<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 29, 1999
REGISTRATION NO. 333-67203
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CYPRESS SEMICONDUCTOR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-2885898
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
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)
COPIES TO:
JOHN A. FORE, ESQ.
WILSON SONSINI GOODRICH & ROSATI
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
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, please 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. [ ]
CALCULATION OF REGISTRATION FEES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED SHARE(4) OFFERING PRICE(1)(2) REGISTRATION FEE(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock, $0.01 par value..... -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value........ -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Debt Securities...................... -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Rule 415 Shelf............. 273,996,250 76,171
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value(4)..... 2,840,000 $9.15625 26,003,750(5) 7,229
- -----------------------------------------------------------------------------------------------------------------------------------
Total....................... $300,000,000 $83,400
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Or (i) if any Debt Securities are issued as an original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price equal to the amount to be registered or (ii) if any Debt Securities
are issued with a principal amount denominated in a foreign currency or
composite currency, such principal amount as shall result in an aggregate
initial offering price equivalent thereto in United States dollars at the
time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o) and, for the selling stockholder
information, Rule 457(a). Exclusive of accrued interest, if any, on the Debt
Securities.
(3) Registration fee previously paid.
(4) Represents shares to be sold by selling stockholders.
(5) Based on the average of the high and low sale prices of the Registrant's
Common Stock as reported on the New York Stock Exchange on March 26, 1999.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. WE CANNOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
SUPPLEMENT IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES, IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 29, 1999
PROSPECTUS SUPPLEMENT
TO PROSPECTUS DATED MARCH , 1999
- --------------------------------------------------------------------------------
7,600,000 SHARES
LOGO
CYPRESS SEMICONDUCTOR CORPORATION
COMMON STOCK
- --------------------------------------------------------------------------------
We are selling 4,760,000 shares of Cypress common stock and UBS AG and
Deutsche Bank Securities Inc. are selling a total of 2,840,000 shares of Cypress
common stock. We will not receive any of the proceeds from the shares of common
stock sold by the selling stockholders.
The underwriter is offering the shares on a firm commitment basis.
You should read this prospectus supplement together with the prospectus
that is to be delivered to you with this prospectus supplement.
Our common stock is traded on the New York Stock Exchange under the symbol
"CY". The last reported sale price of the common stock on the New York Stock
Exchange Composite Transactions Tape on March 26, 1999 was $8.9375 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 3 OF
THE PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C> <C>
PROCEEDS TO
UNDERWRITING PROCEEDS TO SELLING
PRICE TO DISCOUNT CYPRESS STOCKHOLDERS
PUBLIC AND COMMISSION (BEFORE EXPENSES) (BEFORE EXPENSES)
- ------------------------------------------------------------------------------------------------------------------
Per Company Share............. $ $ $ $
- ------------------------------------------------------------------------------------------------------------------
Per Selling Stockholder
Share....................... $ $ $ $
- ------------------------------------------------------------------------------------------------------------------
Total......................... $ $ $ $
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
-------------------------
WARBURG DILLON READ LLC
<PAGE> 3
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING
AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE ON THE FRONT OF THIS PROSPECTUS SUPPLEMENT.
-------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
Selling Stockholders........................................ S-3
Use of Proceeds............................................. S-3
Underwriting................................................ S-4
Legal Matters............................................... S-5
PROSPECTUS
Summary..................................................... 2
Risk Factors................................................ 3
Where You Can Find More Information......................... 10
Use of Proceeds............................................. 11
Ratio of Earnings to Fixed Charges.......................... 11
Description of The Debt Securities.......................... 11
Description of Capital Stock................................ 23
Plan of Distribution........................................ 25
Legal Matters............................................... 26
Experts..................................................... 26
</TABLE>
S-2
<PAGE> 4
SELLING STOCKHOLDERS
Of the 2,840,000 shares to be offered by the selling stockholders, 840,000
were originally issued to them pursuant to original settlement terms of certain
put options held by them in reliance on an exemption from the registration
requirements under Section 3(a)(9) of the Securities Act of 1933. We are
registering those shares of the selling stockholders as required by registration
rights agreements between us and the selling stockholders. Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect to
securities. Unless otherwise indicated below, the persons and entities named in
the table have sole investment power with respect to all shares beneficially
owned, subject to community property laws where applicable.
The table below indicates the number of shares of our common stock that the
selling stockholders may sell using this prospectus supplement.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED AFTER OFFERING
OWNED PRIOR TO NUMBER OF SHARES --------------------
NAME OF BENEFICIAL OWNER OFFERING BEING OFFERED NUMBER PERCENT
------------------------ ------------------- ---------------- ------- -------
<S> <C> <C> <C> <C>
UBS AG............................ 2,815,000 2,815,000 0 0
Deutsche Bank Securities Inc...... 125,000 25,000 100,000 *
</TABLE>
- ---------------
* Less than one percent.
USE OF PROCEEDS
The net proceeds to Cypress from the sale of 4,760,000 shares of common
stock are estimated to be approximately $ million after deducting the
underwriting discount and commission and the estimated offering expenses payable
by Cypress.
The net proceeds from the sale of securities will be used for general
corporate purposes, including capital expenditures and working capital needs. We
expect from time to time to evaluate the acquisition of businesses, products and
technologies for which a portion of the net proceeds may be used. Currently,
however, we do not have any understandings, commitments or agreements with
respect to any material acquisitions for which a portion of the net proceeds may
be used. Pending such uses, we will invest the net proceeds in interest-bearing
securities.
S-3
<PAGE> 5
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated March , 1999, we and the selling stockholders have agreed to
sell to Warburg Dillon Read LLC 7,600,000 shares of common stock. The
underwriter expects to deliver the shares of common stock to purchasers on or
about April , 1999 against payment in immediately available funds.
The underwriting agreement provides that the underwriter is obligated to
purchase all the shares of common stock in the offering if any are purchased.
The underwriter proposes to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus supplement at
that price and to certain dealers at such price less a concession of $ per
share. The underwriter may allow a discount of $ per share on sales to other
broker/dealers. After the public offering of the common stock, the public
offering price and concession and discount to dealers may be changed by the
underwriter. The underwriter may from time to time increase or decrease the
public offering price after the initial public offering to such extent as it may
determine.
The following table summarizes the compensation and estimated expenses we
and the selling stockholders will pay. Under the registration rights agreements
requiring us to register shares of common stock held by the selling
stockholders, we have agreed to indemnify the selling stockholders against
certain liabilities under the Securities Act and to pay certain fees relating to
the sale of the shares, including the underwriting discount and commission paid
by the selling stockholders as set forth below.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- ---------
<S> <C> <C>
Underwriting discount and commission paid by us............. $ $
Expenses payable by us...................................... $ $
Underwriting discount and commission paid by the selling
stockholders.............................................. $ $
</TABLE>
We and certain of our executive officers have agreed not to offer, sell,
contract to sell, announce our intention to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to any additional
shares of our common stock or securities convertible into or exchangeable or
exercisable for any shares of our common stock without the prior written consent
of Warburg Dillon Read LLC for a period of thirty days after the date of this
prospectus supplement, except in our case issuances as a result of the
following:
- the grant of stock options and issuance of stock under any incentive
stock plan in effect on the date of this prospectus supplement;
- the issuance of stock on exercise, conversion or exchange of any options,
warrants, notes or other securities outstanding on the date of this
prospectus supplement;
In addition, none of the foregoing will apply to us in connection with any
acquisition of a business, corporation, products, or technology.
We have agreed to indemnify the underwriter against certain liabilities
under the Securities Act or contribute to payments which the underwriter may be
required to make in that respect.
In connection with this offering, the underwriter and its affiliates may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the shares. These transactions may include stabilization transactions
undertaken in accordance with Rule 104 of Regulation M, under which Rule the
underwriter and its affiliates may bid for or purchase shares for the purpose of
stabilizing their market price. The underwriter also may create a short position
for the account of the underwriter by selling more shares in connection with
this offering than they are committed to purchase from us, and in that case may
purchase shares in the open market following completing of this offering to
cover that short position. Any of the transactions described in this paragraph
may result in the maintenance of the price of the shares at a level above that
which might otherwise prevail in the open market. None of the transactions
described in this paragraph is required, and, if they are undertaken, they may
be discontinued at any time.
S-4
<PAGE> 6
The underwriter or its affiliates have provided and will in the future
continue to provide banking and other financial services to us for which they
received and will receive customary compensation.
Warburg Dillon Read LLC is an indirect wholly owned subsidiary of UBS AG,
one of the selling stockholders. Because UBS AG will receive more than 10% of
the net proceeds of the offering, the offering will be made in compliance with
Rule 2710(c)(8) of the Conduct Rules of the National Association of Securities
Dealers, Inc.
UBS AG, as an affiliate of Warburg Dillon Read LLC, is an "underwriter"
under Section 2(a)(11) of Securities Act. Deutsche Bank Securities Inc., as a
selling stockholder, may be deemed to be an "underwriter" under Section 2(a)(11)
of the Securities Act.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered by this
prospectus supplement will be passed upon for Cypress and the selling
stockholders by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo
Alto, California. Certain legal matters in connection with the offering will be
passed upon for the underwriter by Gibson, Dunn & Crutcher LLP, New York, New
York.
S-5
<PAGE> 7
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE CANNOT
SELL THE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES, IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 29, 1999
PROSPECTUS
CYPRESS SEMICONDUCTOR CORPORATION
-------------------------
$300,000,000
-------------------------
BY THIS PROSPECTUS, WE MAY OFFER --
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
-------------------------
SEE "RISK FACTORS" ON PAGE 3 FOR INFORMATION YOU SHOULD CONSIDER BEFORE
BUYING THE SECURITIES.
-------------------------
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
-------------------------
This prospectus may not be used to offer and sell securities unless
accompanied by a prospectus supplement.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
This prospectus is dated , 1999
<PAGE> 8
SUMMARY
PROSPECTUS SUPPLEMENT
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we may, over the next two years,
sell any combination of securities described in this prospectus in one or more
offerings up to a total dollar amount of $300,000,000. This prospectus provides
you with a general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described below under the heading "Where You Can Find More
Information."
OFFICES AND PLACE OF INCORPORATION
Cypress Semiconductor Corporation is an international supplier of
high-performance integrated circuits with worldwide headquarters in San Jose. We
commenced operations in 1982 and were incorporated in California in December
1982. In February 1987, we were reincorporated in Delaware. Our principal
executive offices are located at 3901 North First Street, San Jose, California
95134. Our telephone number is (408) 943-2600. Our Internet address is
http://www.cypress.com.
THE SECURITIES WE MAY OFFER
We may offer up to $300,000,000 of any of the following securities: debt
securities, preferred stock and common stock. The prospectus supplement will
describe the specific amounts, prices and terms of these securities.
Debt Securities
We may offer unsecured general obligations in the form of either senior or
subordinated debt. Senior debt includes our notes, debt and guarantees, which
are for money borrowed and not subordinated. Subordinated debt, designated at
the time it is issued, is entitled to interest and principal payments after the
senior debt payments.
The senior and subordinated debt will be issued under separate indentures
between us and State Street Bank and Trust Company of California, N.A., as
trustee. We have summarized the general features of the debt from the
indentures. We encourage you to read the indentures, which are exhibits to our
registration statement on Form S-3, file no. 333-67203, and the documents listed
below under the heading "Where You Can Find More Information."
Preferred Stock
We may issue preferred stock in one or more series and will determine the
dividend, voting, and conversion rights, and other provisions at the time of
sale.
Common Stock
Common stock holders are entitled to receive dividends declared by the
Board of Directors, subject to rights of preferred stock holders. Currently, we
do not pay a dividend. Each holder of common stock is entitled to one vote per
share. The holders of common stock have no preemptive rights or cumulative
voting rights.
