<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended MARCH 31, 1996
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 0-26482
PLASMA & MATERIALS TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-4054321
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) number)
9255 Deering Avenue, Chatsworth, California 91311
---------------------------------------------------------------
(Address of principal executive offices)
(818) 886-8000
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 periods that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
--- ---
As of March 31, 1996, the total number of outstanding shares of the
Registrant's common stock was 8,669,660.
<PAGE>
The undersigned Registrant hereby amends the following items of its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, as set forth
below:
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The following exhibits are included herein:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
10.13 Agreement of Limited Partnership of PMT CVD Partners, L.P. (the "CVD
Partnership") dated as of March 29, 1996, entered into between CVD,
Inc. (the "General Partner") and the limited partners listed therein
(the "Limited Partners").*
10.14 Form of Option Agreement, dated as of March 29, 1996, entered into
between PMT and certain of the Limited Partners.
10.15 Form of Common Stock Purchase Warrant, dated as of March 29, 1996,
entered into between PMT and certain of the Limited Partners.
10.16 Form of Partnership Subscription Agreement, dated as of March 29, 1996,
entered into among the Partnership, the General Partner and certain of
the Limited Partners.
10.17 Share Subscription and Shareholders Agreement, dated as of March 29,
1996, entered into between the General Partner and the Limited
Partners, as the shareholders of the General Partner.
10.18 Research & Development Agreement, dated as of March 29, 1996, entered
into between PMT and the CVD Partnership.
10.19 Technology License Agreement, dated as of March 29, 1996, entered into
between PMT and the CVD Partnership.
11.1 Computation of Per Share Earnings.*
27.1 Financial Statement Data.*
</TABLE>
* Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996.
2
<PAGE>
SIGNATURES
----------
Pursuant to the requirements 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.
PLASMA & MATERIALS TECHNOLOGIES, INC.
Date October 2, 1996 /s/ John W. LaValle
------------------ --------------------------------------------
John W. LaValle
Vice President, Chief Financial Officers
and Secretary
3
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EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
10.13 Agreement of Limited Partnership of PMT CVD Partners,
L.P. (the "Partnership"), dated as of March 29, 1996,
entered into between CVD, Inc. (the "General Partner")
and the limited partners listed therein (the "Limited
Partners"). ........................................... *
10.14 Form of Option Agreement, dated as of March 29, 1996,
entered into between PMT and certain of the Limited
Partners. .............................................
10.15 Form of Common Stock Purchase Warrant, dated as of March
29, 1996, entered into between PMT and certain of the
Limited Partners. .....................................
10.16 Form of Partnership Subscription Agreement, dated as of
March 29, 1996, entered into among the Partnership, the
General Partner and certain of the Limited Partners. ..
10.17 Share Subscription and Shareholders Agreement, dated as
of March 29, 1996, entered into between the General Partner
and the Limited Partners, as the shareholders of the General
Partner ..............................................
10.18 Research & Development Agreement, dated as of March 29,
1996, entered into between PMT and the CVD Partnership.
10.19 Technology License Agreement, dated as of March 29, 1996,
entered into between PMT and the CVD Partnership. .....
11.1 Computation of Per Share Earnings .................... *
27.1 Financial Statement Data ............................. *
</TABLE>
* Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996.
4
<PAGE>
EXHIBIT 10.14
OPTION AGREEMENT
This Option Agreement (this "Agreement") is made as of March 29, 1996
by and among Plasma & Materials Technologies, Inc., a California corporation
(the "Company"), PMT CVD Partners, L.P., a California limited partnership (the
"Partnership"), and _____________________________ (the "Investor").
R E C I T A L S:
- - - - - - - -
WHEREAS, the Company and the Investor are limited partners of the
Partnership pursuant to the Limited Partnership Agreement dated as of the date
hereof (the "Partnership Agreement"); and
WHEREAS, the Investor wishes to enter into an agreement granting the
Company an option to purchase, pursuant to the terms and conditions set forth
herein, (i) the Investor's entire limited partnership interest in the
Partnership (the "Partnership Interests") and (ii) all of the shares of the
common stock of CVD, Inc., a California corporation and the general partner of
the Partnership, owned by the Investor (the "GP Shares").
NOW, THEREFORE, in consideration of the mutual covenants expressed
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties agree as follows:
A G R E E M E N T:
- - - - - - - - -
1. Option. The Investor hereby grants to the Company an exclusive,
------
irrevocable option (the "Option") to purchase all but not less than all of the
Partnership Interests and GP Shares now or hereafter beneficially owned or held
by the Investor. The Option is exercisable at any time after the date hereof
and may be exercised in accordance with the terms of Section 4 hereof, provided
that such Option must be exercised prior to March 29, 2001 (the "Option
Termination Date").
2. Exercise Price. Upon exercise of the Option, the aggregate
--------------
purchase price for the Partnership Interests and GP Shares held by the Investor
(collectively, the "Option Exercise Price") shall be determined by the following
formula:
<PAGE>
EP = CC X (1.40)/T/
EP: Option Exercise Price, which shall, in all
circumstances, equal at least 2 X CC
CC: Capital Contribution of the Investor to the Partnership
T: Period of time commencing on the date of the Investor's
Capital Contribution and ending on the Option Closing
Date, as defined below, expressed as a fraction of
years
3. Form of Payment. The Option Exercise Price (a) shall be net of
---------------
the Investor's Percentage Interest (as defined in the Partnership Agreement)
multiplied by all royalty amounts, if any, paid to the Partnership by the
Company pursuant to the R&D Agreement (as defined in the Partnership Agreement)
whether or not such amounts have been distributed to the Investor pursuant to
the Partnership Agreement and (b) may be paid in cash, in Common Stock of the
Company (the "Common Stock"), or in any combination thereof, at the sole
discretion of the Company, provided that any Common Stock delivered to the
Investor shall be either registered under the Securities Act of 1933, as amended
(the "Act"), or shall be subject to such registration rights and procedures
under the Act as may be reasonably acceptable to the Investor. The number of
shares of Common Stock to be delivered in payment of all or a portion of the
Option Exercise Price shall be determined by (i) dividing the portion of the
Option Exercise Price to be paid in shares of Common Stock by (ii) the product
of nine-tenths (0.90) multiplied by the Average Stock Price. For purposes of
this Section 3, the "Average Stock Price" shall mean the average closing sales
prices of Common Stock quoted on Nasdaq National Market or, if then traded on a
national securities exchange, the average closing prices of Common Stock on the
principal national securities exchange on which listed or, if quoted on the
Nasdaq over-the-counter system, the average of the mean of the closing bid and
asked prices of Common Stock quoted on such system, in any such case on each of
the ten (10) trading days immediately preceding the Option Closing Date. Any
shares of Common Stock paid in connection with the Option Exercise Price will be
validly authorized and issued, fully paid and nonassessable and free and clear
of any and all liens and encumbrances.
4. Manner of Exercise. The Option may be exercised at any time by
------------------
written notice from the Company to the Investor stating that the Option is being
exercised and setting forth: (a) the portion, if any, of the Option Exercise
Price to be paid in cash and the portion, if any, of the Option Exercise Price
to be paid in Common Stock and (b) the date, not less than ten (10) or more than
thirty (30) days after the date the Company gives written notice of the exercise
of the Option (the "Exercise Date"), on which the Partnership Interests and GP
Shares shall be purchased (the "Option Closing Date").
5. Transfer of Title; Representations and Warranties. Transfer of
-------------------------------------------------
title by the Investor to the Company of the Partnership Interests and GP Shares
shall be deemed to
2
<PAGE>
occur automatically on the Option Closing Date subject to the payment in full by
the Company on such date of the amount owing to the Investor as determined in
accordance with Sections 2 and 3 hereof, and, in connection with such transfer
of title, the Investor agrees to make such representations and warranties with
respect to its title in and to the Partnership Interests and GP Shares as may be
requested by the Company. After the Option Closing Date, subject to the payment
in full by the Company on such date of the amount owing to the Investor as
determined in accordance with Sections 2 and 3 hereof, the Investor shall have
no rights whatsoever in connection with the Partnership Interests and GP Shares,
other than the right to receive the full Option Exercise Price therefor.
