Exhibit 10.1


 


SHAREHOLDERS AGREEMENT


This Shareholders Agreement (the “AGREEMENT”) is made
and entered into as of April 3, 2007, among Cascade Microtech, Inc., an
Oregon corporation (“ACQUIROR”), Gryphics, Inc., a Minnesota corporation (“TARGET”)
and each of the shareholders of Target set forth on Appendix A hereto
(each a “SHAREHOLDER” and collectively, the “SHAREHOLDERS”).


This Agreement is entered into in connection with that
certain Agreement and Plan of Merger dated as of April 3, 2007 (the “MERGER
AGREEMENT”) by and among Acquiror, Target and Gryphics Acquisition Corporation,
a Minnesota corporation and a wholly-owned subsidiary of Acquiror (“SUB”).  The Merger Agreement provides for the merger
of Target with and into Sub (the “MERGER”) in a transaction in which the issued
and outstanding shares of capital stock of Target (the “TARGET COMMON STOCK”)
will be converted into the right to receive cash and shares of Common Stock,
$0.01 par value, of Acquiror (the “ACQUIROR COMMON STOCK”) as provided by, and on
the terms and conditions set forth in, the Merger Agreement.  Capitalized terms used herein but not defined
herein shall have their defined meanings as set forth in the Merger Agreement.


1.             Representations, Warranties and
Covenants of Each Shareholder.  Each
Shareholder represents, warrants and covenants as follows:


(a)           Each Shareholder has full power and
authority to execute this Agreement, to make the representations and warranties
and covenants herein contained and to perform such Shareholder’s obligations
hereunder.


(b)           Appendix A attached hereto sets
forth all shares of Target Common Stock owned by each Shareholder, including
all Target Common Stock as to which such Shareholder has sole or shared voting
or investment power and all rights, options and warrants to acquire Target
Common Stock.  Except as contemplated by
the Merger Agreement, no other person or entity not a signatory to this
Agreement has a beneficial interest in or right to acquire all or any portion
of the shares of Target Common Stock set forth in Appendix A.


(c)           Each Shareholder is acquiring the
Acquiror Common Stock solely for the Shareholder’s own account, for investment
and not with a view to any resale or other distribution thereof in violation of
the Securities Act.


(d)           Each Shareholder acknowledges and
understands that the terms of the Merger have not been reviewed by the
Commission or by any state securities authorities, that the Acquiror Common
Stock has not been registered under the Securities Act, any state securities
law or registered or qualified under any other securities laws, based on, among
other factors, that no distribution or public offering has been effected and
the Acquiror Common Stock will be issued by Acquiror in connection with a
transaction that does not involve any public offering within the meaning of
Section 4(2) of the Securities Act. Each Shareholder understands that
Acquiror is relying on such Shareholder’s representations as set forth herein
for purposes of claiming such exemption, including the bona fide nature of such
Shareholder’s investment intent 



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as expressed above.  Each Shareholder acknowledges that, except as
is set forth in Section 5 of this Agreement, Acquiror is under no
obligation to register the Acquiror Common Stock under the Securities Act.  As a result, unless an exemption from such
registration is then available or such Shareholder then qualifies to sell
shares of Acquiror Common Stock under Rule 144, such Shareholder must hold the
Acquiror Common Stock until such time as Acquiror has registered the Acquiror
Common Stock for resale under the Securities Act and qualified the Acquiror
Common Stock for resale under applicable state securities laws.


(e)           Each Shareholder is familiar with
Regulation D promulgated under the Securities Act and is an “accredited
investor” as defined in Rule 501(a) of such Regulation D or such Shareholder,
either alone or together with such Shareholder’s representative, has such
knowledge and experience in financial, investment and business matters that the
Shareholder is capable of evaluating the merits and risks of an investment in
the Acquiror Common Stock.  Each
Shareholder acknowledges that shares of Acquiror Common Stock are volatile
securities that involve a high degree of risk. 
Each Shareholder represents that it is capable of determining what
documents and information are necessary to evaluate the Merger and/or an
investment in the Acquiror Common Stock, and has the capacity to protect its
own interests in connection with the Merger and the acquisition of the Acquiror
Common Stock.