2
<PAGE> 9
RISK FACTORS
You should carefully consider the risks described below before
participating in this offering. If any of the following risks actually occur,
our business financial condition and operating results could be materially
adversely affected, the trading price of our common stock could decline, and you
might lose all or part of your investment.
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipate," "believes," "expects,"
"future," "intends" and similar expressions to identify forward-looking
statements. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Our actual
results could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks described below and elsewhere
in this prospectus.
CYPRESS' FUTURE OPERATING RESULTS ARE VERY LIKELY TO FLUCTUATE AND THEREFORE MAY
FAIL TO MEET EXPECTATIONS.
Cypress' operating results have varied widely in the past, and may continue
to fluctuate in the future. In addition, our operating results may not follow
any past trends. Our future operating results will depend on many factors and
may fluctuate and fail to meet the expectations of the company or others for a
variety of reasons set forth in these risk factors. Any downward fluctuation or
failure to meet expectations will likely adversely affect the value of your
investment in our stock. The factors we believe make our results more likely to
fluctuate, and difficult to predict, than results of a typical, non-technology
company our size and age, and which are therefore most likely to produce
departure from expectations, include:
- the intense competitive pricing pressure to which our products are
subject, which can lead to rapid and unexpected declines in average
selling prices;
- the complexity of our manufacturing processes and the sensitivity of our
production costs to declines in manufacturing yields, which make yield
problems both possible and costly when they occur;
- the need for constant, rapid new product introductions which present an
ongoing design and manufacturing challenge significantly impacted by even
relatively minor errors, and which may never achieve expected market
demand.
As a result of these or other factors we could fail to achieve our expectations
as to future revenues, gross profit and income from operations. Also, the
performance of the semiconductor industry as a whole is characterized by
cyclical swings in revenue and profitability and these swings may adversely
impact Cypress.
Since we recognize revenues from sales to our domestic distributors only
when these distributors make a sale to customers, we are highly dependent on the
accuracy of their resale estimates. The occurrence of inaccurate estimates also
contributes to the difficulty in predicting our quarterly revenue and results of
operations, particularly in the last month of the quarter.
CYPRESS FACES PERIODS OF INDUSTRY-WIDE SEMICONDUCTOR OVERSUPPLY WHICH HARM ITS
RESULTS.
The semiconductor industry has historically been characterized by wide
fluctuations in the demand for, and supply of, its products, and these
fluctuations have helped produce many occasions when supply and demand for the
industry's products are not in balance. In the past, our operating results have
been adversely affected by these industry-wide fluctuations in the demand for
semiconductors, which have resulted in under-utilization of our manufacturing
capacity. In some cases, industry downturns with these characteristics have
lasted more than a year. If these cycles continue, they will materially and
adversely affect our business, financial condition and results of operations.
3
<PAGE> 10
CYPRESS' FINANCIAL RESULTS COULD BE ADVERSELY IMPACTED IF THE MARKETS IN WHICH
IT SELLS ITS PRODUCTS DO NOT GROW.
Cypress' continued success depends in large part on the continued growth of
various electronics industries that use our semiconductors, including the
following industries:
- data communications and telecommunications equipment;
- computers and computer related peripherals;
- automotive electronics;
- industrial controls; and
- customer electronics equipment and military equipment.
A significant portion of our products are incorporated into data
communications and telecommunication end-products. Any decline in the demand for
networking applications, mass storage, telecommunications, cellular base
stations, cellular handsets and other personal communication devices which
incorporate our products could adversely affect our business, financial
condition and operating results. In addition, certain of our products, including
Universal Serial Bus micro-controllers, high frequency clocks and static RAMs,
are incorporated into computer and computer-related products, which have
historically experienced significant fluctuations in demand. In addition, we may
be materially and adversely affected by slower growth in the other markets in
which we sell our products.
CYPRESS IS AFFECTED BY A GENERAL PATTERN OF PRODUCT PRICE DECLINE AND
FLUCTUATIONS WHICH CAN ADVERSELY IMPACT OUR BUSINESS.
Even in the absence of an industry downturn, the average selling prices of
our products historically have decreased during the products' lives, and we
expect this trend to continue. In order to offset these average selling price
decreases, we attempt to manufacture the products more cheaply, to generate
greater unit demand to reduce fixed costs per unit and to introduce new, higher
priced products that incorporate advanced features. If our efforts to achieve
these cost reductions, increased unit demand or new product introductions are
not successful or do not occur in a timely manner, or if our newly introduced
products do not gain market acceptance, our business, financial condition and
results of operations could be materially and adversely affected.
In addition to following the general pattern of decreasing average prices
referenced above, the selling prices for certain products, particularly
commodity static RAM products, fluctuate significantly with real and perceived
changes in the balance of supply and demand for these products. Growth in
worldwide supply of static RAMs in recent periods resulted in a decrease in
average selling prices for our products. In the event we are unable to decrease
per unit manufacturing costs faster than the rate at which average selling
prices continue to decline, our business, financial condition and results of
operations will be materially and adversely affected. In addition, we expect our
competitors to invest in new manufacturing capacity and achieve significant
manufacturing yield improvements in the future. These developments could
dramatically increase worldwide supply of static RAM products and associated
downward pressure on pricing.
CYPRESS MAY BE UNABLE TO ADEQUATELY PROTECT ITS INTELLECTUAL PROPERTY RIGHTS,
AND MAY FACE SIGNIFICANT EXPENSES AS A RESULT OF ONGOING, OR FUTURE, LITIGATION.
Protection of intellectual property rights is crucial to Cypress, since
that is how we keep others from copying the innovations which are central to our
existing and future products. So although we are not currently, we may become
involved in litigation to enforce our patents or other intellectual property
rights, to protect our trade secrets and know-how, to determine the validity or
scope of the proprietary rights of others, or to defend against claims of
invalidity. This kind of litigation can be expensive, regardless of whether we
win or lose.
4
<PAGE> 11
Also, Cypress is now and may again become involved in litigation relating
to alleged infringement by us of others' patents or other intellectual property
rights. This kind of litigation is frequently expensive to both the winning
party and the losing party and takes up large amounts of management's time and
attention. In addition, if we lose in this kind of litigation a court could
require us to pay substantial damages and/or royalties, prohibiting from using
essential technologies. For these and other reasons, this kind of litigation
could have a material adverse effect on our business, financial condition and
results of operations. Also, although we may seek to obtain a license under a
third party's intellectual property rights in order to bring an end to certain
claims or actions asserted against us, we may not be able to obtain such a
license on reasonable terms or at all.
We have entered into technology license agreements with third parties which
give those parties the right to use patents and other technology developed by
us, and which give us the right to use patents and other technology developed by
them. We anticipate that we will continue to enter into this kind of licensing
arrangements in the future; however, it is possible that licenses we want will
not be available to us on commercially reasonable terms. If we lose existing
licenses to key technology, or are unable to enter into new licenses which we
deem important, it could have a material adverse effect on our business,
financial condition and results of operations.
Because it is critical to our success that we are able to prevent
competitors from copying our innovations, we intend to continue to seek patent,
trade secret and mask work protection for our semiconductor manufacturing
technologies. The process of seeking patent protection can be long and
expensive, and we cannot be certain that any currently pending or future
applications will actually result in issued patents, or that, even if patents
are issued, they will be of sufficient scope or strength to provide meaningful
protection or any commercial advantage to us. Furthermore, others may develop
technologies that are similar or superior to our technology or design around the
patents we own. We also rely on trade secret protection for our technology, in
part through confidentiality agreements with our employees, consultants and
third parties. However, employees may breach these agreements, and we may not
have adequate remedies for any breach. In any case, others may come to know
about or determine our trade secrets through a variety of methods. In addition,
the laws of certain territories in which we develop, manufacture or sell our
products may not protect our intellectual property rights to the same extent as
do the laws of the United States.
CYPRESS' FINANCIAL RESULTS COULD BE ADVERSELY IMPACTED IF IT FAILS TO DEVELOP,
INTRODUCE AND SELL NEW PRODUCTS OR FAILS TO DEVELOP AND IMPLEMENT NEW
MANUFACTURING TECHNOLOGIES.
Like many semiconductor companies, which frequently operate in a highly
competitive, quickly changing environment marked by rapid obsolescence of
existing products, Cypress' future success depends on its ability to develop and
introduce new products which customers choose to buy. In the last three recent
years we have introduced an average of 131 new products a year, and these
products have been an important source of revenue for us. If we fail to compete
and introduce new product designs in a timely manner or are unable to
manufacture products according to the requirements of these designs, discussed
more below, or if our customers do not successfully introduce new systems or
products incorporating ours, or market demand for our new products does not
exist as anticipated, our business, financial condition and results of
operations could be adversely affected.
For Cypress and many other semiconductor companies, introduction of new
products is a major manufacturing challenge. The new products the market
requires tend to be increasingly complex, incorporating more functions and
operating at greater speed than prior products. Increasing complexity generally
requires smaller features on a chip. This makes manufacturing new generations of
products substantially more difficult than prior products. Ultimately, whether
we can successfully introduce these and other new products depends on our
ability to develop and implement new ways of manufacturing semiconductors. If we
are unable to design, develop, manufacture, market and sell new products
successfully, our business, financial condition and results of operations would
be materially and adversely affected.
5
<PAGE> 12
INTERRUPTIONS IN THE AVAILABILITY OF RAW MATERIALS CAN ADVERSELY IMPACT CYPRESS'
FINANCIAL PERFORMANCE.
Cypress' semiconductor manufacturing operations require raw materials that
must meet exacting standards. We generally have available more than one source
of these materials, but there are only a limited number of suppliers capable of
delivering certain raw materials that meet our standards. If we need to use
other companies as suppliers, we would need them to go through a qualification
process. In addition, the raw materials we need for our business could get
harder to obtain as worldwide use of semiconductors increases. Although we have
faced shortages from time to time in the past and on occasion our suppliers have
told us they need more time than expected to fill our orders, to date we have
not experienced any significant interruption in operations as a result of
difficulties in obtaining raw materials for our manufacturing operations.
However, interruption of any raw material source could have a material adverse
effect on our business, financial condition and results of operations.
OPERATIONAL PROBLEMS EXPERIENCED BY ASSEMBLY AND TEST SUBCONTRACTORS USED BY
CYPRESS CAN ADVERSELY IMPACT ITS FINANCIAL PERFORMANCE.
A high percentage of our products are assembled, packaged and tested at our
manufacturing facility located in the Philippines. We rely on independent
subcontractors to assemble, package and test the balance of our products. This
reliance involves certain risks, since we have reduced control over
manufacturing quality and delivery schedules, whether these companies have
adequate capacity to meet our needs and whether or not they discontinue or
phase-out assembly processes we rely on. We cannot be certain that these
subcontractors will continue to assemble, package and test products for us, and
it might be difficult for us to find alternatives if they do not do so.
THE COMPLEX, ESSENTIAL NATURE OF CYPRESS' MANUFACTURING ACTIVITIES MAKE THE
COMPANY HIGHLY SUSCEPTIBLE TO MANUFACTURING PROBLEMS AND THESE PROBLEMS CAN HAVE
SUBSTANTIAL NEGATIVE IMPACT WHEN THEY OCCUR.
Making semiconductors is a highly complex and precise process, requiring
production in a tightly controlled, clean environment. Even very small
impurities in our manufacturing materials, difficulties in the wafer 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 chips on
each wafer to be nonfunctional. We may experience problems in achieving an
acceptable success rate in the manufacture of wafers, and the likelihood of
facing such difficulties is higher in connection with the transition to new
manufacturing methods. The interruption of wafer fabrication or the failure to
achieve acceptable manufacturing yields at any of our facilities would have a
material adverse effect on our business, financial condition and results of
operations. We may also experience manufacturing problems in our assembly and
test operations and in the introduction of new packaging materials.
CYPRESS MAY NOT BE ABLE TO USE ALL OF ITS EXISTING OR FUTURE MANUFACTURING
CAPACITY, WHICH CAN NEGATIVELY IMPACT ITS BUSINESS.