6. Exercisability of Warrants. Commencing on the Option Closing
--------------------------
Date, and for a period of one (1) year thereafter, that certain Common Stock
Purchase Warrant dated as of any even date herewith (the "Warrant") delivered to
Investor in connection with Investor's original capital contribution to the
Partnership shall be exercisable pursuant to the terms and conditions set forth
therein.
7. Notices. Except as otherwise set forth herein, any notice
-------
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
or, if sent by telecopier, upon confirmation of transmission, or three (3) days
after deposit with the United States Post Office, by registered or certified
mail, or one (1) day after deposit with an overnight air courier, in each case
postage prepaid and addressed to the party to be notified at the addresses and
facsimile numbers set forth on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties to this Agreement.
8. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California.
9. Specific Performance. The parties hereto hereby agree that the
--------------------
breach of any of the terms of this Agreement will cause irreparable injury for
which an adequate remedy at law is not available. Accordingly, the parties
hereto agree that each such party shall be entitled to specifically enforce any
of the provisions hereof by means of injunctive or other equitable relief, which
relief shall be in addition to any other remedies at law or in equity that may
be available to such party.
10. Entire Agreement. This Agreement, along with the Partnership
----------------
Agreement, the Subscription Agreement (as defined in the Partnership Agreement),
the Warrant, the R&D Agreement, the License Agreement (as defined in the
Partnership Agreement) and that certain Share Subscription and Shareholders
Agreement dated as of an even date herewith among CVD, Inc., the Investor and
certain other parties thereto, constitute the entire agreement among the parties
with respect to the subject matter hereof
3
<PAGE>
and thereof and supersede any and all prior agreements and understandings of the
parties, whether written or oral, in connection therewith.
11. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which taken
together shall constitute one agreement.
12. Termination. This Agreement, and the Option granted hereunder,
-----------
shall terminate and have no further force or effect on the Option Termination
Date.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY: PLASMA & MATERIALS TECHNOLOGIES, INC.
By:
---------------------------
Dr. Gregor A. Campbell
President and Chief Executive Officer
Address:
9255 Deering Avenue
Chatsworth, California 91311
Attention: Dr. Gregor A. Campbell
Facsimile No.: (818) 886-8098
PARTNERSHIP: PMT CVD PARTNERS, L.P.
By: CVD, Inc.,
General Partner
By:
--------------------
John W. La Valle
Chief Financial Officer and Secretary
Address:
9255 Deering Avenue
Chatsworth, California 91311
Attention: Mr. John W. La Valle
Facsimile No.: (818) 886-8098
[Signatures continued on following page]
5
<PAGE>
[Signatures continued from previous page]
INVESTOR: ________________________
Address:
________________________
________________________
________________________
6
<PAGE>
EXHIBIT 10.15
THE SECURITIES EVIDENCED BY THIS WARRANT OR ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE
ENCUMBERED OR DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Warrant No.___ March 29, 1996
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, _____________________ and
permitted assigns ("Warrantholder"), is entitled to purchase from Plasma &
Materials Technologies, Inc., a California corporation (the "Company"), on the
terms and conditions contained herein, _________________________ shares of the
Company's Common Stock, no par value per share (the "Common Stock"), at a price
of Twelve Dollars and Seventy-Five Cents ($12.75) per share (the "Warrant
Price").
1. Exercisability of Warrant. This Warrant shall become exercisable
-------------------------
in full immediately following the date of exercise (the "Exercise Date") of the
option by the Company pursuant to that certain Option Agreement dated as of an
even date herewith (the "Option Agreement") among the Company, Warrantholder and
PMT CVD Partners, L.P., a California limited partnership, and shall terminate
and expire in accordance with Section 8 below.
2. Method of Exercise; Payment; Issuance of New Warrant; Transfer and
------------------------------------------------------------------
Exchange. Following the Exercise Date, this Warrant may be exercised by
- --------
Warrantholder, in whole or in part, by the surrender of this Warrant, properly
endorsed, at the principal office of the Company at 9255 Deering Avenue,
Chatsworth, California 91311, and by (a) the payment to the Company of the then
applicable Warrant Price of the Common Stock being purchased and (b) delivery to
the Company of a customary investment letter executed by Warrantholder,
confirming that the shares of Common Stock being purchased are being acquired
for Warrantholder's own account and not with a view to or for sale in connection
with any distribution of such shares, acknowledging securities law restrictions
applicable to such shares, and agreeing that certificates evidencing such shares
shall bear a legend accordingly restricting the transfer of such shares. In the
event of any exercise of the rights represented by this Warrant, certificates
for the shares of Common Stock so purchased shall be delivered to Warrantholder
within a reasonable time after the rights represented by this Warrant shall have
been so exercised, and unless this Warrant has expired, a new Warrant
representing the number of shares of Common Stock, if any, with respect to which
this Warrant shall not then have been exercised, shall also be issued to
Warrantholder within such
<PAGE>
time. In lieu of exercising this Warrant for a specified number of shares of
Common Stock (the "Exercised Shares") and paying the aggregate Warrant Price
therefor (the "Exercise Price"), Warrantholder may elect, at any time after the
Exercise Date and prior to the expiration of this Warrant, to receive a number
of shares of Common Stock equal to the the number of Exercised Shares minus that
number of shares of Common Stock having an aggregate Fair Market Value equal to
the Exercise Price. Following such election, the number of shares of Common
Stock covered by this Warrant shall be deemed automatically reduced by the
number of Exercised Shares. For purposes of this Warrant, the "Fair Market
Value" shall mean the closing sales prices of Common Stock quoted on Nasdaq
National Market or, if then traded on a national securities exchange, the
average closing prices of Common Stock on the principal national securities
exchange on which listed or, if quoted on the Nasdaq over-the-counter system,
the average of the mean of the closing bid and asked prices of Common Stock
quoted on such system, in any such case on each of the ten (10) trading days
immediately preceding the date of such conversion.
3. Stock Fully Paid; Reservation of Shares. The Company covenants
---------------------------------------
and agrees that all shares of Common Stock that may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be fully paid and
nonassessable and free from all liens. The Company covenants and agrees that,
during the period within which the rights represented by this Warrant may be
exercised, it shall reserve for the purpose of the issuance upon exercise of the
purchase rights evidenced by this Warrant, at least the maximum number of shares
of Common Stock as are issuable upon the exercise of the rights represented by
this Warrant.
4. Restrictions on Transferability of Securities; Compliance with
--------------------------------------------------------------
Securities Act.
- --------------
(a) Restrictions on Transferability. This Warrant and the shares
-------------------------------
of Common Stock issuable hereunder shall not be transferable except upon the
conditions specified in this Section 4, which conditions are intended to insure
compliance with the provisions of the Securities Act of 1933, as amended (the
"Securities Act"). Each holder of this Warrant or the Common Stock issuable
hereunder will cause any proposed transferee of the Warrant or such Common Stock
to agree to take and hold such securities subject to the provisions and upon the
conditions specified in this Section.
