AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (the "Amendment") to the Securities Purchase
Agreement dated April 30, 1999 (the "Purchase Agreement") by and between Silicon
Valley Group, Inc., a Delaware corporation (the "SVG"), and Xxxxxxx-Xxxxxxx
Company, a California corporation ("Xxxxxxx-Xxxxxxx"), is made on July 2, 1999
by and between SVG and Xxxxxxx-Xxxxxxx. Capitalized terms used herein are as
defined in the Purchase Agreement unless otherwise defined herein.
RECITALS
A. The parties hereto entered into the Purchase Agreement providing for
purchase of the outstanding SEG LLC Interests and the outstanding International
Subsidiary Capital Stock held by subsidiaries of Xxxxxxx-Xxxxxxx by SVG or a
subsidiary of SVG and the purchase of the Scotts Valley Property (as defined
below) of Xxxxxxx-Xxxxxxx by a designee of SVG.
B. The parties hereto desire to amend the Purchase Agreement as set
forth in this Amendment.
NOW, THEREFORE, the parties hereby agree to amend the Purchase
Agreement as follows:
1. Section 1.4(a) of the Purchase Agreement is amended and restated to
read as follows:
"The parties acknowledge that the Estimated Consideration was based
upon the values for the Included Assets and the Included Liabilities as
of December 31, 1998, as adjusted, as set forth on Schedule 1.4. The
value of Included Assets less the Included Liabilities as of December
31, 1998 of $26,800,000 as set forth on Schedule 1.4, is herein
referred to as the "Preliminary Net Asset Value." Within thirty (30)
days after the Closing Date, Xxxxxxx-Xxxxxxx shall deliver to SVG a
certificate (the "Closing Certificate") setting forth a schedule of and
values for the Included Assets and Included Liabilities (other than the
Unassumed Payables), as of the Valuation Date (as defined below),
determined by Xxxxxxx-Xxxxxxx based on GAAP, which certificate shall be
signed by the President or Vice President of Xxxxxxx-Xxxxxxx. As used
in this Amendment, the term "Valuation Date" shall mean July 3, 1999 at
12:01 a.m., or such other date and time as the parties may agree in
writing. The Closing Certificate shall also include a determination of
the consolidated net assets being acquired by SVG hereunder (the
"Closing Net Asset Value") of the Business, which shall be equal to the
value of the Included Assets minus the value of the Included
Liabilities (excluding the Unassumed Payables) as of the Valuation
Date, plus the cash balances held by the SEG International Entities as
of the Valuation Date; provided, however, that the value of the assets
and liabilities, including the equipment related to the AP Next
product, set forth under the caption "Fixed Valuation" on Schedule 1.4
as of the Valuation Date shall be equal to the value of such assets and
liabilities as of December 31, 1998; and, provided, further, that the
inventory
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balances (net of reserves) determined in accordance with GAAP as of the
Valuation Date shall be increased by $4,500,000. In addition, in order
to determine the value of the Closing Net Assets, Xxxxxxx-Xxxxxxx,
under the observation of SVG, performed a physical inspection and count
of the inventory and equipment included in the Included Assets as of
the close of business on June 25, 1999 in order to provide a
"foundation" for determining the value of those assets as of the
Valuation Date. Xxxxxxx-Xxxxxxx and SVG shall take whatever actions are
reasonably appropriate to update those figures to the Valuation Date.
2. Section 8.1(b) of the Purchase Agreement is amended and restated to
read as follows:
"by either Xxxxxxx-Xxxxxxx or SVG if the Acquisition shall not have
been consummated by July 6, 1999 for any reason; provided, however,
that the right to terminate this Agreement under this Section 8.1(b)
shall not be available to any party whose action or failure to act has
been a principal cause of or resulted in the failure of the Acquisition
to occur on or before such date and such action or failure to act
constitutes a breach of this Agreement;"
3. Section 9.10 of the Purchase Agreement is amended to include the
following:
" "Valuation Date" has the meaning set forth in Section 1.4."
4. If, and only if, there is a Closing under the Purchase Agreement,
SVG agrees that it shall be responsible for the ordinary and normal expenses of
the Business from 12:01 a.m., July 3, 1999 to (as well as after) the Closing,
and Xxxxxxx-Xxxxxxx agrees that all of the income, expenses and cash flows of
the Business shall be attributed to SVG during such period. Xxxxxxx-Xxxxxxx
further agrees that during such period it shall carry on the Business diligently
and in accordance with good commercial practice and in the usual, regular and
ordinary course, in accordance with Section 4.1 of the Purchase Agreement,
including without limitation maintaining, at its expense, insurance coverage for
all personal and real property and all employee-related matters with respect to
the Business.