Cypress has spent, and expects to continue spending, large amounts of money
to upgrade and increase its wafer fabrication, assembly and test manufacturing
capability and capacity. If we end up not needing this capacity and capability
for any of a variety of reasons, including inadequate demand or a significant
shift in mix of product orders making our existing capacity and capability
inadequate or in excess of actual needs, our fixed costs per semiconductor
produced will increase, which will adversely affect us. In addition, if the need
for more advanced technologies requires accelerated conversion to technologies
capable of manufacturing semiconductors having smaller features, or using larger
wafers, we are likely to face higher operating expenses and the need to
write-off capital equipment made obsolete by the technology conversion, which
could adversely affect our business and results of operations.
6
<PAGE> 13
CYPRESS' OPERATIONS AND FINANCIAL RESULTS COULD BE SEVERELY HARMED BY CERTAIN
NATURAL DISASTERS.
Cypress' headquarters and some manufacturing facilities are located near
major earthquake faults. If a major earthquake or other natural disaster occurs,
we could suffer damages that could materially and adversely affect our business,
financial condition and results of operations.
CYPRESS' BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION WILL BE
ADVERSELY IMPACTED IF IT FAILS TO COMPETE IN ITS HIGHLY COMPETITIVE INDUSTRY AND
MARKETS.
The semiconductor industry is intensely competitive. This intense
competition results in a difficult operating environment for most companies in
the industry, including Cypress, marked by erosion of product sale prices over
the lives of each product, rapid technological change, limited product life
cycles and strong domestic and foreign competition in many markets. If we are
not able to compete successfully in this environment, our business, operating
results and financial condition will be adversely affected. A primary cause of
this highly competitive environment is the strengths or our competitors; the
industry consists of major domestic and international semiconductor companies,
many of which have substantially greater financial, technical, marketing,
distribution and other resources than we do. Cypress 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 markets which are important to us. Our ability to compete
successfully in a rapidly evolving high performance end of the semiconductor
technology spectrum depends on many factors, including:
- our success in developing new products and manufacturing technologies;
- the quality and price of our products;
- the diversity of our product line;
- the cost effectiveness of our design, development, manufacturing and
marketing efforts;
- the pace at which customers incorporate our products into their systems,
and
- the number and nature of our competitors and general economic conditions.
We believe we currently compete effectively in the above areas to the
extent they are within our control; however, given the pace at which events
change in the industry, our current abilities are not a guarantee of future
success.
CYPRESS MUST BUILD SEMICONDUCTORS BASED ON ITS FORECASTS OF DEMAND, AND CAN END
UP WITH LARGE AMOUNTS OF UNSOLD PRODUCT IF ITS FORECASTS ARE WRONG.
Cypress must order materials and build semiconductors based on its existing
orders, which may be cancelled under many circumstances, and to a greater extent
on its internal forecasts. As a result, we are very dependent on our forecasts
to predict what we think we will be able to sell. Because our markets are
volatile and subject to rapid technology and price changes, our forecasts may be
wrong, and we may make too many or too few of certain products. Also, our
customers frequently place orders requesting product delivery almost immediately
after the order is made, which makes forecasting customer demand all the more
difficult. The above factors also make it difficult to forecast quarterly
operating results. If we are unable to predict accurately the appropriate amount
of product required to meet customer demand, our business, financial condition
and results of operations could be materially adversely affected.
CYPRESS MUST SPEND HEAVILY ON EQUIPMENT TO STAY COMPETITIVE, AND WILL BE
ADVERSELY IMPACTED IF IT IS UNABLE TO SECURE FINANCING FOR SUCH INVESTMENTS.
Semiconductor manufacturers generally must spend heavily on equipment to
maintain or increase manufacturing capacity and capability in order to remain
competitive. In particular, Cypress expects to spend in excess of $100 million
on equipment in 1999 and anticipates significant continuing capital expenditures
in subsequent years. In the past, we have reinvested a substantial portion of
our cash flow
7
<PAGE> 14
from operations in capacity expansion and improvement programs. However, our
cash flows from operations depend primarily on average selling prices, which
have been declining, and the per unit cost of our products. If we are unable to
decrease costs for our products at a rate at least as fast as the rate of
decline in selling prices for such products, we may not be able to generate
enough cash flow from operations to maintain or increase manufacturing
capability and capacity as necessary. In that case we would need to seek
financing from external sources to satisfy our needs for manufacturing equipment
and, if cash flow from operations declines too much, for operational cash needs
as well. However, such financing may not be available on terms which are
satisfactory to us, in which case our business, financial condition and results
of operations will be adversely impacted.
CYPRESS COMPETES WITH OTHERS TO ATTRACT AND RETAIN KEY PERSONNEL, AND ANY LOSS
OF, OR INABILITY TO ATTRACT, SUCH PERSONNEL WOULD HURT THE COMPANY.
To a greater degree than most non-technology companies, Cypress depends on
the efforts and abilities of certain key management and technical personnel. Our
future success will depend in part upon our ability retain these personnel, and
to attract and retain other highly qualified personnel, particularly product
design engineers. We compete for such personnel with other companies, academic
institutions, government entities and other organizations. Competition for
personnel such as these is intense throughout the technology industry and we may
not be successful in hiring or retaining new or existing qualified personnel. If
we lose existing qualified personnel or are unable to hire new qualified
personnel as needed, our business, financial condition and results of operations
could be adversely affected.
CYPRESS FACES ADDITIONAL PROBLEMS AND UNCERTAINTIES ASSOCIATED WITH
INTERNATIONAL OPERATIONS THAT COULD ADVERSELY IMPACT IT.
International sales represented 39% of our revenues in 1998 and 36% in
1997. Our offshore assembly and test operations, as well as our international
sales, face risks frequently associated with foreign operations, including
- currency exchange fluctuations,
- political instability,
- changes in local economic conditions,
- the devaluation of local currencies,
- import and export controls, and
- changes in tax laws, tariffs and freight rates.
To the extent any such risks materialize, our business, financial condition
and results of operations could be materially and adversely affected.
CYPRESS MUST COMPLY WITH MANY DIFFERENT ENVIRONMENTAL REGULATIONS, WHICH CAN BE
EXPENSIVE.
Cypress must comply with many different 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. This compliance can be expensive. In addition, over the last several
years, the public has paid a great deal of attention to the potentially negative
environmental impact of semiconductor manufacturing operations. This attention
and other factors may lead to changes in environmental regulations which could
force us to purchase additional equipment or comply with other potentially
costly requirements. If we fail to control the use of, or to adequately restrict
the discharge of, hazardous substances under present or future regulations, we
could face substantial liability or suspension of our manufacturing operations,
which could have a material adverse effect on our business, financial condition
and results of operations.
8
<PAGE> 15
CYPRESS DEPENDS ON THIRD PARTIES TO TRANSPORT ITS PRODUCTS AND COULD BE HARMED
IF THESE PARTIES EXPERIENCE PROBLEMS.
Cypress relies on independent carriers and freight forwarders to move its
products between manufacturing plants and to its customers. Cypress has limited
control over these parties; however, any transport or delivery problems because
of their errors, or because of unforeseen interruptions in their activities due
to factors such as strikes, political instability, natural disasters and
accidents, could have a materially adverse effect on our business, financial
conditions and results of operations and ultimately impact our relationship with
our customers.
CYPRESS' OPERATIONS AND PRODUCTS MAY NOT FUNCTION PROPERLY IN THE YEAR 2000
WHICH COULD SIGNIFICANTLY HARM ITS BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
In less than a year, most companies will face a potentially serious problem
because many software applications, operational systems and equipment with
embedded chips or processors may not properly recognize or accurately process
calendar dates beginning in the year 2000, due to the prevalent use of two
digits to represent the year in these systems and equipment.
Like many other companies, the year 2000 issue poses a risk for Cypress.
The year 2000 problem could affect our computers, software and other equipment
we use and operate. This could result in system failures causing disruptions in
operations, including among other things, interruptions in manufacturing, design
and process development operations; temporary disruptions in processing business
transactions; and disruptions in other normal business operations.
Cypress has taken company-wide actions to assess the nature and extent of
work required to prepare its products, systems, equipment and infrastructure for
January 1, 2000. In addition, we have engaged in the process of evaluating our
key suppliers and customers to determine the extent to which our operations are
vulnerable based upon third parties' failure to address their own year 2000
issues. These activities represent our ongoing efforts to address the year 2000
problem that we commenced with the implementation of a year 2000-compliant
accounting software system in 1997.
Cypress' president and executive staff have assumed the responsibility of
managing the impact of the year 2000 problem on all aspects of our operations,
including programs for identification, inventory taking, risk assessment and
cost estimates of problems associates with the year 2000; the plans, remediation
effort and testing methodology to correct those problems; and the development of
contingency plans if some of the corrective actions fail to correct the problem
or do not get implemented in a timely manner. These activities, in varying
phases, are currently in process.
It is our objective to ensure that our internal business (MIS) systems are
compliant by March 1999 and that the rest of our systems, equipment and
infrastructure are compliant by June 1999. Our efforts over the past three
months have shifted in focus from inventory taking and assessment to
remediation, testing, and contingency planning activities. All mission critical
systems, equipment, and infrastructure elements are being tested for year 2000
readiness by June 1999. We have also begun contingency planning efforts,
considering Cypress' entire supply chain and external infrastructure, to ensure
plans will be in place to address any unforeseen year 2000 failures.
Through 1998, Cypress has incurred little cost in addressing the year 2000
problem. In 1999 we expect to incur between two and three million dollars of
expense and capital outlays for remediation, testing and contingency planning
efforts.
In the event year 2000 issues relating to key customers and suppliers are
not successfully resolved, based on information available to us at present, we
believe that the most reasonably likely worst case scenario is a temporary
disruption in infrastructure service, particularly power and telecommunications,
which could adversely impact supplier deliveries or customer shipments. If
severe disruptions occur in these areas and are not corrected in a timely
manner, a revenue or profit shortfall may result in fiscal year 2000.
9
<PAGE> 16
Cypress year 2000 contingency planning efforts are guided by three elements
and specifically expressed in our Year 2000 Mission: (1) Cypress serves its
customers continuously, (2) Cypress maintains continuous employment, and (3)
Cypress increases shareholder value relative to its competitors. The executive
staff of Cypress is directly responsible for developing and approving Cypress'
Year 2000 contingency planning efforts, and the team is led by the CEO. The
operating assumption that external infrastructure may be down for up to 2 - 4
weeks has been used in order to create a suitable framework for contingency
planning efforts, and as a result, Cypress expects to have plans in place to
address any unforeseen year 2000 failures. Our contingency planning efforts will
continue through June 1999, at which time these activities will be documented
and implemented accordingly. A number of business responses are being actively
considered and all should be viewed as likely for some segment of our
customer/supplier base:
- developing second/alternate source suppliers for critical raw materials
and subcontract operations,
- work-in-process inventory "build ahead" in Cypress wafer fab locations,
- finished goods inventory "build ahead" in Cypress/subcontractor assembly
locations,
- increased consignment inventory programs for strategic customers, up to 3
months on customer premises,
- higher year-end 1999 stocking levels for primary Cypress distributors,
- partial/full company shutdown for up to 14 days,
- facility "safe state" plans, including plans to preserve equipment and
the controlled environment of manufacturing facilities, i.e., temperature
and humidity controls, for a period of 2 weeks using self-generated power
in the event of infrastructure shutdown, and
- early payment/collection as well as delayed payment/collection for
Cypress suppliers, customers and employees.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Commission, in accordance with the Securities Exchange Act of 1934. You may read
and copy our reports, proxy statements and other information filed by us at the
public reference facilities of the Commission in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for
further information about the public reference rooms. Our reports, proxy
statements and other information filed with the Commission are available to the
public over the Internet at the Commission's World Wide Web site at
http://www.sec.gov.
