-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PE/P6JtSYcbDPB3R2u7ofNQRgDpuFLXVRZWjUyGz3CnNfWoWZpdqRjp1hdQ5wO+u IVUq+S3ATMLeQTRX1FVLgA== 0000898430-95-002040.txt : 19951020 0000898430-95-002040.hdr.sgml : 19951020 ACCESSION NUMBER: 0000898430-95-002040 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951004 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951019 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEMTECH CORP CENTRAL INDEX KEY: 0000088941 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 952119684 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06395 FILM NUMBER: 95581646 BUSINESS ADDRESS: STREET 1: 652 MITCHELL RD CITY: NEWBURY PARK STATE: CA ZIP: 91320 BUSINESS PHONE: 8054982111 MAIL ADDRESS: STREET 2: 652 MITCHELL ROAD CITY: NEWBURY PARK STATE: CA ZIP: 91320 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) OCTOBER 4, 1995 ----------------------------- SEMTECH CORPORATION - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 1-6395 95-2119684 - -------------------------------------------------------------------------------- (STATE OR OTHER (COMMISSION (IRS EMPLOYER JURISDICTION FILE NUMBER) IDENTIFICATION NO.) OF INCORPORATION) 652 MITCHELL ROAD, NEWBURY PARK, CALIFORNIA 91320 - -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ZIP CODE REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (805) 498-2111 ------------------------- NOT APPLICABLE - -------------------------------------------------------------------------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT.) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On October 4, 1995, the Registrant entered into an Agreement and Plan of Merger ("Merger Agreement") among the Registrant, Semtech Acquisition Corp.(a wholly-owned subsidiary of the Registrant), Gamma Inc. (dba ECI Semiconductor) and the Shareholders of Gamma Inc. dated October 4, 1995. Pursuant to the Merger Agreement, on October 4, 1995, Semtech Acquisition Corp. was merged into Gamma Inc., and Gamma Inc. was the surviving corporation and became a wholly-owned subsidiary of the Registrant. Gamma Inc. was then renamed Semtech Santa Clara Corp. Each share of Gamma Inc. Stock outstanding on October 4, 1995, by virtue of the Merger Agreement, was exchanged for and converted into fully paid and nonassessable voting common shares, par value $.01 per share, of Semtech Corporation common stock, at the exchange rate of 775,000 shares of Semtech Corporation common stock, for 147,566 shares of Gamma Inc. common stock. This agreement defines the terms under which all the outstanding shares of Gamma Inc. were exchanged. Semtech Corporation acquired Gamma Inc. to integrate and complement its existing businesses and technology. The Registrant also entered into a Registration Rights Agreement dated October 4, 1995. This agreement provides that the Semtech Corporation will file with the Securities and Exchange Commission, not later than 90 days after October 4, 1995, a Registration Statement under the Securities Act covering the 775,000 shares of newly issued common stock of the Semtech Corporation which was exchanged for all of the outstanding stock of Gamma Inc. The Registration shall be on Form S-3 or another appropriate form permitting registration of such securities for resale by the former shareholders of Gamma Inc. from time to time. Semtech issued 775,000 new shares of common stock in exchange for all of Gamma, Inc.'s (dba ECI Semiconductor) outstanding stock. Semtech Corporation agreed to use its best efforts to cause this registration to become effective under the Securities Act of 1933, as amended, as soon as practicable following the date on which it is filed. The Registrant also entered into the Escrow Agreement dated October 4, 1995 among the Registrant, the former shareholders of Gamma Inc. and Bank of America NT&SA. This agreement defines terms under which 50,000 (approximately 6.5%) of the shares of Semtech common stock acquired by the shareholders of Gamma Inc. through the Merger Agreement will be held in escrow for a period which under no circumstances will exceed one year for the purpose of satisfying any indemnification obligations of such shareholders arising under the Merger Agreement. The foregoing descriptions are qualified in their entirety by reference to the full texts of the Merger Agreement, the Registration Rights Agreement and Escrow Agreement, which are attached hereto as Exhibits 2.1, 2.2 and 2.3, respectively, and are incorporated herein by reference. Additional information concerning this event is set forth in the Registrant's press release dated October 4, 1995, a copy of which is attached hereto as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) It is impracticable for the Registrant to provide the required financial statements for the acquisition covered by this Report at the time this report is due. Registrant will file the financial statements when they are available, and not later than sixty (60) days after the date on which this Report must be filed. (b) It is impracticable for the Registrant to provide the pro-forma financial information required by Article 11 of Regulation S-X for the acquisition covered by this Report at the time this Report is due. Registrant will file the required pro-forma financial information when such information is available, and not later than sixty (60) days after the date on which this Report must be filed. (c) Exhibits. 2.1 Agreement and Plan of Merger ("Merger Agreement") among the Semtech Corporation, Semtech Acquisition Corp., Gamma Inc. (dba ECI Semiconductor) and the Shareholders of Gamma Inc. dated October 4, 1995. 2.2 Registration Rights Agreement among Semtech Corporation and the Shareholders of Gamma, Inc. dated October 4, 1995. 2.3 Escrow Agreement among Semtech Corporation, the Shareholders of Gamma, Inc. and Bank of America NT&SA, dated October 4, 1995. 99.1 Press Release, dated October 4, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SEMTECH CORPORATION ------------------- (Registrant) Date: October 19, 1995 /s/ David G. Franz, Jr. ----------------------------------- David G. Franz, Jr. Vice President Finance and Chief Financial Officer, Secretary and Treasurer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ---------- ----------- 2.1 Agreement and Plan of Merger ("Merger Agreement") among the Semtech Corporation, Semtech Acquisition Corp., Gamma Inc. (dba ECI Semiconductor) and the Shareholders of Gamma Inc. dated October 4, 1995. 2.2 Registration Rights Agreement among Semtech Corporation and the Shareholders of Gamma, Inc. dated October 4, 1995. 2.3 Escrow Agreement among Semtech Corporation, the Shareholders of Gamma, Inc. and Bank of America NT&SA, dated October 4, 1995. 99.1 Press Release, dated October 4, 1995. EX-2.1 2 AGREEMENT & PLAN OF MERGER EXHIBIT 2.1 AGREEMENT AND PLAN OF MERGER AMONG SEMTECH CORPORATION, SEMTECH ACQUISITION CORP., GAMMA INC. (dba ECI SEMICONDUCTOR), AND THE SHAREHOLDERS OF GAMMA INC. October 4, 1995 TABLE OF CONTENTS -----------------
Page ---- ARTICLE 1 DEFINITIONS................................................. 2 ARTICLE 2 THE MERGER.................................................. 7 2.1 The Merger.................................................. 7 2.2 Articles of Incorporation; By-laws.......................... 8 2.3 Directors and Officers...................................... 8 2.4 Exchange of Shares.......................................... 8 2.5 The Closing................................................. 9 ARTICLE 3 REPRESENTATIONS AND WARRANTIES CONCERNING THE SHAREHOLDERS................................................ 10 3.1 Ownership of Shares......................................... 10 3.2 Execution and Delivery...................................... 10 3.3 No Conflicts................................................ 10 3.4 No Brokers.................................................. 11 3.5 Investment Representations.................................. 11 ARTICLE 4 REPRESENTATIONS AND WARRANTIES CONCERNING ECI............... 12 4.1 Organization and Good Standing; Execution and Delivery....................................... 12 4.2 No Conflicts................................................ 13 4.3 Capitalization.............................................. 13 4.4 Financial Statements........................................ 14 4.5 Title to Property; Encumbrances............................. 14 4.6 Accounts Receivable......................................... 16 4.7 Inventories................................................. 16 4.8 Trademarks, Patents, Etc.................................... 17 4.9 Banking and Insurance....................................... 18 4.10 Indebtedness................................................ 18 4.11 Judgments; Litigation....................................... 19 4.12 Income and Other Taxes...................................... 19 4.13 Questionable Payments....................................... 20 4.14 Employee Benefit Matters.................................... 20 4.15 No Undisclosed Liabilities.................................. 21 4.16 Permits, Licenses, Etc...................................... 21 4.17 Regulatory Filings.......................................... 22 4.18 [INTENTIONALLY LEFT BLANK]................................. 22 4.19 Material Contracts; No Defaults............................. 22 4.20 Absence of Certain Changes.................................. 22 4.21 Employees and Labor Matters................................. 24
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Page ---- 4.22 Affiliations................................................ 24 4.23 Principal Customers and Suppliers........................... 25 4.24 Compliance with Law......................................... 25 4.25 Product Returns............................................. 25 4.26 Product Liability and Product Warranty...................... 26 4.27 Corporate Records........................................... 26 4.28 Hazardous Materials......................................... 26 4.29 No Brokers.................................................. 27 4.30 Disclosure.................................................. 28 ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SEMTECH................... 28 5.1 Organization and Good Standing Semtech of 5.2 Organization, Ownership and Good............................ 28 Standing of Acquisition..................................... 28 5.3 Execution and Delivery...................................... 28 5.4 No Conflicts................................................ 29 5.5 Disclosure.................................................. 29 5.6 Issuance of Semtech Stock................................... 29 5.7 Effect of Merger............................................ 29 5.8 No Liabilities.............................................. 29 5.9 Capitalization of Semtech................................... 29 5.10 Capitalization of Acquisition............................... 30 5.11 Access to Information....................................... 30 5.12 Registration Matters........................................ 30 ARTICLE 6 CONDUCT OF BUSINESS PENDING CLOSING......................... 31 6.1 Qualification............................................... 31 6.2 Ordinary Course............................................. 31 6.3 Organic Changes............................................. 31 6.4 Indebtedness................................................ 32 6.5 Accounting.................................................. 32 6.6 Compliance with Legal Requirements.......................... 32 6.7 Disposition of Assets....................................... 32 6.8 Compensation................................................ 32 6.9 Modification or Breach of Agreements; New Agreements........ 33 6.10 Capital Expenditures........................................ 33 6.11 Consents.................................................... 33 6.12 Maintain Insurance.......................................... 33 6.13 Discharge................................................... 33 6.14 Actions..................................................... 34 6.15 Permits..................................................... 34
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Page ---- 6.16 Tax Assessments and Audits.................................. 34 ARTICLE 7 ADDITIONAL COVENANTS........................................ 34 7.1 Covenants of the Shareholders............................... 34 7.2 Covenants of Semtech........................................ 35 7.3 Access and Information...................................... 36 7.4 Expenses.................................................... 37 7.5 Certain Notifications....................................... 37 7.6 Publicity; Employee Communications.......................... 37 7.7 Further Assurances.......................................... 37 7.8 Competing Offers; Merger or Liquidation..................... 38 7.9 Inconsistent Action......................................... 38 7.10 Post-Termination Employment................................. 38 7.11 Pooling Restrictions on Transactions in Semtech Stock....... 39 ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING............................. 40 8.1 Conditions of Semtech....................................... 40 8.2 Conditions of the Shareholders.............................. 42 ARTICLE 9 TERMINATION................................................. 43 9.1 Termination................................................. 43 9.2 Effect of Termination....................................... 44 ARTICLE 10 INDEMNIFICATION............................................. 44 10.1 Survival of Representations and Warranties.................. 44 10.2 Indemnification............................................. 45 10.3 Third Party Claims.......................................... 46 10.4 Escrow Agent................................................ 47 10.5 Rights of Shareholders...................................... 48 10.6 Termination of Escrow Account............................... 48 10.7 Shares in Escrow Account.................................... 48 ARTICLE 11 GENERAL PROVISIONS.......................................... 49 11.1 Notices..................................................... 49 11.2 Severability................................................ 50 11.3 Entire Agreement............................................ 50 11.4 Successors and Assigns...................................... 50 11.5 Amendment................................................... 50 11.6 Waiver...................................................... 50
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Page ---- 11.7 Counterparts................................................ 51 11.8 Recitals, Schedules and Annexes............................. 51 11.9 Construction................................................ 51 11.10 Governing Law.............................................. 51 11.11 Disclosure on Schedules.................................... 51 11.12 Opportunity to Seek Counsel................................ 51
-iv- AGREEMENT AND PLAN OF MERGER ---------------------------- THIS AGREEMENT AND PLAN OF MERGER is entered into as of October 4, 1995, among SEMTECH ACQUISITION CORP., a California corporation ("Acquisition"), SEMTECH CORPORATION, a Delaware corporation ("Semtech"), GAMMA INC. (dba ECI Semiconductor), a California corporation ("ECI"), and MICHAEL HIMES, MICHAEL WILSON, JIM PRESTON, TROY SPEERS, AND EXTEK COMPANY, a Virginia corporation (collectively, the "Shareholders"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Semtech is in the business of manufacturing, selling and distributing semiconductor devices and ECI is in the business of manufacturing and selling semiconductor devices; WHEREAS, Semtech desires to acquire ECI to integrate and complement its existing business and technology; WHEREAS, the Shareholders collectively own all of the issued and outstanding shares of common stock of ECI (the "ECI Stock"); WHEREAS, Semtech has formed Acquisition for the purpose of acquiring ECI; WHEREAS, the parties hereto desire that Acquisition be merged with and into ECI upon the terms and subject to the conditions contained in this Agreement; AGREEMENT --------- NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 DEFINITIONS ----------- Unless otherwise defined herein or the context otherwise requires, the terms defined in this Article 1 shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise indicated, any reference herein to a "Section", "Article," "Annex" or "Schedule" shall mean the applicable section, article, annex or schedule of or to this Agreement. All accounting terms used in this Agreement not defined in this Article 1 shall, except as otherwise provided for herein, be construed in accordance with generally accepted accounting principles. "Action" shall mean any actual or threatened claim, action, suit, ------ arbitration, hearing, inquiry, proceeding, complaint, charge or investigation by or before any Governmental Entity, mediator or arbitrator and any appeal from any of the foregoing. "Affiliate" of a Person shall mean any Person that directly or --------- indirectly controls, is controlled by, or is under common control with, the indicated Person. "Agreement" shall mean this Agreement and Plan of Merger. --------- "Agreement of Merger" shall mean an agreement of merger substantially ------------------- in the form of Annex A-1 attached hereto and otherwise complying with the --------- requirements of Section 1101 of the CGCL. "Balance Sheet" and "Balance Sheet Date" shall have the meaning ------------- ------------------ assigned to such terms in Section 4.4(a). "CGCL" shall mean the General Corporation Law of the State of ---- California. "Code" shall mean the Internal Revenue Code of 1986, as amended. ---- "Closing" and "Closing Date" have the meaning assigned to such terms ------- ------------ in Section 2.5. -2- "Covenant Not To Compete" shall have the meaning assigned to such ----------------------- term in Section 8.1(f). "Damages" shall mean any and all losses, liabilities, obligations, ------- costs, expenses, damages or judgments of any kind or nature whatsoever (including reasonable attorneys', accountants' and experts' fees, disbursements of counsel, and other costs and expenses incurred pursuing indemnification claims under Article 10 hereof). "Effective Time" shall have the meaning assigned to such term in -------------- Section 2.5. "ERISA" shall mean the Employee Retirement Income Security Act of ----- 1974, as amended from time to time. "Escrow Agreement" shall mean an escrow agreement substantially in ---------------- the form of Annex H attached hereto. "Environmental Laws" shall mean all Legal Requirements pertaining to ------------------ the protection of the environment, the treatment, emission and discharge of gaseous, particulate and effluent pollutants and the use, handling, storage, treatment, removal, transport, transloading, cleanup, decontamination, discharge and disposal of Hazardous Materials, including, without limitation, those statutes, laws, rules and regulations set forth below in the definition of "Hazardous Material." "Governmental Entity" shall mean any local, state, federal or foreign ------------------- (i) court, (ii) government or (iii) governmental department, commission, instrumentality, board, agency or authority, including the Internal Revenue Service and other taxing authorities. "Hazardous Material" shall mean any flammable, ignitable, corrosive, ------------------ reactive, radioactive or explosive substance or material, hazardous waste, toxic substance or related material and any other substance or material defined or designated as a hazardous or toxic substance, material or waste by any Environmental Law currently in effect or as amended or promulgated in the future and shall include, without limitation: (a) those substances included within the definitions of "hazardous substances", "hazardous materials", "toxic substances" or "solid waste" in the Comprehensive Environmental Response, Compensation