(f)            Each Shareholder represents that its
financial condition is such that the Shareholder is able to bear any and all
economic risks associated with investment in the Acquiror Common Stock,
including the risk of holding the Acquiror Common Stock for an indefinite
period of time.  Each Shareholder
represents that it can also afford a complete loss of its investment in the
Acquiror Common Stock, and has adequate means of providing for the Shareholder’s
current needs and possible personal contingencies; provided, however, that
nothing contained herein shall relieve Acquiror from strict adherence to the
terms of Section 5.


(g)           Until such time as the Acquiror
Common Stock has been registered for resale, each Shareholder understands and
acknowledges that each stock certificate representing the Acquiror Common Stock
shall bear a legend in, or substantially in, the following form:


“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS CONTAINED IN A SHAREHOLDERS AGREEMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS.  NEITHER SUCH SHARES NOR ANY
PORTION THEREOF OR INTEREST THEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF (I) EXCEPT AS SET FORTH IN THE SHAREHOLDERS AGREEMENT
AND (II) UNLESS THE SAME ARE REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE AND THE CORPORATION SHALL HAVE RECEIVED EVIDENCE OF SUCH EXEMPTION
REASONABLY SATISFACTORY TO THE CORPORATION (WHICH MAY INCLUDE, AMONG OTHER
THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION).”



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(h)           Each Shareholder understands that
Acquiror may maintain a “stop transfer order” against the Acquiror Common Stock
for the purpose of ensuring compliance with applicable securities laws.  Acquiror shall not be required (a) to
transfer or have transferred on its books any Acquiror Common Stock that has
been sold or otherwise transferred in violation of any of the provisions of
this Agreement or (b) to treat as an owner of such Acquiror Common Stock
or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Acquiror Common Stock shall have been so transferred in
violation of any provision of this Agreement. 
Acquiror agrees that such stop transfer instructions and legends will be
promptly removed and transfers of Acquiror Common Stock will be processed if
the provisions of this Agreement and the Securities Act are complied with.


(i)            Each Shareholder has received a copy
of the Notice and Solicitation of Written Consent dated March 23, 2007,
including copies of Acquiror’s Annual Report on Form 10-K for fiscal the year
ended December 31, 2006, and Acquiror’s Proxy Statement dated
April 10, 2006 (collectively, the “DISCLOSURE MATERIALS”).  Each Shareholder, either alone or together
with the Shareholder’s representative, has made such further investigation as
the Shareholder deems appropriate as to, and is fully familiar with, and
knowledgeable regarding, the financial condition, business affairs and
prospects of Acquiror.  The Shareholder
has been given the opportunity to ask questions of, and receive answers from,
the principal officers of Acquiror concerning the business and financial
affairs of Acquiror, and has had further opportunity to obtain any additional
information necessary to verify the accuracy of the foregoing information. To
the extent any Shareholder has not sought information regarding any particular matter,
the Shareholder represents that Shareholder had no interest in doing so and
that such matters are not material to the Shareholder in connection with this
investment.


2.             Negative Covenants of Shareholder.


(a)           Each Shareholder covenants and agrees
that it will not sell, transfer, exchange, pledge, or otherwise dispose of, or
make any offer or agreement relating to any of the foregoing with respect to,
any Acquiror Common Stock, or any option, right or other interest with respect
to any Acquiror Common Stock, unless (i) such transaction is permitted
pursuant to Rule 144 under the Securities Act, (ii) counsel representing
such Shareholder, which counsel is reasonably satisfactory to Acquiror, shall
have advised Acquiror in a written opinion letter satisfactory to Acquiror and
Acquiror’s legal counsel, and upon which Acquiror and its legal counsel may
rely, that no registration under the Securities Act would be required in
connection with the proposed sale, transfer or other disposition, (iii) a
registration statement under the Securities Act covering the Acquiror Common
Stock proposed to be sold, transferred or otherwise disposed of, describing the
manner and terms of the proposed sale, transfer or other disposition, and
containing a current prospectus, shall have been filed with the Commission and
made effective under the Securities Act, or (iv) an authorized
representative of the Commission shall have rendered written advice to such
Shareholder (sought by such Shareholder or counsel to such Shareholder, with a
copy thereof and all other related communications delivered to Acquiror) to the
effect that the Commission would take no action, or that the staff of the
Commission would not recommend that the Commission take action, with respect to
the proposed disposition if consummated.