(b) Restrictive Legend. Each certificate representing (i) this
------------------
Warrant, (ii) the shares of Common Stock issued upon exercise of the Warrant and
(iii) any other securities issued in respect of such shares of Common Stock upon
any stock split, stock dividend or similar event (collectively, the "Restricted
Securities"), shall (unless otherwise permitted by the provisions of Section
4(c) below or unless such securities have been registered under the Securities
Act) be imprinted with the following legend, in addition to any legend required
under applicable state securities laws:
2
<PAGE>
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
Upon request of a holder of a certificate with such legend imprinted
thereon, the Company shall remove the foregoing legend therefrom or, if
appropriate, issue to such holder a new certificate therefor free of any
transfer legend, if, with such request, the Company shall have received either
the opinion referred to in Section 4(c)(i) or the "no-action" letter referred to
in Section 4(c)(ii) to the effect that any transfer by such holder of the
securities evidenced by such certificate will be exempt from the registration
and/or qualification requirements of, and that such legend is not required in
order to establish compliance with the Securities Act, and if applicable, any
state securities laws under which transfer restrictions on such securities had
been previously imposed.
(c) Notice of Proposed Transfers. The holder of each certificate
----------------------------
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4(c). Prior to any proposed
transfer of any Restricted Securities, the holder thereof shall give written
notice to the Company of such holder's intention to effect such transfer. Each
such notice shall describe the manner and circumstances of the proposed transfer
in sufficient detail, and shall be accompanied by either (i) an unqualified
written legal opinion addressed to the Company from counsel who shall be
reasonably satisfactory to such parties, which opinion shall be reasonably
satisfactory in form and substance to such parties' legal counsel, to the effect
that the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act and any applicable state securities laws,
or (ii) a "no-action" letter from the Securities and Exchange Commission (and
any necessary state securities administrator) to the effect that the transfer of
such securities without registration will not result in a recommendation by the
staff of the Commission (or such administrators) that action be taken with
respect thereto, whereupon the holder of such Restricted Securities shall be
entitled to transfer such Restricted Securities in accordance with the terms of
the notice delivered by the holder to the Company. Each certificate evidencing
the Restricted Securities transferred as above provided shall bear the
appropriate restrictive legend set forth in Section 4(b) above.
5. Adjustment of Purchase Price and Number of Shares of Common
-----------------------------------------------------------
Stock. The number and kind of securities purchasable upon the exercise of this
- -----
Warrant and the Warrant Price shall be subject to adjustment from time to time
upon the happening of certain events, as follows:
3
<PAGE>
(a) Consolidation, Merger, Reorganization, Etc. If the Company at
------------------------------------------
any time while this Warrant remains outstanding and unexpired shall consolidate
with or merge into any other corporation, reorganize, or reclassify, or in any
manner change the securities then purchasable upon the exercise of this Warrant,
then upon consummation thereof this Warrant shall thereafter represent the right
of Warrantholder to receive, to the extent this Warrant is exercisable as
provided above in Section 1, in lieu of shares of Common Stock, the cash or
securities to which Warrantholder would have been entitled upon consummation
thereof if Warrantholder had exercised this Warrant immediately prior thereto.
Upon any such event, an appropriate adjustment shall be made to the Warrant
Price, if necessary in the good faith judgment of the Board of Directors of the
Company, to preserve the economic benefit intended to be conferred upon
Warrantholder in accordance with its terms.
(b) Subdivision or Combination of Shares; Dividends and
---------------------------------------------------
Distribution of Common Stock. If the Company at any time shall subdivide or
- ----------------------------
combine its Common Stock, or take a record of the holders of its Common Stock
for the purpose of entitling them to receive without payment a dividend payable
in, or other distribution of, Common Stock or other securities, then the number
of shares of Common Stock purchasable hereunder shall be adjusted to that number
determined by multiplying the number of shares purchasable upon the exercise of
this Warrant immediately prior to such adjustment by a fraction (i) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately after such subdivision, combination, dividend or
distribution, and (ii) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately prior to such subdivision,
combination, dividend or distribution. Additionally, the Warrant Price shall be
adjusted to that price determined by multiplying the Warrant Price in effect
immediately prior to such subdivision, combination, dividend or distribution by
a fraction (x) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such subdivision, combination,
dividend or distribution, and (y) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such subdivision,
combination, dividend or distribution.
6. Fractional Shares. No fractional shares of Common Stock will be
-----------------
issued in connection with any exercise hereunder but in lieu of such fractional
shares, the Company shall make a cash payment therefor upon the basis of the
fair market value of the Common Stock on the date of such exercise.
7. Governing Law. This Warrant shall be construed and enforced in
-------------
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California.
4
<PAGE>
8. Expiration of Warrant. This Warrant shall terminate and expire
---------------------
and shall no longer be exercisable on or after the date that is one (1) year
from the Exercise Date.
IN WITNESS WHEREOF, this Warrant has been duly executed and issued by
a duly authorized officer of the Company as of this 29th day of March, 1996.
PLASMA & MATERIALS TECHNOLOGIES, INC.,
a California corporation
By:
--------------------------
Dr. Gregor A. Campbell
President and Chief Executive Officer
5
<PAGE>
FORM OF SUBSCRIPTION
--------------------
(To be signed only upon exercise of Warrant)
To the Company:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, __________________________ (______) of the number of shares
of Common Stock purchasable under this Warrant and herewith makes payment of
____________ Dollars ($______) therefor, and requests that a certificate(s) for
such shares be issued in the name of, and delivered to, ______________________,
whose address is _______________________________________________________________
_______________.
The undersigned represents that it is acquiring such shares of Common
Stock for its own account for investment purposes only and not with a view to or
for sale in connection with any distribution thereof.
DATED:
--------------- ------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
------------------------------------------
------------------------------------------
(Address)
6
<PAGE>
EXHIBIT 10.16
PARTNERSHIP SUBSCRIPTION AGREEMENT
THIS PARTNERSHIP SUBSCRIPTION AGREEMENT (this "Agreement") is entered into as
of March 29, 1996 by and among PMT CVD Partners, L.P., a California limited
partnership (the "Partnership"), and ________________ (the "Investor").
R E C I T A L S:
- - - - - - - -
A. The Partnership was recently formed and will be governed in
accordance with the terms and conditions of that certain Agreement of Limited
Partnership dated as of an even date herewith (the "Partnership Agreement") and
entered into by and among the Partnership, the Investor and certain other
investors in the Partnership.
B. The Investor wishes (i) to invest the amount of capital set forth
opposite its name on the signature page hereto (the "Investor's Capital
Investment") and (ii) to subscribe for and acquire Interests, in each case
pursuant to the terms of the Partnership Agreement. To induce the Investor to
make such capital investment, CVD, Inc., a California corporation and the
general partner of the Partnership (the "General Partner"), has agreed to make
the representations and warranties set forth herein.
C. The Company wishes to facilitate the investment by Investor in the
Partnership and all transactions arising therefrom or relating thereto by making
the representation and warranty contained herein.
D. Capitalized terms not otherwise defined herein shall have the
meanings therefor as set forth in the Partnership Agreement.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Closing. On the Closing Date, the Investor will wire transfer the
-------
Investor's Capital Investment to an account designated by the General Partner,
following receipt by the Investor of a Partnership Agreement that has been
executed by the General Partner on behalf of the Partnership.
<PAGE>
2. Representations and Warranties; Investor Acknowledgement; General
-----------------------------------------------------------------
Partner Covenants.
- -----------------
2.1 The Investor. The Investor represents and warrants to the
------------
Partnership that:
(a) The Investor's Interests are being acquired for investment
purposes only, for its own account, without a view to the distribution or sale
thereof.
(b) This Agreement and the Partnership Agreement have been duly
authorized, executed and delivered by the Investor and constitute the valid and
legally binding agreements of the Investor, enforceable against the Investor in
accordance with their respective terms, except to the extent that such
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights in general
or by general principles of equity.
(c) No portion of the assets invested by the Investor in the
Partnership consists of assets of an employee benefit plan subject to Title I of
ERISA.
2.2 Investor Acknowledgement. The Investor acknowledge that the
------------------------
Partnership may allocate to the Investor income that, for federal income tax
purposes with respect to certain tax exempt entities, may be considered
unrelated taxable business income under Sections 511 through 514 of the Code.