The Commission allows us to "incorporate by reference" the information we
filed with them, which means that we can disclose important information by
referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus, and information that we file later
with the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
by us with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act until our offering is complete:
- Annual Report on Form 10-K for the fiscal year ended January 3, 1999.
- Current Report on Form 8-K dated February 12, 1999, as amended on Form
8-K/A filed with the Commission on March 24, 1999; and
- The description of our common stock contained in Form 8-A filed with the
Commission on May 12, 1986, and any amendment or report filed for the
purpose of updating such description.
10
<PAGE> 17
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Chief Financial Officer
Cypress Semiconductor Corporation
3901 North First Street
San Jose, California 95134
(408) 943-2600
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, the net proceeds
from the sale of securities will be used for general corporate purposes,
including capital expenditures and to meet working capital needs. We expect from
time to time to evaluate the acquisition of businesses, products and
technologies for which a portion of the net proceeds may be used. Currently,
however, we do not have any understandings, commitments or agreements with
respect to any material acquisitions for which a portion of the net proceeds may
be used. Pending such uses, we will invest the net proceeds in interest-bearing
securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
---- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.................. 14.4x 19.7x 9.3x 2.8x --(1)
</TABLE>
(1) Earnings were inadequate to cover fixed charges by $124.9 million.
These computations include us and our consolidated subsidiaries, and 50% or
less equity companies. For these ratios, "earnings" is determined by adding
"total fixed charges," excluding interest capitalized, income taxes, minority
common stockholders' equity in net income and amortization of interest
capitalized to income from continuing operations after eliminating equity in
undistributed earnings and adding back losses of companies in which at least 20%
but less than 50% equity is owned. For this purpose, "total fixed charges"
consists of (1) interest on all indebtedness and amortization of debt discount
and expense, (2) interest capitalized and (3) an interest factor attributable to
rentals.
DESCRIPTION OF THE DEBT SECURITIES
The debt securities will either be our senior debt securities or our
subordinated debt securities. The debt securities will be issued under one or
more separate indentures between us and State Street Bank and Trust Company of
California, N.A., as trustee. Senior debt securities will be issued under a
"Senior Indenture" and subordinated debt securities will be issued under a
"Subordinated Indenture." Together, the Senior Indenture and Subordinated
Indenture are called "Indentures."
The prospectus, together with its prospectus supplement, will describe all
the material terms of a particular series of debt securities. The following
summary of certain provisions of the Indentures is not complete. You should look
at the applicable Indenture that is filed as an exhibit to the registration
statement. In the summary below, we have included references to section and
article numbers of the Indentures so that you may easily refer to such
provisions.
11
<PAGE> 18
GENERAL
Debt securities may be issued in separate series without limitation as to
aggregate principal amount. We may specify a maximum aggregate principal amount
for the debt securities of any series. This provision is set forth in section
301 of the applicable Indenture.
Senior debt securities will be unsecured and unsubordinated obligations and
will rank on a parity with all other unsecured and unsubordinated indebtedness,
unless otherwise specified in the prospectus supplement.
Subordinated debt securities will be subordinated in right of payment to
the prior payment in full of all Senior Indebtedness of Cypress, including any
outstanding senior debt securities. See "Subordination" and the prospectus
supplement.
We are not limited as to the amount of debt securities that we may issue
under the Indentures. The Indentures do not contain financial or similar
restrictive covenants. In addition, the Indentures do not provide protection to
holders of debt securities against a sudden or dramatic decline in credit
quality. For example, there would be no protection from a takeover,
recapitalization, special dividend or other restructuring involving Cypress.
The prospectus supplement will set forth the following terms:
- whether the debt securities are senior or subordinated,
- the offering price,
- the title,
- any limit on the aggregate principal amount,
- the person who shall be entitled to receive interest, if other than the
record holder on the record date,
- the date the principal will be payable,
- the interest rate, if any, the date from which interest will accrue, the
interest payment dates and the regular record dates,
- the place for payment of principal, premium, if any, and interest,
- the period, price and terms and conditions for redemption at the option
of Cypress,
- our obligation, if any, to redeem or purchase debt securities pursuant to
any sinking fund or similar provision or at the option of the holder, and
the period, price and terms and conditions for redemption or purchase,
- the denominations of debt securities, if other than denominations of
$1,000 and any integral multiple of $1,000,
- if applicable, the method for determining how principal, premium, if any,
or interest will be calculated by reference to an index or formula,
- if other than U.S. currency, the currency or currency units in which the
principal, premium or interest will be payable,
- if, at our election or the option of the holder, the principal, premium,
if any, or interest is payable in one or more currencies or currency
units other than those in which debt securities are stated to be payable,
the currency or currency units in which payment of any such amount as to
which such election is made will be payable, the periods, the terms and
conditions upon which election shall be made and the amount payable,
- if other than the entire principal amount, the portion of the principal
amount that will be payable upon acceleration of stated maturity,
12
<PAGE> 19
- if the principal amount payable at stated maturity will not be
determinable as of any date prior to stated maturity, the amount which
will be deemed to be the principal amount as of any such date for any
purpose,
- if applicable, that the debt securities are defeasible under the
Indentures as described under "Defeasance and Covenant
Defeasance -- Defeasance and Discharge" or "Defeasance and Covenant
Defeasance -- Defeasance of Certain Covenants,"
- if applicable, the terms of any right to convert debt securities into, or
exchange debt securities for, shares of our common stock or other
securities or property,
- whether the debt securities will be issuable in the form of a global
security and, if so, the depositary and the form of any legend on the
global security,
- in the case of subordinated debt securities, whether the subordination
provisions described below under "Subordination" will apply or whether
different subordination provisions will apply,
- any addition to or change in the Events of Default and any change in the
right of the trustee or the holders to declare the principal amount due
and payable,
- any addition to or change in the Indenture covenants described under
"Restrictive Covenants,"
- any other terms of such debt securities not inconsistent with the
relevant Indenture.
These provisions are set forth in section 301 of the applicable Indenture.
Debt securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which, at the time
of issuance, is below market rates.
CONVERSION
Debt securities may be convertible into or exchangeable for common stock,
preferred stock or other securities or property as set forth in the prospectus
supplement. The prospectus supplement will specify whether, among other things,
the conversion is mandatory or at the option of the holder, as well as other
terms and conditions of conversion.
SUBORDINATION
Unless otherwise indicated in the prospectus supplement, the following
provisions will apply to the subordinated debt securities.
The indebtedness evidenced by the subordinated debt securities is
subordinated to the extent provided in the Subordinated Indenture to the prior
payment in full of all Senior Indebtedness, including any senior debt
securities.
Upon any distribution of our assets upon any dissolution, winding-up,
liquidation or reorganization, or in bankruptcy, insolvency, receivership or
similar proceedings, payment of the principal of, premium, if any, and interest
on the subordinated debt securities is to be subordinated to the extent provided
in the Subordinated 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 subordinated debt securities
because of an Event of Default, the holders of any Senior Indebtedness then
outstanding would be entitled to payment in full in cash of all obligations in
respect to such Senior Indebtedness before the holders of subordinated debt
securities are entitled to receive any payment or other distribution. We are
required to promptly notify holders of Senior Indebtedness if payment of
subordinated debt securities is accelerated because of an Event of Default.
These provisions are set forth in section 1502 of the Subordinated Indenture.
13
<PAGE> 20
We also may not make any payment upon or redemption of or purchase or
otherwise acquire the subordinated debt securities if:
- a default in the payment of the principal of, premium, if any, interest,
rent or other obligations, in respect of Designated Senior Indebtedness
occurs and is continuing beyond any applicable period of grace, or
- any other default occurs and is continuing with respect to Designated
Senior Indebtedness, as defined, that permits 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, which we
refer to as a payment blockage notice, from us or any other person
permitted to give such notice under the Subordinated Indenture.
We may and shall resume payments on the subordinated debt securities:
- in the case of a payment default, upon the date on which such default is
cured or waived or ceases to exist, and
- in the 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 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 ceased to exist and thereafter subsequently
reoccurred, shall be, or be made, the basis for a subsequent payment blockage
notice. These provisions are set forth in section 1504 of the Subordinated
Indenture.
By reason of the subordination provisions described above, in the event of
our bankruptcy, dissolution or reorganization, holders of Senior Indebtedness
may receive more, ratably, and holders of the subordinated debt securities may
receive less, ratably, than the other creditors of Cypress. Such subordination
will not prevent the occurrence of any Event of Default under the Subordinated
Indenture.
We may further describe the provisions, if any, applicable to the
subordination of a particular series of subordinated debt securities in the
prospectus supplement.
We are not limited or prohibited from incurring additional Senior
Indebtedness under the Subordinated Indenture. Senior debt securities, if and
when issued, will constitute Senior Indebtedness.
Definitions of Senior Indebtedness, Indebtedness and Designated Senior
Indebtedness
"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 of Cypress, whether outstanding on the
date of the Subordinated Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by Cypress, 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
subordinated debt securities or expressly provides that such Indebtedness is
"pari passu" or "junior" to the subordinated debt securities.
Senior Indebtedness does not include:
- any Indebtedness of Cypress to any subsidiary of Cypress, and
- our 6% Convertible Subordinated Notes due 2002.
14
<PAGE> 21
"Indebtedness" means, with respect to any person, and without duplication:
(1) all indebtedness, obligations and other liabilities, contingent or
otherwise, of such person for borrowed money, including obligations of
such person (a) 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 (b) 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,
(2) all reimbursement obligations and other liabilities, contingent or
otherwise, of such person with respect to letters of credit, bank
guarantees or bankers' acceptances,
(3) 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
Cypress, and all obligations and other liabilities, contingent or
otherwise, or 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 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,
(4) all obligations of such person, contingent or otherwise, with respect
to an interest rate, currency or other swap, cap, floor or collar
agreement, hedge agreement, forward contract, or other similar
instrument or agreement or foreign currency hedge, exchange, purchase
or similar instrument or agreement,
(5) 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 (1)
through (4),
(6) any indebtedness or other obligations described in clauses (1) through
(4) 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
(7) 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 (1) through
(6).
"Designated Senior Indebtedness" means our obligations under 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
we are a party, expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Subordinated 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.
FORM, EXCHANGE AND TRANSFER
The debt securities will be issuable only in fully registered form, without
coupons. Unless otherwise specified in the prospectus supplement, debt
securities will be issued only in denominations of $1,000 and integral multiples
of $1,000. These provisions are set forth in section 302 of the applicable
Indenture.
15
<PAGE> 22
At the option of the holder, subject to the terms of the Indentures and the
limitations applicable to global securities, debt securities of each series will
be exchangeable for other debt securities of the same series of any authorized
denomination and aggregate principal amount. These provisions are set forth in
section 305 of the applicable Indenture.
Subject to the terms of the Indentures and the limitations applicable to
global securities, debt securities may be presented for exchange as provided
above or for registration of transfer, duly endorsed or with a duly executed
form of transfer, at the office of the security registrar or at the office of
any transfer agent designated by us. No service charge will be imposed for any
registration of transfer or exchange of debt securities, but we may require
payment of a sum sufficient to cover any tax or other governmental charge
payable as a result of the transfer or exchange. Such transfer or exchange will
be effected upon the security registrar or such transfer agent being satisfied
with the documents of title and identity of the person making the request.
We have initially appointed the trustee as security registrar. Any transfer
agent, in addition to the security registrar, initially designated by us will be
named in the prospectus supplement. These provisions are set forth in section
305 of the applicable Indenture.
If the debt securities of any series are to be redeemed in part, we will
not be required to:
- issue, register the transfer of or exchange any debt security of that
series during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption and ending at the
close of business on the day of such mailing, or
- register the transfer or exchange of any debt security of that series
selected for redemption, in whole or in part, except the unredeemed
portion being redeemed in part.
These provisions are set forth in section 305 of the applicable Indenture.
