License Agreement


    Exhibit
      10.7

     

    LICENSE
      AGREEMENT

     

    THIS
      LICENSE AGREEMENT (this “Agreement”) is entered into as of December 20, 2000
      (the “Effective Date”), by and between Strasbaugh, a California corporation
“Strasbaugh”), and Lam Research Corporation, a Delaware corporation (“Lam”).
      Each of Strasbaugh and Lam is sometimes referred to herein as a “Party” and
      sometimes are collectively referred to herein as the “Parties.” Capitalized
      terms used and not otherwise defined herein shall have the meaning ascribed
      thereto in the Purchase Agreement (as defined below).

     

    RECITALS

     

    WHEREAS,
      Lam is engaged in the Semiconductor Processing and Integrated Circuit
      Industry;

     

    WHEREAS,
      Strasbaugh is engaged in the Semiconductor Wafer Industry and other
      industries;

     

    WHEREAS,
      Strasbaugh and Lam have entered into that certain Asset Purchase Agreement
      dated
      as of December 20, 2000 (the “Purchase Agreement”), pursuant to which Lam agreed
      to purchase, and Strasbaugh has agreed to sell the Acquired Assets;
      and

     

    WHEREAS,
      this Agreement is entered into by the Parties pursuant to Section 2(e)(B) of
      the
      Purchase Agreement and constitutes the limited license by Lam to Strasbaugh
      of
      the Acquired Assets under certain restrictions and circumstances as specified
      herein.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual representations,
      warranties, and covenants herein contained and other good and valuable
      consideration, including but not limited to the consideration reflected in
      the
      Purchase Agreement, the receipt and adequacy of which is hereby acknowledged,
      the Parties hereby agree as follows:

     

    1.    Definitions.

     

    (a)    “Improvements”
shall
      mean any work, derivative, improvement, modification, enhancement, upgrade
      or
      adaptation of the Acquired Assets, by or for Strasbaugh and any Intellectual
      Property rights related thereto.

     

    2.    Integrated
      Circuit License and General License Grant.

     

    (a)    Integrated
      Circuit License Grant.
      Subject
      to the terms and limitations provided in this Agreement, Lam grants to
      Strasbaugh a non-exclusive, fully paid-up, royalty-free, non-sublicenseable,
      non-transferable worldwide right and license, during the term of this Agreement,
      to use, upgrade or modify the Acquired Assets in any manner within the
      Semiconductor Processing and Integrated Circuit Industry (including, without
      limitation, to make, have made, sell, offer for sale, repair and reconstruct
      Improvements thereon) and in accordance with this Agreement (the “Integrated
      Circuit License”). The Integrated Circuit License may be exercised only for the
      benefit of Strasbaugh, and shall commence as of the Effective Date provided
      that
      all other conditions of closing set forth in the Purchase Agreement are met
      by
      Strasbaugh.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)    General
      License Grant.
      Subject
      to the terms and limitations provided in this Agreement, Lam grants to
      Strasbaugh an exclusive, irrevocable, perpetual, fully paid-up, royalty-free,
      sublicenseable, transferable, worldwide right and license to use the Acquired
      Assets to make, have made, sell, offer for sale, repair and reconstruct
      Improvements in or for any field other than the Semiconductor Processing and
      Integrated Circuit Industry and in accordance with this Agreement (the “General
      License”). The General License may be exercised only for the benefit of
      Strasbaugh and its duly authorized transferees and licensees, and shall commence
      as of the Effective Date provided that all other conditions of closing set
      forth
      in the Purchase Agreement are met by Strasbaugh.

     

    (c)    Restrictions.
      Other
      than the Integrated Circuit License and the General License expressly granted
      in
      this Agreement, no rights or licenses are granted or deemed granted hereunder
      or
      in connection herewith, including, but not limited to, any rights or licenses,
      express or implied, to any other technology or Intellectual Property rights
      owned by Lam.

     

    3.    Ownership.
      As
      between the Parties and as of the Effective Date, Lam is and shall remain the
      sole and exclusive owner of all right, title and interest in and to the Acquired
      Assets and any Intellectual Property rights related thereto, subject only to
      the
      Integrated Circuit License and the General License. As between the Parties,
      Strasbaugh shall be the sole and exclusive owner of all right, title and
      interest in and to any Improvements and any Intellectual Property rights related
      thereto, subject to the right of first offer described in Section 4
      below.

