<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 3, 1998
----------------
Micrion Corporation
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(Exact name of registrant as specified in its charter)
Massachusetts
----------------------------------------
(State of incorporation or organization)
0-23840 04-2892070
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(Commission File Number) (I.R.S. Employer
Identification No.)
One Corporation Way, Peabody, Massachusetts 01960
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 531-6464
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Item 5. OTHER EVENTS.
On December 3, 1998, Micrion Corporation (the "Company") entered into an
Agreement and Plan of Merger (the "Merger Agreement") among FEI Company, an
Oregon corporation ("FEI"), the Corporation, and MC Acquisition Corporation, a
Oregon corporation and wholly owned subsidiary of FEI (the "Merger Sub").
Pursuant to the Merger Agreement and subject to the terms and conditions
thereof, Micrion will merge with Merger Sub (the "Merger") and become a wholly
owned subsidiary of FEI. Holders of Micrion common stock will receive in the
Merger one share of FEI common stock and $6.00 in cash (or, in certain
circumstances described below, an equivalent amount of shares of FEI common
stock in lieu of cash) (together, the "Merger Consideration") in exchange for
each share of Micrion common stock. The cash portion (or shares in lieu thereof)
may be reduced if the Company's indebtedness at closing of Merger exceeds
certain levels set forth in the Merger Agreement. The descriptions of the Merger
Agreement and the Merger contained herein do not purport to be complete and are
qualified in their entirety by reference to the Merger Agreement, which is filed
herewith as Exhibit 2.1.
In connection with the Merger Agreement, the Company and FEI entered into a
19.9% Stock Option Agreement (the "Option Agreement") dated as of December 3,
1998, pursuant to which the Company granted to FEI an option (the "Option") to
purchase 810,805 shares of the Company's common stock (equal on that date to
19.9% of the outstanding common stock of the Company) for a price of $13.9625
per share. The Option will become exercisable by FEI, in whole or in part,
following the occurrence of a Triggering Event (as defined in the Option
Agreement). The descriptions contained herein of the Option Agreement and the
Option do not purport to be complete and are qualified in their entirety by
reference to the Option Agreement, which is filed herewith as Exhibit 99.1.
In connection with the proposed Merger, Phillips Business Electronics
International B.V. ("PBE"), the majority stockholder of FEI, entered into a
stock purchase agreement (the "PBE Agreement") with FEI pursuant to which PBE
has agreed to finance the cash portion of the Merger Consideration through the
purchase from FEI of additional shares of FEI common stock. PBE also has the
option to purchase additional newly issued shares of FEI to maintain PBE's
majority shareholder position after the issuance of shares to the Company's
stockholders. The PBE Agreement is subject to certain conditions, and if the
stock purchase under the PBE Agreement is not consummated, the Merger
Consideration will consist of one share of FEI common stock plus that an
equivalent amount of shares of FEI common stock in lieu of the cash portion of
the Merger Consideration (based on the average closing price of FEI common stock
over a period of days, as described in the Merger Agreement).
All outstanding options to purchase shares of Micrion common stock will be
accelerated and exercisable immediately prior to the effectiveness of the
Merger, and, as a result, the holders thereof, following exercise of such
options, will be entitled to receive Merger Consideration in the Merger.
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Consummation of the Merger is subject to a number of conditions, including,
but not limited to, approval by the stockholders of Micrion of the Merger
Agreement, approval by the stockholders of FEI of the issuance of shares of FEI
common stock as part of the Merger Consideration, and compliance with pre-merger
notification requirements. PBE has agreed to vote its shares to approve the
issuance of shares by FEI in connection with the Merger.
In connection with the entering into of the Merger Agreement, Micrion
amended its Rights Agreement dated as of July 30, 1997 (the "Rights Agreement")
between Micrion and BankBoston, N.A by a First Amendment to Rights Agreement
dated as of December 2, 1998 (the "Amendment"). The Amendment has the effect of
exempting FEI, the Merger Sub and their affiliates from the definition of
"Acquiring Person", which exemption effectively allows such entities to acquire
or obtain the rights to acquire beneficial ownership of 15% or more of the
outstanding shares of the Micrion common stock and thus consummate the Merger.
Such exemption may not apply upon the occurrence of certain specified events set
forth in the Amendment. The description of the Amendment contained herein does
not purport to be complete and is qualified in its entirety by reference to the
Amendment, which is incorporated herein by reference. The Board of Directors of
Micrion also approved the redemption of all outstanding Rights under the Rights
Agreement immediately prior to the effectiveness of the Merger.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit No. Description
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2.1 Agreement and Plan of Merger among FEI Company, Micrion
Corporation and MC Acquisition Corporation dated as of
December 3, 1998. The Registrant agrees to furnish
supplementally a copy of the omitted schedules listed in
the Agreement and Plan of Merger to the Securities and
Exchange Commission upon request.
4.1 Rights Agreement, dated as of July 30, 1997 between Micrion
Corporation and BankBoston, N.A., as Rights Agent(1)
4.2 First Amendment to Rights Agreement dated as of December 2,
1998(2)
99.1 19.9% Stock Option Agreement between Micrion Corporation
and FEI Company dated as of December 3, 1998.
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(1) Incorporated by reference from the Company's Form 8-A dated July
30, 1997.
(2) Incorporated by reference from the Company's Form 8A/A dated
December 4, 1998
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SIGNATURE
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 hereunto duly authorized.
MICRION CORPORATION
Date: December 8, 1998 By: /s/ David M. Hunter
--------------------------
David M. Hunter,
Vice President and Chief
Financial Officer
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
FEI COMPANY,
MICRION CORPORATION,
AND
MC ACQUISITION CORPORATION
DECEMBER 3, 1998
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TABLE OF CONTENTS
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ARTICLE 1. THE MERGER ...................................................... 1
1.1 The Merger ................................................. 1
1.2 Stockholders' Meeting; Proxy Statement ..................... 2
1.3 Effective Time ............................................. 3
1.4 Effect of Merger ........................................... 3
1.5 Articles of Organization, Bylaws, Directors and Officers ... 3
1.5.1 Articles of Organization and Bylaws ................ 3
1.5.2 Directors .......................................... 3
1.5.3 Officers ........................................... 3
1.6 Merger Consideration ....................................... 4
1.6.1 FEI Stock and Cash ................................. 4
1.6.2 All Stock .......................................... 4
1.7 Shares of Dissenting Stockholders .......................... 4
1.8 Withholding Tax ............................................ 5
1.9 Exchange of Certificates for Shares ........................ 5
1.9.1 Exchange Agent ..................................... 5
1.9.2 Exchange Procedure ................................. 5
1.9.3 No Further Ownership Rights in Micrion Common
Stock .............................................. 6
1.9.4 Termination of Exchange Period; Unclaimed Stock .... 6
1.9.5 Lost, Stolen or Destroyed Certificates ............. 7
1.9.6 Micrion Stock Options and Warrants ................. 7
1.10 Closing .................................................... 7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES .................................. 7
2.1 Micrion's Representations and Warranties ................... 8
2.1.1 Corporate Existence and Authority .................. 8
2.1.2 No Adverse Consequences ............................ 8
2.1.3 Capitalization ..................................... 9
2.1.4 Subsidiaries and Joint Ventures .................... 9
2.1.5 SEC Reports and Financial Statements ............... 10
2.1.6 Information Supplied ............................... 10
2.1.7 Legal Proceedings .................................. 10
2.1.8 Contracts and Arrangements ......................... 11
2.1.9 Material Assets .................................... 11
2.1.10 Compliance with Laws ............................... 11
2.1.11 Environmental Matters .............................. 12
2.1.12 Tax Matters ........................................ 13
2.1.13 Employees and Labor Relations Matters .............. 14
2.1.14 Employee Benefits .................................. 15
2.1.15 Absence of Certain Changes or Events ............... 16
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2.1.16 Undisclosed Liabilities ............................ 17
2.1.17 Insurance .......................................... 17
2.1.18 Intellectual Property .............................. 17
2.1.19 Guaranties; Powers of Attorney ..................... 18
2.1.20 Brokers ............................................ 18
2.1.21 Opinion of Financial Advisor ....................... 18
2.1.22 Vote Required ...................................... 19
2.1.23 Rights Agreement ................................... 19
2.1.24 State Takeover Statutes and Other Takeover
Provisions ......................................... 19
2.1.25 Deferred Compensation Obligations .................. 19
2.1.26 Product Warranties and Liabilities ................. 19
2.1.27 Inventories ........................................ 20
2.1.28 Receivables ........................................ 20
2.1.29 Year 2000 Compliance ............................... 20
2.1.30 Indebtedness ....................................... 21
2.1.31 No Other Representations or Warranty ............... 21
2.2 FEI's Representations and Warranties ....................... 21
2.2.1 Corporate Existence and Authority .................. 21
2.2.2 No Adverse Consequences ............................ 21
2.2.3 Capitalization ..................................... 22
2.2.4 Subsidiaries and Joint Ventures .................... 22
2.2.5 SEC Reports and Financial Statements ............... 23
2.2.6 Information Supplied ............................... 23
2.2.7 Legal Proceedings .................................. 23
2.2.8 Contracts and Arrangements ......................... 23
2.2.9 Material Assets .................................... 24
2.2.10 Compliance with Laws ............................... 24
2.2.11 Environmental Compliance ........................... 24
2.2.12 Tax Matters ........................................ 25
2.2.13 Employees and Labor Relations Matters .............. 26
2.2.14 Employee Benefits .................................. 26
2.2.15 Absence of Certain Changes or Events ............... 26
2.2.16 Undisclosed Liabilities ............................ 28
2.2.17 Insurance .......................................... 28
2.2.18 Intellectual Property .............................. 28
2.2.19 Guaranties; Powers of Attorney ..................... 29
2.2.20 Brokers ............................................ 29
2.2.21 Opinion of Financial Advisor ....................... 29
2.2.22 Vote Required ...................................... 29
2.2.23 Year 2000 Compliance ............................... 30
2.2.24 Financing .......................................... 30
2.2.25 Product Warranties and Liabilities ................. 30
2.2.26 Inventories ........................................ 30
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2.2.27 Receivables ........................................ 30
2.2.28 No Other Representations or Warranties ............. 31
ARTICLE 3 COVENANTS ....................................................... 31
3.1 Continuation of Business ................................... 31
3.1.1 Joint Covenants .................................... 31
3.1.2 Micrion Covenants .................................. 32
3.1.3 Closing Notice ..................................... 33
3.2 No Solicitation ............................................ 33
3.3 Access ..................................................... 33
3.4 Hart Scott Rodino .......................................... 33
3.5 Other Government Consents .................................. 35
3.6 Reasonable Best Efforts; No Inconsistent Action ............ 36
3.7 Changed Circumstances ...................................... 36
3.8 Fees and Expenses .......................................... 36
3.9 Rights Agreement ........................................... 36
3.10 Options and Warrants ....................................... 36
3.11 Press Releases ............................................. 36
3.12 Indemnification; Directors' and Officers' Insurance ........ 37
3.13 Other Agreements and Related Documents ..................... 38
3.13.1 Stock Option Agreement ............................. 38
3.13.2 Employment Agreement ............................... 38
3.13.3 Assignment of Patents and Trademarks ............... 39
3.14 FEI Board of Directors ..................................... 38
3.15 Golden Parachutes .......................................... 38
3.16 Authorized Shares .......................................... 39
ARTICLE 4 CONDITIONS TO THE PARTIES' OBLIGATIONS TO
CONSUMMATE THE MERGER ........................................... 39
4.1 Mutual Conditions .......................................... 39
4.1.1 Governmental Authorizations ........................ 39
4.1.2 Stockholder Approval ............................... 39
4.1.3 No Prohibitions .................................... 39
4.1.4 No Suits ........................................... 39
4.1.5 Nasdaq Listing ..................................... 39
4.1.6 Form S-4 ........................................... 40
4.1.7 Regulatory Burdens ................................. 40
4.2 Conditions to Obligations of FEI ........................... 40
4.2.1 Representations and Warranties; Covenants .......... 40
4.2.2 Dissenting Shares .................................. 41
4.2.3 Delivery of Exhibits and Micrion Officers'
Certificates ....................................... 41
4.3 Conditions to Obligations of Micrion ....................... 41
4.3.1 Representations and Warranties; Covenants .......... 41
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4.3.2 Deposit of Certificates and Funds .................. 42
4.3.3 Delivery of Certificates by FEI .................... 42
ARTICLE 5 TERMINATION ..................................................... 42
5.1 Termination by Mutual Consent .............................. 42
5.2 Termination by Either Party ................................ 42
5.3 Termination by Micrion ..................................... 42
5.4 Termination by FEI ......................................... 43
5.5 Effect of Termination ...................................... 43
ARTICLE 6 GENERAL PROVISIONS
6.1 Nonsurvival of Representations and Warranties .............. 45
6.2 Further Action ............................................. 45
6.3 Entire Agreement ........................................... 45
6.4 Assignment ................................................. 45
6.5 Binding Effect; No Third Party Benefit ..................... 46
6.6 Waiver ..................................................... 46
6.7 Governing Law .............................................. 46
6.8 Severability ............................................... 46
6.9 Time of Essence ............................................ 46
6.10 Counterparts ............................................... 46
6.11 Amendments ................................................. 46
6.12 Notices .................................................... 47
6.13 Voting Agreements .......................................... 47
6.14 Schedules .................................................. 47
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EXHIBITS AND SCHEDULES
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EXHIBITS
Exhibit A Amendment to Micrion Rights Agreement (Section 2.1.23)
Exhibit B 19.9% Stock Option Agreement (Section 3.13.1)
Exhibit C Form of Employment Agreement (Section 3.13.2)
Exhibit D Assignments of Patents and Trademarks (Section 3.13.3)
Exhibit E Voting Agreements (Section 6.13)
SCHEDULES
Schedule 2.1.2 Micrion Adverse Consequences; Required Consents
Schedule 2.1.3 Micrion Options and Warrants
Schedule 2.1.4 Micrion Subsidiaries and Joint Ventures
Schedule 2.1.7 Micrion Legal Proceedings
Schedule 2.1.8 Micrion Contracts and Arrangements
Schedule 2.1.9 Micrion Material Assets
Schedule 2.1.11 Micrion Environmental Matters
Schedule 2.1.12 Micrion Tax Matters
Schedule 2.1.13 Micrion Employees and Labor Matters
Schedule 2.1.14 Micrion Employee Benefits
Schedule 2.1.15 Micrion Changes or Events
Schedule 2.1.16 Micrion Liabilities
Schedule 2.1.18 Micrion Marks, Patents and Copyrights
Schedule 2.1.26 Micrion Products and Warranties
Schedule 2.1.28 Micrion Receivables
Schedule 2.1.30 Micrion Mask Repair Products
Schedule 2.2.2 FEI Adverse Consequences; Required Consents
Schedule 2.2.3 FEI Options and Warrants
Schedule 2.2.4 FEI Subsidiaries and Joint Ventures
Schedule 2.2.7 FEI Legal Proceedings
Schedule 2.2.9 FEI Material Assets
Schedule 2.2.11 FEI Environmental Matters
Schedule 2.2.12 FEI Tax Matters
Schedule 2.2.13 FEI Employees and Labor Matters
Schedule 2.2.14 FEI Employee Benefits
Schedule 2.2.15 FEI Changes or Events
Schedule 2.2.16 FEI Liabilities
Schedule 2.2.18 FEI Marks, Patents and Copyrights
Schedule 2.2.25 FEI Product Warranties
Schedule 3.1.1 Business Continuation
Schedule 3.1.2 Micrion Covenants
Schedule 3.13.12 Micrion Key Employees
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INDEX OF DEFINED TERMS
The following terms are defined in this Agreement in the sections identified
below:
<TABLE>
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Term Definition Section
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"Agreement" Preamble
"Articles of Merger" 1.3
"Blue Sky Laws" 2.1.2(d)
"Business" Introduction to Article 2
"Cash Portion" 1.6
"Certificate of Merger" 1.3
"Certificates" 1.9.2
"Closing" and "Closing Date" 1.11
"Code" Section 1.4
"Confidentiality Agreement" 3.2(b)
"Contamination" 2.1.11(a)
"Contracts" 2.1.8
"Copyrights" 2.1.18(a)(iii)
"Costs" 3.12(a)
"Dissenting Stockholders" 1.6
"Dissenting Shares" 1.7
"DOJ" 3.4
"Effective Time" 1.3
"Environmental Law" 2.1.11(a)
"Equitable Adjustment" 1.6.1
"ERISA" 2.1.14
"Exchange Act" 2.1.2(d)
"Exchange Agent" 1.9.1
"FEI" Recital A
"FEI Board" Recital A
"FEI Expenses" 5.5.2
"FEI Stock Plans" 2.2.3
"FEI Returns" 2.2.12(a)
"FEI SEC Documents" 2.2.5
"FEI Stockholders Meeting" 1.2(a)
"Form S-4" 1.2(a)
"FTC" 3.4
"GAAP" 2.1.5
"Governmental Entity" 2.1.2(b)
"Hazardous Substance" 2.1.11(a)
"HSR Act" 2.1.2(d)
"Indebtedness" 2.1.30
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"Indemnified Parties" 3.12(a)
"Intellectual Property Assets" 2.1.18(a)
"Licenses" 2.1.10
"Marks" 2.1.18(a)(i)
"Material Adverse Effect" Introduction to Article
"Micrion" Recital A
"Micrion Board" Recital A
"Micrion Compensation and Benefit Plans" 2.1.14
"Micrion Returns" 2.1.12(a)
"Micrion SEC Document" 2.1.5
"Micrion Share," "Micrion Shares" 1.6
"Micrion Stock Plans" 2.1.3
"Micrion Stockholders Meeting" 1.2(a)
"Merger" Recitals
"Merger Consideration" 1.6.2
"MBCL" Recital B
"Needham" 2.2.20
"OBCA" Recital B
"Patents" 2.1.18(a)(ii)
"Person" 1.9.4
"Philips" 2.2.3
"Philips Additional Shares Right" 2.2.3
"Pre-Closing Average Price" 1.6.2
"Proxy Statement" 1.2(b)
"Representatives" 3.2
"Required Approvals" 4.1.1
"Right," "Rights" 1.6
"Rights Agreement" 1.6
"SEC" 1.2(b)
"Securities Act" 1.2(b)
"To the knowledge of" Introduction to Article 2
"Stock Option Agreement" Recital C
"Stock Purchase Agreement" 2.2.28
"Sub" Preamble
"Superior Proposal" 3.2
"Surviving Corporation" 1.4
"Taxes" 2.1.12(e)
"Takeover Proposal" 3.2
"Termination Fee" 5.5.2
"Warrants" 2.1.3
"WDR" 2.1.20
"Year 2000 compliant" 2.1.26
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER made as of December 3, 1998 (the
"Agreement") is among FEI COMPANY, an Oregon corporation ("FEI"), MICRION
CORPORATION, a Massachusetts corporation ("Micrion"), and MC ACQUISITION
CORPORATION, an Oregon corporation and wholly-owned subsidiary of FEI ("Sub").
