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Credit Facility Agreement - FEI CO - 3-30-2000

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Credit Facility Agreement - FEI CO - 3-30-2000 Powered By Docstoc
					EXHIBIT 10.12 CREDIT FACILITY AGREEMENT THIS AGREEMENT is made this February 25, 1999 between: 1. FEI COMPANY, having its registered seat at 7451 N.W. Evergreen Parkway, Hillsboro, Oregon, United States of America, 97124-5830, 2. PHILIPS ELECTRON OPTICS INTERNATIONAL B.V., having its registered seat at Achtse Weg Noord 5, 5651 GG, Eindhoven, the Netherlands, (the "Borrowers") and 3. KONINKLIJKE PHILIPS ELECTRONICS N.V., having its registered seat at Groenewoudseweg 1, 5621 BA Eindhoven, the Netherlands (Lender") WHEREAS The Borrowers desire to obtain from the Lender and the Lender has agreed to grant to the Borrowers, a credit facility of 50 million US-Dollars (or its equivalent from time to time in Optional Currencies). NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. DEFINITIONS Words and expressions used in this Agreement shall have the following meaning unless the context otherwise requires: "AGREEMENT" means the present agreement entered into by the Borrowers and the Lender, including the Schedule attached thereto, and any amendment thereto; "AVAILABLE FACILITY" means the Facility minus the Outstanding Amounts; "AVAILABLE REVOLVING CREDIT FACILITY" means the Revolving Credit Facility minus the Outstanding Amounts; "BORROWERS" means either FEI or PEOI, or FEI and PEOI jointly; "BUSINESS DAY" means a day on which banks are open for business of the nature contemplated in this Agreement in Amsterdam and in the financial center of the relevant currency (the relevant financial center for EUR is deemed to be London);

EXHIBIT 10.12 "CURRENT ACCOUNT" means the current account (also within the Philips organization referred to as "Intercompany Bank Account" or "IBA") of PEOI denominated in EUR with the Lender; "DOLLAR AMOUNT" means in relation to a Revolving Advance: (i) if the request for a Revolving Amount is denominated in US-Dollars, the amount specified in that request; or (ii) if such request is denominated in an

EXHIBIT 10.12 "CURRENT ACCOUNT" means the current account (also within the Philips organization referred to as "Intercompany Bank Account" or "IBA") of PEOI denominated in EUR with the Lender; "DOLLAR AMOUNT" means in relation to a Revolving Advance: (i) if the request for a Revolving Amount is denominated in US-Dollars, the amount specified in that request; or (ii) if such request is denominated in an Optional Currency, the US-Dollars equivalent (at the time the Lender receives such request) of the amount specified in the request; "DRAWDOWN DATE" means, in respect of a Revolving Advance, the date of the making thereof as (deemed) specified in the relevant request; "EUR" means the lawful currency of countries participating in the third stage of the Economic and Monetary Union; "EVENT OF DEFAULT" means any of the events set out in Clause 14 hereunder; "FACILITY" means the US-Dollars credit facility set out in Clause 2.2 hereunder; "FEI" means FEI Company; "FEI GROUP" means FEI and its subsidiaries; "FINAL MATURITY DATE" means the third anniversary of this Agreement (February 26, 2002); "INTEREST DETERMINATION DATE" means, in respect of an Interest Period, the day which is two Business Days prior to the first day of such Interest Period; "INTEREST PAYMENT DATE" means, in relation to any Revolving Advance, the last day of an Interest Period relative thereto; "INTEREST PERIOD" means, in relation to any Revolving Advance, a period as selected or deemed to have been selected by the Borrowers in accordance with Clause 5.1 hereunder; "JPY" means the lawful currency of Japan; "LENDER" means Koninklijke Philips Electronics N.V.; "NLG" means the lawful legal tender of the Netherlands; "NOTICE" means a notice of drawdown of a Revolving Advance or a notice requesting a next Interest Period substantially in the form as set out in Schedule A hereto; "MAXIMUM AMOUNT" means the maximum amount of the Facility as specified in Clause 2.1 hereunder and as may be amended in accordance with Clause 15.1 hereof;

EXHIBIT 10.12 "OPTIONAL CURRENCIES" means Dutch Guilders (NLG), Euro (EUR) or Japanese Yen (JPY); "OUTSTANDING ACCOUNTS" the sum of all Revolving Advances outstanding, the debit balance on the Current Account and the interest due "PEOP" means Philips Electron Optics International BV;

EXHIBIT 10.12 "OPTIONAL CURRENCIES" means Dutch Guilders (NLG), Euro (EUR) or Japanese Yen (JPY); "OUTSTANDING ACCOUNTS" the sum of all Revolving Advances outstanding, the debit balance on the Current Account and the interest due "PEOP" means Philips Electron Optics International BV; "REQUIRED AMOUNT" means (i) in the case of US-Dollars drawn under the Revolving Credit Facility, a minimum of 10,000 US-Dollars and a higher whole multiple of US-Dollars 10,000, and (ii) in case of an Optional Currency, such amount as is agreed between the Borrowers and the Lender, or failing agreement, the equivalent of the Required Amounts relevant to the Revolving Credit Facility for US-Dollars; "REVOLVING ADVANCE" means any revolving advance made or to be made available by the Lender to the Borrowers in any one currency in accordance with the provisions of this Agreement and for the time being outstanding under the Revolving Credit Facility, "REVOLVING CREDIT FACILITY" means the credit facility as specified in Clause 2.2 hereof; "TERM" means in relation to a Revolving Advance, the period for which it is to be borrowed, being one, three or six months, ending not later than the Final Maturity Date; "US-DOLLAR" AND "USD" mean the lawful currency of the United States of America. 2. THE FACILITY 2.1 AMOUNT The Lender grants to the Borrowers a total credit facility of 50 million US-Dollars (or its equivalent from time to time in Optional Currencies). This amount may be reduced by FEI in accordance with Clause 15 hereof (partial cancellation). 2.2 REVOLVING CREDIT FACILITY AND CURRENT ACCOUNT The Facility consists of a revolving credit facility for the Maximum Amount (or its equivalent from time to time in Optional Currencies) (the "Revolving Credit Facility") including a credit facility on the Current Account for the maximum of 10 million US-Dollars. If there is a debit balance on the Current Account, the Available Revolving Credit Facility will be reduced accordingly. The Outstanding Amounts will at no time exceed the Maximum Amount. PEOI has entered into an agreement with the Lender specifying the terms and conditions applicable to the Current Account.

EXHIBIT 10.12 2.3 PROCEEDS The proceeds of the Facility will be used for general corporate business purposes of the FEI Group only and not for the purpose of acquisitions or take-overs. 2.4 COMMITMENT FEE FEI will pay to Lender a commitment fee of 0.25 per cent (25 basis points) per annum. from day to day during the period starting February 25, 1999 and ending on the Final Maturity Date on the amount to be calculated as follows: the Maximum Facility minus US-Dollars 10 million minus the sum of the Revolving Advances

EXHIBIT 10.12 2.3 PROCEEDS The proceeds of the Facility will be used for general corporate business purposes of the FEI Group only and not for the purpose of acquisitions or take-overs. 2.4 COMMITMENT FEE FEI will pay to Lender a commitment fee of 0.25 per cent (25 basis points) per annum. from day to day during the period starting February 25, 1999 and ending on the Final Maturity Date on the amount to be calculated as follows: the Maximum Facility minus US-Dollars 10 million minus the sum of the Revolving Advances outstanding. If the aggregate of the Revolving Advances outstanding exceeds or equals the Maximum Amount minus 10 million US-Dollars, no commitment fee has to be paid. The commitment fee will be paid to the bank account of the Lender at the end of each period of six (6) months, for the first time in July 1999 (so the first commitment fee will be paid over a period of six months less 55 days) within 5 Business Days upon the written request of the Lender. Such request will contain a specification of the fee to be paid. 3. CONDITIONS PRECEDENT The several obligations of the Lender under this Facility shall be expressly subject to the Lender having received, in form and substance satisfactory to the Lender, not later than the date set out in Clause 4.1 on which the Borrower gives a Notice for the drawdown hereunder, evidence of authority of those persons authorized to execute, deliver and perform this Agreement and any notices required hereunder on behalf of the Borrowers. 4. DRAWDOWN OF REVOLVING ADVANCES 4.1 NOTICE Revolving Advances will be made by the Lender to FEI or PEOI at the request of the Borrowers (or any one of them), if the following additional conditions are fulfilled: I. The Lender has received from the relevant Borrower not later than 10:00 a.m. (Amsterdam time) on the third Business Day before the Drawdown Date of the Revolving Advance, a written notice specifying: (a) the Drawdown Date of the Revolving Advance, which must be a Business Day ultimately one month before the Final Maturity Date; (b) its amount, which may not result in a breach of Clause 2.2 and so that (i) its Dollar Amount must be equal to or less than the Available Revolving Credit Facility and (ii) if its Dollar Amount is less than the Available Revolving Credit Facility, the amount of that Revolving Advance must be the Required Amount;

EXHIBIT 10.12 (c) its currency (in US-Dollars or one of the Optional currencies); (d) its Term, which must be in accordance with clause 4.2; (e) the name of the borrower (either FEI or PEOI); (f) details of the bank and account to which FEI wishes the proceeds of that Revolving Advance to be made available. II. All representations and warranties in this Agreement have been complied with in all material respects as at the

EXHIBIT 10.12 (c) its currency (in US-Dollars or one of the Optional currencies); (d) its Term, which must be in accordance with clause 4.2; (e) the name of the borrower (either FEI or PEOI); (f) details of the bank and account to which FEI wishes the proceeds of that Revolving Advance to be made available. II. All representations and warranties in this Agreement have been complied with in all material respects as at the date of the request of the Revolving Advance, and would be correct in all material respects if repeated on the Drawdown Date of that Revolving Advance, by reference to the circumstances then existing. III. No Event of Default has occurred on or before the Drawdown Date of that Revolving Advance and is continuing or will occur as a result of making that Revolving Advance. IV. The request is duly signed by an authorized person or persons as specified in Schedule B hereto. Borrowers shall notify the Lender in writing of any change in or withdrawal of the authorization of any person mentioned on Schedule B, notwithstanding their entry in public registers, in default of which notification such change or withdrawal cannot be invoked against the Lender. 4.2 TERM The Term of a Revolving Advance shall begin on the Drawdown Date of that Revolving Advance and shall have a duration of one, three or six months, or a period of less than six months ending on the Final Maturity Date, as selected by the relevant Borrower in the notice requesting that Revolving Advance, except that the Borrowers may not select a Term ending after the Final Maturity Date. 4.3 SUBSTITUTION OF BALANCE ON CURRENT ACCOUNT INTO REVOLVING ADVANCE Revolving Advances will be deemed requested by PEOI and deemed made by the Lender to PEOI if the debit balance on the Current Account is exceeding the equivalent of US-Dollars 10 million for more than 5 consecutive Business Days under the following conditions: I. (a) the Drawdown Date of the Revolving Advance, being a Business Day before the Final Maturity Date, is the day on which the balance on the Current Account is exceeding the equivalent of US-Dollars 10 million for 5 consecutive Business Days (the "Overdrawn Date");

EXHIBIT 10.12 (b) the amount of such Revolving Advance will be a minimum of EUR 10,000, or such higher whole multiple of EUR 10,000 that the amount of the Revolving Advance will not exceed the debit balance on the Current Account on the Overdrawn Date minus the equivalent of US-Dollars 10 million, (c) its Term will be one month; provided that such Revolving Advance does not result in a breach of Clause 2.2; II. All representations and warranties in this Agreement have been complied with in all material respects as at the date of the request of the Revolving Advance, and would be correct in all material respects if repeated on the Drawdown Date of that Revolving Advance, by reference to the circumstances then existing. III. No Event of Default has occurred on or before the Drawdown Date of that Revolving Advance and is

EXHIBIT 10.12 (b) the amount of such Revolving Advance will be a minimum of EUR 10,000, or such higher whole multiple of EUR 10,000 that the amount of the Revolving Advance will not exceed the debit balance on the Current Account on the Overdrawn Date minus the equivalent of US-Dollars 10 million, (c) its Term will be one month; provided that such Revolving Advance does not result in a breach of Clause 2.2; II. All representations and warranties in this Agreement have been complied with in all material respects as at the date of the request of the Revolving Advance, and would be correct in all material respects if repeated on the Drawdown Date of that Revolving Advance, by reference to the circumstances then existing. III. No Event of Default has occurred on or before the Drawdown Date of that Revolving Advance and is continuing or will occur as a result of making that Revolving Advance. If a Revolving Advance is made in accordance with this Clause, the Current Account will be credited on the Overdrawn Date for the amount of such Revolving Advance deemed made. 5. INTEREST 5.1 INTEREST PERIODS REVOLVING ADVANCES Each Revolving Advance shall bear interest calculated by reference to the successive Term of that Revolving Advance. FEI shall notify its selection as to the duration of each Interest Period, in the Notice relative to the Revolving Advance (in case of the first Interest period of the Revolving Advance) and subsequently by Notice in writing to the Lender to be received by it not later than 10:00 am. (Amsterdam time) on the third Business Day prior to the first day of each subsequent Interest Period, provided that if FEI fails to give notice of its selection in relation to the duration of an Interest Period, such duration shall be of one month and further provided that: (a) the first Interest Period in respect of each Revolving Advance shall commence on the Drawdown Date referred to in Clause 4.1 sub I and shall end upon the expiry of the period selected or otherwise determined in accordance with this sub-Clause; (b) each subsequent Interest Period shall commence on the last day of the preceding Interest Period, (c) if any Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day, unless such succeeding Business Day falls in another calendar month in which event that Interest Period shall end upon the immediately preceding Business Day;

EXHIBIT 10.12 (d) if an Interest Period is extended or shortened by application of the preceding paragraph, the following Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so extended or shortened; (e) any Interest Period which commences on a day of a calendar month (whether the last day or another day) for which there is no numerically corresponding day in the month in which the relevant Interest Period should end shall, subject to paragraph (_), end on the last Business Day of such month; and (f) no Interest Period shall extend beyond the Final Maturity Date. 5.2 INTEREST REVOLVING ADVANCES The rate of interest applicable to each Revolving Advance for each Interest Period relative thereto shall be the

EXHIBIT 10.12 (d) if an Interest Period is extended or shortened by application of the preceding paragraph, the following Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so extended or shortened; (e) any Interest Period which commences on a day of a calendar month (whether the last day or another day) for which there is no numerically corresponding day in the month in which the relevant Interest Period should end shall, subject to paragraph (_), end on the last Business Day of such month; and (f) no Interest Period shall extend beyond the Final Maturity Date. 5.2 INTEREST REVOLVING ADVANCES The rate of interest applicable to each Revolving Advance for each Interest Period relative thereto shall be the aggregate of the rate per annum which appears on the Interest Determination Date in London on the relevant page of the Telerate Service designated for the display of London Interbank Offered Rate for that Term in the currency in which the Revolving Advance to which that Term relates is to be denominated plus 0.75% (75 basis points). Interest in relation to a Revolving Advance shall be payable on each Interest Payment Date relative thereto. Interest shall accrue from day to day and shall be computed on the basis of a year of 360 days. 5.3 INTEREST CURRENT ACCOUNT The rate of debit interest applicable to the Current Account shall be the aggregate of the rate per annum. which appears on the relevant page of the Telerate Service designated for the display of London Interbank Offered Rate for a period of one week in the currency in which the Current Account is denominated plus 0.75% (75 basis points). The rate of credit interest on a day to day basis applicable to the Current Account shall be the "LIBID" rate for a period of one week in the currency in which the Current Account is denominated (approximately London Interbank Offered Rate minus 0.125% (12.5 basis points). Interest in relation to the Current Account shall be automatically debited or credited as the case may be from or to the Current Account at the end of each month (a month in this respect win be a month as determined by the 'Philips Concern Calendar', attached as Schedule F). On the request of the Borrowers, the Lender will inform them timely of such periods not covered by Schedule F. The Lender will give a specification of the interest (to be) paid. Interest shall accrue from day to day and shall be computed on the basis of a year of 365 days.

EXHIBIT 10.12 5.4 DETERMINATION OF INTEREST Each determination of the rate of interest by the Lender hereunder shall be in writing and shall in the absence of manifest error be conclusive and binding upon the Borrowers. 5.5 DEFAULT INTEREST The rate of interest on a day to day basis applicable to a Revolving Advance not paid when (declared) due hereunder shall be the aggregate of the interest rate applicable to such Revolving Advance plus one percent (100 basis points).

EXHIBIT 10.12 5.4 DETERMINATION OF INTEREST Each determination of the rate of interest by the Lender hereunder shall be in writing and shall in the absence of manifest error be conclusive and binding upon the Borrowers. 5.5 DEFAULT INTEREST The rate of interest on a day to day basis applicable to a Revolving Advance not paid when (declared) due hereunder shall be the aggregate of the interest rate applicable to such Revolving Advance plus one percent (100 basis points). The rate of interest on a day to day basis applicable to any other amount not paid when (declared) due hereunder shall be the aggregate of the interest rate specified in Clause 5.3 plus one percent (100 basis points). 6. REPAYMENT 6.1 NORMAL REPAYMENT The Facility shall be repaid in the respective currencies of the Revolving Advances in full on the Final Maturity Date, unless it is prepaid earlier in accordance with the provisions of this Agreement. 6.2 PREPAYMENT (a) The Borrowers may prepay any part of all of the outstanding Revolving Advances in the several currencies at any one time, without premium or penalty at any time, if they give to the Lender not less than 5 Business Days written notice of the Revolving Advance(s) to be prepaid and the date and amount of the prepayment. Any such prepayment must be accompanied by accrued interest on the amount prepaid and by any other sum then due pursuant to this Agreement. (b) Any notice of intention to make a prepayment shall be irrevocable and shall oblige the Borrowers to make such prepayment on the relevant Interest Prepayment Date. (c) As the Credit Facility is revolving, any amount prepaid before the Final Termination Date will remain available for reborrowing on the terms and conditions of this Agreement. 7. PAYMENTS All payments to be made hereunder by the Borrowers or the Lender shall be. made in the relevant currency to the relevant account on the date upon which the RELEVANT PAYMENT is due by credit to the account numbers as specified in Schedule C HERETO, OR, as the case may be, such other accounts and/or banks as the parties may from time to time agree upon.

EXHIBIT 10.12 8. TAXES Subject as hereinafter provided, all payments to be made by the Borrowers hereunder (whether of principal, interest or otherwise) shall be made FREE AND clear of and without any deductions or withholdings whatsoever, save and to the extent required by applicable law. If the Borrowers are compelled by law to make any such deduction or withholding, they shall ENSURE THAT such deduction or withholding does not exceed the minimum liability therefor and shall promptly pay to the Lender such additional amount as is necessary to ensure that the net amount received and retained by the Lender is equal to the amount payable by the Borrowers had there been no deduction or withholding.