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(b)           Each Shareholder represents and
warrants that it has no plan or intention to sell, exchange or otherwise
dispose of shares of Acquiror Common Stock received in connection with the
Merger, other than in accordance with the foregoing provisions of this
Section 2.


3.             Rule 144. 
From and after the Effective Time of the Merger and for so long as is
necessary in order to permit each Shareholder to sell the Acquiror Common Stock
held by it pursuant to Rule 144 under the Securities Act, Acquiror will file on
a timely basis all reports required to be filed by it pursuant to
Section 13 of the Exchange Act referred to in paragraph (c)(1) of
Rule 144 under the Securities Act, in order to permit each Shareholder to sell
the Acquiror Common Stock held by it pursuant to the terms and conditions of
Rule 144.  Each Shareholder understands
that, except as provided in this Section 3 and in Section 5 of this
Agreement, Acquiror is under no obligation to register the sale, transfer or
other disposition of any Acquiror Common Stock by or on behalf of any
Shareholder or to take any other action necessary in order to make compliance
with an exemption from registration available.


4.             Restrictions on Resales. 
Each Shareholder agrees and acknowledges that, in addition to the
restrictions imposed under Section 2 of this Agreement, the provisions of
the Securities Act prohibit the public resale of Acquiror Common Stock (except
in a transaction registered under the Securities Act) until such time as such
Shareholder has beneficially owned, within the meaning of Rule 144(d), the
Acquiror Common Stock for a period of at least one (1) year after the date of
the Merger.  Each Shareholder
acknowledges that such Shareholder is familiar with Rule 144 and agrees to comply
with the provisions of such rule as applicable to the Acquiror Common Stock.


5.             Registration of Shares Issued in
the Merger.


(a)           Registrable Shares. For
purposes of this Agreement, “REGISTRABLE SHARES” shall mean the shares of
Acquiror Common Stock issued in the Merger; provided, however, that Registrable
Shares shall not include shares of Acquiror Common Stock issued in the Merger
that have been sold or otherwise transferred by the shareholders of Target who
initially received such shares in the Merger prior to the effective date of the
Registration Statement (as defined below) (the holders of Registrable Shares
collectively hereinafter referred to as the “HOLDERS”); provided further
however, that a distribution of shares of Acquiror Common Stock issued in the
Merger without additional consideration, to underlying beneficial owners (such
as the general and limited partners, shareholders or trust beneficiaries of a
Holder, or the heirs or legal representative upon death of a Holder) shall not
be deemed such a sale or transfer for purposes of this Section 5 and such
underlying beneficial owners, heirs or legal representatives shall be entitled
to the same rights under this Section 5 as the initial Holder from which
the Registrable Shares were received and shall be deemed a Holder for the
purposes of this Section 5.


(b)           Required Registration. Not
later than the 90th day after the Closing Date
(the “Initial Filing Deadline”), Acquiror shall file with the Commission a
registration statement on Form S-3 (or such successor or other appropriate
form) under the Securities Act with respect to the Registrable Shares (the “REGISTRATION
STATEMENT”) and will effect all such registrations, qualifications and
compliances (including, without limitation, obtaining appropriate 