RECITALS
A. The Boards of Directors of FEI and Micrion (respectively, the "FEI
Board" and the "Micrion Board") have determined that it is advisable and in the
best interests of their respective shareholders to enter into a business
combination as described in this Agreement. As used in this Agreement, the term
"FEI" means FEI Company and its wholly owned direct or indirect subsidiaries and
the term "Micrion" means Micrion and its wholly owned direct or indirect
subsidiaries.
B. In furtherance of such combination it is proposed that Micrion merge
with and into Sub pursuant to the applicable provisions of the Oregon Business
Corporation Act (the "OBCA") and the Massachusetts Business Corporation Law (the
"MBCL") and the terms and conditions of this Agreement (the "Merger").
C. To induce FEI to enter into this Agreement, Micrion will enter into a
Stock Option Agreement with FEI (the "19.9% Stock Option Agreement"), pursuant
to which Micrion will grant to FEI an option to purchase Micrion Shares (as
hereinafter defined) pursuant to the terms and conditions set forth in the
Option Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and conditions contained in this Agreement and in the
Stock Option Agreement, the parties agree as follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. Pursuant to the OBCA and the MBCL and subject to and in
accordance with the terms and conditions of this Agreement as soon as
practicable following the satisfaction or waiver of the conditions set forth in
Article 4 of this Agreement, Micrion will merged with and into Sub or, as
specified in Section 1.4, Sub will be merged with and into Micrion.
<PAGE> 10
1.2 STOCKHOLDERS' MEETING; PROXY STATEMENT.
(a) Micrion will take, in accordance with Massachusetts law and
Micrion's Articles of Organization and Bylaws, all action necessary to
convene a meeting of its stockholders (the "Micrion Stockholders Meeting")
as promptly as practicable after the Form S-4 (hereinafter defined) is
declared effective to consider and vote upon approval of this Agreement.
FEI will take, in accordance with Oregon law and its Articles of
Incorporation and Bylaws, all action necessary to convene a meeting of its
stockholders (the "FEI Stockholders Meeting," and either the FEI
Stockholders Meeting or the Micrion Stockholders Meeting, a "Stockholders
Meeting") as promptly as practicable after the Form S-4 is declared
effective to consider and vote upon the approval of the issuance of FEI
Common Stock to be issued in connection with the transactions contemplated
hereby. Except to the extent the Micrion Board determines in good faith,
after receipt of written advice from outside legal counsel experienced in
such matters, that such action is incompatible with compliance by its
directors with their respective fiduciary duties under applicable law, the
Micrion Board shall unanimously recommend that the stockholders of Micrion
approve this Agreement and thereby approve the transactions contemplated
hereby, shall take all lawful action to solicit such approval and shall not
withdraw or modify such recommendation, and the FEI Board shall recommend
that the stockholders of FEI approve the issuance of FEI Common Stock to be
issued in connection with the transactions contemplated hereby and shall
take all lawful action to solicit such approval.
(b) FEI and Micrion will promptly prepare and file with the
Securities and Exchange Commission (the "SEC") a Joint Proxy
Statement/Prospectus (including any amendments or supplements thereto, the
"Proxy Statement"), and FEI shall prepare and file with the SEC a
Registration Statement on Form S-4 in connection with the issuance of
shares of FEI Common Stock in the Merger (including any amendments or
supplements thereto, the "Form S-4") as promptly as practicable. FEI and
Micrion each shall use all reasonable best efforts to have the Form S-4
declared effective under the Securities Act of 1933, as amended (the
"Securities Act") as promptly as practicable after such filing, and
promptly thereafter mail the Form S-4 and Proxy Statement to their
respective stockholders. FEI shall also use all reasonable best efforts to
obtain prior to the effective date of the Form S-4 all necessary state
securities law or "blue sky" permits and approvals required in connection
with the Merger and to consummate the other transactions contemplated by
this Agreement and will pay all expenses incident thereto.
(c) If at any time prior to the Effective Time any information
relating to Micrion or FEI or any of their respective officers or
directors, should be discovered by Micrion or FEI, respectively, which
should be set forth in an amendment or supplement to any of the Form S-4 or
the Proxy Statement, so that any of such documents would not include a
misstatement of material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, Micrion or FEI, as the case may be, shall
promptly notify the other
2
<PAGE> 11
parties hereto and an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent
required by law, disseminated to the stockholders of Micrion and FEI.
1.3 EFFECTIVE TIME. As soon as practicable following Closing of the
Merger, Articles of Merger prepared in accordance with the applicable provisions
of the OBCA and the MBCL (the "Articles of Merger") will be executed and filed
with the State Secretary of the State of Oregon and the Commonwealth of
Massachusetts. The Merger will be effective upon the later of the time when
Articles of Merger are duly filed with the State Secretary of the Commonwealth
of Massachusetts and the time when Articles of Merger are duly filed with the
State Secretary of the State of Oregon, or at such other time as the parties may
agree upon in writing pursuant to applicable law (the "Effective Time").
1.4 EFFECT OF MERGER. At the Effective Time, Micrion will be merged with
and into Sub in the manner and with the effect provided by the OBCA and the
MBCL, the separate corporate existence of Micrion will cease and thereupon Sub
and Micrion will be a single corporation (the "Surviving Corporation") and will
be a wholly owned subsidiary of FEI governed by the laws of the State of Oregon.
The parties will use reasonable efforts to cause the Merger to qualify as a
reorganization under Section 368(a) of the U.S. Internal Revenue Code of 1986,
as amended (the "Code"); PROVIDED, HOWEVER, that if (i) the Merger Consideration
consists of FEI Common Stock and cash pursuant to Section 1.6.1 and the closing
sale price per share of the FEI Common Stock on the Closing Date is not equal to
or greater than 40 percent of the sum of such closing sale price plus the Cash
Portion, as defined in Section 1.6 below or (ii) if the Merger Consideration
consists solely of shares of FEI Common Stock pursuant to Section 1.6.2, then
Sub will be merged with and into Micrion in the manner and with the effect
provided by the OBCA and the MBCL, the separate corporate existence of Sub will
cease and thereupon Sub and Micrion will be the Surviving Corporation and will
be a wholly owned subsidiary of FEI governed by the laws of the Commonwealth of
Massachusetts.
1.5 ARTICLES OF ORGANIZATION, BYLAWS, DIRECTORS AND OFFICERS.
1.5.1 ARTICLES OF ORGANIZATION AND BYLAWS. The Articles of
Incorporation and Bylaws of Sub as in effect at the Effective Time will be the
Articles of Incorporation and Bylaws of the Surviving Corporation.
1.5.2 DIRECTORS. The directors of Sub at the Effective Time will be
the directors of the Surviving Corporation, until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation, or removal in accordance with the Surviving Corporation's Articles
of Incorporation and Bylaws.
1.5.3 OFFICERS. The officers of Sub at the Effective Time will be the
officers of the Surviving Corporation in accordance with the Bylaws of the
Surviving Corporation.
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1.6 MERGER CONSIDERATION.
1.6.1 FEI COMMON STOCK AND CASH. Each share of Micrion Common Stock,
no par value, of Micrion (each a "Micrion Share" and collectively, the "Micrion
Shares") and the associated stock right (each a "Right" and collectively, the
"Rights") issued pursuant to the Rights Agreement dated July 30, 1997, as
amended, between Micrion and BankBoston, N.A. (the "Rights Agreement") and
outstanding immediately before the Effective Time (other than (i) Micrion Shares
that are owned by FEI or Sub, (ii) Micrion Shares that are owned by Micrion, in
each case (i) and (ii) not held on behalf of third parties, or (iii) Micrion
Shares held by stockholders ("Dissenting Stockholders") exercising appraisal
rights pursuant to Sections 85 to 98 of the MBCL (collectively, "Excluded
Micrion Shares")) will be converted into the right to receive (A) one share of
FEI Common Stock, subject to equitable adjustment in the event of a stock split,
combination, stock dividend or similar reclassification of FEI Common Stock or
Micrion Common Stock occurring prior to the Closing Date ("Equitable
Adjustment") and (B) subject to adjustment as provided in Section 4.2.1, $6.00
in cash, without interest (the "Cash Portion").
1.6.2 ALL STOCK. Notwithstanding the foregoing provisions of Section
1.6.1, if the Stock Purchase Agreement, as defined in Section 2.2.24, is
terminated prior to Closing, each Micrion Share and the associated Rights
outstanding immediately before the Effective Time, other than the Excluded
Micrion Shares, will be converted into the right to receive (A) one share of FEI
Common Stock plus (B) such number of shares of FEI Common Stock, which, when
multiplied by the Pre-Closing Average Price, as defined below, equals $6.00,
subject to Equitable Adjustment and subject to adjustment as provided in Section
4.2.1. The aggregate number of shares of FEI Common Stock to be issued to each
Micrion stockholder will be rounded to the nearest whole share.
The "Pre-Closing Average Price" is the average closing price of FEI Common
Stock for the 20 full trading days preceding the date that FEI provides notice
to Philips pursuant to the Stock Purchase Agreement, that all conditions to
Closing of this Agreement specified in Article IV have been satisfied or waived;
provided that if a Material Adverse Effect, as defined in the Stock Purchase
Agreement, occurs or is discovered less than 20 trading days prior to the
Closing Notice Date, then the Pre-Closing Average Price will be the average
closing price of FEI Common Stock only for those full trading days following the
date of such Material Adverse Effect, as defined in the Stock Purchase
Agreement, through and including the Closing Notice Date. "Merger Consideration"
means either the shares of FEI Common Stock plus the Cash Portion to be received
by the Micrion stockholders pursuant to Section 1.6.1 or the shares of FEI
Common Stock to be received by the Micrion stockholders pursuant to Section
1.6.2.
1.7 SHARES OF DISSENTING STOCKHOLDERS. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding Micrion Shares (and
associated Rights) held by any Dissenting Stockholder who has not voted such
Micrion Shares in favor of or consented to the Merger and who complies with all
the provisions of Sections 85 to 98 of the MBCL concerning the right of holders
of Micrion Shares to dissent from the Merger and require appraisal of their
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Micrion Shares ("Dissenting Shares") will not be converted as described in
Section but will become the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to such provisions
of the MBCL. If, after the Effective Time, such Dissenting Stockholder withdraws
his or her demand for appraisal or fails to perfect or otherwise loses his or
her right of appraisal, in any case pursuant to the MBCL, his or her Micrion
Shares will be deemed to be converted as of the Effective Time into the right to
receive the Merger Consideration. Micrion will give FEI (i) prompt notice of any
demands received by Micrion for appraisal of Micrion Shares and (ii) the
opportunity to participate in and direct all negotiations and proceedings with
respect to any such demands. Micrion will not, without the prior written consent
of FEI, make any payment with respect to, or settle, offer to settle, or
otherwise negotiate, any such demands.
1.8 WITHHOLDING TAX. The right of any stockholder to receive the Merger
Consideration will be subject to and reduced by the amount of any required tax
withholding obligation.
1.9 EXCHANGE OF CERTIFICATES FOR SHARES.
1.9.1 EXCHANGE AGENT. Prior to the Effective Time, FEI shall
designate an Exchange Agent selected by FEI with Micrion's prior approval, which
shall not be unreasonably withheld (the "Exchange Agent"), and before the
Effective Time, FEI will make available, or cause the Surviving Corporation to
make available, to the Exchange Agent shares of FEI Common Stock and (if the
Merger Consideration is FEI Common Stock and cash pursuant to Section 1.6.1.)
funds in amounts and at the times necessary for delivery of the Merger
Consideration upon surrender of certificates representing Micrion Shares as part
of the Merger pursuant to Section . The Exchange Agent shall invest such funds,
as directed by FEI, in (a) direct obligations of the United States of America,
(b) obligations for which the full faith and credit of the United States of
America is pledged to provide for the payment of principal and interest or (c)
commercial paper rated, at the time of purchase, in either of the two highest
categories by Moody's Investors Services, Inc. or Standard & Poor's Corporation,
it being understood that any and all interest earned on funds made available to
the Exchange Agent pursuant to this Agreement will be turned over to FEI. In the
event the funds deposited with the Exchange Agent shall realize a loss on any
such investment, FEI shall promptly thereafter deposit in such fund cash in an
amount sufficient to enable such fund to satisfy all remaining obligations
originally contemplated to be paid out of such fund.
1.9.2 EXCHANGE PROCEDURE. As soon as reasonably practicable after the
Effective Time, the Exchange Agent will mail to each holder of record of a
certificate or certificates (the "Certificates") that immediately before the
Effective Time represented Micrion Shares (other than holders of record of
Excluded Micrion Shares), (i) a notice (advising the holders that the Merger has
become effective) and a letter of transmittal specifying that delivery will be
effected, and that risk of loss and title to the Certificates will pass, only
upon proper delivery of the Certificates to the Exchange Agent and (ii)
instructions for exchanging the Certificates (or affidavits in lieu thereof) for
the Merger Consideration. Upon surrender of a
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Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by FEI, together with such letter of transmittal,
properly completed and duly executed, and such other customary documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
will be entitled to receive in exchange therefor the Merger Consideration for
each Micrion Share represented thereby, and the Certificate so surrendered will
be canceled. In the event of a transfer of ownership of Micrion Shares that is
not registered in the transfer records of Micrion, payment may be made to a
Person (as defined in Section below) other than the Person in whose name the
Certificate so surrendered is registered, if such Certificate is properly
endorsed or otherwise is in proper form for transfer and the Person requesting
such payment pays any transfer or other taxes required by reason of the payment
to a Person other than the registered holder of such Certificate or establishes
to the satisfaction of FEI that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 1.9.1, each Certificate will
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration for each Micrion Share
represented thereby. No interest will be paid or will accrue on any cash payable
upon the surrender of any Certificate.
1.9.3 NO FURTHER OWNERSHIP RIGHTS IN MICRION COMMON STOCK. The Merger
Consideration delivered upon the surrender of Certificates in accordance with
the terms of Section 1.9.2 will be deemed to have been delivered in full
satisfaction of all rights pertaining to the Micrion Shares theretofore
represented by such Certificates. At the Effective Time, the stock transfer
books of Micrion will be closed, and there will be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the
Micrion Shares that were outstanding immediately before the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they will be canceled and
exchanged as provided in Section 1.9.2.
1.9.4 TERMINATION OF EXCHANGE PERIOD; UNCLAIMED STOCK. Any shares of
FEI Common Stock and any portion of any cash, dividends or other distributions
with respect to FEI Common Stock deposited by FEI with the Exchange Agent
(including the proceeds of any investments thereof) that remain unclaimed by the
stockholders of Micrion 270 days after the Effective Time shall be paid to FEI.
Any stockholders of Micrion who have not theretofore surrendered their shares
shall thereafter look only to FEI for payment of their shares of FEI Common
Stock and any cash, dividends and other distributions in respect thereof
issuable and/or payable pursuant to this Section 1.9 upon due surrender of (i)
their Certificates (or affidavits of loss in lieu thereof) or (ii) delivery of
duly executed letters of transmittal, as the case may be, in each case with
respect to both clause (i) and (ii), without any interest thereon. None of FEI,
Sub, Micrion or the Exchange Agent will be liable to any Person in respect of
any cash delivered to a public official pursuant to any applicable abandoned
property, escheat, or similar law. As used in this Agreement, the term "Person"
means any individual, corporation, general partnership, limited partnership,
limited liability company, joint venture, trust, cooperative or other
association, Governmental Entity (as defined in Section 2.1.2(b) below), or any
other organization.
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1.9.5 LOST, STOLEN OR DESTROYED CERTIFICATES. If any Certificate has
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed, Micrion
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Agreement; PROVIDED, HOWEVER, that Micrion may, in its sole discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Certificate to give Micrion a bond in such sum as it
may reasonably direct as indemnity against any claim that may be made against
Micrion with respect to the certificate alleged to have been lost, stolen or
destroyed.
1.9.6 MICRION STOCK OPTIONS AND WARRANTS. At the Effective Time, each
then outstanding option and warrant to purchase Micrion Common Stock, whether or
not then exercisable or vested in accordance with its terms (each, a "Micrion
Option") which theretofore has been granted under the Micrion Stock Plans, shall
be terminated. Any and all rights under any provisions of the Micrion Stock
Plans or any other plan, program or arrangement providing for the issuance or
grant of any other interest in respect of the capital stock of Micrion shall be
canceled as of the Effective Time. Prior to the Effective Time, the Board of
Directors of Micrion (or, if appropriate, any committee thereof) and Micrion
shall take all action necessary to terminate all Micrion Stock Plans and any
other plan, program or arrangement with respect to, including any right to
acquire, equity securities of Micrion and to ensure that no Person shall have
any right under any of the Micrion Stock Plans (or any Micrion option, warrant
or other right to acquire equity securities of Micrion granted thereunder)
following the Effective Time other than the 19.9% Stock Option Agreement
attached hereto as EXHIBIT B.
1.10 CLOSING. Unless this Agreement has been terminated and the
transactions contemplated by it have been abandoned pursuant to Article 5, the
closing of the Merger (the "Closing") will take place at the offices of Stoel
Rives LLP, 900 SW Fifth Avenue, Suite 2600, Portland, Oregon 97204, at 5:00
p.m., Pacific time, on the date that is not later than the sixth business day
following the date when the last of the conditions set forth in Article 5 hereof
(other than conditions that by their terms are to occur at Closing) will have
been satisfied or waived in accordance with this Agreement, or at such other
time and date as FEI and Micrion may agree in writing (the "Closing Date").
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
For purposes of the representations and warranties contained in this
Article 2, the following terms have the following meanings:
"Material Adverse Effect" used in connection with a party means any event,
change or effect that is materially adverse to the condition (financial or
other), properties, assets, liabilities, businesses, operations or results of
operations (any one of the foregoing, the "Business") of such party and its
subsidiaries taken as a whole; provided, however, that an adverse event, change
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or effect on the Business of a party that results from any one or more of the
following shall not constitute a Material Adverse Effect: (i) reductions or
cancellations in orders for FIB systems; (ii) delays in shipments by Micrion of
products containing both an ion and electron column due to delays or
interruptions in the supply of electron columns; or (iii) changes in laws,
regulations or GAAP.