5. Pursuant to Section 6.2(n) of the Purchase Agreement, all accounts
receivable in the SEG International Entities (the "International Receivables")
shall have been transferred to Xxxxxxx-Xxxxxxx or an Affiliate of
Xxxxxxx-Xxxxxxx that is not an SEG Entity prior to the Closing. The parties
agree that ownership of the International Receivables shall be transferred as
required as of the Closing; however, such transfers may not be perfected under
the laws applicable to all of the SEG International Entities. Among other tasks,
in order to perfect the transfers of ownership of the International Receivables,
letters must be sent to certain customers of the SEG International Entities.
Xxxxxxx-Xxxxxxx shall be and remain responsible for distributing the customer
letters, and in connection therewith, Xxxxxxx-Xxxxxxx is authorized, on behalf
of each of the SEG International Entities, to contact and notify customers of
each such entity of the change in ownership of such SEG International Entity and
the transfer and assignment of the International Receivables to Xxxxxxx-Xxxxxxx.
The form of such customer notification letters shall be reviewed and approved by
the parties hereto. In the event that all the customer letters are not
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mailed prior to the Closing, SVG agrees, and agrees to direct the SEG
International Entities, to reasonably cooperate with Xxxxxxx-Xxxxxxx by
providing information that resides in the SEG International Entities and
personnel of the SEG International Entities to assist in the distribution of
such customer letters and shall assist in making relevant filings with
appropriate governmental authorities required of such SEG International Entity
so that Xxxxxxx-Xxxxxxx can complete the obligation. Any personnel or other
costs incurred by SVG pursuant hereto shall be paid by Xxxxxxx-Xxxxxxx promptly
after Xxxxxxx-Xxxxxxx receives an invoice from SVG of such expenses. The parties
agree that nothing in this Section 5 shall shift any of the responsibility to
perfect the transfer of the International Receivables or the declaration of any
dividends that Xxxxxxx-Xxxxxxx chooses to declare in order to satisfy its
covenant under Section 5.13 of the Purchase Agreement and to meet the condition
set forth in Section 6.2(n) of the Purchase Agreement from Xxxxxxx-Xxxxxxx to
SVG. To the extent that any of the obligations under this Section 5 cannot be
performed under applicable laws in any jurisdiction, SVG and Xxxxxxx-Xxxxxxx
shall in good faith determine a means of achieving the intent of this Section 5
with respect to such obligations that is in compliance with all such applicable
laws. To the extent that any of the obligations of SVG in this Section 5 are
required to be performed by any of the SEG International Entities after the
Closing, SVG shall direct such SEG International Entity to perform such
obligations as required with respect to SVG hereunder.
6. Subject to the other obligations set forth in this Amendment, as of
the date of the Closing, all of each of the SEG International Entity's payables
to Xxxxxxx-Xxxxxxx are hereby cancelled or contributed to such entity's capital
accounts.
7. Notwithstanding the language set forth in the grant deed from
Xxxxxxx-Xxxxxxx to SELCO concerning property located in Scotts Valley,
California more particularly described in Exhibit A to said grant deed (the
"Scotts Valley Property"), to the effect that the conveyance of said Property is
subject to all liens and encumbrances of record, Xxxxxxx-Xxxxxxx and SVG hereby
affirm and agree that all of the obligations of Xxxxxxx-Xxxxxxx concerning the
Scotts Valley Property which are set forth in or arise under the Purchase
Agreement, including without limitation those obligations arising under Sections
1.1, 2.6, 2.9, 2.11, 2.16, 2.17, 2.23, 4.1, and 7.1 of the Purchase Agreement,
continue in full force and effect, are unaffected by the acceptance of the
aforesaid grant deed by SELCO and are not terminated or diminished by the close
of escrow for sale of the Scotts Valley Property by Xxxxxxx-Xxxxxxx to SELCO, as
the assignee purchaser for SVG. Xxxxxxx-Xxxxxxx also acknowledges and agrees
that notwithstanding the sale of the Scotts Valley Property by Xxxxxxx-Xxxxxxx
to SELCO, SELCO's acceptance of the grant deed, and SVG's leasing of the Scotts
Valley Property from SELCO, the SVG Indemnified Parties retain their rights to
make claims under Section 7.1 of the Purchase Agreement respecting the matters
described on Schedule B of the Pro Forma Title Policy for the Xxxxx Valley
Property. However, nothing in this Amendment shall be construed as establishing
that any representations, warranties or covenants in the Purchase Agreement have
been breached or have not been breached. Nor shall any aspect of this Amendment
be adduced as evidence of any such breach or non-breach.
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8. This Amendment shall be governed by California law and may be
executed in counterparts, each of which shall be deemed an original, and all of
which shall constitute one instrument.
9. Except as expressly amended by this Amendment, all provisions of the
Purchase Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties execute this Amendment as of the date
referred to above.
SILICON VALLEY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxxx
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Title: Vice President of Finance, Chief Financial Officer
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XXXXXXX-XXXXXXX COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
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Print Name: Xxxxx X. Xxxxxxxx
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Title: Vice President, Chief Financial Officer
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