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qualifications under applicable state
securities or “blue sky” laws and compliance with any other applicable
governmental requirements or regulations, and the listing requirements of any
applicable exchange or similar obligations) as any selling Holder may
reasonably request and that would permit or facilitate the sale of Registrable
Shares (provided however that Acquiror shall not be required in connection
therewith to qualify to do business or to file a general consent to service of
process in any such state or jurisdiction). The Registration Statement shall be
declared effective by the Commission not later than one hundred eighty (180)
days after the Closing Date (the “Required Registration Date”).  All other applicable registrations,
qualifications and compliances necessary to allow the Registrable Shares to be
freely tradable shall also be completed by the Required Registration Date.  Acquiror will maintain the effectiveness of
the Registration Statement and other applicable registrations, qualifications
and compliances until the earlier of the one year anniversary of the Closing of
the Merger or the earlier sale by the Target Shareholders of all of the shares
of Acquiror Common Stock registered thereunder (the “REGISTRATION EFFECTIVE
PERIOD”).  After the date the
Registration Statement is first declared effective, the Holders will be
permitted (subject in all cases to the provisions of Section 6(c)) to
offer and sell Registrable Shares during the Registration Effective Period in
the manner described in the Registration Statement provided that the
Registration Statement remains effective and has not been suspended.


(c)           Suspension Right.  Notwithstanding any other provision of this
Section 5, Acquiror shall have the right at any time to require that all Holders
suspend further open market offers and sales of Registrable Shares whenever,
and for so long as, in the reasonable judgment of Acquiror after consultation
with counsel, the use of the Registration Statement and the prospectus related
thereto must be suspended due to the happening of any event as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing (the “SUSPENSION
RIGHT”).  In the event Acquiror exercises
the Suspension Right, such suspension will continue for the period of time
reasonably necessary for disclosure to occur at a time that is not detrimental
to Acquiror and its shareholders or, if earlier, until such time as the
information or event is no longer material, each as determined in good faith by
Acquiror after consultation with counsel. Notwithstanding the foregoing,
Acquiror shall not impose the Suspension Right at any time for more than thirty
(30) consecutive days. Acquiror will promptly give the Holders written notice
of any such suspension and will use all reasonable efforts to minimize the
length of the suspension.  The
Registration Effective Period shall be extended by a period of time equal to
the duration of any period during which the Suspension Right is imposed.  In the event the Required Registration Date
occurs during a period in which the Suspension Right would otherwise be imposed
in accordance with the foregoing, then the Required Registration Date shall be
extended until the end of such period, but in no event for more than sixty (60)
days.  Anything to the contrary notwithstanding,
nothing in this Section 5(c) shall be interpreted to relieve Acquiror of its
obligation to file the Registration Statement on or prior to the Initial Filing
Deadline.


(d)           Further Obligations of Acquiror.


1.             Acquiror
shall furnish to the Holders such reasonable number of copies of the
Registration Statement, each amendment and supplement thereto, the prospectus 



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included in the Registration
Statement (including each preliminary prospectus), any documents incorporated
by reference into the Registration Statement and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Shares owned by them.


2.             Acquiror
will use its best efforts to diligently prepare and file with the Commission
such amendments and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by the Registration Statement.


3.             Acquiror
shall file on a timely basis with the Commission all information that the
Commission may require under either of Section 13 or Section 15(d) of
the Exchange Act and, so long as it is required to file such information, shall
take all action that may be required as a condition to the availability of Rule
144 under the Securities Act (or any successor exemptive rule hereinafter in
effect) with respect to Acquiror Common Stock. Acquiror shall furnish to any
Holder forthwith upon request (i) a written statement by Acquiror as to
its compliance with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of Acquiror as filed with the
Commission, and (iii) any other reports and documents that a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such Registrable Shares without
registration.


4.             Acquiror
shall notify the Holders promptly (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and with respect to the
Registration Statement or post-effective amendment, when the same has become
effective, (ii) of any request after the effective date of the
Registration Statement by the Commission or any other federal or state
governmental authority for amendments or supplements to the Registration
Statement or prospectus or for additional information, (iii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceeding for that purpose, and (iv) of the receipt
by Acquiror of any notification with respect to the suspension of the
qualification of any of the Registrable Shares for sale in any jurisdiction or
the initiation of any proceeding for that purpose.