"To the knowledge of" a party or words of similar import mean the actual
knowledge of any executive officer of that party who has been designated as such
in that party's annual report to stockholders (or his or her successor) and any
other officer who has specific managerial authority with respect to the relevant
area, in each case after due inquiry.
2.1 MICRION'S REPRESENTATIONS AND WARRANTIES. Micrion represents and
warrants to FEI as follows:
2.1.1 CORPORATE EXISTENCE AND AUTHORITY. Micrion is a corporation
duly organized, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts and is in good standing as a foreign corporation
in each jurisdiction where the properties owned, leased or operated, or the
business conducted, by it require such qualification, except for such failures
to qualify or be in such good standing which, when taken together with all other
such failures, is not reasonably likely to have a Material Adverse Effect on
Micrion. Micrion has the full corporate power and authority to enter into this
Agreement and carry out its terms. Except for the approval of its stockholders,
Micrion has taken all corporate action necessary to execute, deliver and perform
this Agreement. This Agreement has been duly and validly executed and delivered
by Micrion and is binding upon and enforceable against Micrion in accordance
with its terms, except as enforceability may be limited or affected by
applicable bankruptcy, insolvency, reorganization, or other laws of general
application relating to or affecting the rights of creditors and except as
enforceability may be limited by principles of equity governing specific
performance, injunctive relief, or other equitable remedies.
2.1.2 NO ADVERSE CONSEQUENCES. Except as set forth on SCHEDULE 2.1.2,
neither the execution and delivery of this Agreement by Micrion nor the
consummation of the transactions contemplated by this Agreement will:
(a) violate or conflict with any provision of Micrion's
articles of organization or bylaws;
(b) violate any law, judgment, order, injunction, decree, rule,
regulation, or ruling of any court, legislature, arbitral tribunal,
administrative agency or commission or other governmental or other
regulatory authority or agency (a "Governmental Entity") applicable to
Micrion, except such as is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Micrion;
(c) either alone or with the giving of notice or the passage of
time or both, conflict with, constitute grounds for termination or
acceleration of, result in the
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breach of the terms, conditions, or provisions of, result in the loss of
any benefit to Micrion under, or constitute a default under any agreement,
instrument, license, or permit to which Micrion is a party or by which it
is bound, except such as is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Micrion; or
(d) except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act and state securities or "blue sky" laws ("Blue Sky Laws"),
(ii) for the pre-merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), (iii) for the filing of Articles of
Merger pursuant to the OBCA and the MBCL, and (iv) with respect to matters
set forth in SCHEDULE 2.1.2, require any consent, approval or authorization
of, permit from, or declaration, filing or registration with, any
governmental or regulatory authority, or any other person or entity by
Micrion, except where the failure to obtain such consent, approval,
authorization, permit or declaration or to make such filing or registration
is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Micrion.
2.1.3 CAPITALIZATION. Micrion has authorized capital stock consisting
of 12,300,000 shares of Micrion Common Stock, of which 4,074,397 shares were
outstanding on November 23, 1998 and 5,000,000 shares of preferred stock, no par
value, none of which is outstanding. Options to purchase 870,815 shares were
outstanding on October 31, 1998 under grants made pursuant to the Micrion Stock
Plans and no stock options have been granted since October 31, 1998. "Micrion
Stock Plans" means, collectively, Micrion's 1986 Incentive Stock Plan, 1990
Nonqualified Stock Option Plan, 1993 Common Stock Incentive Plan, 1994 Amended
and Restated Omnibus Stock Option Plan, 1994 Stock Purchase Plan and 1994
Non-Employee Director Stock Option Plan, each as amended or modified. Warrants
to purchase 100,000 shares were outstanding on November 23, 1998. SCHEDULE 2.1.3
sets forth a complete list of all options and warrants outstanding and the
exercise prices and strike prices thereof. All of the outstanding shares of
capital stock of Micrion have been duly authorized and are validly issued, fully
paid and nonassessable, and no shares were issued in violation of preemptive or
similar rights of any stockholder or in violation of any applicable securities
laws. Except as set forth above, other than shares reserved for issuance
pursuant to the Stock Option Agreement, there are no shares of capital stock of
Micrion authorized, issued or outstanding and, except for options granted
pursuant to the Micrion Stock Plans and the Rights and the Warrants, there are
no preemptive rights or any outstanding subscriptions, options, warrants,
rights, convertible securities or other agreements or commitments of Micrion of
any character relating to the issued or unissued capital stock or other
securities of Micrion. There are no outstanding obligations of Micrion to
repurchase, redeem, or otherwise acquire any of the Micrion Shares.
2.1.4 SUBSIDIARIES AND JOINT VENTURES. Except as disclosed on
SCHEDULE 2.1.4, Micrion has no subsidiaries and owns no stock or other interest
in any other corporation or in any partnership or limited liability company or
other venture or entity. Each subsidiary of
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Micrion is duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or formation, except where the failure to
do so would not have a Material Adverse Effect on Micrion.
2.1.5 SEC REPORTS AND FINANCIAL STATEMENTS. Micrion has filed with
the SEC, and has made available to FEI true and complete copies of, all forms,
reports, schedules, statements and other documents required to be filed by it
since June 30, 1996 under the Exchange Act or the Securities Act (each of such
forms, reports, schedules, statements, and other documents, to the extent filed
and publicly available before the date of this Agreement or filed subsequent to
the date hereof, other than preliminary filings, is referred to as a "Micrion
SEC Document"). Each Micrion SEC Document at the time filed complied and, in the
case of future filings, will comply in all material respects with the applicable
requirements of the Exchange Act or the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. The consolidated
financial statements of Micrion included in the Micrion SEC Documents comply
and, in the case of future filings, will comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been and, in the case of
future filings, will be prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring year end
audit adjustments) the consolidated financial position of Micrion and its
subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
2.1.6 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by or on behalf of Micrion specifically for inclusion or incorporation
by reference in the Form S-4 or the Proxy Statement contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
2.1.7 LEGAL PROCEEDINGS. Except as disclosed in SCHEDULE 2.1.7, there
is neither pending nor, to the knowledge of Micrion, threatened by or against
Micrion any legal action, claim, arbitration, investigation, or proceeding that
could (i) have a Material Adverse Effect on Micrion following the Closing; or
(ii) enjoin, delay or restrict the right or ability of Micrion to perform its
obligations under this Agreement and, to the knowledge of Micrion, there is no
basis for any such claim, litigation, proceeding, or investigation.
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2.1.8 CONTRACTS AND ARRANGEMENTS.
(a) SCHEDULE 2.1.8, which is organized by type of agreement,
contains a complete and accurate list of all agreements of the following types
to which Micrion is a party or by which it is bound and which are material to
Micrion (the "Contracts"):
(i) any mortgage, note or other instrument or agreement relating to
the borrowing of money or the incurrence of indebtedness by Micrion or
Micrion's guaranty of any obligation for the borrowing of money;
(ii) contracts, agreements, purchase orders, or acknowledgment forms
for the purchase, sale, lease or other disposition of Micrion's equipment,
products, materials, or capital assets, or for the performance of services;
(iii) contracts or agreements for the joint performance of work or
services and all other joint venture agreements;
(iv) contracts or agreements with agents, brokers, consignees, sales
representatives, or distributors relating to the sale of Micrion's products
or services; and
(v) contracts or agreements relating to the employment or
compensation of any Micrion Entity's officers, directors, or employees,
including without limitation any collective bargaining agreements.
(b) Each of the Contracts has been duly and validly executed and
delivered by Micrion and is binding upon and enforceable by and against Micrion
in accordance with its terms, except as enforceability may be limited or
affected by applicable bankruptcy, insolvency, reorganization, or other laws of
general application relating to or affecting the rights of creditors and except
as enforceability may be limited by principles of equity governing specific
performance, injunctive relief, or other equitable remedies.
2.1.9 MATERIAL ASSETS. Except as set forth in SCHEDULE 2.1.9, Micrion
has good and marketable title to all of its material properties and assets
subject to no encumbrance, lien, charge, or other restriction (including,
without limitation, any restriction on transfer) of any kind or character other
than (i) such imperfections or irregularities of title, encumbrances, claims,
liens, charges or other conditions, restrictions or reservations as do not
materially affect the use of the properties or assets subject thereto or
affected thereby or otherwise materially impair business operations at such
properties, (ii) statutory liens securing payments (including taxes) not yet due
and (iii) such imperfections or irregularities of title, encumbrances, claims,
liens, charges or other conditions, restrictions or reservations as do not
individually or in the aggregate have a Material Adverse Effect on Micrion.
2.1.10 COMPLIANCE WITH LAWS. Except for those whose absence has not
had and is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect,
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Micrion possesses all governmental and other licenses, certificates, consents,
permits, and other authorizations of Governmental Entities (collectively,
"Licenses") legally required to carry on its business as now conducted. No
material violation exists in respect of, and no proceeding is pending or to
Micrion's knowledge threatened to revoke or limit, any such License. Except as
disclosed in the Micrion SEC Documents, the business of Micrion is not being
conducted in violation of any laws, rules, regulations, ordinances, codes,
judgments, orders, writs, or decrees applicable to its business except where
such violations would not individually or in the aggregate have a Material
Adverse Effect on Micrion.
2.1.11 ENVIRONMENTAL MATTERS.
(a) DEFINITIONS. As used in this Agreement, "Environmental
Law" means any federal, state or local statute, regulation, or ordinance
pertaining to the protection of human health or the environment and any
applicable orders, judgments, decrees, permits, licenses, or other
authorizations, agreements or mandates under such laws. "Hazardous
Substance" means any hazardous, toxic, radioactive, or infectious
substance, material, or waste as defined, listed, or regulated under any
Environmental Law, and includes without limitation petroleum oil and its
fractions. "Contamination" means the existence (actual or reasonably
suspected) in the environment of a Hazardous Substance, if the existence or
suspected existence of such Hazardous Substance requires any investigatory,
remedial, removal, or other response action under any Environmental Law.
(b) ENVIRONMENTAL COMPLIANCE. Except as set forth in SCHEDULE
2.1.11 and except where the contrary would not individually or the
aggregate have a Material Adverse Effect on Micrion:
(1) Micrion possesses all material Licenses it is
required to carry under any Environmental Law for its business as now
conducted. No material violation exists in respect of, and no
proceeding is pending or threatened to revoke or limit, any such
License. Micrion is operating its business in material compliance
with all Environmental Laws. No incident regarding environmental
matters has occurred in connection with the business of Micrion that
was required to be reported to a Governmental Entity under any
Environmental Law that was not so reported.
(2) To the knowledge of Micrion, (i) no real property
currently or previously owned, leased, or occupied by Micrion,
including, without limitation, soil, groundwater or surface water on,
under or adjacent to the properties and buildings thereon (the
"Properties") is or during Micrion's ownership or occupation was used
as a hazardous waste treatment, storage, or disposal facility within
the meaning of Subtitle C of the Resource Conservation and Recovery
Act or any comparable state Environmental Law; and (ii) no real
property currently owned, leased, or occupied by Micrion and no real
property previously owned, leased, or occupied by Micrion is listed
on the National
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Priority List or the Comprehensive Environmental Response,
Compensation and Liability Information System list compiled by the
Environmental Protection Agency or any comparable listing compiled by
any state or local Governmental Entity having jurisdiction over
environmental matters.
(3) Micrion has not received notice from any Governmental
Entity or other Person that it may be in violation of, or liable
under, any Environmental Law and none of the properties of Micrion is
subject to any court order, administrative order or decree arising
under any Environmental Law, nor has been named as a responsible or
potentially responsible party with respect to any site listed on the
lists described in paragraph (2) above or that it otherwise is
potentially liable for Contamination under any Environmental Law.
(4) To the knowledge of Micrion, no portion of any
property currently owned, leased, or occupied by Micrion is
Contaminated and with respect to property previously owned, leased,
or occupied by Micrion, no Contamination occurred during Micrion's
ownership, lease, or occupancy.
2.1.12 TAX MATTERS.
(a) RETURNS. Micrion has prepared in good faith and filed on a
timely basis all federal, state, foreign, and other returns, reports,
forms, declarations, and information returns required to be filed by it
with respect to Taxes (as defined below) that relate to the business,
results of operations, financial condition, properties, or assets of
Micrion (collectively, the "Micrion Returns") and has paid on a timely
basis all Taxes shown to be due on the Micrion Returns and all Taxes with
respect to which no Micrion Returns are required to be filed. Except as
detailed on SCHEDULE 2.1.12, Micrion is not part of an affiliated group of
corporations that files or has the privilege of filing consolidated tax
returns pursuant to Section 1501 of the Code or any similar provisions of
state, local, or foreign law, and Micrion is not a party to any tax-sharing
or tax-allocation agreement. No extensions of time have been requested for
Micrion Returns that have not been filed except as set forth on SCHEDULE
2.1.12. Except as set forth on SCHEDULE 2.1.12, (i) all Micrion Returns
with respect to periods ending on or before the Closing Date have been
examined by the Internal Revenue Service or the appropriate state, local or
foreign taxing authority or the period for assessment of the Taxes in
respect of which such Micrion Returns were required to be filed has
expired, (ii) no issue raised by any relevant taxing authority in
connection with an audit or examination of any such Micrion Returns remains
unresolved, and (iii) no waivers of statutes of limitations are in effect
with respect to any Taxes of any Micrion Entity. All Micrion Returns filed
are complete and accurate in all material respects. Micrion has provided
FEI with complete and accurate copies of Micrion Returns for each of
Micrion's fiscal years 1992 through 1997 and the Forms 1139 related to any
loss or credit or carryback claim for those years.
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(b) TAXES PAID OR RESERVED. The reserves for taxes reflected
in the current balance sheet most recently filed as part of a Micrion SEC
Document are adequate for payment of Taxes in respect of periods ending on
or before the Closing Date. All reserves for Taxes have been determined in
accordance with GAAP consistently applied throughout the periods involved
and prior periods. All Taxes that Micrion has been required to collect or
withhold have been collected or withheld and, to the extent required, have
been paid to the proper taxing authority except where the failure to do so
has not had and is not reasonably likely to have a Material Adverse Effect.
Micrion has not elected to be treated as a consenting corporation pursuant
to Section 341(f) of the Code.
(c) LOSS CARRYFORWARDS; INVESTMENT TAX CREDIT CARRYFORWARDS.
SCHEDULE 2.1.12 contains a complete and accurate list of net operating loss
carryforwards and investment tax credit carryforwards available to Micrion
for federal income tax purposes that originated in taxable years set forth
in SCHEDULE 2.1.12.
(d) GOLDEN PARACHUTE PAYMENTS. Except as set forth on SCHEDULE
2.1.12(d), Micrion will not be obligated as a result of the transactions
contemplated by this Agreement to make a payment that would be a "parachute
payment" to a "disqualified individual," as those terms are defined in
Section 280G of the Code, without regard to whether such payment is
reasonable compensation for personal services performed or to be performed
in the future.
(e) FIRPTA. Micrion is not, nor was it at any time during the
five-year period ending on the Closing Date, a "United States real property
holding corporation" within the meaning of Section 897(c) of the Code.
(f) DEFINITION. As used in this Agreement, the term "Taxes"
means all federal, state, local, or foreign taxes, charges, fees, levies,
or other assessments, including without limitation all net income, gross
income, gross receipts, premium, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
production, value added, estimated severance, stamp, occupation, property,
or other taxes, fees, assessments, or charges of any kind whatsoever,
together with any interest and any penalties (including penalties for
failure to file in accordance with applicable information reporting
requirements), and additions to tax.
2.1.13 EMPLOYEES AND LABOR RELATIONS MATTERS. Except as set
forth on SCHEDULE 2.1.13 or as provided in this Agreement:
(a) Micrion has complied in all material respects with all
applicable labor and employment laws, including provisions thereof relating
to wages, hours, equal opportunity, collective bargaining, and the payment
of social security and other taxes, except where the failure to comply has
not had and is not reasonably likely to have a Material Adverse Effect on
Micrion;
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(b) There is no unfair labor practice charge, complaint,
representation petition, grievance or other action against Micrion pending
or to Micrion's knowledge threatened before the National Labor Relations
Board or any other Governmental Entity and Micrion is not subject to any
order to bargain by the National Labor Relations Board;
(c) There is no labor strike, request for representation,
slowdown, or work stoppage actually occurring, pending, or to Micrion's
knowledge threatened against Micrion;
(d) To Micrion's knowledge no employee of Micrion is subject
to any noncompetition, nondisclosure, confidentiality, employment,
consulting, or similar agreements with Persons other than Micrion relating
to the present business activities of Micrion; and
(e) Attached as SCHEDULE 2.1.13(E) hereto is a list of all
employee positions at Micrion that Micrion is attempting to staff.
2.1.14 EMPLOYEE BENEFITS. SCHEDULE 2.1.14 lists all pension,
retirement, profit sharing, deferred compensation, bonus, commission, incentive,
stock option, life insurance, health and disability insurance, hospitalization,
change of control and all other employee benefit plans or arrangements
established, maintained, or contributed to by Micrion (the "Micrion Compensation
and Benefit Plans"). Complete and accurate copies of each Micrion Compensation
and Benefit Plan and each summary plan description, insurance contract, trust
agreement or other agreement relating to such Micrion Compensation and Benefit
Plans, have been provided to FEI.
Each Micrion Compensation and Benefit Plan that is a "pension plan" ("Pension
Plan"), within the meaning of Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and which is intended to qualify
under Section 401(a) of the Code, has received a favorable determination letter
from the Internal Revenue Service regarding its qualification, and Micrion is
not aware of any circumstances which are likely to cause any Pension Plan to
fail to be qualified under Section 401(a) of the Code. The present value of all
accrued benefits under each Pension Plan covered by Title IV of ERISA does not
exceed by more than $250,000 the fair market value of such Plan's assets. No
"reportable event" (as such term is used in section 4043 of ERISA), non-exempt
"prohibited transaction" (as such term is used in section 406 of ERISA or
section 4975 of the Code), "nondeductible contributions" (as such term is used
in section 4972 of the Code) or "accumulated funding deficiency" (as such term
is used in section 412 or 4971 of the Code) has heretofore occurred with respect
to any Micrion Compensation or Benefit Plan. Neither Micrion nor a controlled
group of corporations of which Micrion is a member has any "potential withdrawal
liability," as defined in Section 4201 of ERISA. To the knowledge of Micrion,
there are not and have not been any excess deferrals or excess contributions
under any ERISA Plan that have not been corrected.