2.3 The General Partner. The General Partner represents and
-------------------
warrants to the Investor that:
(a) The Partnership is a duly organized and validly existing
limited partnership under the laws of the State of California with full
partnership power and authority to conduct its business as contemplated in the
Partnership Agreement and the Partnership will be treated as a partnership for
federal income tax purposes.
(b) The General Partner is a corporation duly organized and
validly existing and in good standing under the laws of the State of California.
(c) This Agreement and the Partnership Agreement have been duly
authorized, executed and delivered by the General Partner and, upon due
execution and delivery by the Investor, will constitute the valid and legally
binding agreements of each of the Partnership and the General Partner,
enforceable against such parties in accordance with their respective terms,
except to the extent that such enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general or by general principles of equity.
2
<PAGE>
(d) Each of the General Partner and the Partnership (i) is a
"small concern," as such term is defined in 13 C.F.R. (S)107.3, and (ii)
complies with all applicable size standards set forth in 13 C.F.R. (S)121.802.
2.4 Company Representation and Warranty. The Company represents
-----------------------------------
and warrants to the Investor that it has furnished or made available to the
Investor all material information reasonably necessary for the Investor to
consider in making its investment in the Partnership, and the Company has not
furnished to the Investor any such information and has not made any
representations (oral or written) which are incorrect in any material respect or
failed to furnish any additional information necessary to make the information
so furnished not misleading in any material respect.
2.5 General Partner Covenants. The General Partner covenants and
-------------------------
agrees as follows:
(a) On the Closing Date, the General Partner shall, with
respect to each of the Partnership and the General Partner, deliver (i) an
executed copy of SBA Form 480 - Size Status Declaration, (ii) an executed copy
of SBA Form 652 - Assurance of Compliance for Nondiscrimination and (iii) the
information needed to complete Part A of SBA Form 1031 - Portfolio Financing
Report, to the Limited Partners requesting such information.
(b) The Partnership covenants and agrees that it will use the
proceeds from the sale of the Interests for research and development with
respect to the Business and for general working capital purposes of the
Partnership. The Partnership will provide all Limited Partners requesting such
information with reasonable access to the Partnership's financial records so as
to allow such Limited Partners to confirm that such proceeds were used in the
manner contemplated by this Agreement, such access to include a review by the
Limited Partners of the use of proceeds within ninety (90) days after the date
hereof. The Partnership acknowledges and agrees that, if the proceeds are not
used in the manner contemplated hereby, the Limited Partners shall have the
right to demand the immediate repayment thereof.
3. Miscellaneous.
-------------
3.1 Choice of Law. This Agreement shall be governed by the laws of
-------------
the State of California.
3.2 Counterparts. This Agreement may be executed in any number of
------------
counterparts with the same effect as if all parties had signed the same
document. All such counterparts shall be deemed an original and shall be
construed together to constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
PARTNERSHIP: PMT CVD PARTNERS, L.P.
By: CVD, Inc.,
General Partner
By:
----------------------
John W. La Valle
Chief Financial Officer and Secretary
INVESTOR:
By:
--------------------------
Investor's Capital Investment:
4
<PAGE>
EXHIBIT 10.17
SHARE SUBSCRIPTION AND SHAREHOLDERS AGREEMENT
THIS SHARE SUBSCRIPTION AND SHAREHOLDERS AGREEMENT (this "Agreement")
is made and entered into as of March 29, 1996 among CVD, Inc., a California
corporation (the "Company"), and each person listed on the signature page hereto
(each, a "Shareholder" and, collectively, the "Shareholders").
R E C I T A L S:
- - - - - - - -
A. The Shareholders wish to subscribe for shares of the Company and
the Company wishes to issue Shares (as defined below) to the Shareholders, as
set forth herein.
B. The Company and the Shareholders deem it to be in their best
interests to enter into this Agreement with respect to the regulation of certain
aspects of the relationship among the parties.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, and for such other consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Subscription for Shares. Upon the terms and subject to the
-----------------------
conditions contained herein and in reliance on the representations and
warranties set forth below, each Shareholder hereby subscribes for that number
of shares (the "Shares") of the Company's common stock, no par value per share
(the "Common Stock"), as is set forth opposite such Shareholder's name on
Schedule 1 hereto, at a purchase price of $0.10 per share. On receipt of a cash
payment in the amount set forth opposite each Shareholder's name on Schedule 1,
the Company agrees to issue to each such Shareholder a share certificate
evidencing the Shares subscribed for thereby.
2. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Shareholder as follows:
2.1 Organization. The Company is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of California.
2.2 Authorization and Enforceability. This Agreement has been
--------------------------------
duly executed and delivered by the Company and constitute the legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
<PAGE>
2.3 Capitalization. The total authorized capital stock of the
--------------
Company consists of 1,000 shares of Common Stock. On issuance pursuant to the
terms hereof, all shares of Common Stock will be duly authorized and validly
issued, fully paid and nonassessable, free of any preemptive or other similar
rights to subscribe for or to purchase any shares of capital stock of the
Company.
3. Representations and Warranties of Each Shareholder. Each
--------------------------------------------------
Shareholder represents and warrants to the Company on its own behalf as follows:
3.1 Investment Intent. Each Shareholder is acquiring its Shares
-----------------
for investment purposes only, for its own account, and not as nominee or agent
for any other person, firm or corporation and not for resale in connection with
any distribution or public offering thereof within the meaning of the Securities
Act of 1933, as amended (the "Securities Act").
3.2 Unregistered Securities. Each Shareholder understands that
-----------------------
the Shares have not been registered under the Securities Act, and that,
accordingly, such securities will not be transferable except pursuant to an
exemption from the registration and prospectus delivery requirement of the
Securities Act or upon satisfaction of such requirement. Each Shareholder
further acknowledges that the Shares will be subject to the transfer
restrictions set forth in Section 7 below and further acknowledges and agrees
that the certificates evidencing such Shares and each certificate issued in
exchange thereof will bear a legend indicating all restrictions on transfer.
3.3 Sophistication and Knowledge. Each Shareholder represents to
----------------------------
the Company that it is an "accredited investor" (as such term is defined in Rule
501 of Regulation D under the Securities Act) and that, by reason of its
business and financial experience, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of an investment in the Shares and is able to bear the
economic risk of such investment. Each Shareholder acknowledges that it has been
given the opportunity to ask questions and receive answers from the Company
concerning the terms and conditions of the transactions contemplated hereby and
the accuracy of the information contained in any document provided to such
Shareholder by the Company.
3.4 Authorization and Enforceability. This Agreement has been
--------------------------------
duly executed and delivered by the Shareholders and constitutes a legal, valid
and binding obligation thereof, enforceable against it in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
2
<PAGE>
4. Shares to Bear Legend. Certificates representing any of the
---------------------
Shares shall bear substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS CONTAINED IN THAT
CERTAIN SHAREHOLDERS AGREEMENT DATED AS OF MARCH 29, 1996 ("THE
AGREEMENT") AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE THEREWITH. A COPY
OF THE AGREEMENT IS ON FILE AT THE OFFICES OF THE COMPANY AND MAY
BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY."
5. Board of Directors. The parties hereto agree that the Board of
------------------
Directors will be constituted as provided in this Section 5 and the provisions
of this Section 5 shall continue until the fifth (5th) anniversary hereof. Each
Shareholder covenants and agrees that it will vote all of its Shares so as to
provide, and the Company will use its best efforts to cause, the Board to be
comprised of four (4) members. The initial Board will consist of the following
members: one (1) member will be designated in writing by the Company, one (1)
member will be designated in writing by Plasma & Materials Technologies, Inc., a
California corporation and a Shareholder ("PMT"), and two (2) members will be
designated by a vote of a majority of the Shareholders holding at least sixty-
seven percent (67%) of the Shares. The Company agrees to reimburse all
reasonable expenses, including travel expenses, incurred by each of the members
of the Board in connection with his or her participation thereon. Any vacancy
in a directorship may only be filled by the party having the right to designate
and elect a member to such vacant position.