5.             Acquiror
shall use commercially reasonable efforts to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement, and if one is
issued, will use commercially reasonable efforts to obtain the withdrawal of
any stop order suspending the effectiveness of the Registration Statement, or
the lifting of any suspension of the qualification (or exemption from
qualification) of any Registrable Shares for sale in any jurisdiction at the
earliest possible time.


(e)           Obligations of Holders.


1.             Each
Holder covenants and agrees that it shall promptly furnish to Acquiror such
information regarding themselves or the Registrable Shares held by them, and
the intended method of disposition of such securities, as shall be reasonably
requested by Acquiror in order to effect the registration of its Registrable
Shares.  Each Holder agrees that it will
not effect any disposition of its Registrable Shares that would constitute a
sale within the meaning of 



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the Securities Act (including a
disposition which qualifies for an exemption from registration thereunder)
except in compliance with the Securities Act and the regulations thereunder,
including all applicable prospectus delivery requirements.


2.             Each
Holder covenants and agrees that it will promptly advise the Company of any
changes in the information concerning each Holder contained in the Registration
Statement and that such Holder will not make any sale of Registrable Shares
pursuant to the Registration Statement without complying with the prospectus
delivery requirements of the Securities Act.


3.             Each
Holder acknowledges that occasionally there may be times (as described in
Section 5(c)) when Acquiror must temporarily suspend the use of the
prospectus forming a part of the Registration Statement until such time as an
amendment to the Registration Statement has been filed by Acquiror and declared
effective by the Commission, the relevant prospectus supplemented by Acquiror
or until such time as Acquiror has filed an appropriate report with the
Commission pursuant to the 1934 Act. 
During any period in which sales are suspended, each Holder covenants
and agrees that it will not offer or sell any such Registrable Shares pursuant
to the Registration Statement or any such prospectus.


(f)            Expenses.  Acquiror agrees to bear the costs and
expenses for any registration pursuant to this Section 5.  The costs and expenses to be borne by
Acquiror for purposes of this Section 5 shall include, without limitation,
printing expenses (including a reasonable number of prospectuses for
circulation by the selling Holders), legal fees and disbursements of counsel
for Acquiror, legal fees and disbursements of one counsel for the Holders in an
amount not to exceed $10,000.00, “blue sky” expenses, accounting fees and
filing fees, but shall not include underwriting commissions or similar charges
(unless engaged by the Acquiror).


(g)           Indemnification.


1.             Acquiror
will indemnify and hold harmless each Holder, such Holder’s officers,
directors, shareholders,  partners and
other affiliates, including without limitation, each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange
Act, and such Holder’s heirs, legal representatives, successors and permitted
assigns, against any losses, claims, damages, or liabilities (joint or several)
to which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a “VIOLATION”):
(A) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(B) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (C) any violation or alleged violation by Acquiror of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law; and Acquiror will pay to each such Holder or other indemnitee
specified above in this Section 5(g)1, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such 



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loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 5(g) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected
without the consent of Acquiror; nor shall Acquiror be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon (a) a Violation which occurs in reliance
upon and in conformity with written information furnished expressly for use in
the Registration Statement by any such Holder or other indemnitee specified
above, or (b) a Violation that would not have occurred if such Holder had
delivered to the purchaser the version of the Prospectus most recently provided
by Acquiror to the Holder prior to the date of such sale.


2.             Each
selling Holder will indemnify and hold harmless Acquiror, each of its
directors, each of its officers who has signed the Registration Statement, each
person, if any, who controls Acquiror within the meaning of the Securities Act,
any other Holder selling securities pursuant to the Registration Statement and
any officer, director, shareholder, partner, affiliate, controlling person, or
heir, legal representative, successor or permitted assign of any such other
Holder, against any losses, claims, damages, or liabilities (joint or several)
to which any of the foregoing persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation (which includes without limitation the failure of
the Holder to comply with the prospectus delivery requirements under the
Securities Act, and the failure of the Holder to deliver the most current
prospectus provided by Acquiror prior to such sale), in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in the Registration Statement or such Violation is caused by the Holder’s
failure to deliver to the purchaser of the Holder’s Registrable Shares a
prospectus (or amendment or supplement thereto) that had been made available to
the Holder by Acquiror prior to such sale; and each such Holder will pay any
legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this Section 5(g)2 in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 5(g)2
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder.