GLOBAL SECURITIES
Some or all of the debt securities of any series may be represented, in
whole or in part, by one or more global securities, which will have an aggregate
principal amount equal to that of the represented debt securities. Each global
security will:
- be registered in the name of a depositary or nominee thereof identified
in the prospectus supplement,
- be deposited with the depositary or nominee, and
- bear a legend regarding the restrictions on exchanges and registration of
transfer referred to below.
No global security may be exchanged in whole or in part for debt securities
registered, and no transfer of a global security in whole or in part may be
registered, in the name of any person other than the depositary for such global
security or any nominee of the depositary unless:
- the depositary has notified us that it is unwilling or unable to continue
as depositary for such global security or has ceased to be qualified to
act as such as required by the Indentures,
- there shall have occurred and be continuing an Event of Default with
respect to the debt securities represented by such global security, or
- there shall exist such circumstances, if any, in addition to or instead
of those described above as may be described in the prospectus
supplement.
All securities issued in exchange for a global security or any portion of a
global security will be registered in such names as the depositary may direct.
These provisions are set forth in sections 204 and 305 of the applicable
Indenture.
As long as the depositary, or its nominee, is the registered holder of a
global security, the depositary or nominee will be considered the sole owner and
holder of such global security and the debt securities
16
<PAGE> 23
represented by such global security for all purposes under the debt securities
and the Indentures. Except in the limited circumstances referred to above,
owners of beneficial interests in a global security:
- will not be entitled to have the global security or any debt securities
represented by the global security registered in their names,
- will not receive or be entitled to receive physical delivery of
certificated debt securities in exchange for the global security, and
- will not be considered to be the owners or holders of such global
security or any debt securities represented by the global security.
All payments of principal, premium, if any, and interest on a global
security will be made to the depositary or its nominee as the holder of such
global security. Some jurisdictions have laws that require that certain
purchasers of securities take physical delivery of such securities in definitive
form. These laws may impair the ability to transfer beneficial interests in a
global security.
Ownership of beneficial interests in a global security will be limited to
institutions that have accounts with the depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. The depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of debt securities represented
by the global security to the accounts of its participants.
Ownership of beneficial interests in a global security will be shown on and
effected through, records maintained by the depositary, with respect to
participants' interests, or any such participant, with respect to interests of
persons held by such participants on their behalf.
Payments, transfers, exchanges and other matters relating to beneficial
interests in a global security will be subject to various depositary policies
and procedures. The depositary policies and procedures may change from time to
time. Neither Cypress nor the trustee will have any responsibility or liability
for the depositary's or any participant's records with respect to beneficial
interests in a global security, or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the prospectus supplement, payment of
interest on a debt security on any interest payment date will be made to the
person in whose name the debt security, or one or more predecessor debt
securities, is registered at the close of business on the regular record date.
This provision is set forth in section 307 of the applicable Indenture.
Unless otherwise indicated in the prospectus supplement, principal,
premium, if any, and interest on the debt securities of a particular series will
be payable at the office of such paying agent or paying agents as we may
designate for such purpose from time to time. However, at our option, we may pay
interest by mailing a check to the record holder.
Unless otherwise indicated in the prospectus supplement, the corporate
trust office of the trustee will be designated as our sole paying agent. Any
other paying agents initially designated by us for the debt securities of a
particular series will be named in the prospectus supplement. We may at any time
designate additional paying agents or rescind the designation of any paying
agent or approve a change in the office through which any paying agent acts.
However, we will be required to maintain a paying agent in each place of payment
for the debt securities of a particular series. These provisions are set forth
in section 1002 of the applicable Indenture.
All moneys paid by us to a paying agent for the payment of the principal,
premium, if any, or interest on any debt security which remain unclaimed (1) for
a period ending the earlier of 10 business days prior to the date such money
would be turned over to the State, or (2) at the end of two years after such
principal, premium or interest has become due and payable, will be repaid to us,
and thereafter, the holder
17
<PAGE> 24
of such debt security may look only to us for payment. These provisions are set
forth in section 1003 of the applicable Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into any other person, in a
transaction in which we are not the surviving corporation, or convey, transfer
or lease our properties and assets substantially as an entirety to, any
successor person, unless:
- the successor person, if any, is a corporation, limited liability
company, partnership, trust or other entity organized and existing under
the laws of the United States, or any state of the United States, and
assumes Cypress's obligations on the debt securities and under the
Indentures,
- immediately after giving effect to the transaction, and treating any
indebtedness which becomes an obligation of Cypress or any subsidiary as
a result of the transaction as having been incurred by it at the time of
the transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing, and
- certain other conditions are met.
These provisions are set forth in section 801 of the applicable Indenture.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default, unless the
prospectus supplement makes the event inapplicable to a particular series of
debt securities:
(1) failure to pay principal of or any premium on any debt security of that
series when due, whether or not such payment is prohibited by the
subordination provisions of the Subordinated Indenture,
(2) failure to pay any interest on any debt securities of that series when
due, continued for 30 days, whether or not such payment is prohibited by
the subordination provisions of the Subordinated Indenture,
(3) failure to deposit any sinking fund payment, when due, in respect of
any debt security of that series, whether or not such deposit is
prohibited by the subordination provisions of the Subordinated
Indenture,
(4) failure of Cypress to perform any other covenant required of us in the
Indenture, other than a covenant included in the Indentures solely for
the benefit of a series other than that series, continued for 60 days
after written notice has been given by the trustee, or the holders of at
least 25% in aggregate principal amount of the outstanding Securities of
that series, as provided in the Indentures,
(5) certain events in bankruptcy, insolvency or reorganization with respect
to Cypress, and
(6) any other Event of Default specified in the prospectus supplement.
These provisions are set forth in section 501 of the applicable Indenture.
If an Event of Default, other than an Event of Default described in clause
(5) above, shall occur and be continuing, either the trustee or the holders of
at least 25% in aggregate principal amount of the outstanding Securities of that
series may declare the principal amount of the debt securities of that series to
be due and payable immediately.
If an Event of Default described in clause (5) above shall occur, the
principal amount of all the debt securities of that series will automatically
become immediately due and payable. Any payment by us on the subordinated debt
securities following any such acceleration will be subject to the subordination
provisions described above. See "Subordination" above.
18
<PAGE> 25
After any such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of the
outstanding Securities of that series may, under certain circumstances, rescind
and annul such acceleration if all Events of Default, other than the non-payment
of accelerated principal, or other specified amount, have been cured or waived.
These provisions are set forth in section 502 of the applicable Indenture. For
information as to waiver of defaults, see "Modification and Waiver."
Subject to the trustee's duties in the case of an Event of Default, the
trustee will not be obligated to exercise any of its rights or powers at the
request of the holders, unless the holders shall have offered to the trustee
reasonable indemnity. This provision is set forth in section 603 of the
applicable Indenture. Subject to the trustee's indemnification, the holders of a
majority in aggregate principal amount of the outstanding Securities of any
series 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 with respect to that series. These provisions
are set forth in section 512 of the applicable Indenture.
No holder of a debt security of any series will have any right to institute
any proceeding under the Indentures, or for the appointment of a receiver or a
trustee, or for any other remedy under the Indenture unless:
- such holder has previously given to the trustee written notice of a
continuing Event of Default with respect to the debt securities of that
series,
- the holders of at least 25% in aggregate principal amount of the
outstanding Securities of that series have made a written request, and
such holder or holders have offered reasonable indemnity to the trustee to
institute such proceeding as trustee, and
- the trustee has failed to institute such proceeding, and has not received
from the holders of a majority in aggregate principal amount of the
outstanding Securities of that series a direction inconsistent with such
request within 60 days after such notice, request and offer.
These provisions are set forth in section 507 of the applicable Indenture.
However, such limitations do not apply to a suit instituted by a holder of
a debt security for the enforcement of payment of the principal of or any
premium or interest on such debt security on or after the applicable due date
specified in such debt security. These provisions are set forth in section 508
of the applicable Indenture.
We are required to furnish to the trustee, on an annual basis, a statement
by our officers as to whether or not Cypress, to the officer's knowledge, is in
default in the performance or observance of any of the terms, provisions and
conditions of the Indenture. If so, such statement shall specify all such known
defaults. These provisions are set forth in section 1004 of the applicable
Indenture.
MODIFICATION AND WAIVER
Cypress and the trustee may make modifications and amendments to the
Indentures with the consent of the holders of a majority in aggregate principal
amount of the outstanding Securities of each series affected by the modification
or amendment.
However, neither Cypress nor the trustee may make any modification or
amendment without the consent of the holder of each outstanding Security of that
series who is affected by the modification or amendment if such modification or
amendment would do any of the following:
- change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security,
- reduce the principal amount of, or any premium or interest on, any debt
security,
- reduce the amount of principal of an Original Issue Discount Security or
any other debt security payable upon acceleration of the maturity of the
debt security,
19
<PAGE> 26
- change the place or currency of payment of principal of, or any premium
or interest on, any debt security,
- impair the right to institute suit for the enforcement of any payment on
or with respect to any debt security,
- in the case of subordinated debt securities, modify the subordination
provisions in a manner materially adverse to the holders of the
subordinated debt securities,
- in the case of debt securities that are convertible into Securities or
other securities of Cypress, adversely affect the right of holders to
convert any of the debt securities other than as provided in or under the
Indentures,
- reduce the percentage in principal amount of outstanding Securities of
any series, the consent of whose holders is required for modification or
amendment of the Indentures,
- reduce the percentage in principal amount of outstanding Securities of
any series necessary for waiver of compliance with certain provisions of
the Indentures or for waiver of certain defaults, or
- modify such provisions with respect to modification and waiver.
These provisions are set forth in section 902 of the applicable Indenture.
Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may waive, on behalf of the holders of all debt
securities of that series, compliance by us with respect to certain restrictive
provisions of the Indentures. These provisions are set forth in section 1010 of
the Senior Indenture and section 1008 of the Subordinated Indenture.
The holders of not less than a majority in principal amount of the
outstanding Securities of any series may, on behalf of all holders of debt
securities of that series, waive any past default under the Indenture with
respect to debt securities of that series, except a default:
- in the payment of principal of or premium or interest on any debt
security of that series, or
- in respect of a covenant or provision of the Indenture which cannot be
amended without the consent of the holder of each outstanding Security of
the series who is affected.
These provisions are set forth in section 513 of the applicable Indenture.
In determining whether the holders of the requisite principal amount of the
outstanding Securities have given or taken any direction, notice, consent,
waiver or other action under the Indenture as of any date, each Indenture will
set forth the following:
- the principal amount of an Original Issue Discount Security that will be
deemed to be outstanding will be the amount of the principal that would be
due and payable as of such date upon acceleration of the maturity to such
date,
- if, as of such date, the principal amount payable at the stated maturity
of a debt security is not determinable, for example, because it is based
on an index, the principal amount of such debt security deemed to be
outstanding as of such date will be an amount determined as set forth in
the Indenture, and
- the principal amount of a debt security denominated in one or more
foreign currencies or currency units that will be deemed to be outstanding
will be the U.S. dollar equivalent.
These provisions are set forth in section 101 of the applicable Indenture.
DEFEASANCE AND COVENANT DEFEASANCE
At our option, we may elect in the prospectus supplement to have the
provisions of section 1302, relating to defeasance and discharge of
indebtedness, or section 1303, relating to defeasance of certain
20
<PAGE> 27
restrictive covenants, applied to the debt securities of any series. These
provisions are set forth in section 1301 of the applicable Indenture.
Defeasance and Discharge
Upon our option, if any, to have section 1302 applied to any debt
securities, the provisions of Article 15 of the Subordinated Indenture relating
to subordination will cease to be effective and, with respect to any debt
securities, we will be discharged from all of our obligations, except those
obligations specified in the following sentence, upon the deposit in trust of
money or U.S. government obligations that will provide money in an amount
sufficient to pay the principal, premium, if any, and interest on such debt
securities.