and -3- Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq., the Resource -- --- Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq., and the -- ---- Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., and in -- --- the regulations promulgated pursuant thereto; (b) those substances defined as "hazardous wastes" in Section 25117 of the California Health and Safety Code, or as "hazardous substances" in Section 25316 of the California Health and Safety Code, and in the regulations promulgated pursuant thereto; (c) those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) as hazardous substances (40 CFR Part 302 and amendments thereto); (d) such other substances, materials and wastes that are or become regulated under applicable local, state or Federal laws or regulations, or which are or become classified as hazardous or toxic under any Legal Requirement; and (e) any material, waste or substance that is, in whole or in part, (i) petroleum, asbestos, polychlorinated biphenyls, methylene chloride, trichloroethylene, 1, 2-trans-dichloroethylene, dioxins or dibenzofurans, (ii) designated as an "extremely hazardous substance" pursuant to Section 302 of the Emergency Planning and Community Right-to-Know Act of 1986, as amended, or (iii) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Sections 1251 et seq. (33 U.S.C. (S) 1321) or listed pursuant to -- --- Section 307 of the Clean Water Act (33 U.S.C. (S) 1317), or Section 112 or other Section of the Clean Air Act, as amended. "IRS" shall mean the United States Internal Revenue Service. --- "Indebtedness" shall mean, when used with reference to any Person, ------------ without duplication, (i) any liability of such Person created or assumed by such Person, or any Subsidiary thereof, (A) for borrowed money, (B) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation, deed of trust or mortgage) given in connection with the acquisition of, or exchange for, any property or assets (other than inventory or similar property acquired and consumed in the Ordinary -4- Course), including securities and other Indebtedness, (C) in respect of letters of credit issued for such Person's account (D) for the payment of money as lessee under leases that should be, in accordance with generally accepted accounting principles, recorded as capital leases for financial reporting purposes; (ii) any liability of others described in the preceding clause (i) guaranteed as to payment of principal or interest by such Person or in effect guaranteed by such Person through an agreement, contingent or otherwise, to purchase, repurchase or pay the related Indebtedness or to acquire the security therefor; (iii) all liabilities or obligations secured by a Lien upon property owned by such Person and upon which liabilities or obligations such Person customarily pays interest or principal, whether or not such Person has not assumed or become liable for the payment of such liabilities or obliga tions; and (iv) any amendment, renewal, extension, revision or refunding of any such liability or obligation; provided, however, that Indebtedness shall not include -------- ------- any liability for compensation of such Person's employees or for inventory or similar property acquired and consumed in the Ordinary Course or for services. "Leased Real Property" shall mean all real property, including -------------------- Structures, currently leased by ECI. "Legal Requirement" shall mean any statute, law, ordinance, rule, ----------------- regulation, permit, order, writ, judgment, injunction, decree or award issued, enacted or promulgated by any Governmental Entity or any arbitrator. "Lien" shall mean all liens (including judgment and mechanics' liens, ---- regardless of whether liquidated), mortgages, assessments, security interests, easements, claims, pledges, trusts (constructive or other), deeds of trust, options or other charges, encumbrances or restrictions. "Material Adverse Effect" shall mean a material adverse effect on the ----------------------- business, financial condition, properties, profitability, prospects or operations of ECI. "Merger" shall mean the merger of Acquisition into ECI in accordance ------ with the terms and conditions of this Agreement and the relevant provisions of the CGCL. "Officers' Certificate" shall mean an officers' certificate of --------------------- Acquisition and ECI substantially in the form of Annexes A-2 and A-3, ----------- --- respectively, and otherwise -5- complying with the requirements of Sections 173 and 1103 of the CGCL. "Ordinary Course" shall mean, when used with reference to ECI, the --------------- ordinary course of ECI's business, consistent with past practices. "Permit" shall have the meaning assigned to such term in Section 4.16. ------ "Permitted Liens" shall mean (a) Liens for ad valorem real or personal --------------- property taxes or assessments not at the time due and (b) Liens in respect of pledges or deposits under workers' compensation laws or similar legislation, carriers', warehousemen's, mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such Liens are not then delinquent. "Person" shall mean all natural persons, corporations, business ------ trusts, associations, companies, partnerships, joint ventures, Governmental Entities and any other entities. "Phase I Report" shall mean the Phase I environmental report dated -------------- September 15, 1995 with respect to the Leased Real Property prepared by Montgomery Watson at the request of Semtech. "Plan" shall mean any "employee benefit plan" within the meaning of ---- Section 3(3) of ERISA and any other written or oral employee benefit plan, arrangement, practice, contract, policy, or program (other than arrangements merely involving the payment of wages) which are or at any time have been established, maintained, or contributed to by ECI or any ERISA Affiliate for the benefit of current or former employees, with respect to which ECI or an ERISA Affiliate has or may in the future have any liability or obligation to contribute or make payments of any kind. "Principal Shareholders" shall mean Michael Himes, Michael Wilson, ---------------------- Jim Preston and Troy Speers. "Securities Act" shall mean the Securities Act of 1933, as amended. -------------- "Structure" shall mean any facility, building, plant, factory, --------- office, warehouse structure or other improvement. -6- "Subsidiary" of a Person shall mean any corporation, partnership, ---------- association or other business entity at least 50% of the outstanding voting power of which is at the time owned or controlled directly or indirectly by such Person or by one or more of such subsidiary entities, or both. "Surviving Corporation" shall have the meaning assigned to such term --------------------- in Section 2.1(a). "Tax" shall mean any Federal, state, local or foreign income, gross --- receipts, license, payroll, unemployment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including, without limitation, taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), employment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated tax or other tax, assessment or charge of any kind whatsoever, including, without limitation, any interest, fine penalty or addition thereto, whether disputed or not. "Tax Return" shall mean any return, declaration, report, claim for ---------- refund or information, or statement relating to Taxes, and any exhibit, schedule, attachment or amendment thereto. ARTICLE 2 THE MERGER ---------- 2.1 The Merger. (a) At the Effective Time, in accordance with the ---------- provisions of this Agreement and the CGCL, Acquisition shall be merged with and into ECI, and ECI shall be the surviving corporation of the Merger (herein sometimes referred to as the "Surviving Corporation") and shall continue its corporate existence under the laws of the State of California. At the Effective Time, the separate existence of Acquisition shall cease. (b) At the Effective Time, the Surviving Corporation shall possess all the rights, privileges, immunities, powers, franchises, properties and assets of Acquisition and ECI, and shall become liable for all the debts, liabilities and duties of Acquisition and ECI to the same extent as if said debts, liabilities and duties had -7- been incurred or contracted by it, all as provided in the CGCL. The name of the Surviving Corporation shall be "Semtech Santa Clara Corp." 2.2 Articles of Incorporation; By-laws. (a) The articles of ---------------------------------- incorporation of Acquisition in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation until amended in accordance with the provisions thereof and as provided by law, provided, however, that the name of the Surviving Corporation as set forth in - -------- ------- its articles of incorporation shall be changed to "Semtech Santa Clara Corp." (b) The by-laws of Acquisition in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation until amended in accordance with the provisions thereof and as provided by law. 2.3 Directors and Officers. (a) The directors of Acquisition shall ---------------------- be the directors of the Surviving Corporation until their respective successors are duly elected and qualified. (b) The officers of Acquisition immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to hold office from the Effective Time until their respective successors are duly selected by the directors of the Surviving Corporation. 2.4 Exchange of Shares. (a) At the Effective Time, each share of ------------------ ECI Stock outstanding as of the Closing Date (excluding shares held by ECI as treasury stock, which shares shall be cancelled and extinguished at the Effective Time) shall, by virtue of the Merger and without any action on the part of Semtech, Acquisition, ECI or the holder thereof, be exchanged for and converted into fully paid and nonassessable voting common shares, par value $.01 per share, of Semtech ("Semtech Stock"), at the exchange rate of 775,000 shares of Semtech Stock, for 147,566 shares of ECI Stock. The exact number of shares of Semtech Stock each Shareholder shall be entitled to receive in exchange for its shares of ECI Stock based on the above exchange rate is set forth in Annex B ------- hereto. Each share of Semtech Stock issued pursuant to this section shall be fully paid and nonassessable. (b) At the Effective Time, each share of capital stock of Acquisition outstanding as of the Closing Date -8- shall thereupon be converted into and become one share of common stock of the Surviving Corporation. Each share of such common stock issued pursuant to this section shall be fully paid and nonassessable. 2.5 The Closing. The closing of the Merger and the other ----------- transactions contemplated by this Agreement (the "Closing") shall take place at the offices of ECI, 1111 Comstock Street, Santa Clara, California 95054 at 10:00 a.m., California time on October 4, 1995 or at such other place, time and date as may be agreed by the parties hereto in writing, such date being generally referred to herein as the "Closing Date." At the time of the Closing, Acquisition and ECI shall cause the Agreement of Merger, together with the Officers' Certificates and any other documents required by law to effect the Merger, to be filed and recorded with the Secretary of State of the State of California in accordance with the provisions of Section 1103 of the CGCL and shall take any and all other lawful actions and do any and all other lawful things necessary to cause the Merger to become effective (the date and time of the filing of the Agreement of Merger, together with any such other documents, being referred to as the "Effective Time"). At the Closing: (a) Each Shareholder shall deliver or cause to be delivered to Semtech: (i) a certificate or certificates represent ing all of the issued and outstanding shares of ECI Stock which is being exchanged by such Shareholder pursuant to Section 2.4 hereof; and (ii) all of the documents, certificates, and instruments required to be delivered, or caused to be delivered, by such Shareholder pursuant to Section 8.1 hereof. (b) Semtech shall deliver or cause to be delivered to each of the Shareholders: (i) a certificate representing the number of shares of Semtech Stock for which the ECI Stock previously held by such Shareholder shall be exchanged pursuant to Section 2.4 hereof, free and clear of all Liens; and -9- (ii) all of the documents, certificates, and instruments required to be delivered, or caused to be delivered, by Semtech pursuant to Section 8.2 hereof. ARTICLE 3 REPRESENTATIONS AND WARRANTIES CONCERNING THE SHAREHOLDERS --------------------------- Each of the Shareholders hereby severally, and not jointly, represents and warrants to, and covenants and agrees with, Semtech and Acquisition that: 3.1 Ownership of Shares. Such Shareholder owns of record and ------------------- beneficially the number of shares of ECI Stock set forth opposite the name of such Shareholder on Annex B hereto, and has, and at all times prior to and as of ------- the Closing such Shareholder will have, good and marketable title to such shares free and clear of all Liens. None of the ECI Stock held by such Shareholder is subject to any proxy, voting trust or other agreement or arrangement with respect to the voting thereof. 3.2 Execution and Delivery. All consents, approvals, authorizations ---------------------- and orders necessary for the exe cution, delivery and performance by such Shareholder of this Agreement (including, without limitation, the transfer of the shares of ECI Stock to be exchanged by such Shareholder hereunder) have been duly and lawfully obtained, and such Shareholder has, and at the Closing will have, full right, power, authority and capacity to execute, deliver and perform this Agreement. This Agreement has been duly executed and delivered by such Shareholder and constitutes a legal, valid and binding agreement of such Shareholder enforceable against such Shareholder in accordance with its terms. 3.3 No Conflicts. The execution, delivery and performance of this ------------ Agreement by such Shareholder and the consummation by such Shareholder of the transactions contemplated hereby will not conflict with or result in a breach or violation of any term or provision of, or (with or without notice or passage of time, or both) constitute a default under, any indenture, mortgage, deed of trust, trust (constructive and other), loan agreement or other agreement or instrument to which such Shareholder is a party or by which such Shareholder or such Shareholder's shares are -10- bound, or to such Shareholder's actual knowledge without investigation, violate any material Legal Requirement applicable to or binding upon such Shareholder. 3.4 No Brokers. No broker, finder or similar agent has been employed ---------- by or on behalf of such Shareholder in connection with this Agreement or the transactions contemplated hereby, and such Shareholder has not entered into any agreement or understanding of any kind with any person or entity for the payment of any brokerage commission, finder's fee or any similar compensation in connection with this Agreement or the transactions contemplated hereby. 3.5 Investment Representations. -------------------------- (a) Such Shareholder is acquiring the Semtech Stock to be acquired by it hereunder for its own account, not as nominee or agent for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act, except pursuant to an effective registration statement under the Securities Act. (b) Such Shareholder understands that (i) the Semtech Stock has not been registered under the Securities Act by reason of a specific exemption therefrom and may not be transferred or resold except as set forth below; and (ii) each certificate representing the Semtech Stock will be endorsed with the following legends: (A) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT; (B) The legend as set forth in Section 7.11 hereof; and (C) Any legend required to be placed thereon by applicable federal or state securities laws. -11- (c) Without limiting the representations of Semtech contained herein, such Shareholder has been furnished with such materials and has been given access to such information relating to Semtech as it or its qualified representative has requested and has been afforded the opportunity to ask questions regarding Semtech, as such Shareholder has found necessary or desirable. ARTICLE 4 REPRESENTATIONS AND WARRANTIES CONCERNING ECI -------------- The Principal Shareholders hereby jointly and severally represent and warrant to, and covenant and agree with, Semtech and Acquisition that: 4.1 Organization and Good Standing; Execution and Delivery. ------------------------------------------------------ (a) ECI has been duly organized and is existing as a corporation in good standing under the laws of the State of California with full power and authority (corporate and other) to own and lease its properties and to conduct its business as currently conducted. ECI has not qualified as a foreign corporation for the transaction of business in any jurisdiction outside the State of California and has not engaged in any activity which would require any such qualification. (b) ECI has no Subsidiary nor owns or controls, or has any other equity investment with a fair market value in excess of $10,000 in, directly or indirectly, any corporation, joint venture, partnership, association or other entity. (c) All Board of Directors' and shareholders' approvals and other material consents, approvals, authorizations and orders necessary for the execution, delivery and performance by ECI of this Agreement have been duly and lawfully obtained, and ECI has, and at the Closing will have, full right, power, authority and capacity to execute, deliver and perform this Agreement. This Agreement has been duly executed and delivered by ECI and constitutes a legal, valid and binding agreement of ECI enforceable against ECI in accordance with its terms. -12- 4.2 No Conflicts. The execution, delivery and performance of this ------------ Agreement and the consummation of the transactions contemplated hereby will not (a) conflict with or result in a breach or violation of any term or provision of, or constitute a default under (with or without notice or passage of time, or both), or otherwise give any Person a basis for accelerated or increased rights or termination or nonperformance under, any indenture, mortgage, deed of trust, loan or credit agreement, or any arrangement or agreement listed in Section 4.19 hereof, except where such conflict, breach or default would not have a Material Adverse Effect, (b) result in the violation of the provisions of the Articles of Incorporation or Bylaws of ECI or, to the Principal Shareholders' knowledge, any Legal Requirement applicable to or binding upon it, the violation of which would have a Material Adverse Effect, (c) result in the creation or imposition of any Lien upon any property or asset of ECI or (d) otherwise cause a Material Adverse Effect. 