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Each Micrion Compensation or Benefit Plan is and has been operated and
administered in substantial compliance with the terms of such plans and the
requirements of all applicable U.S. and non-U.S. laws. Each Micrion Compensation
or Benefit Plan can be terminated by Micrion under the terms of such Micrion
Compensation or Benefit Plan. Any termination of, or withdrawal from, any
Micrion Compensation or Benefit Plan of Micrion on or prior to Closing would not
subject Micrion to any material liability under Title IV of ERISA. Micrion has
no material unfunded liabilities with respect to any Pension Plan which covers
non-U.S. employees (a "Non-U.S. Pension Plan"). Each Non-U.S. Pension Plan has
received all necessary governmental approvals or has been registered with the
appropriate governmental agency as required by local law.
2.1.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
SCHEDULE 2.1.15 or in any Micrion SEC Documents or except as contemplated or
permitted under Section 3.1.2, since September 30, 1998, Micrion has conducted
its business only in, and has not engaged in any material transactions other
than according to, the ordinary and usual course of such business, and there has
not been:
(a) Any event, occurrence or development which individually or
in the aggregate could reasonably be expected to result in a Material
Adverse Effect on Micrion;
(b) Any increase in the rate of terms of compensation payable
or to become payable by Micrion to its directors, officers, or key
employees; any increase in the rate or terms of any bonus, insurance,
pension, or other employee benefit plan, payment, or arrangement made to,
for or with any such directors, officers, or key employees; any special
bonus or remuneration paid; or any written employment contract executed or
amended;
(c) Any amendment to Micrion's Articles of Organization or
Bylaws or any entry into any material agreement, commitment, or transaction
(including, without limitation, any borrowing, capital expenditure or
capital financing or any amendment, modification, or termination of any
existing agreement, commitment, or transaction) by Micrion, except
agreements, commitments, or transactions in the ordinary course of business
and consistent with past practices or as expressly contemplated in this
Agreement;
(d) Any direct or indirect declaration, setting aside, or
payment of any dividend or other distribution (whether in cash, stock,
property, or any combination thereof) in respect of the common stock of
Micrion, or any direct or indirect repurchase, redemption, or other
acquisition by Micrion of any shares of its stock, or any change by Micrion
in its accounting principles, practices or methods;
(e) Any issuance or sale of any stock of Micrion (other than
issuances pursuant to the exercise of warrants or options outstanding on
September 30, 1998) or
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any issuance or granting of any option, warrant, or right to purchase any
stock of Micrion (other than options granted under the Micrion Stock Plans)
or any commitment to do any of the foregoing;
(f) Any material purchase or other acquisition of property by
Micrion, any material sale, lease, or other disposition of property by
Micrion, or any material expenditure by Micrion, except in the ordinary
course of business;
(g) Any incurrence of any noncontract liability which, either
singly or in the aggregate is material to the business, results of
operations or financial condition of Micrion; or
(h) Any encumbrance or consent to encumbrance of any material
property or assets of Micrion except in the ordinary course of business and
except for the types of encumbrances listed in Section 2.1.9.
2.1.16 UNDISCLOSED LIABILITIES. Except for liabilities or obligations
described in the Micrion SEC Documents, SCHEDULE 2.1.16, or in another Schedule
to this Agreement, neither Micrion nor any of its property is subject to any
material liability or obligation, whether absolute or contingent, that has not
been included in the financial statements contained in the Micrion SEC Documents
or adequately reserved for in a financial statement of Micrion that has been
provided to FEI.
2.1.17 INSURANCE. All material fire and casualty, general liability,
business interruption, public liability, workers' compensation and directors'
and officers' liability insurance policies are with reputable insurance
carriers, provide full and adequate coverage for all normal risks incident to
the business of Micrion and its properties and assets, and are in character and
amount at least equivalent to that carried by companies engaged in similar
businesses, except for any failures to maintain insurance policies that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect. Copies of all such policies have been provided to FEI.
2.1.18 INTELLECTUAL PROPERTY.
(a) The term "Intellectual Property Assets" means
collectively:
(i) all registered and unregistered trademarks, service
marks, and applications (collectively, "Marks");
(ii) all patents and patent applications (collectively,
"Patents");
(iii) all copyrights in both published works and
unpublished works that are material to Micrion's businesses
(collectively, "Copyrights"); and
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(iv) all trade secrets used in the conduct of the
businesses of Micrion.
(b) Except as set forth on SCHEDULE 2.1.18, Micrion owns or
has a valid license to use and to bring actions for the misappropriation of
all of the Intellectual Property Assets used in the conduct of its business
without any conflict with or infringement of the rights of others, free and
clear of all liens, charges, encumbrances, or other restrictions of any
kind.
(c) SCHEDULE 2.1.18 contains a list and summary description of
all Marks, Patents and Copyrights.
(d) SCHEDULE 2.1.18 contains a list of all agreements relating
to the Intellectual Property Assets used in the conduct of its business to
which Micrion is a party.
(e) To Micrion's knowledge, there is no unauthorized use,
infringement or misappropriation of any of the Micrion Intellectual
Property Assets by any third party, including any employee or former
employee of Micrion except for potential disputes between the parties
hereto, as to which no representation is made.
(f) Except as set forth on SCHEDULE 2.1.18, there is no
action, suit, proceeding, judgment, order, or writ pending or to Micrion's
knowledge, threatened against Micrion contesting the validity, ownership,
or right to use, sell, license, dispose of, or to bring actions for the
misappropriation of the Intellectual Property Assets used in the conduct of
its business, except for potential disputes between the parties hereto, as
to which no representation is made.
2.1.19 GUARANTIES; POWERS OF ATTORNEY. Micrion is not a guarantor or
otherwise liable for any material obligation (including without limitation any
indebtedness) of any other Person. To Micrion's knowledge, there are no
outstanding powers of attorney executed on behalf of Micrion.
2.1.20 BROKERS. No broker, investment banker, financial advisor, or
other Person, other than Warburg Dillon Read LLC ("WDR"), the fees and expenses
of which will be paid by Micrion, is entitled to any broker's, finder's,
financial advisor's, or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Micrion. Micrion has provided FEI true and correct copies of all
agreements between Micrion and WDR.
2.1.21 OPINION OF FINANCIAL ADVISOR. Micrion has received the written
opinion of WDR, dated December 1, 1998 to the effect that the consideration to
be received in the Merger by Micrion's stockholders is fair to such stockholders
from a financial point of view. An executed copy of such opinion has been
delivered to FEI. Micrion has been authorized by
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WDR, subject to prior review and consent by WDR (such consent not to be
unreasonably withheld), to include such fairness opinion and reference thereto
in the Form S-4 and the Proxy Statement.
2.1.22 VOTE REQUIRED. The affirmative vote of the holders of
two-thirds of the outstanding shares of Micrion Common Stock entitled to vote
thereon is the only vote of any class or series of Micrion's capital stock
necessary to approve the Merger. The Micrion Board at a meeting duly called and
held has (i) approved this Agreement, (ii) unanimously determined that the
Merger is fair to and in the best interests of the holders of Micrion Common
Stock, (iii) resolved to recommend this Agreement and the Merger to such holders
for approval and (iv) directed that this Agreement be submitted to Micrion's
stockholders. Micrion hereby agrees to the inclusion in the Form S-4 and the
Proxy Statement of the recommendations of the Micrion Board described in this
Section.
2.1.23 RIGHTS AGREEMENT. Micrion has provided FEI with a complete and
correct copy of the Rights Agreement, including all amendments and exhibits
thereto. The amendment to the Rights Agreement attached to this Agreement as
EXHIBIT B has been duly authorized by the Micrion Board and has been duly
executed and adopted by Micrion, and accordingly, the execution of this
Agreement and any other related agreements between Micrion and FEI, the Merger
and the other transactions contemplated by this Agreement will not cause the
Rights to become exercisable or result in either FEI or Sub or any of their
Affiliates, alone or together, being considered to be an "Acquiring Person" (as
defined in the Rights Agreement) or the occurrence of a "Distribution Date," a
"Section 13 Event" or a "Triggering Event" (as such terms are defined in the
Rights Agreement).
2.1.24 STATE TAKEOVER STATUTES AND OTHER TAKEOVER PROVISIONS. The
provisions of Chapter 110C and Chapter 110D of the Massachusetts
Corporation-Related Laws and any other Massachusetts state takeover statute or
similar statute or regulation do not apply to prevent or impose conditions on
the Merger, this Agreement, the Stock Option Agreement or any of the
transactions contemplated by this Agreement.
2.1.25 DEFERRED COMPENSATION OBLIGATIONS. Micrion has no deferred
compensation obligations, whether vested or unvested.
2.1.26 PRODUCT WARRANTIES AND LIABILITIES.
(a) Except as set forth on SCHEDULE 2.1.26, (i) there are no
material warranties, express or implied, written or oral, with respect to
the products of Micrion ("Micrion Products"), (ii) as of the date hereof
there are no pending or threatened material claims with respect to any such
warranty, (iii) there are no statements, citations or decisions by any
Governmental Entity declaring any Micrion Products defective or unsafe,
(iv) there are no material pending, or, to the knowledge of Micrion as of
the date hereof, threatened, product liability claims against or involving
Micrion or any Micrion Product and no such claims have been settled or
adjudicated since December 31, 1995,
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and (v) to Micrion's knowledge, Micrion is in compliance with all of its
purchase contracts with customers with respect to Micrion Products and is
not reasonably likely to incur any material penalties or other such form of
purchase price adjustment for late delivery or failure to build to
specification any Micrion Product.
(b) Micrion has provided FEI with a complete list of all
Micrion Products for which there is a remaining purchase price balance due
and with respect to which a customer of Micrion has made a complaint or
assertion that has directly or indirectly been the basis for such
customer's refusal to grant on-site acceptance of such Micrion Product.
(c) In connection with the sale of its first 300 mm wafer
technology workstation, as of the date of this agreement, no facts or
circumstances exist that are reasonably likely to cause Micrion to be
subject to penalties or other purchase price adjustments in excess of 10%
of the purchase price thereof.
2.1.27 INVENTORIES. Micrion's inventories, whether finished goods,
work in process or raw materials, shown on the balance sheet contained in the
most recent Micrion SEC Document or thereafter acquired are all items of a
quality usable or saleable in the ordinary and usual course of Micrion's
business, except for inventory items that are obsolete or not usable or saleable
in the ordinary course of business and that have been written down to an amount
not in excess of realizable market value or for which adequate reserves or
allowances have been provided. The values at which inventories are carried
reflect an inventory valuation policy consistent with Micrion's past practice
and in accordance with GAAP consistently applied.
2.1.28 RECEIVABLES. Each of the receivables of Micrion (including
accounts receivable, loans receivable and advances) that is reflected in the
balance sheet contained in the most recent Micrion SEC Document, and each of the
receivables that has arisen since the date of such balance sheet, has arisen
only from bona fide transactions in the ordinary course of Micrion's business
and Micrion's reserves for doubtful accounts receivable are adequate in
accordance with GAAP. SCHEDULE 2.1.28 contains a statement of accounts
receivable balance as of September 26, 1998, reconciled to such balance sheet.
2.1.29 YEAR 2000 COMPLIANCE. Micrion has a Year 2000 program in place
which is adequate to cause all computer software and data processing devices (i)
used in or for the manufacturing of the Micrion Products by Micrion, or (ii)
used in or by any Micrion Products, including any Micrion Products sold and/or
installed prior to the date hereof, to become Year 2000 compliant during 1999
except to the extent that the failure to do so, individually or in the
aggregate, would not have a Material Adverse Effect on Micrion, and Micrion
reasonably believes that the material costs associated with such program that
are included in Micrion's fiscal 1999 budget are adequate and that the rate of
expenditures after June 30, 1999 will not increase materially. "Year 2000
compliant" means that the product or software accurately processes and stores
date/time data (including, but not limited to, calculating, comparing,
displaying, recording and sequencing operations involving date/time
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data) during, from and into and between the twentieth and twenty-first
centuries, and the years 1999 and 2000, including correct processing of leap
year data.
2.1.30 INDEBTEDNESS. Micrion's Indebtedness does not exceed an
aggregate of $18,518,000, consisting of the following amounts: $7,333,000 under
a term loan from Fleet Bank, $10,000,000 under its Fleet Bank line of credit and
$1,185,000 payable under currently existing capital lease obligations.
"Indebtedness" means all indebtedness for borrowed money, including, without
limitation, the long term and current portions of amounts outstanding as term
debt or under a line of credit and capital lease obligations.
2.1.31 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article 2, Micrion makes no
other express or implied representation or warranty to FEI or Sub.
2.2 FEI'S REPRESENTATIONS AND WARRANTIES. FEI represents and warrants to
Micrion as follows:
2.2.1 CORPORATE EXISTENCE AND AUTHORITY. FEI is a corporation
legally existing under the laws of the State of Oregon and is in good standing
as a foreign corporation in each jurisdiction where the properties owned, leased
or operated, or the business conducted, by it require such qualification, except
for such failures to qualify or be in such good standing which, when taken
together with all other such failures, is not reasonably likely to have a
Material Adverse Effect on FEI. FEI has the full corporate power and authority
to enter into this Agreement and carry out its terms. Except for the approval of
its stockholders, FEI has taken all corporate action necessary to execute,
deliver and perform this Agreement. This Agreement has been duly and validly
executed and delivered by FEI and is binding upon and enforceable against FEI in
accordance with its terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, reorganization, or other laws of general
application relating to or affecting the rights of creditors and except as
enforceability may be limited by principles of equity governing specific
performance, injunctive relief, or other equitable remedies.
2.2.2 NO ADVERSE CONSEQUENCES. Except as set forth on SCHEDULE
2.2.2, neither the execution and delivery of this Agreement by FEI nor the
consummation of the transactions contemplated by this Agreement will:
(a) violate or conflict with any provision of FEI's articles
of incorporation or bylaws;
(b) violate any law, judgment, order, injunction, decree,
rule, regulation, or ruling of any Governmental Entity applicable to FEI,
except such as is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FEI;
(c) either alone or with the giving of notice or the passage
of time or both, conflict with, constitute grounds for termination or
acceleration of, result in the
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breach of the terms, conditions, or provisions of, result in the
loss of any benefit to FEI under, or constitute a default under any
agreement, instrument, license, or permit to which FEI is a party or by
which it is bound, except such as is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FEI; or
(d) except (i) for applicable requirements, if any, of the
Exchange Act, the Securities Act and Blue Sky Laws, (ii) the HSR Act, (iii)
for the filing of Articles of Merger pursuant to the OBCA and the MBCL, and
(iv) with respect to matters set forth in SCHEDULE 2.2.2, require any
consent, approval or authorization of, permit from, or declaration, filing
or registration with, any governmental or regulatory authority, or any
other person or entity by FEI, except where the failure to obtain such
consent, approval, authorization, permit or declaration or to make such
filing or registration is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FEI.
2.2.3 CAPITALIZATION. FEI has authorized capital stock consisting of
30,000,000 shares of FEI Common Stock, of which 18,160,808 shares were
outstanding on November 25, 1998 and 500,000 shares of preferred stock, none of
which is outstanding. Options to purchase 1,493,188 shares of Common Stock were
outstanding on October 31, 1998 under grants made pursuant to the 1984 Stock
Incentive Plan, the 1995 Stock Incentive Plan and the 1995 Supplemental Stock
Incentive Plan (the "FEI Stock Plans") and options to purchase 36,100 shares of
Common Stock have been granted since October 31, 1998. SCHEDULE 2.2.3 sets forth
a complete list of all options outstanding and the exercise prices and strike
prices thereof. All of the outstanding shares of capital stock of FEI have been
duly authorized and are validly issued, fully paid and nonassessable, and no
shares were issued in violation of preemptive or similar rights of any
stockholder or in violation of any applicable securities laws. Except as set
forth above, there are no shares of capital stock of FEI authorized, issued or
outstanding and, except for options granted pursuant to the FEI Stock Plans,
there are no preemptive rights or any outstanding subscriptions, options,
warrants, rights, convertible securities or other agreements or commitments of
FEI of any character relating to the issued or unissued capital stock or other
securities of FEI other than rights of Philips Business Electronics
International B.V. ("Philips") to maintain its percentage interest in the issued
and outstanding shares of FEI as provided in the Combination Agreement dated
November 15, 1996, as amended (the "Philips Additional Shares Right"). There are
no outstanding obligations of FEI to repurchase, redeem, or otherwise acquire
any of the FEI Shares.
2.2.4 SUBSIDIARIES AND JOINT VENTURES. Except as disclosed on
SCHEDULE 2.2.4, FEI has no subsidiaries and owns no stock or other interest in
any other corporation or in any partnership or limited liability company or
other venture or entity. Each subsidiary of FEI is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation, except where the failure to do so would not have a
Material Adverse Effect on FEI.
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2.2.5 SEC REPORTS AND FINANCIAL STATEMENTS. FEI has filed with the
SEC, and has made available to Micrion true and complete copies of, all forms,
reports, schedules, statements and other documents required to be filed by it
since December 31, 1996 under the Exchange Act or the Securities Act (each of
such forms, reports, schedules, statements, and other documents, to the extent
filed and publicly available before the date of this Agreement or filed
subsequent to the date hereof, other than preliminary filings, is referred to as
a "FEI SEC Document"). Each FEI SEC Document, at the time filed complied and, in
the case of future filings, will comply in all material respects with the
applicable requirements of the Exchange Act or the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. The
consolidated financial statements of FEI included in the FEI SEC Documents
comply and, in the case of future filings, will comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, have been and, in the
case of future filings, will be prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted by Form
10-Q of the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring year end audit adjustments) the consolidated
financial position of FEI and its subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended.
2.2.6 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by or on behalf of FEI specifically for inclusion or incorporation by
reference in the Form S-4 or the Proxy Statement contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by FEI with respect to statements made or
incorporated by reference therein based on information supplied by Micrion in
writing specifically for inclusion or incorporation by reference therein. The
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
2.2.7 LEGAL PROCEEDINGS. Except as disclosed in SCHEDULE 2.2.7, there
is neither pending nor, to the knowledge of FEI, threatened by or against FEI
any legal action, claim, arbitration, investigation, or proceeding that could
(i) have a Material Adverse Effect on FEI following the Closing; or (ii) enjoin,
delay or restrict the right or ability of FEI to perform its obligations under
this Agreement and, to the knowledge of FEI, there is no basis for any such
claim, litigation, proceeding, or investigation.