We will, however, continue to be required to:
- exchange or register the transfer of debt securities,
- replace stolen, lost or mutilated debt securities,
- maintain paying agencies,
- hold moneys for payment in trust, and
- effect conversion.
Such defeasance or discharge may occur only if:
- we have delivered to the trustee an opinion of counsel to the effect that
we have received from, or there has been published by, the United States
Internal Revenue Service a ruling, or
- there has been a change in tax law,
in either case to the effect that holders will not recognize gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner, and at the same times as would have been the case if such deposit,
defeasance and discharge were not to occur.
These provisions are set forth in sections 1302 and 1304 of the applicable
Indenture.
Defeasance of Certain Covenants
Upon our option, if any, to have section 1303 applied to any debt
securities, we may omit to comply with certain restrictive covenants, including
those described in the prospectus supplement. In such case, the occurrence of
certain Events of Default described in clause (4) above with respect to such
restrictive covenants under "Events of Default" and in the prospectus
supplement, will be deemed not to result in an Event of Default and, in the case
of the Subordinated Indenture, the provisions of Article 15 relating to
subordination will cease to be effective with respect to any subordinated debt
securities. In order to exercise such option, we will be required to deposit, in
trust for the benefit of the holders of such debt securities, money or U.S.
government obligations which will provide money in an amount sufficient to pay
the principal, premium, if any, and interest on the debt securities.
We will also be required, among other things, to deliver to the trustee an
opinion of counsel that holders will not recognize gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations, and will be subject to federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit and defeasance were not to occur.
In the event we exercised this option and the debt securities were declared
due and payable because of an Event of Default, the amount of deposited money
and U.S. government obligations in trust would be sufficient to pay amounts due
on the debt securities at the time of their respective stated maturities, but
may not be sufficient to pay amounts due on such debt securities upon any
acceleration resulting from
21
<PAGE> 28
such Event of Default. In such case, we would remain liable for such payments.
These provisions are set forth in sections 1303 and 1304 of the applicable
Indenture.
We may, at our option, satisfy and discharge each of the Indentures, except
for certain of our obligations and the trustee's obligations, including, among
others the obligations to apply money held in trust when:
- either (1) all debt securities previously authenticated and delivered,
other than those that were destroyed, lost or stolen and that have been
replaced or paid, and for which money has been deposited in trust or
segregated and held in trust by us and thereafter repaid to us or
discharged from the trust, have been delivered to the trustee for
cancellation or discharge from the trust, or (2) all such debt securities
not previously delivered to the trustee for cancellation
(a) have become due and payable;
(b) will become due and payable at their stated maturity within one
year; or
(c) 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 our name and at our expense, and we have deposited or caused to
be deposited an amount sufficient to pay and discharge the entire
indebtedness on debt securities not previously delivered to the trustee for
cancellation, for principal and any premium and interest to the date of
such deposit, in the case of debt securities which have become due and
payable, or to the stated maturity or redemption date, as the case may be,
- we have paid or caused to be paid all other sums payable by us, and
- we have delivered to the trustee an officers' certificate and an opinion
of counsel to the effect that all conditions precedent relating to the
satisfaction and discharge have been satisfied.
NOTICES
Notices to holders will be given by mail to the addresses of the holders in
the security register. This provision is set forth in sections 101 and 106 of
the applicable Indenture.
GOVERNING LAW
The Indentures and the debt securities will be governed by, and construed
in accordance with, the law of the State of New York, without giving effect to
such state's conflicts of law principles. This provision is set forth in section
112 of the applicable Indenture.
REGARDING THE TRUSTEE
The Indentures contain certain limitations on the right of the trustee,
should it become a creditor of Cypress, to obtain payment of claims in certain
cases or to realize for its own account on certain property received in respect
of any such claim as security or otherwise. These provisions are set forth in
section 613 of the applicable Indenture.
The trustee is permitted to engage in certain other transactions. However,
if the trustee acquires any conflicting interest and there is a default under
the Securities of any series for which the trustee serves as trustee, the
trustee must eliminate such conflict or resign. These provisions are set forth
in section 608 of the applicable Indenture.
22
<PAGE> 29
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 255,000,000 shares. Those shares
consist of:
- 250,000,000 shares designated as common stock, $.01 par value, and
- 5,000,000 shares designated as preferred stock, $.01 par value. The only
equity securities currently outstanding are shares of common stock. As of
September 28, 1998, there were approximately 86.0 million shares of
common stock issued and outstanding.
COMMON STOCK
Holders of common stock are entitled to receive dividends declared by the
Board of Directors, out of funds legally available for the payment of dividends,
subject to the rights of holders of preferred stock. Currently, we are not
paying a dividend. Each holder of common stock is entitled to one vote per
share. Upon any liquidation, dissolution or winding up of our business, the
holders of common stock are entitled to share equally in all assets available
for distribution after payment of all liabilities and provision for liquidation
preference of shares of preferred stock then outstanding. The holders of common
stock have no preemptive rights and no rights to convert their common stock into
any other securities. There are also no redemption or sinking fund provisions
applicable to the common stock.
All outstanding shares of common stock are fully paid and nonassessable.
Our common stock is listed on the New York Stock Exchange under the symbol
"CY." The transfer agent and registrar for the common stock is Boston Equiserve
Limited Partnership.
PREFERRED STOCK
The following description of preferred stock and the description of the
terms of a particular series of preferred stock that will be set forth in the
related prospectus supplement are not complete. These descriptions are qualified
in their entirety by reference to the certificate of designation relating to
that series. The rights, preferences, privileges and restrictions of the
preferred stock of each series will be fixed by the certificate of designation
relating to that series. The related prospectus supplement will also contain a
description of certain United States federal income tax consequences relating to
the purchase and ownership of the series of preferred stock that is described in
the prospectus supplement.
As of September 28, 1998, there were no shares of preferred stock
outstanding. The Board of Directors has the authority, without further action by
the stockholders, to issue up to 5,000,000 shares of preferred stock in one or
more series, and to fix or designate, under our certificate of designation, the
following terms of the preferred stock:
- designations, powers, preferences, and privileges,
- relative participating, optional or special rights, and
- qualifications, limitations or restrictions, including dividend rights,
conversion rights, voting rights, terms of redemption and liquidation
preferences.
Any or all of these rights may be greater than the rights of the holders of
common stock.
The Board of Directors, without stockholder approval, may authorize and
issue preferred stock with voting, conversion or other rights that could
negatively affect the voting power and other rights of the holders of common
stock. The terms of the preferred stock that might be issued could conceivably
prohibit us from:
- consummating a merger,
- reorganizing,
- selling substantially all of our assets,
23
<PAGE> 30
- liquidating, or
- engaging in other extraordinary corporate transactions without
stockholder approval.
Preferred stock could therefore be issued quickly with terms calculated to
delay, defer or prevent a change in control of Cypress or make it more difficult
to remove our management. Additionally, the issuance of preferred stock may have
the effect of decreasing the market price of the common stock.
The prospectus supplement will specify:
- the maximum number of shares,
- the designation of the shares,
- the annual dividend rate, if any, whether the dividend rate is fixed or
variable, the date dividends will accrue, the dividend payment dates, and
whether dividends will be cumulative,
- the price and the terms and conditions for redemption, if any, including
redemption at our option or at the option of the holders, including the
time period for redemption, and any accumulated dividends or premiums,
- the liquidation preference, if any, and any accumulated dividends upon
the liquidation, dissolution or winding up of our affairs,
- any sinking fund or similar provision, and, if so, the terms and
provisions relating to the purpose and operation of the fund,
- the terms and conditions, if any, for conversion or exchange of shares of
any other class or classes of our capital stock or any series of any
other class or classes, or of any other series of the same class, or any
other securities or assets, including the price or the rate of conversion
or exchange and the method, if any, of adjustment,
- the voting rights, and
- any or all other preferences and relative, participating, optional or
other special rights, privileges or qualifications, limitations or
restrictions.
Preferred stock will be fully paid and nonassessable upon issuance. The
preferred stock or any series of preferred stock may be represented, in whole or
in part, by one or more global certificates, which will have an aggregate
principal amount equal to that of the preferred stock represented by the global
certificate.
Each global certificate will:
- be registered in the name of a depositary or a nominee of the depositary
identified in the prospectus supplement,
- be deposited with such depositary or nominee or a custodian for the
depositary, and
- will bear a legend regarding the restrictions on exchanges and
registration of transfer, and any other matters as may be provided for
under the certificate of designation.
24
<PAGE> 31
SECTION 203 OF DELAWARE GENERAL CORPORATION LAW
We are a Delaware corporation subject to Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, Section 203 prohibits
a publicly held Delaware corporation from engaging in a "business combination"
transaction with an "interested stockholder" for a period of three years after
the date the person became an interested stockholder, unless, with certain
exceptions, the business combination or the transaction in which the person
became an interested stockholder is approved in a prescribed manner, as
described below.
The Section 203 restrictions do not apply if:
(1) the business combination or transaction is approved by our Board of
Directors before the date the interested stockholder obtained such
status,
(2) upon consummation of the transaction which resulted in the stockholder
obtaining such status, the stockholder owned at least 85% of the shares
of stock entitled to vote generally in the election of directors that
are outstanding at the time the transaction commenced. The 85%
calculation does not include those shares (a) owned by directors who
are also officers of the target corporation, and (b) held by employee
stock plans that do not permit employees to decide confidentially
whether to accept a tender or exchange offer, or
(3) on or after the date the interested stockholder obtained such status,
the business combination is approved by our Board of Directors and at a
stockholder meeting by the affirmative vote of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested
stockholder.
Generally, a "business combination" includes a merger, asset sale, or other
transaction resulting in a financial benefit to the interested stockholder.
Generally, an "interested stockholder" is a person who, together with affiliates
and associates, owns, or within three years prior to the determination of
interested stockholder status did own, 15% or more of a corporation's voting
stock. Section 203 may prohibit or delay mergers or other takeover or change in
control attempts with respect to Cypress. As a result, Section 203 may
discourage attempts to acquire us even though such transaction may offer our
stockholders the opportunity to sell their stock at a price above the prevailing
market price.
PLAN OF DISTRIBUTION
We may sell the Securities separately or together:
- through one or more underwriters or dealers for public offering and sale,
- directly to investors,
- through agents, or
- through a block trade in which the broker or dealer engaged to handle the
block trade will attempt to sell the Securities as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction.
We may distribute the Securities from time to time in one or more
transactions at a fixed price or prices, which may be changed from time to time:
- at market prices prevailing at the times of sale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
We will describe the method of distribution of the Securities in the
prospectus supplement.
Underwriters, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from us or our purchasers, as their agents
in connection with the sale of Securities. These underwriters, dealers or agents
may be considered to be underwriters under the Securities Act. As a result,
25
<PAGE> 32
discounts, commissions, or profits on resale received by the underwriters,
dealers or agents may be treated as underwriting discounts and commissions. In
the prospectus supplement we will identify any such underwriter, dealer or
agent, and describe any compensation received by them from us. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Underwriters, dealers and agents may be entitled to indemnification by us
against certain civil liabilities, including liabilities under the Securities
Act. Underwriters, dealers and agents also may be entitled to contribution with
respect to payments made by the underwriters, dealers or agents, under
agreements between us and the underwriters, dealers and agents.
We may grant underwriters who participate in the distribution of Securities
an option to purchase additional Securities to cover over-allotments, if any, in
connection with the distribution.
All debt securities will be new issues of securities with no established
trading market. Underwriters involved in the public offering and sale of debt
securities may make a market in the debt securities. However, they are not
obligated to make a market and may discontinue market making activity at any
time. No assurance can be given as to the liquidity of the trading market for
any debt securities.
Underwriters or agents and their associates may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.