4.3 Capitalization. The authorized capital stock of ECI consists -------------- solely of 1,000,000 shares of common stock, no par value, of which only the number of shares listed on Annex B are, and on the Closing Date will be, issued ------- and outstanding. All of such shares have been duly authorized and validly issued and are fully paid, nonassessable and outstanding and are held by the Principal Shareholders, free and clear of all Liens, in the respective amounts reflected in Annex B hereto. Except as set forth in Schedule 4.3, there are (i) no ------- existing options, warrants, rights, calls or commitments of any character relating to any capital stock of ECI, and (ii) no outstanding securities or other instruments convertible into or exchangeable for any capital stock of ECI and no commitments to issue such securities or instruments; and no Person has any right of first refusal, preemptive right, subscription right or similar right with respect to any capital stock of ECI. The offer, issuance and sale of the shares of ECI Stock were (i) exempt from the registration and prospectus delivery requirements of the Securities Act, (ii) registered or qualified (or exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws and (iii) to the Principal Shareholders' knowledge, accomplished in conformity with all other Legal Requirements. -13- 4.4 Financial Statements. -------------------- (a) Schedule 4.4(a) hereto contains true and complete copies of (i) the balance sheet (the "Balance Sheet") of ECI at June 30, 1995 (the ------------- "Balance Sheet Date"), and the related statements of income, shareholders' ------------------ equity and cash flows for the 12 month period then ended, and (ii) the balance sheets of ECI at June 30, 1992, 1993, 1994, and the related statements of income, shareholders' equity and cash flow for each of the fiscal years then ended, all as reviewed by Ireland, San Filippo & Company, along with the report thereon of such firm (the financial statements described in clause (i) and (ii) above are collectively referred to as the "Financial Statements"). -------------------- (b) The Financial Statements present fairly and accurately the financial condition of ECI as of the dates indicated therein and the results of operations and changes in financial position of ECI for the periods specified therein, have been prepared in conformity with generally accepted accounting principles applied on a consistent basis during the periods covered thereby and prior periods, have been derived from the accounting records of ECI. 4.5 Title to Property; Encumbrances. ------------------------------- (a) Schedule 4.5(a) is a list of fixed assets of ECI. ECI has, and immediately prior to the Closing will have, good, valid and marketable title in fee simple to all fixed assets reflected on Schedule 4.5(a), free and clear of all Liens except Permitted Liens. (b) ECI does not own and has never owned in the past any real property. (c) Schedule 4.5(c) contains a list of all real property and personal property leases and material licenses under which ECI is the lessee or licensee. ECI has never been a lessee of any real property or Structure other than the Leased Real Property. All leases and licenses pursuant to which ECI leases or licenses from others real or personal property are valid, subsisting in full force and effect in accordance with their respective terms, and to the Principal Shareholders' knowledge there is not, under any real property or personal property lease or material license, any existing default or event of default (or event that, with notice or passage of time, or both, would constitute a default, or would constitute a basis of force ----- -14- majeure or other claim of excusable delay or nonperfor mance). True and - ------- complete copies of all written real property and written personal property leases and material licenses listed on Schedule 4.5(c) have been delivered to Semtech heretofore. Except as set forth in Schedule 4.5(c), to the Principal Shareholders' knowledge, no such lease or material license will require the consent of the lessor or licensor to or as a result of the consummation of the transactions contemplated by this Agreement. For the purposes of this Section 4.5(c), (i) a "lease" shall include a sublease and (ii) a "material license" shall mean a license in writing requiring aggregate payments in excess of $10,000. (d) All personal property owned by ECI and all personal property held by ECI pursuant to personal property leases is in good operating condition and repair, subject only to ordinary wear and tear, has been operated, serviced and maintained properly and is suitable and appropriate for the use thereof made. The Leased Real Property, the fixed assets and inventory described in Sections 4.5(a), 4.5(c) and 4.7 comprise all of the real property and personal property which are material to the conduct of business of ECI. (e) Except as set forth in Schedule 4.5(e): (i) No notice of violation of any Legal Requirement, or of any covenant, condition, restriction or easement affecting any Leased Real Property or with respect to the use or occupancy thereof, has been given by any Person to ECI or any Principal Shareholder. (ii) To the Principal Shareholders' knowledge, all of the Structures leased by ECI (A) are in good operating condition and repair, (B) are adequate and suitable for the purposes for which they are currently used, and (C) are supplied with utilities and other services necessary for the operation of such Structures, and the business conducted by ECI therein, including gas, electricity, water, telephone, sanitary sewer and storm sewer; (iii) To the knowledge of the Principal Shareholders, no condemnation proceeding is pending or threatened which would impair the occupancy, use or value of any Leased Real Property; -15- (iv) There are currently no (i) leases, subleases, licenses, concessions or other agreements, written or oral, granting to any other Person the right to acquire, use or occupy any portion of any Leased Real Property, (ii) outstanding options or rights of first refusal to lease or purchase all or any portion of Leased Real Property or interest therein or other real property other than as set forth in the leases described on Schedule 4.5(c), and (iii) Persons (other than ECI) in possession of any Leased Real Property; and (v) With respect to each item of Leased Real Property, ECI has not sold, transferred or subjected to a Lien (other than Permitted Liens) such Leased Real Property or any interest therein. 4.6 Accounts Receivable. All accounts receivable of ECI reflected in ------------------- the Balance Sheet and all accounts receivable of ECI that have arisen since the Balance Sheet Date (except such accounts receivable as have been collected since such dates) are valid and enforceable claims, and the goods and services sold and delivered that gave rise to such accounts were sold and delivered in conformity with all applicable express and implied warranties, purchase orders, agreements and specifications. Such accounts receivable of ECI are subject to no valid defense, offset or counterclaim and are fully collectible within thirty days after the Closing Date, except to the extent of the allowance for doubtful accounts reflected on the Balance Sheet. Schedule 4.6 contains a true and complete aging of ECI's accounts receivable as of the Balance Sheet Date. 4.7 Inventories. Schedule 4.7 sets forth a summary of work-in- ----------- process and finished goods inventories of ECI, and the average weekly production rate for the month of August 1995, expressed in terms of numbers of wafer starts per week. Except as described in Schedule 4.7, ECI has good, valid and marketable title to all inventories set forth or reflected in the Balance Sheet or acquired by ECI since the Balance Sheet Date. Such inventories consist of a quality and quantity usable and saleable in the Ordinary Course, except for slow-moving, damaged or obsolete items and materials of below standard quality, all of which have been written down to net realizable market value or in respect of which adequate reserves have been provided, in each case as reflected, in the Balance Sheet. The value at which inventories are carried on the Balance Sheet reflect the normal inventory valuation policy of ECI, as applicable, in accordance with generally accepted accounting principles -16- and on a basis consistent with that of preceding periods. There is no reason to believe that ECI will be unable to obtain, in the foreseeable future in the desired quantity and quality, the raw materials, supplies or component products required for the manufacture, assembly, production or sale of its products including, without limitation, inventory which historically has been imported. 4.8 Trademarks, Patents, Etc. ------------------------ (a) Except to the extent not material to its operations, ECI does not own any registered patents, trade names, trademarks, service marks or copyrights, nor has it been granted a material license or right with respect to the foregoing. (b) Neither ECI nor any Principal Shareholder has received any notice of claims or demands of any Person pertaining to any Actions that are pending, and to the Principal Shareholders' knowledge, there are no such Actions threatened, which challenge the rights of ECI in respect of any trade secrets, know-hows, processes, discoveries, developments, designs, techniques, inventions, confidential data and other information which are material to the conduct of the business of ECI (collectively herein, "Proprietary Information"). ----------------------- ECI owns the Proprietary Information free and clear of any right, equity or claim of others. ECI has caused all of its employees to sign a confidentiality or similar agreement in an effort to protect the secrecy, confidentiality and value of all Proprietary Information. (c) Schedule 4.8(c) contains a true and complete list and description of all material licenses of or rights to Proprietary Information granted to ECI by others or to others by ECI. Except as described in Schedule 4.8(c), (i) ECI has not sold, transferred, assigned, licensed or subjected to any Lien, any Proprietary Infor mation or any interest therein, and (ii) ECI is not obligated or under any liability whatever to make any payments by way of royalties, fees or otherwise to any owner or licensor of, or other claimant to, any Proprietary Information. For purposes of this Section 4.8, a "material license" shall mean a license in writing requiring aggregate payments in excess of $10,000. -17- 4.9 Banking and Insurance. --------------------- (a) Schedule 4.9(a) contains a true and complete list of the names and locations of all financial institutions at which ECI maintains a checking account, deposit account, securities account, safety deposit box or other deposit or safekeeping arrangement, the numbers or other identification of all such accounts and arrangements and the names of all persons authorized to draw against any funds therein. (b) ECI has provided Semtech with true and complete copies of all insurance policies and bonds and self insurance arrangements currently in force that cover or purport to cover risks or losses to or associated with ECI's business, operations, premises, properties, assets, employees, agents and directors and certificates from ECI's insurance agent to the effect that the workers' compensa tion, general liability and property insurances of ECI are currently in force. To the Principal Shareholders' knowledge, ECI has no obligation, liability or other commitment relating to any contract of insurance containing a provision for retrospective rating or adjustment of ECI's premium obligation, except for workers' compensation insurance. 4.10 Indebtedness. ------------ (a) True and complete copies of all instruments and documents evidencing, creating, securing or otherwise relating to Indebtedness of ECI have been delivered to Semtech heretofore. Except as described in Schedule 4.10(a), to the Principal Shareholders' knowledge, no event has occurred and no condition has become known to ECI or any Principal Shareholder (including the transactions contemplated hereby) that constitutes or, with notice or passage of time, or both, would constitute a default or a basis of force majeure or other claim of ----- ------- accelerated or increased rights, termination, excusable delay or nonper formance by ECI or any other Person under any instrument or document relating to or evidencing Indebtedness that would entitle any Person to require ECI to pay any portion of the principal amount of such Indebtedness prior to the scheduled maturity thereof. Except as set forth in Schedule 4.10(a), to the Principal Shareholders' knowledge, no instrument or document evidencing, creating, securing or otherwise relating to Indebtedness will require the consent of any Person to or as a result of the consummation of the trans actions contemplated by this Agreement. -18- (b) None of ECI's directors, employees or shareholders have guaranteed any currently outstanding Indebtedness of ECI. 4.11 Judgments; Litigation. --------------------- (a) There is no outstanding judgment, order, decree, award, stipulation or injunction of any Governmental Entity or arbitrator against or affecting ECI or its properties, assets or business or any Action pending against or affecting ECI or its properties, assets or business, in any of such cases, of which ECI or any Principal Shareholder has received notice or of which any Principal Shareholder has knowledge, and to the Principal Shareholders' knowledge, there is no such Action threatened or a basis for the institution of any such Action which, if decided adversely, would have a Material Adverse Effect. (b) To the Principal Shareholders' knowledge, there is no (i) outstanding judgment, order, decree, award, stipulation or injunction of any Governmental Entity or arbitrator against or affecting any officer or director of ECI relating to ECI or its business, or (ii) Action pending or threatened against ECI's officers or directors relating to ECI or its business. 4.12 Income and Other Taxes. Except as set forth on Schedule 4.12: ---------------------- (a) All Tax Returns required to be filed through and including the date hereof in connection with the operations of ECI have been properly and timely filed. ECI has not requested any extension of time within which to file any Tax Return, which Tax Return has not since been filed. Semtech has heretofore been furnished by ECI with true, correct and complete copies of each Tax Return of ECI with respect to the past three taxable years, and of all reports of, and communications from, any Governmental Entities relating to such period. (b) To Principal Shareholders' knowledge, all Taxes reflected on Tax Returns or withheld and deposited in connection with the operations of ECI have been duly and timely paid or deposited by ECI. ECI has properly withheld or collected all amounts required by law for income Taxes and employment Taxes relating to its employees, creditors, and other third parties, and for sales Taxes on sales, and has properly and timely remitted such withheld or collected amounts to the appropriate Governmental Entity. -19- (c) To the Principal Shareholder's knowledge, ECI has made adequate provision on its books of account for all Taxes with respect to its business, properties and operations through the Balance Sheet Date, and the accruals for Taxes in the Balance Sheet are adequate to cover all liabilities for Taxes of ECI through the Balance Sheet Date. (d) ECI has never (i) had a tax deficiency proposed, asserted or assessed against it (ii) executed any waiver of any statute of limitations on the assessment or collection of any Taxes, or (iii) been delinquent in the payment of any Taxes (other than payment of estimated taxes in fiscal year ending June 30, 1995). (e) No Tax Return of ECI (other than sales tax returns from 1988 through 1994) has been audited or the subject of other Action by any Governmental Entity. ECI has not received any notice from any Governmental Entity of any pending examination or any proposed deficiency, addition, assessment, demand for payment or adjustment relating to or affecting ECI or its assets or properties. 4.13 Questionable Payments. Neither ECI nor any of its directors, --------------------- officers, agents, employees or other Person associated with or acting on behalf of ECI has (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) made any direct or indirect unlawful payments to government officials or employees, or foreign government officials or employees, from corporate funds, (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets, or (d) made or received any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. 4.14 Employee Benefit Matters. ------------------------ (a) Schedule 4.14 contains a true and complete list of all Plans, copies of which have been delivered previously to Purchaser. (b) To the Principal Shareholders' knowledge, all Plans are in material compliance with all applicable requirements of ERISA, the Code and any other Legal Requirement. To the Principal Shareholders' knowledge, ECI has performed all material obligations required to be performed by it under ERISA, the Code and any other -20- applicable Legal Requirement and under the terms of each Plan. (c) ECI does not maintain or make contributions to any pension, profit sharing or other employee retirement benefit plan. ECI has no material liability with respect to any such plan (including, without limitation, any unfunded liability or any accumulated funding deficiency) or any material liability to the Pension Benefit Guaranty Corporation or under Title IV of ERISA with respect to a multi-employer pension benefit plan, nor would ECI have any such liability if any such plan were terminated or if ECI withdrew, in whole or in part, from any multi-employer plan. 4.15 No Undisclosed Liabilities. To the Principal Shareholders' -------------------------- knowledge, except (i) to the extent set forth or provided for in the Balance Sheet or the notes thereto, (ii) as set forth on Schedule 4.15 or (iii) for Taxes accrued between the Balance Sheet Date and the Closing Date and for non- material current liabilities incurred since the Balance Sheet Date in the Ordinary Course, ECI has no liabilities (including Indebtedness), whether accrued, absolute, contingent or otherwise, whether due or to become due and whether the amounts thereof are readily ascertainable or not, or any unrealized or anticipated losses from any commitments of a contractual nature, includ ing Taxes with respect to or based upon the transactions or events occurring at or prior to the Closing which would have a Material Adverse Effect. 4.16 Permits, Licenses, Etc. Except where it would otherwise not ---------------------- cause a Material Adverse Effect, ECI possesses, and is operating in compliance with, all franchises, licenses, permits, certificates, authorizations, rights and other approvals of Governmental Entities necessary to (i) occupy, maintain, operate and use the Leased Real Property as it is currently used, (ii) conduct its business as currently conducted, and (iii) maintain and operate its Plans (the "Permits"). Schedule 4.16 contains a true and complete list of all Permits ------- the revocation, suspension or limitation of which would have a Material Adverse Effect. Each Permit has been lawfully and validly issued, and no proceeding is pending or threatened looking toward the revocation, suspension or limitation of any Permit. To the Principal Shareholders' knowledge, the con summation of the transactions contemplated by this Agreement will not result in the revocation, suspension or limitation of any Permit and to the Principal Shareholders' knowledge, no Permit will require the consent of its issuing authority -21- to or as a result of the consummation of the transactions contemplated hereby. 4.17 Regulatory Filings. To the Principal Shareholders' knowledge, ------------------ ECI has made all required regis trations and filings with and submissions to all applicable Governmental Entities relating to the operations of ECI as currently conducted, including, without limitation, all such applicable Governmental Entities having jurisdiction over any matters pertaining to conservation or protection of the environment, and the treatment, discharge, use, handling, storage or production, or disposal of Hazardous Materials. To the Principal Shareholders' knowledge, all such registrations, filings and submissions were in compliance with all Legal Requirements (including all Environmental Laws) and other requirements when filed, no material deficiencies have been asserted by any such applicable Governmental Entities with respect to such registrations, filings or submissions. 