2.2.8 CONTRACTS AND ARRANGEMENTS. Each material contract, instrument,
agreement, or obligation to which FEI is a party or by which it is bound or
which affects its assets or its rights has been duly and validly executed and
delivered by FEI and is binding upon and enforceable by and against FEI in
accordance with its terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, reorganization, or other laws of general
application relating to or affecting the rights of creditors and except as
enforceability
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may be limited by principles of equity governing specific performance,
injunctive relief, or other equitable remedies. Each material contract of FEI
required to be filed with the FEI SEC Documents has been so filed.
2.2.9 MATERIAL ASSETS. Except as set forth on SCHEDULE 2.2.9, FEI has
good and marketable title to all of its material properties and assets subject
to no encumbrance, lien, charge, or other restriction (including, without
limitation, any restriction on transfer) of any kind or character other than (i)
such imperfections or irregularities of title, encumbrances, claims, liens,
charges or other conditions, restrictions or reservations as do not materially
affect the use of the properties or assets subject thereto or affected thereby
or otherwise materially impair business operations at such properties, (ii)
statutory liens securing payments (including taxes) not yet due and (iii) such
imperfections or irregularities of title, encumbrances, claims, liens, charges
or other conditions, restrictions or reservations as do not individually or in
the aggregate have a Material Adverse Effect on FEI.
2.2.10 COMPLIANCE WITH LAWS. Except for those whose absence has not
had and is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, FEI possesses all Licenses legally required to carry on
its business as now conducted. No material violation exists in respect of, and
no proceeding is pending or to FEI's knowledge threatened to revoke or limit,
any such License. Except as disclosed in the FEI SEC Documents, the business of
FEI is not being conducted in violation of any laws, rules, regulations,
ordinances, codes, judgments, orders, writs, or decrees applicable to its
business except where such violations would not individually or in the aggregate
have a Material Adverse Effect on FEI.
2.2.11 ENVIRONMENTAL COMPLIANCE. Except as set forth in SCHEDULE
2.2.11 and except where the contrary would not individually or the aggregate
have a Material Adverse Effect on FEI:
(a) FEI possesses all material Licenses it is required to
carry under any Environmental Law for its business as now conducted. No
material violation exists in respect of, and no proceeding is pending or
threatened to revoke or limit, any such License. FEI is operating its
business in material compliance with all Environmental Laws. No incident
regarding environmental matters has occurred in connection with the
business of FEI that was required to be reported to a Governmental Entity
under any Environmental Law that was not so reported.
(b) To the knowledge of FEI, (i) no real property currently or
previously owned, leased, or occupied by FEI, including, without
limitation, soil, groundwater or surface water on, under or adjacent to the
properties and buildings thereon (the "FEI Properties") is or during FEI's
ownership or occupation was used as a hazardous waste treatment, storage,
or disposal facility within the meaning of Subtitle C of the Resource
Conservation and Recovery Act or any comparable state Environmental Law;
and (ii) no real property currently owned, leased, or occupied by FEI and
no real property
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previously owned, leased, or occupied by FEI is listed on the National
Priority List or the Comprehensive Environmental Response, Compensation and
Liability Information System list compiled by the Environmental Protection
Agency or any comparable listing compiled by any state or local
Governmental Entity having jurisdiction over environmental matters.
(c) FEI has not received notice from any Governmental Entity
or other Person that it may be in violation of, or liable under, any
Environmental Law and none of the properties of FEI is subject to any court
order, administrative order or decree arising under any Environmental Law,
nor has been named as a responsible or potentially responsible party with
respect to any site listed on the lists described in paragraph (b) above or
that it otherwise is potentially liable for Contamination under any
Environmental Law.
(d) To the knowledge of FEI, no portion of any property
currently owned, leased, or occupied by FEI is Contaminated and with
respect to property previously owned, leased, or occupied by FEI, no
Contamination occurred during FEI's ownership, lease, or occupancy.
2.2.12 TAX MATTERS.
(a) RETURNS. FEI has prepared in good faith and filed on a
timely basis all federal, state, foreign, and other returns, reports,
forms, declarations, and information returns required to be filed by it
with respect to Taxes that relate to the business, results of operations,
financial condition, properties, or assets of FEI (collectively, the "FEI
Returns") and has paid on a timely basis all Taxes shown to be due on the
FEI Returns and all Taxes with respect to which no FEI Returns are required
to be filed. Except as detailed on SCHEDULE 2.2.12, FEI is not part of an
affiliated group of corporations that files or has the privilege of filing
consolidated tax returns pursuant to Section 1501 of the Code or any
similar provisions of state, local, or foreign law, and FEI is not a party
to any tax-sharing or tax-allocation agreement. No extensions of time have
been requested for FEI Returns that have not been filed except as set forth
on SCHEDULE 2.2.12. Except as set forth on SCHEDULE 2.2.12, (i) all FEI
Returns with respect to periods ending on or before the Closing Date have
been examined by the Internal Revenue Service or the appropriate state,
local or foreign taxing authority or the period for assessment of the Taxes
in respect of which such FEI Returns were required to be filed has expired,
(ii) no issue raised by any relevant taxing authority in connection with an
audit or examination of any such FEI Returns remains unresolved, and (iii)
no waivers of statutes of limitations are in effect with respect to any
Taxes of any FEI Entity. All FEI Returns filed are complete and accurate in
all material respects. FEI has provided Micrion with complete and accurate
copies of FEI Federal Returns for FEI's fiscal years 1995 through 1997.
(b) TAXES PAID OR RESERVED. The reserves for taxes reflected
in the current balance sheet most recently filed as part of a FEI SEC
Document are adequate for
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payment of Taxes in respect of periods ending on or before the Closing
Date. All reserves for Taxes have been determined in accordance with GAAP
consistently applied throughout the periods involved and prior periods. All
Taxes that FEI has been required to collect or withhold have been collected
or withheld and, to the extent required, have been paid to the proper
taxing authority except where the failure to do so has not had and is not
reasonably likely to have a Material Adverse Effect on FEI. FEI has not
elected to be treated as a consenting corporation pursuant to Section
341(f) of the Code.
2.2.13 EMPLOYEES AND LABOR RELATIONS MATTERS. Except as set forth on
SCHEDULE 2.2.13 or as provided in this Agreement:
(a) FEI has complied in all material respects with all
applicable labor and employment laws, including provisions thereof relating
to wages, hours, equal opportunity, collective bargaining, and the payment
of social security and other taxes, except where the failure to comply has
not had and is not reasonably likely to have a Material Adverse Effect on
FEI;
(b) There is no unfair labor practice charge, complaint,
representation petition, grievance or other action against FEI pending or
to FEI's knowledge threatened before the National Labor Relations Board or
any other Governmental Entity and FEI is not subject to any order to
bargain by the National Labor Relations Board;
(c) There is no labor strike, request for representation,
slowdown, or work stoppage actually occurring, pending, or to FEI's
knowledge threatened against FEI; and
(e) To FEI's knowledge no employee of FEI is subject to any
noncompetition, nondisclosure, confidentiality, employment, consulting, or
similar agreements with Persons other than FEI relating to the present
business activities of FEI.
2.2.14 EMPLOYEE BENEFITS. SCHEDULE 2.2.14 lists all pension,
retirement, profit sharing, deferred compensation, bonus, commission, incentive,
stock option, life insurance, health and disability insurance, hospitalization,
change of control and all other employee benefit plans or arrangements
established, maintained, or contributed to by FEI (the "FEI Compensation and
Benefit Plans"). Complete and accurate copies of each FEI Compensation and
Benefit Plan and each summary plan description, insurance contract, trust
agreement or other agreement relating to such FEI Compensation and Benefit
Plans, have been provided to Micrion.
No "reportable event" (as such term is used in section 4043 of ERISA),
"prohibited transaction" (as such term is used in section 406 of ERISA or
section 4975 of the Code), "nondeductible contributions" (as such term is used
in section 4972 of the Code) or "accumulated funding deficiency" (as such term
is used in section 412 or 4971 of the Code) has heretofore occurred with respect
to any FEI Compensation or Benefit Plan. FEI does not have any "potential
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withdrawal liability," as defined in Section 4201 of ERISA. To the knowledge of
FEI, there are not and have not been any excess deferrals or excess
contributions under any ERISA Plan that have not been corrected.
Each FEI Compensation or Benefit Plan is and has been operated and administered
in all material respects in conformance with the requirements of such plan and
applicable U.S. and foreign laws, except where such failure would not have a
Material Adverse Effect on FEI. Each FEI Compensation or Benefit Plan can be
terminated by FEI. Any termination of, or withdrawal from, any FEI Compensation
or Benefit Plan on or prior to Closing would not subject FEI to any material
liability under Title IV of ERISA.
2.2.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
SCHEDULE 2.2.15 or in any FEI SEC Documents, since September 27, 1998 FEI has
conducted its business only in, and has not engaged in any material transactions
other than according to, the ordinary and usual course of such business, and
there has not been:
(a) Any event, occurrence or development which individually or
in the aggregate could reasonably be expected to result in a Material
Adverse Effect on FEI;
(b) Any amendment to FEI's Articles of Incorporation or Bylaws
or any entry into any material agreement, commitment, or transaction
(including, without limitation, any borrowing, capital expenditure or
capital financing or any amendment, modification, or termination of any
existing agreement, commitment, or transaction) by FEI, except agreements,
commitments, or transactions in the ordinary course of business and
consistent with past practices or as expressly contemplated in this
Agreement;
(c) Any direct or indirect declaration, setting aside, or
payment of any dividend or other distribution (whether in cash, stock,
property, or any combination thereof) in respect of the common stock of
FEI, or any direct or indirect repurchase, redemption, or other acquisition
by FEI of any shares of its stock, or any change by FEI in its accounting
principles, practices or methods;
(d) Any issuance or sale of any stock of FEI (other than
issuances pursuant to the exercise of warrants or options outstanding on
September 27, 1998) or any issuance or granting of any option, warrant, or
right to purchase any stock of FEI (other than options granted under the
FEI Stock Plans and the FEI Employee Share Purchase Plan) or any commitment
to do any of the foregoing;
(e) Any material purchase or other acquisition of property by
FEI, any sale, lease, or other disposition of property by FEI, or any
material expenditure by FEI, except in the ordinary course of business;
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(f) Any incurrence of any noncontract liability which, either
singly or in the aggregate is material to the business, results of
operations or financial condition of FEI; or
(g) Any encumbrance or consent to encumbrance of any material
property or assets of FEI except in the ordinary course of business and
except for the types of encumbrances listed in Section 2.2.9.
2.2.16 UNDISCLOSED LIABILITIES. Except for liabilities or obligations
described in the FEI SEC Documents, SCHEDULE 2.2.16, or in another Schedule to
this Agreement, neither FEI nor any of its property is subject to any material
liability or obligation, whether absolute or contingent, that has not been
included in the financial statements contained in the FEI SEC Documents or
adequately reserved for in a FEI financial statement that has been provided to
Micrion.
2.2.17 INSURANCE. All material fire and casualty, general liability,
business interruption, public liability, workers' compensation and directors'
and officers' liability insurance policies are with reputable insurance
carriers, provide full and adequate coverage for all normal risks incident to
the business of FEI and its properties and assets, and are in character and
amount at least equivalent to that carried by companies engaged in similar
businesses, except for any failures to maintain insurance policies that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect. Copies of all such policies have been provided to Micrion.
2.2.18 INTELLECTUAL PROPERTY.
(a) Except as set forth on SCHEDULE 2.2.18, FEI owns or has a
valid license to use and to bring actions for the misappropriation of all
of the Intellectual Property Assets, used in the conduct of its business
without any conflict with or infringement of the rights of others, free and
clear of all liens, charges, encumbrances, or other restrictions of any
kind.
(b) SCHEDULE 2.2.18 contains a list and summary description of
all Marks, Patents and Copyrights owned by FEI.
(c) SCHEDULE 2.2.18 contains a list of all agreements relating
to the Intellectual Property Assets used in the conduct of its business to
which FEI is a party.
(d) To FEI's knowledge, there is no unauthorized use,
infringement or misappropriation of any of the FEI Intellectual Property
Assets by any third party, including any employee or former employee of
FEI, except for potential disputes between the parties hereto, as to which
no representation is made.
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(e) Except as set forth on Schedule 2.2.18, there is no
action, suit, proceeding, judgment, order, or writ pending or to FEI's
knowledge, threatened against FEI contesting the validity, ownership, or
right to use, sell, license, dispose of, or to bring actions for the
misappropriation of the Intellectual Property Assets used in the conduct of
its business, except for potential disputes between the parties hereto, as
to which no representation is made.
2.2.19 GUARANTIES; POWERS OF ATTORNEY. FEI is not a guarantor or
otherwise liable for any material obligation (including without limitation any
indebtedness) of any other Person. To FEI's knowledge, there are no outstanding
powers of attorney executed on behalf of FEI.
2.2.20 BROKERS. No broker, investment banker, financial advisor, or
other Person, other than Needham & Company, Inc. ("Needham"), the fees and
expenses of which will be paid by FEI, is entitled to any broker's, finder's,
financial advisor's, or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of FEI.
2.2.21 OPINION OF FINANCIAL ADVISOR. FEI has received the written
opinion of Needham, dated December 1, 1998 to the effect that the Merger
Consideration and Philips' purchase of the Financing Shares are fair to the FEI
shareholders (other than Philips, with respect to the Philips financing) from a
financial point of view. An executed copy of such opinion has been delivered to
Micrion. FEI has been authorized by Needham, subject to prior review and consent
by Needham, to include such fairness opinion and reference thereto in the Form
S-4 and the Proxy Statement.
2.2.22 VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of FEI Common Stock entitled to vote thereon
is the only vote of any class or series of FEI's capital stock necessary to
approve the issuance of shares in connection with the transactions contemplated
by this Agreement and the Stock Purchase Agreement (as defined below). The FEI
Board at a meeting duly called and held has (i) approved this Agreement, (ii)
unanimously determined that the Merger and the transactions contemplated by the
Stock Purchase Agreement are fair to and in the best interests of the holders of
FEI Common Stock, (iii) resolved to recommend the transactions contemplated by
this Agreement and the Stock Purchase Agreement to such holders for approval and
(iv) directed that such proposal be submitted to FEI's stockholders. FEI hereby
agrees to the inclusion in the Form S-4 and the Proxy Statement of the
recommendations of the FEI Board described in this Section.
2.2.23 YEAR 2000 COMPLIANCE. FEI has a Year 2000 program in place
which is adequate to cause all computer software and data processing devices (i)
used in or for the manufacturing of the FEI products by FEI or (ii) used in or
by any FEI products, including any FEI products sold and/or installed prior to
the date hereof, to become Year 2000 compliant during 1999, except where the
failure to comply would not have a Material Adverse Effect on
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FEI, and FEI reasonably believes that all material costs associated with such
program are included in FEI's 1998 budget and in its budget forecasts for 1999.
2.2.24 FINANCING. Simultaneously herewith FEI and Philips are
entering into a Stock Purchase Agreement (the "Stock Purchase Agreement")
pursuant to which Philips has agreed to provide financing to FEI for the cash
portion of the Merger Consideration, on the terms and subject to the conditions
set forth therein. A form of the Stock Purchase Agreement has been provided to
Micrion prior to the date hereof.
2.2.25 PRODUCT WARRANTIES AND LIABILITIES.
(a) Except as set forth on SCHEDULE 2.2.25, (i) there are no
material warranties, express or implied, written or oral, with respect to
the products of FEI ("FEI Products"), (ii) as of the date hereof there are
no pending or threatened material claims with respect to any such warranty,
(iii) there are no statements, citations or decisions by any Governmental
Entity declaring any FEI Products defective or unsafe, (iv) there are no
material pending, or, to the knowledge of FEI as of the date hereof,
threatened, product liability claims against or involving FEI or any FEI
Product and no such claims have been settled or adjudicated since December
31, 1995, and (v) to FEI's knowledge, FEI is in compliance with all of its
purchase contracts with customers with respect to FEI Products and is not
reasonably likely to incur any material penalties or other such form of
purchase price adjustment for late delivery or failure to build to
specification any FEI Product.
(b) FEI has provided FEI with a complete list of all FEI
Products for which there is a remaining purchase price balance due and with
respect to which a customer of FEI has made a complaint or assertion that
has directly or indirectly been the basis for such customer's refusal to
grant on-site acceptance of such FEI Product.
2.2.26 INVENTORIES. FEI's inventories, whether finished goods, work
in process or raw materials, shown on the balance sheet contained in the most
recent FEI SEC Document or thereafter acquired are all items of a quality usable
or saleable in the ordinary and usual course of FEI's business, except for
inventory items that are obsolete or not usable or saleable in the ordinary
course of business and that have been written down to an amount not in excess of
realizable market value or for which adequate reserves or allowances have been
provided. The values at which inventories are carried reflect an inventory
valuation policy consistent with FEI's past practice and in accordance with GAAP
consistently applied.
2.2.27 RECEIVABLES. Each of the receivables of FEI (including
accounts receivable, loans receivable and advances) that is reflected in the
balance sheet contained in the most recent FEI SEC Document, and each of the
receivables that has arisen since the date of such balance sheet, has arisen
only from bona fide transactions in the ordinary course of FEI's business and
FEI reserves for doubtful accounts receivable are adequate in accordance with
GAAP.
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2.2.28 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article 2, FEI makes no other
express or implied representation or warranty to Micrion.
ARTICLE 3
COVENANTS
3.1 CONTINUATION OF BUSINESS.
3.1.1 JOINT COVENANTS. Except as set forth on SCHEDULE 3.1.1, without
the prior written consent of FEI or Micrion, as the case may be, which shall not
be unreasonably withheld or delayed, from and after the execution date of this
Agreement until Closing, Micrion and FEI will each:
(a) operate and maintain its business in its usual manner and
in the ordinary course and, to the extent consistent therewith, use its
reasonable best efforts to preserve its business organization intact and
maintain its existing relations with customers, suppliers, employees and
business associates;
(b) not declare, pay, or set aside for payment any dividend
(whether in cash, stock or property) or other distribution of money or
property in respect of its capital stock; effect any split, combination or
similar reclassification of its capital stock; or purchase or redeem any
shares of its capital stock, except pursuant to existing agreements set
forth on SCHEDULE 2.2.3.