6. Corporation Action and Governance.
---------------------------------
6.1 Restrictions. Prior to the consummation of this transaction
------------
and except as otherwise required by law, without the prior approval of
Shareholders holding at least eighty-five percent (85%) of the Shares, the
Company shall not effect any:
(a) merger (including any exchange of capital stock),
consolidation, recapitalization, stock-split or liquidation;
(b) sale, transfer or other disposition of any of its assets;
3
<PAGE>
(c) increase in authorized capital stock, or issuance of any
equity security or grant of any right or option to purchase any equity security;
(d) change in the nature of the business conducted by it;
(e) amendment or restatement of its Articles of Incorporation
or bylaws from that in effect on the date hereof;
(f) increase or change in the size of the Board;
(g) declaration or payment of any dividends or any other
distributions on or with respect to the Common Stock, or redeem, purchase or
otherwise acquire for value any shares of the Company's capital stock;
(h) enter into or become obligated under any agreement to
complete any of the foregoing.
7. No Transfer. Each Shareholder acknowledges and agrees that,
-----------
during the term of this Agreement, it will not sell, transfer, dispose of or
otherwise encumber any Shares held thereby except pursuant to any sale or
transfer to PMT pursuant to that certain Option Agreement dated of an even date
herewith by and between the Company and each such Shareholder.
8. Amendment. Any amendment, revision or modification of this
---------
Agreement shall require the prior written consent of the Company and of each
Shareholder.
9. Specific Performance. The parties agree that it is impossible to
--------------------
measure in money the damages which will accrue to a party by reason of a failure
to perform any of the obligations set forth in this Agreement. Therefore, if
any party shall institute any action or proceeding to enforce the terms or
alleging a breach of the provisions of this Agreement, in addition to any other
remedy available at law, such party may seek specific performance of the terms
hereof; and any other party against whom such action or proceeding is brought
hereby waives the claim or defense that a remedy at law alone is adequate, and
agrees (to the maximum extent permitted by law) to have such provision
specifically enforced against it by any court of equity, without the necessity
of posting bond or other security against it, and consents to the entry of
injunctive relief against it enjoining or restraining any violation or
threatened violation of this Agreement.
10. Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or, if sent
by telecopier, upon receipt of confirmation of transmission, or three (3) days
after the deposit with the United States Post Office, by registered or certified
mail, or one (1) day after the deposit with an overnight air
4
<PAGE>
courier, in each case postage prepaid and addressed to the party to be notified
at the address indicated for such party on the signature page hereof, or at such
other address as such party may designate by ten (10) days' advance written
notice to the other parties.
11. Successors and Assigns. Except as otherwise set forth herein,
----------------------
all terms, conditions and obligations of this Agreement shall be binding upon
and run in favor of the parties hereto, and their successors and assigns.
12. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall have the force and effect of an original.
13. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California.
14. Termination. This Agreement shall terminate and have no further
-----------
force or effect on March 29, 2001.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
COMPANY: CVD, INC.
9255 Deering Avenue
Chatsworth, California 91311
Fax: (818) 886-8098
By: /s/ John W. La Valle
----------------------
John W. La Valle
Chief Financial Officer and Secretary
SHAREHOLDERS: SBIC PARTNERS, L.P.
201 Main Street, Suite 2302
Fort Worth, Texas 76102
Fax: (817) 338-2047
By: Forrest Binkley & Brown L.P.,
General Partner
By: Forrest Binkley & Brown Venture Co.,
General Partner
By: /s/ Jeffrey J. Brown
-----------------------
Jeffrey J. Brown
Office of the President
[Signatures continued on following page]
6
<PAGE>
[Signatures continued from previous page]
NORWEST EQUITY PARTNERS, V
3000 Sand Hill Road
Building 3, Suite 105
Menlo Park, California 94025
Fax: (415) 854-6652
By: Itasca Partners V, L.L.P.,
General Partner
By: /s/ Kevin G. Hall
-------------------
Kevin G. Hall
Partner
PLASMA & MATERIALS TECHNOLOGIES, INC.
9255 Deering Avenue
Chatsworth, California 91311
Fax: (818) 886-8098
By: /s/ Dr. Gregor A. Campbell
---------------------------
Dr. Gregor A. Campbell
President and Chief Executive Officer
R&M PARTNERS/CVD, G.P.
300 South Grand Avenue, Suite 2900
Los Angeles, California 90071
Fax: (213) 229-8550
By: /s/ Jeffrey L. DuRocher
------------------------
Jeffrey L. DuRocher
Partner
7
<PAGE>
Schedule 1
SHAREHOLDINGS OF SHAREHOLDERS
-----------------------------
<TABLE>
<CAPTION>
Name of Shareholder Number of Shares Purchase Price
- ------------------- ---------------- --------------
<S> <C> <C>
SBIC Partners, L.P. 378 37.80
Norwest Equity Partners, V 378 37.80
Plasma & Materials Technologies, Inc. 197 19.70
R&M Partners/CVD, G.P. 47 4.70
----- -------
TOTAL: 1,000 $100.00
===== =======
</TABLE>
8
<PAGE>
EXHIBIT 10.18
R&D AGREEMENT
THIS R&D AGREEMENT (this "Agreement") is entered into as of March 29,
1996 by and between Plasma & Materials Technologies, Inc., a California
corporation (the "Company"), and PMT CVD Partners, L.P., a California limited
partnership (the "Partnership").
R E C I T A L S:
- - - - - - - -
A. The Partnership was established to develop and refine chemical
vapor deposition ("CVD") technology for commercial use in connection with the
production of integrated circuits.
B. The Company has substantial technological expertise with respect
to the production of integrated circuits and presently employs personnel with
significant technical experience in such area, making the Company well
positioned to assist the Partnership with the development and refinement of CVD
technology and related commercial applications.
C. The Partnership wishes to engage the Company to perform CVD
research and development efforts for and on behalf of the Partnership, and the
Company wishes to accept such engagement on the terms and conditions set forth
herein.
A G R E E M E N T:
- - - - - - - - -
1. Engagement. The Partnership hereby engages the Company to use
----------
commercially reasonable best efforts to develop and refine CVD technology for
commercial use in connection with the production of integrated circuits (the
"Project"). The Company hereby accepts such engagement, as further set forth
herein.
2. Billings. The Company shall bill the Partnership for all costs
--------
and expenses directly and indirectly arising from or relating to CVD research
and development ("CVD Costs and Expenses"). The Company presently anticipates
that such costs and expenses shall be incurred during each calendar year
substantially in accordance with the Preliminary Budget set forth on Exhibit A
hereto. With respect to 1997 and each subsequent calendar year during the term
of this Agreement, the Company shall prepare and present to the Partnership, at
least thirty (30) days prior to the commencement of each such year, a revised
Preliminary Budget for each such year which shall set forth the costs and
expenses which the Company then anticipates to be incurred during each such
year. The Company shall promptly notify the Partnership during the term of this
Agreement if, at any time, the Company reasonably determines that CVD Costs and
Expenses will be incurred in an amount that exceeds by at least twenty percent
(20%) the amount set forth in the applicable Preliminary Budget (as so revised)
for any given calendar year, and such notice shall include a reasonably detailed
report describing the reasons for such contemplated deviation. All billings by
the Company shall be sent on a quarterly basis within fifteen (15) days after
the
<PAGE>
close of each calendar quarter and shall cover all CVD Costs and Expenses
incurred during the calendar quarter then ended, and the Partnership will
reimburse the Company for the amount so billed within fifteen (15) days after
invoicing by the Company, provided that, on execution hereof, the Partnership
will immediately reimburse the Company for all CVD Costs and Expenses incurred
by the Company since January 1, 1996. Notwithstanding anything to the contrary
contained herein, in no event shall the aggregate CVD Costs and Expenses
reimbursable by the Partnership exceed Six Million Five Hundred Thousand Dollars
($6,500,000), unless otherwise agreed upon in writing by the Company and the
Partnership ($6,500,000, or such higher amount so agreed upon, being the
"Maximum Commitment Amount").