     

    4.    Right
      of First Offer.
      Subject
      to the terms and conditions specified in this Section 4, Strasbaugh hereby
      grants to Lam a right of first offer with respect to any assignment, sale or
      other transfer of Improvements by Strasbaugh:

     

    (a)    Each
      time
      Strasbaugh proposes to assign, license, sell or otherwise transfer “Transfer”)
      any Improvement to a third party, Strasbaugh shall first deliver to Lam a notice
      by certified mail (“Notice”) stating (i) a detailed description of the
      Improvement, (ii) its bona fide intention to Transfer the same, and (iii) the
      price and terms upon which it proposes to do so.

     

    (b)    Thereafter,
      Lam shall have access to the Improvement reasonably sufficient to permit a
      due
      diligence evaluation of the same, and Strasbaugh shall cooperate as reasonably
      requested to assist Lam in such evaluation. Within thirty (30) days after
      receipt of the Notice, Lam may elect to purchase or otherwise obtain, at the
      price and on the terms specified in the Notice, such Improvement pursuant to
      and
      in accordance with a definitive purchase and technology transfer agreement
      as
      negotiated by the Parties in good faith, during which time Strasbaugh shall
      not
      Transfer or encumber any portion of such Improvement or enter into discussions
      with any third party concerning any such transaction.

     

    (c)    If,
      pursuant to Section 4(b), Lam does not elect to acquire an Improvement,
      Strasbaugh may, during the one hundred eighty (180) day period following the
      expiration of the period specified in Section 4(b) above, consummate a Transfer
      of such Improvement with any third party at a price not less than, and upon
      terms no more favorable to the offeree, than those specified in the Notice.
      If
      Strasbaugh does not Transfer such Improvement within such period, then the
      right
      provided to Lam hereunder shall be deemed revived and no Transfer of the
      improvement shall be effected unless first reoffered to Lam in accordance
      herewith.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      (d)    This
        right of first offer may not be assigned or transferred by Lam, except to
        any
        wholly-owned subsidiary or parent of, or to any corporation or entity that
        is,
        within the meaning of the Securities Act of 1933, as amended, controlling,
        controlled by or under common control with, Lam.

    

     

    5.    Warranty
      Disclaimer.
      THE
      ACQUIRED ASSETS ARE LICENSED TO STRASBAUGH “AS IS.” LAM MAKES NO WARRANTY,
      EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, CONCERNING THE ACQUIRED ASSETS,
      LAM
      IMPROVEMENTS OR ANY OTHER SUBJECT MATTER UNDER THIS AGREEMENT, INCLUDING WITHOUT
      LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
      AND NONINFRINGEMENT.

     

    6.    Intellectual
      Property Matters.
      In the
      event either Party becomes aware of any infringement of any Intellectual
      Property right of the other which is related to the Acquired Assets or the
      Improvements, it shall provide notice thereof in writing to the other Party.
      Lam
      shall control, in its sole discretion, the protection and enforcement of the
      Acquired Assets.

     

    7.    Confidentiality.

     

    (a)    Each
      Party (a “Receiving Party”) agrees to keep confidential and not disclose or use
      except in performance of its obligations under this Agreement, confidential
      or
      proprietary information related to the technology or business of the other
      Party
      (the “Disclosing Party”) that the Receiving Party learns in connection with this
      Agreement and any other information received from the Disclosing Party,
      including without limitation, to the extent previously, currently or
      subsequently disclosed to the Receiving Party hereunder or otherwise:
      information relating to products or technology of the Disclosing Party, or
      to
      the Disclosing Party’s business (including, without limitation, computer
      programs, code, algorithms, schematics, data, know-how, processes, ideas,
      inventions (whether patentable or not), names and expertise of employees and
      consultants, all information relating to customers and customer transactions
      and
      other technical, business, financial, customer and product development plans,
      forecasts, strategies and information) (all of the foregoing, “Confidential
      Information”). Neither Party shall disclose the terms of this Agreement to any
      third Party without the prior written consent of the other (except for its
      attorneys, accountants, and other service providers as necessary, provided
      that
      such service providers are bound to maintain the confidentiality thereof).
      Each
      Party shall use reasonable precautions to protect the Confidential Information
      of the other in its possession and employ at least those precautions that such
      Party employs to protect its own similar confidential or proprietary
      information. For the purposes of this Agreement, Acquired Assets and the
      Improvements shall be deemed “Confidential Information.”