EXHIBIT 10.12 8. TAXES Subject as hereinafter provided, all payments to be made by the Borrowers hereunder (whether of principal, interest or otherwise) shall be made FREE AND clear of and without any deductions or withholdings whatsoever, save and to the extent required by applicable law. If the Borrowers are compelled by law to make any such deduction or withholding, they shall ENSURE THAT such deduction or withholding does not exceed the minimum liability therefor and shall promptly pay to the Lender such additional amount as is necessary to ensure that the net amount received and retained by the Lender is equal to the amount payable by the Borrowers had there been no deduction or withholding. 9. ILLEGALITY Notwithstanding any other provision herein, if any change in law, regulation or treaty or in the official interpretation or application thereof by any competent authority or any competent court shall make it unlawful for the Lender to make or to fund or continue to fund a Revolving Advance or part THEREOF, THEN the Lender shall be entitled by written notice thereof to the Borrowers, to declare that its participation in the relevant Revolving Advance shall be terminated forthwith or upon expiry of any legally admissible delay, whereupon the Borrowers shall prepay such Revolving Advance TOGETHER WITH accrued interest thereon, whereupon the Facility shall be reduced to the then outstanding Revolving Advances. Notwithstanding the provisions of the Dutch law in this respect, the Lender will make its best efforts in the occurrence of any of the events mentioned in this Clause 9 to secure, in agreement with the Borrowers, a satisfactory solution which would make the reduction of the Facility unnecessary. 10. REPRESENTATIONS AND WARRANTIES The Borrowers hereby REPRESENT AND warrant to and for the benefit of the Lender that: 10.1 FEI is a legal entity duly incorporated in the State of Oregon and validly organized under the laws of the State of Oregon and has the corporate power to carry on its business as it is now being conducted; 10.2 PECII is a limited liability body duly incorporated in the Netherlands and validly existing under the laws of the Netherlands and has the corporate power to carry on its business as it is now being conducted;

EXHIBIT 10.12 10.3 each of the Borrowers has the corporate power and authority to enter into and perform its obligations under this Agreement and has taken all necessary action to authorize the making of the drawdown upon the terms and conditions of this Agreement and to authorize the execution and performance of this Agreement in accordance with its respective terms; 10.4 this Agreement constitutes legal, valid and binding obligations of the Borrowers fully enforceable against them in accordance with its respective terms and the terms thereof have been (or will be where applicable) complied with by the Borrowers in all material respects, the same will constitute legal, valid and binding obligations of the Borrowers enforceable in accordance with its terms subject to the laws of bankruptcy and other laws affecting the rights of creditors generally, 10.5 the execution, delivery and performance by the Borrowers of this Agreement do not and will not violate in any respect any provision of the articles of incorporation of FEI and/or PEOI; 10.6 no litigation, arbitration or administrative proceedings are at present current or pending or, to the knowledge of the Borrowers, threatened which would have a material adverse effect on their ability to perform and comply with their respective obligations under this Agreement;

EXHIBIT 10.12 10.3 each of the Borrowers has the corporate power and authority to enter into and perform its obligations under this Agreement and has taken all necessary action to authorize the making of the drawdown upon the terms and conditions of this Agreement and to authorize the execution and performance of this Agreement in accordance with its respective terms; 10.4 this Agreement constitutes legal, valid and binding obligations of the Borrowers fully enforceable against them in accordance with its respective terms and the terms thereof have been (or will be where applicable) complied with by the Borrowers in all material respects, the same will constitute legal, valid and binding obligations of the Borrowers enforceable in accordance with its terms subject to the laws of bankruptcy and other laws affecting the rights of creditors generally, 10.5 the execution, delivery and performance by the Borrowers of this Agreement do not and will not violate in any respect any provision of the articles of incorporation of FEI and/or PEOI; 10.6 no litigation, arbitration or administrative proceedings are at present current or pending or, to the knowledge of the Borrowers, threatened which would have a material adverse effect on their ability to perform and comply with their respective obligations under this Agreement; 10.7 no Event of Default and no other event which, with the giving of notice or lapse of time or both, might constitute an Event of Default has occurred and is continuing. 11. DEFINITIONS WITH RESPECT TO FINANCIAL RATIOS The following expressions used in this Clause II and Clause 13 shall be construed in accordance with US Generally Accepted Accounting Principles but so that: "INTEREST EXPENSE" in relation to any fiscal year of FEI Group, means the consolidated interest expense under US Generally Accepted Accounting Principles as shown or determined from the Financial Statements for such fiscal year, and in relation to the 12 month period ending at the end of each quarter means the consolidated interest expense under US Generally Accepted Accounting Principles as shown or determined from the Financial Statements for such period. "INCOME FROM OPERATIONS" in relation to any fiscal year of FEI Group, means income (loss) Before Taxes plus or minus the sum of the amounts for such fiscal year included in determining such income (loss) Before Taxes of (A) consolidated interest expense, (B) amortization of intangibles arising from the merger of PEOI with FEI and the acquisition of Micrion by FEI Group for that fiscal year and (C) unusual and non-recurring items for that fiscal year including (a) write-off of in-process research and development, (b) other non cash costs of mergers and acquisitions activity relating to the merger of PEOI with FEI and the acquisition of Micrion (c) restructuring and reorganization costs (d) other non-recurring non-cash losses/gains and charges

EXHIBIT 10.12 (e) extraordinary items (i) cumulative effects of a change in accounting principles, all as determined in accordance with US Generally Accepted Accounting Principles, and in relation to the 12 month period ending at the end of each quarter, means income (loss) Before Taxes plus or minus the sum of the amounts for the previous four quarters included in determining such income (loss) Before Taxes of (A) consolidated interest expense, (B) amortization of intangibles arising from the merger of PEOI with FEI and the acquisition of Micrion by FEI Group for the previous four quarters and (C) unusual and non-recurring for the previous four quarters items including (a) write-off of in-process research and development, (b) other non cash costs of mergers and acquisitions activity relating to the merger of PEOI with FEI and the acquisition of Micrion (c) restructuring and reorganization costs (d) other non-recurring non-cash losses/gains and charges (e) extraordinary items (ii) cumulative effects of a change in accounting principles, all as determined in accordance with US Generally Accepted Accounting Principles, all as shown in or determined from the Financial Statements for the relevant period.

EXHIBIT 10.12 (e) extraordinary items (i) cumulative effects of a change in accounting principles, all as determined in accordance with US Generally Accepted Accounting Principles, and in relation to the 12 month period ending at the end of each quarter, means income (loss) Before Taxes plus or minus the sum of the amounts for the previous four quarters included in determining such income (loss) Before Taxes of (A) consolidated interest expense, (B) amortization of intangibles arising from the merger of PEOI with FEI and the acquisition of Micrion by FEI Group for the previous four quarters and (C) unusual and non-recurring for the previous four quarters items including (a) write-off of in-process research and development, (b) other non cash costs of mergers and acquisitions activity relating to the merger of PEOI with FEI and the acquisition of Micrion (c) restructuring and reorganization costs (d) other non-recurring non-cash losses/gains and charges (e) extraordinary items (ii) cumulative effects of a change in accounting principles, all as determined in accordance with US Generally Accepted Accounting Principles, all as shown in or determined from the Financial Statements for the relevant period. "STOCKHOLDERS' EQUITY" at any time means the aggregate (expressed in US-Dollars) at such time of the total shareholders' equity as shown in or determined by the Financial Statements for the relevant period. "TOTAL CAPITALIZATION" at anytime means the aggregate at such time of Total Debt and Stockholders' Equity as shown in or determined by the Financial Statements for the relevant period. "TOTAL DEBT" at any time means the aggregate (expressed in US-Dollars) of (i) all long term liabilities expressed as being due after one or more years from the relevant balance sheet date, excluding for this purpose all such liabilities classified as "other liabilities (non-interest-bearing)" or "deferred income taxes" plus (ii) all current liabilities but excluding for this purpose all such liabilities classified as "non-interest-bearing debt"; all as shown in or determined from the Financial Statements for the relevant period. "AUDITORS' CERTIFICATE" means a certificate by the auditors of FEI as to the amount of Interest Expense, Income from Operations, Stockholders' Equity, and Total Debt at any date and shall be final and conclusive except for manifest error. "FINANCIAL STATEMENTS" mean the annual audited consolidated financial statements of FEI Group or the quarterly unaudited consolidated financial statements of FEI Group as filed at the SEC (form "10 Q" or "10K"), all expressed in US-Dollars and prepared in accordance with US Generally Accepted Accounting Principles.

EXHIBIT 10.12 12. COVENANTS 12.1 FEI hereby covenants and agrees, so long as any amounts remain outstanding hereunder or, in the event that there are no such amounts outstanding, so long as this Agreement remains in effect that: (a) as soon as available but not later than 50 days after the end of each quarter (beginning with the current one) and with the exception of each fourth quarter of the year, FEI will deliver to the Lender the Financial Statements as at the end of and for that quarter together with copies of the related SEC report "10 Q"; (b) as soon as available but not later than 95 days after the end of each fiscal year (beginning with the current one), FEI will deliver to the Lender its Financial Statements (and one copy of its annual report) as at the end of and for that financial year together with copies of the related SEC reports "10 K" and the related auditors' report. 12.2 Borrowers hereby covenant and agree, so long as any amounts remain outstanding hereunder or, in the event that there are no such amounts outstanding, so long as this Agreement remains in effect that: (a) each of the Borrowers shall duly perform and observe all its obligations under this Agreement and promptly inform the Lender of any circumstance having or which could have a material adverse effect on its ability to perform its obligations hereunder,

EXHIBIT 10.12 12. COVENANTS 12.1 FEI hereby covenants and agrees, so long as any amounts remain outstanding hereunder or, in the event that there are no such amounts outstanding, so long as this Agreement remains in effect that: (a) as soon as available but not later than 50 days after the end of each quarter (beginning with the current one) and with the exception of each fourth quarter of the year, FEI will deliver to the Lender the Financial Statements as at the end of and for that quarter together with copies of the related SEC report "10 Q"; (b) as soon as available but not later than 95 days after the end of each fiscal year (beginning with the current one), FEI will deliver to the Lender its Financial Statements (and one copy of its annual report) as at the end of and for that financial year together with copies of the related SEC reports "10 K" and the related auditors' report. 12.2 Borrowers hereby covenant and agree, so long as any amounts remain outstanding hereunder or, in the event that there are no such amounts outstanding, so long as this Agreement remains in effect that: (a) each of the Borrowers shall duly perform and observe all its obligations under this Agreement and promptly inform the Lender of any circumstance having or which could have a material adverse effect on its ability to perform its obligations hereunder, (b) the Borrowers shall notify the Lender in writing of any Event of Default and of the steps being taken to remedy such Event of Default forthwith upon becoming aware of the occurrence thereof. 13. GUARANTEE AND OTHER CONDITIONS The Borrowers acknowledge that the Lender has agreed to make the Facility available to the Borrowers in reliance on the following guarantee and covenants: 13.1 the Borrowers hereby jointly and severally unconditionally and irrevocably guarantee to the Lender due and punctual payment of the principal of and interest on the Revolving Advances and the Current Account and all other sums due under this Agreement when and as the same shall become due and payable, whether a Revolving Advance is drawn by FEI or PEOI.

EXHIBIT 10.12 13.2 FEI shall be subrogated to all rights of the Lender against PEOI in respect of any amounts paid by FEI pursuant to the provisions of this guarantee, provided, however, that FEI shall not be entitled to enforce or to receive any payments arising out of, or based upon, such rights of subrogation. until all the principal of and interest on the Revolving Advances and the Current Account shall have been paid in full or duly provided for. 13.3 the Borrowers jointly and severally undertake that, so long as any sum remains to be payable by it under this Agreement: (a) their payment obligations under this Agreement rank and will at all times rank at least equally and ratable in all respects (Pari passu) with all their other unsecured and unsubordinated indebtedness for borrowed money except for such indebtedness preferred only by mandatory provisions of law. (b) they will not create or have outstanding any security for their indebtedness for borrowed money on or over the Borrowers' assets except for: (i) the securities listed in Schedule D hereto (ii) any security existing on or over assets acquired by the Borrowers from a Subsidiary not created in contemplation of or in connection with the acquisition of those assets by the Borrowers, (iii) to the extent that any off-balance sheet financing of itself constitutes security over any assets of the Borrowers, that security over such assets, (iv) to the extent that any discounting, factoring or other disposal of any book debts or receivables of themselves constitutes security over such book debts or receivables, that security over such book debts or receivables, (v) securities directly relating

EXHIBIT 10.12 13.2 FEI shall be subrogated to all rights of the Lender against PEOI in respect of any amounts paid by FEI pursuant to the provisions of this guarantee, provided, however, that FEI shall not be entitled to enforce or to receive any payments arising out of, or based upon, such rights of subrogation. until all the principal of and interest on the Revolving Advances and the Current Account shall have been paid in full or duly provided for. 13.3 the Borrowers jointly and severally undertake that, so long as any sum remains to be payable by it under this Agreement: (a) their payment obligations under this Agreement rank and will at all times rank at least equally and ratable in all respects (Pari passu) with all their other unsecured and unsubordinated indebtedness for borrowed money except for such indebtedness preferred only by mandatory provisions of law. (b) they will not create or have outstanding any security for their indebtedness for borrowed money on or over the Borrowers' assets except for: (i) the securities listed in Schedule D hereto (ii) any security existing on or over assets acquired by the Borrowers from a Subsidiary not created in contemplation of or in connection with the acquisition of those assets by the Borrowers, (iii) to the extent that any off-balance sheet financing of itself constitutes security over any assets of the Borrowers, that security over such assets, (iv) to the extent that any discounting, factoring or other disposal of any book debts or receivables of themselves constitutes security over such book debts or receivables, that security over such book debts or receivables, (v) securities directly relating to advance payments, received with a maximum of USD 3 million at any time, (vi) any other security created or outstanding with the prior consent of the Lender, (vii) any rights of set-off arising by operation of law only or in the ordinary course of banking other than rights of set-off arising pursuant to an agreement relating to indebtedness for borrowed money having an initial maturity of more than 1 year entered into after the date of this Agreement. (c) FEI will with each set of the Financial Statements delivered under Clause 12 sub 1 deliver to the Lender an Auditors' Certificate confirming compliance with Clause 13.4 as at the end of a fiscal year or a certificate signed by the Chief Executive Officer or Chief Financial Officer of FEI confirming compliance with Clause 13.4. Each such certificate will set out in reasonable detail and in a form reasonably satisfactory to the Lender the computations necessary to demonstrate such compliance. A draft of such certificate is attached as Schedule E.

EXHIBIT 10.12 13.4 The Borrowers will jointly and severally ensure that, based on the Financial Statements and per the date to which they relate, as any sum remains to be lent to or remains payable under this Agreement: (a) the Stockholders' Equity will in the year 1999 not be less than US-Dollars 92 million; (b) the Stockholders' Equity will in the year 2000 and 2001 not be less than US Dollars 100 million; (c) the ratio of Stockholders Equity to Total Capitalization will be more than 1 to 2; (d) the ratio of Income from Operations to Interest Expense will not in respect of any financial year of the FEI Group, or any 12 month period ending on the last day of a quarter, be less than 4 for the first and second quarter of 1999 and thereafter not less than 6. If FEI Group acquires assets for an amount exceeding 25% of its Stockholders' Equity according to its latest Financial Statements before such acquisition, the Borrowers may request the Lender to adjust the minimum ratios mentioned under 13.4 sub (d) to reflect such acquisition. 13.5 FEI will not dispose and will procure that none of its subsidiaries (including PEO) will, except with the consent of the Lender (disregarding disposals in the ordinary course of business and any sale, lease, transfer or other disposal of any of its revenues or its assets on an arm's length basis for fair market value and the payment of lawful dividends) sell, lease, transfer, lend (other than the lending of cash to any of its subsidiaries) or otherwise

EXHIBIT 10.12 13.4 The Borrowers will jointly and severally ensure that, based on the Financial Statements and per the date to which they relate, as any sum remains to be lent to or remains payable under this Agreement: (a) the Stockholders' Equity will in the year 1999 not be less than US-Dollars 92 million; (b) the Stockholders' Equity will in the year 2000 and 2001 not be less than US Dollars 100 million; (c) the ratio of Stockholders Equity to Total Capitalization will be more than 1 to 2; (d) the ratio of Income from Operations to Interest Expense will not in respect of any financial year of the FEI Group, or any 12 month period ending on the last day of a quarter, be less than 4 for the first and second quarter of 1999 and thereafter not less than 6. If FEI Group acquires assets for an amount exceeding 25% of its Stockholders' Equity according to its latest Financial Statements before such acquisition, the Borrowers may request the Lender to adjust the minimum ratios mentioned under 13.4 sub (d) to reflect such acquisition. 13.5 FEI will not dispose and will procure that none of its subsidiaries (including PEO) will, except with the consent of the Lender (disregarding disposals in the ordinary course of business and any sale, lease, transfer or other disposal of any of its revenues or its assets on an arm's length basis for fair market value and the payment of lawful dividends) sell, lease, transfer, lend (other than the lending of cash to any of its subsidiaries) or otherwise dispose of, by one or more transactions or series of transactions (whether related or not), the whole or any material part of its respective business, revenues or assets ("material" in this context means a sale, lease, transfer, loan or disposal of any part of its business, assets or revenues which, by itself (in the case of a single transaction) or which aggregated (in the case of a number of related transactions), is more than 10 percent of the revenues or assets of the FEI Group taken as a whole or, in any case, the disposal of which (alone or so aggregated) would have a material adverse effect on any Borrower's ability to perform or comply with its obligations under this Agreement). 13.6 FEI will ensure that there is no material change in the nature of the business of the FEI Group taken as a whole (whether by a single transaction or a number of related or unrelated transactions, whether at one time or over a period of time and whether by disposal, acquisition or otherwise) which has or could have a material adverse effect on any Borrower's ability to perform and comply with its obligations under this Agreement.

EXHIBIT 10.12 14. EVENTS OF DEFAULT The following are Events of Default: (a) Non-payment: The Borrowers do not pay in the manner provided in this Agreement (i) any principal payable under it when due, unless the Borrowers satisfy the Lender that non-payment is due solely to administrative error (whether by the Borrowers or a bank involved in transferring funds to the Lender) and payment is made within 5 Business Days after written notice of that non-payment has been given to it by the Lender or (ii) any other sum payable under it within 10 Business Days after written notice of that non-payment has been given to it by the Lender. (b) Breach of Representation or Warranty: Any representation or warranty by the Borrowers pursuant to Clause 10 is not complied with in any material respect or is or proves to have been incorrect, in any material respect, when made. (c) Breach of Other Obligation: The Borrowers do not perform or comply in any material respect with any one or more of their other obligations under this Agreement and, if that default is capable of remedy, it is not remedied within 30 days after written notice of that default has been given to it by the Lender.

EXHIBIT 10.12 14. EVENTS OF DEFAULT The following are Events of Default: (a) Non-payment: The Borrowers do not pay in the manner provided in this Agreement (i) any principal payable under it when due, unless the Borrowers satisfy the Lender that non-payment is due solely to administrative error (whether by the Borrowers or a bank involved in transferring funds to the Lender) and payment is made within 5 Business Days after written notice of that non-payment has been given to it by the Lender or (ii) any other sum payable under it within 10 Business Days after written notice of that non-payment has been given to it by the Lender. (b) Breach of Representation or Warranty: Any representation or warranty by the Borrowers pursuant to Clause 10 is not complied with in any material respect or is or proves to have been incorrect, in any material respect, when made. (c) Breach of Other Obligation: The Borrowers do not perform or comply in any material respect with any one or more of their other obligations under this Agreement and, if that default is capable of remedy, it is not remedied within 30 days after written notice of that default has been given to it by the Lender. (d) Cross Default: Any other indebtedness of the Borrowers in respect of borrowed money and forming part of its Total Debt (i) is payable (whether automatically under the provisions of any agreement relating to that indebtedness or as a result of any declaration or the Eke made under any such agreement) before its normal maturity by reason of any actual default or event of default, however described, and is not paid on becoming so payable or within any applicable grace period unless it is being contested in good faith by appropriate means or (ii) is not paid by reason of the actual default of the Borrowers when due nor within any applicable grace period in any agreement relating to that indebtedness unless it is being contested in good faith by appropriate means, except in any such case where the Borrowers is prevented, directly or indirectly, by any government or other authority from fulfilling the relevant obligation. However, no Event of Default will occur under this Clause 14 (d) unless the amount of the indebtedness for borrowed money in respect of which any event mentioned in this Clause 14 (d) has occurred equals or exceeds US-Dollars 5 million or its equivalent in other currencies (as reasonably determined by the Lender).