3. CVD Costs and Expenses. CVD Costs and Expenses shall include,
----------------------
without limitation, all direct and indirect costs associated with CVD research
and development, such as the base salaries of all PMT personnel engaged in CVD
research and the Company's average overhead rate with respect to such personnel,
which shall not exceed three and one-half times (3.5x) the aggregate of all such
base salaries.
4. Staffing. The Company shall staff the engagement described in
--------
Section 1 with Company personnel who are familiar with basic CVD technology and
who otherwise have training and experience relevant thereto. Additionally, the
Company will hire additional personnel, including without limitation, a
president and/or general manager, as may be requested from time to time by the
Partnership.
5. Development Plan. The Company shall use its commercially
----------------
reasonable best efforts to complete the Project and thereby develop, manufacture
and commercialize the Products in accordance with the Development Plan described
in Exhibit B, which Development Plan shall be revised and updated quarterly by
the Company, if and to the extent reasonably needed, to reflect the actual
progress of the Project and additional technical, industry and other data then
available to the Company which the Company reasonably believes necessitates such
revision. The Company shall provide the Partnership with a written report,
within thirty (30) days after the end of each calendar quarter with respect to
which billings for CVD Costs and Expenses are rendered hereunder, which shall
summarize the progress and/or issues encountered by the Company during the
calendar quarter then ended and shall set forth the Company's revisions, if any,
to the Development Plan pursuant to this Section 5.
6. Reimbursement of Acquisition Costs and Expenses. During the term
-----------------------------------------------
of this Agreement, the Company may determine that the development of CVD
technology requires the acquisition or licensing from unaffiliated third parties
of existing research, technology or intellectual property rights, including
patents and copyrights (collectively, "Third Party Rights"), provided that the
acquisition or licensing of such Third Party Rights must not be reasonably
anticipated by the Company to impair the Company's ability to complete the
Project within the Maximum Commitment Amount. If the Company deems it
2
<PAGE>
appropriate to acquire or license such Third Party Rights, such acquisition or
licensing will be in the name of the Partnership and the Partnership will
reimburse the Company with respect to any and all costs and expenses incurred
directly or indirectly by the Company in connection with such acquisition or
licensing, including without limitation, the purchase price or license fees for
such Third Party Rights and all costs and expenses incidental to the acquisition
thereof. Additionally, such rights may be acquired subject to continuing
royalty obligations of the Partnership with respect to actual future sales, in
which case the Partnership shall execute all necessary documents.
7. Ownership of Work Product. The Partnership shall be the sole and
-------------------------
exclusive owner of all inventions, patents, copyrights, trade secrets and all
other intellectual property developed or invented by employees, consultants or
contractors of the Company pursuant to this Agreement or otherwise resulting
from the work performed on behalf of the Partnership by the Company pursuant to
this Agreement (all such inventions, patents, copyrights, trade secrets and
other intellectual property being herein referred to as the "Partnership
Intellectual Property"). If the Company engages any consultants or independent
contractors to perform any part of the development work subject to this
Agreement, the Company shall obtain such persons' written approval of this
provision in advance and will take all steps necessary to ensure that the
inventions and works of such consultant or contractor are owned by the
Partnership pursuant hereto. The Company shall, with respect to all Partnership
Intellectual Property developed on behalf of the Partnership pursuant hereto,
take all necessary action to make such applications and filings for, and during
the term hereof shall be responsible for maintaining, all patents, copyrights
and other rights of the Partnership in and to any and all patentable or
copyrightable material constituting part of the Partnership Intellectual
Property, to the extent such applications or filings are commercially reasonable
and subject to reimbursement of all out-of-pocket expenses incurred by the
Company, including without limitation, legal fees and expenses, in making or
maintaining such applications or filings.
8. License to Company. As further consideration to the Company
------------------
hereunder, the Partnership hereby grants to the Company, for a term commencing
upon the date hereof and continuing through but terminating on March 29, 2001,
an exclusive, non-transferable, worldwide and royalty-bearing license, under the
Partnership Intellectual Property, to design, develop, manufacture, have
manufactured, use, sell, lease or otherwise dispose of any and all CVD products
for the manufacture of semiconductors, or any part thereof or spare part
therefor. The Company shall pay the Partnership a royalty (the "Royalty") equal
to a percentage of the Net Sales Price, as defined below, of any product which
uses or incorporates any of the Partnership Intellectual Property for CVD
applications (a "Product"), which percentage shall be as follows: for Products
delivered to customers in Japan and other countries in Asia (excluding only
Korea), two percent (2%) commencing July 1, 1996 and throughout the term of this
license; and for Products delivered anywhere else in the world, five percent
(5%) for Products sold commencing July 1, 1996 and through December 31, 1997,
four and one-half percent (4.5%) for Products sold in calendar 1998,
3
<PAGE>
four percent (4%) for Products sold in calendar 1999, and three and one-half
percent (3.5%) for Products sold thereafter. Notwithstanding anything contained
in this Section 8 to the contrary, no Royalty shall be payable upon the sale of
spare parts with respect to any Products then or previously sold. The foregoing
license may be sublicensed by the Company, provided that the Company shall be
responsible for including all sales of Products by sublicensees for purposes of
the reporting and royalty obligations of the Company hereunder (with the same
effect as if such sales were made by the Company).
9. Royalty Reports and Payments.
----------------------------
(a) Royalties shall be payable quarterly on or before the last day
of April, July, October and January of each year for Products sold during the
immediately-preceding calendar quarter ending March, June, September and
December, respectively. Each Royalty payment will be accompanied by a report
setting forth the calculations of the Royalties paid, including the date,
quantity and Net Sales Price of the Products sold. If the Company leases the
Products to a third party, then an appropriate Royalty payment shall be made in
connection with each receipt of a lease payment by the Company.
(b) For purposes of calculating the Royalty, a Product shall be
deemed sold at the time the Product is accepted by the customer after delivery
to the customer and final payment for the Product is due and payable. If any of
the Products are subsequently rejected by a customer, then Royalties paid for
such Products will be credited against future Royalties payable.
(c) If the Company fails to report or pay any Royalties due under
this Section 9, then, if such failure to report or pay is not cured within
thirty (30) days after demand therefor by the Partnership, the Partnership may,
at its election, upon delivering written notice thereof to the Company,
terminate the license granted hereby, in addition to any other remedies that may
be available to the Partnership.
(d) For purposes of the foregoing, the term "Net Sales Price"
shall mean the sales price of Products sold by the Company, excluding all sales
and value-added taxes and other similar taxes (other than taxes based upon the
income of the Company), insurance charges, customs duties, packaging or shipping
charges, cash and other discounts, commissions, specially itemized and non-
recurring engineering or similar charges for services performed by the Company,
and amounts refunded or credited on returned or rejected Products.
10. Audit. The Company agrees to keep complete and accurate records
-----
of all amounts payable by or due to the Partnership hereunder, including all CVD
Costs and Expenses and the amount of all Royalties due to the Partnership. The
Partnership shall have the right, at its expense and not more than once in each
calendar year, to have a certified public accountant of national prominence
reasonably acceptable to the Company examine
4
<PAGE>
such books and records of the Company as are reasonably necessary for purposes
of verifying such amounts, and, among other things, to report compliance or
noncompliance with the Royalty obligations of the Company hereunder. If any
such audit determines that the Company has under-reported Royalties in any
report by more than five percent (5%), or overcharged the Partnership for CVD
Costs and Expenses by more than ten percent (10%), then the Company shall
reimburse the Partnership for the cost of such audit. Any information obtained
in the course of an audit under this Section 10 shall be maintained in
confidence by the Partnership and its agents as confidential and proprietary
information.