     

    (b)    “Confidential
      Information” shall not include information a Receiving Party can document is in
      or (through no improper action or inaction by the Receiving Party or any
      affiliate, agent or employee thereof) enters the public domain (and is readily
      available without substantial effort). A Receiving Party, with prior written
      notice to the Disclosing Party, may disclose such Confidential Information
      to
      the extent required to be disclosed to a governmental entity or agency in
      connection with seeking any governmental or regulatory approval, or pursuant
      to
      the lawful requirement or request of a governmental entity or agency, provided
      that reasonable measures are taken to guard against further disclosure,
      including without limitation, seeking appropriate confidential treatment or
      a
      protective order, or notifying or assisting the Disclosing Party to do
      so.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (c)    Each
      Party acknowledges and agrees that due to the unique nature of the Confidential
      Information, there can be no adequate remedy at law for any breach of its
      obligations hereunder, that any such breach may allow the Receiving Party or
      third parties to unfairly compete with the Disclosing Party, resulting in
      irreparable harm to the Disclosing Party, and therefore, that upon any such
      breach or any threat thereof, the Disclosing Party shall be entitled to
      appropriate equitable relief in addition to whatever remedies it might have
      at
      law. A Receiving Party will notify the Disclosing Party in writing immediately
      upon the occurrence of any such unauthorized release or other breach. Any breach
      of this Section 7 will constitute a material breach of this
      Agreement.

     

    8.    Term
      and Termination.

     

    (a)    Term.
      This
      Agreement shall remain in effect unless terminated as provided herein, except
      for the General License, which is irrevocable.

     

    (b)    Termination
      for Cause.
      Notwithstanding the foregoing, this Agreement may be terminated for cause
      immediately by written notice upon the occurrence of any of the following
      events:

     

    (i)    If
      the
      other ceases to do business, or otherwise terminates its business operations,
      or
      by Lam if there is a change in control of Strasbaugh (which shall include,
      without limitation, the acquisition of or beneficial ownership by one or more
      related persons or entities of fifty percent (50%) or more of the
      then-outstanding stock of Strasbaugh); or

     

    (ii)    If
      the
      other Party materially breaches any material provision of this Agreement and
      fails to cure such breach within thirty (30) days of written notice describing
      the breach; or

     

    (iii)    If
      the
      other Party ceases to carry on as a going concern or becomes insolvent or seeks
      protection under any bankruptcy, receivership, trust deed, creditors
      arrangement, composition or comparable proceeding, or if any such proceeding
      is
      instituted against the other (and not dismissed within ninety (90)
      days).

     

    (c)    Termination
      for Breach of Definitive Agreement.
      The
      Parties further acknowledge that a material breach of any term of a Definitive
      Agreement shall constitute a material breach under this Agreement, and likewise,
      a material breach of this Agreement shall constitute a material breach under
      each other Definitive Agreement (each a “Breach”). Notwithstanding anything else
      provided in a Definitive Agreement, any Breach by such Party shall be subject
      to
      the terms of Sections 8 of the Purchase Agreement.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (d)    Effect
      of Termination and Survival.
      In the
      event of termination or expiration, the Integrated Circuit License and all
      other
      rights and obligations of the parties shall terminate except that the following
      provisions shall survive termination: Sections 2(b), 3, 5, 7, 8. 10 and 12.
      Neither Party shall incur any liability whatsoever for any damage, loss or
      expenses of any kind suffered or incurred by the other arising from or incident
      to any termination of this Agreement (or any part thereof) by such Party which
      complies with the terms of this Agreement whether or not such Party is aware
      of
      any such damages or expenses. Termination is not the sole remedy under this
      Agreement and, whether or not termination is effected, all other remedies will
      remain available.

     

    9.    Limitation
      of Liability.
      EXCEPT
      FOR BREACH OF THE OBLIGATIONS SET FORTH IN SECTIONS 2(b), 3, 7 and 10 HEREIN,
      NEITHER PARTY SHALL BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY
      OR OTHER THEORY OR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
      WITHOUT LIMITATION LOST PROFITS) WITH RESPECT TO ANY SUBJECT MATTER OF THIS
      AGREEMENT. NOTWITHSTANDING ANY OTHER PROVISIONS IN THIS AGREEMENT, NEITHER
      PARTY
      WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY
      CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR COST OF PROCUREMENT
      OF SUBSTITUTE GOODS, SERVICES, TECHNOLOGY OR RIGHTS OR FOR ANY AMOUNT
      AGGREGATING IN EXCESS OF FIVE HUNDRED THOUSAND DOLLARS ($500,000).

