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EXHIBIT 2.2
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 Watkins-Johnson
Company, a California corporation ("WATKINS-JOHNSON"), is made on July 2, 1999
by and between SVG and Watkins-Johnson. 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 Watkins-Johnson
by SVG or a subsidiary of SVG and the purchase of the Scotts Valley Property (as
defined below) of Watkins-Johnson 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, Watkins-Johnson 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
Watkins-Johnson based on GAAP, which certificate shall be signed by the
President or Vice President of Watkins-Johnson. 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
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assets and liabilities as of December 31, 1998; and, provided, further,
that the inventory 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,
Watkins-Johnson, 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. Watkins-Johnson 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 Watkins-Johnson 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 Watkins-Johnson agrees that all of the income, expenses and cash
flows of the Business shall be attributed to SVG during such period.
Watkins-Johnson 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 Watkins-Johnson or an Affiliate of
Watkins-Johnson 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.
Watkins-Johnson shall be and remain responsible for distributing the customer
letters, and in connection therewith, Watkins-Johnson 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
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of the International Receivables to Watkins-Johnson. 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 mailed prior to the Closing, SVG
agrees, and agrees to direct the SEG International Entities, to reasonably
cooperate with Watkins-Johnson 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 Watkins-Johnson can complete the obligation. Any
personnel or other costs incurred by SVG pursuant hereto shall be paid by
Watkins-Johnson promptly after Watkins-Johnson 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 Watkins-Johnson 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
Watkins-Johnson 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
Watkins-Johnson 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 Watkins-Johnson are hereby cancelled or contributed to such entity's
capital accounts.
7. Notwithstanding the language set forth in the grant deed from
Watkins-Johnson 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, Watkins-Johnson and SVG hereby
affirm and agree that all of the obligations of Watkins-Johnson 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 Watkins-Johnson to SELCO, as
the assignee purchaser for SVG. Watkins-Johnson also acknowledges and agrees
that notwithstanding the sale of the Scotts Valley Property by Watkins-Johnson
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 Scott 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/ Russell G. Weinstock
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Print Name: Russell G. Weinstock
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Title: Vice President of Finance, Chief Financial Officer
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WATKINS-JOHNSON COMPANY
By: /s/ Scott G. Buchanan
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Print Name: Scott G. Buchanan
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Title: Vice President, Chief Financial Officer
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