[Letterhead of Veeco Instruments Inc.]
March 5, 1997
Mr. James C. Wyant
President and CEO
Wyko Corporation
2650 E. Elvira Road
Tucson, AZ 85706
Dear Jim,
This letter is intended to summarize our discussions regarding a possible
acquisition by Veeco Instruments Inc. (The "Buyer") of the stock of Wyko
Corporation (the "Company") from the Company's stockholders (The "Sellers").
PART ONE
The parties wish to commence negotiating a definitive written acquisition
agreement providing for the acquisition (a "Definitive Agreement").
Based on the information currently known to the Buyer, it is proposed that
the Definitive Agreement include the following terms:
1. BASIC TRANSACTION
The Buyer would acquire all of the stock of the Company for the consideration
(the "Consideration") set forth in Paragraph 2 below in a transaction that would
qualify to be accounted for as a "pooling-of-interests".
2. CONSIDERATION
The Consideration for all of the stock of the Company would be the issuance to
the Sellers of three million (3,000,000) shares of common stock, of the Buyer
(the "Shares").
3. LIQUIDITY
The Buyer and the Sellers will mutually agree upon a liquidity program with
respect to the Shares.
4. MANAGEMENT STOCK OPTIONS
It is contemplated that the key employees of the Company will receive stock
options of the Buyer pursuant to the Buyer's employee stock option plan.
5. EMPLOYMENT AGREEMENTS
At the Closing certain key management would execute employment agreements in a
form satisfactory to such individuals and the Buyer.
6. OTHER TERMS
The Buyer and the Sellers would make comprehensive representations and
warranties to each other, and each would provide comprehensive covenants,
indemnities and other protections for the benefit of the other. The consummation
of the contemplated transactions by the Buyer and the Sellers would be subject
to the satisfaction of various conditions, including:
(a) approval of the shareholders of the Buyer. Such approval would be
obtained pursuant to a proxy statement prepared and distributed to the
shareholders of the Buyer in accordance with the Securities Exchange Act of
1934, as amended:
(b) approval of the Board of Directors of the Buyer;
(c) approval of the Board of Directors of the Company;
(d) obtaining required approvals of all appropriate regulatory agencies;
(e) termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act");
(f) satisfactory completion of due diligence review by the Buyer and the
Sellers;
(g) execution of a Definitive Agreement and any documents ancillary
thereto:
(h) the issuance of a fairness opinion relating to the transaction by the
Buyer's investment bankers; and
(i) the issuance of an opinion by Ernst & Young LLP that the transaction
would be accounted for as a pooling of interests.
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PART TWO
The following paragraphs of this letter (the "Binding Provisions") are the
legally binding and enforceable agreements of the Buyer and each Seller.
1. ACCESS
During the period from the date this letter is signed by the Sellers (the
"Signing Date") until the date on which either Party provides the other Party
with written notice that negotiations toward a Definitive Agreement are
terminated (the "Termination Date"), the Sellers will afford the Buyer full and
free access to the Company and its subsidiaries, its personnel, properties,
contacts, books and records, and all other documents and data. The Buyer will
afford the Seller the ability to perform due diligence on the Buyer as may
mutually be agreed to.
2. EXCLUSIVE DEALING
Until the later of (i) 90 days after the Signing Date and (ii) the Termination
Date:
(a) the Sellers will not and will cause the Company not to, directly or
indirectly, through any representative or otherwise, solicit or entertain offers
from, negotiate with or in any manner encourage, discuss, accept, or consider
any proposal of any other person relating to the acquisition of the Company or
any of its subsidiaries, their assets or business, in whole or in part, whether
directly or indirectly, through purchase, merger, consolidation, or otherwise
(other than sales of inventory in the ordinary course); and
(b) the Sellers will immediately notify the Buyer regarding any contact
between the Sellers, the Company or their respective representatives and any
other person regarding any such offer or proposal or any related inquiry.