     

    10.    Indemnity.
      Strasbaugh agrees to defend, indemnify and hold harmless Lam, its directors,
      employees and agents, from and against any and all damages, liabilities, costs
      and expenses (including reasonable attorneys’ fees and expenses) arising out of
      or related to Strasbaugh’s exercise of the Integrated Circuit License and/or the
      General License, provided that Lam promptly notifies Strasbaugh of any claim
      it
      receives or that its failure to do so does not materially prejudice Strasbaugh.
      If, in accordance with the foregoing provisions of this Section 10, Lam is
      entitled to indemnification, Strasbaugh will have the right, at its sole
      expense, to contest, defend and litigate any claim, action or proceeding (a
      “Claim”), and may settle the same either before or after the initiation of
      litigation, at such time and upon such terms as Lam deems fair and reasonable.
      If Strasbaugh elects to contest, defend or litigate a Claim, then Lam shall,
      at
      Strasbaugh’s expense, provide such reasonable cooperation as is reasonably
      requested by Strasbaugh; provided, however, that Lam may elect to participate
      in
      such defense at its own expense. Any final determination of a Claim, other
      than
      a settlement, will be binding upon Lam. If, pursuant to this Section 10,
      Strasbaugh elects not to contest, defend or litigate a Claim for which Lam
      is
      entitled to indemnification hereunder and Lam defends or settles the same,
      then
      Lam will be reimbursed by Strasbaugh for all its expenses of defending the
      same
      which are incurred from time to time, including without limitation all
      out-of-pocket costs and all reasonable legal and accounting fees and
      expenses.

     

    11.    Assignment.
      Except
      as otherwise expressly provided in this Agreement, Strasbaugh shall not assign
      (by operation of law or otherwise) or otherwise transfer this Agreement or
      any
      rights or obligations herein to anyone, including any parent, subsidiaries,
      affiliated entities or third parties, or as part of the sale of any portion
      of
      its business, change of control, or pursuant to any merger, consolidation or
      reorganization, without Lam’s prior written consent. Upon any violation of this
      Section 11 by Strasbaugh, Lam shall have the right to terminate this Agreement
      immediately upon written notice.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    12.    Miscellaneous.

     

    (a)    Governing
      Law.
      This
      Agreement shall be governed by and construed under, and the legal relations
      between the parties hereto will be determined in accordance with the laws of
      the
      State of California and the United States without regard to conflicts of law
      provisions thereof. The parties hereby agree to submit for binding arbitration
      in accordance with the following paragraph any and all disputes in connection
      with this Agreement and the performance thereof; except that Lam may take legal
      action in any jurisdiction in which specific collateral is located to realize
      on
      any such collateral or other security or to enforce specific performance of
      Strasbaugh’s obligations hereunder or a judgment or other decision. To the
      extent all or any part of this Section 12(a) is determined to be unenforceable,
      the remaining provisions will remain in effect and be interpreted to best
      effectuate the intent of the Parties.

     

    (b)    Arbitration.
      Subject
      to Section 12(a), any controversy or dispute arising out of or relating to
      this
      Agreement, or the breach thereof, shall be resolved by binding arbitration
      conducted in accordance with the arbitration rules of the American Arbitration
      Association (“AAA”) and judgment upon the award rendered by the arbitral
      tribunal may be entered in any court having jurisdiction thereof. The tribunal
      shall consist of a single arbitrator mutually agreeable to the parties, or
      in
      the absence of such an agreement within thirty (30) calendar days from the
      first
      referral of the dispute to the AAA (the “Referral Date”), designated by the AAA.
      The place of arbitration shall be Santa Clara County, California, unless the
      parties shall have agreed to another location within fifteen (15) calendar
      days
      from. the Referral Date. The arbitral award shall be final and binding. The
      parties waive any right to appeal the arbitral award, to the extent a right
      to
      appeal may be lawfully waived. Each Party retains the right to seek judicial
      assistance: (i) to compel arbitration; (ii) to obtain interim measures of
      protection prior to or pending arbitration (including, without limitation,
      injunctive relief); (iii) to seek injunctive relief in the courts of any
      jurisdiction as may be necessary and appropriate to protect the unauthorized
      disclosure of its proprietary or confidential information; and (iv) to enforce
      any decision of the arbitrator, including the final award. The arbitration
      proceedings contemplated herein shall be as confidential and private as
      permitted by law. Consequently, the parties hereto shall not disclose the
      existence, content or results of any such proceedings, and materials submitted
      in connection therewith shall not be admissible in any other proceeding,
      provided, however, that this confidentiality provision shall not prevent a
      petition to vacate or enforce an arbitral award, and shall not bar disclosures
      required by law.