(c) not issue or sell any capital stock or rights to acquire
capital stock, except:
(1) shares of Micrion Common Stock issued upon the valid
exercise of currently outstanding options under the Micrion
Stock Plans;
(2) shares of FEI Common Stock issued upon the valid exercise
of rights under the FEI Stock Plans;
(3) options to purchase shares under the FEI Stock Plans;
(4) shares of FEI Common Stock or Micrion Common Stock issued
under the FEI or Micrion Employee Stock Purchase Plan, as the
case may be; and
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(5) shares of FEI Common Stock issued pursuant to the Philips
Additional Shares Right and the Stock Purchase Agreement;
(d) not acquire any assets other than assets acquired in the
ordinary and usual course of its business and consistent with past
practices;
(e) not amend its Articles of Organization or Incorporation or
Bylaws, except for an amendment to the FEI Articles of Incorporation to
increase the number of authorized shares of Common Stock; and
(f) not authorize or enter into an agreement to do any of the
foregoing.
3.1.2 MICRION COVENANTS. Without the prior written consent of FEI and
except as contemplated hereby and as set forth on SCHEDULE 3.1.2, from and after
the execution date of this Agreement until Closing, Micrion agrees that:
(a) Micrion will not increase its aggregate Indebtedness above
the amount stated in Section 2.1.30 and will not encumber any of its
material assets or make any material commitments related to such assets,
except in the ordinary and usual course of its business and consistent with
past practices;
(b) Micrion will not make any tax election or permit any
insurance policy naming it as a beneficiary or a loss payable payee to be
canceled or terminated, except in the ordinary and usual course of
business;
(c) Micrion will not make any payment to discharge or satisfy
any lien or encumbrance or pay any obligation or liability (fixed or
contingent) other than (i) any lien or encumbrance or any obligation or
liability set forth in the current financial statements contained in the
Micrion SEC Documents and (ii) current liabilities incurred or maturing in
the ordinary course of business since the date of the current balance sheet
most recently filed as part of a Micrion SEC Document or (iii) payments
under its line of credit facility with Fleet Bank, N.A. ("Fleet") made in
accordance with the terms of the agreements entered into between Micrion
and Fleet as of September 22, 1998 and July 31, 1997;
(d) Micrion will not purchase or otherwise acquire, or agree to
purchase or otherwise acquire, any debt or equity securities of any Person
other than equity securities issued by a money market fund registered as an
investment company under the Investment Company Act of 1940;
(e) Micrion will not increase the wages, salaries,
compensation, pension, or other benefits payable to any of its officers,
employees, or agents, including any severance or change of control
payments, other than increases in wages and salaries
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required by employment arrangements existing on the execution date of this
Agreement or otherwise in the ordinary and usual course of its business;
(f) Micrion will not implement or amend any employee profit
sharing, stock option, stock purchase, pension, bonus, commission,
incentive, retirement, medical reimbursement, life insurance, deferred
compensation, or any other employee benefit plan or arrangement;
(g) Micrion will not change its accounting methods, policies or
practices;
(h) when the consent of any third party to the transactions
contemplated by this Agreement is required under the terms of any Contract
to which Micrion is a party Micrion will use its reasonable best efforts to
obtain such consent on terms and conditions not materially less favorable
than those in effect on the execution date of this Agreement;
(i) Micrion will not settle or compromise any material claims
or litigation or, except in the ordinary and usual course of business,
modify, amend or terminate any of its material contracts or waive, release
or assign any material rights or claims; and
(j) As to negative covenants specified above, Micrion will not
authorize or enter into an agreement to do any of the foregoing.
3.1.3 CLOSING NOTICE. Promptly following the determination by FEI
that the conditions to Closing (other than the condition contained in this
Section 3.1.3) are met, FEI shall deliver to Philips notice to that effect.
3.2 NO SOLICITATION. From and after the date hereof until the earlier of
the Effective Time or termination of the Agreement, subject to the proviso in
the next paragraph, Micrion agrees that neither it nor any of its officers and
directors shall, and that Micrion shall direct and use its reasonable best
efforts to cause its employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
subsidiaries) (such officers, directors, employees, agents and representatives
sometimes collectively referred to herein as "Representatives") not to, directly
or indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries or the making of any proposal or offer with respect to a merger,
reorganization, share exchange, consolidation or similar transaction involving,
or any purchase of 10% or more of the assets or any class of equity securities
of, it or any of its subsidiaries (any such proposal or offer being hereinafter
referred to as a "Takeover Proposal").
Micrion further agrees that neither it nor its Representatives shall directly or
indirectly, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating to a
Takeover Proposal, whether made before or after the date of this Agreement, or
otherwise facilitate any effort or attempt to make or implement a
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Takeover Proposal; PROVIDED, HOWEVER, that nothing contained in this Agreement
shall prevent Micrion or the Micrion Board from:
(a) complying with Rule 14d-9 or Rule 14e-2 promulgated under
the Exchange Act with regard to a Takeover Proposal;
(b) providing information in response to a request therefor by
a Person who has made an unsolicited bona fide written Takeover Proposal if
the Micrion Board receives from the Person so requesting such information
an executed confidentiality agreement on terms substantially equivalent to
those contained in the Confidentiality Agreement dated March 30, 1998
between Micrion and FEI (the "Confidentiality Agreement");
(c) engaging in any negotiations or discussions with any Person
who has made an unsolicited bona fide written Takeover Proposal; or
(d) withdrawing or modifying the approval or recommendation by
the Micrion Board of this Agreement or the Merger in connection with
recommending an unsolicited bona fide written Takeover Proposal to the
stockholders of Micrion or entering into any agreement with respect to an
unsolicited bona fide written Takeover Proposal;
IF AND ONLY TO THE EXTENT THAT, both (i) in each such case referred to in clause
(b), (c) or (d) above, the Micrion Board determines in good faith after receipt
of written advice from outside legal counsel experienced in such matters that
such action is necessary in order for its directors to comply with their
respective fiduciary duties under applicable law and (ii) in each case referred
to in clause (c) or (d) above, the Micrion Board determines in good faith (after
consultation with its financial advisor) that such Takeover Proposal, if
accepted, is reasonably likely to be consummated, taking into account all legal,
financial and regulatory aspects of the proposal and the Person making the
proposal and would, if consummated, result in a transaction superior to the
transaction contemplated by this Agreement, taking into account, among other
things, the long term prospects and interests of Micrion and its stockholders
(any such superior Takeover Proposal being referred to in this Agreement as a
"Superior Proposal").
Micrion will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Micrion agrees that it will take the
necessary steps to promptly inform its Representatives of the obligations
undertaken in this Section 3.2 and in the Confidentiality Agreement. Micrion
will promptly notify FEI if any such inquiries, proposals or offers are received
by, any such information is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, Micrion or any of its
Representatives relating to a Takeover Proposal, indicating, in connection with
such notice, the name of such Person and the material terms and conditions of
any proposals or offers and thereafter shall keep FEI informed, on a current
basis, on the status and terms of any such proposals or offers and the status of
any such negotiations or discussions. Micrion also will promptly request each
Person that has heretofore executed a
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confidentiality agreement in connection with its consideration of a Takeover
Proposal to return all confidential information heretofore furnished to such
Person by or on behalf of it or any of its subsidiaries.
3.3 ACCESS. For the period up to and including the Closing Date, Micrion
and FEI will provide to each other and their authorized agents access to all
physical assets, facilities, financial information, production records,
contracts and other corporate records and document as the other reasonably
requests and will allow the other and the other's authorized agents to meet with
management personnel, employees and any outside consultants, including without
limitation auditors and accountants, investment and other bankers, tax and
financial advisors and environmental consultants; PROVIDED that no investigation
by either Micrion or FEI or any of its Representatives pursuant to this Section
3.3 will affect any representation, warranty or closing condition of the other
party to this Agreement and PROVIDED, FURTHER, that the foregoing shall not
require FEI or Micrion to permit any inspection, or to disclose any information,
that in the reasonable judgment of the nondisclosing party, would result in a
violation of applicable law or would result in the disclosure of any trade
secrets of third parties or violate any of its obligations with respect to
confidentiality if the nondisclosing party shall have used all best efforts to
obtain the consent of such third party to such inspection or disclosure.
3.4 HART SCOTT RODINO. Each of Micrion and FEI will promptly after
executing this Agreement prepare and file with the Federal Trade Commission (the
"FTC") and the Department of Justice (the "DOJ") the premerger notification form
required under the HSR Act and a request for early termination of the waiting
period provided under the HSR Act and similar foreign pre-merger notifications.
The parties will further take all reasonable steps to (i) cooperate with each
other in connection with such filings, which cooperation will include, but not
be limited to, furnishing the other with such information or documents as may be
reasonably required in connection with such filings as permitted by applicable
law; (ii) promptly file after any request by the FTC or the DOJ any appropriate
information or documents so requested by the FTC or the DOJ; and (iii) notify
each other of any other communications with the FTC or the DOJ that relate to
the transactions contemplated by this Agreement and, to the extent appropriate,
permit the other to participate in any conferences with the FTC or the DOJ. The
parties will use best efforts to accelerate and obtain HSR Act clearance;
PROVIDED, HOWEVER, that nothing in this Section 3.4 will require, or be
construed to require, Micrion or FEI to proffer to, or agree to, any concession,
condition, requirement or restriction of any Governmental Entity which either
the Micrion Board or the FEI Board, reasonably determines in good faith would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement as to render inadvisable the
consummation of the Merger. Each of Micrion and FEI will pay its own expenses in
connection with the preparation of the premerger notification form.
3.5 OTHER GOVERNMENT CONSENTS. Promptly following the execution of this
Agreement, the parties will proceed to prepare and file with the appropriate
Governmental Entities any requests for approval or waiver (in addition to those
specifically described above), if any, that are required from Governmental
Entities in connection with the transactions
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contemplated by this Agreement, and the parties will diligently and
expeditiously prosecute and cooperate fully in the prosecution of such requests
for approval or waiver and all proceedings necessary to secure such approvals
and waivers; PROVIDED, HOWEVER, that nothing in this Section 3.5 will require,
or be construed to require, Micrion or FEI to proffer to, or agree to, any
concession, condition, requirement or restriction of any Governmental Entity
which either the FEI Board or the Micrion Board reasonably determines in good
faith would so materially adversely impact the economic or business benefits of
the transactions contemplated by this Agreement as to render inadvisable the
consummation of the Merger.
3.6 REASONABLE BEST EFFORTS; NO INCONSISTENT ACTION. Except as otherwise
provided in this Agreement, each party will use its reasonable best efforts to
effect the transactions contemplated by this Agreement and to fulfill the
conditions to the obligations of the opposing parties set forth in Article of
this Agreement. Except as otherwise provided in this Agreement, no party will
take any action inconsistent with its obligations under this Agreement or that
could hinder or delay the consummation of the transactions contemplated by this
Agreement, except that nothing in this Section will limit the rights of the
parties under Article of this Agreement.
3.7 CHANGED CIRCUMSTANCES. Each of Micrion and FEI will notify the other
party promptly of any fact or occurrence between the date of this Agreement and
the Closing Date of which it becomes aware which would make any of the
conditions to Closing of the other party to this Agreement not capable of being
satisfied and of any event, change or effect that has had or is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
it.
3.8 FEES AND EXPENSES. Except as provided in Section 5.5, all fees and
expenses incurred in connection with the Merger, this Agreement, and the
transactions contemplated by this Agreement will be paid by the party incurring
such fees or expenses, whether or not the Merger is completed.
3.9 RIGHTS AGREEMENT. Except as provided in Section 2.1.23, Micrion will
not redeem the Rights or amend or terminate the Rights Agreement before the
earlier of Effective Time or the termination of this Agreement unless required
to do so by order of a court of competent jurisdiction.
3.10 OPTIONS AND WARRANTS. Prior to the Effective Time, Micrion and FEI
will take such actions as may be necessary so that at the Effective Time each
Micrion option and warrant outstanding will be terminated as provided in Section
1.9.6 of this Agreement.
3.11 PRESS RELEASES. No press releases or other public announcements
concerning the transactions contemplated by this Agreement may be made by any of
the parties without the prior written consent of each of the other parties,
which consent will not be unreasonably withheld; PROVIDED, HOWEVER, that nothing
in this provision will prevent a party from making such releases or
announcements as are necessary for a party to satisfy its legal obligations or
the
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requirements of the Nasdaq National Market or the SEC and then only after prior
consultation with the other party.
3.12 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) From and after the Effective Time, FEI agrees that it will
indemnify and hold harmless each present and former director and officer of
Micrion (when acting in such capacity) (each an "Indemnified Party" and,
collectively, the "Indemnified Parties"), against any costs or expenses
(including, without limitation, reasonable attorneys' fees, costs of
investigation and fees of other advisers and experts), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, including,
without limitation, claims, actions, suits, proceedings or investigations
by or on behalf of any present or former shareholder of Micrion, arising
out of matters existing or occurring at or prior to the Effective Time,
whether asserted or claimed prior to, at or after the Effective Time, to
the fullest extent that Micrion would have been permitted under
Massachusetts Law and its Articles of Organization or Bylaws in effect on
the date hereof to indemnify such Person (and FEI shall also advance
expenses as incurred to the fullest extent permitted under applicable law;
PROVIDED the Person to whom expenses are advanced provides a written
affirmation of his or her good faith belief that the standard of conduct
necessary for indemnification has been met, and an undertaking to repay
such advances if it is ultimately determined that such Person is not
entitled to indemnification).
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 3.12, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify FEI
thereof, but the failure to so notify shall not relieve FEI of any
liability it may have to such Indemnified Party if such failure does not
materially prejudice the indemnifying party. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) FEI or the Surviving Corporation shall have
the right to assume the defense thereof and FEI shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection
with the defense thereof, except that if FEI or the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Parties
advises that there are issues which raise conflicts of interest between FEI
or the Surviving Corporation and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and FEI or the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel for
the Indemnified Parties promptly as statements therefor are received;
PROVIDED, HOWEVER, that FEI shall be obligated pursuant to this paragraph
(b) to pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction unless the use of one counsel for such Indemnified Parties
would present such counsel with a conflict of interest, (ii) the
Indemnified Parties will cooperate in the defense of any such matter and
(iii) FEI shall not be liable for any settlement effected without its
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prior written consent; and PROVIDED, FURTHER, that FEI shall not have any
obligation hereunder to any Indemnified Party if and when a court of
competent jurisdiction shall ultimately determine, and such determination
shall have become final and non-appealable, that the indemnification of
such Indemnified Party in the manner contemplated hereby is prohibited by
applicable law.
(c) The Surviving Corporation shall maintain Micrion's existing
officers' and directors' liability insurance for a period of five years
after the Effective Time; PROVIDED, HOWEVER, that if the existing officers'
and directors' insurance expires, is terminated or canceled during such
five-year period, the Surviving Corporation will obtain officers' and
directors' liability insurance for the remainder of such period of at least
the same coverage and amounts containing terms and conditions that are not
less advantageous to the Indemnified Parties and that is issued by an
insurer having a claims-paying rating at least as good as the rating of the
issuer of Micrion's existing policy.
(d) The provisions of this Section 3.12 are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives.
3.13 OTHER AGREEMENTS AND RELATED DOCUMENTS.
3.13.1 STOCK OPTION AGREEMENT. Contemporaneously with the execution
of this Agreement, FEI and Micrion will execute and deliver the 19.9% Stock
Option Agreement substantially in the form attached hereto as EXHIBIT B.
3.13.2 EMPLOYMENT AGREEMENT. At or prior to Closing, FEI and at least
10 of the 12 individuals listed on SCHEDULE 3.13.2 will enter into employment
agreements substantially in the form attached hereto as EXHIBIT C (each, an
"Employment Agreement"), to be effective upon Closing; PROVIDED that Nicholas P.
Economou will be one of the ten individuals who enters into such an Employment
Agreement.
3.13.3 ASSIGNMENT OF PATENTS AND TRADEMARKS. At Closing, Micrion will
execute assignments of its patents and trademarks to FEI substantially in the
forms attached as EXHIBIT D-1 AND D-2.
3.14 FEI BOARD OF DIRECTORS. Effective upon Closing, FEI will cause
Nicholas P. Economou to be elected or appointed to the FEI Board.
3.15 GOLDEN PARACHUTES. Not later than five days before the Closing Date,
Micrion shall amend the terms of any Micrion compensation or benefit plan, or
any other agreement to which Micrion is a party, that is listed on SCHEDULE
2.1.12(d) so that neither Micrion nor FEI following consummation of the Merger
shall be required to make a payment that would be a "parachute payment" to a
"disqualified individual," as those terms are defined in Section 280G of the
Code.
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3.16 AUTHORIZED SHARES. Prior to Closing, FEI will amend its Articles of
Incorporation to increase the number of its authorized shares of Common Stock to
allow the issuance of the shares of FEI Common Stock included in the Merger
Consideration.
ARTICLE 4
CONDITIONS TO THE PARTIES' OBLIGATIONS
TO CONSUMMATE THE MERGER
4.1 MUTUAL CONDITIONS. The respective obligations of each party to
consummate the Merger are subject to the following conditions:
4.1.1 GOVERNMENTAL AUTHORIZATIONS. All filings required to be made
prior to the Effective Time with, and all consents, approvals and authorizations
required to be obtained prior to the Effective Time from, any Governmental
Entities in order to consummate the transactions contemplated by this Agreement,
will have been made or obtained, as the case may be, and the waiting period (and
any extension thereof) under the HSR Act and any applicable competition laws of
any jurisdiction will have expired or been terminated (collectively, the
"Required Approvals").
4.1.2 STOCKHOLDER APPROVAL. At duly called and held Stockholders'
Meetings, acting in accordance with applicable provisions of their respective
state corporation laws and their respective organizational documents and bylaws
and the rules of the Nasdaq National Market and federal securities laws, Micrion
shall have obtained the approval of the Merger by the holders of at least
two-thirds of the issued and outstanding shares of Micrion Common Stock entitled
to vote thereon and FEI shall have obtained the approval of the holders of at
least a majority of the issued and outstanding shares of FEI Common Stock
entitled to vote thereon on the matters submitted to FEI shareholders in the
Proxy Statement.
4.1.3 NO PROHIBITIONS. There shall not have been promulgated or
issued a law, statute, rule, regulation, decree, order, injunction or ruling by
any Governmental Entity that remains in effect and prohibits, restrains or
enjoins the consummation of the Merger; provided, however, that each party shall
use its reasonable best efforts to have any such decree or order reversed or
vacated.
4.1.4 NO SUITS. No action, suit or other proceeding shall have been
overtly threatened by any Governmental Entity or be pending against any party to
this Agreement to prohibit, restrain or enjoin or otherwise prevent the
consummation of the transactions contemplated by this Agreement.
