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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1997
REGISTRATION NO. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CYPRESS SEMICONDUCTOR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-2885898
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
3901 NORTH FIRST STREET
SAN JOSE, CALIFORNIA 95134-1599
(408) 943-2600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
----------------------
T.J. RODGERS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CYPRESS SEMICONDUCTOR CORPORATION
3901 NORTH FIRST STREET
SAN JOSE, CALIFORNIA 95134-1599
(408) 943-2600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copies to:
JOHN A. FORE, ESQ.
WILSON SONSINI GOODRICH & ROSATI
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94301
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER SECURITY(1) PRICE(1) FEE
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6% Convertible Subordinated Notes
due 2002....................... $175,000,000 100% $ 175,000,000 $51,625
Common Stock, $.01 par value(2).. 7,407,407 shares(2) -- -- --
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(i) under the Securities Act of 1933, as amended.
(2) Such number represents the number of shares of Common Stock as are
initially issuable upon conversion of the 6% Convertible Subordinated Notes
due 2002 registered hereby and, pursuant to Rule 416 under the Securities
Act of 1933 as amended, such indeterminate number of shares of Common Stock
as may be issued from time to time upon conversion of the Notes as a result
of the antidilution provisions thereof. Pursuant to Rule 457(i), no
registration fee is required for these shares.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
CYPRESS SEMICONDUCTOR CORPORATION
$175,000,000 6% CONVERTIBLE SUBORDINATED NOTES DUE 2002
AND
SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
This Prospectus relates to $175,000,000 aggregate principal amount of 6%
Convertible Subordinated Notes due 2002 (the "Notes") of Cypress Semiconductor
Corporation ("Cypress" or the "Company") and the shares of Common Stock, par
value $.01 per share (the "Common Stock"), of the Company issuable upon the
conversion of the Notes (the "Conversion Shares"). The Notes and the Conversion
Shares may be offered from time to time for the accounts of the holders named
herein (the "Selling Securityholders").
The Notes are convertible at the option of the holder into shares of
Common Stock of the Company, unless previously redeemed or repurchased, at any
time prior to maturity, at a conversion price of $23.625 per share (equivalent
to a conversion rate of approximately 42.33 shares per $1,000 principal amount
of Notes), subject to adjustment under certain circumstances. Interest on the
Notes is payable semi-annually in arrears on April 1 and October 1 of each year,
commencing on April 1, 1998.
The Notes are unsecured general obligations of the Company and are
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined). See "Description of Notes--Subordination." The Notes will mature
on October 1, 2002, and may be redeemed, at the option of the Company, in whole
or in part, at any time on or after October 3, 2000 at the redemption prices set
forth in this Prospectus plus accrued interest. See "Description of Notes --
Redemption -- Optional Redemption." The Notes are also redeemable by the Company
in the event of certain developments involving withholding taxes of the United
States. See "Description of Notes -- Redemption -- Redemption for Taxation
Reasons." In the event of a Fundamental Change (as defined), each Holder of
Notes may require the Company to repurchase its Notes, in whole or in part, for
cash, at the repurchase prices set forth in this Prospectus plus accrued
interest. See "Description of Notes -- Repurchase at Option of Holders Upon a
Fundamental Change."
The Notes and the Conversion Shares may be offered by the Selling
Securityholders from time to time in transactions (which may include block
transactions in the case of the Conversion Shares) on any exchange or market on
which such securities are listed or quoted, as applicable, in negotiated
transactions, through a combination of such methods of sale, or otherwise, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices or at negotiated prices. The
Selling Securityholders may effect such transactions by selling the Notes or
Conversion Shares directly or to or through broker-dealers, who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Securityholders and/or the purchasers of the Notes or Conversion Shares
for whom such broker-dealers may act as agents or to whom they may sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). The Company will not receive any of the
proceeds from the sale of the Notes or Conversion Shares by the Selling
Securityholders. The Company has agreed to pay all expenses incident to the
offer and sale of the Notes and Conversion Shares offered by the Selling
Securityholders hereby, except that the Selling Securityholders will pay all
underwriting discounts and selling commissions, if any. See "Plan of
Distribution."
The Notes have been designated for trading on the Portal Market. Notes
sold pursuant to this Prospectus will not remain eligible for trading on the
Portal Market. The Common Stock is traded on the New York Stock Exchange under
the symbol "CY."
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THE NOTES AND THE COMMON STOCK OFFERED HEREBY INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is December ___, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements, and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements, and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C., as
well as the regional offices of the Commission located at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois, and 7 World Trade Center,
Suite 1300, New York, New York. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a World
Wide Web site that contains reports, proxy and information statements, and other
information that are filed through the Commission's Electronic Data Gathering,
Analysis and Retrieval System. This Web site can be accessed at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Notes and Conversion Shares offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company, the Notes and the Conversion Shares,
reference is made to the Registration Statement and the exhibits and schedules
thereto. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference. Copies of the Registration Statement, including all
exhibits thereto, may be obtained from the Commission's principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission, or may
be examined without charge at the offices of the Commission described above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus: (i) the Company's Annual Report
on Form 10-K for the fiscal year ended December 30, 1996, (ii) the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996, and September 29, 1997, (iii) the Company's Current Report on Form 8-K
dated December 19, 1997; and (iv) the Company's Form 8-A filed May 12, 1986. All
documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the termination of the offering to which
this Prospectus relates shall be deemed to be incorporated by reference into
this Prospectus and to be part of this Prospectus from the date of filing
thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus and
the Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus or such Registration Statement. The Company
will provide without charge to each person to whom a copy of the Prospectus has
been delivered, and who makes a written or oral request, a copy of any and all
of the foregoing documents incorporated by reference in the Registration
Statement (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
submitted in writing or by telephone to Chief Financial Officer, Cypress
Semiconductor Corporation, 3901 North First Street, San Jose, California 95134,
Telephone: (408) 943-2600.
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THE COMPANY
Cypress Semiconductor Corporation ("Cypress" or the "Company") designs,
develops, manufactures and markets a broad line of high performance digital and
mixed-signal integrated circuits for a range of markets, including computers,
data communications, telecommunications and instrumentation systems. The Company
currently offers approximately 450 products from its memory products,
programmable products, computation products and data communications divisions.
As of the end of 1996, Cypress marketed its products worldwide through a network
of 22 North American sales offices, 7 North American distributors, 23 U.S. sales
representative firms, 9 European sales offices, 2 Japanese sales offices, an
office in Singapore, an office in Korea, an office in Taiwan and 44
international sales representative firms. The Company sells its products to a
wide range of customers, including Alcatel, Cisco Systems, Compaq Computer,
Hewlett-Packard, IBM, Lucent Technologies, Motorola, NEC, Northern Telecom and
3Com Corporation. In 1996 and for the nine months ended September 29, 1997,
international sales accounted for 27% and 35% of the Company's total sales,
respectively.
The Company's initial strategy was to provide innovative high
performance CMOS (complementary metal-oxide silicon) integrated circuits to
niche markets, which were believed to be too small to warrant the considerable
investment which would be required for the major established international
semiconductor manufacturers to target those markets. The Company modified its
strategy during 1992 to focus on selected high volume products, particularly in
the static RAM (Random Access Memory) and PLD (Programmable Logic Device)
markets, to bring those products to market quickly and at reduced cost and to
achieve significant market acceptance of those targeted products. Because of the
highly competitive nature of the semiconductor industry, its cyclicality and the
anticipated pressure on average selling prices over the life of any particular
product, the Company's ability to successfully implement this strategy and
achieve its revenue, earnings and gross margin goals will depend upon a number
of factors, including its ability to maintain its position in the high
performance markets, to increase its presence in the more competitive high
volume markets, to continue to successfully design and develop new products
utilizing advanced semiconductor design and process technologies in a timely
fashion, to improve manufacturing yields, to reduce manufacturing costs and
cycle time and to effectively market and sell its products in light of
significant domestic and international competition.
The Company was incorporated in California in December 1982. In February
1987, the Company reincorporated in Delaware. The Company's principal executive
offices are located at 3901 North First Street, San Jose, California 95134.
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THE OFFERING
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Securities Offered............ $175,000,000 principal amount of 6% Convertible Subordinated Notes due
2002 (the "Notes").
Interest Payment Dates........ October 1 and April 1, commencing April 1, 1998.
Conversion.................... The Notes are convertible into Common Stock at any time prior to the close
of business on the maturity date, unless previously redeemed or repurchased,
at a conversion price of $23.625 per share (equivalent to a conversion rate
of approximately 42.33 shares per $1,000 principal amount of Notes),
subject to adjustment.
Subordination................. The Notes are subordinated in right of payment to all existing and future
Senior Indebtedness (as defined). The Notes are also structurally
subordinated to the liabilities, including trade payables, of the Company's
subsidiaries. As of September 29, 1997, there was approximately $172.1
million of indebtedness of the Company outstanding that constituted Senior
Indebtedness (including $117.3 million related to certain operating lease
commitments, related first-loss clauses and certain foreign exchange
contracts) and there was approximately $50.8 million of indebtedness and
other liabilities of subsidiaries of the Company outstanding (excluding
intercompany liabilities and indebtedness included as Senior Indebtedness
as a result of guarantees by the Company) to which the Notes are structurally
subordinated. The Indenture does not restrict the Company from incurring
additional Senior Indebtedness or the Company or its subsidiaries from
incurring other indebtedness and liabilities.
Optional Redemption........... Except as described below under "Additional Amounts and Redemption for
Taxation Reasons," the Notes are not redeemable by the Company prior to
October 3, 2000. On or after October 3, 2000, the Notes may be redeemed
at the option of the Company in whole, or from time to time, in part, at the
redemption prices set forth herein plus accrued interest.
Additional Amounts and
Redemption for Taxation
Reasons....................... The Company will pay Additional Amounts (as defined), subject to certain
exceptions, in order that the Non-U.S. Holders (as defined) of Notes receive
the full amount of the principal, premium, if any, and interest specified
therein (including any amount payable upon a repurchase of the Notes as
described immediately below under "Repurchase at Option of Holders Upon
a Fundamental Change") without deduction for or on account of withholding
or other taxes of the United States. In the event that the Company must pay
such Additional Amounts as a result of a change in law, the affected Notes
will be redeemable at the option of the Company, as a whole but not in part,
at 100% of the principal amount thereof, plus any accrued interest and any
Additional Amounts then payable.
</TABLE>
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Repurchase at Option of
Holders Upon a Fundamental
Change........................ In the event of a Fundamental Change (as defined) each Holder of Notes may
require the Company to repurchase its Notes, in whole or in part, for cash at
the repurchase prices set forth herein, subject to adjustment in certain events
as described herein, plus accrued interest.
Use of Proceeds............... The Company will not receive any of the proceeds from the sale by the
Selling Securityholders of the Notes or the Conversion Shares.
</TABLE>
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RISK FACTORS
This Prospectus contains or incorporates by reference forward-looking
statements that involve risks and uncertainties. The statements contained or
incorporated by reference in this Prospectus that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, including, but not limited to, statements as to the future operating
results and business plans of the Company, that involve risks and uncertainties.
The Company's actual results could differ materially from those discussed
herein. Factors that could cause or contribute to such differences include, but
are not limited to, general economic conditions, the cyclical nature of both the
semiconductor industry and the markets addressed by the Company's products such
as the networking, computer, and telecommunications markets, slower than
expected growth in demand for semiconductor products, the availability and
extent of utilization of manufacturing capacity, fluctuation in manufacturing
yields, price erosion, competitive factors, the successful development, timing
and market acceptance of new product introductions, product obsolescence, costs
associated with future litigation, costs associated with protecting the
Company's intellectual property, the successful ramp up of the Company's
Philippines back-end manufacturing plant, and the ability to develop and
implement new technologies, including the continued transition to the Company's
new 0.5 micron process, as well as those discussed elsewhere in this Prospectus
and in any documents incorporated herein by reference. In addition to the other
information in this Prospectus and in any documents incorporated herein by
reference, the following factors should be considered carefully in evaluating an
investment in the Notes.
FLUCTUATIONS IN OPERATING RESULTS
The Company's quarterly and annual results of operations are affected by
a variety of factors that could materially and adversely affect revenues, gross
profit and income from operations. These factors include, among others, demand
for the Company's products; changes in product mix; competitive pricing pressure
(particularly in the static RAM market); fluctuations in manufacturing yields;
the cost and availability of raw materials; unanticipated delays or problems in
the introduction or performance of the Company's new products; the Company's
ability to introduce new products that meet customer requirements; market
acceptance of the Company's products; product introductions by competitors;
slower than expected growth in demand for semiconductor products; the
availability and extent of utilization of manufacturing capacity; product
obsolescence; the successful ramp up of the Company's Philippines backend
manufacturing plant; the resolution of Alphatec's financial situation; the
ability to develop and implement new technologies, including the continued
transition to the Company's new 0.5 process and the continued migration to 0.35
and 0.25 micron processes; the level of expenditures for research and
development and sales as well as the level of expenditure for general and
administrative functions of the Company; costs associated with future
litigation; and costs associated with protecting the Company's intellectual
property. Any one or more of these factors could result in the Company failing
to achieve its expectations as to future revenues, gross profit and income from
operations. Additionally, risks inherent in the cyclical nature of both the
semiconductor industry and the markets addressed by the Company's products may
cause the Company's quarterly and annual results of operations to vary
significantly. Moreover, as is common in the semiconductor industry, the Company
frequently ships more product in the third month of each quarter than in either
of the first two months of the quarter, and shipments in the third month are
higher at the end of that month. The concentration of sales in the last month of
the quarter contributes to the difficulty in predicting the Company's quarterly
revenues and results of operations.
CYCLICAL NATURE OF SEMICONDUCTOR INDUSTRY
The semiconductor industry has historically been characterized by wide
fluctuations in product supply and demand. From time to time, the industry has
also experienced significant downturns, often in connection with,
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or in anticipation of, maturing product cycles and declines in general economic
conditions. These downturns have been characterized by diminished product
demand, production overcapacity and subsequent accelerated erosion of average
selling prices ("ASPs"), and in some cases such downturns have lasted for more
than a year. In the past, the Company's operating results were adversely
affected by industry-wide fluctuations in the demand for semiconductors, which
resulted in under-utilization of the Company's manufacturing capacity. The
Company's results of operations for 1996 were adversely affected as a result of
a significant downturn in the semiconductor industry generally, which
particularly affected memory related products. A continuation of these
conditions would materially and adversely affect the Company's business,
financial condition and results of operations. In addition, the Company's
business, financial condition and results of operations could be materially and
adversely affected by industry-wide fluctuations in the future.
DEPENDENCE ON GROWTH OF END MARKETS
The Company's continued success will depend in large part on the
continued growth of various electronics industries that use semiconductors,
including data communications and telecommunications equipment, computers and
computer related peripherals, automotive electronics, industrial controls,
consumer electronics equipment and military equipment. A significant portion of
the products across the Company's product divisions are incorporated into data
communications and telecommunications end-products. Any decline in the demand in
networking applications, mass storage, telecommunications, cellular base
stations, cellular handsets, and other personal communications devices which
incorporate the Company's products could adversely affect the Company's
business, financial condition and operating results. Certain of the Company's
products, including USB microcontrollers, high frequency clocks and static RAMs,
are incorporated into computer and computer-related products, which have
historically been characterized by significant fluctuations in demand. Any
decline in the demand for advanced microprocessors which utilize these products
could materially and adversely affect the Company's operating results. Further,
any slowdown in the computer and related peripherals markets could also
materially and adversely affect the Company's operating results. No assurance
can be given that the Company will not be materially and adversely affected by
slower growth in any of the markets serviced by the Company's products.
PRODUCT PRICE FLUCTUATIONS
The ASPs of the Company's products historically have decreased over the
products' lives and are expected to continue to do so. To offset such ASP
decreases, the Company relies primarily on cost reductions in the manufacture of
such products, increased unit demand to absorb fixed costs and the introduction
of new, higher priced products that incorporate advanced features. To the extent
that such cost reductions, increased unit demand or new product introductions do
not occur in a timely manner or newly introduced products do not gain market
acceptance, the Company's business, financial condition and results of
operations could be materially and adversely affected. See "-- New Product
Development and Technological Change."
The selling prices for the Company's products, particularly the static
RAM products, fluctuate significantly with real and perceived changes in the
balance of supply and demand for these commodity products. Growth in worldwide
supply of static RAMs has outpaced growth in worldwide demand for static RAMs in
recent periods, resulting in a significant decrease in average selling prices
for the Company's static RAM products. During 1996 and, to a lesser extent,
during the first nine months of 1997, the ASPs of the Company's static RAM
products (which represented approximately 47% of the Company's revenues in 1996
and 39% of the Company's revenues during the first nine months of 1997) declined
at a rate substantially in excess of historical rates. In the event that ASPs
were to continue to decline at a faster rate than that at which the Company is
able to decrease per unit manufacturing costs, the Company's business, financial
condition and results of operations would be materially and adversely affected.
The amount of capacity to be placed into production and future yield
improvements by the Company's competitors could dramatically increase worldwide
supply of static RAM products and increase
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<PAGE> 9
downward pressure on pricing. Furthermore, the Company has no firm information
with which to determine inventory levels of its competitors, or to determine the
likelihood that substantial inventory liquidation may occur, causing further
downward pressure on pricing.
INTELLECTUAL PROPERTY MATTERS; IMPACT OF LITIGATION
The semiconductor industry has experienced a substantial amount of
litigation regarding patent and other intellectual property rights. The Company
is currently and may in the future be involved in litigation with respect to
alleged infringement by the Company of another party's patents, or may in the
future be involved in litigation to enforce its patents or other intellectual
property rights, to protect its trade secrets and know-how, to determine the
validity or scope of the proprietary rights of others, or to defend against
claims of infringement or invalidity. Such litigation has in the past and could
in the future result in substantial costs and diversion of management resources
and payment of substantial damages and/or royalties or prohibitions against
utilization of essential technologies, and could have a material adverse effect
on the Company's business, financial condition and results of operations. From
time to time the Company has received, and may receive in the future,
communications alleging that its products or its processes may infringe on
product or process technology rights held by others. In response to a series of
such communications, the Company commenced a declaratory judgment action in June
1997 in the United States District Court for the District of Nevada against the
Li Second Family Trust (the "Trust") asking for declaratory relief to the effect
that a U.S. patent relating to a portion of the process for manufacturing
semiconductors is unenforceable, invalid and not infringed by the Company. The
Trust has counterclaimed for patent infringement on the same patent alleging
such patent covers oxide-isolated integrated circuits. In correspondence,
attorneys for the Trust have argued that such patent "is applicable to NMOS,
CMOS, Bipolar, BiCMOS and other technologies." The Company believes it has
meritorious defenses to the counterclaim and intends to defend itself
vigorously. However, should the outcome of this action be unfavorable, the
Company's business, financial condition and results of operations could be
materially and adversely affected.
Although the Company does not believe that its products or processes
infringe the proprietary rights of any third parties, there can be no assurance
that infringement or invalidity claims or actions (or claims for indemnification
resulting from infringement claims) will not be asserted against the Company or
that any such assertions (including the above-described counterclaim by the
Trust) will not materially and adversely affect the Company's business,
financial condition or results of operations. Irrespective of the validity or
the successful assertion of such claims or actions (including the
above-described counterclaim by the Trust), the Company could incur significant
costs with respect to the defense thereof which could have a material adverse
effect on the Company's business, financial condition and results of operations.
Moreover, although the Company might seek to obtain a license under a third
party's intellectual property rights with respect to any such claims or actions
asserted against the Company, there can be no assurance that, under such
circumstances, a license would be available under reasonable terms or at all.
The Company has entered into technology license agreements with third
parties which give those parties the right to use patents and other technology
developed by the Company and which give the Company the right to use patents and
other technology developed by such other parties, some of which involve payment
of royalties and some of which involve access to technology used in the
Company's operations. The Company anticipates that it will continue to enter
into such licensing arrangements in the future. There can be no assurance that
such licenses will continue to be available to the Company on commercially
reasonable terms in the future. The loss of or inability to obtain licenses to
key technology in the future could have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company intends to continue to pursue patent, trade secret and mask
work protection for its semiconductor process technologies. To that end, the
Company has obtained certain patents and patent licenses
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and intends to continue to seek patents on its inventions and manufacturing
processes, as appropriate. The process of seeking patent protection can be long
and expensive, and there is no assurance that patents will be issued from
currently pending or future applications or that, if patents are issued, they
will be of sufficient scope or strength to provide meaningful protection or any
commercial advantage to the Company. In particular, there can be no assurance
that any patents held by the Company will not be challenged, invalidated or
circumvented. Furthermore, there can be no assurance that others will not
develop technologies that are similar or superior to the Company's technology,
duplicate the Company's technology or design around the patents owned by the
Company. The Company also relies on trade secret protection for its technology,
in part through confidentiality agreements with its employees, consultants and
third parties. There can be no assurance that these agreements will not be
breached, that the Company will have adequate remedies for any breach or that
the Company's trade secrets will not otherwise become known to or independently
developed by others. In addition, the laws of certain territories in which the
Company's products are or may be developed, manufactured or sold may not protect
the Company's products and intellectual property rights to the same extent as do
the laws of the United States.
NEW PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE
The Company's future success depends on its ability to develop and
introduce new products which compete effectively on the basis of price and
performance and which address customer requirements. The Company is continually
in the process of designing and commercializing new and improved products to
maintain its competitive position. The success of new product introductions is
dependent upon several factors, including timely completion and introduction of
new product designs, achievement of acceptable fabrication yields and market
acceptance. The development of new products by the Company and their design-in
to customers' systems can take several years, depending upon the complexity of
the device and the application. Accordingly, new product development requires a
long-term forecast of market trends and customer needs, and the successful
introduction of the Company's products may be adversely affected by competing
products or technologies serving markets addressed by the Company's products.
The Company is currently developing new products with smaller feature
sizes, the fabrication of which will be substantially more complex than
fabrication of the Company's current products. The successful introduction of
these products and other new products will depend on the Company's development
and implementation of new process technologies. For example, the Company is
currently transitioning to its 0.5 micron process and expects to transition to
smaller geometries in the future. If the implementation of such processes is not
completed on a timely basis, the Company's business, financial condition and
results of operations could be materially and adversely affected. In addition,
as the Company develops its integrated solution products, it will require more
technically sophisticated sales and marketing personnel to market these products
successfully to its customers. If the Company is unable to design, develop,
manufacture, market and sell new products successfully, its business, financial
condition and results of operations results would be materially and adversely
affected.
DEPENDENCE ON LIMITED SOURCES OF SUPPLY AND INDEPENDENT ASSEMBLY SUBCONTRACTORS
Raw materials utilized by the Company's semiconductor manufacturing
operation generally must meet exacting product specifications. The Company
generally uses multiple sources of supply, but there are only a limited number
of suppliers currently delivering certain raw materials that meet the Company's
specifications. Any change in the Company's suppliers would require the
qualification by the Company of the new supplier. Additionally, the availability
of raw materials may decline due to the overall increase in world-wide
semiconductor demand. Although shortages have occurred from time to time in the
past and lead times in the industry have been extended on occasion, to date the
Company has not experienced any significant interruption in operations as a
result of a difficulty in obtaining raw materials for its semiconductor
manufacturing operations. However,
-9-
<PAGE> 11
interruption of any one raw material source could have a material adverse effect
on the Company's business, financial condition and results of operations.
A portion of the Company's products are assembled, packaged and tested
at the Company's back-end manufacturing facility located in the Philippines. The
Company relies on independent subcontractors to assemble, package and test the
balance of its products. This reliance involves significant risks, including
reduced control over product costs, manufacturing yields, quality and delivery
schedules, capacity and discontinuance or phase-out of such subcontractors'
assembly processes. There can be no assurance that the Company's subcontractors
will continue to assemble, package and test products for the Company.
In the second quarter of 1997, Alphatec Electronics PCL ("Alphatec"),
one of the Company's primary back-end manufacturing subcontract vendors, missed
its deadline to repay $43.7 million of third party international bonds. Although
Alphatec has experienced recent financial difficulties, the Company has
experienced no disruption in supply from Alphatec's assembly and test
operations. The Company has consigned capital assets to Alphatec which had a net
book value as of September 29, 1997 of $15.3 million, and Alphatec's production
represents approximately 24% of the Company's back-end manufacturing capacity.
The Company is evaluating alternative options and has commenced qualification of
products and processes at other subcontract vendors. However, should Alphatec
cease operations or be forced to reduce its manufacturing capacity, the
Company's ability to manufacture a material portion of its products in the
future and ability to recover its consigned assets and inventory in process
could be impaired.
RISK OF EXCESS MANUFACTURING CAPACITY; FABRICATION OF WAFERS
The fabrication of integrated circuits is a highly complex and precise
process, requiring production in a tightly controlled, clean environment. Minute
impurities, difficulties in the fabrication process, defects in the masks used
to print circuits on a wafer or other factors can cause a substantial percentage
of wafers to be rejected or numerous die on each wafer to be nonfunctional. The
Company may experience problems in achieving acceptable yields in the
manufacture of wafers, particularly in connection with the expansion of its
capacity and process transitions. The interruption of wafer fabrication or the
failure to achieve acceptable manufacturing yields at any of the Company's
facilities would have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company has made substantial capital expenditures to increase its
assembly and test manufacturing capacity and its wafer fabrication capacity and
capability. Should the need for this additional capacity and capability not
materialize, (such as insufficient loading of the Philippines backend
manufacturing plant or accelerated upgrade to 0.35 and 0.25 micron technologies)
expected cost savings will not materialize and the need to write off capital
equipment made obsolete by the technology conversion may be required. The
Company continues to evaluate its overall manufacturing capacity and capability
relative to market conditions. There can be no assurance that market conditions
will permit the Company to fully utilize this increased capacity and capability
or that the increases in fixed costs and operating expenses related to this
expansion of capacity and capability will not materially and adversely affect
the Company's business, financial condition and results of operations.
Additionally, the Company's headquarters and some manufacturing
facilities are located near major earthquake faults. In the event of a major
earthquake, the Company could suffer damages that could materially and adversely
affect the Company's business, financial condition and results of operations.
-10-
<PAGE> 12
COMPETITION
The semiconductor industry is intensely competitive and has been
characterized by price erosion, rapid technological change and heightened
foreign competition in many markets. The industry consists of major domestic and
international semiconductor companies, many of which have substantially greater
financial, technical, marketing, distribution and other resources than the
Company, as well as emerging companies attempting to obtain a share of the
existing market. The Company faces competition from other domestic and foreign
high performance integrated circuit manufacturers, many of which have advanced
technological capabilities and have increased their participation in the CMOS
and BiCMOS market sector. The ability of the Company to compete successfully in
the rapidly evolving high performance end of the integrated circuit technology
spectrum depends on elements both within and outside of its control, including
success in developing new products and process technologies, product quality and
price, diversity of product line, cost effectiveness, the pace at which
customers incorporate the Company's products into their systems, the number and
nature of its competitors and general economic conditions. The Company believes
it competes favorably with respect to developing new products and process
technologies, product quality and price, diversity of product line and cost
effectiveness. Price competition in the future could further erode average
selling prices and adversely affect revenues and operating results.
In the low to medium density static RAM area (16 Kb or less in density),
the Company competes against equivalent products of a few manufacturers such as
Integrated Device Technology ("IDT"). There is more significant price
competition in the higher-volume 256 Kb and 1 Mb static RAM area, in which the
Company's competitors include IDT, Motorola, Micron Technology, Alliance
Semiconductor, Integrated Silicon Solution, Inc., Hitachi and other Japanese and
Korean manufacturers, as well as several smaller niche oriented semiconductor
start ups.
There are few CMOS competitors in the relatively small high speed PROM
market. However, with the Company's entry into the EPROM market, the Company
will increasingly compete in CMOS EPROMs with Advanced Micro Devices ("AMD"),
SGS-THOMSON, Texas Instruments, Fujitsu, Atmel and Waferscale Integration. The
Company competes extensively against bipolar PROM circuit manufacturers such as
Philips Corporation and AMD.
The Company's PLD competition consists of bipolar products from
companies such as AMD and Texas Instruments, and from CMOS PLDs from larger
competitors, including Samsung, AMD, Actel, Altera, Lattice Semiconductor
Corporation and Xilinx. Additionally, the sale of PLDs is, in part, dependent on
the availability of user design software. Like the Company, both Altera and
Xilinx have such software packages.
The Company's data communications and logic products compete against
bipolar products of similar functionality from established companies such as
AMD, as well as CMOS versions of these products from companies such as IDT,
Samsung and Sharp.
The Company competes against companies such as ICS/Avasem and ICW with
respect to timing technology products; IDT, Quality Semiconductor and Pericom
with respect to FCT products; and IDT, among others, with respect to module
products.
The Company's system logic products compete with products from Intel,
OPTi, VLSI and Taiwanese manufacturers Silicon Integrated Systems, Acer Labs,
Inc. and United Microelectronics Corporation.
-11-
<PAGE> 13
INVENTORY RISK; SHORTENED CUSTOMER LEAD TIME
The Company must order silicon and other raw materials and build
inventory well in advance of product shipments. Because the Company's markets
are volatile and subject to rapid technology and price changes, there is a risk
that the Company will forecast incorrectly and produce excess or insufficient
inventories of particular products. This inventory risk is heightened because
many of the Company's customers place orders with short lead times. These
factors increase not only the inventory risk but also the difficulty of
forecasting quarterly operating results. For example, in the third quarter of
1996, the Company booked a special charge to inventory in the amount of $16
million to provide increased inventory reserve coverage. Failure to predict
accurately the inventory required to meet customer demand could have a material
adverse effect on the Company's business, financial condition and results of
operations.
LIQUIDITY AND FUTURE CAPITAL NEEDS
Semiconductor manufacturers generally have substantial ongoing capital
requirements to maintain or increase manufacturing capacity. Due to the
capital-intensive nature of the semiconductor industry and the Company's need to
continue to invest in advanced manufacturing and test equipment, the Company
expects to spend approximately $160 million in capital expenditures during 1997
and anticipates significant continuing capital expenditures in the next several
years. Historically, the Company has reinvested a substantial portion of its
cash flow from operations in capacity expansion and improvement programs. The
Company's cash flows from operations depend on ASPs and the per unit cost of the
Company's products. In the event that the Company is unable to decrease costs
for its products at a rate equal to the rate of decline in selling prices for
such products, the Company may not be able to generate sufficient cash flows
from operations to maintain or increase manufacturing capacity. There can be no
assurance that the Company will not be required to seek financing from external
sources to satisfy its cash and capital needs or that such financing will be
available on terms satisfactory to the Company. If such financing is required
and is not available on terms satisfactory to the Company, the Company's
business, financial condition and results of operations could be materially and
adversely affected.
On November 25, 1997, the Company repaid the $49 million balance
outstanding under the Company's revolving credit facility. The facility
continues to be available until July 1999.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent upon a limited number of key management and
technical personnel. In addition, the Company's future success will depend in
part upon its ability to attract and retain highly qualified personnel,
particularly product design engineers. The Company competes for such personnel
with other companies, academic institutions, government entities and other
organizations. There can be no assurance that the Company will be successful in
hiring or retaining qualified personnel or that any of the Company's personnel
will remain employed by the Company. Any loss of key personnel or the inability
to hire or retain qualified personnel could have a material adverse effect on
the Company's business, financial condition and results of operations.
RISKS OF INTERNATIONAL OPERATIONS
International sales represented 27% and 35% of the Company's total
revenues in 1996 and the first nine months of 1997, respectively. The Company's
offshore assembly and test operations and export sales are subject to risks
associated with foreign operations, including currency exchange fluctuations,
political instability, changes in local economic conditions and import and
export controls, as well as changes in tax laws, tariffs and freight rates. To
the extent any of such risks materialize, the Company's business, financial
condition and results of operations could be materially and adversely affected.
-12-
<PAGE> 14
ENVIRONMENTAL REGULATIONS
The Company is subject to a variety of federal, state and local
governmental regulations related to the storage, use, discharge and disposal of
toxic, volatile or otherwise hazardous chemicals used in its manufacturing
process. Increasing public attention has been focused on the environmental
impact of semiconductor manufacturing operations. There can be no assurance that
changes in environmental regulations will not impose the need for additional
capital equipment or other requirements. Any failure by the Company to control
the use of, or adequately to restrict the discharge of, hazardous substances
under present or future regulations could subject the Company to substantial
liability or could cause its manufacturing operations to be suspended. Such
liability or suspension of manufacturing operations could have a material
adverse effect on the Company's business and results of operations.
SIGNIFICANT LEVERAGE; DEBT SERVICE
In connection with the sale of the Notes in the initial private
placement, the Company incurred $175 million indebtedness which resulted in a
ratio of long-term debt to total capitalization at September 29, 1997 of
approximately 22.1%. Such ratio would be substantially greater if the Company's
operating lease obligations were treated as long-term debt. As a result of this
additional indebtedness in connection with the sale of the Notes in the initial
placement, the Company's principal and interest obligations have increased
substantially. The degree to which the Company is leveraged could materially and
adversely affect the Company's ability to obtain financing for working capital,
acquisitions or other purposes and could make it more vulnerable to industry
downturns and competitive pressures. The Company's ability to meet its debt
service obligations will be dependent upon the Company's future performance,
which will be subject to financial, business and other factors affecting the
operations of the Company, many of which are beyond its control.
The Company will require substantial amounts of cash to fund scheduled
payments of principal and interest on its outstanding indebtedness, including
the Notes, future capital expenditures and any increased working capital
requirements. If the Company is unable to meet its cash requirements out of cash
flow from operations and its available borrowings, there can be no assurance
that it will be able to obtain alternative financing or that it, will be
permitted to do so under the terms of its existing financing arrangements. In
the absence of such financing, the Company's ability to respond to changing
business and economic conditions, to make future acquisitions, to absorb adverse
operating results or to fund capital expenditures or increased working capital
requirements may be adversely affected. If the Company does not generate
sufficient increases in cash flow from operations to repay the Notes at
maturity, it could attempt to refinance the Notes; however, no assurance can be
given that such a refinancing would be available on terms acceptable to the
Company, if at all. Any failure by the Company to satisfy its obligations with
respect to the Notes at maturity (with respect to payments of principal and
accrued interest) or prior thereto (with respect to payments of interest or
required repurchases) would constitute a default under the Indenture and could
cause a default under agreements governing other indebtedness, if any, of the
Company.
SUBORDINATION AND ABSENCE OF FINANCIAL COVENANTS
The Notes are unsecured and subordinated in right of payment to all
existing and future Senior Indebtedness of the Company. The Notes are also
structurally subordinated to the existing and future liabilities, including
trade payables of the Company's subsidiaries, and the Company conducts a
significant portion of its operations through subsidiaries. As of September 29,
1997, there was approximately $172.1 million of indebtedness of the Company
outstanding that constituted Senior Indebtedness (including $117.3 million
related to certain operating lease commitments, related first-loss clauses and
certain foreign exchange contracts) and approximately $50.8 million of
indebtedness and other liabilities of subsidiaries of the Company outstanding
-13-
<PAGE> 15
(excluding intercompany liabilities and indebtedness included as Senior
Indebtedness as a result of guarantees by the Company,) to which the Notes are
structurally subordinated. The Indenture does not prohibit or limit the
incurrence of Senior Indebtedness or the incurrence of other indebtedness and
liabilities by the Company or its subsidiaries, and the incurrence of any such
additional indebtedness or liabilities could adversely affect the Company's
ability to pay its obligations on the Notes. The Company anticipates that from
time to time it will incur additional indebtedness, including Senior
Indebtedness, and that it and its subsidiaries will from time to time incur
other additional indebtedness and liabilities. See "Description of Notes --
Subordination."
The Indenture does not contain any financial covenants or restrictions
on the payment of dividends, the incurrence of indebtedness, including Senior
Indebtedness, by the Company or the issuance or repurchase of securities by the
Company. The Indenture contains no covenants or other provisions to afford
protection to holders of the Notes in the event of a highly leveraged
transaction or a change in control of the Company except to the extent described
under "Description of Notes -- Repurchase at Option of Holders Upon a
Fundamental Change." The term "Fundamental Change" is limited to certain
specified transactions and may not include other events that might adversely
affect the financial condition of the Company, nor would the requirement that
the Company offer to repurchase the Notes upon a Fundamental Change necessarily
afford Holders of the Notes protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving the
Company.
LIMITATIONS ON REPURCHASE OF NOTES
Upon a Fundamental Change (as defined), each Holder of Notes will have
certain rights, at the Holder's option, to require the Company to repurchase all
or a portion of such Holder's Notes. If a Fundamental Change were to occur,
there can be no assurance that the Company would have or be able to obtain
sufficient funds to pay the repurchase price for all Notes tendered by the
Holders thereof. The Company's future credit agreements or agreements relating
to other indebtedness (including other Senior Indebtedness) to which the Company
becomes a party may contain restrictions and provisions which prohibit the
Company from repurchasing or redeeming any Notes and may provide that certain
transactions constituting a Fundamental Change would constitute an event of
default thereunder. In the event a Fundamental Change occurs at a time when the
Company is prohibited from repurchasing or redeeming Notes, the Company could
seek the consent of its lenders to the repurchase of Notes or could attempt to
refinance the borrowings that contain such prohibition. If the Company does not
obtain such a consent or repay such borrowings, the Company would remain
prohibited from repurchasing or redeeming Notes. In such case, the Company's
failure to repurchase tendered Notes may constitute an Event of Default under
the Indenture, which may, in turn, constitute a further default under the terms
of certain of the Senior Indebtedness. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the Holders of the
Notes. See "Description of Notes -- Repurchase at Option of Holders Upon a
Fundamental Change."
POTENTIAL VOLATILITY OF NOTES AND COMMON STOCK PRICE
The market price for the Common Stock has been volatile. The market
price of the Common Stock and, in turn, the market price of the Notes could be
subject to significant fluctuations in response to variations in quarterly
operating results, shortfalls in revenues or earnings from levels expected by
securities analysts and other factors, such as announcements of technological
innovations or new products by the Company or by the Company's competitors,
government regulations and developments in patent or other proprietary rights.
The securities markets have experienced volatility which is often unrelated to
the operating performance of particular companies, and such volatility may in
the future adversely affect the market price of the Common Stock and, in turn,
the market price of the Notes. Also in the past, following a period of
volatility in the market price of a company's securities, securities class
action lawsuits have been instituted against some companies. A class action
lawsuit was brought against the Company in 1995. Although such litigation was
determined in the Company's favor, it resulted in legal expenses and other costs
and diversion of management resources. Should the Company be subject to such
lawsuits
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<PAGE> 16
in the future, the costs of defending such litigation or any adverse judgment
against the Company or any diversion of management resources could have a
material adverse effect on the Company's business, financial condition and
results of operations.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The Notes were issued in September 1997 in a private placement to a
small number of institutional buyers. The Notes issued in the initial private
placement have been designated for trading on the Portal Market. Notes sold
pursuant to this Prospectus will not remain eligible for trading on the Portal
Market. The Company does not intend to list the Notes on any national securities
exchange or on The Nasdaq Stock Market. There can be no assurance that an active
trading market for the Notes will develop or, if one does develop, that it will
be maintained. If an active trading market for the Notes fails to develop or be
sustained, the trading price of such Notes could be adversely affected, and
holders of the Notes may experience difficulty in reselling the Notes or may be
unable to sell them at all. If a public trading market develops for the Notes,
future trading prices of the Notes will depend upon many factors, including,
among other things, prevailing interest rates and the market price of the shares
of Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale by the Selling
Securityholders of the Notes or the Conversion Shares.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of
earnings to fixed charges for the periods shown.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEAR ----------------------------
-------------------------------- SEPTEMBER 30, SEPTEMBER 29,
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... N/A 8.7x 14.4x 19.7x 9.3x 13.0x 4.1x
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges (i)
earnings consist of earnings before taxes adjusted for fixed charges, minority
interest and investment accounted for by the equity method and (ii) fixed
charges consist of interest expense incurred, plus the portion of rent expense
under operating leases deemed by the Company to be representative of the
interest factor, plus amortization of debt issuance costs and amortization of
the bond discount relating to the 1994 Convertible Subordinated Notes. The
calculation for the nine month period ended September 29, 1997 includes a $1.6
million write-off of unamortized debt issuance costs related to the March 1997
redemption of the 1994 Convertible Subordinated Notes. Excluding this write-off,
earnings to fixed charges ratio would have been 5.1x for the nine month period
ended September 29, 1997. For the fiscal year ended December 28, 1992, earnings
were insufficient to cover fixed charges by $30.9 million.
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<PAGE> 17
SELLING SECURITYHOLDERS
The Notes were originally issued by the Company in a private placement
and were resold by the initial purchasers thereof to qualified institutional
buyers (within the meaning of Rule 144A under the Securities Act) or other
institutional accredited investors (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) in transactions exempt from registration under the
Securities Act, and in sales outside the United States to persons other than
U.S. persons in reliance upon Regulation S under the Securities Act. The Notes
and the Conversion Shares that may be offered pursuant to this Prospectus will
be offered by the Selling Securityholders. The following table sets forth
certain information concerning the principal amount of Notes beneficially owned
by each Selling Securityholder and the number of Conversion Shares that may be
offered from time to time pursuant to this Prospectus.
From time to time, both BancAmerica Robertson Stephens and Deutsche
Morgan Grenfell Inc. or their affiliates have provided, and may continue to
provide, investment banking services to the Company, for which they received or
will receive customary fees. None of the other Selling Securityholders has had
any position, office or other material relationship with the Company or its
affiliates within the past three years.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF NOTES NUMBER OF
BENEFICIALLY PERCENTAGE OF CONVERSION
OWNED THAT NOTES SHARES THAT
NAME MAY BE SOLD OUTSTANDING MAY BE SOLD(1)(2)
---- --------------- ------------- -----------------
<S> <C> <C> <C>
BancAmerica Robertson Stephens ........... $4,740,000 2.7 200,634
Brown & Williamson Tobacco Corp.
Master Retirement Trust.................. 175,000 * 7,407
Credit Suisse First Boston Corporation ... 1,150,000 * 48,677
Deutsche Morgan Grenfell Inc. ............ 8,750,000 5.0 370,370
Donaldson, Lufkin & Jenrette Securities
Corp. .................................... 200,000 * 8,465
Farallon Capital Institutional, Partners LP 5,975,000 3.4 259,910
Farallon Capital Institutional Partners ...
II, LP ................................... 1,105,000 * 46,772
Farallon Capital Offshore Investors, Inc. . 8,625,000 4.9 365,079
Farallon Capital Partners, LP.............. 5,635,000 3.2 238,518
First Indemnity of America Insurance ...... 500,000 * 21,164
Lazard Freres & Co. ....................... 300,000 * 12,698
Manistay Convertible Fund ................. 3,325,000 1.9 140,740
Mainstay VP Convertible Portfolio ......... 500,000 * 21,164
NATWEST Securities Limited ................ 5,000,000 2.9 211,640
New York Life Separate Account #7 ........ 3,000,000 1.7 129,984
North Star Hedge Fund, LP ................ 1,500,000 * 63,492
Salomon Brothers Asset Management, Inc. .. 12,600,000 7.2 533,333
Societe Generale Securities Corp. ........ 7,450,000 4.3 315,343
Any other holders of Notes or future
transferee, pledgee, donee or successor
of or from any such other holder (3)(4) 104,470,000 62.8 4,792,380
</TABLE>
- --------
* Less than 1%.
(1) Assumes conversion of the full amount of Notes held by such holder at the
initial conversion price of $23.625 per share; such conversion price is
subject to adjustment as described under "Description of the
Notes--Conversion." Accordingly, the number of shares of Common Stock
issuable upon conversion of the Notes may increase or decrease from time to
time. Under the terms of the Indenture, fractional shares will not be issued
upon conversion of the Notes; cash will be paid in lieu of fractional
shares, if any.
(2) The number of Conversion Shares held by each holder named herein is less
than 1% of the Company's Outstanding Common Stock as of September 29, 1997.
(3) Information concerning other Selling Securityholders will be set forth in
supplements to this Prospectus from time to time, if required.
(4) Assumes that any other holders of Notes, or any future transferees,
pledgees, donees or successors of or from any such other holders of Notes,
do not beneficially own any Common Stock other than the Common Stock
issuable upon conversion of the Notes at the initial conversion price.
-16-
<PAGE> 18
The preceding table has been prepared based upon the information
furnished to the Company by the Selling Securityholders named therein.
The Selling Securityholders identified above may have sold, transferred
or otherwise disposed of, in transactions exempt from the registration
requirements of the Securities Act, all or a portion of their Notes since the
date on which the information in the preceding table is presented. Information
concerning the Selling Securityholders may change from time to time and any such
changed information will be set forth in supplements to this Prospectus if and
when necessary. Because the Selling Securityholders may offer all or some of the
Notes that they hold and/or Conversion Shares pursuant to the offering
contemplated by this Prospectus, no estimate can be given as to the amount of
the Notes or Conversion Shares that will be held by the Selling Securityholders
upon the termination of this offering. See "Plan of Distribution."
DESCRIPTION OF NOTES
The Notes were issued under an indenture dated as of September 15, 1997
(the "Indenture"), between the Company and State Street Bank and Trust Company
of California, N.A., as trustee (the "Trustee"). The form of the Indenture and
the Registration Rights Agreement (as defined below) have been filed as exhibits
to the Registration Statement. The following summaries of certain provisions of
the Notes, the Indenture and the Registration Rights Agreement do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Notes, the Indenture and the Registration
Rights Agreement, including the definitions therein of certain terms which are
not otherwise defined in this Prospectus. Wherever particular provisions or
defined terms of the Indenture (or the form of Note which is a part thereof) or
the Registration Rights Agreement are referred to, such provisions or defined
terms are incorporated herein by reference. References in this section to the
"Company" are solely to Cypress Semiconductor Corporation, a Delaware
corporation, and not its subsidiaries.
GENERAL
The Notes are unsecured subordinated obligations of the Company, are
limited to $175,000,000 aggregate principal amount, will mature on October 1,
2002 and will be payable at a price of 100% of the principal amount thereof. The
Notes will bear interest at 6% from September 24, 1997, payable semiannually on
April 1 and October 1 of each year, commencing on April 1, 1998.
The Notes are convertible into Common Stock initially at a conversion
price of $23.625 per share, subject to adjustment upon the occurrence of certain
events described under "-- Conversion," at any time prior to the close of
business on the maturity date, unless previously redeemed or repurchased.
The Notes are redeemable (a) at the option of the Company in the event
of certain developments involving withholding taxes of the U.S. as described
below under "-- Redemption -- Redemption for Taxation Reasons" at a redemption
price of 100% of the principal amount of the Notes to be redeemed, plus accrued
interest to, but excluding, the Redemption Date (as defined) and (b) at the
option of the Company under the circumstances and at the redemption prices set
forth below under "-- Redemption -- Optional Redemption," plus accrued interest
to, but excluding, the Redemption Date.
The Indenture does not contain any financial covenants or restrictions
on the payment of dividends by the Company, the incurrence of indebtedness,
including Senior Indebtedness (as defined), by the Company or the issuance or
repurchase of securities by the Company. The Indenture contains no covenants or
other provisions to afford protection to Holders of the Notes in the event of a
highly leveraged transaction or a change in control of
-17-
<PAGE> 19
the Company except to the extent described below under "-- Repurchase at Option
of Holders Upon a Fundamental Change."
CONVERSION
The Holder of any Note has the right at the Holder's option to convert
any Note (in denominations of $1,000 or any multiple thereof) into shares of
Common Stock at any time prior to the close of business on the maturity date,
unless previously redeemed or repurchased, at a conversion price of $23.625 per
share (equivalent to a conversion rate of approximately 42.33 shares per $1,000
principal amount of Notes). The conversion price is subject to adjustment from
time to time as described below. The right to convert a Note called for
redemption or delivered for repurchase will terminate at the close of business
on the Business Day prior to the Redemption Date or the Repurchase Date (as
defined) for such Note, as the case may be.
Beneficial owners of interests in a Note in global form may exercise
their right of conversion by delivering to DTC the appropriate instruction form
for conversion pursuant to DTC's conversion program. To convert a Note held in
certificated form into shares of Common Stock, a Holder must (i) complete and
manually sign the conversion notice on the back of the Note (or complete and
manually sign a facsimile thereof) and deliver such notice to the Trustee at the
office or agency of the Trustee in New York, New York or the Corporate Trust
Office of the Trustee in Los Angeles, California or any Conversion Agent, (ii)
surrender the Note to the Trustee at the office or agency of the Trustee in New
York, New York or the Corporate Trust Office of the Trustee in Los Angeles,
California or to any Conversion Agent, as the case may be, (iii) if required,
furnish appropriate endorsements and transfer documents, (iv) if required, pay
all transfer or similar taxes, and (v) if required, pay funds equal to interest
payable on the next interest payment date. Pursuant to the Indenture, the date
on which all of the foregoing requirements have been satisfied is the date of
surrender for conversion. Such notice of conversion can be obtained from the
Trustee at the Corporate Trust Office or the office of any Conversion Agent. As
promptly as practicable on or after the conversion date, the Company will issue
and deliver to the Trustee a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share in an amount determined as set forth below. Such
certificate will be sent by the Trustee to the appropriate Conversion Agent for
delivery to the Holder. Such Common Stock issuable upon conversion of the Notes
will be fully paid and nonassessable. Any Note surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the next succeeding Interest Payment Date (except Notes called
for redemption on a Redemption Date or to be repurchased on a Repurchase Date
during such period) must be accompanied by payment of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of Notes
being surrendered for conversion. In the case of any Note which has been
converted after any Regular Record Date, but on or before the next Interest
Payment Date, interest the Stated Maturity of which is on such Interest Payment
Date shall be payable on such Interest Payment Date notwithstanding such
conversion. Such interest shall be paid to the Holder of such Note on such
Regular Record Date. As a result, a Holder that surrenders Notes for conversion
on a date that is not an Interest Payment Date will not receive any interest for
the period from the Interest Payment Date next preceding the date of conversion
to the date of conversion or for any later period, even if the Notes are
surrendered after a notice of redemption (except for the payment of interest on
Notes called for redemption on a Redemption Date or to be repurchased on a
Repurchase Date between a Regular Record Date and the Interest Payment Date to
which it relates). No other payment or adjustment for interest, or for any
dividends in respect of Common Stock, will be made upon conversion. Holders of
Common Stock issued upon conversion will not be entitled to receive any
dividends payable to holders of Common Stock as of any record time before the
close of business on the conversion date. No fractional shares will be issued
upon conversion but, in lieu thereof, an appropriate amount will be paid in cash
by the Company based on the market price of Common Stock on the day of
conversion.
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<PAGE> 20
A Holder delivering a Note for conversion will not be required to pay
any taxes or duties in respect of the issue or delivery of Common Stock on
conversion but will be required to pay any tax or duty that may be payable in
respect of any transfer involved in the issue or delivery of the Common Stock in
a name other than that of the Holder of the Note. Certificates representing
Common Stock will not be issued or delivered unless all taxes and duties, if
any, payable by the Holder have been paid.
The initial conversion price of $23.625 per share of Common Stock
(equivalent to a conversion rate of approximately 42.33 shares per $1,000
principal amount of the Notes) is subject to adjustment (under formulae set
forth in the Indenture) in certain events, including: (i) the issuance of Common
Stock as a dividend or distribution on Common Stock; (ii) certain subdivisions
and combinations of the Common Stock; (iii) the issuance to all holders of
Common Stock of certain rights or warrants to purchase Common Stock (provided
that the conversion price will be readjusted to the extent that such rights or
warrants are not exercised prior to the expiration thereof); (iv) the
distribution to all holders of Common Stock of shares of capital stock of the
Company (other than Common Stock) or evidences of indebtedness of the Company or
assets (including securities, but excluding those rights, warrants, dividends
and distributions referred to above or paid in cash); (v) distributions
consisting of cash, excluding any quarterly cash dividend on the Common Stock to
the extent that the aggregate cash dividend per share of Common Stock in any
quarterly period does not exceed the greater of (x) the amount per share of
Common Stock of the next preceding quarterly cash dividend on the Common Stock
to the extent that such preceding quarterly dividend did not require an
adjustment of the conversion price pursuant to this clause (v), and (y) 3.75% of
the average of the daily Closing Prices (as defined) of the Common Stock for the
ten consecutive Trading Days (as defined) immediately prior to the date of
declaration of such dividend, and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company; (vi)
payment in respect of a tender or exchange offer by the Company for the Common
Stock to the extent that the cash and value of any other consideration included
in such payment per share of Common Stock exceeds the Current Market Price (as
defined) per share of Common Stock on the Trading Day next succeeding the last
date on which tenders or exchanges may be made pursuant to such tender or
exchange offer; and (vii) payment in respect of a tender offer or exchange offer
by a person other than the Company in which, as of the closing date of the
offer, the Board of Directors is not recommending rejection of the offer. If an
adjustment is required to be made as set forth in clause (v) above as a result
of a distribution that is a quarterly dividend, such adjustment would be based
upon the amount by which such distribution exceeds the amount of quarterly cash
dividends permitted to be excluded pursuant to such clause (v). In the event of
a distribution to substantially all holders of Common Stock of rights to
subscribe for additional shares of the Company's capital stock as provided in
clause (iii) above, the Company may, instead of making any adjustment in the
conversion price, make proper provision so that each Holder of a Note who
converts such Note after the record date for such distribution and prior to the
expiration or redemption of such rights shall be entitled to receive upon such
conversion, in addition to shares of Common Stock, an appropriate number of such
rights. If an adjustment is required to be made as set forth in clause (v) above
as a result of a distribution that is not a quarterly dividend, such adjustment
would be based upon the full amount of the distribution. The adjustment referred
to in clause (vii) above will only be made if the tender offer or exchange offer
is for an amount which increases that person's ownership of Common Stock to more
than 25% of the total shares of Common Stock outstanding and if the cash and
value of any other consideration included in such payment per share of Common
Stock exceeds the Current Market Price per share of Common Stock on the business
day next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer. The adjustment referred to in clause
(vii) above will not be made, however, if, as of the closing of the offer, the
offering documents with respect to such offer disclose a plan or an intention to
cause the Company to engage in a consolidation or merger of the Company or a
sale of all or substantially all of the Company's assets.
In case of any consolidation or merger of the Company with or into
another Person or any merger of another Person into the Company (other than a
merger which does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock), or in case of any sale or transfer of all or
substantially all of the
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<PAGE> 21
assets of the Company, each Note then outstanding will, without the consent of
the Holder of any Note, become convertible only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by a holder of the number of Common Stock into which such Note
was convertible immediately prior thereto (assuming such holder of Common Stock
failed to exercise any rights of election and that such Note was then
convertible).
The Company from time to time may to the extent permitted by law reduce
the conversion price by any amount for any period of at least 20 days, in which
case the Company shall give at least 15 days notice of such reduction, if the
Board of Directors of the Company has made a determination that such reduction
would be in the best interests of the Company which determination shall be
conclusive. The Company may, at its option, make such reductions in the
conversion price, in addition to those set forth above, as the Board of
Directors of the Company deems advisable to avoid or diminish any Income tax to
holders of Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.
SUBORDINATION
The indebtedness evidenced by the Notes is subordinated in right of
payment to the extent provided in the Indenture to the prior payment in full of
all Senior Indebtedness (as defined). Upon any distribution of assets of the
Company resulting from any dissolution, winding up, liquidation or
reorganization (including any of the foregoing as a result of bankruptcy or
moratorium of payment), the payment on account of the principal of, redemption
of, liquidated damages, if any, or premium, if any, and interest on the Notes
(including on account of a Fundamental Change) is to be subordinated to the
extent provided in the Indenture in right of payment to the prior payment in
full in cash of all Senior Indebtedness. In the event of any acceleration of the
Notes because of an Event of Default (as defined), the holders of any Senior
Indebtedness then outstanding would be entitled to payment in full in cash of
all obligations in respect of such Senior Indebtedness before the Holders of the
Notes are entitled to receive any payment or other distribution in respect
thereof. The Indenture will require that the Company promptly notify the Trustee
if payment of the Notes is accelerated because of an Event of Default.
The Company also may not make any payment upon, redemption of, or
payment of liquidated damages, if any, on or purchase or otherwise acquire the
Notes if (i) a default in the payment of the principal of, premium, if any,
interest, rent or other obligations in respect of Senior Indebtedness occurs and
is continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness (as
defined) that permits the holders of the Designated Senior Indebtedness as to
which such default relates to accelerate its maturity and the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Company or other
person permitted to give such notice under the Indenture. Payments on the Notes
may and shall be resumed (a) in case of a payment default, upon the date on
which such default is cured or waived or ceases to exist and (b) in case of a
nonpayment default, the earlier of the date on which such nonpayment default is
cured or waived or ceases to exist or 179 days after the date on which the
applicable Payment Blockage Notice is received. No new period of payment
blockage may be commenced pursuant to a Payment Blockage Notice unless and until
365 days have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
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<PAGE> 22
By reason of the subordination provisions described above, in the event
of the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and Holders of the Notes may receive
less, ratably, than the other creditors of the Company. Such subordination will
not prevent the occurrence of any Event of Default under the Indenture.
In the event that, notwithstanding the foregoing, the Trustee or any
Holder of the Notes receives any payment or distribution of assets of the
Company of any kind in contravention of any of the subordination provisions of
the Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Senior Indebtedness is paid in full, then such payment or distribution will be
held by the recipient in trust for the benefit of holders of Senior Indebtedness
of the Company or their representative or representatives to the extent
necessary to make payment in full of all Senior Indebtedness of the Company
remaining unpaid, after giving effect to any concurrent payment or distribution,
or provision therefor, to or for the holders of Senior Indebtedness of the
Company.
The Notes are unsecured and subordinated in right of payment to all
existing and future Senior Indebtedness of the Company. The Notes are also
structurally subordinated to the existing and future liabilities, including
trade payables, of the Company's subsidiaries, and the Company conducts a
significant portion of its operations through subsidiaries. As of September 29,
1997, there was approximately $172.1 million of indebtedness of the Company
outstanding constituting Senior Indebtedness (including $117.3 million related
to certain operating lease commitments, related first-loss clauses and certain
foreign exchange contracts) and there was approximately $50.8 million of
indebtedness and other liabilities of subsidiaries of the Company outstanding
(excluding intercompany liabilities and indebtedness included as Senior
Indebtedness as a result of guarantees by the Company) to which the Notes would
have been structurally subordinated. The Indenture does not prohibit or limit
the incurrence of Senior Indebtedness or the incurrence of other indebtedness
and other liabilities by the Company or its subsidiaries, and the incurrence of
any such additional indebtedness or liabilities could adversely affect the
Company's ability to pay its obligations on the Notes. The Company anticipates
that from time to time it will incur additional indebtedness, including Senior
Indebtedness, and that it and its subsidiaries will from time to time incur
other additional indebtedness and liabilities. See "Risk Factors--Subordination
and Absence of Financial Covenants."
The Company is obligated to pay reasonable compensation to the Trustee
and to indemnify the Trustee against any losses, liabilities or expenses
incurred by it in connection with its duties relating to the Notes. The
Trustee's claims for such payments will be senior to those of Holders of the
Notes in respect of all funds collected or held by the Trustee.
The term "Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness (as defined) of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
pari passu or "junior" to the Notes. Notwithstanding the foregoing, Senior
Indebtedness shall not include Indebtedness of the Company to any subsidiary of
the Company.
The term "Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations
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<PAGE> 23
of the Person in respect of overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by notes or similar instruments)
or evidenced by bonds, debentures, notes or similar instruments (whether or not
the recourse of the lender is to the whole of the assets of such Person or to
only a portion thereof) other than any account payable or other accrued current
liability or obligation incurred in the ordinary course of business in
connection with the obtaining of materials or services, (b) all reimbursement
obligations and other liabilities (contingent or otherwise) of such Person with
respect to letters of credit, bank guarantees or bankers' acceptances, (c) all
obligations and liabilities (contingent or otherwise) in respect of leases of
such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the balance
sheet of such Person or under other leases for facilities, equipment or related
assets, whether or not capitalized, entered into or leased for financing
purposes (as determined by the Company) and all obligations and other
liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of real property
or improvements thereon which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property, (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person, and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
The term "Designated Senior Indebtedness" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture (provided that
such instrument agreement or other document may place limitations and conditions
on the right of such Senior Indebtedness to exercise the rights of Designated
Senior Indebtedness).
REDEMPTION
Optional Redemption
At any time on or after October 3, 2000, the Notes will be redeemable at
the Company's option on at least 20 and not more than 60 days notice, in whole,
or from time to time, in part, at the following prices (expressed as percentages
of the principal amount), together with accrued interest to, but excluding, the
Redemption Date.
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<PAGE> 24
If redeemed during the 12-month period beginning October 1 (beginning
October 3, 2000 and ending September 30, 2001, in the case of the first such
period):
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ----- -----------
<S> <C>
2000.................................. 102.4%
2001.................................. 101.2
</TABLE>
and 100% at October 1, 2002; provided that any semi-annual payment of interest
becoming due on the Redemption Date shall be payable to the Holders of record on
the Regular Record Date of the Notes being redeemed.
If fewer than all the Notes are to be redeemed, the Trustee will select
the Notes to be redeemed by lot. If any Note is to be redeemed in part only, a
new Note or Notes in principal amount equal to the unredeemed principal portion
thereof will be issued at the office or agency of the Trustee in the City of New
York or the Corporate Trust Office of the Trustee in Los Angeles, California. If
a portion of a Holder's Notes is selected for partial redemption and such Holder
converts a portion of such Notes, such converted portion shall be deemed to be
taken from the portion selected for redemption.
There is no sinking fund provided for the Notes.
Redemption for Taxation Reasons
If, as a result of any change in, or amendment to, the laws or
regulations prevailing in the United States or any political subdivision or
taxing authority thereof or therein, which change or amendment becomes effective
on or after September 19, 1997 or as a result of any application or official
interpretation of such laws or regulations not generally known before that date
(a "Tax Law Change") the Company is or would be required on the next succeeding
Interest Payment Date to pay Additional Amounts (as defined), and such
requirement or obligation cannot be avoided by the Company taking reasonable
measures available to it, the Company may redeem the affected Notes in whole,
but not in part, at any time, on giving not less than 20 days notice, at a
redemption price equal to 100% of the principal amount thereof plus accrued
interest to, but excluding, the Redemption Date and any Additional Amounts then
payable, provided that no such notice of redemption shall be given earlier than
90 days prior to the earliest date on which the Company would be obligated to
withhold or pay additional amounts were a payment in respect of the Notes then
made.
Prior to the publication of any notice of redemption with respect to a
Tax Law Change, the Company shall deliver to the Trustee (a) a certificate
stating that the Company is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (b) an opinion of counsel selected by the
Company and reasonably acceptable to the Trustee, to the effect that the Company
has or will become obligated to pay such Additional Amounts as a result of a Tax
Law Change. The Company's right to redeem the affected Notes shall continue as
long as the Company is obligated to pay Additional Amounts, notwithstanding that
the Company shall have theretofore made payments of Additional Amounts.
PAYMENT AND CONVERSION
The principal of Notes will be payable in United States dollars, against
surrender thereof at the office or the agency of the Trustee in The City of New
York or the Corporate Trust Office of the Trustee in Los Angeles, California,
or, subject to any applicable laws and regulations, at the office of any Paying
Agent, by dollar check drawn on, or by transfer to a dollar account (such
transfer to be made only to Holders of an aggregate principal
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<PAGE> 25
amount of Notes in excess of $2,000,000) maintained by the Holder with, a bank
in The City of New York. Payment of any installment of interest on Notes will be
made to the Person in whose name such Notes or any predecessor Note is
registered at the close of business on March 15 or September 15 (whether or not
a Business Day) immediately preceding the relevant Interest Payment Date (a
"Regular Record Date"). Payments of such interest will be made by a dollar check
drawn on a bank in The City of New York mailed to the Holder at such Holder's
registered address or, upon application by the Holder thereof to the Trustee not
later than the applicable Regular Record Date, by transfer to a dollar account
(such transfer to be made only to Holders of an aggregate principal amount of
Notes in excess of $2,000,000) maintained by the Holder with a bank in The City
of New York. No such transfer to a dollar account will be made unless the
Trustee has received written wire instructions not less than 15 days prior to
the relevant payment date.
Any payment on the Notes due on any day which is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on such due date, and no interest
shall accrue on such payment for the period from and after such date. "Business
Day," when used with respect to any place of payment, place of conversion or any
other place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in such place of
payment, place of conversion or other place, as the case may be, are authorized
or obligated by law or executive order to close; provided, however, that a day
on which banking institutions in New York, New York are authorized or obligated
by law or executive order to close shall not be a Business Day for certain
purposes.
Notes may be surrendered for conversion, subject to any applicable laws
and regulations, at the office of any Conversion Agent outside the U.S. In
addition, Notes may be surrendered for conversion at the office or agency of the
Trustee in The City of New York or the Corporate Trust Office of the Trustee in
Los Angeles, California. Notes surrendered for conversion must be accompanied by
appropriate notices and any payments in respect of interest or taxes, as
applicable, as described above under "--Conversion."
The Company has initially appointed as Paying Agent and Conversion Agent
the Trustee at its Corporate Trust Office in Los Angeles, California or at the
office or agency of the Trustee in The City of New York. The Company may at any
time terminate the appointment of any Paying Agent or Conversion Agent and
appoint additional or other Paying Agents and Conversion Agents, provided that
until the Notes have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the Notes
have been made available for payment and either paid or returned to the Company
as provided in the Indenture, it will maintain offices or agencies in The City
of New York for payments with respect to the Notes and for the surrender of
Notes for conversion. Notice of any such termination or appointment and of any
change in the office through which any Paying Agent or Conversion Agent will act
will be given in accordance with "--Notices" below.
Interest payable on Notes on any Redemption Date or Repurchase Date that
is an Interest Payment Date will be paid to the Holders of record as of the
immediately preceding Regular Record Date.
All moneys deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of principal of, premium, if any, or
interest on any Notes which remain unclaimed at the end of the earlier of the
date on which such money escheats to the state or two years after such payment
has become due and payable will be repaid to the Company, and the Holder of such
Note will thereafter look only to the Company for payment thereof.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will pay to a Non-U.S. Holder (as defined in "Certain United
States Federal Income Tax Considerations" below) of any Note such additional
amounts ("Additional Amounts") as may be necessary in order
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<PAGE> 26
that every net payment of the principal of, premium, if any, and interest on
such Note, after deduction or withholding for or on account of any present or
future tax, assessment or governmental charge imposed upon or as a result of
such payment by the United States or any political subdivision or taxing
authority thereof or therein, will not be less than the amount provided for in
such Note to be then due and payable; provided however, that the foregoing
obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would
not have been so imposed but for (i) the existence of any present or
former connection between such Non-U.S. Holder (or between a fiduciary,
settlor, beneficiary, member, shareholder of or possessor of a power
over such Non-U.S. Holder, if such Non-U.S. Holder is a trust, an
estate, a partnership or a corporation) and the United States or any
political subdivision or taxing authority thereof or therein, including,
without limitation, such Non-U.S. Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen, domiciliary or resident of the United States or treated as a
resident thereof, or being or having been engaged in trade or business
or present therein, or having or having had a permanent establishment
therein; or (ii) such Non-U.S. Holder's present or former status as a
personal holding company, a foreign personal holding company with
respect to the United States, a controlled foreign corporation, a
passive foreign investment company, or a foreign private foundation or
foreign tax exempt entity for United States tax purposes, or a
corporation which accumulates earnings to avoid United States federal
income tax;
(b) any tax, assessment or other governmental charge which would
not have been so imposed but for the presentation by the Non-U.S. Holder
of such Notes for payment on a date more than 15 days after the date on
which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would
not have been imposed but for the failure to comply with a request by
the Company addressed to such Non U.S. Holder (or such fiduciary,
settler, beneficiary, member, shareholder or possessor) to provide any
certification, identification or other reporting concerning the
nationality, residence, identity or connection with the United States of
such Non-U.S. Holder (or beneficial owner of such Note), if compliance
is required or imposed by a statute, treaty, regulation or
administrative practice of the United States or any political
subdivision or taxing authority thereof or therein as a precondition to
exemption from all or part of such tax, assessment or other governmental
charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on such Note;
(f) any tax, assessment or other governmental charge imposed on
interest received by a Non-U.S. Holder actually or constructively
holding 10% or more of the total combined voting power of all classes of
stock of the Company entitled to vote;
(g) any tax, assessment or other governmental charge imposed on a
Non-U.S. Holder that is a partnership or a fiduciary or other than the
sole beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the
payment of Additional Amounts had the beneficial owner,
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<PAGE> 27
member, beneficiary or settlor directly been the holder of the Note; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and (g).
Notwithstanding the foregoing, the Company shall not be obligated to pay
Additional Amounts in respect of payments becoming due on the Notes more than 15
days after the Redemption Date with respect to any redemption of the Notes
described in the first paragraph under "--Redemption--Redemption for Taxation
Reasons" to the extent that the Company's obligation to pay such Additional
Amounts arises from the Tax Law Change that resulted in such redemption.
REPURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE
If a Fundamental Change (as defined) occurs, each Holder of Notes shall
have the right, at the Holder's option, to require the Company to repurchase all
of such Holder's Notes, or any portion of a Note that is $1,000 or an integral
multiple of $1,000 in excess thereof, on the date (the "Repurchase Date") that
is 45 days after the date of the Company Notice (as defined), at a price (the
"Repurchase Price") (expressed as a percentage of the principal amount) equal to
(i) 106% if the Repurchase Date is during the 12-month period beginning October
1, 1997, (ii) 104.8% if the Repurchase Date is during the 12-month period
beginning October 1, 1998, (iii) 103.6% if the Repurchase Date is during the
12-month period beginning October 1, 1999 and (iv) thereafter at the redemption
price set forth under "--Redemption--Optional Redemption" which would be
applicable to a redemption at the option of the Company on the Repurchase Date;
provided that, if the Applicable Price (as defined) is less than the Reference
Market Price (as defined), the Company shall repurchase such Notes at a price
equal to the foregoing redemption price multiplied by the fraction obtained by
dividing the Applicable Price by the Reference Market Price. In each case, the
Company shall also pay accrued interest on the redeemed Notes to, but excluding,
the Repurchase Date. Any Notes repurchased by the Company shall be canceled.
Within 30 days after the occurrence of a Fundamental Change, the Company
is obligated to give to all Holders of the Notes notice, as provided in the
Indenture (the "Company Notice"), of the occurrence of such Fundamental Change
and of the repurchase right arising as a result thereof. The Company must also
deliver a copy of the Company Notice to the Trustee. To exercise the repurchase
right, a Holder of Notes must deliver on or before the 30th day after the date
of the Company Notice irrevocable written notice to the Trustee or any Paying
Agent of the Holder's exercise of such right, together with the Notes with
respect to which the right is being exercised. Beneficial owners of an interest
in a Global Note may exercise the repurchase right by delivering the appropriate
instruction form for repurchases at the election of Holders pursuant to the DTC
book entry repurchase program.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with which all or substantially all of the Common Stock
shall be exchanged for, converted into, acquired for or constitute solely the
right to receive, consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock or shares which are (or, upon consummation of or immediately following
such transaction or event, will be) listed on a United States national
securities exchange or approved for quotation on the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices. The term "Applicable Price" means (i) in the event of a
Fundamental Change in which the holders of Common Stock receive only cash, the
amount of cash received by the holder of one share of Common Stock and (ii) in
the event of any other Fundamental Change, the average of the last reported sale
price for the Common Stock during the ten Trading Days prior to the record date
for the determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change
or, if no such record date exists, the date upon which the holders of the Common
Stock shall have the right to receive such cash, securities, property or other
assets in connection with the Fundamental Change. The term
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"Reference Market Price" shall initially mean $10.625 (which is equal to 66 2/3%
of the last sale price of the Common Stock on September 18, 1997) and in the
event of any adjustment to the conversion price described above pursuant to the
provisions of the Indenture, the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the conversion price after
giving effect to any such adjustment shall always be the same as the ratio of
$10.625 to the conversion price of $23.625 (without regard to any adjustment
thereto).
Rule 13e-4 under the Exchange Act requires the dissemination of certain
information to security holders in the event of an issuer tender offer and may
apply in the event that the repurchase option becomes available to Holders of
the Notes. The Company will comply with this rule and any other securities laws
to the extent applicable at that time.
Upon a Fundamental Change, each Holder of Notes will have certain
rights, at the Holder's option, to require the Company to repurchase all or a
portion of such Holder's Notes. If a Fundamental Change were to occur, there can
be no assurance that the Company would have or be able to obtain sufficient
funds to pay the repurchase price for all Notes tendered by the Holders thereof.
The Company's future credit agreements or other agreements relating to other
indebtedness (including other Senior Indebtedness) to which the Company becomes
a party may contain restrictions and provisions which prohibit the Company from
repurchasing or redeeming any Notes, and future agreements relating to
indebtedness may also provide that certain transactions constituting a
Fundamental Change would constitute an event of default thereunder. In the event
a Fundamental Change occurs at a time when the Company is prohibited from
repurchasing or redeeming Notes, the Company could seek the consent of its
lenders to the repurchase of Notes or could attempt to refinance the borrowings
that contain such prohibition. If the Company does not obtain such a consent or
repay such borrowings, the Company would remain prohibited from repurchasing or
redeeming Notes. In such case, the Company's failure to repurchase tendered
Notes would constitute an Event of Default under the Indenture, which could, in
turn, constitute a further default under the other Indebtedness that the Company
may enter into from time to time. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the Holders of
Notes.
The repurchase option upon a Fundamental Change feature of the Notes may
in certain circumstances make more difficult or discourage a takeover of the
Company and, thus, the removal of incumbent management. The Fundamental Change
repurchase feature, however, is not the result of management's knowledge of any
specific effort to accumulate the Company's stock or to obtain control of the
Company by means of a merger, tender offer, solicitation or otherwise, or part
of a plan by management to adopt a series of anti-takeover provisions. Instead,
the Fundamental Change repurchase feature is a result of negotiations between
the Company and the initial purchasers. Management has no present intention to
engage in a transaction involving a Fundamental Change, although it is possible
that the Company could decide to do so in the future. Subject to the limitations
on mergers, consolidations and sale of assets described herein, the Company
could, in the future, enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not constitute a Fundamental
Change under the Indenture, but that could increase the amount of indebtedness
(including Senior Indebtedness) outstanding at such time or otherwise affect the
Company's capital structure or credit ratings. The payment of the repurchase
price in the event of a Fundamental Change is subordinated to the prior payment
of Senior Indebtedness as described under "--Subordination" above.
The term "Fundamental Change" is limited to certain specified
transactions and may not include other events that might adversely affect the
financial condition of the Company nor would the requirement that the Company
offer to repurchase the Notes upon a Fundamental Change necessarily afford
Holders of the Notes protection in the event of a highly leveraged transaction,
reorganization, merger or similar transaction involving the Company.
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MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may not consolidate with or merge into any other Person (in
a transaction in which the Company is not the surviving entity) or transfer or
lease its properties and assets substantially as an entirety to any Person
unless (i) the Person formed by such merger or into which the Company is merged
or the Person to which the properties and assets of the Company are so
transferred or leased shall expressly assume the payment of the principal of,
premium, if any, and interest on the Notes, (ii) no default and no Event of
Default shall have occurred and be continuing as a result of such consolidation,
merger, transfer or lease, and (iii) the performance of the other covenants of
the Company under the Indenture and certain other conditions are met.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture: (a) failure
to pay principal of or premium, if any, on any Note when due; (b) failure to pay
any interest on, or Additional Amounts with respect to, any Note when due,
continuing for 30 days; (c) failure to perform any other covenant of the Company
in the Indenture, continuing for 60 days after written notice as provided in the
Indenture; and (d) certain events of bankruptcy, insolvency or reorganization.
Subject to the provisions of the Indenture relating to the duties of the Trustee
in case an Event of Default shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable indemnity. Subject to such provisions
providing for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
If an Event of Default (other than as specified in clause (d) above)
shall occur and be continuing, either the Trustee or the Holders of at least 25%
in aggregate principal amount of the Outstanding Notes may accelerate the
maturity of all Notes; provided, however, that after such acceleration, but
before a judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of Outstanding Notes may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal, have been cured or waived
as provided in the Indenture. If an Event of Default as specified in clause (d)
above occurs and is continuing, then the principal of, and accrued interest on,
all the Notes shall ipso facto become immediately due and payable without any
declaration or other act on the part of the Holders of the Notes or the Trustee.
For information as to waiver of defaults, see "--Meetings, Modification and
Waiver."
No Holder of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default and the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of the Outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a Holder of a
Note, for the enforcement of payment of the principal of, premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note or of the right to convert such Note in accordance with the Indenture.
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance.
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<PAGE> 30
MEETINGS, MODIFICATION AND WAIVER
The Indenture contains provisions for convening meetings of the Holders
of Notes to consider matters affecting their interests.
Modifications and amendments of the Indenture may be made, and certain
past defaults by the Company may be waived, either (i) with the written consent
of the Holders of not less than a majority in aggregate principal amount of the
Outstanding Notes or (ii) by the adoption of a resolution, at a meeting of
Holders of the Notes at which a quorum is present, by the Holders of at least
the lesser of a majority in aggregate principal amount of the Outstanding Notes
and 66 2/3% of the aggregate principal amount of the Notes represented and
entitled to vote at such meeting. However, no such modification or amendment
may, without the consent of the Holder of each Outstanding Note, (a) change the
Stated Maturity of the principal of, or any installment of interest on, any
Note, (b) reduce the principal amount of, or the premium, if any, or interest
on, any Note, (c) reduce the amount payable upon a redemption or repurchase, (d)
modify the provisions with respect to the repurchase right of the Holders in a
manner adverse to the Holders, (e) change the obligation of the Company to pay
Additional Amounts described above in a manner adverse to the Holders, (f)
change the place or currency of payment of principal of, or premium, if any, or
interest on, any Note, (g) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note, (h) modify the
obligation of the Company to maintain an office or agency in The City of New
York, (i) adversely affect the right to convert Notes, (j) modify the
subordination provisions in a manner adverse to the Holders of the Notes, (k)
reduce the above-stated percentage of Outstanding Notes necessary to modify or
amend the Indenture, (l) reduce the percentage of aggregate principal amount of
Outstanding Notes necessary for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults, (m) reduce the percentage in
aggregate principal amount of Outstanding Notes required for the adoption of a
resolution or the quorum required at any meeting of Holders of Notes at which a
resolution is adopted, or (n) modify the obligation of the Company to deliver
information required under Rule 144A to permit resales of Notes and Common Stock
issuable upon conversion thereof in the event the Company ceases to be subject
to certain reporting requirements under the United States securities laws. The
quorum at any meeting called to adopt a resolution will be persons holding or
representing a majority in aggregate principal amount of the Outstanding Notes
and, at any reconvened meeting adjourned for lack of a quorum, 25% of such
aggregate principal amount.
The Indenture may also be modified or amended without the consent of the
Holders: (i) to evidence the succession of another Person to the Company as
otherwise permitted by the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of the Notes or to surrender any power
conferred upon the Company; (iii) to add any Events of Default; (iv) to secure
the Notes; (v) to make provision with respect to the conversion and repurchase
rights of Holders in accordance with the provisions of the Indenture; (vi) to
comply with the requirements of the Trust Indenture Act; or (vii) to cure any
ambiguity, to correct or supplement any provision which may be inconsistent with
any other provision or to make any other provisions with respect to matters or
questions arising under the Indenture, provided such action shall not adversely
affect the interest of Holders of Notes in any material respect.
The Holders of a majority in aggregate principal amount of the
Outstanding Notes may waive compliance by the Company with certain restrictive
provisions of the Indenture by written consent. The Holders of a majority in
aggregate principal amount of the Outstanding Notes also may waive any past
default under the Indenture, except a default in the payment of principal,
premium, if any, or interest, by written consent.
REGISTRATION RIGHTS
The Company has entered into a registration rights agreement with the
initial purchasers (the "Registration Rights Agreement") pursuant to which the
Company is required, at the Company's expense for the benefit of the
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<PAGE> 31
Holders of the Notes and the Common Stock issuable upon conversion thereof
(together, the "Registrable Securities"), (i) file with the Commission within 90
days after the date of original issuance of the Notes, a registration statement
(the "Shelf Registration Statement") covering resales of the Registrable
Securities, (ii) use its reasonable efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act within 180 days
after the date of original issuance of the Notes and (iii) use its reasonable
efforts to keep effective the Shelf Registration Statement until the second
anniversary of the last date of original issuance of Notes or such earlier date
as all Registrable Securities shall have been disposed of or on which all
Registrable Securities held by Persons that are not affiliates of the Company
may be resold without registration pursuant to Rule 144(k) under the Securities
Act (the "Effectiveness Period"). This Registration Statement has been filed
pursuant to the Company's obligations under the Registration Rights Agreement.
The Company will be permitted to suspend the use of the prospectus which is part
of the Shelf Registration Statement in connection with the sales of the
Registrable Securities during certain periods of time under certain
circumstances relating to pending corporate developments, public filings with
the Commission and other events. The Company will provide to each holder of
Registrable Securities copies of the prospectus that is a part of the Shelf
Registration Statement, notify each holder when the Shelf Registration Statement
has become effective and take certain other actions as are required to permit
public resales of the Registrable Securities. A holder of Registrable Securities
that sells such Registrable Securities pursuant to the Shelf Registration
Statement will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and will be bound by the provisions of the Registration Rights
Agreement, including certain indemnification obligations.
If (i) on or prior to 90 days following the date of original issuance of
the Notes a Shelf Registration Statement has not been filed with the Commission
or (ii) on or prior to the 180th day following the date of original issuance of
the Notes, such Shelf Registration Statement is not declared effective (each, a
"Registration Default"), additional interest ("Liquidated Damages") will accrue
on the Notes, from and including the day following such Registration Default
until such time as such Shelf Registration Statement is filed or such Shelf
Registration Statement is declared effective, as the case may be. Liquidated
Damages will be paid semi-annually in arrears, with the first semi-annual
payment due on the first interest payment date following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional one-quarter of one percent (0.25%) of the principal amount, to and
including the 90th day following such Registration Default and one-half of one
percent (0.50%) thereof from and after the 91st day following such Registration
Default. In the event that during the Effectiveness Period the Shelf
Registration Statement ceases to be effective for more than 90 days or the
Company suspends the use of the prospectus which is a part thereof for more than
90 days, whether or not consecutive, during any 12-month period, then the
interest rate borne by Notes will increase by an additional one-half of one
percent (0.50%) per annum from the 91st day of the applicable 12-month period
such Shelf Registration Statement ceases to be effective or the Company suspends
the use of the Prospectus which is a part thereof, as the case may be, until the
earlier of such time as (i) the Shelf Registration Statement again becomes
effective, (ii) the use of the related prospectus ceases to be suspended or
(iii) the Effectiveness Period expires. The Company will agree in the
Registration Rights Agreement to use its reasonable efforts to cause such Common
Stock issuable upon conversion of the Notes to be quoted on the New York Stock
Exchange, or, if the Common Stock is not then quoted on the New York Stock
Exchange, to be listed on such exchange or market in the United States as the
Common Stock is then listed, upon effectiveness of the Shelf Registration
Statement.
This summary of certain provisions of the Registration Rights Agreement
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, all the provisions of the Registration Rights Agreement, a copy
of which has been filed as an exhibit to the Registration Statement.
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<PAGE> 32
TRANSFER AND EXCHANGE
At the option of the Holder upon request confirmed in writing, Notes
will be exchangeable at any time into an equal aggregate principal amount of
Notes of different authorized denominations.
Notes may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed) or exchange, at the office of the Note
Registrar, without service charge but, in the case of a transfer, upon payment
of any taxes and other governmental charges as described in the Indenture. Any
registration of transfer or exchange will be effected upon the Note Registrar
being satisfied with the documents of title and identity of the Person making
the request, and subject to such reasonable regulations as the Company may from
time to time agree upon with the Note Registrar, all as described in the
Indenture. Notes may be transferred in whole or in part in authorized
denominations at the office or agency of the Trustee in The City of New York or
the Corporate Trust Office of the Trustee in Los Angeles, California.
The Company has initially appointed the Trustee as Note Registrar. The
Company reserves the right to vary or terminate the appointment of the Note
Registrar or to appoint additional or other Note Registrars or to approve any
change in the office through which any Note Registrar acts, provided that there
will at all times be a Note Registrar in the City of New York.
In the event of a redemption of less than all of the Notes for any of
the reasons set forth above under "--Redemption," the Company will not be
required (a) to register the transfer or exchange of Notes for a period of 15
days immediately preceding the date notice is given identifying the serial
numbers of the Notes called for such redemption or (b) to register the transfer
of or exchange any Note, or portion thereof, called for redemption.
TITLE
The Company, the Trustee, any Paying Agent, any Conversion Agent and any
Note Registrar may treat the registered owner (as reflected in the Note
Register) of any Note as the absolute owner thereof (whether or not such Note
shall be overdue) for the purpose of making payment and for all other purposes.
NOTICES
Notice to Holders of Notes will be given by mail to the addresses of
such Holders as they appear on the Note Register. Such notices will be deemed to
have been given on the date of such mailing or on the date of the first such
publication, as the case may be.
Notice of a redemption of Notes will be given at least once not less
than 20 nor more than 60 days prior to the Redemption Date (which notice shall
be published in accordance with the procedures described in the preceding
paragraph) and shall be irrevocable and will specify the Redemption Date.
REPLACEMENT OF NOTES
Notes that become mutilated, destroyed, stolen or lost will be replaced
by the Company at the expense of the Holder upon delivery to the Trustee of the
mutilated Notes or evidence of the loss, theft or destruction thereof
satisfactory to the Company and the Trustee. In the case of a lost, stolen or
destroyed Note, indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Note before a replacement Note
will be issued.
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PAYMENT OF STAMP AND OTHER TAXES
The Company will pay all stamp and other duties, if any, which may be
imposed by the United States or any political subdivision thereof or taxing
authority thereof or therein with respect to the issuance of the Notes or the
issuance of Common Stock upon any conversion of Notes. Except as described under
"--Payment of Additional Amounts," the Company will not be required to make any
payment with respect to any other tax, assessment or governmental charge imposed
by any government or any political subdivision thereof or taxing authority
thereof or therein.
GOVERNING LAW
The Indenture, the Notes and the Registration Rights Agreement will be
governed by and construed in accordance with the laws of the State of New York,
United States of America.
INFORMATION CONCERNING THE TRUSTEE
State Street Bank and Trust Company of California, N.A., is the Trustee
under the Indenture. The Company may maintain deposit accounts and conduct other
banking transactions with the Trustee and its affiliates in the normal course of
business.
In case an Event of Default shall occur (and shall not be cured or
waived in a timely manner), the Trustee will be required to use the degree of
care of a prudent person in the conduct of his own affairs in the exercise of
its powers. Subject to such provisions, the Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at the request of
any of the Holders of Notes, unless they shall have offered to the Trustee
reasonable security or indemnity.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain U.S. federal income tax
considerations relevant to holders of the Notes and Common Stock into which the
Notes may be converted. This discussion is based upon the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service
("IRS") rulings and judicial decisions now in effect, all of which are subject
to change (possibly with retroactive effect) or different interpretations. There
can be no assurance that the IRS will not challenge one or more of the tax
consequences described herein, and the Company has not obtained, nor does it
intend to obtain, a ruling from the IRS with respect to the U.S. federal income
tax consequences of acquiring or holding Notes or Common Stock. This discussion
does not purport to deal with all aspects of U.S. federal income taxation that
may be relevant to a particular holder in light of the holder's circumstances
(for example, persons subject to the alternative minimum tax provisions of the
Code). Also, it is not intended to be wholly applicable to all categories of
investors, some of which (such as dealers in securities, banks, insurance
companies, tax-exempt organizations, and persons holding Notes or Common Stock
as part of a hedging or conversion transaction or straddle or persons deemed to
sell Notes or Common Stock under the constructive sale provisions of the Code)
may be subject to special rules. The discussion also does not discuss any aspect
of state, local or foreign law, or U.S. federal estate and gift tax law as
applicable to U.S. Holders (as defined below). In addition, this discussion is
limited to original purchasers of Notes who acquire the Notes at their original
issue price within the meaning of Section 1273 of the Code, and who will hold
the Notes and Common Stock as "capital assets" within the meaning of Section
1221 of the Code.
ALL PROSPECTIVE PURCHASERS OF THE NOTES ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES AND THE COMMON STOCK.
U.S. HOLDERS
As used herein, the term "U.S. Holder" means the beneficial holder of a
Note or Common Stock that for United States federal income tax purposes is (i) a
citizen or resident (as defined in Section 7701(b) of the Code) of the United
States, (ii) a corporation, partnership or other entity formed under the laws of
the United States or any political subdivision thereof, (iii) an estate the
income of which is subject to U.S. federal income taxation regardless of its
source, and (iv) in general, a trust subject to the primary supervision of a
court within the United States and the control of a United States person as
described in Section 7701(a)(30) of the Code. A "Non-U.S. Holder" is any holder
other than a U.S. Holder.
Interest
Stated interest on the Notes will generally be includable in a U.S.
Holder's gross income and taxable as ordinary income for U.S. federal income tax
purposes at the time it is paid or accrued in accordance with the U.S. Holder's
regular method of accounting. There are several circumstances under which the
Company could make a payment on a Note which would affect the yield to maturity
of a Note, including (as described under "Description of Notes") the payment of
Liquidated Damages, the payment of Additional Amounts, the redemption of a Note
by the Company, or the repurchase of a Note at the option of a Holder in the
event of a Fundamental Change. According to Treasury Regulations, the
possibility of a change in the interest rate will not affect the amount of
interest income recognized by a holder (or the timing of such recognition) if
the likelihood of the change, as of the date the debt obligations are issued, is
remote. The Company believes that the likelihood of a change in the interest
rate on the Notes is remote and does not intend to treat the possibility of a
change in the interest rate as affecting the yield to maturity of any Note.
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Conversion of Notes Into Common Stock
A U.S. Holder generally will not recognize any income, gain or loss upon
conversion of a Note into Common Stock except to the extent the Common Stock is
considered attributable to accrued interest not previously included in income
(which is taxable as ordinary income) or with respect to cash received in lieu
of a fractional share of Common Stock. The adjusted basis of shares of Common
Stock received on conversion will equal the adjusted basis of the Note converted
(reduced by the portion of adjusted basis allocated to any fractional share of
Common Stock exchanged for cash) and the holding period of the Common Stock
received on conversion will generally include the period during which the
converted Notes were held. However, a U.S. Holder's tax basis in shares of
Common Stock considered attributable to accrued interest as described above
generally will equal the amount of such accrued interest included in income, and
the holding period for such shares shall begin as of the date of conversion.
The conversion price of the Notes is subject to adjustment under certain
circumstances. Section 305 of the Code and the Treasury Regulations issued
thereunder may treat the holders of the Notes as having received a constructive
distribution, resulting in ordinary income (subject to a possible dividends
received deduction in the case of corporate holders) to the extent of the
Company's current and/or accumulated earnings and profits, if, and to the extent
that certain adjustments in the conversion price that may occur in limited
circumstances (particularly an adjustment to reflect a taxable dividend to
holders of Common Stock) increase the proportionate interest of a holder of
Notes in the fully diluted Common Stock, whether or not such holder ever
exercises its conversion privilege. Moreover, if there is not a full adjustment
to the conversion ratio of the Notes to reflect a stock dividend or other event
increasing the proportionate interest of the holders of outstanding Common Stock
in the assets or earnings and profits of the Company, then such increase in the
proportionate interest of the holders of the Common Stock generally will be
treated as a distribution to such holders, taxable as ordinary income (subject
to a possible dividends received deduction in the case of corporate holders) to
the extent of the Company's current and/or accumulated earnings and profits.
Sale, Exchange or Retirement of the Notes
Each U.S. Holder generally will recognize gain or loss upon the sale,
exchange, redemption, retirement or other disposition of Notes measured by the
difference (if any) between (i) the amount of cash and the fair market value of
any property received (except to the extent that such cash or other property is
attributable to the payment of accrued interest not previously included in
income, which amount will be taxable as ordinary income) and (ii) such holder's
adjusted tax basis in the Notes. Any such gain or loss recognized on the sale,
exchange, redemption, retirement or other disposition of a Note should be
capital gain or loss and will generally be long-term capital gain or loss if the
Note has been held or deemed held for more than one year at the time of the sale
or exchange. On August 5, 1997, legislation was enacted which, among other
things, reduces to 20% the maximum rate of U.S. federal tax on long-term capital
gains on most capital assets held by an individual for more than 18 months. In
addition, under this legislation, gain on most capital assets held by an
individual more than one year and up to 18 months is subject to U.S. federal tax
at a maximum rate of 28%. A holder's initial basis in a Note will be the amount
paid therefor.
The Common Stock
Distributions, if any, paid on the Common Stock after a conversion, to
the extent made from current and/or accumulated earnings and profits of the
Company, as determined for U.S. federal income tax purposes, will be included in
a U.S. Holder's income as ordinary income (subject to a possible dividends
received deduction in the case of corporate holders) as they are paid. Gain or
loss realized on the sale or exchange of Common Stock will equal the difference
between the amount realized on such sale or exchange and the U.S. Holder's
adjusted tax basis
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<PAGE> 36
in such Common Stock. Such gain or loss will generally be long-term capital gain
or loss if the holder has held or is deemed to have held the Common Stock for
more than one year. On August 5, 1997, legislation was enacted that reduces to
20% the maximum U.S. federal rate of tax on long-term capital gains on most
capital assets held by an individual for more than 18 months. In addition, under
this legislation, gain on most capital assets held by an individual more than
one year and up to 18 months is subject to U.S. federal tax at a maximum rate of
28%.
Information Reporting and Backup Withholding
A U.S. Holder of Notes or Common Stock may be subject to "backup
withholding" at a rate of 31% with respect to certain "reportable payments,"
including interest payments, dividend payments and, under certain circumstances,
principal payments on the Notes. These backup withholding rules apply if the
holder, among other things (i) fails to furnish a social security number or
other taxpayer identification number ("TIN") certified under penalties of
perjury within a reasonable time after the request therefor, (ii) furnishes an
incorrect TIN, (iii) fails to report properly interest or dividends, or (iv)
under certain circumstances, fails to provide a certified statement, signed
under penalties of perjury, that the TIN furnished is the correct number and
that such holder is not subject to backup withholding. A holder who does not
provide the Company with its correct TIN also may be subject to penalties
imposed by the IRS. Any amount withheld from a payment to a holder under the
backup withholding rules is creditable against the holder's federal income tax
liability, provided that the required information is furnished to the IRS.
Backup withholding will not apply, however, with respect to payments made to
certain holders, including corporations, tax-exempt organizations and certain
foreign persons, provided their exemptions from backup withholding are properly
established.
The Company will report to the U.S. Holders of Notes and Common Stock
and to the IRS the amount of any "reportable payments" for each calendar year
and the amount of tax withheld, if any, with respect to such payments.
NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a Non-U.S. Holder.
For purposes of withholding tax on interest and dividends discussed
below, a Non-U.S. Holder (as defined above) includes a non-resident fiduciary of
an estate or trust. For purposes of the following discussion, interest,
dividends and gain on the sale, exchange or other disposition of a Note or
Common Stock will be considered to be "U.S. trade or business income" if such
income or gain is (i) effectively connected with the conduct of a U.S. trade or
business or (ii) in the case of a treaty resident, attributable to a permanent
establishment (or, in the case of an individual, a fixed base) in the United
States.
Stated Interest
Generally any interest paid to a Non-U.S. Holder of a Note that is not
U.S. trade or business income will not be subject to U.S. tax if the interest
qualifies as "portfolio interest." Generally interest on the Notes will qualify
as portfolio interest if (i) the Non-U.S. Holder does not actually or
constructively own 10% or more of the total voting power of all voting stock of
the Company and is not a "controlled foreign corporation" with respect to which
the Company is a "related person" within the meaning of the Code, (ii) the
beneficial owner, under penalty of perjury, certifies that the beneficial owner
is not a U.S. person and such certificate provides the beneficial owner's name
and address, (iii) the Non-U.S. Holder is not a bank receiving interest on an
extension of credit made pursuant to a loan agreement made in the ordinary
course of its trade or business, and (iv) the Notes are in registered form.
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<PAGE> 37
The gross amount of payments to a Non-U.S. Holder of interest that do
not qualify for the portfolio interest exemption and that are not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding. U.S.
trade or business income will be taxed at regular U.S. rates rather than the 30%
gross rate. In the case of a Non-U.S. Holder that is a corporation, such U.S.
trade or business income may also be subject to the branch profits tax (which is
generally imposed on a foreign corporation on the actual or deemed repatriation
from the United States of earnings and profits attributable to U.S. trade or
business income) at a 30% rate. The branch profits tax may not apply (or may
apply at a reduced rate) if a recipient is a qualified resident of certain
countries with which the United States has an income tax treaty. To claim the
benefit of a tax treaty or to claim exemption from withholding because the
income is U.S. trade or business income, the Non-U.S. Holder must provide a
properly executed Form 1001 or 4224 (or such successor forms as the IRS
designates), as applicable, prior to the payment of interest. These forms must
be periodically updated. Under recently issued Treasury Regulations that will
generally be effective after December 31, 1998 (the "New Regulations"), the
Forms 1001 and 4224 will be replaced by a new Form W-8. Under the New
Regulations, a Non-U.S. Holder who is claiming the benefits of a treaty may be
required to obtain a U.S. taxpayer identification number and make certain
certifications. Special procedures are provided in the New Regulations for
payments through qualified intermediaries. Prospective investors should consult
their tax advisors regarding the effect, if any, of the New Regulations.
Dividends
In general, dividends paid to a Non-U.S. Holder of Common Stock will be
subject to withholding of U.S. federal income tax at a 30% rate unless such is
reduced by an applicable income tax treaty. Dividends that are connected with
such holder's conduct of a trade or business in the United States (U.S. trade or
business income) are generally subject to U.S. federal income tax at regular
rates, but are not generally subject to the 30% withholding tax if the Non-U.S.
Holder files the appropriate form with the payor, as discussed above. Any U.S.
trade or business income received by a Non-U.S. Holder that is a corporation may
also, under certain circumstances, be subject to an additional "branch profits
tax" at a 30% rate or such lower rate as may be applicable under an income tax
treaty. Currently, dividends paid to an address in a foreign country generally
are presumed (absent actual knowledge to the contrary) to be paid to a resident
of such country for purposes of the withholding discussed above and for purposes
of determining the applicability of a tax treaty rate. Under the New
Regulations, a Non-U.S. Holder claiming the benefits of a treaty generally will
be required to provide a Form W-8 (or suitable substitute form) certifying such
Non-U.S. Holder's entitlements to treaty benefits. Other recently adopted
regulations that will be effective with respect to payments made after December
31, 1997, provide special rules to determine whether, for purposes of
determining the applicability of a tax treaty, dividends paid to a Non-U.S.
Holder that is an entity should be treated as paid to the entity or those
holding an interest in that entity. Prospective investors should consult their
tax advisors regarding the effect, if any, of these new regulations.
A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
U.S. withholding tax pursuant to an income treaty may obtain a refund of any
amounts currently withheld by filing an appropriate claim for a refund with the
IRS.
Conversion
A Non-U.S. Holder generally will not be subject to U.S. federal income
tax on the conversion of Notes into Common Stock, except with respect to cash
(if any) received in lieu of a fractional share or interest not previously
included in income. Cash received in lieu of a fractional share may give rise to
gain that would be subject to the rules described below for the sale of Common
Stock. Cash or Common Stock treated as issued for accrued interest would be
treated as interest under the rules described above.
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<PAGE> 38
Sale, Exchange or Redemption of Notes or Common Stock
Except as described below and subject to the discussion concerning
backup withholding, any gain realized by a Non-U.S. Holder on the sale, exchange
or redemption of a Note or Common Stock generally will not be subject to U.S.
federal income tax, unless (i) such gain is U.S. trade or business income, (ii)
subject to certain exceptions, the Non-U.S. Holder is an individual who holds
the Note or Common Stock as a capital asset and is present in the United States
for 183 days or more in the taxable year of the disposition, (iii) the Non-U.S.
Holder is subject to tax pursuant to the provisions of U.S. tax law applicable
to certain U.S. expatriates (including certain former citizens or residents of
the United States), or (iv) in the case of the disposition of Common Stock, the
Company is a U.S. real property holding corporation. The Company does not
believe that it is currently a "United States real property holding
corporation," or that it will become one in the future.
Federal Estate Tax
Notes held (or treated as held) by an individual who is not a citizen or
resident of the United States (for federal estate tax purposes) at the time of
his or her death will not be subject to U.S. federal estate tax provided that
the interest thereon qualifies as portfolio interest and was not U.S. trade or
business income. Common Stock owned or treated as owned by an individual who is
not a citizen or resident of the United States (for federal estate tax purposes)
will be included in such individual's estate for U.S. federal income tax
purposes unless an applicable estate tax treaty otherwise applies.
Information Reporting and Backup Withholding
The Company must report annually to the IRS and to each Non-U.S. Holder
any interest or dividend that is subject to withholding, or that is exempt from
U.S. withholding tax pursuant to a tax treaty, or interest that is exempt from
U.S. tax under the portfolio interest exception. Copies of these information
returns may also be made available under the provisions of a specific treaty or
agreement to the tax authorities of the country in which the Non-U.S. Holder
resides.
Treasury Regulations provide that backup withholding and additional
information reporting will not apply to payments of principal on the Notes by
the Company to a Non-U.S. Holder if the holder certifies as to its Non-U.S.
status under penalties of perjury or otherwise establishes an exemption
(provided that neither the Company nor its Paying Agent has actual knowledge
that the holder is a U.S. person or that the conditions of any other exemption
are not, in fact, satisfied).
The payment of the proceeds from the disposition of Notes or Common
Stock to or through the U.S. office of any broker, U.S. or foreign, will be
subject to information reporting and possible backup withholding unless the
owner certifies as to its Non-U.S. Holder status under penalty of perjury or
otherwise establishes an exemption, provided that the broker does not have
actual knowledge that the holder is a U.S. person or that the conditions of any
other exemption are not, in fact, satisfied. The payment of the proceeds from
the disposition of a Note or Common Stock to or through a non-U.S. office of a
non-U.S. broker that is not a U.S. related person will not be subject to
information reporting or backup withholding. For this purpose, a "U.S. related
person" is (i) a "controlled foreign corporation" for U.S. federal income tax
purposes, (ii) a foreign person 50% or more of whose gross income from all
sources for the three-year period ending with the close of its taxable year
preceding the payment (or for such part of the period that the broker has been
in existence) is derived from activities that are effectively connected with the
conduct of a U.S. trade or business, or (iii) with respect to payments made
after December 31, 1998, a foreign partnership that, at any time during its
taxable year, is 50% or more (by income or capital interest) owned by United
States persons or is engaged in the conduct of a United States trade or
business.
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<PAGE> 39
In the case of the payment of proceeds from the disposition of Notes or
Common Stock to or through a non-U.S. office of a broker that is either a U.S.
person or a U.S. related person, information reporting is required on the
payment unless the broker has documentary evidence in its files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary.
Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a refund or a credit against such
Non-U.S. Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME AND
ESTATE TAX CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE.
ACCORDINGLY, EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISER AS TO PARTICULAR
TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND THE
COMMON STOCK OF THE COMPANY, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY PROPOSED CHANGES IN APPLICABLE
LAWS.
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<PAGE> 40
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds of the sale of the
Notes and the Conversion Shares (the "Securities") offered hereby. The
Securities may be sold from time to time to purchasers directly by the Selling
Securityholders. Alternatively, the Selling Securityholders may from time to
time offer the Securities through brokers, dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Securityholders and/or the purchasers of the Securities for whom they
may act as agent. The Selling Securityholders and any such brokers, dealers or
agents who participate in the distribution of the Securities may be deemed to be
"underwriters," and any profits on the sale of the Securities by them and any
discounts, commissions or concessions received by any such brokers, dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. To the extent the Selling Securityholders may be deemed to be
underwriters, the Selling Securityholders may be subject to certain statutory
liabilities of, including, but not limited to, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Exchange Act.
The Securities offered hereby may be sold from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
The Securities may be sold by one or more of the following methods, without
limitation: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (d) an exchange
distribution in accordance with the rules of such exchange; (e) face-to-face
transactions between sellers and purchasers without a broker-dealer; and (f)
through the writing of options. At any time a particular offer of the Securities
is made, a revised Prospectus or Prospectus Supplement, if required, will be
distributed which will set forth the aggregate amount and type of Securities
being offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, any discounts, commissions, concessions and
other items constituting compensation from the Selling Securityholders and any
discounts, commissions or concessions allowed or reallowed or paid to dealers.
Such Prospectus Supplement and, if necessary, a post-effective amendment to the
Registration Statement of which this Prospectus is a part, will be filed with
the Commission to reflect the disclosure of additional information with respect
to the distribution of the Securities. In addition, the Securities covered by
this Prospectus may be sold in private transactions or under Rule 144 rather
than pursuant to this Prospectus.
To the best knowledge of the Company, there are currently no plans,
arrangement or understandings between any Selling Securityholders and any
broker, dealer, agent or underwriter regarding the sale of the Securities by the
Selling Securityholders. There is no assurance that any Selling Securityholder
will sell any or all of the Securities offered by it hereunder or that any such
Selling Securityholder will not transfer, devise or gift such Securities by
other means not described herein.
The Selling Securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M which may limit the timing of purchases and sales of any of the Securities by
the Selling Securityholders and any other such person. Furthermore, Regulation M
of the Exchange Act may restrict the ability of any person engaged in the
distribution of the Securities to engage in market-making activities with
respect to the particular Securities being distributed for a period of up to
five business days prior to the commencement of such distribution. All of the
foregoing may affect the marketability of the Securities and the ability of any
person or entity to engage in market-making activities with respect to the
Securities.
Pursuant to the Registration Rights Agreement entered into in connection
with the offer and sale of the Notes by the Company, each of the Company and the
Selling Securityholders will be indemnified by the other
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<PAGE> 41
against certain liabilities, including certain liabilities under the Securities
Act, or will be entitled to contribution in connection therewith.
The Company has agreed to pay substantially all of the expenses
incidental to the registration, offering and sale of the Securities to the
public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Notes and the
Conversion Shares offered hereby will be passed upon for the Company by Wilson
Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the fiscal year ended December
30, 1996 have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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<PAGE> 42
================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information and representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer to
sell or a solicitation of any offer to buy the securities described herein by
anyone in any jurisdiction in which such offer or solicitation is not
authorized, or in and which the person making the offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such offer
or solicitation. Under no circumstances shall the delivery of this Prospectus or
any sale made pursuant to this Prospectus create any implication that the
information contained in this Prospectus is correct as of any time subsequent to
the date of this Prospectus.
----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information....................................................... 2
Documents Incorporated by Reference......................................... 2
The Company................................................................. 3
The Offering................................................................ 4
Risk Factors................................................................ 6
Use of Proceeds............................................................. 15
Ratio of Earnings to Fixed Charges.......................................... 15
Selling Securityholders..................................................... 16
Description of Notes........................................................ 17
Certain United States Federal Income
Tax Considerations........................................................ 33
Plan of Distribution........................................................ 39
Legal Matters............................................................... 40
Experts..................................................................... 40
</TABLE>
CYPRESS
SEMICONDUCTOR
CORPORATION
$175,000,000
6% CONVERTIBLE SUBORDINATED
NOTES DUE 2002
AND
SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
----------------------
PROSPECTUS
----------------------
DECEMBER , 1997
================================================================================
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered hereby. Normal commission expenses and brokerage fees are payable
individually by the Selling Stockholders. All amounts are estimated except the
Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
AMOUNT
----------
<S> <C>
SEC registration fee ............................................ $ 51,625
Accounting fees and expenses .................................... $ 25,000
Legal fees and expenses ......................................... $ 35,000
Miscellaneous fees and expenses ................................. $ 3,375
----------
Total ........................................................... $ 115,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 11 of the Company's Certificate of Incorporation provides that,
to the fullest extent permitted by Delaware law, as the same now exists or may
hereafter be amended, a director shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. Delaware law provides that directors of a corporation will
not be personally liable for monetary damages for breach of their fiduciary
duties as directors, except for liability (i) for any breach of their duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or that involve intentional misconduct or a knowing violation of
law, (iii) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director derived an improper personal
benefit.
Article VI of the Company's Bylaws provides that the Company (i) shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, and (ii) may indemnify any person who was or
is a, party or is threatened to be made a party to any threatened, pending or
contemplated action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was an employee or agent of the corporation, or
is or was serving at the request of the corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Bylaws provide that
the termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably
II-1
<PAGE> 44
believed to be in or not opposed to the best interest of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
Article VI of the Company's Bylaws also provides that the Company (1)
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director or officer of the corporation, or is or was serving at
the request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, and (2) may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was an employee or agent of the corporation, or is or was serving at the
request of the corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.
The Bylaws further provide that, to the extent that a director or
officer of the corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to above, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith and to the extent that an employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, he may be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
The Company's Bylaws also permit the Company to secure insurance on
behalf of any officer, director, employee or other agent for any liability
arising out of his or her actions in such capacity, regardless of whether the
Bylaws would permit indemnification. The Company currently maintains liability
insurance for its officers and directors.
The Company has entered into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Company's
Certificate of Incorporation and Bylaws. These agreements, among other things,
indemnify the Company's directors and officers for certain expenses (including
attorney's fees), judgments, fines and settlement amounts incurred by any such
person in any action or proceeding, including any action by or in the right of
the Company, arising out of such person's services as a director or officer of
the Company, any subsidiary of the Company or any other company or enterprise to
which the person provides services at the request of the Company.
II-2
<PAGE> 45
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------
<S> <C>
4.1 Indenture, dated as of September 15, 1997, between the Company and
State Street Bank and Trust Company of California, N.A., as Trustee,
including the form of Note.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Registration Rights Agreement, dated as of September 15, 1997, among
the Company, Deutsche Morgan Grenfell Inc., Prudential Securities
Incorporated and Robertson, Stephens & Company LLC.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
12.1 Statement re computation of ratios of earnings to fixed charges.
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (see page II-5).
25.1 Statement of Eligibility Under the Trust Indenture Act of 1939 of
a Corporation Designated to Act as Trustee on Form T-1.
</TABLE>
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
II-3
<PAGE> 46
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii) above
shall not apply if the information required to be included in a post-effective
amendment by these clauses is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification of liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(b) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-4
<PAGE> 47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Santa Clara, State of
California, on December 19, 1997.
CYPRESS SEMICONDUCTOR CORPORATION
By /s/ T.J. Rodgers
----------------------------------------
T.J. Rodgers
President and Chief Financial Officer
POWER OF ATTORNEY
Each of the officers and directors of Cypress Semiconductor Corporation
whose signature appears below hereby constitutes and appoints T.J. Rodgers and
Emmanuel Hernandez, and each of them, their true and lawful attorneys-in-fact
and agents with full power of substitutions, each with the power to act alone,
to sign and execute on behalf of the undersigned any amendment or amendments to
this registration statement, and to perform any acts necessary to be done in
order to file such amendment, and each of the undersigned does hereby ratify and
confirm all that said attorneys-in-fact and agents, or their or his substitutes,
shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ T.J. Rodgers President, Chief Financial Officer December 19, 1997
- ----------------------------------- and Director (Principal Executive Officer)
T.J. Rodgers
/s/ Emmanuel Hernandez Chief Financial Officer, Vice President, December 19, 1997
- ----------------------------------- Finance and Administration (Principal
Emmanuel Hernandez Financial and Accounting Officer)
/s/ Pierre R. Lamond Director December 19, 1997
- -----------------------------------
Pierre R. Lamond
/s/ John C. Lewis Director December 19, 1997
- -----------------------------------
John C. Lewis
/s/ Fred B. Bialek Director December 19, 1997
- -----------------------------------
Fred B. Bialek
/s/ Eric A. Benhamou Director December 19, 1997
- -----------------------------------
Eric A. Benhamou
</TABLE>
II-5
<PAGE> 48
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------
<S> <C>
4.1 Indenture, dated as of September 15, 1997, between the Company and
State Street Bank and Trust Company of California, N.A., as Trustee,
including the form of Note.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Registration Rights Agreement, dated as of September 15, 1997, among
the Company, Deutsche Morgan Grenfell Inc., Prudential Securities
Incorporated and Robertson, Stephens & Company LLC.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
12.1 Statement re computation of ratios of earnings to fixed charges.
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (see page II-5).
25.1 Statement of Eligibility Under the Trust Indenture Act of 1939 of
a Corporation Designated to Act as Trustee on Form T-1.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
------------------------------------------------
CYPRESS SEMICONDUCTOR CORPORATION,
COMPANY
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
TRUSTEE
INDENTURE
DATED AS OF SEPTEMBER 15, 1997
6% CONVERTIBLE SUBORDINATED NOTES DUE 2002
------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RECITALS.....................................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.........................1
SECTION 1.1. Definitions................................................................1
Act ..............................................................................2
Additional Amounts...................................................................2
Affiliate............................................................................2
Applicable Price.....................................................................2
Authenticating Agent.................................................................2
Board of Directors...................................................................2
Board ..............................................................................2
Board Resolution.....................................................................2
Business Day.........................................................................2
Cedel ..............................................................................3
Closing Price........................................................................3
Code ..............................................................................3
Commission...........................................................................3
Common Stock.........................................................................3
Company..............................................................................3
Company Order........................................................................3
Company Notice.......................................................................3
Constituent Person...................................................................3
Conversion Agent.....................................................................3
Conversion Price.....................................................................4
Corporate Trust Office...............................................................4
corporation..........................................................................4
Credit Agreement.....................................................................4
Custodian............................................................................4
Defaulted Interest...................................................................4
Depositary...........................................................................4
Designated Senior Indebtedness.......................................................4
Dollar ..............................................................................4
U.S.$ ..............................................................................4
DTC ..............................................................................4
Euroclear............................................................................4
Event of Default.....................................................................5
Exchange Act.........................................................................5
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-i-
<PAGE> 3
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fundamental Change...................................................................5
Global Security......................................................................5
Holder ..............................................................................5
Indebtedness.........................................................................5
Indenture............................................................................6
Initial Purchasers...................................................................6
Interest Payment Date................................................................6
Liquidated Damages...................................................................6
Maturity.............................................................................6
Non-electing Share...................................................................6
Non-U.S. Holder......................................................................6
Note Register........................................................................6
Note Registrar.......................................................................6
Officer..............................................................................7
Officers' Certificate................................................................7
Opinion of Counsel...................................................................7
Outstanding..........................................................................7
Paying Agent.........................................................................8
Payment Blockage Notice..............................................................8
Person ..............................................................................8
Place of Conversion..................................................................8
Place of Payment.....................................................................8
Predecessor Security.................................................................8
Purchase Agreement...................................................................8
Purchased Shares.....................................................................8
Record Date..........................................................................8
Redemption Date......................................................................8
Redemption Price.....................................................................8
Reference Market Price...............................................................8
Registration Rights Agreement........................................................9
Regular Record Date..................................................................9
Regulation S.........................................................................9
Regulation S Global Security.........................................................9
Representative.......................................................................9
Repurchase Date......................................................................9
Repurchase Price.....................................................................9
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-ii-
<PAGE> 4
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Responsible Officer..................................................................9
Restricted Security..................................................................9
Rule 144A............................................................................9
Rule 144A Global Security............................................................9
Rule 144A Information................................................................9
Securities..........................................................................10
Securities Act......................................................................10
Senior Indebtedness.................................................................10
Special Record Date.................................................................10
Stated Maturity.....................................................................10
Subsidiary..........................................................................10
Successor Security..................................................................10
Tax Affected Security...............................................................10
Taxing Jurisdiction.................................................................10
Tax Law Change......................................................................11
Trading Day.........................................................................11
Trust Indenture Act.................................................................11
Trustee.............................................................................11
United States.......................................................................11
U.S. Holder.........................................................................11
SECTION 1.2. Compliance Certificates and Opinions......................................11
SECTION 1.3. Form of Documents Delivered to the Trustee................................12
SECTION 1.4. Acts of Holders of Securities.............................................13
SECTION 1.5. Notices, Etc., to Trustee and Company.....................................15
SECTION 1.6. Notice to Holders of Securities; Waiver...................................16
SECTION 1.7. Effect of Headings and Table of Contents..................................16
SECTION 1.8. Successors and Assigns....................................................16
SECTION 1.9. Separability Clause.......................................................16
SECTION 1.10. Benefits of Indenture....................................................17
SECTION 1.11. Governing Law............................................................17
SECTION 1.12. Legal Holidays...........................................................17
SECTION 1.13. Conflict with Trust Indenture Act........................................17
SECTION 1.14. Jurisdiction.............................................................18
SECTION 1.15. Indenture and Securities Solely Corporate Obligations....................18
ARTICLE TWO SECURITY FORMS.................................................................19
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE> 5
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 2.1. Forms Generally...........................................................19
SECTION 2.2. Form of Security..........................................................19
SECTION 2.3. Assignment Form and Certificate of Transfer...............................33
SECTION 2.4. Form of Election of Holder to Require Repurchase..........................35
SECTION 2.5. Form of Conversion Notice.................................................36
SECTION 2.6. Form of Certificate of Authentication.....................................37
ARTICLE THREE THE SECURITIES...............................................................37
SECTION 3.1. Title and Terms...........................................................37
SECTION 3.2. Denominations.............................................................38
SECTION 3.3. Execution, Authentication, Delivery and Dating............................38
SECTION 3.4. Registration, Registration of Transfer and Exchange; Restrictions on
Transfer 40
SECTION 3.5. Temporary Securities......................................................47
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities...........................48
SECTION 3.7. Payment of Interest; Interest Rights Preserved............................49
SECTION 3.8. Persons Deemed Owners.....................................................50
SECTION 3.9. Cancellation..............................................................50
SECTION 3.10. Computation of Interest...................................................51
SECTION 3.11. CUSIP Numbers.............................................................51
ARTICLE FOUR SATISFACTION AND DISCHARGE....................................................51
SECTION 4.1. Satisfaction and Discharge of Indenture...................................51
SECTION 4.2. Application of Trust Money................................................52
ARTICLE FIVE REMEDIES......................................................................53
SECTION 5.1. Events of Default.........................................................53
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment........................54
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee...........55
SECTION 5.4. Trustee May File Proofs of Claim..........................................56
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities...............57
SECTION 5.6. Application of Money Collected............................................57
SECTION 5.7. Limitation on Suits.......................................................57
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert...............................................58
SECTION 5.9. Restoration of Rights and Remedies........................................58
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE> 6
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 5.10. Rights and Remedies Cumulative...........................................58
SECTION 5.11. Delay or Omission Not Waiver.............................................59
SECTION 5.12. Control by Holders of Securities.........................................59
SECTION 5.13. Waiver of Past Defaults..................................................59
SECTION 5.14. Undertaking for Costs....................................................60
SECTION 5.15. Waiver of Stay, Extension and Usury Laws.................................60
ARTICLE SIX THE TRUSTEE....................................................................60
SECTION 6.1. Certain Duties and Responsibilities.......................................60
SECTION 6.2. Notice of Defaults........................................................62
SECTION 6.3. Certain Rights of Trustee.................................................62
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities....................63
SECTION 6.5. May Hold Securities, Act as Trustee Under Other Indentures................63
SECTION 6.6. Money Held in Trust.......................................................64
SECTION 6.7. Compensation and Reimbursement............................................64
SECTION 6.8. Corporate Trustee Required; Eligibility...................................65
SECTION 6.9. Resignation and Removal; Appointment of Successor.........................65
SECTION 6.10. Acceptance of Appointment by Successor....................................66
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business...............67
SECTION 6.12. Authenticating Agents.....................................................67
SECTION 6.13. Disqualification; Conflicting Interests...................................68
SECTION 6.14. Preferential Collection of Claims Against Company.........................69
ARTICLE SEVEN CONSOLIDATION, MERGER, TRANSFER OR LEASE.....................................69
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms......................69
SECTION 7.2. Successor Substituted.....................................................70
ARTICLE EIGHT SUPPLEMENTAL INDENTURES......................................................70
SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities..........70
SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities.............71
SECTION 8.3. Execution of Supplemental Indentures......................................72
SECTION 8.4. Effect of Supplemental Indentures.........................................72
SECTION 8.5. Reference in Securities to Supplemental Indentures........................72
SECTION 8.6. Notice of Supplemental Indentures.........................................73
ARTICLE NINE MEETINGS OF HOLDERS OF SECURITIES.............................................73
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-v-
<PAGE> 7
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 9.1. Purposes for Which Meetings May Be Called.................................73
SECTION 9.2. Call, Notice and Place of Meetings........................................73
SECTION 9.3. Persons Entitled to Vote at Meetings......................................74
SECTION 9.4. Quorum; Action............................................................74
SECTION 9.5. Determination of Voting Rights; Conduct and Adjournment of Meetings.......75
SECTION 9.6. Counting Votes and Recording Action of Meetings...........................75
ARTICLE TEN COVENANTS......................................................................76
SECTION 10.1. Payment of Principal, Premium and Interest...............................76
SECTION 10.2. Maintenance of Offices or Agencies.......................................76
SECTION 10.3. Money for Security Payments To Be Held in Trust..........................77
SECTION 10.4. Additional Amounts.......................................................78
SECTION 10.5. Corporate Existence......................................................78
SECTION 10.6. Statement by Officers as to Default......................................79
SECTION 10.7. Delivery of Certain Information..........................................79
ARTICLE ELEVEN REDEMPTION OF SECURITIES....................................................80
SECTION 11.1. Right of Redemption......................................................80
SECTION 11.2. Applicability of Article.................................................80
SECTION 11.3. Election to Redeem; Notice to Trustee....................................80
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed........................80
SECTION 11.5. Notice of Redemption.....................................................81
SECTION 11.6. Deposit of Redemption Price..............................................82
SECTION 11.7. Securities Payable on Redemption Date....................................82
SECTION 11.8. Securities Redeemed in Part..............................................83
SECTION 11.9. Conversion Arrangement on Call for Redemption............................83
ARTICLE TWELVE CONVERSION OF SECURITIES....................................................84
SECTION 12.1. Conversion Privilege and Conversion Price................................84
SECTION 12.2. Exercise of Conversion Privilege.........................................84
SECTION 12.3. Fractions of Shares......................................................86
SECTION 12.4. Adjustment of Conversion Price...........................................86
SECTION 12.5. Notice of Adjustments of Conversion Price................................94
SECTION 12.6. Notice of Certain Corporate Action.......................................95
SECTION 12.7. Company to Provide Common Stock..........................................96
SECTION 12.8. Taxes on Conversions.....................................................96
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-vi-
<PAGE> 8
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 12.9. Company Covenant as to Common Stock......................................96
SECTION 12.10. Cancellation of Converted Securities.....................................96
SECTION 12.11. Provision in Case of Consolidation, Merger, or Sale of Assets
of the Company ......................................................97
SECTION 12.12. Responsibility of Trustee for Conversion Provisions......................98
ARTICLE THIRTEEN SUBORDINATION OF SECURITIES...............................................98
SECTION 13.1. Agreement of Subordination...............................................98
SECTION 13.2. Payments to Holders......................................................99
SECTION 13.3. Subrogation of Securities...............................................102
SECTION 13.4. Authorization to Effect Subordination...................................103
SECTION 13.5. Notice to Trustee.......................................................103
SECTION 13.6. Trustee's Relation to Senior Indebtedness of the Company................104
SECTION 13.7. No Impairment of Subordination..........................................104
SECTION 13.8. Article Applicable to Paying Agents.....................................104
SECTION 13.9. Senior Indebtedness of the Company Entitled to Rely.....................105
SECTION 13.10. Certain Conversions Deemed Payment......................................105
ARTICLE FOURTEEN REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
UPON A FUNDAMENTAL CHANGE..............................................................105
SECTION 14.1. Right to Require Repurchase.............................................105
SECTION 14.2. Notices; Method of Exercising Repurchase Right, Etc.....................106
SECTION 14.3. Merger, Consolidation, etc..............................................108
ARTICLE FIFTEEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY..........................109
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders...............109
SECTION 15.2. Trustee to Furnish Company Names and Addresses of Holders...............109
SECTION 15.3. Preservation of Information.............................................110
SECTION 15.4. Reports by Trustee......................................................110
SECTION 15.5. Reports by Company......................................................110
SECTION 15.6. Reports with Respect to Registration of Securities......................111
EXHIBIT A
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-vii-
<PAGE> 9
INDENTURE, dated as of September 15, 1997, between Cypress Semiconductor
Corporation, a Delaware corporation (herein called the "Company"), and State
Street Bank and Trust Company of California, N.A., as Trustee hereunder (herein
called the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of its 6%
Convertible Subordinated Notes due 2002 (herein called the "Securities") in an
aggregate principal amount not to exceed $200,000,000, and to provide therefor
the Company has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, the Company and the Trustee mutually covenant
and agree, for the equal and proportionate benefit of all Holders of the
Securities as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation, other than
-1-
<PAGE> 10
for the purpose of the definition of Indebtedness and Senior
Indebtedness set forth herein; and
(3) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Additional Amounts" has the meaning specified in Section 2.2.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Price" means (i) in the event of a Fundamental Change in
which the holders of Company's Common Stock receive only cash, the amount of
cash received by the holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the arithmetic average of the Closing Price for
the Company's Common Stock during the ten Trading Days prior to the record date
for the determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change,
or, if there is no such record date, the date upon which the holders of the
Common Stock shall have the right to receive such cash, securities, property or
other assets in connection with the Fundamental Change.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.12 to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" or "Board" means either the board of directors of
the Company or any committee of that board empowered to act for it with respect
to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board, a copy
of which, certified by the Secretary or an Assistant Secretary of the Company to
have been duly adopted by the Board and to be in full force and effect on the
date of such certification, shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, Place of
Conversion or any other place, as the case may be, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in such Place of Payment, Place of Conversion or other place, as the case may
be, are authorized or obligated by law or executive order
-2-
<PAGE> 11
to close; provided, however, that a day on which banking institutions in New
York, New York are authorized or obligated by law or executive order to close
shall not be a Business Day for purposes of Section 10.1, 10.3, 11.6 or 13.5.
"Cedel" means Cedel Bank, societe anonyme.
"Closing Price" has the meaning specified in Section 12.4(8)(a).
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Commission" means the United States Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" includes any stock or shares of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which is not subject to redemption by the Company; provided,
however, subject to the provisions of Section 12.11, shares issuable on
conversion of Securities shall include only shares of the class designated as
Common Stock of the Company at the date of this Indenture or shares of any class
or classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; provided,
further, however, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Order" or "Company Request" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Senior
Vice President or a Vice President, and by its principal financial officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Company Notice" has the meaning specified in Section 14.2.
"Constituent Person" has the meaning specified in Section 12.11.
-3-
<PAGE> 12
"Conversion Agent" means any Person authorized by the Company to convert
Securities in accordance with Article Twelve. The Company has initially
appointed the Trustee as its Conversion Agent, which shall maintain an office or
agency in the Borough of Manhattan, The City of New York, New York.
"Conversion Price" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered
(which at the date of this Indenture is located at 725 South Figueroa Street,
Suite 3100, Los Angeles, California 90017), except that with respect to
presentation of securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which at
any particular time, its corporate agency business shall be conducted.
"corporation" means a corporation, company, including, without
limitation, a limited liability company, association, joint-stock company or
business trust.
"Credit Agreement" means that certain Credit Agreement, dated as of
July 24, 1996, among the Company, Bank of America National Trust and Savings
Association, as Agent and Letter of Credit Issuing Bank, Fleet National Bank, as
Co-Agent, and the other financial institutions named therein, arranged by BA
Securities, Inc., as amended through the date hereof, as further amended,
amended and restated, supplemented or otherwise modified from time to time.
"Custodian" shall mean State Street Bank and Trust Company of
California, N.A., as custodian with respect to a Global Security, or any
successor entity thereto.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to any Securities issued in whole or in
part in the form of one or more Global Securities, the clearing agency that is
registered under the Exchange Act and designated to act as Depositary for such
Securities, as contemplated by Section 3.4, or any successor clearing agency
registered under the Exchange Act as contemplated by Section 3.4.
"Designated Senior Indebtedness" means the Company's obligations under
the Credit Agreement and any particular Senior Indebtedness of the Company in
which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such Senior Indebtedness shall be "Designated
Senior Indebtedness" for purposes of the Indenture (provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Indebtedness to exercise the rights of the Designated
Senior Indebtedness).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
-4-
<PAGE> 13
"DTC" means The Depository Trust Company, a New York corporation.
"Euroclear" means Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended from time to time.
"Fundamental Change" means the occurrence of any transaction or event in
connection with which all or substantially all of the Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive, consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock or shares which are (or, upon consummation of or immediately following
such transaction or event, will be) listed on a United States national
securities exchange or approved for quotation on the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices.
"Global Security" means any Security issued in the form set forth in
Section 2.2 and registered in the Note Register in the name of a Depositary or a
nominee thereof.
"Holder", when used with respect to any Security, means the Person in
whose name the Security is registered in the Note Register.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of the Person for borrowed money (including obligations of the
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of the Person or to only a portion
thereof) other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services, (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of the Person with respect to letters of
credit, bank guarantees or bankers' acceptances, (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of the Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of the
Person or under other leases for facilities, equipment or related assets,
whether or not capitalized, entered into or leased for financing purposes (as
determined by the Company) and all obligations and other liabilities (contingent
or otherwise) under any lease or related document (including a purchase
agreement) in connection with the lease of real property or improvements thereon
which provides that the Person is contractually obligated to purchase or cause a
third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of the
Person under such lease
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<PAGE> 14
or related document to purchase or to cause a third party to purchase such
leased property, (d) all obligations of the Person (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement, (e) all direct or indirect guaranties or
similar agreements by the Person in respect of, and obligations or liabilities
(contingent or otherwise) of the Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (d), (f) any indebtedness or other obligations described in clauses
(a) through (d) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by the Person, regardless of whether
the indebtedness or other obligation secured thereby shall have been assumed by
the Person and (g) any and all deferrals, renewals, extensions, refinancings and
refundings of, or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (a) through (f).
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Indenture and any such supplemental indenture,
respectively.
"Initial Purchasers" means Deutsche Morgan Grenfell Inc., Prudential
Securities Incorporated and Robertson, Stephens & Company LLC.
"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Liquidated Damages" has the meaning specified in the Registration
Rights Agreement.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section 12.11.
"Non-U.S. Holder" means any Holder other than a U.S. Holder.
"Note Register" shall have the meaning specified in Section 3.4.
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"Note Registrar" has the meaning specified in Section 2.2. The Company
has initially appointed the Trustee as its Note Registrar in New York for the
purpose of registering Securities and transfers and exchange of Securities as
provided for herein.
"Officer" means the Chairman of the Board, a Vice Chairman of the Board,
the Chief Executive Officer, the President or a Senior Vice President or a Vice
President, the principal financial officer, the Treasurer, or Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President and by the principal financial officer, Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of independent counsel of
recognized standing who may be counsel for the Company and who shall be
reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money in
the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities, provided that if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities converted into Common Stock pursuant to Article
Twelve; provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities are present at a meeting of
Holders of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in
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determining whether the Trustee shall be protected in making such calculation or
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed the
Trustee as its Paying Agent, which shall maintain an office or agency in The
City of New York, New York.
"Payment Blockage Notice" has the meaning specified in Section 13.2.
"Person" means any individual, corporation, partnership, joint venture,
association, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated September 18,
1997, between the Company and the Initial Purchasers, as such agreement may be
amended from time to time.
"Purchased Shares" has the meaning specified in Section 12.4(6).
"QIB" shall mean a "qualified institutional buyer" as defined in
Rule 144A.
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date", when used with respect to any Security to be redeemed
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
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"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Market Price" means $10.625 and in the event of any
adjustment to the Conversion Price pursuant to Section 12.4, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $10.625 to the initial Conversion Price
specified in Section 12.1 (without regard to any adjustment thereto).
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of September 15, 1997, between the Company and the Initial Purchasers,
as such agreement may be amended from time to time.
"Regular Record Date" for interest payable in respect of any Security on
any Interest Payment Date means the March 15 or September 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Global Security" has the meaning specified in Section 3.4.
"Representative" means the (a) indenture trustee or other trustee, agent
or representative for any Senior Indebtedness or (b) with respect to any Senior
Indebtedness that does not have any such trustee, agent or other representative,
(i) in the case of such Senior Indebtedness issued pursuant to an agreement
providing for voting arrangements as among the holders or owners of such Senior
Indebtedness, any holder or owner of such Senior Indebtedness acting with the
consent of the required persons necessary to bind such holders or owners of such
Senior Indebtedness and (ii) in the case of all other such Senior Indebtedness,
the holder or owner of such Senior Indebtedness.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
"Responsible Officer", when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer of the Trustee
to whom such matter is referred because of his knowledge and familiarity with
the particular subject.
"Restricted Security" has the meaning specified in Section 3.4(d).
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
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"Rule 144A Global Security" has the meaning specified in Section 3.4.
"Rule 144A Information" has the meaning specified in Section 10.7.
"Securities" has the meaning ascribed to it in the first paragraph under
the caption "Recitals".
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in such proceeding) and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Indebtedness of the Company, whether outstanding on
the date of this Indenture or thereafter created, incurred, assumed, guaranteed
or in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to, the
foregoing), unless in the case of any particular Indebtedness the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities or expressly provides that such Indebtedness is "pari passu" or
"junior" to the Securities. Notwithstanding the foregoing, Senior Indebtedness
shall not include any Indebtedness of the Company to any Subsidiary of the
Company.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means, with respect to any Person, a corporation more than
50% of the outstanding voting stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries, or by such Person and one
or more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock or other similar interests in the corporation which ordinarily has
or have voting power for the election of directors, or persons performing
similar functions, whether at all times or only so long as no senior class of
stock or other interests has or have such voting power by reason of any
contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
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"Tax Affected Security" means any Security that, if as a result of any
Tax Law Change, the Company has or will become obligated to pay Additional
Amounts in respect of such Security.
"Taxing Jurisdiction" has the meaning specified in Section 2.2.
"Tax Law Change" means any change in, or amendment to, the laws,
regulations, treaties or rulings prevailing in the United States or any
political subdivision or taxing authority thereof or therein, which change or
amendment becomes effective on or after the date hereof or any application or
judicial, legislative or administrative interpretation of such laws,
regulations, treaties or rulings.
"Trading Day" has the meaning specified in Section 12.4(8)(e).
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Indenture was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
"U.S. Holder" means the beneficial holder of a Security or Common Stock
that for United States federal income tax purposes is (i) a citizen or resident
(as defined in Section 7701(b) of the Code) of the United States, (ii) a
corporation, partnership or other entity formed under the laws of the United
States or any political subdivision thereof, (iii) an estate the income of which
is subject to U.S. federal income taxation regardless of its source, and (iv) in
general, a trust subject to the primary supervision of a court within the United
States and the control of a United States fiduciary as described in Section
7701(a)(30) of the Code.
The definitions of certain other terms are specified in Article Twelve
and elsewhere in this Indenture.
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee or any
Paying Agent to take any action under any provision of this Indenture, the
Company shall furnish to the Trustee or the Paying Agent, as the case may be, an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and if
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required hereunder, an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (excluding certificates provided for
in Section 10.6) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or
she has made such examination or investigation as is necessary to enable
him or her, as the case may be, to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which such certificate or opinion is based are erroneous. Any
such certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Officer or Officers stating that the information with respect to such factual
matters is in the possession of the Company unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by (1) one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents or proxies duly appointed in writing by such Holders, (2) the
record of Holders of Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article Nine or (3) a
combination of such instruments and any such record. Such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. The
Trustee shall promptly deliver to the Company copies of all such instruments and
records delivered to the Trustee with a courtesy copy to Company's counsel at
the address listed in Section 1.5 and if pertaining to any conversion notice,
with a courtesy copy to Company's common stock transfer agent at the address
listed in Section 1.5. Such instrument or instruments and record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders of Securities signing such instrument or instruments and so
voting at such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 9.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Security held by any
Person, and the date of his holding the same, shall be proved by the Note
Register.
(d) The fact and date of execution of any such instrument or writing and
the authority of the Person executing the same may also be proved in any other
manner which the Trustee or the Paying Agent deems sufficient; and the Trustee
or any Paying Agent may in any instance require further proof with respect to
any of the matters referred to in this Section 1.4.
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(e) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a record
date, the Company shall notify the Trustee, each Paying Agent and the Holders of
such record date. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 15.1) prior to such first
solicitation or vote, as the case may be. With regard to any record date, the
Holders on such date (or their duly appointed agents or proxies), and only such
Persons, shall be entitled to give or take, or vote on, the relevant action,
whether or not such Holders remain Holders after such record date.
Notwithstanding the foregoing, the Company shall not set a record date for, and
the provisions of this paragraph shall not apply with respect to, any notice,
declaration or direction referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of (i) any notice of default
or breach referred to in Section 5.1(3), if such default or breach has occurred
and is continuing and the Trustee shall not have given such a notice to the
Company, (ii) any declaration of acceleration referred to in Section 5.2, if an
Event of Default has occurred and is continuing and the Trustee shall not have
given such a declaration to the Company, or (iii) any direction referred to in
Section 5.12, if the Trustee shall not have taken the action specified in such
direction, then a record date shall automatically and without any action by the
Company or the Trustee be set for determining the Holders entitled to join in
such notice, declaration or direction, which record date shall be the close of
business on the tenth day (or, if such day is not a Business Day, the first
Business Day thereafter) following the day on which the Trustee receives such
notice, declaration or direction. Promptly after such receipt by the Trustee,
and as soon as practicable thereafter, the Trustee shall notify the Company and
the Holders of any such record date so fixed. The Holders on such record date
(or their duly appointed agents or proxies), and only such Persons, shall be
entitled to join in such notice, declaration or direction, whether or not such
Holders remain Holders after such record date; provided that, unless such
notice, declaration or direction shall have become effective by virtue of
Holders of the requisite principal amount of Securities on such record date (or
their duly appointed agents or proxies) having joined therein on or prior to the
90th day after such record date, such notice, declaration or direction shall
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall be construed to prevent a Holder (or a
duly appointed agent or proxy thereof) from giving, before or after the
expiration of such 90-day period, a notice, declaration or direction contrary to
or different from, or, after the expiration of such period, identical to, the
notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this
paragraph. In addition, nothing in this paragraph shall be construed to render
ineffective any notice, declaration or direction of the type referred to in this
paragraph given at any time to the Trustee and the Company by Holders (or their
duly appointed agents or proxies) of the requisite principal amount of
Securities on the date such notice, declaration or direction is so given.
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(f) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Successor Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(g) The provisions of this Section 1.4 are subject to the provisions of
Section 9.5.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee in Los Angeles, California or the office or
agency of the Trustee in New York, New York by any Holder of Securities
or by the Company shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the Trustee and
received at its Corporate Trust Office, 725 South Figueroa Street, Los
Angeles, California 90017, Attention: Corporate Trust Department -
Cypress Semiconductor Corporation 6% Convertible Subordinated Notes due
2002 (facsimile number (213) 362- 7357), or to or with the office or
agency of the Trustee at State Street Bank and Trust Company, N.A., 61
Broadway, Concourse Level, Corporate Trust Window, New York, New York
10006, Attention: Cypress Semiconductor Corporation 6% Convertible
Subordinated Notes due 2002. In addition, a courtesy copy shall be sent
to Trustee's counsel (which shall not constitute notice to the Trustee):
Shipman & Goodwin LLP, One American Row, Hartford, Connecticut
06103-2819, Attention: Daniel Putnam Brown, Jr., Esq. (facsimile number
(860) 251-5999) or
(2) the Company by the Trustee or any Paying Agent or by any
Holder of Securities shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing, mailed,
first-class postage prepaid, or telecopied and confirmed by mail,
first-class postage prepaid, or delivered by hand or overnight courier,
addressed to the Company at Cypress Semiconductor Corporation, 3901
North First Street, San Jose, California 95134-1599 (facsimile number:
(408) 943-2796), Attention: Chief Financial Officer, or at any other
address previously furnished in writing to the Trustee by the Company.
In addition, a courtesy copy shall be sent to Company's counsel (which
shall not constitute notice to the Company): Wilson Sonsini Goodrich &
Rosati, P.C., 650 Page Mill Road, Palo Alto, Jose, California 94304
(facsimile number (650) 493-6811), Attention: John A. Fore, Esq. and if
relating to a conversion notice as described in Section 2.2, with a copy
to Company's common stock transfer agent, Boston EquiServe Limited
Partnership, 150 Royall Street, Canton, Massachusetts 02021 (telephone
number (617) 575-2000), Attention:
Kevin Breen.
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Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given to Holders of Securities if in writing and mailed,
first-class postage prepaid, to each Holder of a Security affected by such
event, at the address of such Holder as it appears in the Note Register, not
earlier than the earliest date and not later than the latest date prescribed for
the giving of such notice. Such notice shall be conclusively deemed to have been
given and received by Holders when such notice is mailed, whether or not such
Holder receives such notice.
In any case where notice to Holders of Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder of a Security shall affect the sufficiency of such
notice with respect to other Holders of Securities given as provided above. In
case by reason of the suspension of or irregularities in regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Securities as shall be made with the
approval of the Trustee, which approval shall not be unreasonably withheld,
shall constitute a sufficient notification to such Holders for every purpose
hereunder.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
All covenants, stipulations, promises and agreements in this Indenture
by the Company shall bind its successors and assigns, whether so expressed or
not.
SECTION 1.9. Separability Clause.
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In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10. Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors and assigns hereunder and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under this
Indenture. The provisions of Article Thirteen are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Indebtedness of
the Company.
SECTION 1.11. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last day on which a Holder of a
Security has a right to convert his Security shall not be a Business Day at any
Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal and premium, if any, or delivery for conversion
of such Security need not be made at such Place of Payment or Place of
Conversion, as the case may be, on or by such day, but may be made on or by the
next succeeding Business Day at such Place of Payment or Place of Conversion, as
the case may be, with the same force and effect as if made on the Interest
Payment Date, Redemption Date or Repurchase Date, or at the Stated Maturity or
by such last day for conversion; provided, however, that in the case that
payment is made on such succeeding Business Day, no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repurchase Date, Stated Maturity or last day for conversion, as
the case may be.
SECTION 1.13. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under the Trust Indenture Act to be
a part of and to govern this Indenture, the latter provision shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be. Until such time as this Indenture shall be qualified under the Trust
Indenture Act, this Indenture, the Company and the
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<PAGE> 26
Trustee shall be deemed for all purposes hereof to be subject to and governed by
the Trust Indenture Act to the same extent as would be the case if this
Indenture were so qualified on the date hereof.
SECTION 1.14. Jurisdiction.
(a) The Company hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of any New York State or United States Federal court
sitting in New York City over any suit, action or proceeding arising out of or
relating to this Indenture or any Security. The Company irrevocably and
unconditionally waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in such a court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum. To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process with respect to itself
or its property, the Company irrevocably waives such immunity in respect of its
obligations under the Indenture or any Security. The Company agrees that final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Company, and, to the extent permitted by
applicable law, may be enforced in any court to the jurisdiction of which the
Company is subject by a suit upon such judgment or in any manner provided by
law; provided that service of process is effected upon the Company in the manner
specified in the following subsection or as otherwise permitted by law.
(b) As long as any of the Securities remain outstanding, the Company
will at all times have an authorized agent in New York City, upon whom process
may be served in any legal action or proceeding arising out of or relating to
this Indenture or any Security. Service of process upon such agent and written
notice of such service mailed or delivered to the Company shall to the fullest
extent permitted by law be deemed in every respect effective service of process
upon the Company in any such legal action or proceeding. The Company hereby
irrevocably appoints the CT Corporation System, 1633 Broadway, New York, New
York 10019 as its agent for such purpose, and covenants and agrees that service
of process in any suit, action or proceeding may be made upon it at such office
of such agent. Notwithstanding the foregoing, the Company may, with prior
written notice to the Trustee, terminate the appointment of such agent and
appoint another agent for the above purposes so that the Company shall at all
times have an agent for the above purposes in New York City.
SECTION 1.15. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest (including any Additional Amounts or Liquidated Damages) on any
Security and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer, or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or
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<PAGE> 27
otherwise; it being expressly understood that all such liability is hereby
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issue of the Securities.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the Securities Act
and the Exchange Act, applicable state securities law or the rules of any
securities exchange, the Code, and the treasury regulations under the Code, or
as may, consistently herewith, be determined by the Officers executing such
Securities, as evidenced by their execution thereof.
The Assignment Form and Certificate of Transfer shall be in
substantially the form set forth in Section 2.3.
The Election of Holder to Require Repurchase Form shall be substantially
in the form set forth in Section 2.4. The Conversion Notice shall be in
substantially the form set forth in Section 2.5. The Trustee's certificate of
authentication shall be in substantially the form set forth in Section 2.6.
The Securities may be printed, lithographed, typewritten, mimeographed
or otherwise produced, as determined by the Officers executing such Security, as
evidenced by their execution thereof.
SECTION 2.2. Form of Security.
[For Global Security only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR
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<PAGE> 28
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR
TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO CYPRESS
SEMICONDUCTOR CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
(D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE), IT WILL FURNISH TO STATE STREET
BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO
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<PAGE> 29
WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 2(F) ABOVE OR UPON ANY TRANSFER
OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION
S UNDER THE SECURITIES ACT.
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<PAGE> 30
CYPRESS SEMICONDUCTOR CORPORATION
6% CONVERTIBLE SUBORDINATED NOTE DUE 2002
No. _____________ U.S.$_____
CUSIP NO. __________
Cypress Semiconductor Corporation, a Delaware corporation (herein called
the "Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to _______________, or registered assigns (the "Holder"), the principal sum of
_____________ United States Dollars (U.S.$_____) [(which amount may from time to
time be increased or decreased to such other principal amounts (which, taken
together with the principal amounts of all other Outstanding Securities, shall
not exceed $200,000,000 in the aggregate at any time) by adjustments made on the
records of the Trustee, as Custodian of the Depositary, in accordance with the
rules and procedures of the Depositary)]1 on October 1, 2002 and to pay interest
thereon, from September 24, 1997, or from the most recent Interest Payment Date
(as defined below) to which interest has been paid or duly provided for,
semi-annually in arrears on April 1 and October 1 in each year (each, an
"Interest Payment Date"), commencing April 1, 1998, at the rate of 6% per annum
(together with any Additional Amounts and Liquidated Damages that the Company
may be required to pay) until the principal hereof is due, and at a rate of 6%
per annum on any overdue principal and premium, if any, and, to the extent
permitted by law, on any overdue interest.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 15 or September 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for ("Defaulted Interest") will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Company, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payments of principal shall be made upon the
surrender of this Security, at the Corporate Trust Office of the Trustee in Los
Angeles, California or at the office or agency of the Trustee in the Borough of
- ---------------------
1 This language shall appear on each Global Security.
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<PAGE> 31
Manhattan, The City of New York or, subject to the right of the Company to
terminate such appointment, at such other office or agency of the Company as may
be designated by it for such purpose in the Borough of Manhattan, The City of
New York in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts, or
at such other offices or agencies as the Company may designate, by United States
Dollar check drawn on a bank in the United States, or transfer to a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of U.S. $2,000,000, and only
if such Holder shall have furnished wire instructions in writing to the Trustee
no later than 15 days prior to the relevant payment date) maintained by the
Holder with a bank in the United States. Payment of interest on this Security
may be made by United States Dollar check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register, or, upon
written application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by transfer to a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of U.S.$2,000,000 and only if
such Holder shall have furnished wire instructions in writing to the Trustee no
later than 15 days prior to the relevant payment date) maintained by the Holder
with a bank in the United States.
The Company will pay to the Holder of this Security who is a Non-U.S.
Holder such additional amounts ("Additional Amounts") as may be necessary in
order that every net payment of the principal of, premium, if any, and interest
on this Security (including payment on redemption or repurchase), after
deduction or withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
the United States of America or any political subdivision or taxing authority
thereof or therein (each, a "Taxing Jurisdiction"), will not be less than the
amount provided for in this Security to be then due and payable; provided,
however, that the Company shall not be obligated to pay any Additional Amounts
in respect of payments becoming due on the Securities more than 15 days after
the Redemption Date with respect to any redemption of the Tax Affected
Securities pursuant to the fourth paragraph of the reverse of this Security to
the extent that the Company's obligation to pay such Additional Amounts arises
from the Tax Law Change that resulted in such redemption; and provided, further,
that the foregoing obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would
not have been so imposed but for (i) the existence of any present or
former connection between such Non- U.S. Holder (or between a fiduciary,
settlor, beneficiary, member, shareholder of or possessor of a power
over such Non-U.S. Holder, if such Non-U.S. Holder is an estate, a
trust, a partnership or a corporation) and the Taxing Jurisdiction,
including, without limitation, such Non-U.S. Holder (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) being or having
been a citizen, domiciliary or resident of the United States or treated
as a resident thereof, or being or having been engaged in trade or
business or present
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<PAGE> 32
therein, or having or having had a permanent establishment therein or
(ii) such Non-U.S. Holder's present or former status as a personal
holding company, a foreign personal holding company with respect to the
United States, a controlled foreign corporation, a passive foreign
investment company, or a foreign private foundation or foreign tax
exempt entity for United States federal tax purposes, or a corporation
which accumulates earnings to avoid United States federal income tax;
(b) any tax, assessment or other governmental charge which would
not have been so imposed but for the presentation by the Non-U.S. Holder
of this Security for payment on a date more than 15 days after the date
on which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would
not have been imposed but for the failure to comply with a request by
the Company addressed to such Non- U.S. Holder (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) to provide any
certification, identification or other reporting concerning the
nationality, residence, identity or connection with the United States of
such Non-U.S. Holder (or beneficial owner of such Security), if
compliance is required or imposed by a statute, treaty, regulation or
administrative practice of the United States or any political
subdivision or taxing authority thereof or therein as a precondition to
exemption from all or part of such tax, assessment or other governmental
charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on such Security;
(f) any tax, assessment or other governmental charge imposed on
interest received by a Non-U.S. Holder actually or constructively
holding 10% or more of the total combined voting power of all classes of
stock of the Company entitled to vote;
(g) any tax, assessment or other governmental charge imposed on a
Non-U.S. Holder that is a partnership or a fiduciary or other than the
sole beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the
payment of Additional Amounts had the beneficial owner, member,
beneficiary or settlor directly been the Holder of this Security; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and
(g).
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<PAGE> 33
Except as specifically provided herein and in the Indenture, the Company
shall not be required to make any payment with respect to any tax, assessment or
other governmental charge imposed by any government or any political subdivision
or taxing authority thereof or therein. Whenever in this Security there is a
reference, in any context, to the payment of the principal of, premium, if any,
or interest on, or in respect of, any Security such mention shall be deemed to
include mention of the payment of Additional Amounts payable as described in the
preceding paragraph to the extent that, in such context, Additional Amounts are,
were or would be payable in respect of such Security and express mention of the
payment of Additional Amounts (if applicable) in any provisions of this Security
shall not be construed as excluding Additional Amounts in those provisions of
this Security where such express mention is not made.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. Capitalized terms used
herein, including on the reverse hereof, and not defined herein or on the
reverse hereof shall have the respective meanings given to such terms in the
Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers under its corporate
seal.
Dated:
Cypress Semiconductor Corporation
[seal] By:
-------------------------------------
Name:
Title:
Attest
By:
-------------------------------
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<PAGE> 34
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "6% Convertible Subordinated Notes due 2002" (herein
called the "Securities"), limited in aggregate principal amount to U.S.
$200,000,000, issued and to be issued under and pursuant to an Indenture, dated
as of September 15, 1997 (herein called the "Indenture"), between the Company
and State Street Bank and Trust Company of California, N.A., Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness of the Company and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
The Securities are issuable in the denomination of U.S.$1,000 and integral
multiples thereof. As provided in the Indenture and subject to the limitations
therein set forth, the Securities are exchangeable at the Corporate Trust Office
of the Trustee, or the office or agency of the Trustee, or at such other office
or agency of the Company as may be designated by it for such purpose, in The
City of New York (each a "Note Registrar").
No sinking fund is provided for the Securities. The Securities will not
be redeemable at the option of the Company prior to October 3, 2000. At any time
on or after October 3, 2000, and prior to maturity, the Securities are subject
to redemption at the option of the Company at any time, in whole or in part, at
the following Redemption Prices (expressed as percentages of the principal
amount) upon not less than 20 nor more than 60 days' notice to the Holders prior
to the Redemption Date.
If redeemed during the 12-month period beginning October 1 (beginning
October 3, 2000 and ending September 30, 2001, in the case of the first such
period):
Year Redemption Price
---- ----------------
2000 102.4%
2001 101.2
and 100% at October 1, 2002, together, in each case, with accrued interest to,
but excluding, the Redemption Date; provided that Securities that are Tax
Affected Securities are also redeemable, in whole but not in part, under the
circumstances described in the next succeeding paragraph, at a Redemption Price
equal to 100% of the principal amount thereof plus interest accrued to, but
excluding, the Redemption Date; provided, however, that interest installments on
Securities whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
If the Company determines that, principally as a result of a Tax Law
Change, the Company is or would become obligated to pay Additional Amounts to
the Holder of any Security, as described
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<PAGE> 35
in the third paragraph of the face of this Security, and such obligation cannot
be avoided by the Company taking reasonable measures available to it, then the
Company may, at its option, redeem the Tax Affected Securities in whole, but not
in part, at any time, on giving not less than 20 days' notice to the Holders
prior to the Redemption Date, at a Redemption Price equal to 100% of the
principal amount plus interest accrued to, but excluding, the Redemption Date
and any Additional Amounts then payable; provided, that no such notice of
redemption shall be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay any such Additional Amounts were a
payment in respect of the Tax Affected Securities then made. Prior to the
publication of any notice of redemption pursuant to this paragraph, the Company
shall deliver to the Trustee (a) an Officers' Certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company so to
redeem have occurred and (b) an Opinion of Counsel of recognized standing
selected by the Company and reasonably acceptable to the Trustee to the effect
that the circumstances referred to above in this paragraph exist. The Trustee
shall accept such opinion as sufficient evidence of the satisfaction of the
conditions precedent described above, in which event it shall be conclusive and
binding on the Holders. The Company's right to redeem the Tax Affected
Securities shall continue as long as the Company is obligated to pay such
Additional Amounts, notwithstanding that the Company shall have made payments of
Additional Amounts specified in such third paragraph.
In the event of a redemption of less than all of the Securities, the
Company will not be required (a) to register the transfer or exchange of
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer or exchange of any Security, or
portion thereof, called for redemption.
In any case where the due date for the payment of the principal or
premium, if any, or interest, including Additional Amounts and Liquidated
Damages on, any Security or the last day on which a Holder of a Security has a
right to convert his Security shall be, at any Place of Payment or Place of
Conversion, as the case may be, a day on which banking institutions at such
Place of Payment or Place of Conversion are authorized or obligated by law or
executive order to close, then payment of principal, premium, if any, or
interest, including Additional Amounts and Liquidated Damages, or delivery for
conversion of such Security need not be made on or by such date at such place
but may be made on or by the next succeeding day at such place which is not a
day on which banking institutions are authorized or obligated by law or
executive order to close, with the same force and effect as if made on the date
for such payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable for
the period after such date.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time prior to the
close of business on October 1, 2002, or in case this Security or a portion
hereof is called for redemption or the Holder hereof has exercised his right to
require the Company to repurchase this Security, or such portion hereof, then in
respect
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<PAGE> 36
of this Security until and including, but (unless the Company defaults in making
the payment due upon redemption or repurchase, as the case may be) not after,
the close of business on the Business Day next preceding the Redemption Date or
the Repurchase Date, as the case may be, to convert this Security (or any
portion of the principal amount hereof that is an integral multiple of
U.S.$1,000, provided that the unconverted portion of such principal amount is
U.S.$1,000 or any integral multiple thereof) into fully paid and nonassessable
Common Stock of the Company at an initial Conversion Price of U.S. $23.625 for
each share of Common Stock (or at the then current adjusted Conversion Price if
an adjustment has been made as provided in the Indenture).
In order to convert such Security, a Holder must surrender this
Security, duly endorsed or assigned to the Company or in blank and, in case such
surrender shall be made during the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date ("Interest Period") (except Securities
called for redemption on a Redemption Date or to be repurchased on a Repurchase
Date during, in each case, such Interest Period), also accompanied by payment in
New York Clearing House or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted, and also the conversion notice
hereon duly executed, to the Company at the Corporate Trust Office of the
Trustee in Los Angeles, California, or the office or agency of the Trustee in
the Borough of Manhattan, The City of New York or at such other office or agency
of the Company, subject to any laws or regulations applicable thereto and
subject to the right of the Company to terminate the appointment of any
Conversion Agent (as defined below) as may be designated by it for such purpose
in the Borough of Manhattan, The City of New York, or at such other offices or
agencies as the Company may designate (each a "Conversion Agent"), provided
further, that if this Security or portion hereof has been called for redemption
on a Redemption Date or is repurchasable on a Repurchase Date occurring, in
either case, during the Interest Period and is surrendered for conversion during
such Interest Period, then the Holder of this Security who converts this
Security or a portion hereof during such Interest Period will be entitled to
receive the interest accruing hereon from the Interest Payment Date next
preceding the date of such conversion to such succeeding Interest Payment Date
and shall not be required to pay such interest upon surrender of this Security
for conversion. Subject to the aforesaid requirement for payment and, in the
case of a conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security) of record at such Regular
Record Date to receive an installment of interest, no cash payment or adjustment
is to be made on conversion, if the date of conversion is not an Interest
Payment Date, for interest accrued hereon from the Interest Payment Date next
preceding the date of conversion, or for dividends on the Common Stock issued on
conversion hereof. The Company shall thereafter deliver to the Holder the fixed
number of shares of Common Stock (together with any cash adjustment, as provided
in the Indenture) into which this Security is convertible and such delivery will
be deemed to satisfy the Company's obligation to pay the principal amount of
this Security. No fractions of shares or scrip representing fractions of shares
will be issued on conversion, but instead of any fractional interest (calculated
to the nearest 1/100th of a share) the Company shall pay a cash adjustment as
provided in the Indenture. The Conversion Price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that
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<PAGE> 37
in case of certain consolidations or mergers to which the Company is a party
(other than a consolidation or merger which does not result in any
reclassification, conversion, exchange or cancellation of the Common Stock) or
the transfer of all or substantially all of the property and assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then Outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger or transfer by a holder of the number
of shares of Common Stock of the Company into which this Security could have
been converted immediately prior to such consolidation, merger or transfer
(assuming such holder of Common Stock is not a Constituent Person and failed to
exercise any rights of election and received per share the kind and amount
received per share by a plurality of Non-electing Shares). No adjustment in the
Conversion Price will be made until such adjustment would require an increase or
decrease of at least one percent of such price, provided that any adjustment
that would otherwise be made will be carried forward and taken into account in
the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of Common Stock issued upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information to
such Holder of Restricted Securities or such holder of Common Stock issued upon
conversion of Restricted Securities, or to a prospective purchaser of any such
security designated by any such Holder or holder, as the case may be, to the
extent required to permit compliance by such Holder or holder with Rule 144A
under the Securities Act in connection with the resale of any such security.
The Holder of this Security and the Common Stock issuable upon
conversion thereof is entitled to the benefits of a Registration Rights
Agreement (subject to the provisions thereof), dated as of September 15, 1997,
between the Company and the Initial Purchasers.
If a Fundamental Change (as defined in the Indenture) occurs at any time
on or prior to October 1, 2002, each Holder shall have the right, at such
Holder's option, to require the Company to repurchase all of such Holder's
Securities (or any portion of such Securities that is $1,000 or an integral
multiple of $1,000 in excess thereof) on the 45th day after notice thereof. Such
payment shall be made at the following Repurchase Prices (expressed as
percentages of the principal amount thereof) in the event of a Fundamental
Change occurring during the 12-month period beginning October 1:
Year Percentage
---- ----------
1997 106.0%
1998 104.8
1999 103.6
2000 102.4
2001 101.2
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<PAGE> 38
and 100% at October 1, 2002; provided in each case that if the Applicable Price
(as defined in the Indenture) is less than the Reference Market Price (as
defined in the Indenture), the Company shall repurchase such Securities at a
price equal to the foregoing Repurchase Price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. In each
case, the Company shall also pay accrued interest, if any, on such Securities
to, but excluding the Repurchase Date; provided that if such Repurchase Date is
April 1 or October 1, then the interest payable on such date shall be paid to
the Holder of record of the Securities on the Regular Record Date. Whenever in
this Security there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Security shall not be
construed as excluding the Repurchase Price in those provisions of this Security
when such express mention is not made.
[The following paragraph shall appear in each Security that is not a
Global Security:
In the event of redemption, repurchase or conversion of this Security in
part only, a new Security or Securities for the unredeemed, unrepurchased or
unconverted portion hereof will be issued in the name of the Holder hereof.]
[The following paragraph shall appear in the Global Security:
In the event of a deposit or withdrawal of an interest in this Security,
including an exchange, transfer, redemption, repurchase or conversion of this
Security in part only, the Trustee, as Custodian of the Depositary, shall make
an adjustment on its records to reflect such deposit or withdrawal in accordance
with the rules and procedures of the Depositary.]
The indebtedness evidenced by this Security and the obligations of the
Company under the Indenture are to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Indenture) of the Company,
and this Security is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.
If an Event of Default (as defined in the Indenture) shall occur and be
continuing, the principal of all the Securities, together with accrued interest
to the date of declaration, may be declared due and payable in the manner and
with the effect provided in the Indenture. Upon payment (i) of the amount of
principal so declared due and payable, together with accrued interest and
premium, if any, Additional Amounts, if any, and Liquidated Damages, if any, to
the date of declaration, and (ii) of interest on any overdue principal and
overdue interest, to the extent permitted
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<PAGE> 39
by law, all of the Company's obligations in respect of the payment of the
principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with either (a) the written consent of
the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding (as defined in the Indenture), or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least the lesser of (i) a
majority in aggregate principal amount of the Securities at the time Outstanding
and (ii) 66-2/3% in aggregate principal amount of the Outstanding Securities
represented and entitled to vote at such meeting. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Successor Security to this Security, whether or not
notation of such consent or waiver is made upon this Security or such other
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default, (b) the
Holders of not less than 25% in aggregate principal amount of the Securities
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Securities
Outstanding a direction inconsistent with such request, and (c) shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium, if any, or interest hereon (including any
Additional Amounts and Liquidated Damages) on or after the respective due dates
expressed herein or for the enforcement of the right to convert this Security as
provided in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Additional Amounts and Liquidated Damages, as described
herein) this Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of Securities is registrable on the Note Register (as
defined in the Indenture) upon surrender of a
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<PAGE> 40
Security for registration of transfer (a) at the Corporate Trust Office of the
Trustee or at the office or agency of the Trustee in the Borough of Manhattan or
at such other office or agency of the Company as may be designated by it for
such purpose in the Borough of Manhattan, The City of New York, or (b) subject
to any laws or regulations applicable thereto and to the right of the Company to
terminate the appointment of any Note Registrar, at the offices of the Note
Registrars described herein or at such other offices or agencies as the Company
may designate, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Note Registrar duly
executed by, the Holder thereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees by the Note Registrar. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to recover any tax or other governmental charge payable in
connection therewith.
No recourse for the payment of the principal (and premium, if any) or
interest (including any Additional Amounts or Liquidated Damages) on this
Security and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of consideration for the
issue hereof, expressly waived and released.
Prior to due presentation of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered, as the owner thereof for
all purposes, whether or not such Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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<PAGE> 41
SECTION 2.3. Assignment Form and Certificate of Transfer.
ASSIGNMENT FORM AND
CERTIFICATE OF TRANSFER
To assign this Security fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) (other than any transfer pursuant to a registration
statement that has been declared effective under the Securities Act of 1933, as
amended (the "Securities Act") (or any successor provision)), the undersigned
confirms that such Securities are being transferred:
CHECK ONE BOX BELOW
[ ] to the Company or a subsidiary thereof; or
[ ] pursuant to and in compliance with Rule 144A under the
Securities Act; or
[ ] pursuant to and in compliance with Regulation S under the
Securities Act; or
[ ] to an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act; or
[ ] pursuant to Rule 144 of the Securities Act;
and unless the box below is checked, the undersigned confirms that such
Securities are not being transferred to an "affiliate" of the Company as defined
in Rule 144 under the Securities Act (an "Affiliate").
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<PAGE> 42
[ ] The transferee is an Affiliate of the Company.
Dated:____________________
---------------------------------
---------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange with
membership in an approved signature
guarantee medallion program pursuant to the
Securities and Exchange Commission Rule
17Ad-15 if shares of Common Stock are to be
issued, or Securities to be delivered, other
than to or in the name of the registered
Holder.
---------------------------------
Signature Guarantee
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<PAGE> 43
SECTION 2.4. Form of Election of Holder to Require Repurchase.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Company to pay it or
_______________ the Repurchase Price plus interest accrued to, but excluding,
the Repurchase Date, as provided in the Indenture.
Dated:
-------------------------- ----------------------------------
----------------------------------
Signature(s) must be guaranteed by
a commercial bank or trust company
or a member firm of a major stock
exchange with membership in an
approved signature guarantee
medallion program pursuant to the
Securities and Exchange Commission
Rule 7Ad-15 if shares of Common
Stock are to be issued, or
Securities to be delivered, other
than to or in the name of the
registered Holder.
----------------------------------
Signature Guaranteed
Principal amount to be repurchased:
-------------------
Remaining principal amount following such repurchase:
--------------------
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE> 44
SECTION 2.5. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or any portion of the principal amount hereof
(which is an integral multiple of U.S.$1,000) below designated, into shares of
Common Stock of the Company in accordance with the terms of the Indenture
referred to in this Security, and directs that such shares, together with a
check in payment for any fractional shares and any Securities representing any
unconverted principal amount hereof, be delivered to and be registered in the
name of the undersigned unless a different name has been indicated below. If
shares of Common Stock or Securities are to be registered in the name of a
Person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the undersigned
on account of interest accompanies this Security.
---------------------------------
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<PAGE> 45
Dated:
--------------------------------- ---------------------------------
Signature(s)
If shares or Securities are to be Signature(s) must be guaranteed
registered in the name of a Person other by a commercial bank or trust
than the Holder, please print such company or a member firm of a
Person's name and address: major stock exchange with
membership in an approved
signature guarantee medallion
program pursuant to the Securities
and Exchange Commission Rule
- --------------------------------------- 17Ad-15 if shares of Common Stock
Name are to be issued, or Securities
to be delivered, other than to or
in the name of the registered
Holder.
- ---------------------------------------
Address
---------------------------------
Signature Guaranteed
If only a portion of the Security
- --------------------------------------- is to be converted, please
Social Security or other Taxpayer indicate:
Identification Number, if any
Principal amount to be converted:
U.S.$_____________________
SECTION 2.6. Form of Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:
----------------------------
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By:
---------------------------------
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<PAGE> 46
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to U.S. $200,000,000, except for
Securities authenticated and delivered in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6, 8.5, 11.8, 12.2 or 14.2(e).
The Securities shall be known and designated as the "6% Convertible
Subordinated Notes due 2002" of the Company. Their Stated Maturity shall be
October 1, 2002 and they shall bear interest on their principal amount from
September 24, 1997, payable semi-annually in arrears on April 1 and October 1 in
each year, commencing April 1, 1998, at the rate of 6% (together with any
Additional Amounts and Liquidated Damages the Company may be required to pay)
until the principal thereof is due, and at the rate of 6% per annum on any
overdue principal and, to the extent permitted by law, on any overdue interest;
provided, however, that payments shall only be made on Business Days as provided
in Section 1.12.
The Securities are entitled to the benefits of registration rights as
provided by the Registration Rights Agreement.
The principal of, premium, if any, and interest on the Securities shall
be payable as provided in the form of Security set forth in Section 2.2 and the
Repurchase Price shall be payable at such places as are identified in the
Company Notice given pursuant to Section 14.2 (any city in which any Paying
Agent is located being herein called a "Place of Payment").
The Securities shall be redeemable at the option of the Company, in
whole or in part, and at the option of the Company or otherwise in the event of
certain developments, including, develop ments with respect to U.S. withholding
taxes or certification requirements, as provided in Article Eleven and in the
form of Security set forth in Section 2.2.
The Securities shall be convertible as provided in Article Twelve (any
city in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article Thirteen.
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<PAGE> 47
The Securities shall be subject to repurchase by the Company at the
option of the Holder as provided in Article Fourteen.
SECTION 3.2. Denominations.
The Securities shall be issuable without coupons in denominations of
U.S.$1,000 and integral multiples thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Senior Vice Presidents or one of its Vice
Presidents, under an impression of its corporate seal or a facsimile of its
corporate seal reproduced thereon attested by its Treasurer or one of its
Assistant Treasurers or Secretary or one of its Assistant Secretaries. Any such
signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of an individual or
individuals who were at any time the proper officer or officers of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its order for authentication (or to the Paying Agent),
together with a Company Order for the authentication and delivery of such
Securities, and the Trustee or an Authenticating Agent in accordance with such
Company Order shall authenticate and make available for delivery such Securities
as in this Indenture provided and not otherwise. In connection with any Company
Order for authentication, an Officers' Certificate and Opinion of Counsel
pursuant to Section 1.2 shall be required.
Each Security shall be dated the date of its authentication.
In authenticating the Securities and in accepting the additional
responsibilities under the Indenture in relation to such Securities, the Trustee
shall be entitled to receive and shall be fully protected in relying upon, an
Opinion of Counsel stating that:
(a) the form or forms of such Securities have been established in
conformity with the provisions of this Indenture;
(b) the terms of such Securities have been established in
conformity with the provisions of this Indenture;
(c) such Securities, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for authentication in
accordance with this Indenture,
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<PAGE> 48
authenticated and delivered by the Trustee in accordance with this Indenture and
issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their terms, subject
to applicable bankruptcy, insolvency, reorganization and other similar laws of
general applicability relating to or affecting the enforcement of creditors'
rights, to general equitable principles and to such other qualifications as such
counsel shall conclude do not materially affect the rights of Holders of such
Securities;
(d) all laws and requirements in respect of the execution and
delivery by the Company of such Securities and of the supplemental indenture, if
any, have been complied with and that authentication and delivery of such
Securities and the execution and delivery of the supplemental indenture, if any,
by the Trustee will not violate the terms of the Indenture;
(e) the Company has the corporate power to issue such Securities,
and has duly taken all necessary corporate action with respect to such issuance;
and
(f) the issuance of such Securities will not contravene the
articles of incorporation or by-laws of the Company or result in any violation
of any of the terms or provisions of any law or regulation or of any indenture,
mortgage or other agreement by which the Company is bound known to such Counsel,
which violation would have a material adverse effect on the Company.
The Trustee shall not be required to authenticate and deliver any such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual signature
of an authorized signatory, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder is entitled to the benefits of this
Indenture.
Any Global Security shall represent such of the outstanding Securities
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be increased or reduced to reflect transfers or exchanges
permitted hereby. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in such manner and upon instructions given by the holder of such
Securities in accordance with this Indenture. Payment of principal of and
interest and premium, if any, on any Global Security shall be made to the Holder
of such Global Security.
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<PAGE> 49
SECTION 3.4. Registration, Registration of Transfer and Exchange; Restrictions
on Transfer.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 10.2
(including the office or agency of State Street Bank and Trust Company of
California, N.A., in the Borough of Manhattan, The City of New York) being
herein sometimes collectively referred to as the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities.
Upon surrender for registration of transfer of any Security at an office
or agency of the Company designated pursuant to Section 10.2 for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of any authorized denominations and of a like aggregate principal amount and
tenor and bearing such restrictive legends as may be required by this Indenture.
At the option of the Holder, and subject to the further provisions of
this Section 3.4, Securities may be exchanged for other Securities of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency maintained by the
Company pursuant to Section 10.2. Whenever any Securities are so surrendered for
exchange, and subject to the further provisions of this Section 3.4, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. Every Security
presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Note Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and, subject to the other provisions ofthis Section 3.4, entitled to the
same benefits, under and subject to the same restrictions imposed by this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Except as provided in Section 3.6, no service charge shall be made to a
Holder for any registration of transfer or exchange of Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
8.5, 11.8, 12.2 or 14.2(e) (other than, in the case of Securities, where the
Common Stock is to be issued or delivered in a name other than that of the
Holder of the Security) not involving any transfer and other than any stamp and
other duties, if any, which may be imposed in connection with any such transfer
or exchange by the United States or any political subdivision thereof or
therein, which shall be paid by the Company.
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<PAGE> 50
In the event of a redemption of the Securities in part, neither the
Company nor the Note Registrar will be required (a) to register the transfer of
or exchange of Securities for a period of 15 days immediately preceding the date
notice is given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer of or exchange any Security, or
portion thereof, called for redemption.
(b) So long as the Securities are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Securities that are so eligible may be represented by one or more Global
Securities registered in the name of the Depositary or the nominee of the
Depositary, except as otherwise specified below. The transfer and exchange of
beneficial interests in any such Global Security shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor.
Securities that upon initial issuance are beneficially owned by QIBs
will be represented by a Global Security (the "Rule 144A Global Security") and
Securities that upon initial issuance are beneficially owned by Non-U.S. Persons
will be represented by another Global Security (the "Regulation S Global
Security"). Transfers of interests in the Securities between the Rule 144A
Global Security and the Regulation S Global Security will be made in accordance
with the standing instructions and procedures of the Depositary and its
participants. The Trustee shall make appropriate endorsements to reflect
increases or decreases in the principal amounts of such Global Securities as set
forth on the face of the Security ("Principal Amount") to reflect any such
transfers.
Except as provided below, beneficial owners of a Global Security shall
not be entitled to have certificates registered in their names, will not receive
or be entitled to receive physical delivery of certificates in definitive form
and will not be considered Holders of such Global Securities.
(c) So long as the Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Security to a QIB in accordance with Rule 144A or to a Non-U.S.
Person in accordance with Regulation S, and upon receipt of the definitive
Security or Securities being so transferred, together with a certification,
substantially in the form on the reverse of the Security, from the transferor
that the transfer is being made in compliance with Rule 144A or Regulation S, as
the case may be (or other evidence satisfactory to the Trustee), the Trustee
shall make an endorsement on the Rule 144A Global Security or the Regulation S
Global Security, as the case may be, to reflect an increase in the aggregate
Principal Amount of the Securities represented by such Global Security, the
Trustee shall cancel such definitive Security or Securities in accordance with
the standing instructions and procedures of the Depositary, the aggregate
Principal Amount of Securities represented by such Global Security to be
increased accordingly; provided that no definitive Security, or portion thereof,
in respect of which the Company or an Affiliate of the Company held any
beneficial interest shall be included in such Global Security until such
definitive Security is freely tradable in accordance with Rule 144(k); provided
further that the Trustee shall issue Securities in definitive form upon any
transfer of a beneficial interest in the Global Security to the Company or any
Affiliate of the Company.
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Upon any sale or transfer of a Security to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit A to
this Indenture.
Any Global Security may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Securities to be tradeable on The Portal Market or as may be required for the
Securities to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or Regulation S or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
Euroclear, Cedel or any securities exchange or automated quotation system upon
which the Securities may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Securities are subject.
(d) Every Security that bears or is required under this Section
3.4(d) to bear the legend set forth in this Section 3.4(d) (together with any
Common Stock issued upon conversion of the Securities and required to bear the
legend set forth in Section 3.4(e), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this Section 3.4
(d) (including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the Holder of each such Restricted Security by such Holder's acceptance thereof,
agrees to be bound by all such restrictions on transfer. As used in Sections
3.4(d) and 3.4(e), the term "transfer" encompasses any sale, pledge, transfer or
other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Security (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 3.4(e), if
applicable) shall bear a legend in substantially the following form, unless such
Security has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), or unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS
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DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL
NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO CYPRESS SEMICONDUCTOR CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK
AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(F) ABOVE), IT WILL FURNISH TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND
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TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED
HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Security (or Successor Security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to the conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such
Security for exchange to the Note Registrar in accordance with the provisions of
this Section 3.4, be exchanged for a new Security or Securities of like tenor
and aggregate principal amount, which shall not bear the restrictive legend
required by this Section 3.4(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 3.4(b) and in this
Section 3.4(d)), a Global Security may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints DTC to act as Depositary with respect to the
Global Securities. Initially, the Rule 144A Global Security and the Regulation S
Global Security shall be issued to the Depositary, registered in the name of
Cede & Co., as the nominee of the Depositary, and deposited with the Custodian
for Cede & Co.
If at any time the Depositary for a Global Security notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security, the Company may appoint a successor Depositary with respect to such
Global Security. If a successor Depositary is not appointed by the Company
within ninety (90) days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
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authentication and delivery of Securities, will authenticate and deliver,
Securities in certificated form, in aggregate principal amount equal to the
Principal Amount of such Global Security, in exchange for such Global Security.
If a Security in certificated form is issued in exchange for any portion
of a Global Security after the close of business at the office or agency where
such exchange occurs on any Record Date and before the opening of business at
such office or agency on the next succeeding Interest Payment Date, interest
will not be payable on such Interest Payment Date in respect of such Security,
but will be payable on such Interest Payment Date, subject to the provisions of
Section 3.7, only to the Person to whom interest in respect of such portion of
such Global Security is payable in accordance with the provisions of this
Indenture.
Securities in certificated form issued in exchange for all or a part of
a Global Security pursuant to this Section 3.4 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such
Securities in certificated form to the Persons in whose names such Securities in
certificated form are so registered.
At such time as all interests in a Global Security have been redeemed,
repurchased, converted, canceled, exchanged for Securities in certificated form,
or transferred to a transferee who receives Securities in certificated form
thereof, such Global Security shall, upon receipt thereof, be canceled by the
Trustee in accordance with standing procedures and instructions existing between
the Depositary and the Custodian. At any time prior to such cancellation, if any
interest in a Global Security is exchanged for Securities in certificated form,
redeemed, converted, repurchased or canceled, exchanged for Securities in
certificated form or transferred to a transferee who receives Securities in
certificated form therefor or any Security in certificated form is exchanged or
transferred for part of a Global Security, the principal amount of such Security
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on such Global Security, by
the Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), any stock certificate representing Common Stock issued upon
conversion of such Security shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or such Common Stock has
been issued upon conversion of Securities that have been transferred pursuant to
a registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company in writing with written notice
thereof to the Common Stock transfer agent:
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THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES
THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO CYPRESS
SEMICONDUCTOR CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR
TO SUCH TRANSFER FURNISHES TO BOSTON BANK, N.A., AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT,
AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH
TO BOSTON BANK, N.A., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED
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HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 3.4(e).
(f) Any Security or Common Stock issued upon the conversion or
exchange of a Security that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Securities or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
SECTION 3.5. Temporary Securities
Pending the preparation of Securities in certificated form, the Company
may execute and the Trustee or an Authenticating Agent shall, upon the written
request of the Company, authenticate and deliver temporary Securities (printed
or lithographed). Temporary Securities shall be issuable in any authorized
denomination, and substantially in the form of the Securities in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Securities, all as may be determined by the Company. Every such
temporary Security shall be executed by the Company and authenticated by the
Trustee or such Authenticating Agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Securities in
certificated form. Without unreasonable delay the Company will execute and
deliver to the Trustee or such Authenticating Agent Securities in certificated
form (other than in the case of Global Securities) and thereupon any or all
temporary Securities (other than any such Global Security) may be surrendered in
exchange therefor, at each office or agency maintained by the Company and the
Trustee or such Authenticating Agent shall authenticate and make available for
delivery in exchange for such temporary Securities an equal aggregate principal
amount of Securities in certificated form. Such exchange shall be made by the
Company at its own expense and without any charge therefor. Until so exchanged,
the temporary Securities shall in all respects be entitled to the same benefits
and subject to the same limitations under this Indenture as Securities in
certificated form authenticated and delivered hereunder.
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SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities
If any mutilated Security is surrendered to the Trustee or to a Note
Registrar, the Company shall execute, the Trustee or an Authenticating Agent
shall authenticate and the Trustee or Note Registrar shall deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there be delivered to the Company and either to the Trustee or to a
Note Registrar:
(1) evidence to their satisfaction of the destruction,
loss or theft of any Security, and
(2) such security or indemnity as may be satisfactory
to the Company and the Trustee and such Note Registrar to save each of them and
any agent of either of them harmless, then, in the absence of actual notice to
the Company, the Trustee or the Note Registrar that such Security has been
acquired by a bona fide purchaser, the Company shall execute, and upon its
request, the Trustee or an Authenticating Agent shall authenticate and the
Trustee or Note Registrar shall deliver in lieu of any such destroyed, lost or
stolen Security or in exchange for the Security, a new Security of like tenor
and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto (other than any
stamp and other duties, if any, which may be imposed in connection therewith by
the United States of America or any political subdivision thereof or therein,
which shall be paid by the Company) and any other expenses (including the fees
and expenses of the Trustee, any Paying Agent and any Note Registrar) connected
therewith.
Every new Security issued pursuant to this Section 3.6 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and such new Security shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies of any Holder with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
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Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security, and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon, the Trustee shall fix the Special Record
Date for the payment of such Defaulted Interest, which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities at
such Holder's address as it appears in the Note Register, not less than
10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall
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carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name such Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable.
SECTION 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company or the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of, premium, if any, and
(subject to Section 3.7) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Note Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of a Security
in global form or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any Depositary, as a Holder, with respect to
such Global Security or impair, as between such Depositary and owners of
beneficial interests in such Global Security, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Global Security.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered to the Trustee shall be canceled promptly by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 3.9. The Trustee shall destroy all canceled
Securities in accordance with applicable law and its customary practices in
effect from time to time.
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SECTION 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 3.11. CUSIP Numbers.
The Company in issuing Securities may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such "CUSIP" numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers
either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Securities, and any such redemption
or repurchase shall not be affected by any defect in or omission of such CUSIP
numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of conversion, or registration of
transfer or exchange, or replacement of Securities herein expressly provided for
and any right to receive Additional Amounts and Liquidated Damages, if any, as
provided in the form of Security set forth in Section 2.2 and the Company's
obligations to the Trustee pursuant to Section 6.7), and the Trustee, at the
expense of the Company, shall execute proper instruments in form and substance
satisfactory to the Trustee acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited with the Trustee or the Paying
Agent in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section
10.3) have been delivered to the Trustee for cancellation; or
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(B) all such Securities not theretofore delivered to the Trustee
or the Paying Agent or its agent for cancellation (other than Securities
referred to in clauses (i) and (ii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of clause (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
(immediately available to the Holders in the case of clause (i)) in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal, premium, if any, and interest
(including any applicable Additional Amounts and Liquidated Damages) to
the date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.12, the obligation of
the Company to pay Additional Amounts and, if money shall have been deposited
with the Trustee pursuant to clause (1)(B) of this Section 4.1, the obligations
of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive. Funds held in trust pursuant to this Section are not subject to the
provisions of Article Thirteen.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine to the Persons entitled thereto, of the principal, premium, if any,
and interest for whose payment such
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money has been deposited with the Trustee; but such money need not be segregated
from other funds except to the extent required by law.
All moneys deposited with the Trustee pursuant to Section 4.1 (and held
by it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon a Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Thirteen or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Security at its Maturity, whether or not such payment is
prohibited by the subordination provisions of Article Thirteen; or
(2) default in the payment of any interest (including any
Additional Amounts or Liquidated Damages, if any) upon any Security when
it becomes due and payable, and continuance of such default for a period
of 30 days, whether or not such payment is prohibited by the
subordination provisions of Article Thirteen; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or breach of which is specifically
dealt with elsewhere in this Section), and continuance of such default
or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(4) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable bankruptcy,
moratorium of payments, insolvency, reorganization or other similar
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law or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of substantially all of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable bankruptcy, moratorium of payments,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent or to be granted
moratorium of payment, or the consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any applicable bankruptcy, moratorium of payment,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy, moratorium of payment or insolvency proceedings
against it, or the filing by it of a petition or consent seeking
reorganization or similar relief under any applicable law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
substantially all of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or (5)) occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 5.1(4) or (5) occurs, the principal of,
and accrued interest on, all the Securities shall ipso facto become immediately
due and payable without any declaration or other Act of the Holders or any act
on the part of the Trustee.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article Five provided, the Holders of a
majority in aggregate principal amount of the Outstanding Securities, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) The Company has paid or deposited with the Trustee a sum
sufficient to pay
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(A) all overdue interest (including any Additional Amounts
and Liquidated Damages) on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate
borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at a rate of 6% per annum, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the principal
of, and any interest on, Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.13.
No rescission or annulment referred to above shall affect any subsequent
default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that, if
(1) default is made in the payment of any interest (including any
Additional Amounts and Liquidated Damages) on any Security when
it becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and interest (including any Additional Amounts
and Liquidated Damages) and interest on any overdue principal and premium, if
any, and on any overdue interest (including any Additional Amounts and
Liquidated Damages), to the extent permitted by law, at a rate of 6% per annum,
and in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of
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the sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, moratorium of payments, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other
obligor upon the Securities or the property of the Company or of such other
obligor or the creditors of either, the Trustee (irrespective of whether the
principal of, and any interest on, the Securities shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the
Securities and take such other actions, including participating as a
member, voting or otherwise, of any official committee of creditors
appointed in such matter, and to file such other papers or documents, in
each of the foregoing cases, as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders of Securities
allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable
or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement,
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adjustment or composition affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security in any such proceeding; provided, however, that the Trustee
may, on behalf of such Holders, vote for the election of a trustee in bankruptcy
or similar official.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which judgment
has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium,
if any, or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal, premium, if any, or interest (including any Additional
Amounts and Liquidated Damages) on the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal, premium, if any, and interest
(including any Additional Amounts and Liquidated Damages), respectively;
and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
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(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, premium, if any, and interest on such Security on
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be), and to convert such Security in accordance with Article Twelve, and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Securities shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
such Holders shall continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
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Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders of Securities is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders of Securities may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or (subject to the
limitations contained in this Indenture) by the Holders of Securities.
SECTION 5.12. Control by Holders of Securities.
Subject to Section 6.3(6), the Holders of a majority in aggregate
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction;
(3) the Trustee need not take any action which might result in
personal liability or be unjustly prejudicial to the Holders of
Securities not consenting; and
(4) such direction shall be presented by such Holders to the
Trustee in a timely manner.
SECTION 5.13. Waiver of Past Defaults.
The Holders, either (a) through the written consent of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of the lesser
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of (x) not less than a majority in aggregate principal amount of Outstanding
Securities and (y) at least 66-2/3% in aggregate principal amount of the
Outstanding Securities represented at such meeting, may on behalf of the Holders
of all the Securities waive any past default hereunder and its consequences,
except a default (1) in the payment of the principal of, premium, if any, or
interest on any Security, or (2) in respect of a covenant or provision hereof
which under Article Eight cannot be modified or amended without the consent of
the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant.
SECTION 5.15. Waiver of Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension law or usury law or other
law that would prohibit or forgive the Company from paying all or any portion of
its obligations on the Securities as provided herein, wherever enacted, now or
at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
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(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing of which
a Responsible Officer of the Trustee has actual knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect
of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in aggregate principal amount of
the Outstanding Securities or such lesser percentage as provided in this
Indenture relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
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repayment of such funds or adequate indemnity against such risk or liability has
not been provided to it.
SECTION 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder as to which
the Trustee has received written notice, the Trustee shall give to all Holders
of Securities, in the manner provided in Section 1.6, notice of such default,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of, premium, if
any, or interest on any Security, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and provided, further, that in the case of any default of the character
specified in Section 5.1(3), no such notice to Holders of Securities shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, other
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order,
and any resolution of the Board shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities
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pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document, but the Trustee in its sole discretion may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(8) the permissive right of the Trustee to take or refrain from
taking any actions enumerated in this Indenture shall not be construed
as a duty and the Trustee shall not be answerable in such actions other
than for its own negligence, bad faith or willful misconduct in
exercising any such right; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by the Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture, of the Securities or of the
Common Stock issuable upon the conversion of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities, Act as Trustee Under Other Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Conversion
Agent or any other agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company with the same rights it would have if it were not the
Trustee, Authenticating Agent, Paying Agent, Conversion Agent or such other
agent.
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The Trustee may become and act as trustee under other indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding in the same manner as if it were not
Trustee hereunder.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except for
any such expense, disbursement or advance as may be attributable to its
negligence, bad faith or willful misconduct. The Trustee agrees to repay
such expenses, disbursements and advances attributable to its
negligence, bad faith or willful misconduct upon the entry of a final
nonappealable determination that the Trustee engaged in negligence, bad
faith or willful misconduct; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence, bad faith or willful
misconduct on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs,
expenses and reasonable attorneys' fees of defending itself against any
claim or liability in connection with the exercise or performance of any
of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(4) or Section 5.1(5), the expenses
(including the reasonable charges of its counsel) and the compensation for the
services are intended to constitute expenses of the administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.
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Any Paying Agent or Authenticating Agent appointed hereunder shall be
entitled to the benefits of Section 6.7(3) as if the indemnity set forth
therefor were specifically afforded to such Paying Agent or Authenticating
Agent.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee, any Paying Agent
or any Authenticating Agent, as the case may be.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any) or interest on
particular Securities.
SECTION 6.8. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such, having (or
if the Trustee is a member of a bank holding company, its bank holding company
has) a combined capital and surplus of at least U.S.$50,000,000, subject to
supervision or examination by Federal or state authority, in good standing. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article and a successor shall be appointed pursuant to Section 6.9.
SECTION 6.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required
by Section 6.10 shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities, delivered
to the Trustee and the Company.
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If the instrument of acceptance by a successor Trustee required by Section 6.10
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the removed Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security
for at least six months, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
shall comply with the applicable requirements of this Section and Section 6.10.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.10, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders of Securities and accepted appointment in the manner required by this
Section and Section 6.10, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.10. Acceptance of Appointment by Successor.
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Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture), shall
be the successor of the Trustee hereunder, provided such corporation shall be
otherwise eligible under this Article, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 6.12. Authenticating Agents.
The Trustee may appoint an additional Authenticating Agent or Agents
with respect to the Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon exchange or substitution pursuant
to this Indenture.
Securities authenticated by an Authenticating Agent shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder, and every reference in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof, the District
of Columbia authorized under such laws to act as Authenticating Agent and
subject to supervision or examination
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by government or other fiscal authority. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.12, such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent
(including the duties under this Indenture), shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.12 and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.
If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section 6.12, the Securities may have endorsed thereon, in
addition to or in lieu of the Trustee's certification of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
By [Authenticating Agent],
as Authenticating Agent
By: ________________________________________
Authorized Signatory
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SECTION 6.13. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.14. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of Section 311 of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor).
ARTICLE SEVEN
CONSOLIDATION, MERGER, TRANSFER OR LEASE
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to any
Person, and shall not transfer and assign all its obligations of, and position
as, the Company hereunder, except for a consolidation or merger in which the
Company is the surviving party, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or which acquires by conveyance or transfer the
properties and assets of the Company substantially as an entirety, or to
which obligations of, and position as, the Company hereunder are
transferred and assigned (the "Successor") (i) shall be a corporation,
limited liability company, partnership or trust organized and existing
under the laws of, and resident for tax purposes in, the United States
of America or any political subdivision thereof, and (ii) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, due and
punctual payment of the principal of and interest (including Additional
Amounts, if any, and Liquidated Damages, if any) on all of the
Securities and the performance of every covenant of this Indenture and
in the Securities on the part of the Company to be performed or
observed;
(b) immediately after giving effect to any such consolidation,
merger, conveyance or transfer, or such transfer and assignment, no
default and no Event of Default shall have occurred and be continuing;
and
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(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer, or such transfer and
assignment, and such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been compiled with.
SECTION 7.2. Successor Substituted.
Upon any consolidation, merger or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety, or upon
transfer and assignment of all obligations of, and position as, the Company
hereunder, in accordance with Section 7.1, the Successor shall succeed to and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such Successor had been named as the
Company herein, and thereafter, the predecessor Person shall be relieved of all
obligations and covenants under the Indenture and the Securities.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities.
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto in form
satisfactory to the Trustee for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities as permitted by
this Indenture; or
(2) to add to the covenants of the Company for the benefit of the
Holders of Securities, or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 12.11 or the repurchase rights
of Holders of Securities pursuant to Section 14.3; or
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(6) to comply with the requirements of the Trust Indenture Act or
the rules and regulations of the Commission thereunder in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by this Indenture or otherwise; or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or
which is otherwise defective, or to make any other provisions with
respect to matters or questions arising under this Indenture as the
Company and the Trustee may deem necessary or desirable, provided, such
action pursuant to this clause (7) shall not adversely affect the
interests of the Holders of Securities in any material respect.
Upon Company Request, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and subject to and upon receipt by
the Trustee of the documents described in Section 8.3 hereof, the Trustee shall
join with the Company in the execution of any supplemental indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained.
SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities.
With either (a) the written consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities, by the Act
of said Holders delivered to the Company and the Trustee, or (b) by the adoption
of a resolution, at a meeting of Holders of the Outstanding Securities at which
a quorum is present, by the Holders of the lesser of (x) not less than a
majority in aggregate principal amount of the Outstanding Securities and (y)
66-2/3% in aggregate principal amount of the Outstanding Securities represented
at such meeting, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent or affirmative vote of the
Holder of each Outstanding Security,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
or the rate of interest payable thereon or any premium payable upon
redemption or repurchase thereof, or change the obligation of the
Company to pay Additional Amounts pursuant to Section 10.4 in a manner
adverse to the Holders, or change the Place of Payment or coin or
currency in which any Security or the interest or any premium thereon or
any other amount in respect thereof is payable, or impair the right to
institute suit for the enforcement of any payment in respect of any
Security on or after the Stated Maturity thereof (or, in the case of
redemption or any repurchase, on or after the Redemption Date or
Repurchase Date, as the case may be) or, except as permitted by Section
12.11, adversely affect the right to convert any Security as provided in
Article
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Twelve, or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders of
Securities, or
(2) reduce the requirements of Section 9.4 for quorum or voting,
or reduce the percentage in aggregate principal amount of the
Outstanding Securities the consent of whose Holders is required for any
such supplemental indenture or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in
this Indenture, or
(3) modify any of the provisions of this Section or Section 5.13,
except to increase any percentage contained herein or therein or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby; or
(4) modify the provisions of Article Fourteen in a manner adverse
to the Holders; or
(5) modify any of the provisions of Section 10.7 in a manner
adverse to the Holders.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 8.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture, and that such supplemental
indenture has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 8.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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SECTION 8.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 8.6. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Company
shall give notice to all Holders of Securities of such fact, setting forth in
general terms the substance of such supplemental indenture, in the manner
provided in Section 1.6. Any failure of the Company to give such notice, or any
defect therein, shall not in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities may be called at any time and from
time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.
SECTION 9.2. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities
for any purpose specified in Section 9.1, to be held at such time and at such
place in Los Angeles, California or in the Borough of Manhattan, The City of New
York, as the Trustee shall determine. Notice of every meeting of Holders of
Securities, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 1.6, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities shall have requested the Trustee to call a meeting of the Holders of
Securities for any purpose specified in Section 9.1, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as
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provided herein, then the Company or the Holders of Securities in the amount
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in paragraph (a)
of this Section.
SECTION 9.3. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities, a Person
shall be (a) a Holder of one or more Outstanding Securities on the applicable
record date, or (b) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 9.4. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such reconvened meeting, such
reconvened meeting may be further adjourned for a period not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
reconvened meeting (subject to repeated applications of this sentence). Notice
of the reconvening of any adjourned meeting shall be given as provided in
Section 9.2(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage of the principal amount of the Outstanding Securities which shall
constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in aggregate principal
amount of the Outstanding Securities at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso to Section 8.2) shall be effectively passed and decided
if passed or decided by the lesser of (i) not less than a majority in aggregate
principal amount of the Outstanding Securities and (ii) Persons entitled to vote
not less than 66-2/3% in aggregate principal amount of Outstanding Securities
represented and entitled to vote at such meeting.
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Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities, whether or not present or represented at the meeting. The
Trustee shall, in the name and at the expense of the Company, notify all the
Holders of Securities of any such resolutions or decisions pursuant to Section
1.6.
SECTION 9.5. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved in
the manner specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman (which may be the Trustee) of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 9.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be entitled
to one vote for each U.S.$1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to Section
9.2 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 9.6. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts at Stated Maturity and serial numbers of the Outstanding
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any
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resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 9.2 and, if
applicable, Section 9.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay
the principal of and premium, if any, and interest (including Additional
Amounts, if any, or Liquidated Damages, if any) on the Securities in accordance
with the terms of the Securities and this Indenture. The Company will deposit or
cause to be deposited with the Trustee on or prior to the due date for any
installment of interest thereon or on the Stated Maturity of any Security all
payments so due, which payments shall be in immediately available funds on the
date of such due date or Stated Maturity, as the case may be.
SECTION 10.2. Maintenance of Offices or Agencies.
The Company hereby appoints the Corporate Trust Office of the Trustee in
Los Angeles, California and the office or agency of the Trustee in the Borough
of Manhattan, The City of New York, as places where Securities may be presented
or surrendered for payment, where Securities may be surrendered for registration
of transfer or exchange, where Securities may be surrendered for conversion, and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served, and where Securities may be surrendered for
registration of transfer or exchange and where Securities may be surrendered for
conversion.
The Company may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all of
such purposes; provided, however, that until all of the Securities have been
delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 10.3, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment and conversion, where Securities may be
surrendered for registration of transfer or exchange and where notices and
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demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 1.6, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency, or shall fail to furnish the Trustee with the address thereof,
presentations and surrenders may be made and notices and demands may be served
on the office or agency of the Trustee in the Borough of Manhattan, the City of
New York.
SECTION 10.3. Money for Security Payments To Be Held in Trust.
If the Company shall act as its own Paying Agent, it will, on or before
each due date of the principal of, premium, if any, or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or prior to each due date of the principal of, premium, if any, or interest on
any Securities, deposit with such Paying Agent a sum sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held for
the benefit of the Persons entitled to such principal, premium, if any, or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be
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held by the Trustee upon the same trusts as those upon which such sums were held
by the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further liability
with respect to such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for the earlier of ten days
prior to the time such money would escheat to the state or two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
SECTION 10.4. Additional Amounts.
The Company will pay to the Holder of any Security Additional Amounts as
provided in the form of Security, as set forth in Section 2.2. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of,
premium, if any, or interest on, or in respect of, any Security, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
for in this Section to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of Additional Amounts (if applicable)
in any provisions hereof shall not be construed as excluding Additional Amounts
in those provisions hereof where such express mention is not made.
At least 10 days prior to April 1, 1998, or an earlier Redemption Date
or Repurchase Date (and at least 10 days prior to each date of payment of
principal, premium, if any, or interest after April 1, 1998, or such earlier
Redemption Date or Repurchase Date), the Company shall furnish the Trustee, the
office or agency of the Trustee in the Borough of Manhattan and the Paying Agent
in the Borough of Manhattan, The City of New York, if other than the Trustee or
an agent thereof, with an Officers' Certificate instructing the Trustee and such
Paying Agents whether or not such payment of principal of, premium, if any, or
interest on the Securities shall be made to the Holders of Securities subject to
withholding or deduction. If any withholding or deduction shall be required,
such Officers' Certificate shall specify the amount required to be withheld or
deducted with respect to such payments to such Holders of Securities and the
Company will pay to the Trustee or the applicable Paying Agent the Additional
Amounts, if any, required to be paid as set forth in the first sentence of this
Section 10.4. The Company covenants to indemnify the Trustee and any Paying
Agent for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence, bad faith or willful misconduct arising
out of or in connection with actions taken or omitted by any of them in reliance
on any Officers' Certificate furnished pursuant to this Section. In the absence
of any such Officers' Certificates with respect to withholding, the Trustee can
conclusively rely on the fact that there is no such withholding.
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SECTION 10.5. Corporate Existence.
Subject to Article Seven, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence.
SECTION 10.6. Statement by Officers as to Default.
The Company will deliver to the Trustee within 120 days after the end of
each fiscal year of the Company an Officers' Certificate stating that in the
course of performance by the signers of their duties as such officers of the
Company they would normally obtain knowledge of whether any default exists in
the performance and observance of any of the terms, provisions and conditions of
this Indenture and whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture. Such Officers' Certificate shall
further state, as to each such officer signing such Certificate, to the best of
the knowledge of such officer, as of the date of such Officers' Certificate, (a)
whether any such default exists, (b) whether the Company (as applicable) during
the preceding fiscal year kept, observed, performed and fulfilled each and every
covenant and obligation of the Company under this Indenture and (c) whether
there was any default in the performance and observance of any of the terms,
provisions or conditions of this Indenture during such preceding fiscal year. If
the officer or officers signing the Officers' Certificate know of such a
default, whether then existing or occurring during such preceding fiscal year,
the Officers' Certificate shall describe such default and its status with
particularity. The Company shall also promptly notify the Trustee if the
Company's fiscal year is changed so that the end thereof is on any date other
than the then current fiscal year end date.
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 10.6 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 10.7. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a holder of a Restricted Security, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such holder of Restricted Securities, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such holder with Rule 144A
under the Securities Act (or any successor provision thereto) in connection with
the resale of any such security; provided, however, that the Company shall not
be required to furnish such information in connection with any request made on
or after the date which is two years from the later of (i) the date such a
security (or
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any such predecessor security) was last acquired from the Company or (ii) the
date such a security (or any such predecessor security) was last acquired from
an "affiliate" of the Company within the meaning of Rule 144 under the
Securities Act (or any successor provision thereto). "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
The Securities may be redeemed in accordance with the provisions of the
form of Security set forth in Section 2.2.
SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of the Securities or this Indenture,
shall be made in accordance with such provision and this Article Eleven.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of any of the Securities, the Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date. If the Securities are to be redeemed pursuant to an election of the
Company which is subject to a condition specified in the form of Security set
forth in Section 2.2, the Company shall furnish the Trustee with an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred.
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed (other than pursuant
to the fourth paragraph on the reverse of the form of Security in Section 2.2),
the particular Securities to be redeemed shall be selected by the Trustee within
seven Business Days after it receives the notice described in 11.3, from the
Outstanding Securities not previously called for redemption, by such method as
the Trustee may deem fair and appropriate.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities
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which have been converted during a selection of Securities to be redeemed may be
treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Note Registrar in
writing of the securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
1.6 to the Holders of Securities to be redeemed not less than 20 nor more than
60 days prior to the Redemption Date, and such notice shall be irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities are to be redeemed,
the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities which will be outstanding after
such partial redemption,
(4) that on the Redemption Date the Redemption Price, and accrued
interest, if any, will become due and payable upon each such Security to
be redeemed, and that interest thereon shall cease to accrue on and
after said date,
(5) the Conversion Price then in effect, the date on which the
right to convert the Securities to be redeemed will terminate and the
places where such Securities, may be surrendered for conversion,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if
any, and
(7) in the case of a notice of redemption pursuant to the fourth
paragraph on the reverse of the form of Security in Section 2.2, a form
of written certification of each beneficial owner of a Security as to
such beneficial owner's entitlement to Additional Amounts.
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In case of a partial redemption, the notice shall specify the serial and
CUSIP numbers (if any) and the portions thereof called for redemption and that
transfers and exchanges may occur on or prior to the Redemption Date.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.
SECTION 11.6. Deposit of Redemption Price.
By 10:00 a.m. (New York time) on any Redemption Date of the Securities,
the Company shall deposit with the Trustee or with the Paying Agent so directed
by the Trustee (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 10.3) an amount of money (which shall
be in immediately available funds on such Redemption Date) sufficient to pay the
Redemption Price of, and accrued interest on, all the Securities which are to be
redeemed on that date other than any Securities called for redemption on that
date which have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security, if a Security, or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.7) be paid to the Company on Company
Request as soon as administratively practicable after the Trustee receives such
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price together with accrued and unpaid
interest to the Redemption Date; provided, however, that installments of
interest on Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Record Date according
to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if any, and,
to the extent permitted by applicable law, accrued interest on such Security
shall, until paid, bear interest from the Redemption Date at a rate
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of 6% per annum and such Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
SECTION 11.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 10.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and make available for delivery to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
SECTION 11.9. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange
for the purchase and conversion of any Securities by an agreement with one or
more investment bankers or other purchasers (the "Purchasers") to purchase such
securities by paying to the Trustee in trust for the Holders, on or before the
Redemption Date, an amount not less than the applicable Redemption Price,
together with interest accrued to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article Eleven, the
obligation of the Company to pay the Redemption Price, together with interest
accrued to, but excluding, the Redemption Date, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such Purchasers. If such
an agreement is entered into (a copy of which shall be filed with the Trustee
prior to the close of business on the Business Day immediately prior to the
Redemption Date), any Securities called for redemption that are not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, and consistent with
any agreement or agreements with such Purchasers, to be acquired by such
Purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article Twelve) surrendered by such Purchasers for conversion, all
as of immediately prior to the close of business on the Redemption Date (and the
right to convert any such Securities shall be extended though such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it to the
Holders in the same manner as it would monies deposited with it by the Company
for the redemption of Securities. Without the Trustee's prior written consent,
no arrangement between the Company and such Purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such Purchasers, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
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ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article
Twelve, at the option of the Holder thereof, the Holder of any Security is
entitled at his option, at any time prior to the close of business on October 1,
2002, to convert such Security into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common
Stock of the Company at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall be
subject, in the case of the conversion of any Global Security, to any applicable
book-entry procedures of the Depositary therefor and the following sentence. In
case a Security or portion thereof is called for redemption or is delivered for
repurchase, such conversion right in respect of the Security or portion so
called shall expire at the close of business on the Business Day prior to the
Redemption Date or the Repurchase Date (as defined in Article Fourteen), as the
case may be, unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be initially U.S.$23.625
per share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in this Article Twelve.
SECTION 12.2. Exercise of Conversion Privilege.
Beneficial owners of interests in a Global Security may exercise their
right of conversion by delivering to the Depositary the appropriate instruction
form for conversion pursuant to the Depositary's conversion program and, in the
case of conversions through Euroclear or Cedel, in accordance with Euroclear's
or Cedel's normal operating procedures. To convert a definitive Security into
shares of Common Stock, a Holder must (i) complete and manually sign the
conversion notice in the form set forth in Section 2.4 on the back of the
definitive Security (or complete and manually sign a facsimile thereof) and
deliver such notice to the Trustee at the Corporate Trust Office of the Trustee
or the office or agency of State Street Bank and Trust Company of California,
N.A., in New York, New York, (ii) surrender the definitive Security to the
Trustee at the Corporate Trust Office of the Trustee or the office or agency of
the State Street Bank and Trust Company of California, N.A., in New York, New
York, (iii) if required, furnish appropriate endorsements and transfer
documents, (iv) if required, pay all transfer or similar taxes, and (v) if
required, pay funds equal to interest payable on the next Interest Payment Date.
The date on which all of the foregoing requirements have been satisfied is the
date of surrender for conversion. The Trustee shall promptly deliver to the
Company and the Company's Common Stock transfer agent notification of such
notice of conversion at the address described in Section 1.5. Such notice of
conversion can be obtained from the Trustee at the Corporate Trust Office or the
office of any Conversion Agent. Each Security surrendered for conversion will be
converted into Common Stock in registered form. Each Security
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surrendered for conversion (in whole or in part) during the period from the
close of business on any Regular Record Date to the opening of business on the
next succeeding Interest Payment Date (except Securities called for redemption
on a Redemption Date or to be repurchased on a Repurchase Date during, in each
case, such period) shall be accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of such
Security (or part thereof, as the case may be) being surrendered for conversion.
The interest so payable on such Interest Payment Date with respect to any
Security (or portion thereof, if applicable) which has been called for
redemption on a Redemption Date, or is repurchasable on a Repurchase Date,
occurring, in either case, during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date, which Security (or portion thereof, if
applicable) is surrendered for conversion during such period, shall be paid to
the Holder of such Security being converted in an amount equal to the interest
that would have been payable on such Security if such Security had been
converted as of the close of business on such Interest Payment Date. The
interest so payable on such Interest Payment Date in respect of any Security (or
portion thereof, as the case may be) which has not been called for redemption on
a Redemption Date, or is not eligible for repurchase on a Repurchase Date,
occurring, in either case, during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date, which Security (or
portion thereof, as the case may be) is surrendered for conversion during such
period, shall be paid to the Holder of such Security as of such Regular Record
Date. Except as provided in this paragraph and subject to the last paragraph of
Section 3.7, no cash payment or adjustment shall be made upon any conversion on
account of, if the date of conversion is not an Interest Payment Date, any
interest accrued from the Interest Payment Date next preceding the conversion
date, in respect of any Security (or part thereof, as the case may be)
surrendered for conversion, or on account of any dividends on the shares of
Common Stock issued upon conversion. The Company's delivery to the Holder of the
number of shares of Common Stock (and cash in lieu of fractions thereof, as
provided in this Indenture) into which a Security is convertible will be deemed
to satisfy the Company's obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion,
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the shares of Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock at
such time. As promptly as practicable on or after the conversion date, the
Company shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 12.3.
All shares of Common Stock delivered upon such conversion of Securities
that are Restricted Securities shall, if required, bear restrictive legends set
forth in Section 3.4(e) and shall be subject to the restrictions on transfer
provided in such legends. Neither the Trustee nor any agent maintained
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for the purpose of such conversion shall have any responsibility for the
inclusion or content of any such restrictive legends on such shares of Common
Stock; provided, however, that the Trustee or Conversion Agent shall have
provided, to the Company or to the Note Registrar for such shares of Common
Stock, prior to or concurrently with a request to the Company to deliver such
shares of Common Stock, written notice that the Securities delivered for
conversion are Restricted Securities.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security. A Security may
be converted in part, but only if the principal amount of such Security to be
converted is any integral multiple of U.S.$1,000 and the principal amount of
such security to remain Outstanding after such conversion is equal to U.S.$1,000
or any integral multiple thereof.
SECTION 12.3. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion of
any Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Securities (or specified portions
thereof), the Company shall calculate and pay a cash adjustment in respect of
such fraction (calculated to the nearest 1/100th of a share) in an amount equal
to the same fraction of the Current Market Price per share of Common Stock
(calculated in accordance with Section 12.4(8) below) at the close of business
on the day of conversion.
SECTION 12.4. Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustments from time to time
as follows:
(1) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator of which shall be the sum of such
number of shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such determination.
If any dividend or distribution of the type described in this Section 12.4(1) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
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(2) In case the Company shall issue rights or warrants to all holders of
its outstanding Common Stock entitling them (for a period expiring within 45
days after the date fixed for determination of stockholders entitled to receive
such rights or warrants) to subscribe for or purchase Common Stock at a price
per share less than the Current Market Price (as defined in Section 12.4(8)(b))
on the date fixed for determination of stockholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date fixed for determination of shareholders entitled
to receive such rights or warrants by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for determination of stockholders entitled to receive such rights
and warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and the denominator of which shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled to
receive such rights and warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be
successively made whenever any such rights and warrants are issued, and shall
become effective immediately after the opening of business on the day following
the date fixed for determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such Common Stock, there shall be taken into account
any consideration received by the Company for such rights or warrants, the value
of such consideration, if other than cash, to be determined by the Board of
Directors.
(3) In case outstanding Common Stock shall be subdivided into a greater
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, in case outstanding
shares of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12.4(1)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 12.4(2), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 12.4(1) (any of the
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foregoing hereinafter in this Section 12.4(4) called the "Distribution
Securities")), then, in each such case, the Conversion Price shall be reduced so
that the same shall be equal to the price determined by multiplying the
Conversion Price in effect on the Distribution Record Date with respect to such
distribution by a fraction the numerator of which shall be the Current Market
Price per share of Common Stock on such Distribution Record Date less the fair
market value (as determined by the Board of Directors whose determination shall
be conclusive, and described in a resolution of the Board of Directors) on the
Distribution Record Date of the portion of the Distribution Securities so
distributed applicable to one share of Common Stock and the denominator of which
shall be the Current Market Price per share of Common Stock, such reduction to
become effective immediately prior to the opening of business on the day
following such Distribution Record Date; provided, however, that in the event
the then fair market value (as so determined) of the portion of the Distribution
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price per share of the Common Stock on the
Distribution Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion the amount of Distribution Securities such Holder would have received
had such Holder converted each Security on the Distribution Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared. If the Company's
Board of Directors determines the fair market value of any distribution for
purposes of this Section 12.4(4) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price of
the Common Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of shares of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 12.4 (and no adjustment to the
Conversion Price under this Section 12.4 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be made under this Section 12.4(4). If
any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon the
occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets or different
amounts of any of the foregoing, or both, then the date of the occurrence of any
and each such event shall be deemed to be the date of distribution and record
date with respect to new rights or warrants with such rights (and a termination
or expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 12.4 was made, (1) in the case of any such
rights or warrants which shall all have been
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redeemed or repurchased without exercise by any holders thereof, the Conversion
Price shall be readjusted upon such final redemption or repurchase to give
effect to such distribution or Trigger Event, as the case may be, as though it
were a cash distribution, equal to the per share redemption or repurchase price
received by a holder or holders of shares of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of shares of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants which shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants to subscribe for additional shares of the Common
Stock (other than rights or warrants described in Section 12.4(2)), pro rata to
holders of Common Stock, and in the case of the rights issued pursuant to the
Company's rights agreement in existence as of the date hereof, the Company may,
in lieu of making any adjustment pursuant to this Section 12.4(4), make proper
provision (in the case of the Company's rights agreement in existence as of the
date hereof, to the extent it does not make proper provision) so that each
holder of a Security who converts such Security (or any portion thereof) after
the Distribution Record Date for such distribution shall be entitled to receive
upon such conversion, in addition to the shares of Common Stock issuable upon
such conversion (the "Conversion Shares"), a number of rights or warrants to be
determined as follows: (i) if such conversion occurs on or prior to the date for
the distribution to the holders of such rights or warrants of separate
certificates evidencing such rights or warrants (the "Distribution Date"), the
same number of rights or warrants to which a holder of a number of shares of
Common Stock equal to the number of Conversion Shares is entitled at the time of
such conversion in accordance with the terms and provisions of and applicable to
such rights or warrants; and (ii) if such conversion occurs after the
Distribution Date, the same number of rights or warrants to which a holder of
the number of shares of Common Stock into which the principal amount of the
Security so converted was convertible immediately prior to the Distribution Date
would have been entitled on the Distribution Date in accordance with the terms
and provisions of, and applicable to such rights or warrants.
For purposes of this Section 12.4(4) and Sections 12.4(1) and (2), any
dividend or distribution to which this Section 12.4(4) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 12.4(4) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
12.4(1) and (2) with respect to such dividend or distribution shall then be
made), except (A) the Distribution Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution" and "the date fixed for
such determination" within the meaning of Sections 12.4(1) and (2) and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed
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"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 12.4(1).
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding (x) any quarterly cash dividend
on the Common Stock to the extent the aggregate cash dividend per share of
Common Stock in any quarterly period does not exceed the greater of (A) the
amount per share of Common Stock of the next preceding quarterly cash dividend
on the Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 12.4(5)
(as adjusted to reflect subdivisions or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Prices (determined as set
forth in Section 12.4(8)) during the ten Trading Days immediately prior to the
date of declaration of such dividend, (y) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary and (z) any cash that is distributed as part of
a distribution requiring a Conversion Price adjustment pursuant to Section
12.4(4)), then, in such case, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Distribution Record
Date by a fraction of which the numerator shall be the Current Market Price of
the Common Stock on the Distribution Record Date less the amount of cash so
distributed (and not excluded as provided above) applicable to one share of
Common Stock and the denominator shall be such Current Market Price of the
Common Stock, such reduction to be effective immediately prior to the opening of
business on the day following the Distribution Record Date; provided, however,
that in the event the portion of the cash so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market Price of the
Common Stock on the Distribution Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted each Security on the Distribution Record
Date. In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been declared.
If any adjustment is required to be made as set forth in this Section 12.4(5) as
a result of a distribution that is a quarterly dividend, such adjustment shall
be based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 12.4(5) above as
a result of a distribution that is not a quarterly dividend, such adjustment
shall be based upon the full amount of the distribution.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that as of the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it may be
amended) that exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Price shall be
reduced so that the same
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shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of Common Stock outstanding (including any tendered or
exchanged shares) on the Expiration Time multiplied by the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
Common Stock outstanding (less any Purchased Shares) on the Expiration Time and
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event that
the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such tender or exchange offer had not been made.
(7) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary of the Company for an amount which increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board) at the last time (the "Tender Expiration Time") tenders
or exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds the Current Market Price per share of the Common
Stock on the Trading Day next succeeding the Tender Expiration Time, and in
which, as of the Tender Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Tender Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Tender Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Tender Expiration Time and the denominator shall be the sum
of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Tender Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Accepted Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Accepted Purchased Shares) on the Tender
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Tender Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Tender Expiration Time. In the event that such Person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such purchases or all
such purchases
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are rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such tender or exchange offer had not
been made. Notwithstanding the foregoing, the adjustment described in this
Section 12.4(7) shall not be made if, as of the Tender Expiration Time, the
offering documents with respect to such offer disclose a plan or intention to
cause the Company to engage in any transaction described in Article Seven.
(8) For purposes of this Section 12.4, the following terms shall have
the meaning indicated:
(a) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, in each case on the New York Stock
Exchange, or, if such security is not listed or admitted to trading on
such Exchange, on the principal security exchange or quotation system in
the United States on which such security is quoted or listed or admitted
to trading, or, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as
reported by the Nasdaq National Market or a similar generally accepted
reporting service, or if not so available, in such manner as furnished
by any New York Stock Exchange member firm selected from time to time by
the Board of Directors for that purpose, or a price determined in good
faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose determination
shall be conclusive.
(b) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading
Days immediately prior to the date in question; provided, however, that
(1) if the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution or Fundamental Change requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 12.4(1), (2), (3), (4), (5), (6) or (7) occurs
during such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by which
the Conversion Price is so required to be adjusted as a result of such
other event, (2) if the "ex" date for any event (other than the
issuance, distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
12.4(1), (2), (3), (4), (5), (6) or (7) occurs on or after the "ex" date
for the issuance or distribution requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, and
(3) if the "ex" date for the issuance, distribution or Fundamental
Change requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (1) or
(2) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any
cash and the fair market value (as determined by the Board of Directors
in a manner consistent with any determination of such value for purposes
of Section 12.4(4), (6)
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or (7) whose determination shall be conclusive and described in a
resolution of the Board of Directors) of the evidences of indebtedness,
shares of capital stock or assets being distributed applicable to one
share of Common Stock as of the close of business on the day before such
"ex" date. For purposes of any computation under Section 12.4(6) or (7),
the Current Market Price of the Common Stock on any date shall be deemed
to be the average of the daily Closing Prices per share of Common Stock
for such day and the next two succeeding Trading Days; provided,
however, that if the "ex" date for any event (other than the tender or
exchange offer requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 12.4(1), (2), (3), (4), (5),
(6) or (7) occurs on or after the Expiration Time or Tender Expiration
Time, as the case may be, for the tender or exchange offer requiring
such computation and prior to the day in question, the Closing Price for
each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted as
a result of such other event. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the Closing Price
was obtained without the right to receive such issuance or distribution,
(2) when used with respect to any subdivision or combination of shares
of Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, and (3) when used
with respect to any tender or exchange offer means the first date on
which the Common Stock trades regular way on such exchange or in such
market after the Expiration Time or Tender Expiration Time, as the case
may be, of such offer.
(c) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(d) "Distribution Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash, securities
or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(e) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange
or another national security exchange is open for business or (y) if the
applicable security is quoted on the Nasdaq National Market, a day on
which trades may be made on thereon or (z) if the applicable security is
not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which
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banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(9) No adjustment in the Conversion Price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such
price; provided, however, that any adjustments which by reason of this paragraph
(9) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Article shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be.
(10) The Company may, at its option, make such reductions in the
Conversion Price as the Board deems advisable, in addition to those required by
paragraphs (1), (2), (3), (4), (5), (6) or (7) of this Section 12.4 in order to
avoid or diminish any income tax to any holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution on Common
Stock (or rights to acquire such shares) or from any event treated as such for
income tax purposes, resulting from any dividend or distribution of shares or
issuance of rights or warrants to purchase or subscribe for shares or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is (i) at least twenty (20) days, (ii) the reduction is irrevocable
during the period and (iii) the Board shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall give notice of the reduction to the
Holders of Securities in the manner provided in Section 1.6 at least fifteen
(15) days prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which it
will be in effect.
(11) No adjustment of the Conversion Price will result in zero or a
negative number.
SECTION 12.5. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.4 and shall prepare a certificate signed by
the President, Treasurer, Chief Financial Officer or Vice President of
Finance of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall promptly be filed with the Trustee and
with each Conversion Agent; and
(2) a notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall promptly be
prepared and as soon as practicable
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thereafter, such notice shall be provided by the Company to all Holders
in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours. Unless and until the Trustee shall receive such certificate, it may
assume without inquiry that the Conversion Price has not been adjusted.
SECTION 12.6. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on all or substantially all of its Common Stock payable
(i) otherwise than exclusively in cash or (ii) exclusively in cash in an
amount that would require any adjustment pursuant to Section 12.4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights
that would require any adjustment pursuant to Section 12.4; or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common
Stock), or of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary of the Company shall commence a
tender offer for all or a portion of the Company's outstanding Common
Stock (or shall amend any such tender offer);
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record, expiration or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, (y) the date on which the right to make tenders under such tender
offer expires or
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(z) the date on which such reclassification, consolidation, merger, share
exchange, conveyance, transfer, sale, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of shares of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, share exchange, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up. If at the time
the Trustee shall not be the Conversion Agent, a copy of such notice and any
notice referred to in the following paragraph shall also forthwith be filed by
the Company with the Trustee.
The preceding paragraph to the contrary notwithstanding, the Company
shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6, notice of any tender
offer by the Company or any subsidiary of the Company for all or any portion of
the Common Stock at or about the time that such notice of tender offer is
provided to the public generally (such notice to be sent to all Holders within
five days after receipt of such notice by the Trustee or Conversion Agent from
the Company).
SECTION 12.7. Company to Provide Common Stock.
The Company shall ensure that the Company has, free from preemptive
rights, out of its authorized but unissued Common Stock, the full number of
shares of Common Stock for the purpose of effecting the conversion of
Securities.
SECTION 12.8. Taxes on Conversions.
The Company will pay any and all taxes and duties that may be payable in
respect of the issue or delivery of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax or
duty which may be payable in respect of any transfer involved in the issue and
delivery of Common Stock in a name other than that of the Holder of the Security
or Securities to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Company the
amount of any such tax or duty, or has established to the satisfaction of the
Company that such tax or duty has been paid.
SECTION 12.9. Company Covenant as to Common Stock.
The Company covenants that all Common Stock which may be delivered upon
conversion of Securities, upon such delivery, will have been duly authorized and
validly issued and will be fully paid and nonassessable and, except as provided
in Section 12.8, the Company will pay all taxes, liens and charges with respect
to the issue thereof.
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SECTION 12.10. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or its agent to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.
SECTION 12.11. Provision in Case of Consolidation, Merger, or Sale of Assets of
the Company.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding Common Stock of the Company) or any sale
or transfer of all or substantially all of the assets of the Company, the
Company and the Person formed by such consolidation or resulting from such
merger or which acquires such assets shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 12.1, to convert such Security only
into the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, sale or transfer by a holder of the number of shares
of Common Stock of the Company into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer,
assuming such holder of Common Stock of the Company (i) is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
(a "Constituent Person"), or an Affiliate of a Constituent Person, and (ii)
failed to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer is
not the same for each share of Common Stock of the Company held immediately
prior to such consolidation, merger, sale or transfer by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purposes of this Section 12.11 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by the
holders of each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section 12.11 shall similarly apply to
successive consolidations, mergers, sales or transfers. Notice of the execution
of such a supplemental indenture shall be given by the Company to the Holder of
each Security as provided in Section 1.6 promptly upon such execution.
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Neither the Trustee, any Paying Agent nor any Conversion Agent shall be
under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property or cash receivable by
Holders of Securities upon the conversion of their Securities after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Opinion of Counsel with
respect thereto, which the Company shall cause to be furnished to the Trustee.
SECTION 12.12. Responsibility of Trustee for Conversion Provisions.
The Trustee and any Conversion Agent shall not at any time be under any
duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same, or whether a supplemental indenture
need be entered into. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
Common Stock, or of any other securities or property or cash, which may at any
time be issued or delivered upon the conversion of any Security; and it or they
do not make any representation with respect thereto. Neither the Trustee,
subject to the provisions of Section 6.1, nor any Conversion Agent shall be
responsible for any failure of the Company to make or calculate any cash payment
or to issue, transfer or deliver any Common Stock or share certificates or other
securities or property or cash upon the surrender of any Security for the
purpose of conversion; and the Trustee and any Conversion Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
of the Company contained in this Article.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. Agreement of Subordination.
The Company covenants and agrees, and each Holder of Securities issued
hereunder by his acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article Thirteen;
and each Person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of, premium, if any, and interest on all
Securities (including, but not limited to, the Redemption Price with respect to
the Securities called for redemption in accordance with Article Eleven, or the
Repurchase Price with respect to Securities submitted for
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repurchase in accordance with Article Fourteen, as the case may be, as provided
in this Indenture and Additional Amounts, if any, and Liquidated Damages, if
any) issued hereunder shall, to the extent and in the manner hereinafter set
forth, be subordinated and subject in right of payment to the prior payment in
full in cash of all Senior Indebtedness of the Company, whether outstanding at
the date of this Indenture or thereafter incurred.
No provision of this Article Thirteen shall prevent the occurrence of
any default or Event of Default hereunder.
SECTION 13.2. Payments to Holders.
No payment shall be made with respect to the principal of, or premium,
if any, or interest on the Securities by the Company (including, but not limited
to, the Redemption Price with respect to the Securities to be called for
redemption in accordance with Article Eleven or the Repurchase Price with
respect to Securities submitted for repurchase in accordance with Article
Fourteen, as the case may be, as provided in this Indenture and Additional
Amounts, if any, and Liquidated Damages, if any), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 13.5, if:
(i) a default in the payment of principal, premium, interest,
rent or other obligations due on any Senior Indebtedness of the Company
has occurred and is continuing (or, in the case of Senior Indebtedness
of the Company for which there is a period of grace, in the event of
such a default that continues beyond the period of grace, if any,
specified in the instrument or lease evidencing such Senior Indebtedness
of the Company), unless and until such default shall have been cured or
waived or shall have ceased to exist; or
(ii) a default (other than a payment default but including any
default in the payment of principal, premium, interest, rent or other
obligations on Designated Senior Indebtedness that would be a payment
default but for the period of grace specified in such instrument or
lease) on Designated Senior Indebtedness occurs and is continuing that
then permits holders of such Designated Senior Indebtedness to
accelerate its maturity and the Trustee receives a notice of the default
(a "Payment Blockage Notice") from a Representative of Designated Senior
Indebtedness or a holder of Designated Senior Indebtedness or the
Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (unless such default was
waived, cured or otherwise
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ceased to exist and thereafter subsequently reoccurred) shall be, or be made,
the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:
(1) in the case of a payment default, the date upon which
the default is cured or waived or ceases to exist, or
(2) in the case of a default referred to in clause (ii)
above, the earlier of the date on which such default is cured or waived or
ceases to exist or 179 days after the date on which the applicable Payment
Blockage Notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated,
unless this Article Thirteen otherwise prohibits the payment or distribution at
the time of such payment or distribution (including without limitation, in the
case of default referred to in clause (ii) above, as a result of a payment
default with respect to the applicable Senior Indebtedness as a consequence of
the acceleration of the maturity thereof or otherwise).
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, moratorium of
payments, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness of the Company shall first be paid in
full in cash or other payment satisfactory to the holders of such Senior
Indebtedness of the Company, or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders of such Senior
Indebtedness of the Company before any payment is made on account of the
principal of, premium, if any, or interest (including Additional Amounts, if
any, or Liquidated Damages, if any) on the Securities by the Company (except
payments by the Company made pursuant to Article Four from monies deposited with
the Trustee pursuant thereto prior to commencement of proceedings for such
dissolution, winding-up, liquidation or reorganization); and upon any such
dissolution or winding-up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled, except for the provision of this Article Thirteen, shall
(except as aforesaid) be paid by the Company or by any receiver, trustee in
bankruptcy, moratorium of payments, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness of the Company held by such holders,
or as otherwise required by law or a court order) or their Representative or
Representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness of the Company may have
been issued, as their respective interests may appear, to the extent necessary
to pay all Senior Indebtedness of the
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Company in full, in cash or other payment satisfactory to the holders of such
Senior Indebtedness of the Company, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness of the
Company, before any payment or distribution is made to the Holders or to the
Trustee.
For purposes of this Article Thirteen, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Thirteen with
respect to the Securities to the payment of all Senior Indebtedness of the
Company which may at the time be outstanding; provided that (i) the Senior
Indebtedness of the Company is assumed by the new corporation, if any, resulting
from any reorganization or readjustment, and (ii) the rights of the holders of
Senior Indebtedness of the Company (other than leases which are not assumed by
the Company or the new corporation, as the case may be) are not, without the
consent of such holders, altered by such reorganization or readjustment. The
merger of the Company into another corporation or the liquidation or dissolution
of the Company following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article Seven shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 13.2
if such other corporation shall, as a part of such merger, conveyance or
transfer, comply with the conditions stated in Article Seven.
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest on the Securities by the Company (including, but not limited to, the
Redemption Price with respect to the Securities called for redemption in
accordance with Article Eleven or the Repurchase Price with respect to
Securities submitted for repurchase in accordance with Article Fourteen, as the
case may be, as provided in this Indenture and Additional Amounts, if any, and
Liquidated Damages, if any), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 13.5, until all
Senior Indebtedness of the Company has been paid in full in cash or other
payment satisfactory to the holders of Senior Indebtedness of the Company or
such acceleration is rescinded in accordance with the terms of this Indenture.
If payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness of the Company of
the acceleration.
In the event that, notwithstanding the foregoing provisions, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing, shall be received by the Trustee or the
Holders of the Securities before all Senior Indebtedness of the Company is paid
in full in cash or other payment satisfactory to the holders of such Senior
Indebtedness of the Company, or provision is made for such payment thereof in
accordance with its terms in cash or other payment satisfactory to the holders
of such Senior Indebtedness of the Company, such payment or distribution shall
be held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness of the Company or their Representative or
Representatives, or to the
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trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness of the Company may have been issued, as their
respective interests may appear, as calculated by the Company, for application
to the payment of all Senior Indebtedness of the Company remaining unpaid to the
extent necessary to pay all Senior Indebtedness of the Company in full in cash
or other payment satisfactory to the holders of such Senior Indebtedness of the
Company, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of such Senior Indebtedness of the
Company.
Nothing in this Article Thirteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.7. This Section 13.2 shall be
subject to the further provisions of Section 13.5.
SECTION 13.3. Subrogation of Securities.
Subject to the payment in full in cash of all Senior Indebtedness of the
Company, the Holders of the Securities shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Indebtedness of the
Company pursuant to the provisions of this Article Thirteen (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness of the Company
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness of the Company until the
principal, premium, if any, and interest on the Securities shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of the Company of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article Thirteen, and no payment over
pursuant to the provisions of this Article Thirteen, to or for the benefit of
the holders of Senior Indebtedness of the Company by Holders of the Securities
or the Trustee, shall, as between the Company, its creditors other than holders
of Senior Indebtedness of the Company, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness of the Company. It is understood that the provisions of this
Article Thirteen are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness of the Company, on the other hand.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of the Senior Indebtedness
of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture,
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subject to the rights, if any, under this Article Thirteen of the holders of
Senior Indebtedness of the Company in respect of cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article Thirteen, the Trustee, subject to the provisions of Section 6.1,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness of the Company and other Indebtedness of the Company, the amount
thereof or payable thereon and all other facts pertinent thereto or to this
Article Thirteen.
SECTION 13.4. Authorization to Effect Subordination.
Each Holder of a Security by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article Thirteen and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 5.4 hereof at least 30 days before the expiration of the
time to file such claim, the holders of any Senior Indebtedness of the Company
or their Representatives are hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Securities.
SECTION 13.5. Notice to Trustee.
The Company shall give prompt written notice in the form of an Officers'
Certificate to a Responsible Officer of the Trustee and to any Paying Agent of
any fact known to the Company which would prohibit the making of any payment of
monies deposited by the Company to or by the Trustee or any Paying Agent in
respect of the Securities pursuant to the provisions of this Article Thirteen.
Notwithstanding the provisions of this Article Thirteen or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
deposited by the Company to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article Thirteen, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office from the Company (in the form of an Officers'
Certificate) or a Representative of Senior Indebtedness or of a holder or
holders of Senior Indebtedness of the Company or from any trustee thereof; and
before the receipt of any such written notice, the Trustee shall be entitled in
all respects to assume that no such facts exist; provided that if on a date not
fewer than two Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any
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Security) the Trustee shall not have received, with respect to such monies, the
notice provided for in this Section 13.5, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies deposited by the Company and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such prior date.
Notwithstanding anything in this Article Thirteen to the contrary,
nothing shall prevent any payment by the Trustee to the Holders of monies
deposited with it pursuant to Section 4.1, and any such payment shall not be
subject to the provisions of Section 13.1 or 13.2.
The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Representative or a Person representing himself to be a holder of
Senior Indebtedness of the Company (or a trustee on behalf of such holder) to
establish that such notice has been given by a Representative or a holder of
Senior Indebtedness of the Company or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness of the Company held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article Thirteen,
and if such evidence is not furnished the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 13.6. Trustee's Relation to Senior Indebtedness of the Company.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Thirteen in respect of any Senior Indebtedness
of the Company at any time held by it, to the same extent as any other holder of
Senior Indebtedness of the Company, and nothing in this Indenture shall deprive
the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Thirteen, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness of the Company shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and the Trustee shall not be
liable to any holder of Senior Indebtedness of the Company if it shall pay over
or deliver to Holders of Securities, the Company or any other Person money or
assets to which any holder of Senior Indebtedness of the Company shall be
entitled by virtue of this Article Thirteen or otherwise.
SECTION 13.7. No Impairment of Subordination.
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No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
SECTION 13.8. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that the first
paragraph of Section 13.5 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
SECTION 13.9. Senior Indebtedness of the Company Entitled to Rely.
The holders of Senior Indebtedness of the Company (including, without
limitation, Designated Senior Indebtedness) shall have the right to rely upon
this Article Thirteen, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holders unless such holders
shall have agreed in writing thereto.
SECTION 13.10. Certain Conversions Deemed Payment.
For the purposes of this Article Thirteen only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Twelve shall not be deemed to constitute a payment or distribution on
account of the principal of (or premium, if any) or interest on Securities or on
account of the purchase or other acquisition of Securities, and (2) the payment,
issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to Section 12.2), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute payment on account
of the principal of such Security. For the purposes of this Section 13.10, the
term "junior securities" means (a) shares of any stock of any class of the
Company (including, without limitation, the Common Stock of the Company), or (b)
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness of the Company which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article. Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness of the Company
and the Holders, the right, which is absolute and unconditional, of the Holder
of any Security to convert such Security in accordance with Article Twelve.
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ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION
OF THE HOLDER UPON A FUNDAMENTAL CHANGE
SECTION 14.1. Right to Require Repurchase.
In the event that a Fundamental Change (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, to require
the Company to repurchase, and upon the exercise of such right the Company shall
repurchase, all of such Holder's Securities, or any portion of the principal
amount thereof that is equal to U.S.$1,000 or any integral multiple thereof
(provided that no single Security may be repurchased in part unless the portion
of the principal amount of such Security to be Outstanding after such repurchase
is equal to U.S.$1,000 or integral multiples of U.S.$1,000 in excess thereof),
on the date (the "Repurchase Date") that is 45 days after the date of the
Company Notice (as defined in Section 14.2) at the following prices (expressed
as percentages of the principal amount thereof) (the "Repurchase Price") in the
event of a Fundamental Change occurring during the 12-month period beginning
October 1 (plus interest accrued to, but excluding, the Repurchase Date):
<TABLE>
<CAPTION>
Year Repurchase Price
- ---- ----------------
<S> <C>
1997 106.0%
1998 104.8
1999 103.6
2000 102.4
2001 101.2
</TABLE>
and 100% at October 1, 2002; provided that if the Applicable Price with respect
to the Fundamental Change is less than the Reference Market Price, the Company
shall repurchase such Securities at a price equal to the foregoing Repurchase
Price multiplied by the fraction obtained by dividing the Applicable Price by
the Reference Market Price; and provided, further, that installments of interest
on Securities whose Stated Maturity is on or prior to the Repurchase Date shall
be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the Regular Record Date according to their
terms and the provisions of Section 3.7. Such right to require the repurchase of
the Securities shall not continue after a discharge of the Company from its
obligations with respect to the Securities in accordance with Article Four,
unless a Fundamental Change shall have occurred prior to such discharge.
Whenever in this Indenture (including Sections 2.2, 3.1, 5.1(1) and 5.8) there
is a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price is,
was or would be so payable at such time, and express mention of the Repurchase
Price in any provision of this Indenture shall not be construed as excluding the
Repurchase Price in those provisions of this Indenture when such express mention
is not made.
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SECTION 14.2. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, on or before the 30th day after
the occurrence of a Fundamental Change, the Company or, at the request and
expense of the Company, the Trustee, shall give to all Holders of Securities, in
the manner provided in Section 1.6, notice (the "Company Notice") of the
occurrence of the Fundamental Change and of the repurchase right set forth
herein arising as a result thereof. The Company shall also deliver a copy of
such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be
exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a Holder must
follow to exercise a repurchase right, and the place or places where such
Securities maturing after the Repurchase Date, are to be surrendered for payment
of the Repurchase Price and accrued interest, if any,
(5) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any, will become due and payable upon each such Security
designated by the Holder to be repurchased, and that interest thereon shall
cease to accrue on and after said date, and
(6) the Conversion Price then in effect, the date on which
the right to convert the principal amount of the Securities to be repurchased
will terminate and the place or places where such Securities may be surrendered
for conversion.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Security is to be repurchased in part,
the serial number thereof, the portion of the principal amount thereof to be
repurchased and the name of the Person in which the portion thereof to remain
Outstanding after such repurchase is to be registered) and a statement that an
election to exercise the repurchase right is being made thereby,
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and (ii) the Securities with respect to which the repurchase right is being
exercised. Such written notice shall be irrevocable, except that the right of
the Holder to convert the Securities with respect to which the repurchase right
is being exercised shall continue until the close of business on the Business
Day prior to the Repurchase Date.
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid to
the Trustee or the Paying Agent the Repurchase Price in cash, as provided above,
for payment to the Holder on the Repurchase Date together with accrued and
unpaid interest to the Repurchase Date payable with respect to the Securities as
to which their purchase right has been exercised; provided, however, that
installments of interest that mature on or prior to the Repurchase Date shall be
payable in cash, in the case of Securities, to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 6% per annum, and each Security shall remain convertible into Common
Stock until the principal of such Security (or portion thereof, as the case may
be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) All securities delivered for repurchase shall be delivered to
the Trustee, the Paying Agent or any other agents (as shall be set forth in the
Company Notice) to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.
SECTION 14.3. Merger, Consolidation, etc.
In the case of any merger, consolidation, sale or transfer of all or
substantially all of the assets of the Company to which Section 12.11 applies,
in which the Common Stock of the Company is changed or exchanged as a result
into the right to receive shares of stock and other securities or property or
assets (including cash) which includes Common Stock of the Company or common
stock of another Person that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and such shares
constitute at the time such change or exchange becomes effective
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in excess of 50% of the aggregate fair market value of such shares of stock and
other securities, property and assets (including cash) (as determined by the
Company, which determination shall be conclusive and binding), then the Company
and the Person resulting from such merger or consolidation or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of Holders to cause the Company to repurchase the Securities following
a Fundamental Change, including without limitation the applicable provisions of
this Article Fourteen and the definitions of the Common Stock and Fundamental
Change, as appropriate, and such other related definitions set forth herein as
determined in good faith by the Company and the Company (which determination
shall be conclusive and binding), to make such provisions apply in the event of
a subsequent Fundamental Change to the common stock and the issuer thereof if
different from the Company and the Common Stock of the Company (in lieu of the
Company and Common Stock of the Company).
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of Securities as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that no such list need be furnished so long as the Trustee is
acting as Note Registrar.
SECTION 15.2. Trustee to Furnish Company Names and Addresses of Holders.
The Trustee will furnish or cause to be furnished to the Company, or to
Company's counsel:
(a) within 10 days from the date of this Indenture, an updated
Note Register,
(b) semi-annually, not more than 15 days after the Regular Record
Date, an updated Note Register, in such form as the Company may reasonably
require, of the names and addresses of the Holders of Securities as of such
Regular Record Date,
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(c) During the preparation, pendency and effectiveness of the
Shelf Registration Statement (described in the Registration Rights Agreement)
beginning thirty days after the date of this Indenture and until such time as
the Company is no longer required to maintain the effectiveness of such Shelf
Registration Statement, the Trustee shall provide the Company on the first and
fifteenth date of every month (unless such date is a weekend or holiday, and
then on the preceding Business Day) during such period with an updated copy of
the Note Register detailing the holders of the Securities for the preceding
week, and
(d) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that no such list need be furnished so long as the Trustee is
not acting as Note Registrar.
SECTION 15.3. Preservation of Information.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 15.1, if any, and
the names and addresses of Holders received by the Trustee in its capacity as
Note Registrar. The Trustee may destroy any list furnished to it pursuant to
Section 15.1 upon receipt of a new list so furnished.
(b) If and when this Indenture has become qualified under the
Trust Indenture Act, the rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
hereunder.
SECTION 15.4. Reports by Trustee.
(a) If and when this Indenture becomes qualified under the Trust
Indenture Act, the Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) If and when this Indenture becomes qualified under the Trust
Indenture Act, a copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the
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Company. The Company will notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 15.5. Reports by Company.
If and when this Indenture becomes qualified under the Trust Indenture
Act, the Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with
the Trustee within 15 days after the same is so required to be filed with the
Commission.
SECTION 15.6. Reports with Respect to Registration of Securities.
The Company shall provide to the Trustee a form of Selling
Securityholder Questionnaire, within forty-five (45) days of the date of this
Indenture. Within ten (10) Business Days following the receipt of such Selling
Securityholder Questionnaire, the Trustee shall deliver to each Holder of
Securities at such time a copy of the Selling Securityholder Questionnaire in
the form provided to the Trustee by the Company. Thereafter, and until such time
as the Company is no longer required to maintain the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights Agreement), the
Trustee shall deliver, upon request of any Holder of Securities, a Selling
Securityholder Questionnaire in the form provided to the Trustee by the Company.
---------------------
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 121
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
CYPRESS SEMICONDUCTOR CORPORATION
By _________________________________________________
Name: Emmanuel Hernandez
Title: Chief Financial Officer, Vice President,
Finance and Administration, and
Secretary
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., Trustee
By _________________________________________________
Name:
Title:
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<PAGE> 122
EXHIBIT A
Cypress Semiconductor Corporation
3901 North First Street
San Jose, CA 95134-1599
State Street Bank and Trust Company of California, N.A.
725 South Figueroa Street, Suite 3100
Los Angeles, California 90017
Gentlemen:
We are delivering this letter in connection with an offering of 6%
Convertible Subordinated Notes due 2002 (the "Notes") which are convertible into
shares of Common Stock, $.01 par value (the "Common Stock"), of Cypress
Semiconductor Corporation (the "Company").
We hereby confirm that:
1. we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933 (the "Securities
Act") or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the
Securities Act:
2. (A) any purchase of Notes by us will be for our own account
or for the account of one or more other institutional accredited
investors or as fiduciary for the account of one or more trusts, each of
which is an "accredited investor" within the meaning of Rule 501(a)(7)
under the Securities Act (such trusts, together with accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the
Securities Act, an "Institutional Accredited Investor") and for each of
which we exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3(a)(2) of the Securities Act, or a
"savings and loan association" or other institution described in Section
3(l)(5)(a) of the Securities Act that is acquiring Notes as fiduciary
for the account of one or more institutions for which we exercise sole
investment discretion;
3. in the event that we purchase any Notes, we will acquire
Notes having a minimum principal amount of not less than $250,000 for
our own account or for any separate account for which we are acting;
4. we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing the Notes; and
<PAGE> 123
5. we are not acquiring Notes with a view to distribution
thereof or with any present intention of offering or selling Notes or
the Common Stock issuable upon conversion thereof, except as permitted
below; provided that the disposition of our property and property of any
accounts for which we are acting as fiduciary shall remain at all times
within our control.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the shares of Common Stock issuable upon
conversion thereof have not been registered under the Securities Act, and we
agree, on our own behalf and on behalf of each account for which we acquire any
Notes, that if in the future we decide to resell or otherwise transfer such
Notes or the Common Stock issuable upon conversion thereof, such Notes or Common
Stock may be resold or otherwise transferred only (i) to the Company or any
subsidiary thereof, or (ii) inside the United States to a person who is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, or (iii) inside the
United States to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Trustee or transfer agent for such securities a
signed letter containing certain representations and agreements relating to the
restrictions on transfer of such securities (the form of which letter can be
obtained from such Trustee or transfer agent), or (iv) outside the United States
in a transaction meeting the requirements of Rule 904 under the Securities Act,
or (v) pursuant to the exemption from registration provided by Rule 144 under
the Securities Art (if applicable), or (vi) pursuant to a registration statement
which has been declared effective under the Securities Act (and which continues
to be effective at the time of such transfer), and in each case, in accordance
with any applicable securities laws of any State of the United States or any
other applicable jurisdiction and in accordance with the legends set forth on
the Notes or the Common Stock issuable upon conversion thereof, as the case may
be. We further agree to provide any person purchasing any of the Notes or the
Common Stock issuable upon conversion thereof other than pursuant to clause (vi)
above from us a notice advising such purchaser that resales of such securities
are restricted as stated herein. We understand that the Trustee for the Notes
and/or the transfer agent for the Common Stock will not be required to accept
for registration of transfer any Notes or any shares of Common Stock issued upon
conversion of the Notes except upon presentation of evidence satisfactory to the
Company that the foregoing restrictions on transfer have been complied with. We
further understand that any Notes and any certificates representing Common Stock
will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph other
than certificates representing Common Stock transferred pursuant to clause (vi)
above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
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<PAGE> 124
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
________________________________________
(Name of Purchaser)
By: _____________________________________
Name:
Title:
Address:
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<PAGE> 1
EXHIBIT 4.3
CYPRESS SEMICONDUCTOR CORPORATION
REGISTRATION RIGHTS AGREEMENT
Dated as of
September 15, 1997
Deutsche Morgan Grenfell Inc.
Prudential Securities Incorporated
Robertson, Stephens & Company LLC
c/o Deutsche Morgan Grenfell Inc.
51 West 52nd Street
New York, NY 10019
Ladies and Gentlemen:
Cypress Semiconductor Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to Deutsche Morgan Grenfell Inc.,
Prudential Securities Incorporated and Robertson, Stephens & Company LLC (the
"Initial Purchasers") upon the terms set forth in a purchase agreement dated
September 18, 1997 (the "Purchase Agreement") between the Initial Purchasers and
the Company, its 6% Convertible Subordinated Notes due 2002. As an inducement to
the Initial Purchasers to enter into the Purchase Agreement and in satisfaction
of a condition to the obligations of the Initial Purchasers thereunder, the
Company agrees with the Initial Purchasers, (i) for the benefit of the Initial
Purchasers and (ii) for the benefit of the Holders (as defined below) from time
to time of the Registrable Securities (as defined below), including the Initial
Purchasers, as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Offering Memorandum, dated September 18, 1997, in respect of
the Securities. As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Affiliate" of any specified Person means any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified Person. For purposes of this definition, control of
a Person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" shall mean this Registration Rights Agreement as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.
<PAGE> 2
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock, $0.01 par value, of the Company
and any other shares of common stock as may constitute "Common Stock" for
purposes of the Indenture.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b) hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Holder" shall mean any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" shall mean the Indenture, dated as of September 15, 1997,
between the Company and the Trustee thereunder, pursuant to which the Securities
are being issued, as amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Issue Date" means September 24, 1997.
"Liquidated Damages" has the meaning set forth in Section 2(c).
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Shelf 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.
"Registration Default" has the meaning set forth in Section 2(c) hereof.
"Registrable Security" shall mean any Restricted Security and any share
of Common Stock issuable upon conversion thereof except any such Restricted
Security or share of Common Stock which (i) has been effectively registered
under the Securities Act and sold in a manner contemplated by the Registration
Statement, (ii) has been transferred in compliance
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<PAGE> 3
with Rule 144 under the Securities Act (or any successor provision thereto), or
is transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto), or (iii) has otherwise been transferred and a new Security
or share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in accordance
with the Indenture.
"Registration Default" has the meaning set forth in Section 2(c).
"Restricted Securities" shall mean Securities required pursuant to the
Indenture to bear the restrictive legend set forth in Section 3.4(d) of the
Indenture.
"Rule 144" shall mean Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 144A" shall mean Rule 144A promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 415" shall mean Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 430A" shall mean Rule 430A promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Securities" shall mean the $175,000,000 aggregate principal amount of
6% Convertible Subordinated Notes due 2002 of the Company being issued pursuant
to the Indenture (together with up to $25,000,000 aggregate principal amount of
such convertible subordinated notes if, and to the extent, the Intial
Purchasers' over-allotment option is exercised).
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a shelf registration statement of
the Company pursuant to the provisions of Section 2 hereof filed with the
Commission which covers some or all of the Registrable Securities, as
applicable, on Form S-3 or other appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the Commission,
amendments and supplements to such registration statement, including
post-
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<PAGE> 4
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
"Special Counsel" means any special counsel to the Holders, determined
as provided in Section 4 hereof.
"Trust Indenture Act" has the meaning set forth in Section 1.1 of the
Indenture.
"Trustee" means the Trustee under the Indenture.
"underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION.
(a) The Company shall, within 90 calendar days following the
Issue Date, file with the Commission a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement and, thereafter, shall use its
reasonable efforts to cause such Shelf Registration Statement to be declared
effective under the Securities Act as soon as practicable, and in any event
within 180 calendar days after the Issue Date.
(b) The Company shall use its reasonable efforts:
(i) To keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part thereof
to be usable by Holders for a period of two years from the later
of a) the Issue Date or b) the last date of original issuance of
the Securities or such shorter period that will terminate upon
the earliest of the following: (A) when all the Securities
covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (B) when all shares
of Common Stock issued upon conversion of any such Securities
that had not been sold pursuant to the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement and (C) when there shall cease to be outstanding
Registrable Securities (in any such case, such period being
called the "Effectiveness Period"); and
(ii) After the effectiveness of the Shelf Registration
Statement, promptly upon the request of any Holder, to take any
action reasonably necessary to register the sale of any
Registrable Securities of such Holder and to identify such Holder
as a selling securityholder.
The Company shall be deemed not to have used its reasonable efforts to keep the
Shelf Registration Statement effective during the requisite period if the
Company voluntarily takes
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<PAGE> 5
any action that would result in Holders of Registrable Securities covered
thereby not being able to offer and sell any such Registrable Securities during
that period, unless (i) such action is required by applicable law, (ii) the
continued effectiveness of the Shelf Registration Statement would require the
Company to disclose a material financing, acquisition or other corporate
transaction, and the Board of Directors shall have determined in good faith that
such disclosure is not in the best interests of the Company and the holders of
its outstanding Common Stock, or (iii) the Board of Directors shall have
determined in good faith that there is a valid business purpose or reason for
such suspension, and (x), in the case of clause (i) above, the Company
thereafter promptly complies with the requirements of paragraph 3(i) below and
(y) the Company complies with its obligations, if any, to pay Liquidated
Damages.
(c) (1) If (i) on or prior to 90 days following the Issue Date a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the 180th day following the Issue Date, such Shelf Registration
Statement is not declared effective (each, a "Registration Default"), additional
interest ("Liquidated Damages") will accrue on the Restricted Securities from
and including the date following such Registration Default until such time as
such Shelf Registration Statement is filed or such Shelf Registration Statement
is declared effective, as the case may be. Liquidated Damages will be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date under the Indenture following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional one-quarter of one percent (0.25%) of the principal amount, to and
including the 90th day following such Registration Default and one-half of one
percent (0.50%) thereof from and after the 91st day following such Registration
Default. In the event that Shelf Registration Statement ceases to be effective
for more than 90 days or the Company suspends the use of the prospectus which is
a part thereof for more than 90 days, whether or not consecutive, during any
12-month period, then the interest rate borne by Restricted Securities will
increase by an additional one-half of one percent (0.50%) per annum from the
91st day of the applicable 12-month period such Shelf Registration Statement
ceases to be effective or the Company suspends the use of the prospectus which
is a part thereof, as the case may be, until the earlier of such time as (i) the
Shelf Registration Statement again becomes effective, (ii) the use of the
related prospectus ceases to be suspended or (iii) the Effectiveness Period
expires. Following the cure of all Registration Defaults relating to any
Restricted Securities, the accrual of Liquidated Damages with respect to such
Restricted Securities will cease (without in any way limiting the effect of any
subsequent Registration Default). In no event shall the Company be required to
pay Liquidated Damages in excess of the applicable maximum amount of one-half of
one percent (0.50%) set forth above, regardless of whether one or multiple
Registration Defaults exist.
(2) Liquidated Damages on the Restricted Securities shall
be paid by the Company to the holders of record of such Restricted Securities on
each Interest Payment Date (as defined in the Indenture) in the same manner as
for interest on such Restricted Securities as provided in the form of Securities
set forth in Section 2.2 of the Indenture.
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<PAGE> 6
(3) All of the Company's obligations set forth in this
Section 2(c) which are unsatisfied to any extent with respect to any Restricted
Security at the time such security ceases to be a Restricted Security shall
survive until such time as all such obligations with respect to such security
have been satisfied in full (notwithstanding the earlier termination of this
Agreement).
(4) Any payments due and payable pursuant to this Section
2(c) shall be subordinated to Senior Indebtedness (as defined in the Indenture)
to the extent and in the manner set forth in the Indenture.
(5) The rights of the recordholders of Restricted
Securities to Liquidated Damages as set forth in this Section 2(c) is not
intended to be exclusive of any other right or remedy, and shall be in addition
to every other right and remedy given hereunder or under the Indenture or now or
hereafter existing at law or in equity or otherwise.
3. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall furnish to the Special Counsel and Holders
(if requested), prior to the filing thereof with the Commission, a copy
of any Shelf Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and
shall use its reasonable efforts to reflect in each such document, when
so filed with the Commission, such comments as the Special Counsel and
Holders reasonably may propose.
(b) The Company shall take such action as may be necessary so
that (i) any Shelf Registration Statement and any amendment thereto and
any Prospectus forming part thereof and any amendment or supplement
thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with the
Securities Act and the Exchange Act, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming part
of any Shelf Registration Statement, and any amendment or supplement to
such Prospectus, does not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were
made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and, in
the case of clause (i), the Holders and, if requested by any Initial
Purchaser or any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and
when the Shelf
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<PAGE> 7
Registration Statement or any post effective amendment
thereto has become effective; and
(ii) of any request by the Commission for
amendments or supplements to the Shelf Registration
Statement or the Prospectus included therein or for
additional information.
(2) The Company shall advise the Holders and, if requested
by any such Holder, confirm such advice in writing of:
(i) the issuance by the Commission of any stop
order suspending effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) the receipt by the Company of any notification
with respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction
or the initiation of any proceeding for such purpose; and
(iii) the happening of any event that requires the
making of any changes in the Shelf Registration Statement
or the Prospectus so that, as of such date, the Shelf
Registration Statement and the Prospectus do not contain
an untrue statement of a material fact and do not omit to
state a material fact required to be stated therein or
necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which
they were made) not misleading (which advice shall be
accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(d) The Company shall use its reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(e) The Company shall furnish to the Special Counsel and each
Holder (if requested) with respect to a Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial statements
and schedules, and, if the Holder so requests in writing, all reports,
other documents and exhibits (including those incorporated by
reference).
(f) The Company shall, during the Effectiveness Period, deliver
to each Holder with respect to a Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary
Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder
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<PAGE> 8
may reasonably request, and the Company consents (except during the
continuance of any event described in Section 3(c)(2)(iii)) to the use
of the Prospectus or any amendment or supplement thereto by each of the
Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities pursuant to
any Shelf Registration Statement, the Company shall register or qualify
or cooperate with the Special Counsel and Holders in connection with the
registration or qualification of such Registrable Securities for offer
and sale under the securities or blue sky laws of such jurisdictions as
any such Holders reasonably request in writing and do any and all other
acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Registrable Securities covered by such Shelf
Registration Statement; provided, however, that in no event shall the
Company be obligated to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Section 3(g), (ii) file any general
consent to service of process in any jurisdiction where it is not as of
the date hereof then so subject or (iii) subject itself to taxation in
any jurisdiction if it is not so subject.
(h) Unless any Registrable Securities shall be in book-entry only
form, the Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to any Shelf Registration Statement free
of any restrictive legends and in such permitted denominations and
registered in such names as Holders may request in connection with the
sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document
so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
notifies the Holders of the occurrence of any event contemplated by
paragraph 3(c)(2)(iii) above, the Holders shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall provide a CUSIP number for the
Securities registered under such Shelf Registration Statement.
-8-
<PAGE> 9
(k) The Company shall use its reasonable efforts to comply with
all applicable rules and regulations of the Commission and shall make
generally available to their securityholders or otherwise provide in
accordance with Section 11(a) of the Securities Act as soon as
practicable after the effective date of the applicable Shelf
Registration Statement an earnings statement satisfying the provisions
of Section 11(a) of the Securities Act.
(l) The Company shall cause the Indenture and the Securities to
be qualified under the Trust Indenture Act in a timely manner; and in
connection with such qualification, the Company shall cooperate with the
Trustee under the Indenture and the Holders (as defined in the
Indenture) to effect such changes to the Indenture as may be required
for such Indenture to be so qualified in accordance with the terms of
the Trust Indenture Act; and the Company shall execute and use all
reasonable efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner.
(m) The Company may require each Holder with respect to a Shelf
Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of Registrable Securities held
by such Holder as may be required by applicable law or regulation for
inclusion in such Shelf Registration Statement (including, without
limitation, the information required by Item 507 of Regulation S-K of
the Securities Act), and the Company may exclude from such registration
the Registrable Securities of any Holder that fails to furnish such
information within a reasonable time after receiving such request
unless, and until such time as, such information is furnished by such
Holder.
(n) The Company shall enter into such customary agreements
(including underwriting agreements in customary form) to take all other
appropriate actions in order to expedite or facilitate the registration
or the disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into pursuant to an
underwritten offering in accordance with the provisions of Section 6,
cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 (or such other
provisions and procedures acceptable to the Managing Underwriters, if
any) with respect to all parties to be indemnified pursuant to Section
5.
(o) The Company shall make reasonably available for inspection by
one representative of the Holders designated in writing by the Holders
of a majority of the Registrable Securities to be registered thereunder,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent
retained by such representative or any such underwriter all relevant
financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries;
-9-
<PAGE> 10
(p) The Company shall cause the Company's officers, directors and
employees to make reasonably available for inspection all relevant
information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with any such
Shelf Registration Statement, in each case, as is customary for similar
due diligence examinations; provided, however, that any information that
is designated in writing by the Company, in good faith, as confidential
at the time of delivery of such information shall be kept confidential
by such representative, any Holders or any such underwriter, attorney,
accountant or agent, unless such disclosure is made in connection with a
court proceeding or required by law, or such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality;
(q) The Company will use its reasonable efforts to cause the
Common Stock issuable upon conversion of the Securities to be admitted
for quotation on the New York Stock Exchange or other stock exchange or
trading system on which the Common Stock primarily trades on or prior to
the effective date of any Shelf Registration Statement hereunder.
(r) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate
as a member of an underwriting syndicate or selling group or "assist in
the distribution" (within the meaning of the Rules of Fair Practice and
the By-Laws of the National Association of Securities Dealers, Inc.
("NASD")) thereof, whether as a Holder of such Registrable Securities or
as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such broker-dealer in complying
with the requirements of such Rules and By-Laws, including, without
limitation, by (A) such Rules or By-Laws, including Schedule E thereto,
shall so require, engaging a "qualified independent underwriter" (as
defined in Schedule E) to participate in the preparation of the Shelf
Registration Statement relating to such Registrable Securities and to
exercise usual standards of due diligence in respect thereto, (B)
indemnifying any such qualified independent underwriter to the extent of
the indemnification of underwriters provided in Section 5 hereof and (C)
providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the
Rules of Fair Practice of the NASD.
(s) The Company shall use its reasonable efforts to take all
other steps necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
(t) Notwithstanding any provision of this Section 3 to the
contrary, the Company shall not be required to amend or supplement the
Shelf Registration Statement pursuant to the requirements of Sections
3(b), 3(c), 3(i) or 3(s) hereof if (i) such amendment or supplement
would require the Company to disclose a material financing, acquisition
or corporate transaction and the Board of Directors shall have
-10-
<PAGE> 11
determined that such disclosure is not in the best interests of the
Company and the holders of its outstanding Common Stock or (ii) the
Board of Directors shall have determined in good faith that there is a
valid business purpose or reason for suspending the use of the
Prospectus included in such Shelf Registration Statement in accordance
with Section 3(i) hereof instead of making such amendment or supplement,
provided that in each such case the Company complies with its
obligations, if any, to pay Liquidated Damages.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section 6, the
Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall bear or
reimburse the Holders for the reasonable fees and disbursements of a Special
Counsel designated by the Company. For purposes of this Agreement, the Company
initially appoints Venture Law Group, as Special Counsel; provided that the
Holders of a majority of the Registrable Securities covered by the Shelf
Registration Statement have the right pursuant to this Agreement to substitute
another firm of counsel as Special Counsel under this Agreement.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any Shelf
Registration Statement, the Company shall indemnify and hold harmless each
Holder, the Initial Purchasers, each underwriter who participates in an offering
of Registrable Securities, each person, if any, who controls any of such parties
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and each of their respective directors, officers, employees,
trustees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, including any amounts paid in settlement of any
investigation, litigation, proceeding or claim, joint or several, as
incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto) covering Registrable Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, that the Company shall not be liable under
this clause (i) for any settlement of any action effected without its
written consent, which consent shall not be unreasonably withheld; and
(ii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the
Holders, such Holder or any underwriter (except to the extent otherwise
expressly provided in Section 5(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or
-11-
<PAGE> 12
body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under
subparagraph (i) of this Section 5(a);
provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder or any
underwriter in writing expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto). Any amounts advanced by the Company to an indemnified party pursuant
to this Section 5 as a result of such losses shall be returned to the Company if
it shall be finally determined by such a court in a judgment not subject to
appeal or final review that such indemnified party was not entitled to
indemnification by the Company.
(b) Each Holder shall agree, severally and not jointly, to indemnify and
hold harmless the Company, each underwriter who participates in an offering of
Registrable Securities and the other Holders and each of their respective
directors, officers (including each officer of the Company who signed the Shelf
Registration Statement), employees, trustees and agents and each Person, if any,
who controls the Company, any underwriter or any other Holder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all loss, liability, claim, damage and expense whatsoever
described in the indemnity contained in Section 5(a)(i) and (ii) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto); provided, however, that, no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers served on such indemnified
party, but failure to so notify an indemnifying party shall not relieve it of
any liability which it may have to the indemnified party otherwise than on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. If an indemnifying party so
elects within a reasonable time after receipt of such notice, such indemnifying
party, jointly with any other indemnifying party, may assume the defense of such
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action, provided that if any such indemnified party
reasonably determines that there may be legal defenses available to such
indemnified party which are different from or in addition to those available to
such indemnifying party or that representation of such indemnifying party and
any indemnified party by the same counsel would present a conflict of interest,
then such
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<PAGE> 13
indemnifying party or parties shall not be entitled to assume such defense. If
an indemnifying party is not entitled to assume the defense of such action as a
result of the proviso to the preceding sentence, counsel for such indemnifying
party shall be entitled to conduct the defense of such indemnifying party and
counsel for each indemnified party or parties shall be entitled to conduct the
defense of such indemnified party or parties. If an indemnifying party assumes
the defense of an action in accordance with and as permitted by the provisions
of this paragraph, such indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying party or parties
be liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from its own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Holders
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and the Holders, as incurred; provided that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company, on the one
hand, and the Holders, on the other hand, such parties shall contribute to such
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company, on the one hand, and
the Holders, on the other hand, with respect to the statements or omissions
which resulted in such loss, liability, claim, damage or expense, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and of the Holders, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or by or on behalf of the Holders, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Initial Purchasers agree, and the Holders shall agree, that it would not be
just and equitable if contribution pursuant to this Section 5 were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account the relevant equitable considerations. For purposes of
this Section 5(d), each director, officer, employee, trustee, agent and Person,
if any, who controls a Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such Holder, and each director, officer, employee, trustee and agent of the
Company, and each Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent.
-13-
<PAGE> 14
(e) The Company may require, as a condition to including any Registrable
Securities in any Registration Statement filed and to entering into any
underwriting agreement with respect thereto, that the Company shall have
received an undertaking reasonably satisfactory to it from the Holder of such
Registrable Securities and from each underwriter named in any such underwriting
agreement, severally and not jointly, to comply with the provisions of
paragraphs (a) through (d) of this Section 5.
6. UNDERWRITTEN OFFERING. The Holders who desire to do so may sell
Registrable Securities in an underwritten offering. In any such underwritten
offering, the investment banker or bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto will be approved by the Holders of a majority of the
Registrable Securities to be included in such offering; provided, however, that
(i) such investment bankers and managers and underwriting arrangements must be
reasonably satisfactory to the Company and (ii) the Company shall not be
obligated to arrange for more than one underwritten offering during the
Effectiveness Period. No Holder may participate in any underwritten offering
contemplated hereby unless such Holder (a) agrees to sell such Holder's
Registrable Securities in accordance with any approved underwriting
arrangements, (b) completes and executes all reasonable questionnaires, powers
of attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements
and (c) at least 20% of the outstanding Registrable Securities are included in
such underwritten offering. The Holders participating in any underwritten
offering shall be responsible for any expenses customarily borne by selling
securityholders, including underwriting discounts and commissions and fees and
expenses of counsel to the selling securityholders and shall reimburse the
Company for the fees and disbursements of their counsel, their independent
public accountants and any printing expenses incurred in connection with such
underwritten offerings. Notwithstanding the foregoing or the provisions of
Section 6(a) hereof, upon receipt of a request from the Managing Underwriter or
a representative of Holders of a majority of the Registrable Securities
outstanding to prepare and file an amendment or supplement to the Shelf
Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Company in good faith has a valid business reason for
such delay.
The Company shall in connection with an underwritten offering in
accordance with the provisions of this Section:
(a) The Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing
Underwriters administering an underwritten offering of Registrable
Securities registered thereunder reasonably request to be included
therein and to which the Company does not reasonably object and shall
make all required filings of such Prospectus supplement or
post-effective amendment as soon
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<PAGE> 15
as practicable after they are notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;
(b) make such representations and warranties to the Holders and
the underwriters in form, substance and scope as are customarily made by
the Company to underwriters in primary underwritten offerings and
covering matters, including, but not limited to, those set forth in the
Purchase Agreement;
(c) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to each
Holder and the underwriters covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Holders and underwriters
(it being agreed that the matters to be covered by such opinion or
written statement by such counsel delivered in connection with such
opinions shall include in customary form, without limitation, as of the
date of the opinion and as of the effective date of the Shelf
Registration Statement or most recent post-effective amendment thereto,
as the case may be, the absence from such Shelf Registration Statement
and the prospectus included therein, as then amended or supplemented,
including the documents incorporated by reference therein, of an untrue
statement of a material fact or the omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading);
(d) obtain "cold comfort" letters and updates thereof from the
independent public accountants of the Company (and, if necessary, any
other independent public accountants of any subsidiary of the Company or
of any business acquired by the Company for which financial statements
and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each Holder and the underwriters
in customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with primary underwritten
offerings; and
(e) deliver such documents and certificates as may be reasonably
requested by any such Holders and the Managing Underwriters, including
those to evidence compliance with Section 3(i) and with any customary
conditions contained in the underwriting agreement or other agreement
entered into by the Company.
7. MISCELLANEOUS.
(a) Other Registration Rights. The Company may grant registration
rights that would permit any Person that is a third party the right to include
securities held by such Person on any Shelf Registration Statement, provided
that if the Managing Underwriter, if any, of such offering delivers an opinion
to the Holders that the total amount of securities which they and the holders of
such registration rights intend to include in any Shelf Registration Statement
is so large as to materially adversely affect the success of such offering
(including
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<PAGE> 16
the price at which such securities can be sold), then only the amount, the
number or kind of securities to be offered for the account of holders of such
registration rights will be reduced to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount, number or
kind recommended by the Managing Underwriter prior to any reduction in the
amount of Registrable Securities to be included.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Deutsche Morgan Grenfell Inc.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by
such Holder to the Company in accordance with the provisions of
this Section 7(c);
(2) if to the Initial Purchasers, initially at the address
set forth in the Purchase Agreement;
(3) if to the Company, initially at its address set forth
in the Purchase Agreement; and
(4) if to the Special Counsel, the address given by such
Special Counsel to the Company in accordance with the provisions
of this Section 7(c).
All such notices and communications shall be deemed to have been duly given when
received.
The Initial Purchasers, the Company and the Special Counsel by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Registrable Securities.
The Company hereby agrees to extend the benefits of this Agreement to any Holder
of Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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<PAGE> 17
(f) Headings. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, United States of
America, without giving effect to any provisions relating to conflicts of laws.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
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<PAGE> 18
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
CYPRESS SEMICONDUCTOR CORPORATION
By: ____________________________________________
Name: Emmanuel Hernandez
Title: Chief Financial Officer, Vice President,
Finance and Administration, and Secretary
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
DEUTSCHE MORGAN GRENFELL INC.
PRUDENTIAL SECURITIES INCORPORATED
ROBERTSON, STEPHENS & COMPANY LLC
Acting severally on behalf of themselves and the
several Initial Purchasers named herein.
By: DEUTSCHE MORGAN GRENFELL INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
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<PAGE> 1
EXHIBIT 5.1
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
TELEPHONE 415-493-9300 FACSIMILE 415-493-6811
WWW.WSGR.COM
JOHN ARNOT WILSON
RETIRED
December 19, 1997
Cypress Semiconductor Corporation
3901 North First Street
San Jose, CA 95134-1599
Re: REGISTRATION STATEMENT ON FORM S-3
----------------------------------
Ladies and Gentlemen:
We are acting as counsel for Cypress Semiconductor Corporation, a Delaware
corporation (the "Company") in connection with the registration under the
Securities Act of 1933, as amended, of $175,000,000 aggregate principal amount
of 6% Convertible Subordinated Notes due 2002 (the "Notes"), and such
indeterminate number of shares of Common Stock, $0.01 par value (the "Common
Stock"), of the Company, as may be required for issuance upon conversion of the
Notes (the "Conversion Shares"). The Notes and the Conversion Shares are to be
offered and sold by certain securityholders of the Company (the "Selling
Securityholders"). In this regard we have participated in the preparation of a
Registration Statement on Form S-3 relating to the Notes and the Conversion
Shares. (Such Registration Statement, as it may be amended from time to time, is
herein referred to as the "Registration Statement").
We are of the opinion that the Notes have been duly authorized and are
binding obligations of the Company entitled to the benefits of the Indenture
dated as of September 15, 1997, between the Company and State Street Bank and
Trust Company of California, N.A., as Trustee. We are of the further opinion
that the Conversion Shares have been duly authorized and, when issued by the
Company upon conversion of the Notes in accordance with the Indenture, will be
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION> Nine Months Ended
Fiscal Year ---------------------
------------------------------------------------------- Sept. 30, Sept. 29,
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
(in thousands, except ratio data)
<S> <C> <C> <C> <C> <C> <C> <C>
Pretax Income (Loss) from Continuing $(32,928) $12,567 $80,115 $161,384 $83,505 $81,448 $27,934
Operations:
Loss Recognized on Investment in Less than 50%
Owned Person Accounted for under the Equity
Method 0 0 0 0 0 321
Minority Interest in the Loss of Majority-Owned
Subsidiary 0 (967) 0 0 (1,539) 0 (450)
-------- -------- -------- -------- -------- -------- --------
(32,928) 11,600 80,115 161,384 81,966 81,448 27,805
-------- -------- -------- -------- -------- -------- --------
Fixed Charges:
Interest Expense and Amortization of Debt
Discount 0 289 4,041 6,239 6,895 4,545 4,043
Amortization of Debt Expense 0 0 278 414 414 310 1,757
Appropriate Portion of Rent Expense Related
to Interest Charges 0 1,220 1,651 1,998 2,569 1,927 3,038
-------- -------- -------- -------- -------- -------- --------
Total Fixed Charges 0 1,509 5,970 8,651 9,878 6,782 8,838
-------- -------- -------- -------- -------- -------- --------
Earnings (Loss) Before Income Taxes, Loss on
Investment Accounted for Under Equity
Method, Minority Interest, and Fixed Charges $(32,928) $13,109 $86,085 $170,035 $91,844 $ 88,230 $36,643
-------- -------- -------- -------- -------- -------- --------
Ratio of Earnings to Fixed Charges N/A(A) 8.7x 14.4x 19.7x 9.3x 13.0x 4.1x(B)
======== ======== ======== ======== ======== ======== ========
</TABLE>
(A) For the fiscal year ended December 28, 1992, earnings were insufficient to
cover fixed charges by $30.9 million.
(B) The calculation for the nine month period ended September 29, 1997
includes a $1.6 million write-off of unamortized debt issuance costs
related to the March 1997 redemption of the 1994 Convertible Subordinated
Notes. Excluding this write-off, earnings to fixed charges ratio would
have been 5.1x for the nine month period ended September 29, 1997.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 20, 1997 (except as to Note 8, which is as of February 25, 1997)
appearing on page 35 of Cypress Semiconductor Corporation's Annual Report on
Form 10-K for the year ended December 30, 1996. We also consent to the
references to us under the headings "Experts" in such Prospectus.
Price Waterhouse LLP
San Jose, California
December 19, 1997
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
<PAGE> 1
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [X]
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
- --------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
UNITED STATES
- --------------------------------------------------------------------------------
(Jurisdiction of incorporation or organization if not a U.S. national bank)
06-1143380
- --------------------------------------------------------------------------------
(IRS Employer Identification No.)
725 SOUTH FIGUEROA STREET, SUITE 3100, LOS ANGELES, CALIFORNIA
- --------------------------------------------------------------------------------
(Address of principal executive offices)
90017
- --------------------------------------------------------------------------------
(Zip Code)
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
725 SOUTH FIGUEROA STREET, SUITE 3100, LOS ANGELES, CALIFORNIA, 90017
213-362-7338
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
CYPRESS SEMICONDUCTOR CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Obligor as specified in its charter)
DELAWARE
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
94-2885898
- --------------------------------------------------------------------------------
(IRS Employer Identification No.)
3901 NORTH FIRST STREET
SAN JOSE, CALIFORNIA
- --------------------------------------------------------------------------------
(Address of principal executive offices)
95134-1599
- --------------------------------------------------------------------------------
(Zip code)
6% CONVERTIBLE SUBORDINATED NOTES DUE 2002
(PROPOSED MAXIMUM AGGREGATE OFFERING PRICE OF $175,000,000)
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
(a) The trustee is subject to the supervision of the Comptroller of the
Currency, Western District Office, 50 Fremont Street, Suite 3900,
San Francisco, CA 94105-2292.
(b) The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with the obligor.
The Trustee is not affiliated with the obligor.
No responses are included for Items 3-15 of this Form T-1 because the obligor is
not in default on securities issued under indentures under which State Street
Bank and Trust Company of California, N.A. is trustee.
Item 16. List of Exhibits.
1. Articles of Association of State Street Bank and Trust Company of
California, N.A.*
2. Certificate of Corporate Existence (with fiduciary powers) from the
Comptroller of the Currency, Administrator of National Banks.*
3. Authorization of the Trustee to exercise fiduciary powers (included
in Exhibits 1 and 2; no separate instrument).
4. By-laws of State Street Bank and Trust Company of California, N.A.*
5. Consent of State Street Bank and Trust Company of California, N.A.
required by Section 321(b) of the Act.*
6. Consolidated Report of Income at the close of business March 31,
1997, Federal Financial Institutions Examination Council,
Consolidated Reports of Condition and Income for A Bank With Domestic
Offices Only and Total Assets of Less Than $100 Million - FEI 034.**
* The indicated documents have been filed as exhibits with
corresponding exhibit numbers to the Form T-1 of Oasis Residential,
Inc., filed pursuant to Section 305(b)(2) of the Act, filed with the
Securities and Exchange Commission on November 18, 1996 (Registration
No. 033-90488), and are incorporated herein by reference.
** The indicated document was filed as an exhibit with a corresponding
exhibit number to the Form T-1 filed as Exhibit 25 to a Registration
Statement on Form S-4 of Silicon Graphics, Inc., filed with the
Securities and Exchange Commission on July 30, 1997 (Registration
No. 333-32379), and is incorporated herein by reference.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee,
State Street Bank and Trust Company of California, N.A., organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Los Angeles, and State of California, on the
19th day of December, 1997.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
By: /s/ Jeanie Mar
---------------------------------
Jeanie Mar
Assistant Vice President
-3-