LEGAL MATTERS
The validity of the issuance of Cypress' Securities offered by this
prospectus will be passed upon for Cypress 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 January 3,
1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
26
<PAGE> 33
PROSPECTUS SUPPLEMENT MARCH , 1999
7,600,000 SHARES
CYPRESS SEMICONDUCTOR CORPORATION
COMMON STOCK
LOGO
WARBURG DILLON READ LLC
<PAGE> 34
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated (other than the registration fee) expenses to be
paid by the registrant in connection with this offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 83,400
Trustee's fees and expenses................................. 25,000
Accounting fees and expenses................................ 75,000
Legal fees and expenses..................................... 200,000
Printing and engraving...................................... 100,000
Blue sky fees and expenses.................................. 15,000
Transfer agent fees and expenses............................ 15,000
Rating agencies' fees....................................... 75,000
Miscellaneous............................................... 36,600
--------
Total............................................. $625,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Certificate of Incorporation
Article 11 of our 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:
- for any breach of their duty of loyalty to the corporation or its
stockholders,
- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law,
- for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law, or
- for any transaction from which the director derived an improper personal
benefit.
Bylaws
Article VI of our bylaws provides that we:
(1) will 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-1
<PAGE> 35
(2) 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 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 our bylaws also provides that we:
(1) will 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. However, no indemnification will 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.
Our bylaws also permit us 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. We currently maintain liability insurance for our officers and
directors.
II-2
<PAGE> 36
We have entered into agreements to indemnify our directors and officers, in
addition to the indemnification provided for in our certificate of incorporation
and bylaws. These agreements, among other things, indemnify our 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 Cypress, arising out of such person's
services as a director or officer of Cypress, any subsidiary of Cypress or any
other company or enterprise to which the person provides services at the request
of Cypress.
The form(s) of proposed underwriting agreement(s) to be filed as (an)
Exhibit(s) to this registration statement or incorporated by reference in this
registration statement may include provisions regarding the indemnification of
our officers and directors by the several underwriters.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<C> <S>
1.1 Form of Underwriting Agreement (Common Stock).
1.2 Form of Underwriting Agreement (Convertible Securities).*
1.3 Form of Underwriting Agreement (Debt Securities).*
1.4 Form of Underwriting Agreement (Preferred Stock).*
3.1 (i) Restated Certificate of Incorporation, as amended.(1)
(ii) Certificate of Amendment of Restated Certificate of
Incorporation, as amended.(2)
(iii) Bylaws, as amended.(1)
4.1 Form of Senior Indenture.**
4.2 Form of Subordinated Indenture.**
4.3 Form of Senior Debt Security (included in Exhibit 4.1).**
4.4 Form of Subordinated Debt Security (included in Exhibit
4.2).**
4.5 Specimen of stock certificate of Cypress Semiconductor
Corporation's Common Stock.(1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Registration Rights Agreement, dated March 29, 1999, by and
between Cypress Semiconductor Corporation and UBS AG, London
Branch.
10.2 Registration Rights Agreement, dated March 29, 1999, by and
between Cypress Semiconductor Corporation and Deutsche Bank
Securities Inc.
12.1 Computation of Ratios of Earnings to Fixed Charges.**
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.3 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney of certain directors and officers of
Cypress Semiconductor Corporation (see page II-5 of initial
filing of this Form S-3).**
25.1 Form T-1 Statement of Eligibility of Trustee for Senior
Indenture under the Trust Indenture Act of 1939.**
25.2 Form T-1 Statement of Eligibility of Trustee for
Subordinated Indenture under the Trust Indenture Act of
1939.**
</TABLE>
- ---------------
* To be filed by amendment or by a report on Form 8-K pursuant to section 601
of Regulation S-K.
** Previously filed.
(1) Incorporated by reference to our registration statement on Form S-1 (No.
33-12153) which became effective on March 4, 1987.
II-3
<PAGE> 37
(2) Incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended December 28, 1992.
ITEM 17. UNDERTAKINGS
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 in order to:
(a) include any prospectus required by Section 10(a) (3) of the
Securities Act,
(b) reflect in the prospectus any facts or events arising after the
effective date of the registration statement, or the most recent
post-effective amendment of the registration statement 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 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement, and
(c) 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 clauses (a) and (b) do not apply if the
information required to be included in a post-effective amendment by
such clauses is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed 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.
(4) That, for purposes of determining any liability under the Securities
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 this 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.
Insofar as indemnification for liabilities arising under the Securities 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 Commission
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 38
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities 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 Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities 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-5
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on March 29,
1999.
CYPRESS SEMICONDUCTOR CORPORATION
By: /s/ T. J. RODGERS
------------------------------------
T. J. Rodgers
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act, 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 and Chief Executive March 29, 1999
- -------------------------------------------------------- Officer
T. J. Rodgers
/s/ EMMANUEL HERNANDEZ Chief Financial Officer, Vice March 29, 1999
- -------------------------------------------------------- President, Finance and
Emmanuel Hernandez Administration (Principal
Financial and Accounting
Officer)
* Chairman of the Board of March 29, 1999
- -------------------------------------------------------- Directors
Eric A. Benhamou
* Director March 29, 1999
- --------------------------------------------------------
Fred B. Bialek
* Director March 29, 1999
- --------------------------------------------------------
John C. Lewis
* Director March 29, 1999
- --------------------------------------------------------
Alan F. Shugart
</TABLE>
*By: /s/ EMMANUEL HERNANDEZ
---------------------------------
Emmanuel Hernandez,
Attorney-in-Fact
II-6
<PAGE> 40
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
1.1 Form of Underwriting Agreement (Common Stock).
1.2 Form of Underwriting Agreement (Convertible Securities).*
1.3 Form of Underwriting Agreement (Debt Securities).*
1.4 Form of Underwriting Agreement (Preferred Stock).*
3.1 (i) Restated Certificate of Incorporation, as amended.(1)
(ii) Certificate of Amendment of Restated Certificate of
Incorporation, as amended.(2)
(iii) Bylaws, as amended.(1)
4.1 Form of Senior Indenture.**
4.2 Form of Subordinated Indenture.**
4.3 Form of Senior Debt Security (included in Exhibit 4.1).**
4.4 Form of Subordinated Debt Security (included in Exhibit
4.2).**
4.5 Specimen of stock certificate of Cypress Semiconductor
Corporation's Common Stock.(1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Registration Rights Agreement, dated March 29, 1999, by and
between Cypress Semiconductor Corporation and UBS AG, London
Branch.
10.2 Registration Rights Agreement, dated March 29, 1999, by and
between Cypress Semiconductor Corporation and Deutsche Bank
Securities Inc.
12.1 Computation of Ratios of Earnings to Fixed Charges.**
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.3 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney of certain directors and officers of
Cypress Semiconductor Corporation (see page II-5 of initial
filing of this Form S-3).**
25.1 Form T-1 Statement of Eligibility of Trustee for Senior
Indenture under the Trust Indenture Act of 1939.**
25.2 Form T-1 Statement of Eligibility of Trustee for
Subordinated Indenture under the Trust Indenture Act of
1939.**
</TABLE>
- ---------------
* To be filed by amendment or by a report on Form 8-K pursuant to Section 601
of Regulation S-K.
** Previously filed.
(1) Incorporated by reference to our registration statement on Form S-1 (No.
33-12153) which became effective on March 4, 1987.
(2) Incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended December 28, 1992.
<PAGE> 1
EXHIBIT 1.1
Shares
Common Stock
($ Par Value)
UNDERWRITING AGREEMENT
March 29, 1999
<PAGE> 2
UNDERWRITING AGREEMENT
March 29, 1999
WARBURG DILLON READ LLC,
as Managing Underwriter
299 Park Avenue
New York, New York 10171-0026
Ladies and Gentlemen:
Cypress Semiconductor Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell and the persons named in Schedule A annexed hereto
(the "Selling Stockholders") propose to sell to you as underwriter (the
"Underwriter") an aggregate of shares (the "Firm Shares") of Common Stock, $.01
par value (the "Common Stock"), of the Company, of which shares are to be issued
and sold by the Company and an aggregate of shares are to be sold by the Selling
Stockholders in the respective amounts set forth under the caption "Firm Shares"
in Schedule B annexed hereto. In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional shares of Common Stock (the
"Additional Shares"). The Firm Shares and the Additional Shares are hereinafter
collectively sometimes referred to as the "Shares." The Shares are described in
the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively
called the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, (File No. 333-67203)
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the "Exchange Act"). The Company has
furnished to you , for use by the Underwriter and by dealers, copies of one or
more preliminary prospectuses and the documents incorporated by reference
therein (each thereof, including the documents incorporated therein by
reference, being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it becomes effective, including all documents filed as a part
thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under
<PAGE> 3
-2-
the Act and also including any registration statement filed pursuant to Rule
462(b) under the Act, is herein called the Registration Statement, and the
prospectus, including all documents incorporated therein by reference, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the Prospectus.
The Company, the Selling Stockholders and the Underwriter agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth: (i)
the Company agrees to sell to the Underwriter and the Underwriter agrees to
purchase from the Company ___________ Firm Shares at a purchase price of $ per
Share; and (ii) each of the Selling Stockholders, severally and not jointly,
agrees to sell to the Underwriter and the Underwriter agrees to purchase from
such Selling Stockholder the respective number of Firm Shares set forth opposite
the name of such Selling Stockholder in Schedule A annexed hereto, in each case
at a purchase price of $ per Share. The Underwriter intends (i) to make a public
offering of the Firm Shares as soon after the date hereof as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth
in the Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the Underwriter the option to
purchase, and upon the basis of the warranties and representations and subject
to the terms and conditions herein set forth, the Underwriter shall have the
right to purchase, from the Company all or a portion of the Additional Shares as
may be necessary to cover over-allotments made in connection with the offering
of the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares. This option may be exercised by
you at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); provided, however, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company and the Selling Stockholders by Federal
Funds wire
<PAGE> 4
-3-
transfer, against delivery of the certificates for the Firm Shares to you
through the facilities of the Depository Trust Company ("DTC") for the account
of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time, on April __, 1999 (unless another time shall be agreed to by
you, the Company and the Selling Stockholders or unless postponed in accordance
with the provisions of Section 10 hereof). The time at which such payment and
delivery are actually made is hereinafter sometimes called the time of purchase.
Certificates for the Firm Shares shall be delivered to you in definitive form in
such names and in such denominations as you shall specify no later than the
second business day preceding the time of purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by you, the
Company and the Selling Stockholders agree to make such certificates available
to you for such purpose at least one full business day preceding the time of
purchase.
Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify no later than the second business day preceding the additional
time of purchase. For the purpose of expediting the checking of the certificates
for the Additional Shares by you, the Company agree to make such certificates
available to you for such purpose at least one full business day preceding the
additional time of purchase.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Underwriter that:
(a) the Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary Prospectus,
or instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act; when the Registration Statement becomes effective, the
Registration Statement and the Prospectus will fully comply in all material
respects with the provisions of the Act, and the Registration Statement will not
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 the Prospectus will not 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, in light of the circumstances under
which they were made, not misleading; any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement have
been so described or filed;
<PAGE> 5
-4-
provided, however, that the Company makes no warranty or representation with
respect to any statement contained in the Registration Statement or the
Prospectus in reliance upon and in conformity with information concerning the
Underwriter and furnished in writing by or on behalf of the Underwriter through
you to the Company expressly for use in the Registration Statement or the
Prospectus; the documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects with
the requirements of the Exchange Act, and do not 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, in light of the circumstances under
which they were made, not misleading and the Company has not distributed any
offering material in connection with the offering or sale of the Shares other
than the Registration Statement, the Preliminary Prospectus, the Prospectus or
any other materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company has an authorized
capitalization as set forth under the heading entitled "Actual" in the section
of the Registration Statement and the Prospectus entitled "Capitalization" and,
as of the time of purchase the Company shall have an authorized capitalization
as set forth under the heading entitled "As Adjusted" in the section of the
Registration Statement and the Prospectus entitled "Capitalization"; all of the
issued and outstanding shares of capital stock including Common Stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
full power and authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, properties, financial condition or results of operation of the
Company and its Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect"). The Company has no subsidiaries (as defined in the
Rules and Regulations) other than the entities listed on Exhibit 21.1 to the
Company's
<PAGE> 6
-5-
Annual Report on Form 10-K for the fiscal year ended January 3, 1999
(collectively, the "Subsidiaries"); other than the Subsidiaries, the Company
does not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity; complete and
correct copies of the certificates of incorporation and of the bylaws of the
Company and the Subsidiaries and all amendments thereto have been delivered to
you, and except as set forth in the exhibits to the Registration Statement no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date; each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement; each Subsidiary is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of the properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect;
all of the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable and
(except as otherwise described in this Section 3(d)) are owned by the Company
subject to no security interest, other encumbrance or adverse claims; no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares of capital stock
or ownership interests in the Subsidiaries are outstanding.