3.             Each
person entitled to indemnification under this Section 5(g) (the “INDEMNIFIED
PARTY”) shall give notice to the party required to provide indemnification (the
“INDEMNIFYING PARTY”) promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought and shall permit the
Indemnifying Party to assume the defense of any such claim and any litigation
resulting therefrom, provided that counsel for the Indemnifying Party who
conducts the defense of such claim or any litigation resulting therefrom shall
be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party’s expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 5(g) unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of any
such claim or litigation, shall (except with the consent of each Indemnified
Party) consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a 



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release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.


4.             To
the extent that the indemnification provided for in this Section 5(g) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.


6.             Noncompetition.


(a)           Each Shareholder covenants and agrees
that for a period of two (2) years commencing at the Effective Time, such
Shareholder shall not directly, or indirectly through one or more other persons
or entities, engage in, or have any financial or other interests (whether as a
principal, partner, shareholder, director, officer, agent, executive,
consultant or otherwise) in or provide assistance to any person, firm,
corporation or business that engages in any business activity which is the same
as or competes with any business activity engaged in, or to the knowledge of
Shareholder planned by, Acquiror or Target at the Effective Time (the “BUSINESS”),
in any state, country, territory or area of the world where the Business is
conducted; provided, however, the parties hereto agree and acknowledge that
such Business is conducted in each state of the United States and the District
of Columbia.  Notwithstanding the
foregoing, nothing contained in this Agreement shall prevent or otherwise limit
a Shareholder from holding, for investment purposes, no more than five percent
(5%) of any class of equity securities of a company engaged in the Business if
such class of equity securities is traded on a national securities exchange or
on the NASDAQ National Market System.


(b)           Each Shareholder covenants and agrees
that, for a period of two (2) years commencing at the Effective Time, such
Shareholder shall not use for his, her or its benefit, or disclose, communicate
or divulge to, or use for the direct or indirect benefit of any person, firm,
association or company, other than Acquiror and Target, any confidential
information regarding the business methods, business policies, procedures,
techniques, trade secrets, software, technology, products, customer lists,
customer and personnel data or other knowledge or processes used or developed
by Target, or other information concerning the business of Acquiror or Target
of which such Shareholder becomes aware. 
The foregoing restrictions shall not apply to (i) information which
is or becomes, other than as a result of a breach of this Agreement, generally
available to the public, or (ii) the disclosure of information required
pursuant to a 



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subpoena or other legal process;
provided that the party required to disclose such information shall notify
Acquiror, in writing, of the receipt of any such subpoena or other legal
process requiring such disclosure immediately after receipt thereof and
Acquiror shall have a reasonable opportunity to quash such subpoena or other
legal process prior to any disclosure by a Shareholder.


(c)           Each Shareholder covenants and agrees
that, for a period of two (2) years commencing at the Effective Time, such
Shareholder will not: (i) perform work for or solicit, directly or
indirectly, any business which is the same or competes with the Business from
any person or entity which was a customer, client or Prospect (as hereinafter
defined) of Acquiror or Target during the two (2) years prior to the Effective
Time, or otherwise induce any such person or entity to cease or reduce their
business relationship with Acquiror or Target; (ii) use or disclose to any
person or entity, directly or indirectly, any information concerning the names,
addresses and/or telephone numbers of Acquiror’s or Target’s suppliers or
customers; (iii) solicit or in any manner attempt to induce or encourage
any person or entity to leave the employment of Acquiror or Target or cease or
reduce their business or commercial relationship with Acquiror or Target; or
(iv) aid others in doing anything described in this paragraph, whether as
an officer, director, shareholder, partner, consultant or otherwise.