EXHIBIT 10.12 (e) INSOLVENCY: FEI or PEOI is (or is deemed by law or a court to be) insolvent (including a faillissement (within the meaning of the Netherlands' bankruptcy act) or unable to pay its debts or one of the Borrowers stops, suspends or threatens to stop or suspend payment of all or a material part of its indebtedness (including a surse'ance van betaling, within the meaning of the Netherlands' bankruptcy act), begins negotiations or takes any other step with a view to the deferral, rescheduling or other readjustment of all of its indebtedness (or of any material part which it will or might otherwise be unable to pay when due), proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors or a moratorium is agreed or declared in respect of or affecting all or a material part of the indebtedness of the Borrowers. (f) WINDING-UP: An order is made or an effective resolution is passed for the winding-up of one of the Borrowers. (g) ANALOGOUS EVENTS: Any event occurs which, under the law of any relevant jurisdiction, has an analogous or equivalent effect to any event mentioned in Clause 14 (e). (h) CHANGE OF CONTROL: The Lender has given written notice to FEI that it ceases to own directly or indirectly more than 50 per cent of the issued equity share capital of FEI. However, no Event of Default will occur under this clause 14 (h) unless 120 days have elapsed since the Lender ceased to own directly or indirectly more than 50 per cent of the issued equity share capital of FEI, or since the relevant written notice, whichever is latest.

EXHIBIT 10.12 (e) INSOLVENCY: FEI or PEOI is (or is deemed by law or a court to be) insolvent (including a faillissement (within the meaning of the Netherlands' bankruptcy act) or unable to pay its debts or one of the Borrowers stops, suspends or threatens to stop or suspend payment of all or a material part of its indebtedness (including a surse'ance van betaling, within the meaning of the Netherlands' bankruptcy act), begins negotiations or takes any other step with a view to the deferral, rescheduling or other readjustment of all of its indebtedness (or of any material part which it will or might otherwise be unable to pay when due), proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors or a moratorium is agreed or declared in respect of or affecting all or a material part of the indebtedness of the Borrowers. (f) WINDING-UP: An order is made or an effective resolution is passed for the winding-up of one of the Borrowers. (g) ANALOGOUS EVENTS: Any event occurs which, under the law of any relevant jurisdiction, has an analogous or equivalent effect to any event mentioned in Clause 14 (e). (h) CHANGE OF CONTROL: The Lender has given written notice to FEI that it ceases to own directly or indirectly more than 50 per cent of the issued equity share capital of FEI. However, no Event of Default will occur under this clause 14 (h) unless 120 days have elapsed since the Lender ceased to own directly or indirectly more than 50 per cent of the issued equity share capital of FEI, or since the relevant written notice, whichever is latest. (i) CHANGE IN RELATIONSHIP BORROWERS: FEI ceases to own directly or indirectly 100 per cent of the issued equity share capital of PEOI, unless such reduction is approved beforehand in writing by the Lender. If at any time and for any reason (and whether within or beyond the control of any party to this Agreement) any Event of Default has occurred then at any time thereafter, the Lender shall by written notice to the Borrowers declare all Outstanding Amounts, all unpaid accrued interest or fees and any other sum then payable under this Agreement to be immediately due and payable, whereupon they shall become so due and payable, unless the event which constitutes the Event of Default is remedied before the Lender has sent the aforementioned notice and the Lender is informed of such remedy by the Borrowers in writing before the Lender sent such notice.

EXHIBIT 10.12 However, if the Event of Default as referred to under Clause 14 (e) or 14 (g) is capable of being cured, the Outstanding Amounts, all unpaid accrued interest or fees and any other sum then payable under this Agreement, shall become due and payable 5 days after the notice to declare all such amounts due and payable has been sent by the Lender, unless the Lender explicitly mentions a different period in such notice, and unless FEI Group did not meet the ratios mentioned in Clause 13.4, based on latest monthly management report as FEI submits to the Lender each month, in which case all amounts outstanding as referred to win become due and payable immediately. If an Event of Default as referred to under Clause 14 (e) or 14 (g) has occurred, no Revolving Advances or draw downs form the Current Account will be possible till such Event of Default is cured, unless approved by the Lender beforehand. At any time after such occurrence the Lender may, by notice in writing to the Borrowers, declare that the Facility is cancelled and that all amounts outstanding thereunder, if any, are immediately due and payable, together with interest thereon and any other costs, charges and expenses. Such declaration shall be effective forthwith. The Borrowers jointly and severally under-take to indemnify the Lender against any reasonable direct loss or expenses which any of them may sustain or incur as a consequence of the occurrence of any Event of Default hereunder. 15. CANCELLATION BY BORROWERS 15.1 NOTICE OF CANCELLATION

EXHIBIT 10.12 However, if the Event of Default as referred to under Clause 14 (e) or 14 (g) is capable of being cured, the Outstanding Amounts, all unpaid accrued interest or fees and any other sum then payable under this Agreement, shall become due and payable 5 days after the notice to declare all such amounts due and payable has been sent by the Lender, unless the Lender explicitly mentions a different period in such notice, and unless FEI Group did not meet the ratios mentioned in Clause 13.4, based on latest monthly management report as FEI submits to the Lender each month, in which case all amounts outstanding as referred to win become due and payable immediately. If an Event of Default as referred to under Clause 14 (e) or 14 (g) has occurred, no Revolving Advances or draw downs form the Current Account will be possible till such Event of Default is cured, unless approved by the Lender beforehand. At any time after such occurrence the Lender may, by notice in writing to the Borrowers, declare that the Facility is cancelled and that all amounts outstanding thereunder, if any, are immediately due and payable, together with interest thereon and any other costs, charges and expenses. Such declaration shall be effective forthwith. The Borrowers jointly and severally under-take to indemnify the Lender against any reasonable direct loss or expenses which any of them may sustain or incur as a consequence of the occurrence of any Event of Default hereunder. 15. CANCELLATION BY BORROWERS 15.1 NOTICE OF CANCELLATION FEI may declare on behalf of the Borrowers in writing that the Facility is cancelled in full or in part. If the Facility is cancelled in part, such notice shall state the new Maximum Amount (in US-Dollars). The cancellation will be effective on the date mentioned in the notice ("Cancellation date"). The Cancellation Date should be at least five (5) Business Days after receipt by the Lender of such notice. 15.2 PARTIAL CANCELLATION A partial cancellation will only become effective if on the Cancellation Date the Outstanding Amounts are less than the proposed amended Maximum Amount. 15.3 CANCELLATION IS IRREVOCABLE Any cancellation in accordance with this article 15 will be irrevocable. Any reduction of the Maximum Amount made in accordance with this Clause 15, will not be available for reborrowing.

EXHIBIT 10.12 16 MISCELLANEOUS 16.1 Expenses The Borrowers and the Lender will pay their own costs and expenses (including taxes thereon and legal fees) incurred in connection with the preparation, negotiation or entry into this Agreement and/or any amendment of, supplement to or waiver in respect of this Agreement. Where any repayment of principal by the Borrowers is made on a day which is not an Interest Payment Date, the Borrowers shall pay all such amounts as shall be necessary to compensate the Lender for any direct loss or expenses incurred by it for the remainder (if any) of the then current Interest Period(s) as a result of such prepayment unless such prepayment is made in compliance with Clause 6.2 sub (a) and the certificate of the Lender as to such amounts shall be conclusive and binding on the Borrowers save for manifest error. 16.2 LAW AND JURISDICTION

EXHIBIT 10.12 16 MISCELLANEOUS 16.1 Expenses The Borrowers and the Lender will pay their own costs and expenses (including taxes thereon and legal fees) incurred in connection with the preparation, negotiation or entry into this Agreement and/or any amendment of, supplement to or waiver in respect of this Agreement. Where any repayment of principal by the Borrowers is made on a day which is not an Interest Payment Date, the Borrowers shall pay all such amounts as shall be necessary to compensate the Lender for any direct loss or expenses incurred by it for the remainder (if any) of the then current Interest Period(s) as a result of such prepayment unless such prepayment is made in compliance with Clause 6.2 sub (a) and the certificate of the Lender as to such amounts shall be conclusive and binding on the Borrowers save for manifest error. 16.2 LAW AND JURISDICTION This Agreement shall be governed by and construed in all respects in accordance with the laws of The Netherlands. The Borrowers hereby irrevocably submit, in respect of any suit, action or proceeding arising out of this Agreement, to the non-exclusive jurisdiction of the Courts of the Netherlands. 16.3 REMEDIES AND OTHER WAIVERS Save as otherwise provided in this Agreement no failure to exercise nor any delay in exercising on the part of any Lender any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 16.4 ENTIRE AGREEMENT AND SCHEDULES This Agreement constitutes the entire Agreement between the parties with respect to the subject matter hereof as of the date of this Agreement and supersedes all prior agreements, negotiations, representations and proposals whether written or oral with respect to the credit facility contemplated herein. The Appendices to this Agreement are incorporated in full in this Agreement and form part thereof.

EXHIBIT 10.12 16.5 COMMUNICATIONS All notices (including Notices), requests, demands or other communications to or upon the parties hereto shall be in writing and deemed to have been duly given or made when delivered (in the case of personal delivery or letter) and when dispatched to the party to which the same is required or permitted to be Oven under this Agreement, addressed as follows:
IF TO THE LENDER: Koninklijke Philips Electronics N.V. as well as to: Corporate Treasury Department Attn: Mr. Jan Maarten Ingen Housz Building HRT-28 Rembrandt Tower, Amstelplein 1 P.O. Box 77900 1070 MX Amsterdam The Netherlands Tel: 3120 59 77 350 Fax: 3120 59 77 357 IF TO THE BORROWERS:

Koninkfijke Philips Electronics N.V. Corporate Treasury Department Attn: Mrs Laura Munisteri Building HRT-28 Rembrandt Tower, Amstelplein 1 P.O. Box 77900 1070 MX Amsterdam The Netherlands Tel: 3120 59 77 363 Fax: 3120 59 77 370

EXHIBIT 10.12 16.5 COMMUNICATIONS All notices (including Notices), requests, demands or other communications to or upon the parties hereto shall be in writing and deemed to have been duly given or made when delivered (in the case of personal delivery or letter) and when dispatched to the party to which the same is required or permitted to be Oven under this Agreement, addressed as follows:
IF TO THE LENDER: Koninklijke Philips Electronics N.V. as well as to: Corporate Treasury Department Attn: Mr. Jan Maarten Ingen Housz Building HRT-28 Rembrandt Tower, Amstelplein 1 P.O. Box 77900 1070 MX Amsterdam The Netherlands Tel: 3120 59 77 350 Fax: 3120 59 77 357 IF TO THE BORROWERS: FEI Company as well as to: Attn: Mr. Mark V. Allred 7451 N.W. Evergreen Parkway, Hillsboro, Oregon, 97124-5830, United States of America Tel: 1503 844 2666 Fax: 1503 726 2720 As well as to: Philips Electron Optics International B.V. and Attn: Mr. Michel G. van Woesik Achtseweg Noord 5 P.O. Box 218 5600 NID Eindhoven The Netherlands Tel: 3140 276 63 47 Fax: 3140 276 6164 Building AAE Philips

Koninkfijke Philips Electronics N.V. Corporate Treasury Department Attn: Mrs Laura Munisteri Building HRT-28 Rembrandt Tower, Amstelplein 1 P.O. Box 77900 1070 MX Amsterdam The Netherlands Tel: 3120 59 77 363 Fax: 3120 59 77 370

FEI Company Attn: Mr. Derek Garrett 7451 N.W. Evergreen Parkway, Hillsboro, Oregon, 97124-5830, United States of America Tel: 1503 844 2699 Fax: 1503 726 2720

Philips Electron Optics International B.V. Attn: Mr. Nico. H.W. Vrijenhoek Achtseweg Noord 5 P.O. Box 218 5600INID Eindhoven The Netherlands Tel: 3140 276 60 34 Fax: 3140 276 6164 Electron Optics International B.V.

17. NOVATION 17.1 This Agreement shall benefit and bind the parties, their assignees and their respective successors. Any reference in this Agreement to any party shall be construed accordingly.

EXHIBIT 10.12 17.2 The Borrowers may not novate or assign its rights or obligations under this Agreement without the prior written approval of the Lender. 17.2 The Lender may novate or assign its rights or obligations under this Agreement to a group company of the Lender (in the sense of article 2:24b of the Dutch Civil Code), unless such novation or assignment will have any adverse effects with respect to (one of) the Borrowers. In the event of an allowed novation or assignment the Borrowers will co-operate to effect such novation or assignment.

EXHIBIT 10.12 IN WITNESS WHEREOF the parties hereto have executed this Agreement as per February 17th, 1999.

EXHIBIT 10.12 17.2 The Borrowers may not novate or assign its rights or obligations under this Agreement without the prior written approval of the Lender. 17.2 The Lender may novate or assign its rights or obligations under this Agreement to a group company of the Lender (in the sense of article 2:24b of the Dutch Civil Code), unless such novation or assignment will have any adverse effects with respect to (one of) the Borrowers. In the event of an allowed novation or assignment the Borrowers will co-operate to effect such novation or assignment.

EXHIBIT 10.12 IN WITNESS WHEREOF the parties hereto have executed this Agreement as per February 17th, 1999.
FEI COMPANY __________________________________ V. Sarkissian Title: Chief Executive Officer Date: ____________________________________ Mr. Mark V. Allred Title: Corporate Controller Date:

PHILIPS ELECTRON OPTICS INTERNATIONAL B.V. __________________________________ Mr. Nico H. W. Vrijenhoek Title: General Manager Date: KONINKLIJKE PHILIPS ELECTRONICS N.V. __________________________________ Mr. J.M.L.M. Ingen Housz Title: Director Philips Corporate Treasury ____________________________________ Mr. Michel G. van Woesik Title: Treasurer Date:

Date:

EXHIBIT 10.14 CONFIDENTIAL MASTER DIVESTMENT AGREEMENT This master divestment agreement is made the 28th day of October, 1999 BY AND BETWEEN FEI Company, having its registered office at 7451 NW Evergreen Parkway, Hillsboro, Oregon, 97124-5830, USA ("FEI"), on the one hand, and Koninklijke Philips Electronics NV, having its registered office at Groenewoudseweg 2, Eindhoven, The Netherlands, acting also to the benefit of its worldwide subsidiaries ("Philips"), on the other hand. WHEREAS in October 1996 Philips Electron Optics BV ("PEO") and Philips Industrial Electronics International BV ("PIE") entered into a Heads of Agreement for the future distribution by PIE of PEO's products; subsequently FEI and Philips entered into various agreements on the basis of which (i) FEI acquired certain

EXHIBIT 10.12 IN WITNESS WHEREOF the parties hereto have executed this Agreement as per February 17th, 1999.
FEI COMPANY __________________________________ V. Sarkissian Title: Chief Executive Officer Date: ____________________________________ Mr. Mark V. Allred Title: Corporate Controller Date:

PHILIPS ELECTRON OPTICS INTERNATIONAL B.V. __________________________________ Mr. Nico H. W. Vrijenhoek Title: General Manager Date: KONINKLIJKE PHILIPS ELECTRONICS N.V. __________________________________ Mr. J.M.L.M. Ingen Housz Title: Director Philips Corporate Treasury ____________________________________ Mr. Michel G. van Woesik Title: Treasurer Date:

Date:

EXHIBIT 10.14 CONFIDENTIAL MASTER DIVESTMENT AGREEMENT This master divestment agreement is made the 28th day of October, 1999 BY AND BETWEEN FEI Company, having its registered office at 7451 NW Evergreen Parkway, Hillsboro, Oregon, 97124-5830, USA ("FEI"), on the one hand, and Koninklijke Philips Electronics NV, having its registered office at Groenewoudseweg 2, Eindhoven, The Netherlands, acting also to the benefit of its worldwide subsidiaries ("Philips"), on the other hand. WHEREAS in October 1996 Philips Electron Optics BV ("PEO") and Philips Industrial Electronics International BV ("PIE") entered into a Heads of Agreement for the future distribution by PIE of PEO's products; subsequently FEI and Philips entered into various agreements on the basis of which (i) FEI acquired certain electron optics business from Philips and (ii) ultimately Philips Industrial Electronics International BV acquired the majority of shares in FEI; WHEREAS subsequently PIE changed its corporate name into Philips Business Electronics International B.V. (PBE). WHEREAS FEI acquired the sales and service activities in certain countries but the parties agreed that in certain other countries, other companies within the Philips group of companies ("Philips Group") would continue to act as distributor for FEI's product range; WHEREAS the parties hereto have now agreed to transfer all sales and service activities carried on by the Philips Group at the date of this Agreement in all remaining countries to FEI and terminate any and all Philips

EXHIBIT 10.14 CONFIDENTIAL MASTER DIVESTMENT AGREEMENT This master divestment agreement is made the 28th day of October, 1999 BY AND BETWEEN FEI Company, having its registered office at 7451 NW Evergreen Parkway, Hillsboro, Oregon, 97124-5830, USA ("FEI"), on the one hand, and Koninklijke Philips Electronics NV, having its registered office at Groenewoudseweg 2, Eindhoven, The Netherlands, acting also to the benefit of its worldwide subsidiaries ("Philips"), on the other hand. WHEREAS in October 1996 Philips Electron Optics BV ("PEO") and Philips Industrial Electronics International BV ("PIE") entered into a Heads of Agreement for the future distribution by PIE of PEO's products; subsequently FEI and Philips entered into various agreements on the basis of which (i) FEI acquired certain electron optics business from Philips and (ii) ultimately Philips Industrial Electronics International BV acquired the majority of shares in FEI; WHEREAS subsequently PIE changed its corporate name into Philips Business Electronics International B.V. (PBE). WHEREAS FEI acquired the sales and service activities in certain countries but the parties agreed that in certain other countries, other companies within the Philips group of companies ("Philips Group") would continue to act as distributor for FEI's product range; WHEREAS the parties hereto have now agreed to transfer all sales and service activities carried on by the Philips Group at the date of this Agreement in all remaining countries to FEI and terminate any and all Philips distributorships and sell such sales and service activities as a going concern on the terms and conditions set out in this Agreement. NOW IT IS AGREED ARTICLE 1 DEFINITIONS In this Agreement the following expressions have the following meanings:

2
1.01 "AGREED FORM": a document in a form agreed between the parties prior to the entering into of this Agreement, the list of such documents being set forth in Article 4.02; "AGREEMENT": the contract made herein between the parties including the Schedules and the Agreed Form documents; "ASSETS": all assets and associated liabilities directly belonging to the Business, including trade accounts receivable, Books, Fixed Assets, Inventories, Contracts and Assigned IP; "ASSIGNED IP": the technical information and commercial know-how which is used at the date hereof in the Business and which, for the avoidance of doubt, excludes any patents or patent applications and trademarks but includes all customers' lists, vendor lists, telephone numbers, technical know how, trade secrets, tradenames and copyrights