3. CONFIDENTIALITY
Except as and to the extent required by law, each party will not disclose or
use, and will direct its representatives not to disclose or use to the detriment
of any other party, any confidential information with respect to the Company or
the Buyer furnished, or to be furnished, by any party or their respective
representatives to any other party or its representatives at any time or in any
manner other than in connection with its evaluation of the transaction proposed
in this letter. For purposes of this Paragraph, "Confidential Information" means
any information about the Company or the Buyer stamped "confidential" or
identified in writing as such to the parties promptly following its disclosure,
unless (i) such information is already known to the other party or its
representatives or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such other party or
its representatives, (b) the use of such information is necessary or appropriate
in making any filing or obtaining any consent or
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approval required for the consummation of the acquisition, or (c) the furnishing
or use of such information is required by or necessary or appropriate in
connection with legal proceedings. Upon the written request of any party, the
other parties will promptly return to the requesting party or destroy any
Confidential Information in its possession and certify in writing to the
requesting party that it has done so.
4. DISCLOSURE
Except as and to the extent required by law, without the prior written consent
of the other party, neither the Buyer nor the Sellers will, and each will direct
its representatives not to make, directly or indirectly, any public comment,
statement, or communication with respect to, or otherwise to disclose or to
permit the disclosure of the existence of discussions regarding, a possible
transaction between the Parties or any of the terms, conditions, or other
aspects of the transaction proposed in this letter. If a party is required by
law to make any such disclosure, it must first provide to the other party the
content of the proposed disclosure, the reasons that such disclosure is required
by law, and the time and place that the disclosure will be made. Notwithstanding
the foregoing, it is contemplated that a joint press release substantially in
the form of Exhibit A hereto will be issued upon the execution of this letter.
5. COSTS
The Buyer and the Company will be responsible for and bear all of its own costs
and expenses (including any broker's or finder's fees and the expenses of its
representatives) incurred at any time in connection with pursuing or
consummating the Possible Acquisition. Notwithstanding the preceding sentence,
the Buyer will pay the HSR Act filing fee.
6. CONSENTS
During the period from the Signing Date until the Termination Date, the Buyer
and each Seller will cooperate with each other and proceed, as promptly as is
reasonably practical, to prepare and to file the notifications required by the
HSR Act.
7. ENTIRE AGREEMENT
The Binding Provisions constitute the entire agreement between the parties, and
supersede all prior oral or written agreements, understandings, representations
and warranties, and course of conduct and dealing between the parties on the
subject matter hereof. Except as otherwise provided herein, the Binding
Provisions may be amended or modified only by a writing executed by all of the
parties.
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8. GOVERNING LAW
The Binding Provision will be governed by and construed under the laws of the
State of New York without regard to the conflicts of all principles thereof.
9. JURISDICTION: SERVICE OF PROCESS
Any action of proceeding seeking to enforce any provisions of, or based on any
right arising out of, this letter may be brought against any of the parties in
the courts of the State of New York, County of New York, or, if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of New York, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
10. TERMINATION
The Binding Provisions will automatically terminate on June 3, 1997 and may be
terminated earlier upon written notice by either party to the other party
unilaterally, for any reason or no reason, with or without cause, at any time;
provided, however, that the termination of the Binding Provisions will not
affect the liability of a party for breach of any of the Binding Provisions
prior to the termination. Upon termination of the Binding Provisions, the
parties will have no further obligations hereunder, except as stated in
Paragraphs 2, 3, 4, 5, 7, 8, 9, 10, 11, and 12 of this Part Two, which will
survive any such termination.
11. COUNTERPARTS
This letter may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this letter and all of which, when taken
together, will be deemed to constitute one and the same agreement.
12. NO LIABILITY
The paragraphs and provisions of Part One of this letter do not constitute and
will not give rise to any legally binding obligation on the part of any of the
parties or the Company. Moreover, except as expressly provided in the Binding
Provisions (or as expressly provided in any binding written agreement that the
parties may enter into in the future), no past or future action, course of
conduct, or failure to act relating to the acquisition, or relating to the
negotiation of the terms of the acquisition or any Definitive Agreement, will
give rise to or serve as a basis for any obligation or other liability on the
part of the parties or the Company.
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If you are in agreement with the foregoing, please sign and return one copy of
this letter agreement, which thereupon will constitute our agreement with
respect to its subject matter.
Very truly yours,
VEECO INSTRUMENTS INC.
By: /s/ Edward H. Braun
-----------------------------------
Name: Edward H. Braun
Title: President and CEO
Duly executed and agreed
on March 5, 1997.
WYKO CORPORATION
By: /s/ James C. Wyant
-------------------
Name: James C. Wyant
Title: President and CEO
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