AGREEMENT AND PLAN OF MERGER
AMONG
FEI COMPANY,
MICRION CORPORATION,
AND
MC ACQUISITION CORPORATION
DECEMBER 3, 1998
TABLE OF CONTENTS
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.....................10
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................................12
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
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2.1.15 Absence of Certain Changes or Events................16
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........................19
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.....................23
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..........................24
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...................................27
2.2.15 Absence of Certain Changes or Events................27
2.2.16 Undisclosed Liabilities.............................28
2.2.17 Insurance...........................................28
2.2.18 Intellectual Property...............................29
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.......................................30
2.2.23 Year 2000 Compliance................................30
2.2.24 Financing...........................................30
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2.2.25 Product Warranties and Liabilities..................30
2.2.26 Inventories.........................................31
2.2.27 Receivables.........................................31
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......................................34
3.2 No Solicitation.............................................34
3.3 Access......................................................35
3.4 Xxxx Xxxxx Xxxxxx...........................................36
3.5 Other Government Consents...................................36
3.6 Reasonable Best Efforts; No Inconsistent Action.............36
3.7 Changed Circumstances.......................................37
3.8 Fees and Expenses...........................................37
3.9 Rights Agreement............................................37
3.10 Options and Warrants........................................37
3.11 Press Releases..............................................37
3.12 Indemnification; Directors' and Officers' Insurance.........37
3.13 Other Agreements and Related Documents......................39
3.13.1 Stock Option Agreement..............................39
3.13.2 Employment Agreement................................39
3.13.3 Assignment of Patents and Trademarks................39
3.14 FEI Board of Directors......................................39
3.15 Golden Parachutes...........................................39
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................................40
4.1.3 No Prohibitions.....................................40
4.1.4 No Suits............................................40
4.1.5 Nasdaq Listing......................................40
4.1.6 Form S-4............................................40
4.1.7 Regulatory Burdens..................................40
4.2 Conditions to Obligations of FEI............................41
4.2.1 Representations and Warranties; Covenants...........41
4.2.2 Dissenting Shares...................................42
4.2.3 Delivery of Exhibits and Micrion Officers'
Certificates......................................42
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4.3 Conditions to Obligations of Micrion........................42
4.3.1 Representations and Warranties; Covenants...........42
4.3.2 Deposit of Certificates and Funds...................43
4.3.3 Delivery of Certificates by FEI.....................43
ARTICLE 5 TERMINATION .........................................43
5.1 Termination by Mutual Consent...............................43
5.2 Termination by Either Party.................................43
5.3 Termination by Micrion......................................44
5.4 Termination by FEI..........................................44
5.5 Effect of Termination.......................................45
ARTICLE 6 GENERAL PROVISIONS................................................46
6.1 Nonsurvival of Representations and Warranties...............46
6.2 Further Action..............................................46
6.3 Entire Agreement............................................46
6.4 Assignment..................................................47
6.5 Binding Effect; No Third Party Benefit......................47
6.6 Waiver......................................................47
6.7 Governing Law...............................................47
6.8 Severability................................................47
6.9 Time of Essence.............................................47
6.10 Counterparts................................................47
6.11 Amendments..................................................47
6.12 Notices.....................................................48
6.13 Voting Agreements...........................................48
6.14 Schedules...................................................48
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EXHIBITS AND SCHEDULES
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 XXX Xxxxx, 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:
Term Definition Section
"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)
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"Indebtedness" 2.1.30
"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 2
"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
"Xxxxxxx" 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.
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
2
misleading, Micrion or FEI, as the case may be, shall promptly notify the
other 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
4
Micrion Shares ("Dissenting Shares") will not be converted as described in
Section 1.6 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 1.6. 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 Xxxxx'x 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
5
thereof) for the Merger Consideration. Upon surrender of a 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 1.9.4 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.
6
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, 000 XX Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000, 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
7
its subsidiaries taken as a whole; provided, however, that an adverse event,
change 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;
8
(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 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 Xxxx-Xxxxx-Xxxxxx
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.
9
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 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.
10
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.
11
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, 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
12
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 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
13
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.
(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
14
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;
(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
15
Micrion, there are not and have not been any excess deferrals or excess
contributions under any ERISA Plan that have not been corrected.
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;
16
(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 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");
17
(iii) all copyrights in both published works and
unpublished works that are material to Micrion's businesses
(collectively, "Copyrights"); and
(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.
18
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 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
19
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, 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
20
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 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;
21
(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 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
22
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.
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
23
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 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
24
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 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.
25
(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 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
26
respect to any FEI Compensation or Benefit Plan. FEI does not have any
"potential 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;
27
(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 Xxxxxxx & Company, Inc. ("Xxxxxxx"), 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 Xxxxxxx, 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 Xxxxxxx, subject to prior review and consent
by Xxxxxxx, 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 FEI, and
29
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
32
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
33
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 confidentiality agreement in
34
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 XXXX XXXXX XXXXXX. 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 contemplated by this Agreement, and
the parties will diligently and expeditiously prosecute and cooperate fully in
the
35
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 4
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 3.6 will limit the rights of the
parties under Article 4 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 requirements of the Nasdaq National Market or the SEC and then only after
prior consultation with the other party.
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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 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
37
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
Xxxxxxxx X. Xxxxxxxx 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
Xxxxxxxx X. Xxxxxxxx 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
40
an amount equal to the Indebtedness in excess of $16,844,000 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).
(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
Xxxxxxxx Xxxxxxxx, 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
41
an earlier date); and (ii) FEI shall have performed and complied in all material
respects 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
42
(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.
43
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 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),
44
only with respect to termination by FEI because Micrion, any of
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.
45
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
46
waive one or more of its rights under this Agreement only in a written
instrument signed by such party.
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: Xx. Xxxx Xxxxxxxxxx
FEI Company
0000 XX Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
To Micrion: Xx. Xxxxxxxx X. Xxxxxxxx
Micrion Corporation
Xxx Xxxxxxxxxxx Xxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to: Xx. Xxxxxx X. Xxxx
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place, 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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
47
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.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
the day and year first written above.
FEI COMPANY MICRION CORPORATION
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------ -------------------------
(Signature) (Signature)
Name: Xxxx Xxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer Title: Chief Executive Officer
MC ACQUISITION CORPORATION
By: /s/ Xxxx Xxxxxxxxxx
------------------------
(Signature)
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
48