1.02

1.03

1.04

2
1.01 "AGREED FORM": a document in a form agreed between the parties prior to the entering into of this Agreement, the list of such documents being set forth in Article 4.02; "AGREEMENT": the contract made herein between the parties including the Schedules and the Agreed Form documents; "ASSETS": all assets and associated liabilities directly belonging to the Business, including trade accounts receivable, Books, Fixed Assets, Inventories, Contracts and Assigned IP; "ASSIGNED IP": the technical information and commercial know-how which is used at the date hereof in the Business and which, for the avoidance of doubt, excludes any patents or patent applications and trademarks but includes all customers' lists, vendor lists, telephone numbers, technical know how, trade secrets, tradenames and copyrights in relation to the Business together with the exclusive right for FEI and any assignee to represent itself as carrying on the Business in succession to Philips; "BOOKS": the books, records, documents of title, Employee Records and other documents which Philips uses exclusively in the Business as at the date hereof; "BUSINESS": the marketing, sale and servicing of FEI products, as carried out at the date of this Agreement by various Local Philips Companies on the basis of distribution agreements; "CLOSING": the completion of the transactions contemplated hereunder, as described in Article 4 on the respective Closing Dates; "CLOSING ACCOUNTS" the accounts of the Business for the accounting reference period beginning on April 4, 1999 and ending on the respective Closing Date (comprising a NOC statement); "CLOSING AMOUNT": the amount indicated in Article 3.02 to be paid by FEI to Philips on the respective Closing Date, in accordance with Article 4; "CLOSING DATE": 5.00 p.m. on the date on which the respective Closing takes place; "CONSISTENTLY APPLIED" means the consistent application of Philips Accounting Policies by the individual business organizations within the Business in the national sales organizations ("NSO's"). Such application shall be measured on the basis of the application of Philips Accounting Policies by such individual business organizations in their financial statements for the financial year 1998, as consolidated in the audited financial statements of Koninklijke Philips Electronics N.V. for the financial year 1998. Should any of such individual business organizations have applied different methods for the same item, but both such methods are acceptable under Philips

1.02

1.03

1.04

1.05

1.06

1.07

1.08

1.09

1.10

1.11

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Accounting Policies, then the only criterion for measuring whether or not Philips Accounting Policies have been consistently applied shall be whether each of the individual business organizations in question has applied those accounting policies consistently with those used in its own financial figures which were consolidated in the Annual Report 1998 of Philips. 1.12 "CONTRACTS": all contracts (except employment agreements) to which a Local Philips Company is a party relating solely to the Business; "COUNTRY AGREEMENT": the respective contract to be entered into prior to the Closing Date for the agreed upon transfer of the Local Activities from the Local Philips Company to the Local FEI Company,

1.13

3
Accounting Policies, then the only criterion for measuring whether or not Philips Accounting Policies have been consistently applied shall be whether each of the individual business organizations in question has applied those accounting policies consistently with those used in its own financial figures which were consolidated in the Annual Report 1998 of Philips. 1.12 "CONTRACTS": all contracts (except employment agreements) to which a Local Philips Company is a party relating solely to the Business; "COUNTRY AGREEMENT": the respective contract to be entered into prior to the Closing Date for the agreed upon transfer of the Local Activities from the Local Philips Company to the Local FEI Company, substantially in the form set forth in Schedule 1.13; "CREDITORS": amounts owed by the Philips Group as at Closing solely in relation to the Business; "DEBTORS": amounts owed to the Philips Group as at Closing solely in relation to the Business; "DISCLOSURE LETTER": the letter (together with any schedules thereto) of even date making certain disclosures against the Warranties addressed by Philips to FEI for the purposes of Article 13.02; "EMPLOYEES": those persons employed in each of the Local Philips Companies as per October 25, 1999 and listed on Schedule 1.18 who devote at least 50% of their working hours to the Business; "EMPLOYEE RECORDS": all records in respect of the Employees; "FIXED ASSETS": all service tools, furniture and other equipment used exclusively by the Philips Group for the purposes of the Business as at Closing (as the same are listed at Schedule 1.20); "IFO" income from operation, excluding interest, taxation and extraordinary items as defined in the 1998 Annual Report of Philips; "INVENTORIES": all inventories of materials and work-in-progress, packaging, consumables, service parts and other stock-in-trade held by the Philips Group for the purposes of the Business as at Closing; "LIABILITIES": all liabilities solely relating to the Business including the Contracts but excluding real property leases and any tort liability arising from the actions of the Philips Group prior to or after the Closing and any breach of contract claim arising out of the actions of the Philips Group (unless due to the products purchased from

1.13

1.14

1.15

1.16

1.18

1.19 1.20

1.21

1.22

1.23

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the FEI Group) or a third party claiming damages solely because the Local Philips Company is selling the Business; 1.24 "LOCAL ACTIVITIES": the Assets, Business and Liabilities in a particular country which are to be transferred by a Local Philips Company to the respective Local FEI Company; "LOCAL FEI COMPANY": a legal entity indicated by FEI in the respective country to which all Local Activities are to be transferred (whether it be a FEI subsidiary or a third party); "LOCAL PHILIPS COMPANY": a (direct or indirect) subsidiary of Philips which has entered into a distributor/agency agreement with FEI or a subsidiary thereof, and which is to terminate such distributorship and to transfer the Local Activities on the basis of this Agreement (a list of countries is attached as Schedule 2.03);

1.25

1.26

4
the FEI Group) or a third party claiming damages solely because the Local Philips Company is selling the Business; 1.24 "LOCAL ACTIVITIES": the Assets, Business and Liabilities in a particular country which are to be transferred by a Local Philips Company to the respective Local FEI Company; "LOCAL FEI COMPANY": a legal entity indicated by FEI in the respective country to which all Local Activities are to be transferred (whether it be a FEI subsidiary or a third party); "LOCAL PHILIPS COMPANY": a (direct or indirect) subsidiary of Philips which has entered into a distributor/agency agreement with FEI or a subsidiary thereof, and which is to terminate such distributorship and to transfer the Local Activities on the basis of this Agreement (a list of countries is attached as Schedule 2.03); "NOC" shall have the meaning in accordance with the definition as mentioned in the 1998 Annual Report of Philips: (in)tangible fixed assets, provisions, current assets (excluding cash and cash equivalents), current liabilities (excluding deferred tax positions, pension liabilities and interest bearing debt). "PENSIONS SCHEDULE": the agreement relating to the pensions of those Employees who are members of a Pension Scheme at Closing; "PENSION SCHEME": a local Philips pension fund arrangement, if any, for the benefit of Employees of the respective Philips entities. "PHILIPS ACCOUNTING POLICIES" as set out in the Annual Report 1998 of Philips, and as applied by the Local Philips Companies; "PRINCIPAL CLOSING AMOUNT" means the amount to be paid for the Businesses to be transferred on the Principal Closing Date; "PRINCIPAL CLOSING DATE" means the date referenced in Article 4.01; "PURCHASE PRICE": the total purchase price for the Business, being the Principal Closing Amount and the Second Closing Amount, as may be adjusted pursuant to Article 5.1; "REFERENCE ACCOUNTS" the unaudited accounts of the Business for the accounting reference period which ended on the April 4, 1999 (comprising a NOC statement), annexed hereto as Schedule 1.34; "SECOND CLOSING AMOUNT" means the amount to be paid for the Businesses to be transferred on the Second Closing Date;

1.25

1.26

1.27

1.28

1.29

1.30

1.31

1.32 1.33

1.34

1.35

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1.36 1.37 1.38 "SECOND CLOSING DATE" means November 26, 1999; "SIGNING DATE": means the date on which this Agreement is signed. "SITE AND OTHER SERVICES AGREEMENT": the agreement relating to the provision of site and other services by a Local Philips Company to a Local FEI Company; "WARRANTIES": the warranties and representations contained in Schedule 1.39.

1.39

In this Agreement words importing the singular include the plural and vice versa and words importing gender include any other gender. The headings of Articles are for ease of reference and shall not affect the construction of this Agreement.

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1.36 1.37 1.38 "SECOND CLOSING DATE" means November 26, 1999; "SIGNING DATE": means the date on which this Agreement is signed. "SITE AND OTHER SERVICES AGREEMENT": the agreement relating to the provision of site and other services by a Local Philips Company to a Local FEI Company; "WARRANTIES": the warranties and representations contained in Schedule 1.39.

1.39

In this Agreement words importing the singular include the plural and vice versa and words importing gender include any other gender. The headings of Articles are for ease of reference and shall not affect the construction of this Agreement. References in this Agreement to Articles or Schedules are references to clauses of or schedules to this Agreement. The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement. ARTICLE 2 AGREEMENT FOR SALE AND TRANSFER
2.01 On the terms and subject to the conditions of this Agreement, Philips hereby sells and FEI hereby purchases and assumes the Business as a going concern and comprising the Assets and Liabilities. Each acquisition of any Local Activity shall be made on substantially the terms set out in the form of the model Country Agreement, subject to such modifications and amendments as may be necessary in the case of the respective countries, including any which may be necessary to take account of any legal requirements in a country in which the respective Business is conducted. Philips and FEI agree and warrant to procure 2.02.1 (in the case of the Philips Group) that its respective Local Philips Companies owning the respective Businesses will comply with the respective Country Agreement and become a signatory to such agreement prior to or on the respective Closing Date; (in the case of FEI) that its respective Local FEI Companies or appointed third parties through which FEI will acquire the respective Businesses will comply with the respective Country Agreement and become a signatory to such agreement prior to or on the respective Closing Date.

2.02

2.02.2

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2.03 The list of countries to be transferred on the Principal Closing Date and the Second Closing Date respectively is attached hereto as Schedule 2.03. The Local Philips Companies in these 27 countries will abstain from distributing electron miscroscopes in their respective territory for a period of three years as from the respective Closing Date.

ARTICLE 3 PURCHASE PRICE
3.01 In consideration for the purchase of the Business, FEI shall pay to Philips the Purchase Price.

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2.03 The list of countries to be transferred on the Principal Closing Date and the Second Closing Date respectively is attached hereto as Schedule 2.03. The Local Philips Companies in these 27 countries will abstain from distributing electron miscroscopes in their respective territory for a period of three years as from the respective Closing Date.

ARTICLE 3 PURCHASE PRICE
3.01 In consideration for the purchase of the Business, FEI shall pay to Philips the Purchase Price. On the Principal Closing Date , no payment shall take place and on the Second Closing Date, FEI shall pay the sum of the Principal Closing Amount (being EUR -142,000; minus one hundred and forty two thousand, excluding VAT) and the Second Closing Amount (being EUR 1,764,000; one million, seven hundred and sixty four thousand EURO's; excluding VAT; totalling 1,622,000 EURO) to Philips by electronic funds transfer in immediately available funds, to the credit of such account of Philips with a Dutch clearing bank as Philips shall notify in writing to FEI not less than five business days prior to each Closing. The allocation of the Purchase Price to the respective Local Activities is defined in Schedule 3.02. ARTICLE 4 CLOSING AND COVENANTS TO CLOSING DATE 4.01 The parties undertake commercial best endeavours to sign all Country Agreements by the end of business on October 28 and have the Principal Closing occur by no later than October 31, 1999 and the Second Closing by November 26, 1999. In case of a delay in a either South Africa or Brasil, Philips will continue as FEI's distributor in these countries through December 31, 1999. In case a Country Agreement for South Africa or Brasil is not signed as per December 31, 1999, the pertaining Local Activities will be terminated at the sole risk and expense of FEI and the Business will be deemed transferred as from December 31, 1999. In case of a delay in the other countries after the agreed Closing Date, Philips will continue to act for the sole risk and account of FEI, under sole managerial decision-making of FEI appointed personnel; Philips will cause such Business to continue operation in a normal, business like fashion in accordance with past practice and will not cause or permit its Businesses to enter into any transaction outside the ordinary course of business. However, in case within five working days from November 26 next, in any country a Closing can still take place, Philips will waive its rights as regards acting for the sole risk and

3.02

7
account of FEI and the Closing will take place (with retroactive effect) as of November 26. In case a certain Country Agreement is not signed as per December 31, 1999, the pertaining Local Activities will be terminated at the sole risk and expense of FEI and the Business will be deemed transferred as from the respective Closing Date. 4.02 On Closing, each party shall cause to be delivered to the other the following documents in the Agreed Form (with changes agreed to by the parties): *all applicable signed Country Agreements (facsimile copies thereof). *the list of Employees and if applicable, a Pensions Schedule *such other documents as are material to the Business and necessary to effect the transactions contemplated under this Agreement and each Country Agreement.

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account of FEI and the Closing will take place (with retroactive effect) as of November 26. In case a certain Country Agreement is not signed as per December 31, 1999, the pertaining Local Activities will be terminated at the sole risk and expense of FEI and the Business will be deemed transferred as from the respective Closing Date. 4.02 On Closing, each party shall cause to be delivered to the other the following documents in the Agreed Form (with changes agreed to by the parties): *all applicable signed Country Agreements (facsimile copies thereof). *the list of Employees and if applicable, a Pensions Schedule *such other documents as are material to the Business and necessary to effect the transactions contemplated under this Agreement and each Country Agreement. 4.03 Philips hereby agrees and declares that it will execute and deliver and procure the execution and delivery of any other documents and take any other steps as shall reasonably be required by FEI to vest the Local Activities in FEI or the Local FEI Company and transfer the Assigned IP. FEI hereby agrees and declares that it will execute and deliver and procure the execution and delivery of any other documents and take any other steps as shall reasonably be required by Philips to vest the Local Activities in FEI or the Local FEI Company. If and to the extent the Local Philips Company has provided its customers with a prepayment/ bankguarantee, then the Local FEI Company shall undertake to replace same by a similar prepayment/bankguarantee acceptable to the customer, or, in case customer refuses, provide same as a guarantee to the Local Philips Company. This agreement becomes effective and binding upon the parties as from the Signing Date. The Parties agree as follows with respect to the period between the Signing Date and the respective Closing Date: a. Each Party will file (and each Party will cause its Group Companies to file) any notification and report forms and related material that each Party or its Group Company may be required to file with any governmental authority, will use its best commercial efforts to obtain the expiration or early termination of the applicable waiting period (or any extension thereof) for any required pre-acquisition or pre-merger notice to such authority, and will make any further filings, including the submission of any additional information or documentary material, pursuant thereto that may be necessary. b. Philips will cause its Businesses to continue operation in a normal, business like fashion in accordance with past practice and will not cause or permit its Businesses to enter into any transaction outside the ordinary course of business. ARTICLE 5 REFERENCE ACCOUNTS AND CLOSING ACCOUNTS 5.01 REFERENCE ACCOUNTS

4.04

8
Philips has delivered to FEI the Reference Accounts of the Business as of April 4, 1999, attached hereto as Schedule 1.32. The financial statements referred in this Article 5.1 have been prepared by Philips. Since the Business has not been accounted for separately within Philips, FEI understands that these financial statements have required allocations in which Philips utilized its reasonable judgement. Philips represents that the Reference Accounts have been prepared in accordance with the Philips Accounting Policies Consistently Applied. 5.02 CLOSING ACCOUNTS Philips shall prepare the Closing Accounts using the Philips

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Philips has delivered to FEI the Reference Accounts of the Business as of April 4, 1999, attached hereto as Schedule 1.32. The financial statements referred in this Article 5.1 have been prepared by Philips. Since the Business has not been accounted for separately within Philips, FEI understands that these financial statements have required allocations in which Philips utilized its reasonable judgement. Philips represents that the Reference Accounts have been prepared in accordance with the Philips Accounting Policies Consistently Applied. 5.02 CLOSING ACCOUNTS Philips shall prepare the Closing Accounts using the Philips Accounting Policies Consistently Applied. Such Closing Accounts shall be delivered to FEI by Philips as soon as possible and in any event no later than sixty (60) days after the respective Closing Date. FEI shall be entitled to review the Closing Accounts in order to establish that the agreed accounting policies (the Philips Accounting Policies) have indeed been Consistently Applied. In case of such audit, FEI shall provide a copy of its full report to Philips within 60 days after receipt by FEI of the Closing Accounts. Unless FEI within twenty (20) days after delivery of said report, notifies Philips in writing that it disputes the Closing Accounts or any portion thereof and specifies the basis for its dispute, the Closing Accounts shall become final and binding on the parties for the purpose of determining the corrective payment as referred to in Article 5.3 hereof. 5.03 PROCEDURE FOR DISPUTE AND THE CLOSING ACCOUNTS In the event FEI notifies Philips in accordance with Article 5.2, that a dispute does exist in respect of the Closing Accounts and if FEI and Philips are unable to resolve such dispute within thirty (30) business days after any such notification has been given, the dispute shall be submitted to a jointly appointed independent auditor, ("Arbitrator") or in case of disagreement a request for the appointment shall be submitted to the President of the Dutch Accounting Federation. Should FEI notify Philips that a dispute does exist in respect of the Closing Accounts, then Philips shall be entitled to bring into the dispute any other items whether or not those items have been valued. A final settlement shall fully take these positions into account in determining the amount of the settlement or the award, as the case may be. Philips and FEI shall provide full cooperation to the Arbitrator and the Arbitrator shall be asked to make a final and binding determination as to the matter or matters in dispute within sixty (60) days after the dispute is presented to him (unless the Arbitrator and both parties agree that a longer period is appropriate) after its appointment. The Arbitrator shall use the Philips Accounting Policies, Consistently Applied as the basis for its determination, unless same have been explicitly deviated from in the main body of this Agreement.

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The Arbitrator shall confine himself only to unresolved adjustments. The Arbitrator, in reaching a decision, shall provide a written explanation of his conclusions to each Party, and his determination shall be conclusive and binding upon the Parties. The Arbitrator will allocate between claimant and defendant his fees and expenses. 5.04 CLOSING ACCOUNTS AND SETTLEMENT FOR THE PERIOD BETWEEN APRIL 4, 1999 AND CLOSING DATE FEI shall be entitled to all of the Assets and shall assume all of the Liabilities pertaining to each of the respective Business as of the respective Closing Date. In addition, the Parties will settle the NOC; the respective settlement shall be determined on the basis of the Reference Accounts and the Closing Accounts as set forth hereinafter. Once the respective Closing Accounts have been determined in accordance with the above, any differences in the NOC resulting from a

5.05

9
The Arbitrator shall confine himself only to unresolved adjustments. The Arbitrator, in reaching a decision, shall provide a written explanation of his conclusions to each Party, and his determination shall be conclusive and binding upon the Parties. The Arbitrator will allocate between claimant and defendant his fees and expenses. 5.04 CLOSING ACCOUNTS AND SETTLEMENT FOR THE PERIOD BETWEEN APRIL 4, 1999 AND CLOSING DATE FEI shall be entitled to all of the Assets and shall assume all of the Liabilities pertaining to each of the respective Business as of the respective Closing Date. In addition, the Parties will settle the NOC; the respective settlement shall be determined on the basis of the Reference Accounts and the Closing Accounts as set forth hereinafter. Once the respective Closing Accounts have been determined in accordance with the above, any differences in the NOC resulting from a comparison of the Reference Accounts and the respective Closing Accounts will give rise to an adjustment, pursuant to which: (i) Philips shall pay the difference to FEI in the event the NOC in the Closing Accounts is lower than the NOC in the Reference Accounts, such payment on an after tax basis only if Philips is obliged to pay the related taxes and the payment is not tax deductible; (ii) FEI shall pay the difference to Philips in the event the NOC in the Closing Accounts is higher than the NOC in the Reference Accounts, such payment on an after tax basis if Philips is obliged to pay the related taxes and the payment is not tax deductible. Any payment to be made hereunder is subject to an interest charge at EURIBOR (3 months rate at Closing) + 2% calculated as from the Closing Date until the day payment is actually received.

5.05

ARTICLE 6 CONTRACTS
6.01 As further consideration for the sale and purchase hereunder and subject as hereinafter mentioned, FEI undertakes with Philips: 6.01.1 that it will with effect from the Closing Date carry out, perform and complete all obligations and liabilities created by or arising under the Contracts; and that it will indemnify Philips and any other member of the Philips Group fully at all times from and against any and all actions,

6.01.2

10 proceedings, costs, claims, demands, expenses and liabilities which may be suffered or incurred by them as a result of (a) any failure by FEI so to do, (b) any tort or breach of contract claim due to the acts or omissions of the Local FEI Company, including but not limited to any breach of any representation, warranty or covenant set out herein. And Philips undertakes with FEI:
6.01.3 that it will indemnify FEI and any other member of the FEI Group fully at all times from and against any and all actions, proceedings, costs, claims, demands, expenses and liabilities which may be suffered or incurred by them as a result of any tort or breach of contract claim due to Philips or the Local Philips Company including but not limited to any breach of any representation, warranty or covenant set out herein.