11. Assignment. This Agreement shall be binding upon the
----------
transferees, successors, assigns and legal representatives of the parties
hereof.
12. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California.
13. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed given if delivered personally
or if sent by a private courier service of national prominence, or by registered
or certified mail, postage prepaid, addressed as follows:
If to the Plasma & Materials Technologies, Inc.
Company, to: 9255 Deering Avenue
Chatsworth, California 91311
Attention: Dr. Gregor A. Campbell
With a Riordan & McKinzie
copy to: 5743 Corsa Avenue, Suite 116
Westlake Village, California 91362
Attention: Lawrence C. Weeks, Esq.
If to the PMT CVD Partners, L.P.
Partnership, to: 9255 Deering Avenue
Chatsworth, California 91311
Attention: Mr. John W. La Valle
With a Cooley Godward Castro Huddleson &
copy to: Tatum
3000 Sand Hill Road
Building 3, Suite 230
Menlo Park, California 94025
Attention: Mark Tanoury, Esq.
5
<PAGE>
14. Counterparts. This Agreement may be executed in counterparts
------------
with the same force and effect as if each of the signatories had executed the
same instrument.
15. Term; Termination. This Agreement shall terminate on March 29,
-----------------
2001. This Agreement may be terminated earlier by either party after the
delivery of written notice to the other party of a material breach by the other
party of any material provision set forth herein, provided that the breaching
party shall have thirty (30) days following receipt of such notice to cure such
breach, to the reasonable satisfaction of the non-breaching party. No
termination of this Agreement shall affect the rights and obligations of the
parties arising as of such termination and, notwithstanding anything contained
herein to the contrary, (a) if this Agreement is terminated by the Company by
reason of the Partnership's breach as provided above, the rights of the Company
under Section 8, and its attendant obligations under Section 9, shall become
perpetual, and (b) the rights and obligations of the parties under Sections 7,
10 and 16 shall survive such termination.
16. Confidentiality. Each of the Company and the Partnership shall
---------------
hold and keep confidential all information, documents and data relating to CVD
technology which are received from the other party during the term of this
Agreement.
6
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
COMPANY: PLASMA & MATERIALS TECHNOLOGIES, INC.,
a California corporation
By: /s/ Dr. Gregor A. Campbell
---------------------------
Dr. Gregor A. Campbell
President and Chief Executive Officer
PARTNERSHIP: PMT CVD PARTNERS, L.P.,
a California limited partnership
By: CVD, Inc.,
General Partner
By: /s/ John W. La Valle
---------------------
John W. La Valle
Chief Financial Officer and Secretary
7
<PAGE>
Exhibit A
PARTNERSHIP 1996 BUDGET
-----------------------
A-1
<PAGE>
Exhibit B
DEVELOPMENT PLAN
----------------
CVD RESEARCH & DEVELOPMENT PROGRAM TASKS
1. January - July 1996: Scope/Project Parameters for Early Prototype
------------------------------------------------------------------
Development
-----------
Resolve issues and obtain data on the following variables:
A. Shorten Clean Process Time
B. Increase Speed of Chuck Declamping
C. Increase Speed of top coat deposition rate
D. Reduce Particle Count
2. July - October 1996: Early Stage Productization
------------------------------------------------
A. Integrate Prototype Development
B. Resolve Integration Issues
C. Build 2 tools, 1 for PMT and 1 for Anelva
3. July - December 1996: Strategic Marketing Development
------------------------------------------------------
A. Survey Customers for Needs
B. Develop Business and Marketing Plans
C. Line up JDP Partners
D. Execute Marketing and Business Plan
4. October - December 1996: IRONMAN and Beta Unit Production
----------------------------------------------------------
A. Complete IRONMAN testing
B. Build 1 to 2 Beta Units for JDP programs, to be ready for system
delivery in December 96/January 97
DEVELOPMENT RESOURCES REQUIRED
1. March - December 1996: Early Prototype Development
---------------------------------------------------
10 Engineers including process, CAD, software, technicians and
designers
1 General Manager/President to coordinate and manage work program
2. July - December 1996: Business/Marketing Plan
----------------------------------------------
1 Strategic Marketing Executive
3. July 1996 - March 1997: Mid Stage Productization
-------------------------------------------------
8-10 additional engineers for production/assembly and IRONMAN testing
B-1
<PAGE>
Exhibit B (cont'd)
DEVELOPMENT PLAN
----------------
OTHER
Additional plan, personnel resources, capital equipment requirements will be
scoped and agreed upon at the 1996 mid-year status meeting.
B-2
<PAGE>
EXHIBIT 10.19
TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (this "Agreement") is entered into
as of March 29, 1996 between Plasma & Materials Technologies, Inc., a California
corporation (the "Company"), and PMT CVD Partners, L.P., a California limited
partnership (the "Partnership").
R E C I T A L S:
- - - - - - - -
A. The Company designs, manufactures, markets and sells advanced
semiconductor manufacturing equipment, including a plasma source covered by
United States Patent No. 4,990,229, entitled "High Density Plasma Deposition and
Etching Apparatus" (together with its foreign counterparts, the "MORI Patent"),
which plasma source can be incorporated into, among other equipment, chemical
vapor deposition ("CVD") systems for the manufacture of semiconductors.
B. The Partnership has been formed pursuant to that certain Agreement
of Limited Partnership of PMT CVD Partners, L.P. dated as of an even date
herewith (the "Partnership Agreement"), to which the Company is a party and, in
connection therewith, the Company has agreed to contribute to the capital of the
Partnership a non-exclusive, royalty-free license for CVD applications for
semiconductor manufacturing under all PMT patents and technology (including
without limitation the MORI Patent and related technology).
C. The parties intend to effect such contribution of license rights
pursuant hereto.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Grant of License. Pursuant to Section 3.1(b) of the Partnership
----------------
Agreement and for the consideration provided in the Partnership Agreement, the
Company hereby grants to the Partnership a non-exclusive, worldwide and fully
paid license, under all patents, copyrights, trade secrets and other
intellectual property of the Company (including without limitation the MORI
Patent and related technology), to design, develop, manufacture, have
manufactured, use, sell, lease or otherwise dispose of any and all CVD systems
for the manufacture of semiconductors, or any part thereof or spare part
therefor, including without limitation the plasma source or any spare part
therefor which is a component of or used in any such CVD systems. Such license
shall not be assignable or transferable, and may not be sublicensed, at all
times prior to September 30, 2001, but on and after such date such license may
be sold, assigned, sublicensed or otherwise dealt in and with solely for the
Partnership's own account and without royalty, accounting, reporting or other
obligation of any nature to
<PAGE>
the Company. For purposes of the foregoing, "system" shall mean a stand-alone
set of equipment for the chemical vapor deposition of film in the semiconductor
manufacturing process, and shall not include components or spare parts (or
plasma sources or spare parts) except only to the extent manufactured solely for
use in systems as so defined. Furthermore, such license shall be limited solely
to CVD applications, and shall not confer upon the Partnership any license or
right with respect to systems, components or spare parts not used solely for CVD
applications. Such license shall further be subject to the limitations set forth
in Sections 4, 5 and 6 hereof. All such CVD systems, and all components thereof
and spare parts therefor which are within the scope of the license rights
granted hereby, are referred to herein as the "Products."
2. Technical Assistance. In order to assist the Partnership in the
--------------------
manufacture of the Products under this license, the Company agrees from time to
time during the term hereof (as provided in Section 9 hereof) to provide the
Partnership upon request with the following documents, information, technology
and manufacturing know-how related to the design, development or manufacture of
the Products, all at no cost to the Partnership:
(a) all technical information related to the Products;
(b) all engineering documentation related to the Products;
(c) all manufacturing documentation related to the Products;
(d) all quality assurance documentation related to the Products;
and
(e) all process information related to the Products.