4.18 [INTENTIONALLY LEFT BLANK] 4.19 Material Contracts; No Defaults. Schedule 4.19 contains a true ------------------------------- and complete list of all material contracts, agreements, commitments, binding arrangements and instruments to which ECI is a party and true and complete copies of all such contracts, agreements, commitments, binding arrangements and instruments have been delivered to Semtech. For purposes of this Section 4.19, "material" shall mean any contract, agreement, commitment or binding arrangement (i) entered into other than in the ordinary course of business, or (ii) entered into in the ordinary course of business where the amount involved exceeds $10,000, excluding however, in the case of either clause (i) or (ii), any contract, agreement, commitment, binding arrangement or instrument terminable at the option of ECI upon notice of 30 days or less and any agreements relating to the transfer of certain vehicles of ECI previously approved by Semtech. There has not been any material default in any obligation to be performed by ECI under any such contract, agreement, commitment, binding arrangement or instrument, and ECI has not waived any material right thereunder or with respect thereto, that would cause a Material Adverse Effect. 4.20 Absence of Certain Changes. Since the Balance Sheet Date, except -------------------------- as disclosed in Schedule 4.20, ECI has not: (i) incurred any debts, obligations or liabilities, other than incurred in the Ordinary Course -22- which, individually or in the aggregate, are not material; (ii) subjected to or permitted a Lien (other than a Permitted Lien) upon or otherwise encumbered any of its assets, tangible or intangible; (iii) sold, transferred, licensed or leased any of its assets or properties except in the Ordinary Course or as otherwise agreed to by Semtech; (iv) discharged or satisfied any Lien other than a Lien securing, or paid any obligation or liability other than, current liabilities shown on the Balance Sheet and current liabilities incurred since the Balance Sheet Date, in each case in the Ordinary Course; (v) cancelled or compromised any debt owed to or by or claim of or against it, or waived or released any right of material value other than in the Ordinary Course; (vi) suffered any physical damage, destruction or loss (whether or not covered by insurance) outside the Ordinary Course causing a Material Adverse Effect; (vii) entered into any material transaction or otherwise committed or obligated itself to any capital expenditure other than in the Ordinary Course and other than in connection with the purchase of the EPI reactor and the metal etcher, which have been consented to by Semtech; (viii) to the Principal Shareholders' knowledge, made or suffered any change in, or condition affecting, its condition (financial or otherwise), properties, profitability, prospects or operations other than changes, events or conditions in the Ordinary Course, none of which (individually or in the aggregate) has had or may have a Material Adverse Effect; (ix) except as requested by Semtech, made any change in the accounting principles, methods, records or practices followed by it or depreciation or amortization policies or rates theretofore adopted; (x) other than in the Ordinary Course, made or suffered any amendment or termination of any material contract, agreement, lease or license to which it is a party; (xi) paid, or made any accrual or arrangement for payment of, any severance or termination pay to, or entered into any employment or loan or loan guarantee agreement with, any current or former officer, director or employee or consul tant; (xii) other than annual increases in salary consistent with past practices, paid, or made any accrual or arrangement for payment of, any increase in compensation, bonuses or special compensation of any kind to any employee other than pursuant to an agreement disclosed on Schedule 4.21(a) or other than in the Ordinary Course, or paid, or made any accrual or arrangement for payment of, any increase in compensation, bonuses or special compensation of any kind to any officer or director of ECI or any consultant to ECI; (xiii) made or agreed to make any charitable contributions; (xiv) changed or suffered change in any benefit plan or -23- labor agreement affecting any employee of ECI otherwise than to conform to Legal Requirements; or (xv) entered into any agreement or otherwise obligated itself to do any of the foregoing. 4.21 Employees and Labor Matters. --------------------------- (a) Schedule 4.21(a) contains a true and complete list of all contracts, agreements, plans (other than the Plans), arrangements, commitments and understand ings (formal and informal) pertaining to terms of employ ment, compensation, bonuses, profit sharing, stock purchases, stock repurchases, stock options, commissions, incentives, loans or loan guarantees, severance pay or benefits, use of ECI's property and related matters of ECI with any current or former officer, director, employee or consultant, and true and complete copies of all such contracts, agreements, plans, arrangements and understandings have been delivered to Semtech heretofore. (b) There are no labor, collective bargaining, union or similar agreements under or by which ECI is obligated. (c) Except as set forth on Schedule 4.21(c), neither Surviving Corporation, Semtech nor ECI will have any responsibility for continuing any person in the employ (or retaining any person as a consultant) of ECI from and after the Closing. (d) There is not occurring or, to the Principal Shareholders' knowledge, threatened, any strike, slow down, picket, work stoppage or other concerted action by any union or other group of employees or other persons against ECI or its premises or products. To the Principal Shareholders' knowledge, no union or other labor organization has attempted to organize any of the employees of ECI. (e) To the Principal Shareholders' knowledge, ECI has complied with all Legal Requirements relating to employment and labor, and, to the knowledge of the Principal Shareholders, no facts or circumstances exist that could provide a reasonable basis for a claim of wrongful termination by any current or former employee of ECI against ECI. 4.22 Affiliations. None of the Principal Shareholders, any officer, ------------ director or key employee of ECI -24- or any associate or Affiliate of ECI or any of such Persons has, directly or indirectly, (i) an interest in any Person that (A) furnishes or sells, or proposes to furnish or sell, services or products that are furnished or sold by ECI or (B) purchases from or sells or furnishes to, or proposes to purchase from or sell or furnish to, ECI any goods or services or (ii) a beneficial interest in any contract or agreement to which ECI is a party or by which ECI or any of the assets of ECI are bound or affected. 4.23 Principal Customers and Suppliers. --------------------------------- (a) Since the Balance Sheet Date, none of the top ten customers that have purchased goods or services from ECI during each of the last two fiscal years has ter minated its relationship with or adversely curtailed its purchases from ECI or indicated (for any reason) its intention so to terminate its relationship or curtail its purchases. (b) Since the Balance Sheet Date, none of the top ten suppliers from whom ECI purchased goods or services during the twelve months ended on the Balance Sheet Date has terminated its relationship with or adversely curtailed its accommodations, sales or services to ECI or indicated (for any reason) its intention to terminate such relationship or curtail its accommodations, sales or services. 4.24 Compliance with Law. To the Principal Shareholders' knowledge, ------------------- except as set forth in Schedule 4.24, ECI (i) has never violated, has never conducted its business or operations in violation of, and has never used or occupied its properties or assets in violation of, any Legal Requirement, (ii) has never been alleged to be in violation of any Legal Requirement, and (iii) has not received any notice of any alleged violation of, nor any citation for noncompliance with, any Legal Requirement, the violation or alleged violation of which, in any of such cases, has had or would have a Material Adverse Effect. 4.25 Product Returns. ECI has not experienced any product returns --------------- which have had a Material Adverse Effect. The Principal Shareholders have no knowledge of any possible product returns which are likely to have a Material Adverse Effect. -25- 4.26 Product Liability and Product Warranty. No express warranties -------------------------------------- are provided with respect to the products sold or services rendered by ECI. ECI has not suffered any product liability claims. 4.27 Corporate Records. The copies or originals of the Articles of ----------------- Incorporation and Bylaws and all amendments thereto, and minute books and stock records of ECI previously delivered to, or made available for inspection by, Semtech are true, complete and correct. 4.28 Hazardous Materials. Except as set forth in the Phase I Report: ------------------- (a) To the Principal Shareholders' knowledge, ECI has not, and no previous owner or operator of the Leased Real Property or any real property or Structure previously leased by ECI has, stored, generated, used, manufactured or treated any Hazardous Material on such property other than such Hazardous Materials as are customarily used in the semiconductor manufacturing business and which have been used in compliance with all applicable Environmental Laws. (b) To the Principal Shareholders' knowledge, ECI has not, and no previous owner or operator of the Leased Real Property or any real property or Structure previously leased by ECI has, transported or arranged for the transportation of any Hazardous Materials from such property other than Hazardous Materials which are or were being transported from such property for disposal, treatment or recycling in the normal course of ECI's business and in compliance with all applicable Environmental Laws. (c) To the Principal Shareholders' knowledge, ECI has not, and no previous owner or operator of the Leased Real Property or any real property or Structure previously leased by ECI has, released, deposited, spilled, discharged or disposed of any Hazardous Materials on or under such property or any property adjoining any Leased Real Property. (d) To the Principal Shareholders' knowledge, the Leased Real Property and ECI's operations conducted thereon are in material compliance with all Environmental Laws applicable thereto. (e) Neither ECI nor any Principal Shareholder has received any notice, citation, summons or -26- order and to the Principal Shareholders' knowledge, no complaint has been filed, no penalty has been assessed and no investigation or review is pending or threatened, by any Governmental Entity, with respect to (i) any alleged violation by ECI of any Environmental Law, (ii) any alleged failure by ECI to have any environmental permit, certificate, license, approval, registration or authori zation required in connection with its business or properties, or (iii) any use, possession, generation, treatment, storage, recycling, transportation, release or disposal by ECI of any Hazardous Material. (f) ECI has not received any request for information, notice of claim, demand or notification that it is or that indicates that it may be a "potentially responsible party" with respect to any investigation or remediation of any threatened or actual release of any Hazardous Material. (g) Except for the acid neutralization pass-through system at 975 Comstock Street, Santa Clara, California, to the Principal Shareholders' knowledge, no underground storage tanks are, or have been, located on the Leased Real Property or on any real property or Structure previously leased by ECI. (h) No notice has been received by ECI with respect to the listing or proposed listing of the Leased Real Property on the National Priorities List promulgated pursuant to CERCLA, CERCLIS or any similar state list of sites requiring investigation or cleanup. (i) ECI has delivered to Semtech copies of any environmental inspection reports, investigations, studies, tests, reviews or other analyses with respect to the Leased Real Property which are in ECI's possession or control. 4.29 No Brokers. No broker, finder or similar agent has been employed ---------- by or on behalf of ECI in connection with this Agreement or the transactions contemplated hereby, and ECI has not entered into any agreement or understanding of any kind with any person or entity for the payment of any brokerage commission, finder's fee or any similar compensation in connection with this Agreement or the transactions contemplated hereby. -27- 4.30 Disclosure. ---------- (a) No representation or warranty of any Principal Shareholder in this Agreement and no information contained in any Schedule or other writing delivered pursuant to this Agreement or at the Closing contains or will contain any untrue statement of a material fact. (b) To the extent that any representation or warranty in this Article 4 is qualified to any Principal Shareholder's "knowledge," "knowledge" shall mean the actual knowledge of such Principal Shareholder, but after making only reasonable inquiries of ECI's officers and directors responsible for that aspect of ECI's operations and business to which such representation or warranty relates and without any further investigation or inquiry. Furthermore, for purposes of this Article 4, the knowledge of a Principal Shareholder shall not be imputed to any other Principal Shareholder. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SEMTECH ----------------------------------------- Semtech hereby represents and warrants to, and covenants and agrees with, each of the Shareholders that: 5.1 Organization and Good Standing of Semtech. Semtech has been duly ----------------------------------------- organized and is existing as a corporation in good standing under the laws of the State of Delaware with full corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. 5.2 Organization, Ownership and Good Standing of Acquisition. -------------------------------------------------------- Acquisition is a wholly-owned subsidiary of Semtech and has been duly organized and is existing as a corporation in good standing under the laws of the State of California with full corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. Acquisition has conducted no business other than for the purpose of consummating the transactions contemplated by this Agreement. 5.3 Execution and Delivery. This Agreement has been duly authorized ---------------------- by all necessary corporate action on the part of Semtech and Acquisition, respectively, has been -28- duly executed and delivered by, and constitutes the legal, valid and binding agreement of, Semtech and Acquisition, respectively, enforceable against each of them in accordance with its terms. 5.4 No Conflicts. The execution, delivery and performance of this ------------ Agreement by Semtech and Acquisition, respectively, and the consummation thereby of the transactions contemplated hereby will not conflict with or result in the violation of the provisions of the Certificate of Incorporation or Bylaws of Semtech or the Articles of Incorporation or Bylaws of Acquisition, respectively. 5.5 Disclosure. The information contained in this Agreement and in ---------- any writing furnished to the Shareholders pursuant hereto, when taken together with Semtech's annual report on Form 10-K for its fiscal year ended January 31, 1995, and quarterly reports on Form 10-Q for its fiscal quarters ended April 30, 1995 and July 31, 1995, does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or herein or necessary to make the statements therein or herein, in light of the circumstances under which they were made, not misleading. 5.6 Issuance of Semtech Stock. Each share of Semtech Stock issued to ------------------------- the Shareholders hereunder has been duly authorized, and upon issuance pursuant to the terms of the Merger and as provided herein, will be validly issued, fully paid and nonassessable, and, based in part on the representations of the Shareholders contained herein, will be issued in compliance with applicable state and federal securities laws, free and clear of all liens. 5.7 Effect of Merger. Upon completion of the Merger, the Surviving ---------------- Corporation will possess all of the rights, properties and assets of Acquisition and ECI. Semtech has no present intention to liquidate any significant portion of the assets of the Surviving Corporation or discontinue the historic lines of business of ECI or Acquisition. 5.8 No Liabilities. Acquisition has no liabilities, other than -------------- liabilities arising under this Agreement. 5.9 Capitalization of Semtech. The authorized capital stock of ------------------------- Semtech consists solely of 15,000,000 shares of common stock, $.01 par value, of which 5,045,039 -29- are, and on the Closing Date will be, issued and outstanding. All of such shares have been duly authorized and validly issued and are fully paid and nonassessable Except as set forth in Schedule 5.9, there are (i) no existing options, warrants, rights, calls or commitments of any character relating to any capital stock of Semtech, and (ii) no outstanding securities or other instruments convertible into or exchangeable for any capital stock of Semtech and no commitments to issue such securities or instruments; and no Person has any right of first refusal, preemptive right, subscription right or similar right with respect to any capital stock of Semtech. 5.10 Capitalization of Acquisition. The authorized capital stock of ----------------------------- Acquisition consists solely of 100,000 shares of common stock, of which 10,000 are, and on the Closing Date will be, issued and outstanding. All of such shares have been duly authorized and validly issued and are fully paid and nonassessable. There are (i) no existing options, warrants, rights, calls or commitments of any character relating to any capital stock of Acquisition, and (ii) no outstanding securities or other instruments convertible into or exchangeable for any capital stock of Acquisition and no commitments to issue such securities or instruments; and no Person has any right of first refusal, preemptive right, subscription right or similar right with respect to any capital stock of Acquisition. 5.11 Access to Information. Without limiting the representations of --------------------- the Shareholders contained herein, Semtech has been furnished with such materials and has been given access to such information relating to ECI as it or its representatives have requested and has been afforded the opportunity to ask questions regarding ECI, all as Semtech has found necessary or desirable. 5.12 Registration Matters. As of the date hereof: -------------------- (a) Except for shares covered by its stock option and other employee plans, Semtech (i) has no outstanding securities that are the subject of an effective registration statement under the Securities Act, and (ii) has taken no action to register any of its securities (except as contemplated by Section 8.2(c) hereof). (b) There are currently no outstanding registration rights relating to any of Semtech's securities, except for the Registration Rights Agreement to be entered -30- into between Semtech and the Shareholders pursuant to Section 8.2(c) hereof. (c) Except as contemplated by the Merger and as otherwise disclosed to the Shareholders in writing, in the past 12 months, Semtech has not engaged in any discussions or negotiations contemplated to result in any strategic transaction outside the ordinary course of business. ARTICLE 6 CONDUCT OF BUSINESS PENDING CLOSING ----------------------------------- During the period commencing on the date hereof and continuing through the Closing Date, ECI and the Shareholders covenant and agree (except as expressly contemplated by this Agreement or to the extent that Semtech shall otherwise expressly consent in writing) that: 6.1 Qualification. ECI shall maintain all qualifications to transact ------------- business and remain in good standing in California. 