10 proceedings, costs, claims, demands, expenses and liabilities which may be suffered or incurred by them as a result of (a) any failure by FEI so to do, (b) any tort or breach of contract claim due to the acts or omissions of the Local FEI Company, including but not limited to any breach of any representation, warranty or covenant set out herein. And Philips undertakes with FEI:
6.01.3 that it will indemnify FEI and any other member of the FEI Group fully at all times from and against any and all actions, proceedings, costs, claims, demands, expenses and liabilities which may be suffered or incurred by them as a result of any tort or breach of contract claim due to Philips or the Local Philips Company including but not limited to any breach of any representation, warranty or covenant set out herein.

6.02

If any claim shall be made by any third party (i) against Philips (or a Philips Company) in respect of which Philips (for the purpose of this Article deemed to include a Philips Company, as the case may be)

seeks to be indemnified under Article 6.01 or (ii) against FEI (or an FEI Company) in respect of which FEI (for the purpose of this Article deemed to include an FEI Company, as the case may be) seeks to be indemnified under Article 6.01 (hereinafter the party seeking to be indemnified being "the Indemnitee", and the party requested to indemnify "the Indemnitor"), then the Indemnitee shall promptly inform the Indemnitor and:
6.02.1 the Indemnitor shall have the right upon written notice to the Indemnitee to have the conduct of all litigation or other proceedings ("proceedings") in respect thereof and in that connection the Indemnitee shall give or cause to be given to the Indemnitor all such assistance as the Indemnitor may reasonably require in disputing any such claim and conducting proceedings and shall instruct such solicitors or other professional advisers as the Indemnitor may nominate (and to whom the Indemnitee shall have no reasonable objection) to act on behalf of the Indemnitee but in accordance with the instructions of the Indemnitor; the Indemnitor shall keep the Indemnitee fully and promptly informed of the conduct of any proceedings of which it has conduct, shall consult the Indemnitee on any matter which is or is likely to be material in relation thereto and shall take account of all reasonable requirements of the Indemnitee in relation thereto; neither the Indemnitee (where the Indemnitee is responsible for the conduct of any proceedings) nor the Indemnitor (where such proceedings are delegated to it in accordance with 6.02.1 above) shall

6.02.2

6.02.3

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make any settlement or compromise of the claim which is the subject of proceedings nor agree to any matter in the conduct of proceedings which may affect the amount of the liability in connection with such claim without the prior approval of the Indemnitor or, as the case may be, the Indemnitee , such approval not to be unreasonably withheld or delayed; 6.02.4 where the Indemnitor takes over the conduct of any proceedings pursuant to the provisions of 6.02.1 above, the Indemnitor shall indemnify and keep the Indemnitee indemnified in respect of all liabilities and out-of-pocket

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make any settlement or compromise of the claim which is the subject of proceedings nor agree to any matter in the conduct of proceedings which may affect the amount of the liability in connection with such claim without the prior approval of the Indemnitor or, as the case may be, the Indemnitee , such approval not to be unreasonably withheld or delayed; 6.02.4 where the Indemnitor takes over the conduct of any proceedings pursuant to the provisions of 6.02.1 above, the Indemnitor shall indemnify and keep the Indemnitee indemnified in respect of all liabilities and out-of-pocket costs, charges and expenses properly incurred by the Indemnitee as a consequence of such proceedings, save to the extent that such costs, charges or expenses are recovered from another party to the proceedings.

6.03

Insofar as the benefit or burden of any Contracts or the benefit of any other Asset, or component of Liability cannot effectively be assigned by Philips to FEI or assumed by FEI except by an agreement of novation with the agreement or consent of any other party thereto or of any third party and, even though the Local FEI Company has requested the Local Philips Company to procure same, such novation, agreement or consent shall not have taken place or have been obtained prior to Closing (each be a "Nonassigned Right"): 6.03.1 Philips shall use all reasonable endeavours in assisting FEI to procure that agreement or consent as aforesaid is obtained, wherever FEI requests same; unless and until the said Nonassigned Rights shall be novated or assigned as aforesaid Philips shall: 6.03.2.1 hold the same in trust for FEI and FEI shall (if sub-contracting is permissible and lawful under the Contract(s) in question) perform all the obligations of Philips thereunder as Philips' sub-contractor; and (so far as it lawfully may) give to FEI the benefit and burden to the same extent as if the same had been novated, act under the reasonable direction of FEI and account to and be indemnified by FEI accordingly;

6.03.2

6.03.2.2

6.03.3

if any of the Nonassigned Rights does not permit sub-contracting the parties will make such other arrangements between themselves as may be permissible to implement as far as possible the effective transfer of the benefits and obligations of such Nonassigned Right to FEI; and

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6.03.4 unless and until the Nonassigned Rights shall be novated or assigned Philips will (so far as it lawfully may) give all reasonable assistance to FEI to enable FEI to enforce Philips' rights thereunder.

6.04

As from the Closing Date, each party will afford the other and their affiliates with all reasonable assistance in connection with the administration of and collection of sums owing (subject to reimbursement of all out-of-pocket expenses but otherwise free of charge) to the other party. Provided, further, that the assisting party shall give to the claiming party an accounting of all amounts but in no event shall the assisting party assume any liability for any outstanding obligation owed, except to the extent it does not comply with the provisions of this section. This section will not be

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6.03.4 unless and until the Nonassigned Rights shall be novated or assigned Philips will (so far as it lawfully may) give all reasonable assistance to FEI to enable FEI to enforce Philips' rights thereunder.

6.04

As from the Closing Date, each party will afford the other and their affiliates with all reasonable assistance in connection with the administration of and collection of sums owing (subject to reimbursement of all out-of-pocket expenses but otherwise free of charge) to the other party. Provided, further, that the assisting party shall give to the claiming party an accounting of all amounts but in no event shall the assisting party assume any liability for any outstanding obligation owed, except to the extent it does not comply with the provisions of this section. This section will not be construed as obligating the Local FEI Company to continue any Business or Local Activity for any period subsequent to the Closing. All notices, correspondence, information, orders or inquiries relating to the Contracts or Business which are received by Philips or a Local Philips Company on or after Closing shall (to the extent to which they relate to the Business) promptly be passed to FEI or the respective Local FEI Company. For a short period and on conditions set forth in Schedule 6.06, the Local FEI Companies (those remaining part of the FEI Group of Companies) are authorized to continue using the Local Philips Company's name and letterhead in order to execute a smooth and efficient transition to the new company. ARTICLE 7 EMPLOYEES

6.05

6.06

7.01

It is the intention of the parties that the Businesses are transferred on a `going concern' basis and henceforth that the Employees are transferred to the Local FEI Company by means of the Country Agreements. If and to the extent such transfer can not take place by means of executing a Country Agreement, FEI undertakes that it and/or the Local FEI Company will timely offer all the Employees employment. It is understood that said Employees shall no longer have resort under any individual employment agreement and any Philips' Collective Labor Agreements or similar agreements after the respective Closing Date, unless agreed otherwise. Accordingly, the Local Philips Company's rights, powers, duties, liabilities and obligations in respect of any contract of employment with the Employees in force immediately before Closing shall be automatically transferred to the Local FEI Company by operation of law (wherever possible). It is agreed that salary rights (including bonus, accrued vacation rights, etc) accrued by the Employees until the Closing Date shall automatically transfer to the Local FEI Company, unless and to the extent same exceed the Local Philips Company's policies at Closing

13
7.02 FEI shall be responsible for and shall at all times from the Closing Date indemnify and hold Philips fully and effectively indemnified from and against all costs, claims, demands, proceedings and expenses incurred or suffered in connection with claims by all or any of the Employees in respect of any period of employment from and after the Closing Date or the termination of the employment of all or any of the Employees by FEI or the Local FEI Company other than (a) as a result of a tort, any negligent act or omission of Philips prior to Closing, or (b) as set forth in Schedule 4.6 to a Country Agreement in case it pertains to a `shared' Employee listed therein. Philips shall at all times hereafter indemnify and hold FEI fully and effectively indemnified from and against all costs, claims, demands, proceedings and expenses incurred or suffered in connection with claims by all or any of the Employees in respect of any period of employment up to the

13
7.02 FEI shall be responsible for and shall at all times from the Closing Date indemnify and hold Philips fully and effectively indemnified from and against all costs, claims, demands, proceedings and expenses incurred or suffered in connection with claims by all or any of the Employees in respect of any period of employment from and after the Closing Date or the termination of the employment of all or any of the Employees by FEI or the Local FEI Company other than (a) as a result of a tort, any negligent act or omission of Philips prior to Closing, or (b) as set forth in Schedule 4.6 to a Country Agreement in case it pertains to a `shared' Employee listed therein. Philips shall at all times hereafter indemnify and hold FEI fully and effectively indemnified from and against all costs, claims, demands, proceedings and expenses incurred or suffered in connection with claims by all or any of the Employees in respect of any period of employment up to the Closing Date. The parties anticipate that certain Local Companies will wish to ensure the continuation of the services of (a) certain Philips employees who will not be transferred and (b) certain Employees who should continue to serve Philips Analytical. In such cases, the Country Agreement will contain a consultancy or local services agreement arranging for such continuation of service provision to the other, which shall be substantially in the form as the model attached hereto as Schedule 7.03.

7.03

ARTICLE 8 PENSIONS
8.01 Entitlements to pension benefits, termination benefits, severance indemnities and retiree medical benefits as accrued with occupational plans of Philips by the employees concerned up to the Closing Date are as to their funding either funded with a company pension fund, insured, book reserved plan or financed otherwise. Depending on the funding made the following will apply: A) FUNDING EFFECTUATED BY WAY OF A PENSION SCHEME: With respect to the pensionable service of the employees concerned up to the Closing Date the employees participating in the Philips' Pension Scheme will become entitled to a deferred pension (also known as a paid-up policy) in accordance with the rules and regulations of the particular Pension Scheme. If requested by FEI, Philips will make reasonable endeavours to have the liabilities (and associated assets) transferred by such Pension Scheme to a funding vehicle to be indicated by FEI, subject to the necessary approvals being obtained, and in accordance with the rules and regulations of the relevant Pension Scheme.

B) FUNDING EFFECTUATED BY WAY OF AN INSURANCE:

14
In case the entitlements have been insured Philips will make reasonable efforts, if requested by FEI, to have the liabilities accrued up to the Closing Date transferred to a funding vehicle to be indicated by FEI, subject to the necessary approvals being obtained and in accordance with applicable legislation. C) FUNDING EFFECTUATED BY WAY OF A BOOK RESERVE WITH PHILIPS: In those cases where entitlements have been taken care of by way of a book reserve Philips shall include a provision in the Reference Accounts of the local Business which is equal to the actuarial present value of rights accrued up to Closing Date as calculated by Philips under the relevant local book reserve system.

14
In case the entitlements have been insured Philips will make reasonable efforts, if requested by FEI, to have the liabilities accrued up to the Closing Date transferred to a funding vehicle to be indicated by FEI, subject to the necessary approvals being obtained and in accordance with applicable legislation. C) FUNDING EFFECTUATED BY WAY OF A BOOK RESERVE WITH PHILIPS: In those cases where entitlements have been taken care of by way of a book reserve Philips shall include a provision in the Reference Accounts of the local Business which is equal to the actuarial present value of rights accrued up to Closing Date as calculated by Philips under the relevant local book reserve system. D) FUNDING OTHERWISE: If entitlements have not been funded according to A, B or C above, a comparison will be made between the liability value of the rights as accrued up to the Closing Date and the present value of the accrued amounts included in the Reference Accounts; the difference between the two will be taken into consideration as a price adjustment. 8.02 In principle the Parties hereto will undertake all reasonable commercial endeavours to try to obtain the necessary approvals in order to support a temporary continuation of the affiliation to the plans as indicated under A and B (note: under C and D, is excluded), subject to local (statutory and Pension Scheme) rules and regulations. ARTICLE 9 INTELLECTUAL PROPERTY RIGHTS 9.01 All Assigned IP shall transfer at Closing. Except for Assigned IP, no other intellectual property rights are transferred or licensed by means of this Agreement. ARTICLE 10 SITE AND OTHER SERVICES 10.01 A Local Philips Company may provide to the Local FEI Company such site and other services, if any, in accordance with the provisions of the respective Local Agreement. ARTICLE 11 DISCONTINUATION OF DISTRIBUTORSHIPS 11.01 By signing a Country Agreement, each existing distribution or agency agreement between the Local Philips Company and FEI or any of its affiliates is terminated as from the respective Closing Date.

15 ARTICLE 12 TAXATION
12.01 The Country Agreements will contain one of the clauses set forth below (depending on whether they are located within or outside the European Union): {{FOR THE EU COUNTRIES:}} Parties agree that the transaction as set forth herein in principle qualifies as a totality of assets as mentioned in article 6 - 8 of the Sixth Directive. This implies that in principle no VAT is due. If however article 6-8 of the Sixth Directive is not applicable or the tax authorities would at any moment judge that article 6-8 is not applicable, Philips will be allowed to charge VAT to the Local FEI Company, which will as then immediately be paid by the Local FEI Company to Philips. {{FOR THE NON EU COUNTRIES:}} All prices are excluding any VAT, sales tax, import tax, customs duty

15 ARTICLE 12 TAXATION
12.01 The Country Agreements will contain one of the clauses set forth below (depending on whether they are located within or outside the European Union): {{FOR THE EU COUNTRIES:}} Parties agree that the transaction as set forth herein in principle qualifies as a totality of assets as mentioned in article 6 - 8 of the Sixth Directive. This implies that in principle no VAT is due. If however article 6-8 of the Sixth Directive is not applicable or the tax authorities would at any moment judge that article 6-8 is not applicable, Philips will be allowed to charge VAT to the Local FEI Company, which will as then immediately be paid by the Local FEI Company to Philips. {{FOR THE NON EU COUNTRIES:}} All prices are excluding any VAT, sales tax, import tax, customs duty or any other kind of similar tax (hereinafter referred to as "Turnover Tax"). If any payment to be made by Local FEI Company to Philips is subject to a Turnover Tax, Philips will invoice this Turnover Tax to Local FEI Company on the original invoice. If to the contrary any invoice by Philips to Local FEI Company has been made in error without any such Turnover Tax, Philips shall promptly notify Local FEI Company of such event and may at any time issue a separate invoice for such Turnover Tax which invoice shall be paid by Local FEI Company. 12.02 FEI will indemnify and hold harmless a Local Philips Company on an after tax basis if and to the extent such Local Philips Company is obliged by local tax authorities to make payments directly related to FEI's transfer pricing practiced prior to the Closing Date. ARTICLE 13 WARRANTIES 13.01 This Agreement has been entered into by FEI in reliance upon the Warranties to the intent that each of the Warranties shall be construed as a separate and independent Warranty so that FEI shall have a separate claim and right of action in respect of every breach of each Warranty. No claim shall be made by FEI for breach of any of the Warranties or other provisions of this Agreement if the fact, omission, circumstance or occurrence giving rise to or forming the basis of the claim has been fairly disclosed to FEI in the Disclosure Letter delivered at least five days prior to Closing (but updated by Philips prior to Closing) or was otherwise known prior to the date hereof.

13.02

16
13.03 No claim shall be made by FEI for breach: (i) of the covenants in Section 5.02 that the Closing Accounts will be prepared in accordance with Philips Accounting Policies Consistently Applied (the "NOC Financial Covenant"), unless such claim is in repsect of one single matter and it is for an amount in excess of 5% of the asset component of the applicable NOC for the Local Activity transferred and (ii) of any of the other Warranties or other provisions of this Agreement unless such claim is in respect of one single matter and it is for an amount in excess of EUR 25,000. No claim shall be made by FEI for breach of any of the Warranties or other provisions of this Agreement unless the aggregate loss or damage (in respect of one or more matters) exceeds EUR 125,000 in which event a claim in respect of the excess over EUR 25,000 may be made; provided, however that this limitation shall not apply to breaches of

13.04

16
13.03 No claim shall be made by FEI for breach: (i) of the covenants in Section 5.02 that the Closing Accounts will be prepared in accordance with Philips Accounting Policies Consistently Applied (the "NOC Financial Covenant"), unless such claim is in repsect of one single matter and it is for an amount in excess of 5% of the asset component of the applicable NOC for the Local Activity transferred and (ii) of any of the other Warranties or other provisions of this Agreement unless such claim is in respect of one single matter and it is for an amount in excess of EUR 25,000. No claim shall be made by FEI for breach of any of the Warranties or other provisions of this Agreement unless the aggregate loss or damage (in respect of one or more matters) exceeds EUR 125,000 in which event a claim in respect of the excess over EUR 25,000 may be made; provided, however that this limitation shall not apply to breaches of the NOC Financial Covenant. The liability of Philips in respect of the aggregate of all the claims made by FEI for breach of any of the Warranties or other provisions of this Agreement shall not exceed the Purchase Price. No claim may be brought by FEI for breach of any of the Warranties or other provisions of this Agreement unless written notice thereof shall have been given to Philips accompanied by reasonable particulars of the claim including the amount of the claim within 15 months of the Principal Closing Date. No claim shall be made by FEI for breach of any of the Warranties or other provisions of this Agreement in respect of any matter to the extent that the subject matter of the claim shall be tax deductible, and/or can be recovered in whole or in part by FEI under a policy of insurance If any claim for breach of any of the Warranties is based upon a liability of FEI which is contingent only, Philips shall not be liable hereunder to make any payment to FEI unless and until such contingent liability becomes an actual liability and is discharged. Where any claim is made by a third party against FEI in relation to which it appears that Philips is or may be liable hereunder and FEI claims indemnification from Philips under this Article 13, FEI shall as soon as practicable give notice thereof to Philips and transfer to Philips' sole control the defense of such claim and FEI shall take such action as Philips may reasonably require to avoid, dispute, resist, appeal against, compromise or defend the claim and any adjudication in respect thereof and FEI shall render to Philips all such assistance as it may reasonably request in relation to such claim including instructing such professional advisers as Philips may nominate to the intent that the conduct of such claim shall be delegated to Philips entirely. Where any third party is liable to FEI in relation to any matter which has given rise to a liability on the part of Philips hereunder, FEI shall procure that all reasonable

13.04

13.05

13.06

13.07

13.08

13.09

13.10

17
endeavours are used to recover any amounts due from any such third party and shall forthwith upon such recovery reimburse Philips an amount equal to any sum paid by it in respect of such liability subject to a deduction of the net (i.e. out of pocket) expenses incurred by FEI. 13.11 Any sum recovered from Philips pursuant to any claim under the Warranties will be deemed to be a reduction of the Purchase Price and shall be deemed to reduce the amount apportioned to the Asset(s) to which it most closely relates.