4.1.5 NASDAQ LISTING. The shares of FEI Common Stock issuable to
Micrion stockholders shall have been authorized for inclusion on the Nasdaq
National Market. FEI shall use its reasonable best efforts to effect the
inclusion of all such shares on the Nasdaq National Market.
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4.1.6 FORM S-4. No stop order suspending the effectiveness of the
Form S-4 shall have been issued, and no proceedings for that purpose shall have
been instituted or threatened by the SEC.
4.1.7 REGULATORY BURDENS. No Regulatory Approval shall have imposed
any condition, requirement or restriction which the FEI Board or the Micrion
Board determines in good faith would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement to FEI
and its stockholders or Micrion and its stockholders, as the case may be, as to
render inadvisable the consummation of the Merger.
4.2 CONDITIONS TO OBLIGATIONS OF FEI. The obligations of FEI and Sub to
effect the Merger are also subject to the satisfaction or waiver by FEI at or
prior to the Effective Time of the following conditions:
4.2.1 REPRESENTATIONS AND WARRANTIES; COVENANTS. Except with respect
to the representation of Micrion regarding Indebtedness contained in Section
2.1.30, (i) the representations and warranties of Micrion set forth in this
Agreement (A) to the extent qualified by Material Adverse Effect shall be true
and correct and (B) to the extent not qualified by Material Adverse Effect shall
be true and correct, except that this clause (B) shall be deemed satisfied so
long as any failures of such representations and warranties to be true and
correct, taken together, do not have a Material Adverse Effect on Micrion, in
each case (A) and (B), as of the Closing Date as though made on and as of the
Closing Date (except to the extent such representations and warranties speak of
an earlier date); and (ii) except with respect to the covenant of Micrion
regarding Indebtedness contained in Section 3.1.2(a), Micrion shall have
performed and complied in all material respects with all covenants, obligations
and agreements required to be performed and complied with by it under this
Agreement at or prior to the Closing Date, and FEI shall have received a
certificate signed on behalf of Micrion by an executive officer of Micrion to
the effect of (i) and (ii).
If the representation contained in Section 2.1.30 is not true and correct as of
the Closing Date or if the Micrion covenant contained in Section 3.1.2(a) has
not been complied with, the following provisions shall apply:
(1) CLOSING ON OR PRIOR TO MARCH 31, 1999. If the Closing
occurs on or prior to March 31, 1999, if Micrion Indebtedness at Closing is
greater than $17,681,000, the Cash Portion will be reduced by an amount
equal to the Indebtedness in excess of $17,681,000 divided by the number of
Micrion Shares for which Merger Consideration will be paid pursuant to
Section 1.6.1. If Micrion Indebtedness at Closing is greater than
$21,844,000, FEI will be entitled to terminate this Agreement pursuant to
Section 5.4(c).
(2) CLOSING AFTER MARCH 31, 1999 AND ON OR PRIOR TO JUNE 30,
1999. If the Closing occurs after March 31, 1999 and on or prior to June
30, 1999, if Micrion Indebtedness at Closing is greater than $16,844,000,
the Cash Portion will be reduced by an amount equal to the Indebtedness in
excess of $16,844,000 divided by the number
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of Micrion Shares for which Merger Consideration will be paid pursuant to
Section 1.6.1. If Micrion Indebtedness at Closing is greater than
$21,844,000, FEI will be entitled to terminate this Agreement pursuant to
Section 5.4(c).
(3) CLOSING AFTER JUNE 30, 1999. If the Closing occurs after
June 30, 1999, if Micrion Indebtedness at Closing is greater than
$16,007,000, the Cash Portion will be reduced by an amount equal to the
Indebtedness in excess of $16,007,000 divided by the number of Micrion
Shares for which Merger Consideration will be paid pursuant to Section
1.6.1. If Micrion Indebtedness at Closing is greater than $23,507,000, FEI
will be entitled to terminate this Agreement pursuant to Section 5.4(c).
(4) ALL STOCK CONSIDERATION. If the Merger Consideration
consists solely of shares of FEI Common Stock pursuant to Section 1.6.2 and
Micrion Indebtedness at Closing is greater than $17,681,000, $16,844,000 or
$16,007,000, for Closing at the time specified in (1), (2) or (3) above,
respectively, then the number of shares of FEI Common Stock to be issued to
each Micrion stockholder as Merger Consideration will be reduced by a
number equal to (a) (i) the amount of the applicable excess Indebtedness
pursuant to paragraph (1), (2) or (3) above, divided by (ii) the
Pre-Closing Average Price, divided by (b) the number of Micrion Shares
outstanding prior to such reduction.
4.2.2 DISSENTING SHARES. No more than fifteen percent (15%) of the
total issued and outstanding Micrion Shares (taking into account all Micrion
Shares issued or issuable pursuant to options, warrants, convertible securities
or other rights to acquire Micrion Shares) shall be Dissenting Shares.
4.2.3 DELIVERY OF EXHIBITS AND MICRION OFFICERS' CERTIFICATES. FEI
shall have received an Employment Agreement with at least 10 of the 12
individuals listed on SCHEDULE 3.13.12 including an Employment Agreement with
Nicholas Economou, the 19.9% Stock Option Agreement, the Patent Assignment and
the Trademark Assignment, all executed by the parties thereto, and the
certificate of Micrion officers referred to in Section 4.2.1.
4.3 CONDITIONS TO OBLIGATIONS OF MICRION. The obligations of Micrion to
effect the merger are also subject to the satisfaction or waiver by Micrion at
or prior to the Effective Time of the following conditions:
4.3.1 REPRESENTATIONS AND WARRANTIES; COVENANTS. (i) The
representations and warranties of FEI set forth in this Agreement (A) to the
extent qualified by Material Adverse Effect shall be true and correct and (B) to
the extent not qualified by Material Adverse Effect shall be true and correct,
except that this clause (B) shall be deemed satisfied so long as any failures of
such representations and warranties to be true and correct, taken together, do
not have a Material Adverse Effect on FEI, in each case (A) and (B), as of the
Closing Date as though made on and as of the Closing Date (except to the extent
such representations and warranties speak of an earlier date); and (ii) FEI
shall have performed and complied in all material respects
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with all material obligations and agreements required to be performed and
complied with by it under this Agreement at or prior to the Closing Date.
Micrion shall have received a certificate signed on behalf of FEI by an
executive officer of FEI to the effect of (i) and (ii).
4.3.2 DEPOSIT OF CERTIFICATES AND FUNDS. FEI shall have deposited the
shares of FEI Common Stock and funds (if the Merger Consideration will be paid
pursuant to Section 1.6.1) specified in Section 1.9.1 hereof.
4.3.3 DELIVERY OF CERTIFICATES BY FEI. Micrion shall have received
the certificate of FEI officers referred to in Section 4.3.1.
ARTICLE 5
TERMINATION
5.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approvals by stockholders of Micrion and FEI by mutual
written consent of Micrion and FEI by action of their respective Boards of
Directors.
5.2 TERMINATION BY EITHER PARTY. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by action of
either the FEI Board or the Micrion Board if any one of the following conditions
are met:
(a) the Merger shall not have been consummated by October 31,
1999, whether such date is before or after the date of approvals by the
stockholders of Micrion or FEI, PROVIDED, that the right to terminate this
Agreement pursuant to this clause (a) shall not be available to any party
that has breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the
occurrence of the failure of the Merger to be consummated;
(b) the approval of Micrion's stockholders required by Section
4.1.2 shall not have been obtained at a meeting duly convened therefor or
at any adjournment or postponement thereof;
(c) the approval of FEI' shareholders as required by Section
4.1.2 shall not have been obtained at a meeting duly convened therefor or
at any adjournment or postponement thereof;
(d) any order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and nonappealable
(whether before or after the approval by the stockholders of Micrion or
FEI); or
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(e) if the Pre-Closing Average Price is less than $3.00,
subject to Equitable Adjustment.
5.3 TERMINATION BY MICRION. This Agreement may be terminated and the
Merger may be abandoned by action of the Micrion Board, whether before or after
the approval by stockholders of Micrion:
(a) at any time prior to the Effective Time if there has been a
material breach by FEI of any representation, warranty, covenant or
agreement contained in this Agreement that is not curable or, if curable,
is not cured within a reasonable time (but in no event more than 45 days)
after written notice of such breach is given by FEI to Micrion;
(b) at any time prior to the Effective Time, if all of the
following conditions are met:
(1) Micrion is not in material breach of any of its
covenants contained in Section 3.2, 3.4, 3.5 and 3.6 of this
Agreement,
(2) the Micrion Board authorizes Micrion, subject to
complying with the terms of this Agreement, to enter into a binding
written agreement concerning a transaction that constitutes a
Superior Proposal and Micrion notifies FEI in writing that it intends
to enter into such an agreement, attaching a summary of the material
terms thereof,
(3) FEI does not make, within five business days after
receipt of Micrion's written notification of its intention to enter
into a binding agreement for a Superior Proposal, an offer that the
Micrion Board determines, in good faith consistent with its fiduciary
obligations under applicable law after consultation with its
financial advisors, is at least as favorable, taking into account,
among other things, the long-term prospects and interests of Micrion
and its stockholders, as the Superior Proposal, AND
(4) Micrion promptly, but in no event later than two
business days after the date of such termination, pays to FEI in
immediately available funds the fees required to be paid pursuant to
Section 5.5. Micrion agrees (i) that it will not enter into a binding
agreement referred to in clause 5.3 (b)(2) above until at least the
sixth business day after it has provided the notice to FEI required
thereby and (ii) to notify FEI promptly if its intention to enter
into a written agreement referred to in its notification changes at
any time after giving such notification; or
(c) within five business days following receipt by Micrion of
written notice from FEI that the Stock Purchase Agreement has been
terminated.
5.4 TERMINATION BY FEI. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after the approval by
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the stockholders of FEI, by action of the FEI Board if any one of the following
conditions are met:
(a) Micrion enters into a binding agreement for a Superior
Proposal or the Micrion Board recommends a Superior Proposal or shall have
withdrawn or adversely modified its approval or recommendation of this
Agreement or failed to reconfirm its recommendation of this Agreement
within five business days after a written request by FEI to do so;
(b) there has been a material breach by Micrion of any
representation, warranty, covenant or agreement contained in this Agreement
that is not curable or, if curable, is not cured within a reasonable time
(but in no event more than 45 days) after written notice of such breach is
given by FEI to Micrion;
(c) if Micrion Indebtedness at Closing exceeds the applicable
amount specified in the last sentence of either subsection 4.2.1(1),
4.2.1(2), or 4.2.1.(3);
(d) if Micrion, any of its subsidiaries or any of their
Representatives shall take any actions pursuant to clause (b), (c) or (d)
of the proviso set forth in Section 3.2; PROVIDED that if Micrion or any of
its representatives shall take any actions pursuant to clause (b) or (c) of
such proviso, FEI may only terminate this Agreement no later than 30 days
following the date on which Micrion provides notice to FEI that it has
taken such action; or
5.5 EFFECT OF TERMINATION.
5.5.1 In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article V, this Agreement shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, agents, legal and financial
advisors or other representatives); PROVIDED, HOWEVER, no such termination shall
relieve any party hereto of any liability or damages resulting from any breach
of this Agreement.
5.5.2 In the event that:
(i) a Takeover Proposal shall have been made to Micrion or any
of its stockholders or any Person shall have publicly announced an
intention (whether or not conditional) to make a Takeover Proposal
with respect to Micrion and thereafter this Agreement is terminated
by either FEI or Micrion pursuant to Section 5.2(b), or
(ii) this Agreement is terminated (A) by Micrion pursuant to
Section 5.3(b) or (B) by FEI pursuant to Section 5.4(a) or Section
5.4(d) (in the case of 5.4(d), only with respect to termination by
FEI because Micrion, any of
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its subsidiaries or any of their Representatives shall have taken any
actions pursuant to clause (d) of the proviso set forth in Section
3.2) or because of a breach of Section 3.2 by Micrion,
then Micrion shall promptly, but in no event later than two business days after
the date of such termination or such earlier time as required by this Agreement,
pay FEI a termination fee of $3.5 million (the "Termination Fee"), payable by
wire transfer of same day funds. If this Agreement is terminated by FEI pursuant
to Section 5.4(d) because Micrion, any of its subsidiaries or any of their
Representatives shall have taken any actions pursuant to clause (b) or (c) of
the proviso set forth in Section 3.2 and Micrion consummates an agreement for a
Takeover Proposal within nine months after FEI's termination of this Agreement,
Micrion shall promptly, but in no event later than the date of such
consummation, pay to FEI the Termination Fee.
5.5.3 Micrion acknowledges that the agreements contained in Section
5.5 are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, FEI and Sub would not enter into this Agreement;
accordingly, if Micrion fails to promptly pay the amount due pursuant to Section
5.5.2 and, in order to obtain such payment, FEI commences a suit which results
in a judgment against Micrion for the fee set forth therein, Micrion shall pay
to FEI its reasonable costs and expenses (including attorneys' fees) in
connection with such suit, together with interest from the date of termination
of this Agreement on the amounts owed at the prime rate as announced by Key Bank
of Oregon in effect from time to time during such period plus two percent.
ARTICLE 6
GENERAL PROVISIONS
6.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement will survive the Effective Time.
6.2 FURTHER ACTION. Micrion, Sub, and FEI will execute any documents and
take any additional action reasonably required to implement fully this
Agreement.
6.3 ENTIRE AGREEMENT. This Agreement (including any exhibits hereto), the
Confidentiality Agreement and the Exchange Of Information and Joint Defense
Agreement constitute the entire agreement and understanding among Micrion, Sub,
and FEI regarding the subject matter hereof and thereof and supersede and
replace all prior or contemporaneous negotiations, representations,
understandings or agreements, whether written or oral among the parties with
respect to the subject matter hereof. No party to this Agreement is relying on
any representations or warranties other than those that are set forth in this
Agreement.
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6.4 ASSIGNMENT. This Agreement may not be assigned by any party or by
operation of law without the prior written consent of all parties.
6.5 BINDING EFFECT; NO THIRD PARTY BENEFIT. This Agreement will inure to
the benefit of and be binding upon each of the parties and their respective
successors and assigns, subject to the restrictions on assignment contained in
Section 6.4. Nothing express or implied in this Agreement is intended or will be
construed to confer upon or give to any Person other than the parties to this
Agreement any rights or remedies under or by reason of this Agreement or any
transaction contemplated by it, except with respect to Section 3.12.
6.6 WAIVER. Failure of any party at any time to require performance of
any provision of this Agreement will not limit such party's right to enforce
such provision, nor will any waiver of any breach of any provision of this
Agreement constitute a waiver of any succeeding breach of such provision or a
waiver of such provision itself. Any waiver of any provision of this Agreement
will be effective only if set forth in writing and signed by the party to be
bound.
6.7 GOVERNING LAW. This Agreement will be governed and construed in
accordance with the laws of the State of Oregon.
6.8 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
6.9 TIME OF ESSENCE. Micrion, Sub and FEI hereby acknowledge and agree
that time is strictly of the essence with respect to each and every term,
condition, obligation, and provision of this Agreement.
6.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which taken together will
constitute one and the same instrument, binding on the parties. If this
Agreement is executed in counterparts, each party will transmit by facsimile a
copy of the signed counterpart upon execution and will cause an executed
original counterpart to be transmitted by courier service to the other parties.
6.11 AMENDMENTS. This Agreement may not be modified or amended except by
the written agreement of Micrion, Sub and FEI. This Agreement may not be
terminated other than pursuant to Article 5 except by the written agreement of
Micrion, Sub and FEI. A party may waive one or more of its rights under this
Agreement only in a written instrument signed by such party.
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6.12 NOTICES. All notices or other communications required or permitted
under this Agreement must be in writing and must be personally delivered, sent
by registered or certified mail, postage prepaid, return receipt requested, or
sent by facsimile. Any notice, if mailed, will be deemed given when received;
any notice, if transmitted by facsimile, will be deemed given when transmitted
and electronically confirmed. Notices will be given to the following Persons:
To FEI: Mr. Vahe Sarkissian
FEI Company
7451 NW Evergreen Parkway
Hillsboro, Oregon 97124
Facsimile No.: (503) 640-7570
With a copy to: Stephen E. Babson
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2300
Portland, OR 97204
Facsimile No.: (503) 220-2480
To Micrion: Dr. Nicholas P. Economou
Micrion Corporation
One Corporation Way
Peabody, MA 01960
Facsimile No.: (978) 531-9648
With a copy to: Ms. Roslyn G. Daum
Choate, Hall & Stewart
Exchange Place, 53 State Street
Boston, MA 02109
Facsimile No.: (617) 248-4000
or to such other persons or addresses as may be designated in writing by a
party.
6.13 VOTING AGREEMENTS. Philips has duly executed and delivered to Micrion
a Voting Agreement substantially in the form of EXHIBIT F-1 hereto with respect
to all shares of FEI Common Stock owned by Philips and all executive officers of
Micrion have duly executed and delivered to FEI Voting Agreements substantially
in the form of EXHIBIT F-2 with respect to the shares held by those individuals.
6.14 SCHEDULES. Disclosure of any fact or item in any Schedule hereto
shall be deemed to have been so disclosed in any other Schedule hereto provided
that disclosure of such fact or item on such Schedule contains fair disclosure
of the facts that would otherwise be required to be disclosed in such other
Schedule. Matters reflected in the Schedules hereto are not necessarily limited
to matters required by this Agreement to be disclosed herein, are not
necessarily indicative of "materiality" and may be provided for information
purposes only.
47
<PAGE> 56
IN WITNESS WHEREOF, the parties have executed this Agreement, effective the
day and year first written above.
FEI COMPANY MICRION CORPORATION
By: ________________________ By: ________________________
(Signature) (Signature)
Name: Name:
Title: Title:
MC ACQUISITION CORPORATION
By: ________________________
(Signature)
Name:
Title:
48
<PAGE> 1
EXHIBIT 10.38
EXHIBIT B
19.9% STOCK OPTION AGREEMENT
19.9% STOCK OPTION AGREEMENT, dated as of December 3, 1998 (the
"AGREEMENT"), between FEI Company, an Oregon corporation ("PARENT"), and Micrion
Corporation, a Massachusetts corporation (the "COMPANY").
