
revenues and profitability by licensing the Technology for Parametric
Probers sold into the production and process integration markets.
F. Both parties are willing to expend the effort and incur the cost of
jointly incorporating the Technology into the Prober to create the
Parametric Probers (the "Development Effort") in consideration of the
willingness of each party to enter into a license agreement
substantially in the form attached as Exhibit C (the "License
Agreement") and a stock purchase agreement and related documents
substantially in the form attached as Exhibit D (the "Stock Purchase
Agreement").
Accordingly, the parties agree as follows:
1. DEVELOPMENT
1.1. CASCADE.
Promptly upon execution of this Agreement, Cascade shall commence work on the
Development Effort. In so doing, Cascade shall place primary emphasis on
modifying the design and specifications of the Technology as necessary to
incorporate the Technology into the Parametric Probers and secondary emphasis on
recommending changes to the Probers and Prober manufacturing process needed to
incorporate the Technology into the Parametric Probers. In addition, Cascade
shall alert Electroglas to any opportunities to make changes to the Probers or
Prober manufacturing process that will reduce the costs associated with
manufacturing or operating the Probers. Cascade shall permit Electroglas to
review the designs, specifications, and drawings of the Technology to assist
Cascade personnel in incorporating the Technology into the Parametric Probers.
1.2. ELECTROGLAS.
Promptly upon execution of this Agreement, Electroglas shall commence work on
the Development Effort. In so doing, Electroglas shall make available
Electroglas's personnel for assistance in the Development Effort. Electroglas
shall permit representatives of Cascade to examine such documents,
specifications, manufacturing processes; and other materials, information or
processes that Cascade may request that are reasonably' related to incorporating
the Technology into the Parametric Probers. Electroglas shall review the
designs, specifications, and drawings of the modifications and enhancements
proposed by Cascade to the Prober, and shall complete the detailed designs of
such modifications and enhancements according to the engineering standards and
manufacturing documentation requirements of Electroglas.
1.3. OWNERSHIP OF RESULTANT INTELLECTUAL PROPERTY.
As between the parties, Cascade shall be the sole owner of all enhancements or
modifications to
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the Probers which affect its low leakage or low noise parametric performance
developed during the term of this Agreement and Electroglas shall be the sole
owner of all other enhancements or modifications to the Probers developed during
the term of this Agreement, regardless of who is deemed to be the author or
inventor of such modification. Each party shall ensure that the party's
employees, agents. and subcontractors involved in the Development Effort are
party to a binding agreement obligating such person to assign to such party all
intellectual property rights resulting from the Development Effort.
1.4 INDEMNIFICATION FOR INFRINGEMENT
Each party shall ensure that all code prepared in connection with the
Development Effort and all other modifications or enhancements to the Technology
or the Probers completed by such party or such party's employees are an original
work prepared without copying or otherwise infringing the intellectual property
rights of any other person, and shall indemnify, defend and hold the other party
harmless from any infringement claim arising from the other party's use of such
modifications or enhancements as permitted by the License Agreement. Such
indemnification shall be limited to the intellectual property rights of others
in force as of the Effective Date of this Agreement, and the total liability of
each party for defending and holding the other party harmless under this Section
1.4 shall not exceed one-half of all payments received by CASCADE from
ELECTROGLAS under the License Agreement. The indemnifying party shall have
control of the defense of any lawsuit based on such infringement claim, and the
indemnified party shall assist the indemnifying party without cost in the
defense of such suit or action by providing information and fact witnesses as
needed. The indemnified party shall have the right to be represented by it own
attorneys at the indemnified party's own expense, which attorneys will act only
in an advisory capacity. Nothing herein shall authorize the indemnifying party
to settle any lawsuit without the written consent of the indemnified party if,
by such settlement, the indemnified party is obligated t6 make any monetary
payment, to transfer any property or any interest in property, to become subject
to an injunction, to grant any license or other rights under its intellectual
property rights, or to acknowledge any action or inaction of the indemnified
party disputed by such party. The indemnifying party shall have the right to
change any of its prior modifications or enhancements so as to avoid such
infringement claim with respect to future Parametric Probers subject to a
renegotiation of the royalty payment and exclusivity minimums to reflect any
reduction in performance of the Parametric Probers. If the indemnified party
does not implement such a change within sixty (60) days after notice by the
indemnifying party of such change, then the indemnifying party's obligations
under this Section 1.4 with respect to such infringement claim shall not apply
to infringements which occur thereafter.
2. RESOURCE COMMITMENTS
2.1. RESOURCES.
The parties shall devote such personnel and equipment to the Development Effort
as they deem necessary under the circumstances.