17
endeavours are used to recover any amounts due from any such third party and shall forthwith upon such recovery reimburse Philips an amount equal to any sum paid by it in respect of such liability subject to a deduction of the net (i.e. out of pocket) expenses incurred by FEI. 13.11 Any sum recovered from Philips pursuant to any claim under the Warranties will be deemed to be a reduction of the Purchase Price and shall be deemed to reduce the amount apportioned to the Asset(s) to which it most closely relates. Philips shall not be liable hereunder and no claim or claims shall be made against it in relation to any breach or non-fulfillment of any of the Warranties which occurs as a result of or is otherwise attributable to: any matter provided for under the terms of this Agreement or carried out in the implementation hereof;

13.12

- any voluntary act of FEI carried out after the date hereof; - any act, matter or thing done or omitted to be done by or at the written request or with the written approval of FEI; or - any legislation not in force at the date hereof or any change of law or administrative practice which takes effect retroactively. ARTICLE 14 ACCESS TO INFORMATION
14.01 Each Party shall give the other access to (and the opportunity to make copies of) all data and information, including all updates and amendments thereof existing at the Closing Date, which form part of or relate to any item, matter or part thereof transferred pursuant to this Agreement and will provide all reasonable assistance to the other to enable it to execute financial reporting and finalize tax returns for all periods prior to the Closing Date. ARTICLE 15 CONFIDENTIALITY 15.01 The parties agree that the contents of this Agreement and all information disclosed by either party to the other relating to the business of either party (including the Business) shall remain confidential and, save as required by any applicable rules of any Stock Exchange or other government department or similar authority or court or tribunal of competent jurisdiction (in which event the party required to make a disclosure shall give prior written notice to the other of such required disclosure),

18 shall not be used or communicated to any other person whatsoever except professional advisers in confidence without the prior written agreement of the parties and then only to such extent as may be reasonably necessary to enable the parties to carry out their obligations or enforce their rights under this Agreement. Save as aforesaid, no announcement or publicity relating thereto shall be made or issued at any time by either party without the prior written consent of the other. The parties further agree that the obligations in this Article shall survive Closing of this Agreement for so long as such information is not (otherwise than by breach of any obligation of confidentiality) in the public domain. ARTICLE 16

18 shall not be used or communicated to any other person whatsoever except professional advisers in confidence without the prior written agreement of the parties and then only to such extent as may be reasonably necessary to enable the parties to carry out their obligations or enforce their rights under this Agreement. Save as aforesaid, no announcement or publicity relating thereto shall be made or issued at any time by either party without the prior written consent of the other. The parties further agree that the obligations in this Article shall survive Closing of this Agreement for so long as such information is not (otherwise than by breach of any obligation of confidentiality) in the public domain. ARTICLE 16 COSTS
16.01 Save as otherwise agreed all expenses incurred by or on behalf of the parties, including all fees of agents, solicitors, accountants and actuaries employed by either of the parties in connection with the negotiation, preparation and execution of this Agreement and related agreements shall be borne solely by the party which incurred them. ARTICLE 17 NOTICES 17.01 All notices, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given if addressed, and delivered by hand, with recorded delivery, or sent by registered mail, with postage pre-paid, or sent by facsimile and confirmed by registered mail, with postage pre-paid, to the addresses set forth in Article 17.03 (or to such other address as may be given by written notice). Any such communication shall be deemed to have been made to the other party two days from the date of posting (if by letter) and if by facsimile transmission on the day of such transmission. If to Philips, addressed to: Koninklijke Philips Electronics NV Groenewoudseweg 1 5621 BA Eindhoven The Netherlands marked for the attention of Corp. Legal Dept. If to FEI, addressed to: FEI Company

17.02

17.03

19 7451 NW Evergreen Parkway, Hillsboro, Oregon, 97124-5830 USA
marked for the attention of the General Counsel ARTICLE 18 CONDITIONS TO CLOSING 18.01 CONDITIONS TO THE OBLIGATIONS OF PHILIPS AND FEI The obligations of the parties hereto to effect the Closing are subject to the satisfaction (or waiver) prior to the respective Closing of the following conditions: (a) BOARD APPROVALS. At the Board Meeting of FEI, the Board Members of FEI shall have voted to approve (i) the Agreement and the intended transaction, and (ii) any further actions necessary to consummate the

19 7451 NW Evergreen Parkway, Hillsboro, Oregon, 97124-5830 USA
marked for the attention of the General Counsel ARTICLE 18 CONDITIONS TO CLOSING 18.01 CONDITIONS TO THE OBLIGATIONS OF PHILIPS AND FEI The obligations of the parties hereto to effect the Closing are subject to the satisfaction (or waiver) prior to the respective Closing of the following conditions: (a) BOARD APPROVALS. At the Board Meeting of FEI, the Board Members of FEI shall have voted to approve (i) the Agreement and the intended transaction, and (ii) any further actions necessary to consummate the transaction. At the Board of Management Meeting of Philips, the Board Members shall have voted to approve (i) the Agreement and the intended transaction and (ii) any further actions necessary to consummate the transaction. (b) NO INJUNCTIONS. There shall not (i) be in effect any statute, regulation, order, decree or judgment of any governmental entity which makes illegal or which enjoins, prevents in any material respect or imposes any burdensome condition or restriction as a consequence of the consummation of the transactions contemplated by this Agreement or (ii) have been commenced or threatened in writing, and shall be continuing, any action or proceeding by any governmental entity which seeks to prevent, enjoin in any material respect or imposes any burdensome condition or restriction as a consequence of the transactions contemplated by this Agreement; (c) WORKERS COUNCIL. All required employee consultation procedures shall have been pursued to the extent that they can no longer lead to a substantial change or delay in the transactions contemplated hereby. 18.02 CONDITIONS TO THE OBLIGATIONS OF FEI The obligation of FEI to effect the Closing is subject to the satisfaction (or waiver by FEI) prior to the respective Closing, of the following conditions: (a) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of Philips contained herein that is qualified by materiality shall be true and correct, and each of the representations and warranties of Philips that is not so qualified shall be true and correct in all material respects, in each case as if made as of the Closing (except that representations and warranties that are made as of a specific date need be true or true in all material respects, as the case may be, only as of such date), and FEI shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of Philips; (b) COVENANTS. The covenants and agreements of Philips to be performed on or prior to the Closing shall have been duly performed in all material respects, and FEI shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of Philips;

20
18.03 CONDITIONS TO THE OBLIGATIONS OF PHILIPS The obligation of Philips to effect the Closing is subject to the satisfaction (or waiver) prior to the respective Closing of the following conditions:

20
18.03 CONDITIONS TO THE OBLIGATIONS OF PHILIPS The obligation of Philips to effect the Closing is subject to the satisfaction (or waiver) prior to the respective Closing of the following conditions: (a) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of FEI contained herein that is qualified by materiality shall be true and correct, and each of the representations and warranties of FEI that is not so qualified shall be true and correct in all material respects, in each case as if made as of the Closing (except that representations and warranties that are made as of a specific date need be true or true in all material respects, as the case may be, only as of such date), and Philips shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of FEI; (b) COVENANTS. The covenants and agreements of FEI to be performed on or prior to the Closing shall have been duly performed in all material respects, and Philips shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of FEI. ARTICLE 19 MISCELLANEOUS 19.01 Failure by either party to exercise or enforce any right conferred by this Agreement shall not be deemed to be a waiver of any such right nor operate so as to bar the exercise or enforcement thereof or of any other right on any other occasion. This Agreement represents the entire understanding between the parties in relation to the subject matter hereof and supersedes all agreements and representations made by either party, whether oral or written and this Agreement may only be modified if such modification is in writing and signed by a duly authorized representative of each party. This Agreement shall prevail over any inconsistent terms and conditions in any other agreement between the parties or referred to in correspondence or elsewhere (including Country Agreements) and any conditions or stipulations to the contrary are hereby excluded and extinguished. The parties shall, and shall use all reasonable endeavours respectively to procure that any necessary third party shall, do execute and perform all such further deeds, documents, assurances, acts and things as either party hereto may reasonably require by notice in writing to the other party to carry the provision of this Agreement into full force and effect. This Agreement shall be governed by and construed and interpreted in accordance with the law of THE NETHERLANDS, and the parties hereby agree that all matters arising out of or in connection with this Agreement shall be subject to UNCITRAL Arbitration which shall take place in Amsterdam.

19.02

19.03

19.04

21 IN WITNESS WHEREOF the parties or their authorized representatives have set their hands the day and year first above written.
KONINKLIJKE PHILIPS ELECTRONICS N.V. ______________________________________ Name: FEI COMPANY

_________________________ Name:

Title: Title:

21 IN WITNESS WHEREOF the parties or their authorized representatives have set their hands the day and year first above written.
KONINKLIJKE PHILIPS ELECTRONICS N.V. ______________________________________ Name: FEI COMPANY

_________________________ Name:

Title: Title:

22
LIST OF SCHEDULES: Schedule 1.13: Schedule 1.18: Schedule 1.20: Schedule 1.34: Schedule 1.39: Schedule 2.03: Schedule 3.02: Schedule 6.06: Schedule 7.03:

Model Country Agreement List of Employees as per October 25, 1999 List of all Fixed Assets Reference Accounts Warranties and Representations List of countries for Principal and Second Closing respectively The allocation of the Purchase Price to the respective Local Activities Terms and Conditions for using the Local Philips Company name Employee continuation arrangements

23 SCHEDULE 7.03 (TO THE MASTER AGREEMENT) ADDITIONAL (OPTIONAL) LOCAL ARRANGEMENT ON SHARED EMPLOYEES The general ruling applicable within Philips also applies here: an employee will be on the payroll of a party which makes use of 50% or more of the time of the employee involved ("Hiring Party"). No cherry picking. In most countries such Local Arrangements are required between the Local FEI Company and the local Philips Analytical organisation for the services of identified Sales and Customer Support employees to be provided to the other party ("Receiving Party"). The Local Arrangement will be made for a period of one year (the first ending December 31, 2000) and is automatically annually extended; termination is only possible by giving a six (6) months' written notice prior to the expiration date (so each year before July 1). The Local Arrangement will be based on a fixed percentage of the time and cost of the identified employees as estimated per year. It is assumed that this percentage also applies for each month. The sharing ratio may vary from year to year only by plus or minus 20%, unless otherwise agreed (e.g. in case of a `60-40' sharing in year one, a `68-32' in year two is allowed, an `80-20' sharing not). The employees involved must register their time spending per business. This register will be made available to both parties per month. By determining the priority of time allocation per month beyond the contracted percentage of time, the Hiring Party will decide on the priority after consultation with the Receiving Party. Any time spent in addition to the contracted time will be invoiced per quarterly period by the Hiring Party to the Receiving Party. On termination of the Local Arrangement for whatsoever reason, the terminating party will pay an equal percentage of the redundancy cost of the employee involved as the allocation in time and cost, based on the average of the last 2 full years, provided (a) the person involved receives notice of termination within 9 months as

22
LIST OF SCHEDULES: Schedule 1.13: Schedule 1.18: Schedule 1.20: Schedule 1.34: Schedule 1.39: Schedule 2.03: Schedule 3.02: Schedule 6.06: Schedule 7.03:

Model Country Agreement List of Employees as per October 25, 1999 List of all Fixed Assets Reference Accounts Warranties and Representations List of countries for Principal and Second Closing respectively The allocation of the Purchase Price to the respective Local Activities Terms and Conditions for using the Local Philips Company name Employee continuation arrangements

23 SCHEDULE 7.03 (TO THE MASTER AGREEMENT) ADDITIONAL (OPTIONAL) LOCAL ARRANGEMENT ON SHARED EMPLOYEES The general ruling applicable within Philips also applies here: an employee will be on the payroll of a party which makes use of 50% or more of the time of the employee involved ("Hiring Party"). No cherry picking. In most countries such Local Arrangements are required between the Local FEI Company and the local Philips Analytical organisation for the services of identified Sales and Customer Support employees to be provided to the other party ("Receiving Party"). The Local Arrangement will be made for a period of one year (the first ending December 31, 2000) and is automatically annually extended; termination is only possible by giving a six (6) months' written notice prior to the expiration date (so each year before July 1). The Local Arrangement will be based on a fixed percentage of the time and cost of the identified employees as estimated per year. It is assumed that this percentage also applies for each month. The sharing ratio may vary from year to year only by plus or minus 20%, unless otherwise agreed (e.g. in case of a `60-40' sharing in year one, a `68-32' in year two is allowed, an `80-20' sharing not). The employees involved must register their time spending per business. This register will be made available to both parties per month. By determining the priority of time allocation per month beyond the contracted percentage of time, the Hiring Party will decide on the priority after consultation with the Receiving Party. Any time spent in addition to the contracted time will be invoiced per quarterly period by the Hiring Party to the Receiving Party. On termination of the Local Arrangement for whatsoever reason, the terminating party will pay an equal percentage of the redundancy cost of the employee involved as the allocation in time and cost, based on the average of the last 2 full years, provided (a) the person involved receives notice of termination within 9 months as from receipt of the terminating party's intention to stop using the respective person's services, and (b) the total amount spent by the party incurring redundancy costs is above 200,000 euro (at which point the amounts above said threshold are subject to this paragraph). List of `shared' employees:
--------------------------------------------------------------------------------------------------------NAME: BIRTHDATE: EMPLOYED BY: % ANA; %FEI -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23 SCHEDULE 7.03 (TO THE MASTER AGREEMENT) ADDITIONAL (OPTIONAL) LOCAL ARRANGEMENT ON SHARED EMPLOYEES The general ruling applicable within Philips also applies here: an employee will be on the payroll of a party which makes use of 50% or more of the time of the employee involved ("Hiring Party"). No cherry picking. In most countries such Local Arrangements are required between the Local FEI Company and the local Philips Analytical organisation for the services of identified Sales and Customer Support employees to be provided to the other party ("Receiving Party"). The Local Arrangement will be made for a period of one year (the first ending December 31, 2000) and is automatically annually extended; termination is only possible by giving a six (6) months' written notice prior to the expiration date (so each year before July 1). The Local Arrangement will be based on a fixed percentage of the time and cost of the identified employees as estimated per year. It is assumed that this percentage also applies for each month. The sharing ratio may vary from year to year only by plus or minus 20%, unless otherwise agreed (e.g. in case of a `60-40' sharing in year one, a `68-32' in year two is allowed, an `80-20' sharing not). The employees involved must register their time spending per business. This register will be made available to both parties per month. By determining the priority of time allocation per month beyond the contracted percentage of time, the Hiring Party will decide on the priority after consultation with the Receiving Party. Any time spent in addition to the contracted time will be invoiced per quarterly period by the Hiring Party to the Receiving Party. On termination of the Local Arrangement for whatsoever reason, the terminating party will pay an equal percentage of the redundancy cost of the employee involved as the allocation in time and cost, based on the average of the last 2 full years, provided (a) the person involved receives notice of termination within 9 months as from receipt of the terminating party's intention to stop using the respective person's services, and (b) the total amount spent by the party incurring redundancy costs is above 200,000 euro (at which point the amounts above said threshold are subject to this paragraph). List of `shared' employees:
--------------------------------------------------------------------------------------------------------NAME: BIRTHDATE: EMPLOYED BY: % ANA; %FEI -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

EXHIBIT 10.15 EMPLOYMENT AGREEMENT This Employment Agreement, effective as of August 12, 1999, by and between FEI Company, an Oregon corporation ("Employer"), and Nicholas P. Economou, an individual ("Employee"). IN CONSIDERATION OF the mutual covenants herein contained, and other good and valuable consideration, the parties hereto agree as follows:

EXHIBIT 10.15 EMPLOYMENT AGREEMENT This Employment Agreement, effective as of August 12, 1999, by and between FEI Company, an Oregon corporation ("Employer"), and Nicholas P. Economou, an individual ("Employee"). IN CONSIDERATION OF the mutual covenants herein contained, and other good and valuable consideration, the parties hereto agree as follows: 1) EMPLOYMENT. a) Employer hereby agrees to employ Employee, and Employee agrees to serve, as Chief Operating Officer of Employer, during the Period of Employment as defined in Section 2. 2) PERIOD OF EMPLOYMENT. a) DURATION UNDER NORMAL CIRCUMSTANCES. i) The "Period of Employment" shall be the period commencing on the date hereof and ending on the second anniversary of the closing of the merger transaction between the Employer and Micrion Corporation ("Micrion"). b) TERMINATION EVENTS. i) Notwithstanding anything in this Section 2 to the contrary, the Period of Employment shall terminate upon the earliest to occur of the following: A. the retirement of Employee under the terms of Employer's 401(k) plan; B. the Disability (as defined in Section 8) of Employee and the expiration of the 30-day period referred to in the definition of Disability without the actions referred to therein being taken by Employee; C. the death of Employee; D. the 90th day after service of notice by Employee to Employer, in accordance with the provisions of Section 11, that Employee elects to terminate the Period of Employment (with or without Good Reason) (a "voluntary termination by Employee"); E. the 90th day after service of notice by Employer to Employee, in accordance with the provisions of Section 11, that Employer elects to terminate the Period of Employment (a "voluntary termination by Employer"), other than a termination by

Employer with Cause; and F. promptly upon service of notice by Employer to Employee, in accordance with the provisions of Section 11, that Employer elects to terminate the Period of Employment with Cause. 3) DUTIES DURING THE PERIOD OF EMPLOYMENT. i) Employee shall devote his full business time, attention and best efforts to the affairs of Employer and its subsidiaries during the Period of Employment and shall have such duties, responsibilities and authority as shall be assigned to him from time to time by the Chief Executive Officer or the Board of Directors of Employer, which duties, responsibilities and authority shall be commensurate in all material respects with those held, exercised and assigned as of the date of this Agreement. It is expressly acknowledged and agreed that Employee may be requested to assume the position of president or senior officer of any subsidiary or division of Employer or any position of corporate officer of Employer, provided that the responsibilities and authority assigned to such position are commensurate in all material respects with those assigned to, or held and exercised by, Employee as

Employer with Cause; and F. promptly upon service of notice by Employer to Employee, in accordance with the provisions of Section 11, that Employer elects to terminate the Period of Employment with Cause. 3) DUTIES DURING THE PERIOD OF EMPLOYMENT. i) Employee shall devote his full business time, attention and best efforts to the affairs of Employer and its subsidiaries during the Period of Employment and shall have such duties, responsibilities and authority as shall be assigned to him from time to time by the Chief Executive Officer or the Board of Directors of Employer, which duties, responsibilities and authority shall be commensurate in all material respects with those held, exercised and assigned as of the date of this Agreement. It is expressly acknowledged and agreed that Employee may be requested to assume the position of president or senior officer of any subsidiary or division of Employer or any position of corporate officer of Employer, provided that the responsibilities and authority assigned to such position are commensurate in all material respects with those assigned to, or held and exercised by, Employee as of the date of this Agreement, and provided further that, in the event of a transfer of Employee to the employ of a subsidiary of Employer, such subsidiary expressly assumes all of Employer's obligations under this Agreement. Employee may engage in other activities, such as activities involving charitable, educational, religious and similar types of organizations (all of which are deemed to benefit Employer), non-industry speaking engagements, and similar type activities, and may serve on the board of directors of other corporations approved by the Chief Executive Officer of Employer, in each case to the extent that such other activities do not materially detract from or limit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of Employer and its subsidiaries. 4) LOCATION OF EMPLOYMENT. i) During the Period of Employment, Employer may only require Employee to be based in or within 50 miles of Peabody, MA except that Employer may require Employee to be based more than 50 miles from Peabody, MA in connection with the relocation of the executive office of Employer in which Employee is employed; PROVIDED, HOWEVER, that Employer shall pay to, or reimburse Employee for, on an after-tax basis, all reasonable expenses of relocation of Employee and Employee's immediate family living with Employee at the time of such relocation, incurred and substantiated by Employee in connection with any such relocation.