     

    (c)    Entire
      Agreement.
      This
      Agreement and any other Definitive Agreement, together with all attachments
      hereto and thereto, constitute the entire understanding and agreement of the
      parties with respect to the subject matter of this Agreement, and supersedes
      all
      prior and contemporaneous understandings and agreements, whether written or
      oral, with respect to such subject matter. Any changes to the Agreement must
      be
      in writing and signed by authorized representatives of all parties.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (d)    Waiver.
      Any
      failure on the part of any Party to enforce at any time, or for any period
      of
      time, any of the provisions of this Agreement shall not be deemed or construed
      to be a waiver of such provisions or of the right of such Party thereafter
      to
      enforce each and every such provision. No waiver will be binding unless executed
      in writing by the Party making the waiver.

     

    (e)    Independent
      Contractors.
      The
      Parties hereto are independent contractors and nothing contained in this
      Agreement shall be deemed or construed to create a partnership, joint venture,
      employment, franchise, or agency relationship between the parties. Neither
      Party
      has any right or authority to bind the other in any way.

     

    (f)    Headings.
      Headings and captions are for convenience only and are not to be used in the
      interpretation of this Agreement.

     

    (g)    Severability.
      If any
      provision of this Agreement shall be held by a court of competent jurisdiction
      to be contrary to law, the remaining provisions of this Agreement shall remain
      in full force and effect.

     

    (h)    Notices.
      All
      notices, requests, demands, applications, services of process, and other
      communications which are required to be or may be given under this Agreement
      will be in writing and will be deemed to have been duly given if sent by
      telecopy or facsimile transmission, answer back requested, or delivered by
      courier or mailed, certified first class mail, postage prepaid, return receipt
      requested, to the parties to this Agreement at the following
      addresses:

     

    
      	
              If
                to Lam:

            	
              Lam Research Corporation

              4650
                Cushing Parkway

              Fremont,
                CA 94538-6470

              Facsimile:
                (510) 572-1586

              Attention:
                Craig Garber, Vice President-Treasurer

            
	 	 
	
              with
                a copy to:

            	
              Brobeck,
                Phleger & Harrison LLP

              One
                Market

              Spear
                Street Tower

              San
                Francisco, CA 94105

              Facsimile:
                (415) 442-1010

              Attention:
                Shane M. Byrne, Esq.

            
	 	 
	
              If
                to Strasbaugh:

            	
              Strasbaugh

              825
                Buckley Road

              San
                Luis Obispo, CA 93401

              Facsimile:
                (805) 541-6425

              Attention:
                Jim Burke

            


    

    
       

      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                with
                  a copy to:

              	
                Diehl
                  & Rodewald, P.C.

                1043
                  Pacific Street

                San
                  Luis Obispo, CA 93401

                Facsimile:
                  (805) 541-6870

                Attention:
                  Joseph W. Diehl, Esq.

              


      

       

      if
        to
        such other address as either Party will have furnished to the other by notice
        given in accordance with this Section. Such notice will be effective, (i)
        if
        delivered in person or by courier, upon actual receipt by the intended
        recipient, or (ii) if sent by telecopy or facsimile transmission, on the
        date of
        transmission unless transmitted after normal business hours, in which case
        on
        the following date, (iii) if mailed, upon the date of first attempted
        delivery.

    

     

    (i)    No
      Third Party Beneficiaries.
      This
      Agreement shall not confer any rights or remedies upon any Person other than
      the
      Parties and their respective successors and permitted assigns.

     

    (j)    Construction.
      The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the Parties
      and no presumption or burden of proof shall arise favoring or disfavoring either
      Party by virtue of the authorship of any of the provisions of this
      Agreement.

     

    (k)    Counterparts.
      This
      Agreement may be executed in any number of counterparts and each such
      counterpart shall be deemed an original.

     

    (This
      space intentionally left blank.)

     

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

      IN
        WITNESS WHEREOF, the Parties have, by their respective duly authorized officers,
        executed this License Agreement as of the Effective Date.

      


      
        	
                LAM
                  RESEARCH CORPORATION,

              	 	
                STRASBAUGH,

              
	
                a
                  Delaware corporation

              	 	
                a
                  California corporation

              
	 	 	 
	 	 	
                /s/
                  April A. Strasbaugh, Secretary 
                  

                

              
	
                By:
                  /s/ Stephen G. Newberry 
                  

                

              	 	
                /s/
                  James M. Burke 
                  

                

              
	
                Name:
                  Stephen G. Newberry

              	 	
                Name:
                  James M. Burke

              
	
                Title:
                  President/COO

              	 	
                Title:
                  CEO

              


      

      


    

    -9-