WHEREAS, Parent, MC Acquisition Corporation, an Oregon corporation and a
wholly owned subsidiary of Parent ("NEWCO"), and the Company are
contemporaneously herewith entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "MERGER AGREEMENT"), which provides, among other
things, for the merger of the Company with Newco (the "MERGER");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Newco have requested that the Company grant to Parent an
option to purchase shares of Common Stock, no par value, of the Company (the
"COMMON STOCK"), upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce Parent and Newco to enter into the Merger
Agreement, the Company is willing to grant Parent the requested option and the
Board of Directors of the Company has approved the granting of such option and
authorized the Company to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. THE OPTION; EXERCISE; ADJUSTMENTS; PAYMENT OF SPREAD. On the terms and
subject to the conditions set forth herein, the Company hereby grants to Parent
an irrevocable option (the "OPTION") to purchase up to 810,805 shares of Common
Stock (the "SHARES") at a cash purchase price per Share equal to the value of
the Merger Consideration (as defined in the Merger Agreement), the stock
component of which will be valued as the average of the closing prices of Parent
Common Stock as quoted on the Nasdaq National Market and reported in THE WALL
STREET JOURNAL for the five consecutive trading days immediately preceding and
including the date of announcement by Parent of the execution of the Merger
Agreement (the "Purchase Price"). The Option may be exercised by Parent, in
whole or in part, at any time, or from time to time, following the occurrence of
one of the events set forth in Section 5.5.2(i) of the Merger Agreement, the
termination by Parent of the Merger Agreement pursuant to Section 5.4(a) or (d)
thereof or because of a breach of Section 3.2 by the Company, or the termination
of the Merger Agreement by the Company pursuant to Section 5.3(b) thereof, in
each case prior to the termination of the Option in accordance with the terms of
this Agreement.
<PAGE> 2
(b) In the event Parent wishes to exercise the Option, Parent shall
send a written notice to the Company (the "STOCK EXERCISE NOTICE") specifying a
date for the closing of such purchase (subject to the HSR Act (as defined below)
and obtaining other applicable regulatory approvals and the satisfaction of the
conditions set forth in Section 2 below) not earlier than two business days
following the date the Stock Exercise Notice is given. In the event of any
change in the number of issued and outstanding shares of Common Stock by reason
of any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Shares subject to this Option and the Purchase Price shall be appropriately
adjusted to restore Parent to its rights hereunder, including its right to
purchase Shares representing 19.9% of the capital stock of the Company entitled
to vote generally for the election of the directors of the Company which is
issued and outstanding immediately prior to the exercise of the Option at an
aggregate purchase price equal to the Purchase Price multiplied by 810,805.
(c) At any time after the Option is exercisable pursuant to the
terms of Section 1(a) hereof, Parent may elect, in lieu of purchasing the Shares
hereunder, to receive from the Company an amount in cash (the "CASH AMOUNT")
equal to the Spread (as hereinafter defined) multiplied by all or such portion
of the Shares subject to the Option as Parent shall specify in a written notice
to the Company (the "CASH EXERCISE NOTICE") specifying a date not later than 20
business days and not earlier than five business days following the date the
Cash Exercise Notice is given on which the Company shall pay to Parent such Cash
Amount. As used herein "SPREAD" shall mean the excess, if any, over the Purchase
Price of the higher of (x) if applicable, the highest price per share of Common
Stock (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid or proposed to be paid by any person pursuant to a Takeover
Proposal (as defined in the Merger Agreement) (the "ALTERNATIVE PURCHASE PRICE")
and (y) the closing price of the shares of Common Stock as quoted on the Nasdaq
National Market and reported in THE WALL STREET JOURNAL on the last trading day
prior to the date of the Cash Exercise Notice (the "CLOSING PRICE"). If the
Alternative Purchase Price can be calculated by reference only to a cash amount
paid or proposed to be paid for any shares of Common Stock outstanding, such
cash amount shall be deemed to be the Alternative Purchase Price; if, in the
case of clause (x) above, no shares of Common Stock will be purchased only for
cash, the Alternative Purchase Price shall be the sum of (i) the fixed cash
amount, if any, included in the Alternative Purchase Price plus (ii) the fair
market value of such property other than cash included in the Alternative
Purchase Price. If, in the case of clause (x) above, such other property
consists of securities with an existing public trading market, the average of
the closing prices (or the average of the closing bid and asked prices if
closing prices are unavailable) for such securities in their principal public
trading market on the five trading days ending one day prior to the date of the
Cash Exercise Notice shall be deemed to equal the fair market value of such
property. If such other property consists of something other than cash or
securities with an existing public trading market and, as of the payment date
for the Spread, agreement by the parties hereto on the value of such other
property has not been reached, the Alternative Purchase Price shall be deemed to
equal the Closing Price. Upon Parent's receipt of the Cash Amount,
<PAGE> 3
Parent shall not have the right to receive the Shares for which Parent shall
have elected to be paid the Spread.
2. CONDITIONS TO DELIVERY OF SHARES. The Company's obligation to deliver
Shares upon exercise of the Option is subject only to the conditions that:
(a) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
prohibiting the exercise of the Option and/or the delivery of the Shares
shall be in effect;
(b) Any applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, (the "HSR ACT") and under
any applicable foreign pre-merger notification or similar laws shall have
expired or been terminated; and
(c) Parent or Newco has not materially breached a representation,
warranty or covenant contained in the Merger Agreement; provided that this
subsection (c) shall be a condition to the Company's obligation to deliver
the Shares upon exercise of the Option only if the Company terminated the
Merger Agreement as a result of such breach.
3. THE CLOSING. (a) Any closing hereunder shall take place on the date
specified by Parent in its Stock Exercise Notice or Cash Exercise Notice, as the
case may be, at 9:00 A.M., local time, at the offices of Stoel Rives LLP, 900 SW
Fifth Avenue, Suite 2600, Portland, Oregon 97204, or, if Shares are to be
delivered and the conditions set forth in Section 2 have not then been
satisfied, on the second business day following the satisfaction of such
conditions, or at such other time and place as the parties hereto may agree in
writing (the "CLOSING DATE"). On the Closing Date, (i) in the event of a closing
pursuant to Section 1(b) hereof, the Company shall deliver to Parent a
certificate or certificates, representing the Shares in the denominations
designated by Parent in its Stock Exercise Notice and Parent shall purchase such
Shares from the Company at the Purchase Price or (ii) in the event of a closing
pursuant to Section 1(c) hereof, the Company shall deliver to Parent the Cash
Amount. Any payment made by Parent to the Company, or by the Company to Parent,
pursuant to this Agreement shall be made by certified or official bank check or
by wire transfer of federal funds to a bank designated by the party receiving
such funds.
(b) The certificates representing the Shares shall bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Parent that (a) the Company is a corporation duly organized,
validly existing and
<PAGE> 4
in good standing under the laws of the Commonwealth of Massachusetts and has the
requisite corporate power and authority to enter into and perform this
Agreement; (b) the execution and delivery of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company and this Agreement has been
duly executed and delivered by a duly authorized officer of the Company and
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; (c)
the Company has taken all necessary corporate action to authorize and reserve
the Shares issuable upon exercise of the Option, and the Shares, when issued and
delivered by the Company upon exercise of the Option and paid for by Parent as
contemplated hereby, will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights; (d) except as otherwise may be
required by the HSR Act and other applicable foreign pre-merger or similar laws,
the execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby do not require the consent,
waiver, approval or authorization of or any filing with any person or public
authority and will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of the Company's
articles of organization or bylaws, or any indenture, mortgage, lien, lease,
agreement, contract, instrument, order, law, rule, regulation, judgment,
ordinance, or decree, or restriction by which the Company or any of its
subsidiaries or any of their respective properties or assets is bound; (e) no
restrictive provision of any "fair price," "moratorium," "control share
acquisition," or other form of antitakeover statute or regulation, including,
without limitation, the provisions of Chapter 110C and Chapter 110D of the
Massachusetts Corporation-Related Laws, or similar provision contained in the
charter or bylaws of the Company, is or shall be applicable to the acquisition
of Shares by Parent pursuant to this Agreement; and (f) the Company has taken
all corporate action necessary so that the rights issuable pursuant to the
Rights Agreement (as defined in the Merger Agreement) will not separate from the
Shares or otherwise became exercisable, as a result of entering into this
Agreement, the Merger Agreement, or consummating the Merger and/or the other
transactions contemplated hereby and thereby.
5. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and warrants
to the Company that: (a) Parent is a corporation legally existing under the laws
of the State of Oregon and has the requisite corporate power and authority to
enter into and perform this Agreement; (b) the execution and delivery of this
Agreement by Parent and the consummation by it of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Parent and this
Agreement has been duly executed and delivered by a duly authorized officer of
Parent and constitutes a valid and binding obligation of Parent, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
(c) Parent is acquiring the Option and, if and when it exercises the Option,
will be acquiring the Shares issuable upon
<PAGE> 5
the exercise thereof for its own account and not with a view to distribution or
resale in any manner which would be in violation of the Securities Act or
applicable state securities laws.
6. LISTING OF SHARES; FILINGS; GOVERNMENTAL CONSENTS. Subject to applicable
law and the rules and regulations of the Nasdaq National Market, the Company
shall promptly after receipt of Stock Exercise Notice file a notification form
for listing of additional shares to list the Shares on the Nasdaq National
Market and shall use its reasonable best efforts to obtain approval of such
listing and to effect all necessary filings by the Company under the HSR Act;
PROVIDED, HOWEVER, that if the Company is unable to effect such listing on the
Nasdaq National Market by the Closing Date, the Company shall nevertheless be
obligated to deliver the Shares upon the Closing Date and to continue diligently
to pursue listing of the Shares on the Nasdaq National Market. Each of the
parties hereto shall use its reasonable best efforts to obtain consents of all
third parties and governmental authorities necessary to the consummation of the
transactions contemplated.
7. REGISTRATION RIGHTS. (a) In the event that Parent shall desire to sell
any of the Shares within three years after the purchase of such Shares pursuant
hereto, and such sale requires, in the opinion of counsel to Parent, which
opinion shall be reasonably satisfactory to the Company and its counsel,
registration of such Shares under the Securities Act, the Company shall
cooperate with Parent and any underwriters in registering such Shares for
resale, including, without limitation, promptly filing a registration statement
which complies with the requirements of applicable federal and state securities
laws, and entering into an underwriting agreement with such underwriters upon
such terms and conditions as are customarily contained in underwriting
agreements with respect to secondary distributions; provided that the Company
shall not be required to have declared effective more than two registration
statements hereunder and shall be entitled to delay the filing or effectiveness
of any registration statement for up to 60 days if the offering would, in the
judgment of the Board of Directors of the Company, require premature disclosure
of any material corporate development or material transaction involving the
Company or interfere with any pending or proposed securities offering by the
Company.
(b) If the Common Stock is registered pursuant to the provisions of
this Section 8, the Company agrees (i) to furnish copies of the registration
statement and the prospectus relating to the Shares covered thereby in such
numbers as Parent may from time to time reasonably request and (ii) if any event
shall occur as a result of which it becomes necessary to amend or supplement any
registration statement or prospectus, to prepare and file under the applicable
securities laws such amendments and supplements as may be necessary to keep
available for at least 90 days a prospectus covering the Common Stock meeting
the requirements of such securities laws, and to furnish Parent such numbers of
copies of the registration statement and prospectus as amended or supplemented
as may reasonably be requested. The Company shall bear the cost of the
registration, including, but not limited to, all registration and filing fees,
printing expenses, and fees and disbursements of counsel and accountants for the
Company, except that Parent shall pay the fees and disbursements of its counsel,
and the underwriting fees and selling commissions applicable to
<PAGE> 6
the shares of Common Stock sold by Parent. Company shall indemnify and hold
harmless (i) Parent, its affiliates and its officers and directors and (ii) each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act or the Securities Exchange Act of 1934, as amended
(collectively, the "UNDERWRITERS") ((i) and (ii) being referred to as
"INDEMNIFIED PARTIES") against any losses, claims, damages, liabilities or
expenses, to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
registration statement filed pursuant to this paragraph, or arise out of or are
based upon 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; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any such documents in reliance upon and
in conformity with written information furnished to the Company by the
Indemnified Parties expressly for use or incorporation by reference therein; and
PROVIDED FURTHER that as to any preliminary prospectus, prospectus or any
amendment or supplement thereto, this indemnity agreement shall not inure to the
benefit of any Indemnified Party on account of any loss, claim, damage,
liability or expense arising from the fact that such Indemnified Party sold
Common Stock to a person as to whom it shall be established that there was not
sent or given, at or prior to such sale, a copy of the prospectus covering such
Common Stock, as then amended or supplemented in any case where such delivery is
required by the Securities Act and the loss, claim, damage, liability or expense
results from an untrue statement or omission of a material fact contained in
such preliminary prospectus, prospectus or amendment or supplement thereto which
was corrected in the prospectus as then amended or supplemented. As used in this
Agreement, "PERSON" shall have the meaning specified in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended. Each Indemnified
Party shall give notice to the Company promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought and shall
permit the Company to assume the defense of any such claim or litigation
resulting therefrom. If within 15 days after receipt of such notice from an
Indemnified Party the Company does not notify the Indemnified Party that the
Company will assume defense of such claim, the Indemnified Party may elect to
control the conduct and settlement of such action and all reasonable costs of
defending such action shall be indemnified under this Section 7(b). No
Indemnified Party shall consent to entry of any judgment or settle such claim or
litigation without the prior written consent of the Company, unless the Company
has failed to assume control of the conduct of such claim as described in the
foregoing sentence.
(c) Parent and the Underwriters shall indemnify and hold harmless
the Company, its affiliates and its officers and directors against any losses,
claims, damages, liabilities or expenses to which the Company, its affiliates
and its officers and directors may become subject, insofar as such losses,
claims, damages, liabilities (or actions in respect thereof) and expenses arise
out of or are based upon any untrue statement of any material fact contained or
incorporated by reference in any registration statement filed pursuant to this
<PAGE> 7
paragraph, or arise out of or are based upon 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, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by Parent or the Underwriters, as
applicable, specifically for use or incorporation by reference therein.
8. EXPENSES. Each party hereto shall pay its own expenses incurred in
connection with this Agreement, except as otherwise specifically provided
herein.
9. SPECIFIC PERFORMANCE. The Company acknowledges that if the Company fails
to perform any of its obligations under this Agreement immediate and irreparable
harm or injury would be caused to Parent for which money damages would not be an
adequate remedy. In such event, the Company agrees that Parent shall have the
right, in addition to any other rights it may have, to specific performance of
this Agreement. Accordingly, if Parent should institute an action or proceeding
seeking specific enforcement of the provisions hereof, the Company hereby waives
the claim or defense that Parent has an adequate remedy at law and hereby agrees
not to assert in any such action or proceeding the claim or defense that such a
remedy at law exists. The Company further agrees to waive any requirements for
the securing or posting of any bond in connection with obtaining any such
equitable relief.
10. NOTICE. All notices or other communications under this Agreement shall
be in writing and shall be deemed duly given, effective (i) three business days
later, if sent by registered or certified mail, return receipt requested,
postage prepaid, (ii) when sent, if sent by telecopier or fax, provided that the
telecopy or fax is promptly confirmed by telephone confirmation thereof, (iii)
when served, if delivered personally to the intended recipient, and (iv) one
business day later, if sent by overnight delivery via a national courier
service, and in each case, addressed to the intended recipient at the address
set forth in the preamble hereof. Any party may change the address to which
notices or other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth:
If to Parent:
FEI Company
7451 NW Evergreen Parkway
Hillsboro, OR 97124
Attn: Chief Executive Officer
Telecopy: (503) 640-7570
<PAGE> 8
With a copy to:
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Attn: Stephen E. Babson
Telecopy: (503) 220-2480
If to the Company:
Micrion Corporation
One Corporation Way
Peabody, MA 01960
Attn: Chief Executive Officer
Telecopy: (978) 531-9648
With a copy to:
Choate, Hall & Stewart
Exchange Place, 53 State Street
Boston, MA 02109
Attn: Roslyn G. Daum
Telecopy: (617) 248-4000
11. PARTIES IN INTEREST. This Agreement shall inure to the benefit of and
be binding upon the parties named herein and their respective successors and
assigns; PROVIDED, HOWEVER, that such successor in interest or assigns shall
agree to be bound by the provisions of this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the Company or Parent, or their successors or assigns, any rights or remedies
under or by reason of this Agreement.
12. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the Merger
Agreement and the other documents referred to therein, contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous agreements and understandings, oral
or written, with respect to such transactions. This Agreement may not be
changed, amended or modified orally, but may be changed only by an agreement in
writing signed by the party against whom any waiver, change, amendment,
modification or discharge may be sought.
13. ASSIGNMENT. No party to this Agreement may assign any of its rights or
obligations under this Agreement without the prior written consent of the other
party hereto, except that Parent may assign its rights and obligations hereunder
to any of its direct or
<PAGE> 9
indirect wholly owned subsidiaries (including Newco), but no such transfer shall
relieve Parent of its obligations hereunder if such transferee does not perform
such obligations.
14. HEADINGS. The section headings herein are for convenience only and
shall not affect the construction of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon (regardless of the laws that
might otherwise govern under applicable Oregon principles of conflicts of law).
17. TERMINATION. The right to exercise the Option granted pursuant to this
Agreement shall terminate at the earlier of (i) the Effective Time (as defined
in the Merger Agreement); (ii) upon termination of the Merger Agreement OTHER
THAN a termination of the Merger Agreement described in Section 5.2.2 of the
Merger Agreement; and (iii) 180 days after a termination of the Merger Agreement
described in Section 5.5.2 of the Merger Agreement (the date referred to in
clause (iii) being hereinafter referred to as the "OPTION TERMINATION DATE");
provided that, if the Option cannot be exercised or the Shares cannot be
delivered to Parent upon such exercise because the conditions set forth in
Section 2(a) or (b) hereof have not yet been satisfied, the Option Termination
Date shall be extended until thirty days after such impediment to exercise or
delivery has been removed.
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Shares.
18. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, of the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
19. PUBLIC ANNOUNCEMENT. Parent shall consult with the Company and the
Company shall consult with Parent before issuing any press release with respect
to the initial announcement of this Agreement, the Option, the Merger Agreement
or the transactions contemplated hereby and neither party shall issue any such
press release prior to such
<PAGE> 10
consultation except as may be required by law or the applicable rules and
regulations of the Nasdaq National Market or any listing agreement with the
NASD.
IN WITNESS WHEREOF, Parent and the Company have caused this Agreement to be
duly executed and delivered on the day and year first above written.
[SIGNATURE PAGE FOLLOWS]
<PAGE> 11
MICRION CORPORATION
__________________________________
By:
Title:
FEI COMPANY
__________________________________
By:
Title:
