EXHIBIT 2.3
ESCROW AGREEMENT
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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"), XXXXXXX XXXXX, XXXXXXX XXXXXX, XXX XXXXXXX,
XXXX XXXXXX, 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
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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
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Escrow Agent a stock certificate representing the number of shares of Semtech
Stock set forth opposite their respective names in Exhibit A attached hereto
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(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
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date hereof and terminate on the first anniversary of the date hereof.
3. Claims Against Escrow Account.
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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.
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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.
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4. Payment of Allowed Claims. During the term of this Escrow
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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.
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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
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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.
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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,
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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
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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.
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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
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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
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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.
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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
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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
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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.
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11. Execution Counterparts. This Escrow Agreement may be executed in
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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
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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
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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
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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
000 Xxxxxxxx Xxxx,
Xxxxxxx Xxxx, XX 00000-0000
Attn.: Xx. Xxxx X. Xxx
Telecopy: (000) 000-0000
With a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx
Twenty-Third Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
(b) As to Shareholders, to the addresses set forth in Exhibit A attached
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hereto.
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(c) As to Escrow Agent: Bank of America
Global Escrow Depository Services
#8010
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
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
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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
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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
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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
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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
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references to days shall mean calendar days.
20. Automatic Succession. Notwithstanding anything to the contrary
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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
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Semtech and the Shareholders of such succession as soon as practicable following
the occurrence thereof.
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[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/ Xxxx X. Xxx
______________________________
Xxxx X. Xxx, President
SHAREHOLDERS:
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Xxxxx X. Xxxxxxx
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Xxx Xxxxxxx
Xxxx Xxxxxx
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Xxxx Xxxxxx
Extek Company,
a Virginia corporation
By:_____________________________
ESCROW AGENT:
Bank of America NT&SA
By: /s/ Xxxxx Veih
______________________________
An Authorized Officer
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EXHIBIT A
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Social Security
or Federal Tax Number of
Name and Address Identification Escrowed Pro Rata
of Shareholder Number Shares Percentage
---------------- --------------- ---------- ----------
Xxxxxxx Xxxxx/1/ ###-##-#### 40,659 81.32%
00000 Xxxx Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Xxxxxxx Xxxxxx ###-##-#### 4,969 9.94%
0000 Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Xxx Xxxxxxx ###-##-#### 2,440 4.88%
0000 Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
Xxxx Xxxxxx ###-##-#### 966 1.93%
00000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Extek Company 541495024 966 1.93%
X.X. Xxx 000
Xxxxxxx, XX 00000
TOTAL: 50,000 100%
______________________
/1/ Copies of all notices sent to Xxxxxxx Xxxxx shall be sent to:
Xxxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn.: Xxxxxxx X. XxXxxxxx, Esq.
Telecopy: (000) 000-0000
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