6.2 Ordinary Course. Subject to the provisions of Section 6.10 --------------- hereof, ECI shall conduct its business in, and only in, the Ordinary Course (excluding any transaction between ECI on the one hand, and any of its officers, directors, employees or Shareholders, on the other hand) and, to the extent consistent with such business, shall preserve intact its current business organizations, and shall use its best efforts to keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and going business value shall be unimpaired at the Closing Date. ECI shall maintain its properties and assets in good condition and repair. 6.3 Organic Changes. ECI shall not (a) amend its Articles of --------------- Incorporation or Bylaws (or equivalent documents), (b) acquire by merging or consolidating with, or agreeing to merge or consolidate with, or purchase substantially all of the stock or assets of, or otherwise acquire any business or any corporation, partnership, association or other business organization or division thereof (c) enter into any partnership or joint venture, (d) declare, set aside, make or pay any dividend or other -31- distribution in respect of its capital stock or purchase or redeem, directly or indirectly, any shares of its capital stock (e) issue or sell any shares of its capital stock of any class or any options, warrants, conversion or other rights to purchase any such shares or any securities convertible into or exchangeable for such shares, or (f) liquidate or dissolve or obligate itself to do so. 6.4 Indebtedness. Subject to the provisions of Section 6.10 hereof, ------------ ECI shall not incur any Indebtedness, sell any debt securities or lend money to or guarantee the Indebtedness of any Person. ECI shall not restructure or refinance its existing Indebtedness. 6.5 Accounting. Except to the extent requested by Semtech, ECI shall ---------- not make any change in the accounting principles, methods, records or practices followed by it or depreciation or amortization policies or rates theretofore adopted by it. ECI shall maintain its books, records and accounts in accordance with generally accepted accounting principles applied on a basis consistent with that of prior periods. 6.6 Compliance with Legal Requirements. ECI shall use its reasonable ---------------------------------- best efforts to comply promptly with all requirements that applicable law may impose upon it and its operations which become known to the officers of ECI and with respect to the transactions contemplated by this Agreement, and shall cooperate promptly with, and furnish information to, Semtech in connection with any such requirements imposed upon Semtech, or upon any of its affiliates, in connection therewith or herewith. 6.7 Disposition of Assets. ECI shall not sell, transfer, license, --------------------- lease or otherwise dispose of, or suffer or cause the encumbrance by any Lien upon any of its properties or assets, tangible or intangible, or any interest therein, except for sales of inventory in the Ordinary Course. 6.8 Compensation. ECI shall not (a) adopt or amend in any material ------------ respect any collective bargaining, bonus, profit-sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other plan, agreement, trust, fund or arrangement for the benefit of employees (whether or not legally binding) other than to comply with any Legal Requirement or (b) pay, or make any accrual or arrangement for payment of, any increase in compensation, bonuses or special compensation of any kind, -32- or any severance or termination pay to, or enter into any employment or loan or loan guarantee agreement with, any current or former officer, director, employee or consultant of ECI. 6.9 Modification or Breach of Agreements; New Agreements. Subject to ---------------------------------------------------- the provisions of Section 6.10 hereof, ECI shall not terminate or modify, or commit or cause or suffer to be committed any act that will result in a material breach or violation of any term of or (with or without notice or passage of time, or both) constitute a default under or otherwise give any person a basis for non-performance under, any indenture, mortgage, deed of trust, loan or credit agreement, lease, license or other agreement, instrument, arrangement or understanding, written or oral, disclosed in this Agreement or the Schedules hereto. ECI shall refrain from becoming a party to any contract or commitment other than in the Ordinary Course. ECI shall meet all of its contractual obligations in accordance with their respective terms. 6.10 Capital Expenditures. Except for (i) capital expenditures or -------------------- commitments necessary to maintain its properties and assets in good condition and repair (the amount of which shall not exceed $10,000 in the aggregate) and (ii) the purchase of the EPI reactor and metal etcher which have been consented to by Semtech, ECI shall not purchase or enter into any contract to purchase any capital assets without the prior written consent of Semtech. 6.11 Consents. ECI shall use its best efforts to obtain any consent, -------- authorization or approval of, or exemption by, any Person requested by Semtech (including those that may apply to the items listed on Schedules 4.5(c), 4.10 and 4.16) in connection with the transactions contemplated hereby or the taking of any action in connection with the consummation thereof. 6.12 Maintain Insurance. ECI shall maintain its Policies in full ------------------ force and effect and shall not do, permit or willingly allow to be done any act by which any of the Policies may be suspended, impaired or cancelled. 6.13 Discharge. ECI shall not cancel, compromise, release or --------- discharge any claim of ECI upon or against any person or waive any right of ECI of material value, and not discharge any Lien (other than Permitted Liens) upon any asset of ECI or compromise any debt or other obligation of -33- ECI to any person other than Liens, debts or obligations with respect to current liabilities of ECI. 6.14 Actions. ECI shall not institute, settle or agree to settle any ------- Action before any Governmental Entity. 6.15 Permits. ECI shall use its reasonable best efforts to maintain ------- in full force and effect, and comply with, all Permits. 6.16 Tax Assessments and Audits. ECI shall furnish promptly to -------------------------- Semtech a copy of all notices of proposed assessment or similar notices or reports that are received from any taxing authority and which relate to ECI's operations for periods ending on or prior to the Closing Date. The Shareholders shall cause ECI to promptly inform Semtech of any investigation, audit or other proceeding by a Governmental Entity in connection with any Taxes, assessment, governmental charge or duty and the results of any settlement or final determination in any such proceeding. ARTICLE 7 ADDITIONAL COVENANTS -------------------- 7.1 Covenants of the Shareholders. During the period from the date ----------------------------- hereof through the Closing Date, each Shareholder agrees to: (a) use its reasonable best efforts to comply promptly with all requirements that applicable Legal Requirements may impose upon it with respect to the transactions contemplated by this Agreement, and shall cooperate promptly with, and furnish information to, Semtech in connection with any such requirements imposed upon Semtech or upon any of its affiliates in connection therewith or herewith; (b) use its reasonable best efforts to obtain (and to cooperate with Semtech in obtaining) any consent, authorization or approval of, or exemption by, any Person required to be obtained or made by such Shareholder in connection with the transactions contemplated by this Agreement; -34- (c) use its reasonable best efforts to bring about the satisfaction of the conditions precedent to Closing set forth in Section 8.1 of this Agreement; (d) promptly advise Semtech orally and, within three business days thereafter, in writing of any change in ECI's business or condition that has had or which such Shareholder reasonably believes is likely to have a Material Adverse Effect; and (e) deliver to Semtech prior to the Closing a written statement disclosing any untrue statement in this Agreement or any Schedule hereto (or supplement thereto) or document furnished pursuant hereto, promptly upon the discovery of such untrue statement accompanied by a written supplement to any Schedule to this Agreement that may be affected thereby; provided, however, that -------- ------- the disclosure of such untrue statement shall not prevent Semtech from terminating this Agreement pursuant to Section 9.1(c) hereof at any time at or prior to the Closing in respect of any original untrue or misleading statement. 7.2 Covenants of Semtech. During the period from the date hereof to -------------------- the Closing Date, Semtech shall: (a) comply promptly with all requirements that applicable Legal Requirements may impose upon it with respect to the transactions contemplated by this Agreement, and shall cooperate promptly with, and furnish information to, the Shareholders in connection with any such require ments imposed upon the Shareholders or ECI or upon any of ECI's affiliates in connection therewith or herewith; (b) use its reasonable best efforts to obtain any consent, authorization or approval of, or exemption by, any Person required to be obtained or made by Semtech in connection with the transactions contemplated by this Agreement; (c) use its reasonable best efforts to bring about the satisfaction of the conditions precedent to Closing set forth in Section 8.2 of this Agreement; (d) promptly advise the Shareholders orally and, within three business days thereafter, in writing of any change in Semtech's business or condition that has had or which Semtech reasonably believes is likely to have a material adverse effect on Semtech and its subsidiaries, taken as a whole; and -35- (e) deliver to the Shareholders, prior to the Closing a written statement disclosing any untrue statement in this Agreement or any Schedule hereto (or supplement thereto) or document furnished pursuant hereto, promptly upon the discovery of such untrue statement, accom panied by a written supplement to any Schedule to this Agreement that may be affected thereby; provided, however, that the disclosure of such untrue statement shall not - -------- ------- prevent the Shareholders from terminating this Agreement pursuant to Section 9.1(d) hereof at any time at or prior to the Closing in respect of any original untrue or misleading statement. 7.3 Access and Information. ---------------------- (a) During the period commencing on the date hereof and continuing through the Closing Date, the Shareholders shall cause ECI (i) to afford to Semtech and to Semtech's accountants, counsel, investment bankers and other representatives, reasonable access to all of its properties, books, contracts, commitments, records and personnel, (ii) after the issuance of any required public announcement to authorize Semtech and such representatives of Semtech to talk directly with ECI's customers and (iii) to furnish promptly to Semtech all information concerning its business, properties and personnel, as Semtech may reasonably request from time to time. (b) Except to the extent permitted by the provisions of Section 7.6 hereof, Semtech shall hold in confidence, and shall use reasonable efforts to ensure that its employees and representatives hold in confidence, all such information supplied to it by the Shareholders or ECI concerning ECI and shall not disclose such information to any third party except as may be required by any Legal Requirement and except for information that (i) is or becomes generally available to the public other than as a result of disclosure by Semtech or its representatives, (ii) becomes available to Semtech or its representatives from a third party other than the Shareholders or ECI, and Semtech or its representatives have no reason to believe that such third party is not entitled to disclose such information, (iii) is known to Semtech or its representa tives on a non-confidential basis prior to its disclosure by any Shareholder or ECI or (iv) is made available by any Shareholder or ECI to any other Person on a non-restricted basis. Semtech's obligations under the foregoing sentence shall expire on the Closing Date or, if the Closing does not occur, two (2) years after the date hereof. -36- 7.4 Expenses. All costs and expenses (including, without limitation, -------- all legal fees and expenses and fees and expenses of any brokers, finders or similar agents) incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring the same; provided, however, that the costs and expenses incurred by or for the benefit of ECI shall not exceed $25,000. Without limiting the generality of the foregoing, Shareholders shall pay for all legal fees and other expenses which are incurred in connection with their respective personal financial, legal or other matters, and shall not pass such expenses on to ECI. 7.5 Certain Notifications. At all times from the date hereof to the --------------------- Closing Date, each party shall promptly notify the others in writing of the occurrence of any event that will or may result in the failure to satisfy any of the conditions specified in Article 8 hereof. 7.6 Publicity; Employee Communications. At all times prior to the ---------------------------------- Closing Date, each party shall obtain the consent of all other parties hereto prior to issuing, or permitting any of its directors, officers, employees or agents to issue, any press release or other information to the press, employees of ECI, employees of Semtech or any third party with respect to this Agreement or the transactions contemplated hereby; provided, however, that no party shall -------- ------- be prohibited from supplying any information to any of is representatives, agents, attorneys, advisors, financing sources and others to the extent necessary to complete the transactions contemplated hereby so long as such representatives, agents, attorneys, advisors, financing sources and others are made of and agree to be bound by the terms of this Section 7.6. Nothing contained in this Agreement shall prevent any party to this Agreement at any time from furnishing any required information to any Govern mental Entity or authority pursuant to a Legal Requirement or from complying with its legal or contractual obligations. 7.7 Further Assurances. ------------------ (a) Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Legal Requirements, to consummate and make effective the transactions contemplated by this Agreement. (b) If at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, the Shareholders and the proper officers or directors of Semtech, as the case may be, shall take or cause to be taken all such necessary or convenient action and execute, and deliver and file, or cause to be executed, delivered and filed, all necessary or convenient documentation. 7.8 Competing Offers; Merger or Liquidation. The Shareholders agree --------------------------------------- that they will not, and will cause ECI not to, directly or indirectly, through any officer, director, agent or otherwise, solicit, initiate or encourage discussions with, or the submissions of bids, offers or proposals by, any Person with respect to an acquisition of ECI or its assets or capital stock or a merger or similar transaction, and the Shareholders will not, and will not permit ECI to, engage any broker, financial adviser or consultant with an incentive to initiate or encourage proposals or offers from other parties. Furthermore, the Shareholders shall not, and shall not permit ECI to, directly or indirectly, through any officer, director, agent or otherwise, engage in negotiations concerning any such transaction with, or provide information to, any Person other than Semtech and its representatives with a view to engaging, or preparing to engage, that Person with respect to any matters in this Section. 7.9 Inconsistent Action. The Shareholders shall not take or suffer ------------------- to be taken, and shall not permit ECI to take or cause or suffer to be taken, any action that would cause any of the representations or warranties of any of the Shareholders in this Agreement to be untrue, incorrect, incomplete or misleading. 7.10 Post-Termination Employment. Each Shareholder acknowledges and --------------------------- agrees that after the Closing (a) neither Semtech nor ECI shall be required to employ or retain any employee of ECI or any other Person, and (b) Semtech, in its sole and absolute discretion, may cause ECI to retain all, some, or none of such employees. Notwith standing the foregoing, (i) the Surviving Corporation and the Shareholders agree that simultaneously with the Closing, ECI shall enter into employment agreements with Michael Wilson, Jim Preston, and Troy Speers, respectively, substantially in the forms of Annex C-1, C-2 and C-3, --------- --- --- respectively, and (ii) Semtech agrees to comply with any applicable requirements of the Worker Adjustment and Retraining Notification Act. -38- 7.11 Pooling Restrictions on Transactions in Semtech Stock. Semtech ----------------------------------------------------- has informed the Shareholders that it is a material factor to Semtech in entering into this Agreement that the transactions contemplated by this Agreement be treated as a pooling-of-interests under generally accepted accounting principles. Therefore, notwithstanding any other provision of this Agreement, prior to the publication and dissemination by Semtech of consolidated financial results which include results of combined operations of ECI and Semtech for at least thirty days on a consolidated basis following the Closing Date, the Shareholders shall not sell or otherwise transfer or dispose of, or otherwise reduce their risk in, any shares of the Semtech Stock received by the Shareholders (including, by way of example and not limitation, engaging in put, call, short-sale, straddle or similar market transactions). Shareholders covenant and agree with Semtech to hold their shares of Semtech Stock until the publication and dissemination of financial statements by Semtech which include the results of at least thirty (30) days of combined operations of Semtech and the Surviving Corporation. Additionally, the certificates evidencing the Semtech Stock to be received by the Shareholders will bear a legend substantially in the form set forth below: THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED, AND SEMTECH CORPORATION SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED SALE, TRANSFER OR ASSIGNMENT PRIOR TO THE PUBLICATION AND DISSEMINATION OF FINANCIAL STATEMENTS BY SEMTECH CORPORATION WHICH INCLUDE THE RESULTS OF AT LEAST THIRTY (30) DAYS OF COMBINED OPERATIONS OF SEMTECH CORPORATION AND THE COMPANY ACQUIRED BY SEMTECH FOR WHICH THESE SHARES ARE ISSUED. UPON THE WRITTEN REQUEST OF THE STOCKHOLDERS DIRECTED TO SEMTECH CORPORATION, AND SATISFACTION OF COVENANTS SET FORTH IN SECTION 7.11 OF THAT CERTAIN AGREEMENT AND PLAN OF MERGER DATED AS OF OCTOBER 4, 1995. SEMTECH CORPORATION AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH THE TRANSFER AGENTS). Semtech covenants that the publication and dissemination of Semtech's financial statements described -39- above shall occur no later than March 15, 1996 and following such publication, Semtech agrees to cause its transfer agent and registrar to remove the foregoing legend from the Semtech Stock received by the Shareholders upon the request of the Shareholders. Semtech acknowledges that the Shareholders and ECI make no representations and warranties as to whether the transactions contemplated by this Agreement will be treated as a pooling-of-interests under generally accepted accounting principles. ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING ------------------------------- 8.1 Conditions of Semtech. Notwithstanding any other provision of --------------------- this Agreement, the obligations of Semtech to consummate the transactions contemplated hereby shall be subject to the satisfaction, at or prior to the Closing Date, of the following conditions: (a) There shall not be instituted and pending or threatened any Action before any Governmental Entity (i) challenging or otherwise seeking to restrain or prohibit the consummation of the transactions contemplated hereby or (ii) seeking to prohibit the direct or indirect ownership or operation by Semtech of all or a material portion of the business or assets of ECI, or to compel Semtech or ECI to dispose of or hold separate all or a material portion of the business or assets of ECI or Semtech; (b) The representations and warranties of each of the Shareholders in this Agreement shall be true and correct in all respects on and as of the Closing Date with the same effect as if made on the Closing Date and each of the Shareholders and ECI shall have complied with all covenants and agreements and satisfied all conditions to be performed or satisfied on or prior to the Closing Date by the Shareholders or ECI, respectively; (c) Each Principal Shareholder (other than Michael Himes) shall have entered into an employment agreement with ECI substantially in the forms of Annex C-1, C-2 and C-3, respectively. - ----- --- --- --- (d) Semtech shall have received from Hopkins & Carley, counsel for Michael Himes, a written opinion dated -40- the Closing Date and addressed to Semtech, in substantially the form attached as Annex D hereto; - ------- (e) Semtech shall have received from each Shareholder a Closing certificate dated the Closing Date in substantially the form attached as Annex ----- E-1 hereto; - --- (f) Semtech shall have received a certifi cate of the Secretary of ECI in substantially the form attached as Annex F-1 hereto; --------- (g) Each Principal Shareholder shall have entered into a Covenant Not To Compete with Semtech and the Surviving Corporation in substantially the forms of Annex G-1, G-2, G-3 and G-4, respectively --------- --- --- --- (collectively, the "Covenant Not To Compete"); ----------------------- (h) The Shareholders shall have entered into an Escrow Agreement with Semtech in substantially the form of Annex H hereto; ------- (i) Semtech shall have concluded (through its representatives, accountants, counsel and other experts) an investigation of the business, condition (financial and other), properties, assets, prospects, operations and affairs of ECI and shall be satisfied, in its sole discretion, with the results thereof; (j) All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments, releases and documents referenced herein or incident to the transactions contemplated hereby shall be in form and substance satisfactory to Semtech and its counsel; (k) No act, event or condition shall have occurred after the date hereof which Semtech determines has had or could have a Material Adverse Effect; (l) Semtech shall have received from ECI the balance sheet of ECI at August 31, 1995 and the related statements of income, shareholders' equity and cash flows for the two month period then ended; (m) ECI shall have received from third parties all consents specifically requested by Semtech; and -41- (n) Semtech shall have been satisfied that the transactions contemplated hereby may be treated as a pooling-of-interests under generally accepted accounting principles. 8.2 Conditions of the Shareholders. Notwithstanding any other ------------------------------ provision of this Agreement, and except as set forth below, the obligations of the Share holders to consummate the transactions contemplated hereby shall be subject to the satisfaction, at or prior to the Closing, of the following conditions: (a) There shall not be instituted and pending or threatened any Action before any Governmental Entity (i) challenging or otherwise seeking to restrain or prohibit the consummation of the transactions contemplated hereby or (ii) seeking to prohibit the direct or indirect ownership or operation by Semtech of all or a material portion of the business or assets of ECI, or to compel Semtech or ECI to dispose of or hold separate all or a material portion of the business or assets of ECI or Semtech; (b) The representations and warranties of Semtech in this Agreement shall be true and correct in all respects on and as of the Closing Date with the same effect as if made on the Closing Date and Semtech shall have complied with all covenants and agreements and satisfied all conditions on its part to be performed or satisfied on or prior to the Closing Date; (c) Semtech shall have duly executed and delivered to the Shareholders a Registration Rights Agreement substantially in the form of Annex ----- I attached hereto; - -- (d) Each Principal Shareholder (other than Michael Himes) shall have entered into an Employment Agreement with ECI in substantially the forms of Annex C-1, C-2 and C-3, respectively; - --------- --- --- (e) The Shareholders shall have received from Semtech a Closing certificate dated the Closing Date in substantially the form attached as Annex ----- E-2 hereto; - --- (f) The Shareholders shall have received a certificate of the Secretary of Acquisition in substantially the form attached as Annex F-2 hereto; --------- -42- (g) Each Principal Shareholder shall have entered into their respective Covenant Not to Compete. (h) The Shareholders shall have concluded on their own (or through their representatives, accountants, counsel and other experts) an investigation of the business, condition (financial and other), properties, assets, prospects, operations and affairs of Semtech and shall be satisfied, in their sole discretion, with the results thereof; (i) All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments, releases and documents referenced herein or incident to the transactions contemplated hereby shall be in form and substance satisfactory to the Shareholders and their counsel; and (j) No act, event or condition shall have occurred after the date hereof which the Shareholders determine has had or could have a material adverse effect upon Semtech and its subsidiaries taken as a whole. ARTICLE 9 TERMINATION ----------- 9.1 Termination. This Agreement may be termi nated at any time prior ----------- to the Closing: (a) by mutual written consent of Semtech and the Shareholders; (b) by the Shareholders, on the one hand, or by Semtech, on the other hand, by written notice to the other party or parties hereto if the merger shall not have been consummated on or before October 30, 1995 (or such later date as Semtech and the Shareholders may agree), provided that in the case of a termination under this clause (b), the party or parties terminating this Agreement shall not then be in material breach of any of their obligations under this Agreement; (c) by Semtech if (i) there has been a material misrepresentation, breach of warranty or breach of covenant by any Shareholder or ECI under this Agreement or (ii) any of the conditions precedent to Closing set forth in -43- Section 8.1 have not been met on the Closing Date, and, in each case, Semtech is not then in material default of its obligations hereunder; or (d) by the Shareholder or Shareholders holding a majority of the ECI Stock currently outstanding if (i) there has been a material misrepresentation, breach of warranty or breach of covenant by Semtech under this Agreement or (ii) any of the conditions precedent to Closing set forth in Section 8.2 have not been met on the Closing Date, and, in each case, such Shareholder or Shareholders are then in material default of such Shareholder's obligations hereunder. 9.2 Effect of Termination. --------------------- (a) In the case of any termination of this Agreement, the provisions of Section 7.3 and 7.4 shall remain in full force and effect. (b) Upon termination of this Agreement as provided in Section 9.1 (a), except as stated in subsection (a) above, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any party hereto or their respective directors, officers, employees, agents or other representatives. (c) In the event of termination of this Agreement as provided in Section 9.1(b), (c) or (d) hereof, such termination shall be without prejudice to any rights that the terminating party or parties may have against the breaching party or parties or any other person under the terms of this Agreement or otherwise. ARTICLE 10 INDEMNIFICATION --------------- 10.1 Survival of Representations and Warranties. ------------------------------------------ (a) The representations and warranties of the parties hereto contained in this Agreement or in any writing delivered pursuant hereto or at the Closing shall survive the Closing and the consummation of the transactions contemplated hereby (and any examination or investigation by or on behalf of any party hereto) until (i) the date of the first audit report of the financial statements containing combined operations of Semtech and the Surviving -44- Corporation, for those items expected to be encountered in the audit process and (ii) the first anniversary of the Closing Date for other items. (b) No Action may be commenced with respect to any representation, warranty, covenant or agreement in this Agreement, or in any writing delivered pursuant hereto, unless written notice, setting forth in reasonable detail the claimed breach thereof, shall be delivered pursuant to Section 11.1 to the party or parties against whom liability for the claimed breach is charged on or before the termination of the survival period specified in Section 10.1(a) for such representation, warranty, covenant or agreement. 10.2 Indemnification. Subject to the limitations set forth in this --------------- Article 10: (a) The Principal Shareholders covenant and agree to defend, indemnify and hold harmless Semtech and the Surviving Corporation from and against any Damages (to the extent of such Principal Shareholder's pro rata share of such Damages based upon his proportionate interest in ECI) arising out of or resulting from: (i) any inaccuracy in or breach of any representation or warranty made by the Principal Shareholders in this Agreement (other than in Article 3 hereof) or in any writing delivered pursuant to this Agreement or at the Closing; (ii) the failure of the Principal Shareholders or ECI to perform or observe fully any covenant, agreement or provision to be performed or observed by such Principal Shareholders or ECI pursuant to this Agreement or the Covenant Not to Compete or any other written agreement entered into pursuant hereto; or (iii) any Taxes owed or accrued by ECI arising from the conduct of its business for all periods prior to the Balance Sheet Date. (b) Each Shareholder severally covenants and agrees to defend, indemnify and hold harmless Semtech and the Surviving Corporation from and against any Damages arising out of or resulting from any inaccuracy in or breach of any representation or warranty made by such Shareholder in Article 3 of this Agreement. (c) Semtech covenants and agrees to defend, indemnify and hold harmless the Shareholders from and against any Damages arising out of or resulting from: (i) any inaccuracy in or breach of any representation or warranty, made by Semtech in this Agreement or in any writing delivered pursuant to this Agreement or at the -45- Closing; or (ii) the failure by Semtech or Acquisition to perform or observe any covenant, agreement or condition to be performed or observed by it pursuant to this Agreement. (d) Notwithstanding any other provision of this Agreement, the obligation of the Shareholders to indemnify Semtech and the Surviving Corporation under this Article 10 shall apply (i) only to the extent that the amount of Damages due the party being indemnified exceeds, for all claims, losses, expenses, obligations and liabilities, an accumulated total of $250,000.00 in the aggregate and (ii) only to the amounts in excess of such accumulated total. 10.3 Third Party Claims. ------------------ (a) If any party entitled to be indemnified pursuant to Section 10.2 (an "Indemnified Party") receives notice of the assertion by any third ----------------- party of any claim or of the commencement by any such third person of any Action (any such claim or Action being referred to herein as an "Indemnifiable Claim") ------------------- with respect to which another party hereto (an "Indemnifying Party") is or may ------------------ be obligated to provide indemnification, the Indemnified Party shall promptly notify the Indemnifying Party in writing (the "Claim Notice") of the ------------ Indemnifiable Claim; provided, that the failure to provide such notice shall not -------- relieve or otherwise affect the obligation of the Indemnifying Party to provide indemnification hereunder, except to the extent that any Damages directly resulted or were caused by such failure. (b) The Indemnifying Party shall have thirty days after receipt of the Claim Notice to undertake, conduct and control, through counsel of its own choosing, and at its expense, the settlement or defense thereof, and the Indemnified Party shall cooperate with the Indemnifying Party in connection therewith; provided, that (i) the Indemnifying Party shall permit the -------- Indemnified Party to participate in such settlement or defense through counsel chosen by the Indemnified Party (subject to the consent of the Indemnifying Party, which consent shall not be unreasonably withheld), provided that the fees and expenses of such counsel shall not be borne by the Indemnifying Party, and (ii) the Indemnifying Party shall not settle any Indemnifiable Claim without the Indemnified Party's consent. So long as the Indemnifying Party is vigorously contesting any such Indemnifiable Claim in good faith, the Indemnified Party shall not pay or settle such claim without the -46- Indemnifying Party's consent, which consent shall not be unreasonably withheld. (c) If the Indemnifying Party does not notify the Indemnified Party within thirty days after receipt of the Claim Notice that it elects to undertake the defense of the Indemnifiable Claim described therein, the Indemnified Party shall have the right to contest, settle or compromise the Indemnifiable Claim in the exercise of its reasonable discretion; provided, that -------- the Indemnified Party shall notify the Indemnifying Party of any compromise or settlement of any such Indemnifiable Claim. (d) Anything contained in this Section 10.3 to the contrary notwithstanding, the Shareholders shall not be entitled to assume the defense for any Indemnifiable Claim (and shall be liable for the reasonable fees and expenses incurred by the Indemnified Party in defending such claim) if the Indemnifiable Claim seeks an order, injunction or other equitable relief or relief for other than money damages against Semtech which Semtech determines, after conferring with its counsel, cannot be separated from any related claim for money damages and which, if successful, would adversely affect the business, properties or prospects of ECI; provided, however, if such equitable relief -------- ------- portion of the Indemnifiable Claim can be so separated from that for money damages, the Shareholders shall be entitled to assume the defense of the portion relating to money damages. 10.4 Escrow Agent. The parties hereto agree that pursuant to the ------------ Escrow Agreement, at the time of the Closing, there shall be established an escrow account ("Escrow Account") with Bank of America NT&SA (hereinafter along with any successor escrow agent referred to as "Escrow Agent"), into which there shall be returned and held from the Semtech Stock to be issued by Semtech to the Shareholders pursuant to this Agreement, in proportion to the Shareholders' respective percentage holdings of the Semtech Stock issued at the Closing, a total number of 50,000 shares of Semtech Stock. Each Shareholder shall furnish to the Escrow Agent an appropriate number of stock powers (with signatures guaranteed) in favor of Semtech covering the number of shares issued to it to be held in the Escrow Account. All claims of indemnification for which Semtech shall become entitled hereunder (or any claim which Semtech may have against the Shareholders under (i) applicable environmental or similar laws for contribution, cost recoveries or implied indemnity for any liability with respect to any environmental claim, or (ii) common law -47- EX-2.2 3 REGISTRATION RIGHTS AGREEMENT EXHIBIT 2.2 REGISTRATION RIGHTS AGREEMENT ----------------------------- THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as --------- of October 4, 1995, by and between SEMTECH CORPORATION, a Delaware corporation (the "Company"), and each of the Persons who have executed this Agreement and ------- are named in Annex A to this Agreement (each sometimes referred to herein individually as an "Investor" and sometimes collectively as the "Investors"). -------- --------- RECITALS -------- A. Investors collectively own all of the outstanding shares of common stock of Gamma, Inc. (dba ECI Semiconductor), a California corporation ("ECI"). B. Concurrently herewith, Semtech Acquisition Corp., a California corporation and wholly owned subsidiary of the Company ("Acquisition") merged with and into ECI (the "Merger") in accordance with the terms and conditions set forth in that certain Agreement and Plan of Merger dated October 4, 1995 (the "Merger Agreement"). C. In connection with the Merger, Investors will receive an aggregate of 775,000 shares of newly issued common stock of the Company (the "Shares") in exchange for all of their stock in ECI. D. The execution and delivery of this Agreement by the parties hereto are a condition to consummation of the transactions contemplated in the Merger Agreement. Therefore, the parties hereto hereby agree as follows: 1. Definitions. Unless the context otherwise requires, the terms defined ----------- in this Section 1 shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms herein defined. "Agreement" means this Registration Rights Agreement. --------- "Board" means the Board of Directors of the Company. ----- "Closing Date" means the Closing Date as such term is defined in the Merger ------------ Agreement. "Common Stock" means the common stock of the Company. ------------ "Commission" means the Securities and Exchange Com mission. ---------- "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Investor" has the meaning assigned to it in the introductory paragraph of -------- this Agreement. "Person" includes any natural person, corporation, trust, association, ------ company, partnership, joint venture and other entity and any government, governmental agency, instrumentality or political subdivision. "Prospectus" means the prospectus included in any Registration Statement ---------- (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus. The terms "register," "registered" and "registration" refer to a -------- ---------- ------------ registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. "Registration Expenses" means all reasonable expenses incurred by the --------------------- Company in complying with Section 2 hereof, including all registration and filing fees, listing fees for the Shares, printing expenses, fees and disbursements of counsel for the Company, and blue sky fees and expenses in all states. "Registrable Securities" means all Shares and any Common Stock issued or ---------------------- issuable in respect of the Shares -2- pursuant to any stock split, stock dividend, recapitalization, or similar event; provided, however, that Registrable Securities shall cease to be Registrable Securities when they may be sold pursuant to Rule 144 under the Securities Act. "Registration Statement" means any registration statement of the Company ---------------------- which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all materials incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 144" means Rule 144 under the Securities Act, as such Rule may be -------- amended from time to time, or any similar rule or regulation hereafter adopted by the Commission (excluding Rule 144A). "Securities Act" means the Securities Act of 1933, as amended. -------------- 2. Registration ------------ (a) Registration. The Company shall, not later than 90 days after ------------ the Closing Date (the "Filing Date"), prepare and file with the Commission a Registration Statement pursuant to Rule 415 (or any appropriate similar rule that may be adopted by the Commission) under the Securities Act covering the Registrable Securities (the "Registration"). The Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by such holders from time to time. (b) Effectiveness. The Company shall use its best efforts to cause ------------- the Registration to become effective under the Securities Act as soon as practicable following the Filing Date. Subject to the requirements of the Securities Act including, without limitation, requirements relating to updating through post-effective amendments or otherwise, the Company shall use its best efforts to keep the Registration continuously effective until the third anniversary of the Closing Date. The Company shall use its best efforts to take such actions under the laws of various -3- states as may be required to cause the resale of the Shares pursuant to the Registration to be lawful. (c) Following the effectiveness of a Registration Statement filed pursuant to this section, the Company may, at any time, suspend the effectiveness of such Registration for up to 60 days, as appropriate (a "Suspension Period"), by giving notice to each Investor, if the Company shall have determined that the Company may be required to disclose any material corporate development which disclosure may have a material adverse effect on the Company. Notwithstanding the foregoing, no more than two Suspension Periods (i.e., 120 days) may occur in immediate succession. The period of any such suspension of the registration statement shall be added to the period of time the Company agrees to keep the Registration Statement effective as provided in Section 2(b). The Company shall use its best efforts to limit the duration and number of any Suspension Periods. Each Investor agrees that, upon receipt of any notice from the Company of a Suspension Period, such Investor shall forthwith discontinue disposition of shares covered by such Registration Statement or prospectus until such Investor (i) is advised in writing by the Company that the use of the applicable prospectus may be resumed, (ii) has received copies of a supplemental or amended prospectus, if applicable, and (iii) has received copies of any additional or supplemental filings which are incorporated or deemed to be incorporated by reference in such prospectus. 3. Expenses of Registration. All Registration Expenses shall be borne by ------------------------ the Company; provided, however, that the term Registration Expenses shall not include, and in no event will the Company be obligated to pay, expenses and fees of counsel for the Investors, stock transfer taxes or underwriters' discounts or commissions relating to Registrable Securities. 4. Obligations of the Company. To effect the registration of the -------------------------- Registrable Securities, the Company shall, as expeditiously as reasonably possible. (a) Prepare and file with the Commission such amendments and supplements to a Registration Statement with respect to the Registrable Securities and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities -4- Act with respect to the disposition of all securities covered by such Registration Statement. (b) Furnish to the Investors such numbers of copies of a Prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (c) Use its best efforts to register and qualify the securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Investors, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (d) Notify each Investor of Registrable Securities covered by such Registration Statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. (e) Furnish, at the request of any Investor requesting registration of Registrable Securities pursuant to this Agreement, on the date the Registration Statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the Investors of Registrable Securities and (ii) a letter, dated such date, from the independent accountants of the Company, in form and substance as is customarily given by independent accountants to underwriters in an underwritten public offering, addressed to the Investors requesting registration of Registrable Securities, but only to the extent the foregoing opinions or letters are simultaneously delivered to the underwriter in connection with such Registration Statement. -5- 5. Indemnification. ---------------- (a) The Company will, and does hereby undertake to, indemnify and hold harmless each Investor, each of such Investor's officers, directors, partners and agents, and each Person controlling such Investor, with respect to any registration, qualification, or compliance effected pursuant to this Agreement, against all claims, losses, damages, and liabilities (or actions in respect thereto) to which they may become subject under the Securities Act, the Exchange Act, or other federal or state law arising out of or based on (i) any untrue statements (or alleged untrue statement) of a material fact contained in any prospectus, offering circular, or other similar document (including any related Registration Statement, notification, or the like) incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission ) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any violation or alleged violation by the Company of any federal, state or common law rule or regulation applicable to the Company in connection with any such registration, qualification, or compliance, and will reimburse, as incurred, each such Investor, each such underwriter, and each such director, officer, partner, agent and controlling person, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense, arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by such Investor and stated to be specifically for use therein. (b) Each Investor will, if Registrable Securities held by or issuable to such Investor are included in such registration, qualification, or compliance, indemnify the Company, each of its directors, and each officer who signs a Registration Statement in connection therewith, and each person controlling the Company, and each other Investor, each of such other Investor's officers, partners, directors and agents and each person controlling such other Investor, against all claims, losses, damages, and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such Registration Statement, -6- prospectus, offering circular, or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse, as incurred, the Company, each such other Investor, and each such director, officer, partner, and controlling person, for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) was made in such Registration Statement, prospectus, offering circular, or other document, in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Investor and stated to be specifically for use therein. In no event will any Investor be required to enter into any agreement or undertaking in connection with any registration under this Agreement providing for any indemnification or contribution obligations on the part of such Investor greater than such Investor's obligations under this Agreement. (c) Each party entitled to indemnification under this Section 5 (the "Indemnified Party") shall give notice to the party required to provide such indemnification (the "Indemnifying Party") of any claim as to which indemnification may be sought promptly after such Indemnified Party has actual knowledge thereof, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be subject to approval by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at the Indemnifying Party's expense if representation of such Indemnified Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 5, except to the extent that such failure to give notice shall materially adversely affect the Indemnifying Party in the defense of any such claim or any such litigation. No Indemnifying Party, in the defense of any such claim or litigation, -7- shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff therein, to such Indemnified Party, of a release from all liability in respect to such claim or litigation. 6. Information by Investor. Each Investor shall furnish to the Company ----------------------- such information regarding such Investor and the distribution proposed by such Investor as the Company may reasonable request in writing and as shall be required in connection with any registration, qualification, or compliance referred to in this Agreement. 7. Delay of Registration. No Investor shall have any right to obtain or --------------------- seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement. 8. Rule 144 Reporting. With a view to making available to the Investors ------------------ the benefits of certain rules and regulations of the Commission which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to: (a) Make and keep public information available, as those terms are understood and defined in Rule 144, as long as Registrable Securities are outstanding; (b) File with the Commission, in a timely manner, all reports and other documents required of the Company under the Securities Act and the Exchange Act; (c) So long as any Investor owns any Registrable Securities, furnish to such Investor forthwith upon request: a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as such Investor may reasonably request in availing itself of any rule or regulation of the Commission allowing it to sell any such securities without registration. 9. Miscellaneous. ------------- 9.1 Waivers and Amendments. With the written consent of the ---------------------- Investors holding a majority of the Registrable Securities then outstanding, the obligations of -8- the Company and the rights of the Investors under this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely), and with the same consent the Company, when authorized by resolution of its Board, may enter into a supplementary agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of any supplemental agreement or modifying in any manner the rights and obligations hereunder of the Investors and the Company; provided, however, that no such waiver or supplemental agreement shall reduce the aforesaid proportion of Registrable Securities, which are required to consent to any waiver or supplemental agreement, without the consent of the Investors then holding all of the Registrable Securities. Upon the effectuation of each such waiver, consent or agreement of amendment or modification, the Company agrees to give promptly written notice thereof to the Investors who have not previously consented thereto in writing. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally or by course of dealing, but only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, except to the extent provided in this Section 9.1. No waiver by any party of the breach of any term or provision contained in this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 9.2 Effect of Waiver or Amendment. Each Investor acknowledges that ----------------------------- by operation of Section 9.1 hereof Investors holding a majority of the Registrable Securities will, subject to the limitations contained in such Section 9.1, have the right and power to diminish or eliminate certain rights of such Investor under this Agreement. 9.3 Rights of Investors Inter Se. Each Investor shall have the ---------------------------- absolute right to exercise or refrain from exercising any right or rights which such Investor may have by reason of this Agreement including, without limitation, the right to consent to the waiver of any obligation of the Company under this Agreement and to enter into an agreement with the Company for the purpose of modifying this Agreement or any agreement effecting any such modification, and such Investor shall not incur any liability to any other Investor -9- or Investors with respect to exercising or refraining from exercising any such right or rights. 9.4 Notices. All notices, requests, consents and other ------- communications required or permitted hereunder shall be in writing and shall be delivered, or mailed first class postage prepaid, registered or certified mail, (a) If to any Investor, addressed to such Investor at its address shown on Annex A hereto, or at such other address as such Investor may specify by written notice to the Company, or (b) If to the Company, at 652 Mitchell Road, Newbury Park, CA 91320-2289, Attention: Mr. John D. Poe, or at such other address as the Company may specify by written notice to the Investors, and each such notice, request, consent and other communication shall for all purposes of the Agreement be treated as being effective or having been given when delivered, if delivered personally, or, if sent by mail, at the earlier of its actual receipt or three (3) days after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid. 9.5 Severability. Should any one or more of the provisions of this ------------ Agreement or of any agreement entered into pursuant to this Agreement be determined to be illegal or unenforceable, all other provisions of this Agreement and of each other agreement entered into pursuant to this Agreement, shall be given effect separately from the provision or provisions determined to be illegal or unenforceable and shall not be affected thereby. 9.6 Parties in Interest. All the terms and provisions of this ------------------- Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, whether so expressed or not. Subject to the immediately preceding sentence, this Agreement shall not run to the benefit of or be enforceable by any Person other than a party to this Agreement and its successors and assigns. 9.7 Headings. The headings of the sections, subsections and -------- paragraphs of this Agreement have been inserted for convenience of reference only and do not con stitute a part of this Agreement. -10- 9.8 Choice of Law. It is the intention of the parties that the ------------- internal substantive laws, and not the laws of conflicts, of the State of California should govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties. 9.9 Counterparts. This Agreement may be executed in any number of ------------ counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. -11- [REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE] IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed personally or by a duly authorized representative thereof as of the day and year first above written. SEMTECH CORPORATION, a Delaware corporation By: /s/ John D. Poe -------------------------------- Title: PRESIDENT ----------------------------- /s/ Michael Himes ----------------------------------- Michael Himes /s/ Michael Wilson ----------------------------------- Michael Wilson /s/James A Preston ----------------------------------- Jim Preston /s/ Troy Speers ----------------------------------- Troy Speers EXTEK COMPANY, a Virginia corporation By:________________________________ Title:_____________________________ -12- ANNEX A
Initial Number of Shares of Registrable Name of Investor Address of Investor Securities ---------------- ------------------- ---------- Michael Himes 22800 Riva Ridge Road 630,226 Los Gatos, CA 95030 Michael Wilson 9510 Sugar Babe Drive 77,024 Gilroy, CA 95020 Jim Preston 1504 Emperor Way 37,814 Sunnyvale, CA 94087 Troy Speers 48879 Gamay Drive 14,968 Fremont, CA 94539 EXTEK Company P.O. Box 566 14,968 Herndon, VA 22070
EX-2.3 4 ESCROW AGREEMENT EXHIBIT 2.3 ESCROW AGREEMENT ---------------- THIS ESCROW AGREEMENT (this "Escrow Agreement") is made and entered into as of the 4th day of October, 1995, by and among SEMTECH CORPORATION, a Delaware corporation ("Semtech"), MICHAEL HIMES, MICHAEL WILSON, JIM PRESTON, TROY SPEERS, AND EXTEK COMPANY, a Virginia corporation (collectively, the "Shareholders") and Bank of America NT&SA, (together with its successors and assigns, the "Escrow Agent"). RECITALS -------- A. Shareholders collectively owned all of the outstanding shares of Gamma, Inc. (dba ECI Semiconductor) ("ECI"), a California corporation (the "ECI Shares"). B Pursuant to that certain Agreement and Plan of Merger dated as of October 4, 1995 (the "Merger Agreement"), among Semtech, ECI, Shareholders, and Semtech Acquisition Corp., a California corporation and wholly-owned subsidiary of Semtech ("Acquisition"), Acquisition was merged with and into ECI (the surviving corporation hereinafter referred to as the "Company"), and the ECI Shares were exchanged for and converted into common shares of Semtech corporation ("Semtech Shares"). C. Pursuant to Article 10 of the Merger Agreement, Shareholders are obligated to deliver certain of the Semtech Shares received in exchange for the ECI Shares to the Escrow Agent to be held in escrow in accordance with the terms hereunder. NOW THEREFORE, in consideration of the promises and the mutual representations, warranties, covenants and agreements contained in this Escrow Agreement, and intending to be legally bound, the parties hereto agree as follows: 1. Escrow. (a) Each of the Shareholders hereby delivers to the ------ Escrow Agent a stock certificate representing the number of shares of Semtech Stock set forth opposite their respective names in Exhibit A attached hereto --------- (the "Escrow Shares") and an appropriate number of stock powers in favor of Semtech covering such shares with signature guaranteed, the receipt of which the Escrow Agent hereby acknowledges, pursuant to Article 10 of the Merger Agreement. The Escrow Shares shall be deposited in an account established at the Escrow Agent for receipt of such shares (the "Escrow Account") and shall be held in such Escrow Account and distributed in accordance with the terms and provisions of this Escrow Agreement. (b) All Semtech Shares in the Escrow Account shall be registered in the names of the holders thereof as their interests require; cash dividends on such shares shall be paid to the registered owner, the voting rights of such shares shall remain with the registered owner until cancelled. In the event of any stock split, stock dividend, stock distribution or other event or recapitalization or reclassification or liquidating dividend upon or affecting the issued and outstanding stock of Semtech (a "Distribution"), Semtech shall deposit into the Escrow Account all such Distributions with respect to all shares then held in the Escrow Account. 2. Term. The term of this Escrow Agreement shall commence on the ---- date hereof and terminate on the first anniversary of the date hereof. 