(d)           For purposes of clause (i) of the
preceding paragraph, the term “solicit” means including without limitation
(a) responding to requests for proposals and invitations for bids,
(b) initiating contacts with customers, clients, or Prospects of Acquiror
or Target for the purpose of offering goods or services that are competitive
with the goods or services offered by Acquiror or Target, and
(c) participating in joint ventures or teaming agreements or acting as a
consultant or subcontractor or employee of others who directly solicit business
prohibited by this Agreement.  The terms “client”
and “customer” include any parent corporation, subsidiary corporation,
affiliate corporation or partner or joint venture of a client or customer.  “Prospect” means any person or entity to whom
Acquiror or Target has submitted a proposal, or whom Acquiror or Target has
solicited to become a customer.


(e)           Each Shareholder acknowledges that
the restrictions contained in Sections 6(a), (b) and (c), in view of the
nature of the business of Acquiror and Target, are reasonable and necessary in
order to protect the legitimate interests of Acquiror and Target, and that any
violation thereof would result in irreparable injuries to Acquiror and Target
for which damages alone would not adequately compensate Acquiror and Target for
the harm suffered.  Therefore, each
Shareholder acknowledges and agrees that, in the event of a violation by such
Shareholder of any of the restrictions contained in Sections 6(a), (b) and
(c), Acquiror and Target shall each be entitled to seek and obtain from any
court of competent jurisdiction (and without having to join any other party in
such action) temporary, preliminary and permanent injunctive relief, in
addition to any other rights or remedies to which it or they may be entitled by
contract, statute, or common law, and each Shareholder hereby consents to the
issuance of such injunction or grant of such specific performance.


(f)            It is expressly agreed by each
Shareholder that if, in any judicial proceeding, the geographic coverage of the
covenant contained in Section 6(a) or the periods of time in
Sections 6(a) and (c) should be adjudged unreasonable, then such
geographic coverage or such period or periods of time, as the case may be,
shall be reduced to the extent necessary to 



 10
 









enable the court to enforce the
restrictions in Sections 6(a) and (c) to the fullest extent permitted
under applicable law.


(g)           Notwithstanding the forgoing
provisions of this Section 6, each of Acquiror, Target, Sub and the
Shareholders hereby agree and acknowledge that MOLEX Incorporated shall not be
subject to the provisions of this Section 6.


7.             Termination of Prior Agreements. 
Each party hereto agrees and consents to the termination of the
Shareholders Agreement dated as of March 30, 2001, by and among Target and the
Shareholders with such termination to be effective at the Effective Time.


8.             Notices. 
All notices, requests, demands or other communications which are
required or may be given pursuant to the terms of this Agreement shall be in
writing and shall be deemed to have been duly given (i) upon receipt, if
delivered by hand, (ii) one (1) business day after deposit with a
nationally-recognized overnight courier service, with delivery charges prepaid
or otherwise satisfied, or (iii) three (3) days after deposit in the United
States mail, postage prepaid, certified or registered mail, addressed to a
party as follows:


if to Acquiror or Sub:


Cascade Microtech, Inc.


2430 NW 206th Avenue


Beaverton, OR 97006


Attention:  President


Fax No.:  503-601-1414


Telephone No.:  503-601-1000


with a copy to:


Ater Wynne LLP


222 SW Columbia, Suite 1800


Portland, OR  97201


Attention:  Gregory E.  Struxness, Esq.


Fax No:  503-226-0079


Telephone No:  503-226-8449


if to Target, to:


Gryphics, Inc.


3850 Annapolis Lane, #140


Plymouth, Minnesota  55447-8789


Attention:  President


Fax No:  763-509-0066


Telephone No:  763-509-0077



 11
 









with a copy to:


Leonard, Street and Deinard


150 South Fifth Street, Suite 2300


Minneapolis, MN  55402


Attention:  Albert A. Woodward,
Esq.


Fax No:  612-335-1657


Telephone No:  612-335-1945


if to Shareholders:


At the address set forth
beneath each Shareholders’ signature below


with a copy to:


Leonard, Street and Deinard


150 South Fifth Street, Suite 2300


Minneapolis, MN  55402


Attention:  Albert A. Woodward,
Esq.