5) CURRENT CASH COMPENSATION. i) Employer will pay to Employee during the Period of Employment a base annual salary of not less than Employee's salary at Micrion as of January 1, 1999 (or such greater amount as may have been approved by the Employer's Board of Directors in its sole discretion), payable in substantially equal monthly installments during each calendar year, or portion thereof, of the Period of Employment; PROVIDED, HOWEVER, that Employer agrees to review such base annual salary annually and in light of such review may, in the sole discretion of the Board of Directors of Employer, increase such salary, taking into account such factors as it deems pertinent. 6) EMPLOYEE BENEFITS. a) VACATION AND SICK LEAVE. i) Employee shall be entitled to the usual number of days of paid annual vacation, all paid Employer holidays and reasonable sick leave consistent with Employer's existing policies and giving full credit for the Employee's service with Micrion. b) REGULAR REIMBURSED BUSINESS EXPENSES. i) Employer shall reimburse Employee for all expenses and disbursements reasonably incurred at Employer's request or consistent with Employer's policies, and substantiated by Employee, in the performance of his duties during the Period of Employment.

5) CURRENT CASH COMPENSATION. i) Employer will pay to Employee during the Period of Employment a base annual salary of not less than Employee's salary at Micrion as of January 1, 1999 (or such greater amount as may have been approved by the Employer's Board of Directors in its sole discretion), payable in substantially equal monthly installments during each calendar year, or portion thereof, of the Period of Employment; PROVIDED, HOWEVER, that Employer agrees to review such base annual salary annually and in light of such review may, in the sole discretion of the Board of Directors of Employer, increase such salary, taking into account such factors as it deems pertinent. 6) EMPLOYEE BENEFITS. a) VACATION AND SICK LEAVE. i) Employee shall be entitled to the usual number of days of paid annual vacation, all paid Employer holidays and reasonable sick leave consistent with Employer's existing policies and giving full credit for the Employee's service with Micrion. b) REGULAR REIMBURSED BUSINESS EXPENSES. i) Employer shall reimburse Employee for all expenses and disbursements reasonably incurred at Employer's request or consistent with Employer's policies, and substantiated by Employee, in the performance of his duties during the Period of Employment. c) EMPLOYEE BENEFIT PLANS OR ARRANGEMENTS. i) In addition to the cash compensation provided for in Section 5 hereof, Employee, subject to meeting eligibility requirements and to the provisions of this Agreement, shall be entitled to participate without discrimination or duplication in all employee (including executive) benefit plans of Employer, as presently in effect or as they may be modified or added to by Employer from time to time, to the extent such plans are available to other similarly situated executives or employees of Employer, including, without limitation, plans providing retirement benefits, medical and other health insurance, life insurance, disability insurance, and accidental death or dismemberment insurance.

d) EMPLOYER'S INCENTIVE COMPENSATION PLANS. i) In addition to the cash compensation provided for in Section 5 hereof and the employee benefits of Employer provided for in paragraph (c) of this Section 6, Employee, subject to meeting eligibility requirements and to the provisions of this Agreement, shall be entitled to participate in all incentive compensation plans of Employer, as presently in effect or as they may be modified or added to by Employer from time to time, to the extent such plans are available to similarly situated executives or employees of Employer, including, without limitation, the 1995 Stock Incentive Plan and the 1995 Supplemental Stock Incentive Plan (as the same may be modified, replaced, or added to by Employer from time to time), and other performance share plans, management incentive plans, deferred compensation plans, and supplemental retirement plans. 7) TERMINATION. a) DEATH, OR RETIREMENT OR DISABILITY. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of (1) the death of Employee, (2) the retirement of Employee under the terms of Employer's 401(k) plan or (3) the Disability of the Employee, Employee (or Employee's estate) will be entitled to receive only: (i) the base salary otherwise payable under Section 5 through the end of the month in which Employee's employment is terminated, together with salary, compensation or benefits which have been earned or become payable as of the date of termination but which have not yet been paid to Employee;

d) EMPLOYER'S INCENTIVE COMPENSATION PLANS. i) In addition to the cash compensation provided for in Section 5 hereof and the employee benefits of Employer provided for in paragraph (c) of this Section 6, Employee, subject to meeting eligibility requirements and to the provisions of this Agreement, shall be entitled to participate in all incentive compensation plans of Employer, as presently in effect or as they may be modified or added to by Employer from time to time, to the extent such plans are available to similarly situated executives or employees of Employer, including, without limitation, the 1995 Stock Incentive Plan and the 1995 Supplemental Stock Incentive Plan (as the same may be modified, replaced, or added to by Employer from time to time), and other performance share plans, management incentive plans, deferred compensation plans, and supplemental retirement plans. 7) TERMINATION. a) DEATH, OR RETIREMENT OR DISABILITY. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of (1) the death of Employee, (2) the retirement of Employee under the terms of Employer's 401(k) plan or (3) the Disability of the Employee, Employee (or Employee's estate) will be entitled to receive only: (i) the base salary otherwise payable under Section 5 through the end of the month in which Employee's employment is terminated, together with salary, compensation or benefits which have been earned or become payable as of the date of termination but which have not yet been paid to Employee; (ii) such other awards or bonuses as the Board of Directors may in its sole discretion determine; (iii) during the 12-month period following the termination of Employee's employment as a result of the death of Employee, maintenance in effect for the continued benefit of Employee's dependents of all insured and selfinsured employee medical and dental benefit plans in which Employee was participating immediately prior to termination provided that such continued participation is possible under the general terms and conditions of such plans (and any applicable funding media) and Employee's dependents continue to pay an amount equal to the Employee's regular contribution for such participation; and (iv) such other benefits, if any, as shall be determined to be applicable in accordance with Employer's plans and practices as in effect on the date of termination.

b) VOLUNTARY TERMINATION BY EMPLOYEE WITHOUT GOOD REASON. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of a voluntary termination by Employee without Good Reason, Employee will be entitled to receive only: A. the base salary otherwise payable under Section 5 through the day on which Employee's employment is terminated, together with salary, compensation or benefits payable to other similarly situated employees (excluding any incentive compensation) which have been earned or become payable as of the date of termination but which have not yet been paid to Employee; B. to the extent possible, the opportunity to convert group and individual life and disability insurance policies of Employer then in effect for Employee to individual policies of Employee upon the same terms as similarly situated employees of Employer may apply for such conversions; and C. such other benefits, if any, as shall be determined to be applicable in accordance with Employer's plans and practices for similarly situated employees in effect on the date of termination. c) VOLUNTARY TERMINATION BY EMPLOYEE WITH GOOD REASON OR BY EMPLOYER WITHOUT CAUSE. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of a voluntary

b) VOLUNTARY TERMINATION BY EMPLOYEE WITHOUT GOOD REASON. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of a voluntary termination by Employee without Good Reason, Employee will be entitled to receive only: A. the base salary otherwise payable under Section 5 through the day on which Employee's employment is terminated, together with salary, compensation or benefits payable to other similarly situated employees (excluding any incentive compensation) which have been earned or become payable as of the date of termination but which have not yet been paid to Employee; B. to the extent possible, the opportunity to convert group and individual life and disability insurance policies of Employer then in effect for Employee to individual policies of Employee upon the same terms as similarly situated employees of Employer may apply for such conversions; and C. such other benefits, if any, as shall be determined to be applicable in accordance with Employer's plans and practices for similarly situated employees in effect on the date of termination. c) VOLUNTARY TERMINATION BY EMPLOYEE WITH GOOD REASON OR BY EMPLOYER WITHOUT CAUSE. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of a voluntary termination by Employee with Good Reason (as hereinafter defined), or a voluntary termination by Employer without Cause (as hereinafter defined), then Employee will be entitled to receive: A. the base salary otherwise payable under Section 5 through the end of the month in which Employee's employment is terminated, together with salary, compensation or benefits which have been earned or become payable as of the date of termination but which have not yet been paid to the Employee; B. a lump-sum severance payment in an amount equal to the product of (A) the base annual salary at the rate in effect under Section 5 on the date of termination, and (B) a multiplier equal to x/52, where "x" equals the number of weeks remaining until the Final Day of Period of Employment; provided that the payment made pursuant to this paragraph (ii) shall be repaid by Employee in the event Employee violates in any material respect the provisions of Section 9 hereof; C. maintenance in effect for the continued benefit of Employee and his spouse and his dependents for a period terminating on the earlier of (A) the earlier of

the Final Day of Period of Employment and the date on which Employee retires under the terms of Employer's 401(k) plan, and (B) the commencement of equivalent benefits from a new employer of: (I) all insured and selfinsured medical and dental benefit plan in which Employee was participating immediately prior to termination, provided that Employee's continued participation if possible under the general terms and conditions of such plans (and any applicable funding media) and Employee continues to pay an amount equal to Employee's regular contribution for such participation; and (II) the group and individual life and disability insurance policies of Employer then in effect for Employee; provided, however, that if Employer so elects, or if such continued participation is not possible under the general terms and conditions of such plans or under such policies, Employer shall, in lieu of the foregoing, arrange to have issued for the benefit of Employee and Employee's dependents individual policies of insurance providing benefits substantially similar (on an after-tax basis) to those described in this paragraph, or, if such insurance is not available at a reasonable cost to Employer, Employer shall otherwise provide Employee and Employee's dependents equivalent benefits (on an after-tax basis); provided further that, in no event shall Employee be required to pay any premiums or other charges in an amount greater than that which Employee would have paid in order to participate in Employer's plans and policies; and for a period terminating on the earlier of the Final Day of Period of Employment and the date on which Employee

the Final Day of Period of Employment and the date on which Employee retires under the terms of Employer's 401(k) plan, and (B) the commencement of equivalent benefits from a new employer of: (I) all insured and selfinsured medical and dental benefit plan in which Employee was participating immediately prior to termination, provided that Employee's continued participation if possible under the general terms and conditions of such plans (and any applicable funding media) and Employee continues to pay an amount equal to Employee's regular contribution for such participation; and (II) the group and individual life and disability insurance policies of Employer then in effect for Employee; provided, however, that if Employer so elects, or if such continued participation is not possible under the general terms and conditions of such plans or under such policies, Employer shall, in lieu of the foregoing, arrange to have issued for the benefit of Employee and Employee's dependents individual policies of insurance providing benefits substantially similar (on an after-tax basis) to those described in this paragraph, or, if such insurance is not available at a reasonable cost to Employer, Employer shall otherwise provide Employee and Employee's dependents equivalent benefits (on an after-tax basis); provided further that, in no event shall Employee be required to pay any premiums or other charges in an amount greater than that which Employee would have paid in order to participate in Employer's plans and policies; and for a period terminating on the earlier of the Final Day of Period of Employment and the date on which Employee reaches age 65, Employer shall provide Employee with benefits equivalent to the additional benefits Employee would have received under the employee pension and retirement benefit plans maintained by the Employer and supplemental or excess executive retirement plans, or executive plans of deferred compensation whether or not qualified for federal income tax purposes in which Employee was participating immediately prior to termination and assuming an annual rate of Salary equal to the rate applicable to the Employee immediately prior to termination is in effect, as if Employee had received credit under such plans for service with Employer during such period following Employee's termination, with such benefits payable by Employer at the same times and in the same manner as such benefits would have been received by Employee under such plans. d) TERMINATION BY EMPLOYER WITH CAUSE. i) If the Period of Employment terminates pursuant to paragraph (b) of Section 2 as a result of a termination by Employer with Cause, Employee will be entitled to receive only: A. the base salary otherwise payable under Section 5 through the day on which Employee's employment is terminated, together with salary, compensation or

benefits which have been earned or become payable as of the date of termination but which have not yet been paid to Employee; and B. such other benefits, if any, as shall be determined to be applicable under the circumstances in accordance with Employer's plans and practices in effect on the date of termination. e) DATE OF PAYMENT. i) Except as otherwise provided herein, all cash payments and lump-sum awards required to be made pursuant to the provisions of paragraphs (a) through (e) of this Section 7 shall be made no later than the thirtieth day following the date of Employee's termination. f) EXCLUSIVE REMEDY. i) Employee shall have no claim for damages or other remedies, at law, in equity or otherwise, by reason of any breach of this Agreement by Employer, or of termination of this Agreement by reason thereof, other than as set forth in this Section 7. 8) DEFINITIONS. i) For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

benefits which have been earned or become payable as of the date of termination but which have not yet been paid to Employee; and B. such other benefits, if any, as shall be determined to be applicable under the circumstances in accordance with Employer's plans and practices in effect on the date of termination. e) DATE OF PAYMENT. i) Except as otherwise provided herein, all cash payments and lump-sum awards required to be made pursuant to the provisions of paragraphs (a) through (e) of this Section 7 shall be made no later than the thirtieth day following the date of Employee's termination. f) EXCLUSIVE REMEDY. i) Employee shall have no claim for damages or other remedies, at law, in equity or otherwise, by reason of any breach of this Agreement by Employer, or of termination of this Agreement by reason thereof, other than as set forth in this Section 7. 8) DEFINITIONS. i) For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below: ii) "CAUSE" shall mean (i) the willful engaging by Employee in conduct which is not authorized by the Board of Directors of Employer or within the normal course of Employee's business decisions and is known by Employee to be materially detrimental to the best interests of Employer or any of its subsidiaries, (ii) the willful engaging by Employee in conduct which Employee knows is, or has substantial reason to believe to be, illegal to the extent of a felony violation, or the equivalent seriousness under laws other than those of the United States, and which has effects on Employer or Employee materially injurious to Employer, (iii) the engaging by Employee in any willful and conscious act of serious dishonesty, in each case which the Board of Directors of Employer reasonably determines affects adversely, or could in the future affect adversely, the value, reliability or performance of Employee to Employer in a material manner; (iv) the willful and continued failure by Employee to perform substantially his duties to Employer under this Agreement (including any sustained and unexcused absence of Employee from the performance of his duties under this Agreement, which absence has not been certified in writing as due to physical or mental illness in accordance with the procedures set forth in this Section 8 under "Disability"), after a written demand for substantial performance has been delivered to Employee by the Board of Directors specifically identifying the manner in which Employee has failed to

substantially perform his duties and after such Employee has had a reasonable opportunity to cease such failure to perform, or (v) the sustained and unexcused absence of Employee from the performance of his duties under this Agreement for a period of 180 days or more within any period of 365 consecutive days, regardless of the reason for such absence, unless Employee demonstrates that such absence is due to Disability. For purposes of this paragraph, no act, or failure to act, on Employee's part shall be considered "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that such action or omission was in, or not opposed to, the best interests of Employer. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors of Employer or based upon the advice of counsel for Employer shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of Employer. Notwithstanding the foregoing, there shall not be deemed to be a termination by Employer with Cause unless and until there shall have been delivered to Employee a copy of a resolution duly adopted by the affirmative vote of a majority of the entire membership of the Board of Directors of Employer at a meeting of such Board held after reasonable notice to Employee and at which Employee has an opportunity, together with his counsel, to be heard before such Board, finding that, in the good faith opinion of such Board, Employee was guilty of the conduct set forth above and specifying the particulars thereof in detail. iii) "DISABILITY" shall mean the absence of Employee from his duties with Employer on a full-time basis for one hundred eighty (180) days within any period of three hundred and sixty-five (365) consecutive days as a result of

substantially perform his duties and after such Employee has had a reasonable opportunity to cease such failure to perform, or (v) the sustained and unexcused absence of Employee from the performance of his duties under this Agreement for a period of 180 days or more within any period of 365 consecutive days, regardless of the reason for such absence, unless Employee demonstrates that such absence is due to Disability. For purposes of this paragraph, no act, or failure to act, on Employee's part shall be considered "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that such action or omission was in, or not opposed to, the best interests of Employer. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors of Employer or based upon the advice of counsel for Employer shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of Employer. Notwithstanding the foregoing, there shall not be deemed to be a termination by Employer with Cause unless and until there shall have been delivered to Employee a copy of a resolution duly adopted by the affirmative vote of a majority of the entire membership of the Board of Directors of Employer at a meeting of such Board held after reasonable notice to Employee and at which Employee has an opportunity, together with his counsel, to be heard before such Board, finding that, in the good faith opinion of such Board, Employee was guilty of the conduct set forth above and specifying the particulars thereof in detail. iii) "DISABILITY" shall mean the absence of Employee from his duties with Employer on a full-time basis for one hundred eighty (180) days within any period of three hundred and sixty-five (365) consecutive days as a result of Employee's incapacity due to physical or mental illness as certified in writing by a physician selected by Employee and reasonably acceptable to Employer (it being understood that such physician shall be deemed to be reasonably acceptable to Employer if, within a period of fifteen (15) days after Employee notifies Employer of the name of such physician, Employer does not object to the use of such physician), unless within thirty (30) days after written notice to Employee by Employer, in accordance with the provisions of Section 12, that Employee's employment is being terminated by reason of such absence, Employee shall have returned to the full performance of Employee's duties. iv) "FINAL DAY OF PERIOD OF EMPLOYMENT" shall mean the final day of the Period of Employment under Section 2(a) as in effect on the date of termination. v) Voluntary termination by Employee with "GOOD REASON" shall mean a voluntary termination by Employee resulting from the Employer (i) reducing Employee's base annual salary as in effect immediately prior to such reduction or reducing in a material respect Employee's opportunity to earn incentive compensation as provided in Section 6(d) of this Agreement; (ii) effecting a change in the position of Employee which does not represent a promotion from Employee's position provided for herein; (iii) assigning Employee duties or responsibilities which are

materially inconsistent with Employee's position provided for herein or requiring Employee to be based in a location that is outside 50 miles from the location specified in Section 4 of this Agreement; (iv) removing Employee from or failing to reappoint or reelect Employee to such position, except in connection with a termination as a result of death, Disability, voluntary termination by Employee, retirement by Employee or termination by Employer with Cause; or (v) otherwise materially breaching its obligations under this Agreement, in each case after notice in writing from Employee to Employer and a period of 30 days after such notice during which Employer fails to correct such conduct; PROVIDED, HOWEVER, that it is expressly acknowledged and agreed that a transfer of Employee (a) to the position of another corporate officer of Employer, or to any subsidiary of Employer in the capacity of president or senior officer of such subsidiary or (b) from the position of president or senior officer of any subsidiary of Employer to a position of corporate officer of Employer (in each case as contemplated by the second sentence of Section 3 of this Agreement) shall not by itself constitute "Good Reason" within the meaning of clauses (ii), (iii), (iv) or (v) of this paragraph, provided that, in the case of any transfer to a subsidiary of Employer, such subsidiary expressly assumes all of Employer's obligations under this Agreement. 9) NON-COMPETITION AND NON-DISCLOSURE; EMPLOYEE COOPERATION. a) Without the consent in writing of the Board of Directors of Employer, upon termination of Employee's employment for any reason, Employee will not for a period of two years thereafter, acting alone or in conjunction

materially inconsistent with Employee's position provided for herein or requiring Employee to be based in a location that is outside 50 miles from the location specified in Section 4 of this Agreement; (iv) removing Employee from or failing to reappoint or reelect Employee to such position, except in connection with a termination as a result of death, Disability, voluntary termination by Employee, retirement by Employee or termination by Employer with Cause; or (v) otherwise materially breaching its obligations under this Agreement, in each case after notice in writing from Employee to Employer and a period of 30 days after such notice during which Employer fails to correct such conduct; PROVIDED, HOWEVER, that it is expressly acknowledged and agreed that a transfer of Employee (a) to the position of another corporate officer of Employer, or to any subsidiary of Employer in the capacity of president or senior officer of such subsidiary or (b) from the position of president or senior officer of any subsidiary of Employer to a position of corporate officer of Employer (in each case as contemplated by the second sentence of Section 3 of this Agreement) shall not by itself constitute "Good Reason" within the meaning of clauses (ii), (iii), (iv) or (v) of this paragraph, provided that, in the case of any transfer to a subsidiary of Employer, such subsidiary expressly assumes all of Employer's obligations under this Agreement. 9) NON-COMPETITION AND NON-DISCLOSURE; EMPLOYEE COOPERATION. a) Without the consent in writing of the Board of Directors of Employer, upon termination of Employee's employment for any reason, Employee will not for a period of two years thereafter, acting alone or in conjunction with others, directly or indirectly (i) engage (either as owner, partner, stockholder, employer, employee, director, consultant or agent) in any business in which he has been directly engaged, or has supervised as an executive, during the last two years prior to such termination and which is directly in competition with a business conducted by Employer or any of its subsidiaries; (ii) induce any customers of Employer or any of its subsidiaries with whom Employee has had contacts or relationships, directly or indirectly, during and within the scope of his employment with Employer or any of its subsidiaries, to curtail or cancel their business with such companies or any of them; (iii) solicit or canvas business from any person who was a customer of Employer or any of its subsidiaries at or during the two-year period immediately preceding termination of Employee's employment; or (iv) induce, or attempt to influence, any Employee of Employer or any of its subsidiaries to terminate his employment; PROVIDED, HOWEVER, that the limitation of subparagraph (i) shall not apply if Employee's employment is terminated as a result of a voluntary termination by Employee with Good Reason or a termination by Employer without Cause. The provisions of subparagraphs (i), (ii), (iii) and (iv) above are separate and distinct commitments independent of each of the other subparagraphs. It is agreed that the ownership of not more than 1/2 of 1% of the equity securities of any company having securities listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be deemed inconsistent with clause (i) of this paragraph (a).