3. Claims Against Escrow Account. ----------------------------- 3.1 If at any time during the term of this Escrow Agreement, Semtech claims that Semtech or the Company is entitled to indemnification under the Merger Agreement, then in any such case Semtech shall give written notice of such claim to the Shareholders and the Escrow Agent in accordance with Section 14 hereof, within 60 days of discovery of such claim, stating in reasonably sufficient detail the events or circumstances which are the basis for and amount of such claim; provided however, that Semtech's failure to so notify the Shareholders and Escrow Agent within 60 days shall not cause a disallowance of such claim unless the Shareholders's rights are thereby prejudiced. If the Shareholders object to such claim, they shall give written notice of such objection to Semtech and the Escrow Agent within ten (10) days after the date of receipt of Semtech's notice by the Shareholders and Escrow Agent, and shall state the basis for such objection. Notwithstanding the foregoing, such ten (10) day period shall be extended to a twenty (20) day period if within such original ten (10) day period the Shareholders give written notice to Semtech and the Escrow Agent that the additional time is necessary to respond to the claim. If no objection to Semtech's claim is made by the Shareholders within such ten (10) day period, or twenty (20) day period, as applicable, the claim shall be allowed and shall be paid by the Escrow Agent pursuant to Section 4 without further mutual instructions from the parties. -2- 3.2 If the Shareholders file timely notice of objection to any claim, Semtech and the Shareholders shall attempt to resolve the dispute and, if they are able to do so, shall give written notice to the Escrow Agent of the resolution of the dispute and the amount of the claim allowed, if any. 3.3 (a) If Semtech and the Shareholders are unable informally to resolve a disputed claim pursuant to Subsection 3.2 within twenty (20) days after the date of the Shareholders's objection to Semtech's claim, and if the parties agree that the dispute involves financial matters, it shall be referred to and determined by a certified public accountant (or firm of certified public accountants) mutually acceptable to the parties. In the event they cannot agree on such selection, each party shall nominate a certified public accountant as its representative and the two certified public accountants so nominated shall jointly select a third certified public accountant. In such event, the resolution of the dispute shall be decided by a majority of the three certified public accountants. The resolution of the dispute by the certified public accountant or accountants shall be final and binding upon all parties as to financial matters, but shall not extend to any nonfinancial interpretation of the Merger Agreement unless Semtech and the Shareholders shall mutually agree in writing to the contrary. If the dispute does not involve financial matters, or if the parties are unable to agree whether or not the dispute involves financial matters (which disagreement the parties hereby agree is a non-financial matter), then the dispute shall be settled by arbitration in San Jose, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association existing at the date of submission. The resolution of any disputed claim by the arbitrator shall be final and binding upon all parties. Judgment on the arbitrator's award may be rendered in any court of competent jurisdiction. The certified public accountant or arbitrator, as applicable, shall promptly notify the Escrow Agent, Semtech and the Shareholders of its determination and the amount of the claim allowed. Notwithstanding the foregoing, Semtech and the Shareholders may each respectively appoint such additional attorneys, accountants and agents to act for them before the certified public accountant or the arbitrator, as the case may be. (b) Semtech shall provide the Shareholders, and their attorneys, accountants and agents, with such reasonable access to information and records of the Company as would permit determination or verification by them of Semtech's entitlement to a claim. -3- 4. Payment of Allowed Claims. During the term of this Escrow ------------------------- Agreement, the Escrow Agent shall deliver to Semtech Escrow Shares having a value equal to the amount of any claim allowed in accordance with the provisions of Section 3, free and clear of any interest of the Shareholders therein, effective on the business day next following the day on which the claim is allowed, or as soon thereafter as reasonably practicable. For purposes of such payment, the per share current market value of such shares shall be equal to the closing price for Semtech Shares as reported on NASDAQ-NMS on October 4, 1995. To the extent that any claim allowed hereunder would require the issuance of fractional shares, the amount of such claim shall be rounded to the nearest amount such that the issuance of fractional shares shall not be required. 5. Disbursement of Shares in the Escrow Account. -------------------------------------------- 5.1 On the last day of the term of this Escrow Agreement as set forth in Section 2 hereof, the Escrow Agent shall first pay to Semtech any claim allowed but not paid prior to such date, and thereafter, distribute to the Shareholders the entire remaining balance of the Escrow Account, regardless of whether there is outstanding on such date any claim asserted by Semtech and disputed by the Shareholders which has not yet been allowed pursuant to Section 3. 5.2 Any distribution to the Shareholders provided for herein shall be made pro rata in proportion to the number of shares deposited in the Escrow Account by each Shareholder as set forth in Exhibit A attached hereto. If --------- a Shareholder is deceased at the time of such distribution, such shares shall be delivered to the estate of such Shareholder or to his beneficiaries designated in writing and delivered to the Escrow Agent. 6. Escrow Agent. ------------ 6.1 The duties of the Escrow Agent hereunder shall be entirely administrative and not discretionary. The Escrow Agent shall be obligated to act only in accordance with written instructions received by it as provided in this Escrow Agreement and is authorized hereby to comply with any orders, judgments or decrees of any court and shall not be liable as a result of its compliance with the same. 6.2 As to any legal questions arising in connection with the administration of this Escrow Agreement, -4- the Escrow Agent may rely absolutely upon the opinions given to it by its counsel and shall be free of liability for acting in reliance on such opinions. 6.3 The Escrow Agent may rely absolutely upon the genuineness and authorization of the signature and purported signature of any party upon any instruction, notice, release, receipt or other document delivered to it pursuant to this Escrow Agreement. 6.4 The Escrow Agent may, as a condition to the disbursement of monies or disposition of securities as provided herein, require from the payee or recipient a receipt therefor and, upon final payment or disposition, a release of the Escrow Agent from any liability arising out of its execution or performance of this Escrow Agreement, such release to be in a form satisfactory to the Escrow Agent. 6.5 The Escrow Agent shall be entitled to refrain from taking any action contemplated by this Escrow Agreement in the event it becomes aware of any dispute between Semtech and the Shareholders (other than a dispute subject to the provisions of Section 3 of this Escrow Agreement) as to any material facts or as to the happening of any event precedent to such action. 6.6 Semtech agrees to pay the Escrow Agent a fee as set forth in Exhibit B attached hereto for its services hereunder, to be paid upon the - --------- execution of this Escrow Agreement, and further agrees to reimburse the Escrow Agent for all reasonable out-of-pocket expenses incurred in connection with the services provided hereunder. 7. Indemnity. --------- 7.1 The Shareholders and Semtech agree to and hereby do waive any suit, claim, demand or cause of action of any kind which they may have or may assert against the Escrow Agent arising out of or relating to the execution or performance by the Escrow Agent of this Escrow Agreement, unless such suit, claim, demand or cause of action is based upon the wilful neglect or gross negligence or bad faith of the Escrow Agent. They further agree to indemnify the Escrow Agent against and from any and all claims, demands, costs, liabilities and expenses, including reasonable counsel fees, which may be asserted against it or to which it may be exposed or which it may incur by reason of its execution or performance of this Escrow Agreement. Such agreement to indemnify shall -5- survive the termination of this Escrow Agreement until extinguished by any applicable statute of limitations. 7.2 In case any litigation is brought against the Escrow Agent in respect of which indemnity may be sought hereunder, the Escrow Agent shall give prompt notice of that litigation to the parties hereto, and the parties upon receipt of that notice shall have the obligation and the right to assume the defense of such litigation, provided that failure of the Escrow Agent to give that notice shall not relieve the parties hereto from any of their obligations under this Section unless that failure prejudices the defense of such litigation by said parties. At its own expense, the Escrow Agent may employ separate counsel and participate in the defense. The parties hereto shall not be liable for any settlement without their respective consents. 8. Acknowledgment by the Escrow Agent. By execution and delivery ---------------------------------- of this Escrow Agreement, the Escrow Agent acknowledges that the terms and provisions of this Escrow Agreement are acceptable and it agrees to carry out the provisions of this Escrow Agreement on its part. 9. Resignation or Removal of Escrow Agent; Successors. -------------------------------------------------- 9.1 (a) The Escrow Agent may resign as such following the giving of thirty (30) days' prior written notice to the other parties hereto. Similarly, the Escrow Agent may be removed and replaced following the giving of thirty (30) days' prior written notice to the Escrow Agent by Semtech and the Shareholders. In either event, the duties of the Escrow Agent shall terminate thirty (30) days after the date of such notice (or as of such earlier date as may be mutually agreeable); and the Escrow Agent shall then deliver the balance of the Escrow Account then in its possession to a successor Escrow Agent as shall be appointed by the other parties hereto as evidenced by a written notice filed with the Escrow Agent. (b) If for any reason any successor bank is unwilling to serve as successor Escrow Agent and if the other parties hereto are unable to agree upon a successor or shall have failed to appoint a successor prior to the expiration of thirty (30) days following the date of the notice of resignation or removal, the then acting Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor Escrow Agent or other appropriate -6- relief; and any such resulting appointment shall be binding upon all of the parties hereto. 9.2 Every successor appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to Semtech and the Shareholders, an instrument in writing accepting such appointment hereunder, and thereupon such successor, without any further act, shall become fully vested with all the duties, responsibilities and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of its successor or any of the parties hereto, execute and deliver an instrument or instruments transferring to such successor all the rights of such predecessor hereunder, and shall duly assign, transfer and deliver all securities held by it pursuant to this Escrow Agreement to its successor. Should any instrument be required by any successor for more fully vesting in such successor the duties, responsibilities and obligations hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on the request of any of the other parties hereto, be executed, acknowledged and delivered by the predecessor. 9.3 In the event of an appointment of a successor, the predecessor shall cease to be custodian of any securities it may hold pursuant to this Escrow Agreement, and the successor shall become such custodian. 9.4 Upon acknowledgment by any successor Escrow Agent of the receipt of the then remaining balance of the Escrow Account, the then acting Escrow Agent shall be fully released and relieved of all duties, responsibilities and obligations under this Escrow Agreement. 10. Entire Agreement, Amendments and Waivers. This Escrow Agreement ---------------------------------------- contains the entire agreement (including representations, warranties and covenants) among the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, negotiations, discussions, arrangements or understandings with respect thereto. No amendment, supplement, modification or waiver of this Escrow Agreement shall be binding unless executed in writing by the Escrow Agent, Semtech and the Shareholders. No waiver of any of the provisions of this Escrow Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. -7- 11. Execution Counterparts. This Escrow Agreement may be executed in ---------------------- one or more counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same instrument. 12. Severability. If any provision of this Escrow Agreement, or any ------------ covenant, obligation or agreement contained herein, is determined by a court to be invalid or unenforceable, such determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if such invalid or unenforceable portion were not contained therein. Such invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. 13. Captions. The captions and headings in this Agreement shall be -------- solely for convenience of reference and shall in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. 14. Notices. All notices or other communications which are required ------- or permitted hereunder shall be in writing and shall be deemed to be sufficiently given when delivered personally or mailed by registered or certified mail, postage prepaid, and addressed as follows: (a) As to Semtech: Semtech Corporation 652 Mitchell Road, Newbury Park, CA 91320-2289 Attn.: Mr. John D. Poe Telecopy: (805) 498-3804 With a copy to: Paul, Hastings, Janofsky & Walker Twenty-Third Floor 555 South Flower Street Los Angeles, California 90071 Attn.: Robert A. Miller, Esq. Telecopy: (213) 627-0705 (b) As to Shareholders, to the addresses set forth in Exhibit A attached --------- hereto. -8- (c) As to Escrow Agent: Bank of America Global Escrow Depository Services #8010 333 South Beaudry Avenue Twenty-Fifth Floor Los Angeles, CA 90017 Telecopy: (213) 345-0670 Any of the parties hereto may, by notice given hereunder, designate any further or different address to which subsequent notices or other communications shall be sent. 15. Expenses. Except as otherwise provided for herein, each party -------- shall be responsible for its own costs and expenses with respect to matters involving this Escrow Agreement, except that the costs and expenses with respect to the third-party certified public accountant chosen by the parties, or chosen by the certified public accountants representing such parties, and the costs and expenses of the arbitrator, shall be shared equally by Semtech and the Shareholders. 16. Successors. This Agreement shall be binding upon, and inure to ---------- the benefit of, the heirs, executors, successors and assignees of the parties hereto, and no other person shall have any right, benefit or obligation hereunder. 17. Gender. Words of the masculine gender include the feminine and ------ the neuter, and when the context so requires, words of the neuter gender may refer to any gender. 18. Applicable Law. This Agreement shall be governed by and -------------- construed and enforced in accordance with the internal laws (and not the law of conflicts) of the State of California. 19. Reference to Days. For purposes of this Agreement, all ----------------- references to days shall mean calendar days. 20. Automatic Succession. Notwithstanding anything to the contrary -------------------- contained herein, any company into which the Escrow Agent may be merged or with which it may be consolidated, or any company to whom Escrow Agent may transfer a substantial amount of its global escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties hereto, except that Escrow Agent shall notify -9- Semtech and the Shareholders of such succession as soon as practicable following the occurrence thereof. -10- [ESCROW AGREEMENT SIGNATURE PAGE] IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed on its behalf as of the day and year first above written. SEMTECH: Semtech Corporation, a Delaware corporation By:/s/ John D. Poe ______________________________ John D. Poe, President SHAREHOLDERS: /s/ Michael Himes ----------------------------- Michael Himes Michael Wilson ----------------------------- Michael Wilson James A. Preston ----------------------------- Jim Preston Troy Speers ----------------------------- Troy Speers Extek Company, a Virginia corporation By:_____________________________ ESCROW AGENT: Bank of America NT&SA By: /s/ Kathy Veih ______________________________ An Authorized Officer -11- EXHIBIT A ---------
Social Security or Federal Tax Number of Name and Address Identification Escrowed Pro Rata of Shareholder Number Shares Percentage - ---------------- --------------- ---------- ---------- Michael Himes/1/ ###-##-#### 40,659 81.32% 22800 Riva Ridge Road Los Gatos, CA 95030 Michael Wilson ###-##-#### 4,969 9.94% 9510 Sugar Babe Drive Gilroy, CA 95020 Jim Preston ###-##-#### 2,440 4.88% 1504 Emperor Way Sunnyvale, CA 94087 Troy Speers ###-##-#### 966 1.93% 48879 Gamay Drive Fremont, CA 94539 Extek Company 541495024 966 1.93% P.O. Box 566 Herndon, VA 22070 TOTAL: 50,000 100%
______________________ /1/ Copies of all notices sent to Michael Himes shall be sent to: Hopkins & Carley 150 Almaden Boulevard Fifteenth Floor San Jose, California 95113-2089 Attn.: Anthony J. McCarthy, Esq. Telecopy: (408) 998-4790 -12- EX-99.1 5 PRESS RELEASE DATED OCTOBER 4, 1995 [SEMTECH LOGO] NEWS RELEASE HOLD FOR RELEASE 5:15 PM EDT OCT. 4, 1995 CONTACT: JOHN BAUMANN TELEPHONE: (805) 498-2111, EXT. 262 SEMTECH CORPORATION ACQUIRES ECI SEMICONDUCTOR ---------------------------------------------- NEWBURY PARK, CALIFORNIA, October 4, 1995 - SEMTECH CORPORATION (SMTC-NASDAQ) today announced it has completed the purchase of Gamma, Inc., dba ECI Semiconductor of Santa Clara, California. Semtech will issue 775,000 new shares of common stock in exchange for all of ECI Semiconductor's outstanding shares. Including the new shares issued for the acquisition, Semtech now has approximately 6.4 million common shares outstanding on a fully diluted basis. The transaction will be treated as a pooling-of-interests for accounting purposes. Accordingly, Semtech will incur one-time transaction expenses of approximately $500,000 in its third quarter. ECI Semiconductor is a ten-year-old analog semiconductor manufacturer supplying foundry wafers, custom linear and digital arrays, and general purpose analog semiconductor devices. ECI has approximately 110 employees, all of whom will become part of the Semtech organization. ECI reported revenues for the periods equivalent to Semtech's first and second quarters of fiscal 1996 of approximately $3.5 million and $4.2 million, respectively. Semtech previously reported revenues of approximately $9.3 million and (more) SEMTECH NEWS RELEASE October 4, 1995, 5:15 PM EDT Page 2 $10.6 million respectively for its first and second quarters. John D. Poe, President and Chief Executive Officer of Semtech, stated, "It is our absolute intention to continue ECI's role as a foundry supplier to all of ECI's valued customers. With ECI's design and production capabilities, we will not only continue to serve ECI's foundry customers, but will now have the opportunity to fulfill the growing demand for analog semiconductors in new market applications. We will use the ECI facility in Santa Clara to increase our design and applications engineering functions, and to gain access to the support infrastructure available in the San Francisco Bay Area." Michael Himes, President of ECI Semiconductor, stated, "The combination of our two companies brings complimentary strengths and advantages that enhance our ability to address new and growing market opportunities. ECI will provide important additions in process technology, product diversity, wafer fab capacity, and a new customer base." Poe noted that, "Semtech provides to our combined companies capital resources, strategic direction, and worldwide sales and marketing channels. In the past year, as a supplier to Semtech, ECI has demonstrated unique capabilities in meeting technical and manufacturing challenges. We are now pleased to offer these capabilities to all of Semtech's customers worldwide." F.M. Roberts & Company, Inc. of Los Angeles, Semtech's investment banker, is the advisor on this transaction. Semtech Corporation designs, manufactures, and markets analog semiconductor products for both U.S. and overseas customers in commercial and government markets. Semtech's principal executive offices are located in Newbury Park, California. Manufacturing facilities are located in California, Texas, Mexico, and Scotland. (end) -----END PRIVACY-ENHANCED MESSAGE-----