Fax No:  612-335-1657


Telephone No:  612-335-1945


or to such other address as any party may designate
for itself by notice given as provided in this Agreement, except that notices
of change of address shall only be effective upon receipt.


9.             Termination. 
This Agreement shall terminate and shall be of no further force and
effect upon the termination of the Merger Agreement.


10.          Counterparts. 
This Agreement shall be executed in one or more counterparts, any of
which may be a facsimile copy, each of which shall be deemed an original, and
all of which together shall constitute one instrument.


11.          Binding Agreement. 
This Agreement will inure to the benefit of and be binding upon and
enforceable against the parties and their successors and assigns, including
administrators, executors, representatives, heirs, legatees and devisees of
each Shareholder and any pledgee holding Acquiror Common Stock as collateral.


12.          Waiver. 
No waiver by any party hereto of any condition or of any breach of any
provision of this Agreement shall be effective unless in writing and signed by
each party hereto.


13.          Governing Law. 
This Agreement shall be governed by and construed, interpreted and
enforced in accordance with the laws of the State of Oregon.


14.          Integration. 
This Agreement constitutes the entire understanding of the parties
hereto with respect to the subject matter of the Agreement.



 12
 









15.          Attorneys’ Fees. 
In the event of any legal action or proceeding to enforce or interpret
the provisions hereof, the prevailing party shall be entitled to reasonable
attorneys’ fees, and disbursements whether or not the proceeding results in a
final judgment.


16.          Effect of Headings. 
The Section headings herein are for convenience only and shall not
affect the construction or interpretation of this Agreement.


17.          Third-Party Reliance. Counsel to and accountants for the
parties shall be entitled to rely upon this Agreement.


IN WITNESS WHEREOF, the parties have duly caused this
Agreement to be executed as of the day and year first above written.



 13
 









 


	
  GRYPHICS, INC.

  	
  CASCADE MICROTECH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ James J. Rathburn

  	
   

  	
  By:

  	
  /s/ Eric Strid

  
	
   

  	
  James J.
  Rathburn

  	
   

  	
  Eric Strid

  
	
   

  	
  President

  	
   

  	
  President and Chief Executive Officer

  
					



 


 


	
  GRYPHICS ACQUISITION CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Eric Strid

  	
   

  
	
   

  	
  Eric Strid

  
	
   

  	
  President and Chief Executive Officer

  



 


	
  SHAREHOLDERS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ James J. Rathburn

  	
   

  	
  /s/ Robert M. Dingmann

  
	
  James J.
  Rathburn

  	
  Robert M. Dingmann

  
	
   

  	
   

  
	
   

  	
   

  
			



 


	
  /s/ Bruce E. Hendry

  	
   

  	
  /s/ Dennis Bergquist

  
	
  Bruce E. Hendry

  	
  Dennis Bergquist

  
	
   

  	
   

  
	
   

  	
   

  



 


	
  /s/ David Ihle

  	
   

  	
  /s/ Richard Kallio

  
	
  David Ihle

  	
  Richard Kallio

  
	
   

  	
   

  
	
   

  	
   

  



 


 


	
  MOLEX Incorporated

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Martin P. Slark

  	
   

  
	
  Title:

  	
  Vice Chairman and Chief Executive Officer

  	
   

  
					



 



 14














APPENDIX A


SHAREHOLDERS
OF TARGET


 




	
  Shareholder

  	
   

  	
  Number of Shares of 

  Target Common Stock

  	
   

  
	
  James J. Rathburn

  	
   

  	
  271,201

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robert Dingmann

  	
   

  	
  29,055

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bruce E. Hendry

  	
   

  	
  200,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dennis Bergquist

  	
   

  	
  188,300

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  David Ihle

  	
   

  	
  45,761

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Richard Kallio

  	
   

  	
  81,451

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MOLEX Incorporated

  	
   

  	
  202,047