Exhibit 10.1
SHAREHOLDERS
AGREEMENT
This Shareholders Agreement (the
“AGREEMENT”) is made and entered into as of
April 3, 2007, among Cascade Microtech, Inc., an Oregon
corporation (“ACQUIROR”), Gryphics, Inc., a Minnesota
corporation (“TARGET”) and each of the shareholders of
Target set forth on Appendix A hereto (each a
“SHAREHOLDER” and collectively, the
“SHAREHOLDERS”).
This Agreement is entered into in
connection with that certain Agreement and Plan of Merger dated as
of April 3, 2007 (the “MERGER AGREEMENT”) by and
among Acquiror, Target and Gryphics Acquisition Corporation, a
Minnesota corporation and a wholly-owned subsidiary of Acquiror
(“SUB”). The Merger Agreement provides for the
merger of Target with and into Sub (the “MERGER”) in a
transaction in which the issued and outstanding shares of capital
stock of Target (the “TARGET COMMON STOCK”) will be
converted into the right to receive cash and shares of Common
Stock, $0.01 par value, of Acquiror (the “ACQUIROR COMMON
STOCK”) as provided by, and on the terms and conditions set
forth in, the Merger Agreement. Capitalized terms used herein
but not defined herein shall have their defined meanings as set
forth in the Merger Agreement.
1.
Representations, Warranties and Covenants of Each
Shareholder . Each
Shareholder represents, warrants and covenants as
follows:
(a)
Each Shareholder has full power and authority to execute this
Agreement, to make the representations and warranties and covenants
herein contained and to perform such Shareholder’s
obligations hereunder.
(b)
Appendix A attached hereto sets forth all shares of Target
Common Stock owned by each Shareholder, including all Target Common
Stock as to which such Shareholder has sole or shared voting or
investment power and all rights, options and warrants to acquire
Target Common Stock. Except as contemplated by the Merger
Agreement, no other person or entity not a signatory to this
Agreement has a beneficial interest in or right to acquire all or
any portion of the shares of Target Common Stock set forth in
Appendix A.
(c)
Each Shareholder is acquiring the Acquiror Common Stock solely for
the Shareholder’s own account, for investment and not with a
view to any resale or other distribution thereof in violation of
the Securities Act.
(d)
Each Shareholder acknowledges and understands that the terms of the
Merger have not been reviewed by the Commission or by any state
securities authorities, that the Acquiror Common Stock has not been
registered under the Securities Act, any state securities law or
registered or qualified under any other securities laws, based on,
among other factors, that no distribution or public offering has
been effected and the Acquiror Common Stock will be issued by
Acquiror in connection with a transaction that does not involve any
public offering within the meaning of Section 4(2) of the
Securities Act. Each Shareholder understands that Acquiror is
relying on such Shareholder’s representations as set forth
herein for purposes of claiming such exemption, including the bona
fide nature of such Shareholder’s investment
intent
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as expressed above. Each
Shareholder acknowledges that, except as is set forth in
Section 5 of this Agreement, Acquiror is under no obligation
to register the Acquiror Common Stock under the Securities
Act. As a result, unless an exemption from such registration
is then available or such Shareholder then qualifies to sell shares
of Acquiror Common Stock under Rule 144, such Shareholder must hold
the Acquiror Common Stock until such time as Acquiror has
registered the Acquiror Common Stock for resale under the
Securities Act and qualified the Acquiror Common Stock for resale
under applicable state securities laws.
(e)
Each Shareholder is familiar with Regulation D promulgated under
the Securities Act and is an “accredited investor” as
defined in Rule 501(a) of such Regulation D or such Shareholder,
either alone or together with such Shareholder’s
representative, has such knowledge and experience in financial,
investment and business matters that the Shareholder is capable of
evaluating the merits and risks of an investment in the Acquiror
Common Stock. Each Shareholder acknowledges that shares of
Acquiror Common Stock are volatile securities that involve a high
degree of risk. Each Shareholder represents that it is
capable of determining what documents and information are necessary
to evaluate the Merger and/or an investment in the Acquiror Common
Stock, and has the capacity to protect its own interests in
connection with the Merger and the acquisition of the Acquiror
Common Stock.
(f)
Each Shareholder represents that its financial condition is such
that the Shareholder is able to bear any and all economic risks
associated with investment in the Acquiror Common Stock, including
the risk of holding the Acquiror Common Stock for an indefinite
period of time. Each Shareholder represents that it can also
afford a complete loss of its investment in the Acquiror Common
Stock, and has adequate means of providing for the
Shareholder’s current needs and possible personal
contingencies; provided, however, that nothing contained herein
shall relieve Acquiror from strict adherence to the terms of
Section 5.