2.2. COSTS AND EXPENSES.
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Each, party shall bear its own costs and expenses in connection with providing
the foregoing resources and any other costs and expenses incurred in connection
with this Agreement.
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3. POST DEVELOPMENT MATTERS
3.1. PROJECT COMPLETION.
Each party shall promptly notify the other in writing in accordance with Section
7.2 upon the successful development of Parametric Prober One or Parametric
Prober Two. Neither party shall be required to deliver the notice required
pursuant to this Section 3.1 unless the applicable Parametric Prober in question
meets the Specifications applicable thereto to the satisfaction of such party,
provided, however, that such notice shall not be unreasonably withheld, delayed,
or denied. Electroglas shall make a best effort to complete the pro-forma
analysis described in Section (a) iii) of Exhibit B within two (2) weeks after
notification by Cascade of the successful development of the applicable
Parametric Prober.
3.2. LICENSE AND STOCK PURCHASE AGREEMENT.
Within Thirty (30) days after both parties have received the notice required by
Section 3.1 with respect to Parametric Prober One, both parties shall execute
the License and Stock Purchase Agreements in the forms attached as Exhibits C
and D hereto, respectively, subject only to the condition set forth in
Section 3.3.
3.3. TECHNOLOGY DUE DILIGENCE.
The obligation of Electroglas to enter into the License and Stock Purchase
Agreements shall be expressly conditioned upon Electroglas satisfying itself
that Cascade owns the Technology and may grant an exclusive license to the
Technology; provided, however, that nothing in this Section 3.3 shall relieve
either party of its obligation to make the representations and warranties
contained in the License and Stock Purchase Agreements. The condition described
in this Section 3.3 shall be deemed to have been satisfied unless, no later than
May 28, 1999, Electroglas shall have notified Cascade of a specified impediment
to Cascade's rights described in this Section 3.3.
3.4. DEFAULT FEE.
In the event of a breach by either party of Sections 3.1 or Section 3.2
(subject, at all times, to the limitation on Electroglas's obligation imposed by
Section 3.3), the parties shall be obligated to pay a default fee as set forth
below.
3.4.1. In the event of a breach of Sections 3.1 or 3.2 by Electroglas
(subject, at all times, to the limitation on Electroglas's
obligation imposed by Section 3.3), Electroglas shall pay
Three Hundred Thousand Dollars ($300,000) to Cascade within.
Sixty (60) days from the date of such breach.
3.4.2. In the event of a breach of Sections 3.1 or 3.2 by Cascade,
Cascade shall pay Two Hundred Thousand Dollars ($200,000) to
Electroglas within Sixty (60) days from the date of such
breach.
3.4.3. Payment of the default fee specified in this Section 3.4 shall
constitute the -sole and exclusive remedy of the parties for a
breach of Sections 3.1 or 3.2.
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4. CONFIDENTIAL INFORMATION
4.1. DEFINITION OF CONFIDENTIAL INFORMATION.
"Confidential Information" means:
(a) All specifications, drawings, designs, and 6ther material of any kind,
in whatever form, related to the Technology, the Probers, or the
production or manufacture thereof, any intellectual property resulting
from the Development Effort, any relevant sales and marketing
information, including, but not limited to product pricing, market
positioning strategy, customer lists, and the like;
(b) any other information disclosed by a party which is in written or other
tangible form and is marked "Confidential," "Proprietary," or in some
other manner to indicate its confidential nature;
(c) all nonpublic information concerning the customers and clients of the
parties to this Agreement;
(d) the nonpublic terms of this Agreement and all nonpublic reports and
pricing and sales information provided pursuant to this Agreement;
(e) oral information disclosed by a party and which is designated as
confidential at the time of disclosure; and
(f) other information, whether written or oral, that by its nature is such
that the parties, being sensitive to the need to protect the
confidential information of the other, should inquire as to its
confidential status (unless upon inquiry the party is advised that the
information is not confidential).
Information ceases to be Confidential Information if the owner or possessor of
the information (the "Owner") discloses it to a third party free from
restrictions similar to those imposed by this Agreement. Information is deemed
to be Confidential Information unless the party to whom the information is
disclosed (the "Recipient") proves otherwise.
4.2. EXCLUSIONS.
Notwithstanding. the above, "Confidential Information" does not include
information that the Recipient can prove:
(a) is in the public domain at the time it is disclosed or enters in the
public domain other than through an infringement of the rights of the
Owner;
(b) is known to the Recipient, without restriction, at the time of
disclosure; or
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(c) is independently developed by the Recipient without any use of the
Confidential Information of the Owner.
4.3. OBLIGATION TO KEEP CONFIDENTIAL INFORMATION CONFIDENTIAL.
Each Recipient shall treat as confidential all Confidential Information of the
Owner. A Recipient shall not use Confidential Information of an Owner except as
permitted in this Agreement or the License Agreement. A Recipient shall not
disclose Confidential Information to any employee, agent, or third party except
as may be reasonably required in connection with this Agreement. Each Recipient
shall use at least the same degree of care with respect to the Confidential
Information of the other party as the Recipient uses to prevent the disclosure
of its own confidential information of like importance, but in no event less
care than a reasonably prudent business person.
4.4. PERMITTED DISCLOSURES.
When disclosing Confidential Information as permitted by this Agreement, the
Recipient shall impose confidentiality obligations on the subsequent recipient
at least as protective as those set forth in this Agreement. Each party shall
enter into written confidentiality agreements with its employees who have access
to such information obligating them to respect the confidentiality of the
Confidential Information of the other party. Each Recipient shall assist. the
Owner in enforcing such agreements.
4.5. DISCLOSURE PURSUANT TO GOVERNMENT ORDER.
A Recipient may disclose Confidential Information pursuant to the order or
requirement of a court, administrative agency, or other governmental body if the
Recipient gives immediate notice of the request for the information to the Owner
so that the Owner may seek a protective order or otherwise preserve the
confidentiality of the information.
4.6. ACKNOWLEDGMENTS.
Each party hereby acknowledges that the Confidential Information of the other
party is commercially and competitively valuable; that by this Agreement, the
parties are taking reasonable steps to protect their legitimate interest in the
Confidential Information; and that the restrictions contained in this Agreement
are reasonably necessary to protect each party's legitimate interest in its
Confidential Information.
5. CONDUCT ON PREMISES
A party (the "Guest Party") to this Agreement sending employees, agents, or
subcontractors to the facility of the other party (the "Host Party") shall take
reasonable precautions to prevent the occurrence of any injury to persons or
property during the progress of the Development Effort and, except to the extent
that any injury to a Guest Party employee, agent, or subcontractor is due solely
and directly to negligence of the Host Party, the Guest Party shall indemnify
the Host Party against all losses which may result in any way from any
.negligent act or omission of the Guest Party or the Guest Party's agents,
employees, or subcontractors. Guest Party shall maintain
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such public liability, property damage and employer's liability compensation
insurance as will protect Host Party from risks and. from claims under any
applicable worker's compensation or occupational disease acts. Guest Party shall
instruct and require Guest Party's visiting employees, agents, and
subcontractors to observe and obey all rules, policies, and procedures in effect
at the facilities of Guest Party.
6. TERM AND TERMINATION
6.1. TERM.
The term of this Agreement and the Development Effort shall begin on the
Effective Date hereof and continue for a total of Two Hundred Seventy (270)
days.
6.2. SURVIVAL.
The provisions of Articles 1.4, 4, 5, and 7 shall survive the expiration,
cancellation, or termination of this Agreement.
7. MISCELLANEOUS
7.1. AMENDMENTS, WAIVERS, AND CONSENTS.
This Agreement shall not be am-ended except in a writing signed by the parties.
No course of dealing between the parties shall constitute an amendment of this
Agreement. No waiver or consent shall be binding except in a writing signed by
the party making the waiver or giving the consent. No waiver of any provision or
consent to any action shall constitute a waiver of any other provision or
consent to any other action, whether or not similar. No waiver or consent shall
constitute a continuing waiver or consent except to the extent specifically set
forth in writing.
7.2. NOTICE.
Any notice, instruction, or communication required or permitted to be given
under this Agreement to any party shall be in writing (which may include
telecopier or other similar form of reproduction followed by a mailed hard copy,
but not electronic mail) and shall be deemed given when actually received or, if
earlier, five days after deposit in the United States Mail by certified or
express mail, return receipt requested, postage prepaid addressed to the party
at its principal address noted below. Each party shall make an ordinary, good
faith effort to ensure that the person to be given notice actually receives such
notice. A party giving notice shall deliver a copy of the notice to the
recipient's attorney indicated below, at the same time and in the same or an
equivalent manner. Each party shall ensure that the other parties to this
Agreement have a current address, fax number, and telephone number for the party
and if desired, the party's attorney, for the purpose of giving notice. The
principal offices of the parties and their attorneys are presently located at
the following addresses:
Electroglas: Electroglas, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
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Attn.: Xxxxxx X. Xxxxxxxx, Vice President
(000) 000-0000 (FAX)
(000) 000-0000 (Voice)
Electroglas Counsel: Enterprise Law Group, Inc.
Menlo Oaks Corporate Center 0000
Xxxxxxxx Xxxxx, Xxxxx 000 Xxxxx
Xxxx, XX 00000-0000
Attn.: Xxxxxxx X. Xxxxx, Esq. /
Xxxxxx X. Xxxxxxxx, Esq.
000-000-0000 (FAX)
650-462-4700 (Voice)
Cascade: Cascade Microtech, Inc.
2430 N.W. 000 xx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
Attn.: Xxxxx XxXxxxxx
(000)000-0000 (FAX)
(000)000-0000 (Voice)
Cascade Counsel: Ater, Wynne, Hewitt, Xxxxxx
& Xxxxxxxx
000 X.X. Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000-0000
Attn.: Xxxx Xxxxxxxxxxxxxx, Esq.
000 000-0000 (FAX)
503 226-0079 (Voice)
A party may change his or its address for purposes of this Section 7.2 by giving
the other party written notice of the new address in the manner set forth above.
7.3. GOVERNING LAW.
The rights and obligations of the parties shall be governed by, and this
Agreement shall be construed and enforced in accordance with, the laws of the
State of California, excluding any rules that would apply the law of another
jurisdiction.
7.4. JURISDICTION AND VENUE.
With respect to any legal proceeding instituted by Cascade involving this
Agreement, the parties hereto consent to the personal jurisdiction of all
federal and state courts in California, and agree that venue shall lie
exclusively in Santa Xxxxx County, California. With respect to any legal
proceeding instituted by Electroglas involving this Agreement, the parties
hereto consent to the personal jurisdiction of all federal and state courts in
Oregon, and agree that venue shall lie exclusively in Multnomah County, Oregon.
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7.5. ENTIRE AGREEMENT.
This Agreement and the documents and agreements contemplated in this Agreement
constitute the entire agreement between the parties with regard to the subject
matter hereof and thereof. This Agreement supersedes all previous agreements
between or among the parties. There are now no agreements, representations. or
warranties between or among the parties other than those set forth in this
Agreement or the documents and agreements contemplated in this Agreement. In the
event of any inconsistency between custom and practice in any trade or industry
and, this Agreement, this Agreement is intended to modify trade custom and shall
control. Neither custom and practice in any trade or industry, nor any course of
dealing between the parties, shall be deemed to supplement this Agreement where
this Agreement is silent.
7.6. SEVERABILITY.
If any provision of this Agreement, or the application of such provision to any
person or circumstances, is held invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall continue
in full force without being impaired or invalidated.
7.7. TIME OF ESSENCE.
Time is of the essence of this Agreement and the time periods set forth in this
Agreement are to be strictly construed and enforced. Where no definite time for
performance is specified, however, a delay or omission to exercise any right,
power, or remedy hereunder upon any breach or default under this Agreement shall
not impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach or default, or of any similar breach or, default
thereafter occurring, or an acquiescence therein.
7.8. NO PARTNERSHIP, ETC.
This Agreement does not make the parties partners or joint venturers with each
other, nor does it create any principal and agent or trustee and beneficiary
relationship or other association between any of the parties, except as
expressly stated otherwise. No action taken by any party pursuant to this
Agreement shall create any such relationship in the absence of express language
in this Agreement to the contrary. The relationship of the parties to each other
is that of independent contractors.
7.9. CONSTRUCTION OF AGREEMENT.
The terms of this Agreement have been negotiated by the parties hereto, and no
provision of this Agreement shall be construed against either party as the
drafter thereof.
7.10. EXECUTION OF AGREEMENT.
Each party has. been represented by counsel in the negotiation and execution of
this Agreement. This Agreement is executed voluntarily without any duress or
undue influence on the part of or on behalf of the parties hereto. The parties
acknowledge that they have read and understood this Agreement and its legal
effect.
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7.11. AUTHORITY OF EXECUTING PARTIES.
The undersigned represent that they are authorized to execute and deliver this
Agreement on behalf of the respective parties hereto. Each party has relied upon
the authority of the other in executing and delivering this Agreement.
7.12. EXHIBITS.
All Exhibits hereto shall be deemed to be a part of this Agreement and are fully
incorporated in this Agreement by this reference.
7.13. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Joint Development
Agreement as of the date first referenced above.
"Electroglas" "Cascade"
Electroglas, Inc., Cascade Microtech, Inc.,
a Delaware corporation an Oregon corporation
By: /s/ XXXX XXXXXXX By: /s/ XXXX XXXXX
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Xxxx Xxxxxxx, Xxxx Xxxxx,
Chief Executive Officer Chief Executive Officer
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