3. Further Assistance. In order to further assist the Partnership to
------------------
develop, manufacture, assemble, test and repair the Products, the Company agrees
as follows:
(a) from time to time during the term hereof, the Company shall
make reasonably available to the Partnership, for consultation at the Company's
facilities, qualified employees of the Company to render technical advice to the
Partnership regarding the manufacture, assembly, testing and repair of the
Products; and
(b) from time to time during the term hereof, the Company shall
allow the Partnership's personnel to visit the Company's manufacturing plants
for the study of systems, procedures, practices and methods as reasonably needed
to further enable the Partnership to develop, manufacture, assemble, test and
repair the Products.
The Partnership agrees to reimburse the Company for the Company's
reasonable out-of-pocket expenses incurred in connection with complying with
this Section 3,
2
<PAGE>
including all salary and wage expenses of employees or consultants of the
Company to the extent that their time is used to provide this assistance to the
Partnership.
4. Obligations with Respect to Watkins-Johnson Company. The
---------------------------------------------------
Partnership acknowledges that the Company and Watkins-Johnson Company ("W-J")
are parties to, among other agreements, a Technology License and Sales Agreement
(the "W-J Agreement") which provides that, during the Covenant Period
(determined as provided therein), the Company will not (a) sell, offer for sale,
or solicit the purchase of its products for CVD applications for semiconductor
manufacturing, or (b) grant any licenses to make, have made, use, sell or modify
such products for CVD applications for semiconductor manufacturing.
Accordingly, the Partnership specifically acknowledges and agrees that the
license rights granted hereunder shall not include any rights to make, have
made, sell, offer for sale, use, modify or solicit the purchase of any products
for CVD applications during the Covenant Period. The Company represents and
warrants to the Partnership that the Covenant Period shall terminate no later
than July 1, 1996. The Company shall indemnify and hold harmless the
Partnership from and against any loss, liability, claim or expense arising by
reason of any claim by W-J that this Agreement or the transactions contemplated
hereby violate the W-J Agreement.
5. Rights and Obligations with respect to Anelva Corporation. The
---------------------------------------------------------
Partnership acknowledges that the Company and Anelva Corporation, a corporation
existing under the laws of Japan ("Anelva"), are parties to a Memorandum of
Intent dated December 7, 1995 providing for, and pursuant thereto shall enter
into, among other agreements, a Joint Development Agreement, a Sales and
Marketing Agreement and a Manufacturing Agreement for the development,
manufacturing and marketing of CVD systems incorporating the Company's helicon
plasma source for oxidizing film for 200 millimeter wafers, and any improvements
thereto (the "JD Products"). The Partnership specifically acknowledges and
agrees that (a) it shall succeed to and assume all rights and obligations of the
Company under such Joint Development Agreement, and (b) pursuant to the
marketing rights to be granted to Anelva by the Company under the Sales and
Marketing Agreement, Anelva will have, during the Term of the Sales and
Marketing Agreement, the exclusive right (i) to market and sell the JD Products
for installation and use in the Anelva Territories (as defined below in this
paragraph) and to market and sell components and spare parts for the JD Products
in the Anelva Territories, and (ii) to market and sell the JD Products and
components and spare parts for the JD Products to the Anelva Japanese Customers
(as defined below in this paragraph). Accordingly, the license rights granted
herein by the Company to the Partnership shall be subject to such exclusive
rights of Anelva and, during the Term of the Sales and Marketing Agreement, the
Partnership shall not market or sell any JD Products for installation in the
Anelva Territories or to the Anelva Japanese Customers. For purpose of the
foregoing, the term "Anelva Territories" means Japan, Taiwan and all of Asia,
excluding Korea (but specifically including China, Hong Kong, Vietnam, Thailand,
Cambodia, Burma, India, Pakistan, Bangladesh, Sri Lanka, Indonesia, Singapore,
Malaysia, Philippines and the Eastern and Central Asian republics of the former
U.S.S.R.), and all of the Pacific Region
3
<PAGE>
(including Australia). Furthermore, for purposes of the foregoing, the term
"Anelva Japanese Customers" means NEC Corporation and its affiliates, Hitachi
and its affiliates, Matsushita and its affiliates, Sony and its affiliates,
Fujitsu and its affiliates, Mitsubishi and its affiliates, and any customer with
which Anelva has an existing relationship as acknowledged and agreed upon in
writing by Anelva and the Company.
6. Export Regulations. It is agreed that the worldwide license
------------------
granted to the Partnership herein is subject to all applicable restrictions
regarding the sale, transfer and/or export by the Partnership or its assigns or
sublicensees of any of the Products or any technology relating thereto pursuant
to the Export Administration Regulations of the United States Department of
Commerce, Office of Export Administration, as in effect from time to time during
the term hereof and, in accordance with such Regulations as presently in effect,
the Partnership agrees that it shall not sell, transfer or export any such
technology, or any Products or other commodities resulting therefrom, without
the prior approval of the United States government (and the Partnership agrees
to execute and deliver to the Company, upon request at any time or from time to
time during the term hereof, further written certifications to such effect.)
7. Confidentiality of Proprietary Information. The Partnership
------------------------------------------
hereby agrees that, during the term hereof and continuing after its termination
or expiration, it will keep in confidence and prevent the disclosure to any
unauthorized persons of any proprietary information, technology and
manufacturing know-how of the Company which is licensed to the Partnership or
otherwise made available to the Partnership hereunder. However, such
obligations of the Partnership shall terminate to the extent that any such
information, technology or know-how (a) is in or enters the public domain
through no fault of the Partnership, or (b) is or becomes independently known to
the Partnership free of any obligation of confidentiality hereunder.
8. No Warranty by the Company. The Company makes no warranty to the
--------------------------
Partnership as to the accuracy, sufficiency or suitability for use of any
technical information provided to the Partnership hereunder, or for the quality
of any Products made hereunder. The Company assumes no responsibility for
consequential damages, which might arise out of the manufacture, sale or use of
any of the Products.
9. Term; Termination. The license granted under Section 1 hereof
-----------------
shall be for perpetuity. For all other purposes, the term hereof shall be ten
(10) years.
10. Scope of Agreement. This Agreement constitutes the entire
------------------
understanding and agreement between the parties regarding this specific matter
and supersedes all prior representations and agreements. It may not be modified
or amended other than by an instrument in writing executed by the parties.
4
<PAGE>
11. Governing Law. This Agreement shall be construed and governed in
-------------
accordance with the laws of the State of California.
12. Notices. All notices required or permitted shall be in writing
-------
and addressed as follows:
If to the Company, to:
Plasma & Materials Technologies, Inc.
9255 Deering Avenue
Chatsworth, California 91311
Attention: Dr. Gregor A. Campbell
With a copy to:
Lawrence C. Weeks, Esq.
Riordan & McKinzie
5743 Corsa Avenue, Suite 116
Westlake Village, California 91362
If to the Partnership, to:
PMT CVD Partners, L.P.
c/o Plasma & Materials Technologies, Inc.
9255 Deering Avenue
Chatsworth, California 91311
Attention: Mr. John W. La Valle
With a copy to:
Mark Tanoury, Esq.
Cooley Godward Castro Huddleson & Tatum
3000 Sand Hill Road
Building 3, Suite 230
Menlo Park, California 94025
or to such other address as either party may from time to time, designate in
writing to the other.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and become effective as of the date first set forth above.
COMPANY: PLASMA & MATERIALS TECHNOLOGIES, INC.
By: /s/ Dr. Gregor A. Campbell
---------------------------
Dr. Gregor A. Campbell
President and Chief Executive Officer
PARTNERSHIP: PMT CVD PARTNERS, L.P.
By: CVD, Inc.,
General Partner
By: /s/ John W. La Valle
---------------------
John W. La Valle
Chief Financial Officer and Secretary
6