(g)
Until such time as the Acquiror Common Stock has been registered
for resale, each Shareholder understands and acknowledges that each
stock certificate representing the Acquiror Common Stock shall bear
a legend in, or substantially in, the following form:
“THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS CONTAINED IN A
SHAREHOLDERS AGREEMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS. NEITHER SUCH SHARES NOR ANY PORTION THEREOF OR INTEREST
THEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF (I) EXCEPT AS SET FORTH IN THE SHAREHOLDERS AGREEMENT
AND (II) UNLESS THE SAME ARE REGISTERED UNDER THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL HAVE
RECEIVED EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE
CORPORATION (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION).”
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(h)
Each Shareholder understands that Acquiror may maintain a
“stop transfer order” against the Acquiror Common Stock
for the purpose of ensuring compliance with applicable securities
laws. Acquiror shall not be required (a) to transfer or
have transferred on its books any Acquiror Common Stock that has
been sold or otherwise transferred in violation of any of the
provisions of this Agreement or (b) to treat as an owner of
such Acquiror Common Stock or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such
Acquiror Common Stock shall have been so transferred in violation
of any provision of this Agreement. Acquiror agrees that such
stop transfer instructions and legends will be promptly removed and
transfers of Acquiror Common Stock will be processed if the
provisions of this Agreement and the Securities Act are complied
with.
(i)
Each Shareholder has received a copy of the Notice and Solicitation
of Written Consent dated March 23, 2007, including copies of
Acquiror’s Annual Report on Form 10-K for fiscal the year
ended December 31, 2006, and Acquiror’s Proxy Statement
dated April 10, 2006 (collectively, the “DISCLOSURE
MATERIALS”). Each Shareholder, either alone or together
with the Shareholder’s representative, has made such further
investigation as the Shareholder deems appropriate as to, and is
fully familiar with, and knowledgeable regarding, the financial
condition, business affairs and prospects of Acquiror. The
Shareholder has been given the opportunity to ask questions of, and
receive answers from, the principal officers of Acquiror concerning
the business and financial affairs of Acquiror, and has had further
opportunity to obtain any additional information necessary to
verify the accuracy of the foregoing information. To the extent any
Shareholder has not sought information regarding any particular
matter, the Shareholder represents that Shareholder had no interest
in doing so and that such matters are not material to the
Shareholder in connection with this investment.
2.
Negative Covenants of Shareholder .
(a)
Each Shareholder covenants and agrees that it will not sell,
transfer, exchange, pledge, or otherwise dispose of, or make any
offer or agreement relating to any of the foregoing with respect
to, any Acquiror Common Stock, or any option, right or other
interest with respect to any Acquiror Common Stock, unless
(i) such transaction is permitted pursuant to Rule 144 under
the Securities Act, (ii) counsel representing such
Shareholder, which counsel is reasonably satisfactory to Acquiror,
shall have advised Acquiror in a written opinion letter
satisfactory to Acquiror and Acquiror’s legal counsel, and
upon which Acquiror and its legal counsel may rely, that no
registration under the Securities Act would be required in
connection with the proposed sale, transfer or other disposition,
(iii) a registration statement under the Securities Act
covering the Acquiror Common Stock proposed to be sold, transferred
or otherwise disposed of, describing the manner and terms of the
proposed sale, transfer or other disposition, and containing a
current prospectus, shall have been filed with the Commission and
made effective under the Securities Act, or (iv) an authorized
representative of the Commission shall have rendered written advice
to such Shareholder (sought by such Shareholder or counsel to such
Shareholder, with a copy thereof and all other related
communications delivered to Acquiror) to the effect that the
Commission would take no action, or that the staff of the
Commission would not recommend that the Commission take action,
with respect to the proposed disposition if consummated.
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(b)
Each Shareholder represents and warrants that it has no plan or
intention to sell, exchange or otherwise dispose of shares of
Acquiror Common Stock received in connection with the Merger, other
than in accordance with the foregoing provisions of this
Section 2.
3.
Rule 144 . From and
after the Effective Time of the Merger and for so long as is
necessary in order to permit each Shareholder to sell the Acquiror
Common Stock held by it pursuant to Rule 144 under the Securities
Act, Acquiror will file on a timely basis all reports required to
be filed by it pursuant to Section 13 of the Exchange Act
referred to in paragraph (c)(1) of Rule 144 under the
Securities Act, in order to permit each Shareholder to sell the
Acquiror Common Stock held by it pursuant to the terms and
conditions of Rule 144. Each Shareholder understands that,
except as provided in this Section 3 and in Section 5 of
this Agreement, Acquiror is under no obligation to register the
sale, transfer or other disposition of any Acquiror Common Stock by
or on behalf of any Shareholder or to take any other action
necessary in order to make compliance with an exemption from
registration available.
4.
Restrictions on Resales . Each Shareholder agrees and acknowledges
that, in addition to the restrictions imposed under Section 2
of this Agreement, the provisions of the Securities Act prohibit
the public resale of Acquiror Common Stock (except in a transaction
registered under the Securities Act) until such time as such
Shareholder has beneficially owned, within the meaning of Rule
144(d), the Acquiror Common Stock for a period of at least one (1)
year after the date of the Merger. Each Shareholder
acknowledges that such Shareholder is familiar with Rule 144 and
agrees to comply with the provisions of such rule as applicable to
the Acquiror Common Stock.
5.
Registration of Shares Issued in the Merger .
(a)
Registrable Shares . For purposes of this Agreement,
“REGISTRABLE SHARES” shall mean the shares of Acquiror
Common Stock issued in the Merger; provided, however, that
Registrable Shares shall not include shares of Acquiror Common
Stock issued in the Merger that have been sold or otherwise
transferred by the shareholders of Target who initially received
such shares in the Merger prior to the effective date of the
Registration Statement (as defined below) (the holders of
Registrable Shares collectively hereinafter referred to as the
“HOLDERS”); provided further however, that a
distribution of shares of Acquiror Common Stock issued in the
Merger without additional consideration, to underlying beneficial
owners (such as the general and limited partners, shareholders or
trust beneficiaries of a Holder, or the heirs or legal
representative upon death of a Holder) shall not be deemed such a
sale or transfer for purposes of this Section 5 and such
underlying beneficial owners, heirs or legal representatives shall
be entitled to the same rights under this Section 5 as the
initial Holder from which the Registrable Shares were received and
shall be deemed a Holder for the purposes of this
Section 5.
(b)
Required Registration . Not later than the 90
th day after the Closing Date (the
“Initial Filing Deadline”), Acquiror shall file with
the Commission a registration statement on Form S-3 (or such
successor or other appropriate form) under the Securities Act with
respect to the Registrable Shares (the “REGISTRATION
STATEMENT”) and will effect all such registrations,
qualifications and compliances (including, without limitation,
obtaining appropriate
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qualifications under applicable
state securities or “blue sky” laws and compliance with
any other applicable governmental requirements or regulations, and
the listing requirements of any applicable exchange or similar
obligations) as any selling Holder may reasonably request and that
would permit or facilitate the sale of Registrable Shares (provided
however that Acquiror shall not be required in connection therewith
to qualify to do business or to file a general consent to service
of process in any such state or jurisdiction). The Registration
Statement shall be declared effective by the Commission not later
than one hundred eighty (180) days after the Closing Date (the
“Required Registration Date”). All other
applicable registrations, qualifications and compliances necessary
to allow the Registrable Shares to be freely tradable shall also be
completed by the Required Registration Date. Acquiror will
maintain the effectiveness of the Registration Statement and other
applicable registrations, qualifications and compliances until the
earlier of the one year anniversary of the Closing of the Merger or
the earlier sale by the Target Shareholders of all of the shares of
Acquiror Common Stock registered thereunder (the
“REGISTRATION EFFECTIVE PERIOD”). After the date
the Registration Statement is first declared effective, the Holders
will be permitted (subject in all cases to the provisions of
Section 6(c)) to offer and sell Registrable Shares during the
Registration Effective Period in the manner described in the
Registration Statement provided that the Registration Statement
remains effective and has not been suspended.
(c)
Suspension Right . Notwithstanding any other provision
of this Section 5, Acquiror shall have the right at any time
to require that all Holders suspend further open market offers and
sales of Registrable Shares whenever, and for so long as, in the
reasonable judgment of Acquiror after consultation with counsel,
the use of the Registration Statement and the prospectus related
thereto must be suspended due to the happening of any event as a
result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing (the
“SUSPENSION RIGHT”). In the event Acquiror
exercises the Suspension Right, such suspension will continue for
the period of time reasonably necessary for disclosure to occur at
a time that is not detrimental to Acquiror and its shareholders or,
if earlier, until such time as the information or event is no
longer material, each as determined in good faith by Acquiror after
consultation with counsel. Notwithstanding the foregoing, Acquiror
shall not impose the Suspen