b) Employee shall not, at any time during the Period of Employment or following Employee's termination of employment for any reason whatsoever, disclose, use, transfer or sell, except in the course of employment with Employer, any confidential or proprietary information of Employer and its subsidiaries so long as such information has not otherwise been publicly disclosed by Employer or is not otherwise in the public domain, except as required by law or pursuant to legal process. c) Employee agrees to cooperate with Employer, by making himself available to testify on behalf of Employer or any subsidiary or affiliate of Employer, in any action, suit or proceeding, whether civil, criminal, administrative or investigative, and to assist Employer, or any subsidiary or affiliate of Employer in any such action, suit or proceeding, by providing information and meeting and consulting with the Board of Directors of Employer or its representatives or counsel, or representatives or counsel of Employer, or any subsidiary or affiliate of Employer, as requested by such Board of Directors, representatives or counsel. Employer agrees to reimburse the Employee, on an after-tax basis, for all expenses actually incurred in connection with his provision of testimony or assistance. 10) GOVERNING LAW; MODIFICATION AND SEVERABILITY; DISPUTES; ARBITRATION. a) This Agreement is governed by and is to be construed and enforced in accordance with the laws of the State of Oregon.

b) Employee shall not, at any time during the Period of Employment or following Employee's termination of employment for any reason whatsoever, disclose, use, transfer or sell, except in the course of employment with Employer, any confidential or proprietary information of Employer and its subsidiaries so long as such information has not otherwise been publicly disclosed by Employer or is not otherwise in the public domain, except as required by law or pursuant to legal process. c) Employee agrees to cooperate with Employer, by making himself available to testify on behalf of Employer or any subsidiary or affiliate of Employer, in any action, suit or proceeding, whether civil, criminal, administrative or investigative, and to assist Employer, or any subsidiary or affiliate of Employer in any such action, suit or proceeding, by providing information and meeting and consulting with the Board of Directors of Employer or its representatives or counsel, or representatives or counsel of Employer, or any subsidiary or affiliate of Employer, as requested by such Board of Directors, representatives or counsel. Employer agrees to reimburse the Employee, on an after-tax basis, for all expenses actually incurred in connection with his provision of testimony or assistance. 10) GOVERNING LAW; MODIFICATION AND SEVERABILITY; DISPUTES; ARBITRATION. a) This Agreement is governed by and is to be construed and enforced in accordance with the laws of the State of Oregon. b) If any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, ordinance or principle of law, such portion shall be deemed to be modified or altered to the extent necessary to conform thereto or, if that is not possible, to be omitted from this Agreement; and the invalidity of any such portion shall not affect the force, effect and validity of the remaining portion hereof. c) Except as provided in this Section 10(c), any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. i) The arbitrators shall have the authority to award such remedies or relief that a court of the State of Oregon could order or grant in an action governed by Oregon law, including, without limitation, specific performance of any obligation created under this Agreement, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process, but shall not be empowered to award punitive damages. The arbitration proceedings shall be conducted in Portland, Oregon or, in the event that the executive office of Employer has been relocated, in such other major city as is most proximate to such relocated executive office. ii) Notwithstanding the foregoing, any party may bring and pursue an action in any

Federal or State court in the city where the arbitration proceedings shall be conducted pursuant to the foregoing sentence seeking provisional relief, including a temporary restraining order or preliminary injunction, pending an arbitration proceeding. Any provisional relief obtained shall be discontinued once the arbitrators have assumed jurisdiction and ordered such discontinuance. d) Any amounts that have become payable pursuant to the terms of this Agreement or any judgment by a court of law or a decision by arbitrators pursuant to this Section 10 but which are not timely paid shall bear interest at the prime rate in effect at the time such payment first becomes payable, as quoted by Key Bank of Oregon. 11) NOTICES. i) All notices or other communications hereunder shall be deemed to have been duly given and made if in writing and if served by personal delivery upon the party for whom it is intended, if delivered by registered or certified mail, return receipt requested, or by a national courier service, or if sent by telecopier, PROVIDED that the telecopy is promptly confirmed by telephone confirmation thereof, to the person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such person:

Federal or State court in the city where the arbitration proceedings shall be conducted pursuant to the foregoing sentence seeking provisional relief, including a temporary restraining order or preliminary injunction, pending an arbitration proceeding. Any provisional relief obtained shall be discontinued once the arbitrators have assumed jurisdiction and ordered such discontinuance. d) Any amounts that have become payable pursuant to the terms of this Agreement or any judgment by a court of law or a decision by arbitrators pursuant to this Section 10 but which are not timely paid shall bear interest at the prime rate in effect at the time such payment first becomes payable, as quoted by Key Bank of Oregon. 11) NOTICES. i) All notices or other communications hereunder shall be deemed to have been duly given and made if in writing and if served by personal delivery upon the party for whom it is intended, if delivered by registered or certified mail, return receipt requested, or by a national courier service, or if sent by telecopier, PROVIDED that the telecopy is promptly confirmed by telephone confirmation thereof, to the person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such person: To Employee:

Telephone: Telecopy: To Employer: FEI Company 7451 NW Evergreen Parkway Hillsboro, OR 97124 Attn: Chief Executive Officer

With a copy to: STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 Portland, Oregon 97204-1268 Telephone: 503-224-3380 Telecopy: 503-220-2480 Attn: Stephen E. Babson 12) WITHHOLDING. i) All payments to be made to Employee under this Agreement will be subject to required withholding taxes and other deductions. 13) SUCCESSORS; BINDING AGREEMENT. a) Any Successor (as hereinafter defined) to Employer shall be bound by this Agreement. Employer will seek to have any Successor assent to the fulfillment by Employer of its obligations under this Agreement at Employee's request. Failure of Employer to obtain such assent within thirty (30) days after such request shall constitute Good Reason for termination by Employee of Employee's employment and, upon a voluntary termination by Employee pursuant to Section 2, shall entitle Employee to the benefits provided in Section 7(c). For purposes of this Agreement, "Successor" shall mean any person other than Philips Electronics N.V. and its affiliates that succeeds

With a copy to: STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 Portland, Oregon 97204-1268 Telephone: 503-224-3380 Telecopy: 503-220-2480 Attn: Stephen E. Babson 12) WITHHOLDING. i) All payments to be made to Employee under this Agreement will be subject to required withholding taxes and other deductions. 13) SUCCESSORS; BINDING AGREEMENT. a) Any Successor (as hereinafter defined) to Employer shall be bound by this Agreement. Employer will seek to have any Successor assent to the fulfillment by Employer of its obligations under this Agreement at Employee's request. Failure of Employer to obtain such assent within thirty (30) days after such request shall constitute Good Reason for termination by Employee of Employee's employment and, upon a voluntary termination by Employee pursuant to Section 2, shall entitle Employee to the benefits provided in Section 7(c). For purposes of this Agreement, "Successor" shall mean any person other than Philips Electronics N.V. and its affiliates that succeeds to, or has the practical ability to control (either immediately or with the passage of time), Employer's business directly, by merger or consolidation, or indirectly, by purchase of the Employer's voting securities, all or substantially all of its assets or otherwise. b) For purposes of this Agreement, "Employer" shall include any corporation or other entity which is the surviving or continuing entity in respect of any amalgamation, merger, consolidation, dissolution, asset acquisition or other form of business combination. 14) MISCELLANEOUS. a) Except to the extent that the terms of this Agreement confer benefits that are more favorable to Employee than are available under any other employee benefit or executive compensation plan of Employer in which Employee is a participant, Employee's rights under any such employee (including executive) benefit plan or executive compensation plan shall be determined in accordance with the terms of such plan (as it may be modified or added to by Employer from time to time). b) This Agreement constitutes the entire understanding between Employer and Employee relating to employment of Employee by Employer and its subsidiaries and supersedes and cancels all prior agreements and understandings with respect to the subject matter

of this Agreement and such other written agreements. Employee shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by Employee under such prior agreements and understandings. c) This Agreement may be amended but only by a subsequent written agreement of the parties. d) This Agreement shall be binding upon and shall inure to the benefit of Employee, his heirs, executors, administrators and beneficiaries, and shall be binding upon and inure to the benefit of Employer and its successors and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written.

of this Agreement and such other written agreements. Employee shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by Employee under such prior agreements and understandings. c) This Agreement may be amended but only by a subsequent written agreement of the parties. d) This Agreement shall be binding upon and shall inure to the benefit of Employee, his heirs, executors, administrators and beneficiaries, and shall be binding upon and inure to the benefit of Employer and its successors and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. FEI COMPANY By:_______________________________ (Authorized Officer)

Nicholas P. Economou

EXHIBIT 10.16 May 14, 1998 Mr. Vahe Sarkissian 22000 Rolling Hills Rd. Saratoga, CA 95070 Subject: FEI Employment Terms Dear Mr. Sarkissian: On behalf of the search committee of the FEI Board of Directors this letter will confirm our offer of employment to you as Chief Executive Officer for FEI Company. The terms and conditions of employment are as follows:
REPORTING RELATIONSHIP: RESPONSIBILITIES: You will report to the FEI Board of Directors You will lead and direct the Senior Management Team (SMT) with primary accountability for delivering value to the FEI stockholders through the strategic planning, direction and delivery of performance that will enhance shareholder value of FEI Company. You will be a member of the Board of Directors. Your compensation will be subject to approval by the Compensation Committee of the Board and will be based upon the following four components: 1) A base salary at the annual rate of $310,000, to be paid semi-monthly and reviewed annually during the last week of December. 2) An annual bonus with a guarantee of $200,000 for the initial twelve (12) month period of employment and thereafter paid on the basis of two-thirds the annual salary based on achievement of objectives.

COMPENSATION:

EXHIBIT 10.16 May 14, 1998 Mr. Vahe Sarkissian 22000 Rolling Hills Rd. Saratoga, CA 95070 Subject: FEI Employment Terms Dear Mr. Sarkissian: On behalf of the search committee of the FEI Board of Directors this letter will confirm our offer of employment to you as Chief Executive Officer for FEI Company. The terms and conditions of employment are as follows:
REPORTING RELATIONSHIP: RESPONSIBILITIES: You will report to the FEI Board of Directors You will lead and direct the Senior Management Team (SMT) with primary accountability for delivering value to the FEI stockholders through the strategic planning, direction and delivery of performance that will enhance shareholder value of FEI Company. You will be a member of the Board of Directors. Your compensation will be subject to approval by the Compensation Committee of the Board and will be based upon the following four components: 1) A base salary at the annual rate of $310,000, to be paid semi-monthly and reviewed annually during the last week of December. 2) An annual bonus with a guarantee of $200,000 for the initial twelve (12) month period of employment and thereafter paid on the basis of two-thirds the annual salary based on achievement of objectives.

COMPENSATION:

Mr. Vahe Sarkissian May 14, 1998 Page Two 3) A grant of 50,000 shares of FEI common stock with vesting of 25,000 shares immediately and 25,000 shares upon completing thirteen (13) months of employment. A loan to cover the state and federal taxes payable in connection with the stock grant. The loan will be forgiven at 20 per cent per year for five years. The balance of the loan plus interest is due FEI should you terminate your employment prior to five years. 4) Options of 200,000 shares of FEI common stock to vest 20 per cent per year over five (5) years from the date of issue. The option price will be based on the market value of the stock at the date of the grant or the date of employment whichever is later. The exercise period is ten (10) years. [Terms changed by mutual agreement to 49,380 ISO's and 150,620 restricted stock purchase.] 5) As the CEO of FEI you will participate in stock option grants made on an annual basis by the FEI Board Compensation Committee and in such amounts as are commensurate with your responsibilities. The Committee currently considers annual grants in

Mr. Vahe Sarkissian May 14, 1998 Page Two 3) A grant of 50,000 shares of FEI common stock with vesting of 25,000 shares immediately and 25,000 shares upon completing thirteen (13) months of employment. A loan to cover the state and federal taxes payable in connection with the stock grant. The loan will be forgiven at 20 per cent per year for five years. The balance of the loan plus interest is due FEI should you terminate your employment prior to five years. 4) Options of 200,000 shares of FEI common stock to vest 20 per cent per year over five (5) years from the date of issue. The option price will be based on the market value of the stock at the date of the grant or the date of employment whichever is later. The exercise period is ten (10) years. [Terms changed by mutual agreement to 49,380 ISO's and 150,620 restricted stock purchase.] 5) As the CEO of FEI you will participate in stock option grants made on an annual basis by the FEI Board Compensation Committee and in such amounts as are commensurate with your responsibilities. The Committee currently considers annual grants in the range of 40,000 to 50,000 shares to meet these criteria in light of the capital structure of the Company, the competitive environment and the general outlines of the Company's existing stock incentive plans. Future grants of options are within the discretion of the Compensation Committee and subject to the availability at the time of grant of options under a shareholder-approved plan. A portion of the option grants or their vesting may be made contingent upon company performance. BENEFITS: You will be eligible to participate in the FEI benefit and perquisite programs offered to other Company Executives (see attached for list of standard benefits). Your annual vacation will be four (4) weeks. Should FEI terminate you without cause during the first three (3) years of employment, you will be entitled to twelve (12) months of base salary as

SEVERANCE:

Mr. Vahe Sarkissian May 14, 1998 Page Three severance, your stock and options will be credited with an additional twelve (12) months of vesting, the loan described above will be forgiven and will be entitled to CEO bonus or incentive compensation for any period of service not covered by an earlier payment RELOCATION/TEMPORARY HOUSING:

You will be eligible for the Company's executive relocation package and temporary housing cost reimbursement. Your role in the existing four companies with which you are associated will be diminished operationally; however, you will still function as a member of their respective boards. [You will continue as Chairman of Surface Interface, Inc.]

OUTSIDE BUSINESS ACTIVITY:

Mr. Vahe Sarkissian May 14, 1998 Page Three severance, your stock and options will be credited with an additional twelve (12) months of vesting, the loan described above will be forgiven and will be entitled to CEO bonus or incentive compensation for any period of service not covered by an earlier payment RELOCATION/TEMPORARY HOUSING:

You will be eligible for the Company's executive relocation package and temporary housing cost reimbursement. Your role in the existing four companies with which you are associated will be diminished operationally; however, you will still function as a member of their respective boards. [You will continue as Chairman of Surface Interface, Inc.]

OUTSIDE BUSINESS ACTIVITY:

I would appreciate your response to this offer letter no later than May 15, 1998 and would like to establish your official date of employment as May 15, 1998. I look forward to your joining the FEI team and the future success we will enjoy. Sincerely yours, Dr. Lynwood Swanson Chairman If you agree with the above, please sign on the below stated line and return one copy to FEI and retain one copy for yourself. Vahe Sarkissian

EXHIBIT 21.1 LIST OF SUBSIDIARIES
JURISDICTION OF INCORPORATION --------------Oregon The Netherlands Japan Oregon Germany Barbados Oregon Korea Belgium Austria Norway Hong Kong

NAME ---FEI Company Philips Electron Optics International B.V. Micrion KK Micrion Corporation FEI Deutschland GmbH FEI Company FSC Ltd. FEI Asia Corporation Asia FEI Company FEI Company N.V. FEI Company GmbH FEI Company AS FEI Company Ltd.

EXHIBIT 21.1 LIST OF SUBSIDIARIES
JURISDICTION OF INCORPORATION --------------Oregon The Netherlands Japan Oregon Germany Barbados Oregon Korea Belgium Austria Norway Hong Kong Spain Switzerland Denmark Sweden Singapore Czech Republic

NAME ---FEI Company Philips Electron Optics International B.V. Micrion KK Micrion Corporation FEI Deutschland GmbH FEI Company FSC Ltd. FEI Asia Corporation Asia FEI Company FEI Company N.V. FEI Company GmbH FEI Company AS FEI Company Ltd. FEI Company S.A. FEIC A.G. FEI Company A/S FEI Company FEI Company of USA (SE Asia) P.t.e. Ltd. Philips Electron Optics Czech Republic SO

Philips Electron Optics Canada, Ltd. Philips Electron Optics SRL Philips Electron Optics Nederland B.V. (Sales/Service) Philips Electron Optics Japan Ltd. Philips Optique Electronique S.A.S. Philips Electron Optics B.V. FEI UK Ltd. FEI Europe Ltd.

Canada Italy The Netherlands Japan France The Netherlands United Kingdom United Kingdom

EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT

Philips Electron Optics Canada, Ltd. Philips Electron Optics SRL Philips Electron Optics Nederland B.V. (Sales/Service) Philips Electron Optics Japan Ltd. Philips Optique Electronique S.A.S. Philips Electron Optics B.V. FEI UK Ltd. FEI Europe Ltd.

Canada Italy The Netherlands Japan France The Netherlands United Kingdom United Kingdom

EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Nos. 333-08863, 333-32911, 33357331, 333-92629, and 333-92631 of FEI Company on Form S-8 of our reports dated February 8, 2000, appearing in the Annual Report on Form 10-K of FEI Company for the year ended December 31, 1999. DELOITTE & TOUCHE LLP Portland, Oregon March 24, 2000

ARTICLE 5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE

YEAR DEC 31 1999 DEC 31 1999 11,124 0 80,680 (3,052) 59,517 171,859 48,505 (19,737) 288,100 86,902 0 0 0 218,406 (65,829) 288,100 216,152 216,152 131,143 218,667 0 0 1,162

EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Nos. 333-08863, 333-32911, 33357331, 333-92629, and 333-92631 of FEI Company on Form S-8 of our reports dated February 8, 2000, appearing in the Annual Report on Form 10-K of FEI Company for the year ended December 31, 1999. DELOITTE & TOUCHE LLP Portland, Oregon March 24, 2000

ARTICLE 5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

YEAR DEC 31 1999 DEC 31 1999 11,124 0 80,680 (3,052) 59,517 171,859 48,505 (19,737) 288,100 86,902 0 0 0 218,406 (65,829) 288,100 216,152 216,152 131,143 218,667 0 0 1,162 (2,580) 4,800 (7,380) 0 0 0 (7,380) (.34) (.34)

ARTICLE 5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

YEAR DEC 31 1999 DEC 31 1999 11,124 0 80,680 (3,052) 59,517 171,859 48,505 (19,737) 288,100 86,902 0 0 0 218,406 (65,829) 288,100 216,152 216,152 131,143 218,667 0 0 1,162 (2,580) 4,800 (7,380) 0 0 0 (7,380) (.34) (.34)