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Exhibit 2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This Amendment dated April 23, 1999 ("Amendment") to the
Preferred Shares Rights Agreement ("Rights Agreement"), dated as of August 29,
1997, is between Quality Semiconductor, Inc., a California corporation (the
"Company"), and BankBoston, a national banking association (the "Rights Agent").
WHEREAS, the Company and the Rights Agent have heretofore
executed and entered into the Rights Agreement.
WHEREAS, the Company, Integrated Device Technology, Inc., a
corporation organized under the laws of Delaware ("IDT"), and Penguin
Acquisition, Inc., a California corporation ("Sub"), have entered into entering
into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which,
among other things, the outstanding shares of the Company's Common Stock will be
exchanged for shares of IDT Common Stock and Sub will merge with and into the
Company (the "Merger") with the Company surviving as a wholly-owned subsidiary
of Acquiror.
WHEREAS, pursuant to Section 27 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement and amend the
Rights Agreement in order to make any change which the Company may deem
necessary or desirable and which shall be consistent with, and for the purposes
of fulfilling, the objectives of the Board of Directors of the Company in
adopting the Rights Agreement.
WHEREAS, the Board of Directors of the Company has determined
that an amendment to the Rights Agreement as set forth herein is necessary and
desirable and is consistent with the objectives of the Board of Directors of the
Company in adopting the Rights Agreement, and the Company and the Rights Agent
desire to evidence such amendment in writing.
WHEREAS, all acts and things necessary to make this Amendment a
valid agreement, enforceable according to its terms, have been done and
performed, and the execution and delivery of this Amendment by the Company and
the Rights Agent have been in all respects duly authorized by the Company and
the Rights Agent.
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment to Section 1. Section 1 of the Rights Agreement is
supplemented to add the following definitions in the appropriate locations:
"`Merger' shall have the meaning set forth in the Merger
Agreement."
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"`Merger Agreement' shall mean the Agreement and Plan of Merger,
dated as of November 1, 1998, by and among IDT, Penguin Acquisition Inc. and
Quality Semiconductor, Inc., as it may be amended from time to time."
2. Amendment of the definition of "Acquiring Person." The
definition of "Acquiring Person" in Section 1(a) of the Rights Agreement shall
be amended by adding the following at the end of Section 1(a):
"Notwithstanding the foregoing or any provision to the contrary
in this Agreement none of IDT, Penguin Acquisition, Inc., or any
of their respective Affiliates or Associates shall, individually
or collectively, be deemed to be an Acquiring Person pursuant to
this Agreement by virtue of (i) the execution of the Merger
Agreement, and (ii) the consummation of the Merger or the other
transactions contemplated in the Merger Agreement."
3. Amendment of the definition of "Distribution Date." The
definition of "Distribution Date" in Section 1(h) of the Rights Agreement is
amended by adding the following sentence at the end thereof:
"Notwithstanding the foregoing or any provision to the contrary
in this Agreement, a Distribution Date shall not be deemed to
occur by reason of (i) the execution of the Merger Agreement,
(ii) the consummation of the Merger, or the other transactions
contemplated in the Merger Agreement, or (iii) the announcement
of the Merger Agreement or the other transactions contemplated by
the Merger Agreement."
4. Amendment of the definition of "Expiration Date". Section 1(j)
of the Rights Agreement is amended and restated to read in its entirety as
follows:
"`Expiration Date' shall mean the earliest of (i) immediately
prior to the consummation of the Merger, (ii) the Redemption
Date, (iii) the time at which the Board of Directors orders the
exchange of the Rights as provided in Section 24 hereof and (iv)
the Close of Business on the Final Expiration Date."
5. Amendment of the definition of "Permitted Offer." Section 1(l)
of the Rights Agreement is amended and restated to read in its entirety as
follows:
"`Permitted Offer' shall mean a tender offer for all outstanding
Common Shares made in the manner prescribed by Section 14(d) of
the Exchange Act and the rules and regulations thereunder;
provided, however, that a majority of the Board of Directors has
determined that the offer is both adequate and otherwise in the
best
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interests of the Company and its shareholders (taking into
account all factors that the Board of Directors deems relevant,
including without limitation, prices that could reasonably be
achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value)."
6. Amendment of the definition of "Shares Acquisition Date."
Section 1(u) of the Rights Agreement is amended by adding the following sentence
at the end thereof:
"Notwithstanding the foregoing or any provision to the contrary
in this Agreement, a Shares Acquisition Date shall not be deemed
to occur by virtue of (i) the execution of the Merger Agreement,
(ii) the consummation of the Merger, or the other transactions
contemplated in the Merger Agreement, or (iii) the announcement
of the Merger or the other transactions contemplated by the
Merger Agreement."
7. Amendment to Section 30. Section 30 of the Rights Agreement is
amended to add the following sentence at the end thereof:
"Nothing in this Agreement shall be construed to give any holder
of Rights or any other Person any legal or equitable rights,
remedies or claims under this Agreement by virtue of the
execution of the Merger Agreement, or by virtue of any of the
transactions contemplated by the Merger Agreement."
8. This Amendment shall be deemed to be entered into under the
laws of the State of California and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
9. This Amendment may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
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10. As amended hereby, the Agreement shall remain in full force
and effect.
QUALITY SEMICONDUCTOR, INC.
By: /s/ R. Xxxx Xxxxx
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R. Xxxx Xxxxx
Title: President and Chief Executive Officer
Attest:
BANKBOSTON, N.A.
as Rights Agent
By: /s/ Xxxxxxxx Xxxxxxxx
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Signature of Authorized Signatory
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