(e) neither the Company nor any of its Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would result in any breach of, or constitute a default under) its
respective charter or by-laws or in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which any of them or any
of their properties is bound, and the execution, delivery and performance of
this Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in any breach
of or constitute a default under (nor constitute any event which with notice,
lapse of time, or both would result in any breach of, or constitute a default
under) any provisions of the charter or by-laws, of the Company or any of its
Subsidiaries or under any provision of any license, indenture, mortgage, deed of
trust, bank loan or credit
<PAGE> 7
-6-
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or their respective properties may be bound or
affected, or under any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or any of its
Subsidiaries;
(f) this Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms;
(g) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus and the certificates for the Shares are in
due and proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(h) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable;
(i) no approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transaction as contemplated
hereby other than registration of the Shares under the Act and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD");
(j) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of capital
stock of the Company upon the issue and sale of the Shares to the Underwriter
hereunder, nor does any person have preemptive rights, co-sale rights, rights of
first refusal or other rights to purchase any of the Shares other than those
that have been expressly waived prior to the dates hereof;
(k) PricewaterhouseCoopers LLP, whose reports on the consolidated
financial statements of the Company and its Subsidiaries are filed with the
Commission as part of the Registration Statement and Prospectus, are independent
public accountants as required by the Act;
<PAGE> 8
-7-
(l) each of the Company and its Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation or
rule, and has obtained all necessary authorizations, consents and approvals from
other persons, in order to conduct its respective business; neither the Company
nor any of its Subsidiaries is in violation of, or in default under, any such
license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any of its Subsidiaries the effect of which could have a Material
Adverse Effect;
(m) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(n) there are no actions, suits, claims, investigations or
proceedings pending or threatened to which the Company or any of its
Subsidiaries or any of their respective officers is a party or of which any of
their respective properties is subject at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency which could result in a judgment, decree or order
having a Material Adverse Effect or consummation of the transaction contemplated
hereby;
(o) the audited financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the Company and its Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and its
Subsidiaries for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved;
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been: (i)
any material adverse change, or any development which, in the Company's
reasonable judgment, is likely to cause a material adverse change, in the
business, properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or otherwise),
business or operations of the Company and its Subsidiaries taken as a whole;
(ii) any transaction which is material to the Company or its Subsidiaries,
except transactions in the ordinary course of business; (iii) any obligation,
direct or contingent, which is material to
<PAGE> 9
-8-
the Company and its Subsidiaries taken as a whole, incurred by the Company or
its Subsidiaries, except obligations incurred in the ordinary course of
business; (iv) any change in the capital stock or outstanding indebtedness of
the Company or its Subsidiaries; or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company; neither the Company
nor its Subsidiaries has any material contingent obligation which is not
disclosed in the Registration Statement;
(q) the Company has obtained the agreement of each of its directors
and its five highest-paid officers not to sell, offer to sell, contract to sell,
hypothecate grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable for Common Stock or warrants or other rights to purchase Common
Stock for a period of 30 days after the date of the Prospectus; and
(r) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
4. Representations and Warranties of the Selling Stockholder. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) such Selling Stockholder, at the time of delivery thereof, will
be the lawful owner of the number of Shares to be sold by such Selling
Stockholder pursuant to this Agreement and, at the time of delivery thereof,
will have valid and marketable title to such Shares, and upon delivery of and
payment for such Shares (whether at the time of purchase or the additional time
of purchase, as the case may be), the Underwriters will acquire valid and
marketable title to such Shares free and clear of any claim, lien, encumbrance,
security interest, community property right, restriction on transfer or other
defect in title;
(b) such Selling Stockholder has and at the time of delivery of such
Shares will have, full legal right, power and capacity, and any approval
required by law (other than those imposed by the Act and the securities or blue
sky laws of certain jurisdictions), to sell, assign, transfer and deliver such
Shares in the manner provided in this Agreement;
<PAGE> 10
-9-
(c) when the Registration Statement becomes effective and at all
times subsequent thereto through the time of purchase or the termination of the
offering of the Shares, the Registration Statement and Prospectus, and any
supplements or amendments thereto, insofar as the statements therein relate to
such Selling Stockholder, will not 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;
(d) such Selling Stockholder has duly executed and delivered this
Agreement and any other document necessary or desirable in connection with the
transactions contemplated thereby; and
(e) the sale of such Selling Stockholder's Shares pursuant to this
Agreement is not prompted by any information concerning the Company which is not
set forth in the Prospectus.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares;
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to the Underwriter in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriter, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriter may request for the purposes
contemplated by the Act; in the Underwriter is required to deliver a prospectus
within the nine-month period referred to in Section 10(a)(3) of the Act in
connection with the sale of the Shares, the Company will prepare promptly upon
request, but at the expense of the Underwriter, such amendment to the
Registration Statement and such
<PAGE> 11
-10-
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective and (ii) if Rule
430A under the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
including by filing any documents that would be incorporated therein by
reference and to file no such amendment or supplement to which you shall object
in writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the Commission in
order to comply with the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriter promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Act which, in the judgment of the
Company, would require the making of any change in the Prospectus then being
used, or in the information incorporated therein by reference, so that the
Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to the Underwriter
promptly
<PAGE> 12
-11-
such amendments or supplements to such Prospectus as may be necessary to reflect
any such change and to furnish you a copy of such proposed amendment or
supplement before filing any such amendment or supplement with the Commission;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy the
provisions of Section 11(a) of the Act) covering a period of 12 months beginning
after the effective date of the Registration Statement (as defined in Rule
158(c) of the Act) as soon as is reasonably practicable after the termination of
such 12-month period;
(i) to furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and of cash flow of the Company for
such fiscal year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants;
(j) to furnish to you two signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference
therein);
(k) to furnish to you as early as practicable prior to the time of
purchase, but not later than two business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements, if any, of
the Company and its Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 8(c) hereof;
(l) to furnish to you, before filing with the Commission subsequent
to the effective date of the Registration Statement and during the period
referred to in paragraph (e) above, a copy of any document proposed to be filed
pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(m) not to sell, offer or agree to sell, contract to sell, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock or
permit the registration under the Act of any shares of Common Stock, except for
the registration of the Shares and the sales to the Underwriter pursuant to this
<PAGE> 13
-12-
Agreement and except for issuances of Common Stock upon the exercise of
outstanding options, warrants and debentures, for a period of 30 days after the
date hereof, without your prior written consent; and
(n) to use its best efforts to cause the Shares to be listed on the
New York Stock Exchange.
6. Certain Covenants of the Company and the Selling Stockholder. The
Company and each of the Selling Stockholder agree with the Underwriter as
follows:
(a) the Company will pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriter except
as set forth under Section 7 hereof or (iii) or (iv) below) in connection with
(i) the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the issuance, sale and
delivery of the Shares by the Company and the Selling Stockholders, (iii) the
word processing and/or printing of this Agreement, any dealer agreements, any
Statements of Information and the reproduction and/or printing and furnishing of
copies of each thereof to the Underwriter and to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering and
sale under state laws and the determination of their eligibility for investment
under state law as aforesaid (including the legal fees and filing fees and other
disbursements of counsel to the Underwriter) and the printing and furnishing of
copies of any blue sky surveys or legal investment surveys to the Underwriter
and to dealers, (v) any listing of the Shares on any securities exchange and any
registration thereof under the Exchange Act, (vi) the filing for review of the
public offering of the Shares by the NASD, and (vii) the performance of the
Company's and the Selling Stockholders' other obligations hereunder; and
(b) the Company will not issue, sell, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock or permit the registration under the Act
of any shares of Common Stock, except for the registration of the Shares and the
sales to the Underwriter pursuant to this Agreement and except for issuances of
Common Stock in connection with acquisitions of other companies or upon the
exercise of outstanding options, warrants and debentures, for a period of 30
days after the date of the Prospectus, without your prior written consent.
<PAGE> 14
-13-
7. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 10 hereof or the default by the
Underwriter in its obligations hereunder, the Company shall, in addition to
paying the amounts described in Section 6(a) hereof, reimburse the Underwriter
for all of its out-of-pocket expenses, including the fees and disbursements of
its counsel.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholder on the date
hereof and at the time of purchase (and the obligations of the Underwriter at
the additional time of purchase are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof and
at the time of purchase (unless previously waived) and at the additional time of
purchase, as the case may be), the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Wilson,
Sonsini, Goodrich & Rosati, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of purchase,
as the case may be, and in form satisfactory to Gibson, Dunn & Crutcher LLP,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and the Prospectus, to execute and deliver this Agreement and to issue, sell and
deliver the Shares as herein contemplated;
(ii) each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation with full corporate power and authority
to own, lease and operate its respective properties and to conduct its
respective business;
(iii) the Company and its Subsidiaries are duly qualified or
licensed by each jurisdiction in which they conduct their respective businesses
and in which the failure, individually or in the aggregate, to be so licensed or
qualified could have a Material Adverse Effect and the Company and its
<PAGE> 15
-14-
Subsidiaries are duly qualified, and are in good standing, in each jurisdiction
in which they own or lease real property or maintain an office and in which such
qualification is necessary;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be duly and validly and
issued and will be fully paid and non-assessable;
(vi) the Company has an authorized capitalization as set forth in
the Registration Statement and the Prospectus; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued, and are
fully paid, nonassessable and free of statutory and contractual preemptive
rights; the Shares when issued will be free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar rights;
the certificates for the Shares are in due and proper form and the holders of
the Shares will not be subject to personal liability by reason of being such
holders;
(vii) other than the Subsidiaries, the Company does not own or
control, directly or indirectly, any corporation, association or other entity;
each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement; each Subsidiary is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of the properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect;
all of the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable and,
except as otherwise stated in the Registration Statement, are owned by the
Company, in each case subject to no security interest, other encumbrance or
adverse claim; to the best of such counsel's knowledge, no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding;
<PAGE> 16
-15-
(viii) the capital stock of the Company, including the Shares,
conforms to the description thereof contained in the Registration Statement and
Prospectus;
(ix) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act;
(x) the Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act and any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424 under the Act
has been made in the manner and within the time period required by such Rule
424;
(xi) no approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and sale
of the Shares and consummation by the Company of the transactions contemplated
hereby other than registration of the Shares under the Act (except such counsel
need express no opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriter);
(xii) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with, or result in any breach
of, or constitute a default under (nor constitute any event which with notice,
lapse of time, or both, would result in any breach of or constitute a default
under), any provisions of the charter or by-laws of the Company or any of its
Subsidiaries or under any provision of any license, indenture, mortgage, deed of
trust, bank loan, credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of its Subsidiaries;
<PAGE> 17
-16-
(xiii) to the best of such counsel's knowledge, neither the
Company nor any of its Subsidiaries is in violation of its charter or by-laws or
is in breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of, or constitute a
default under), any license, indenture, mortgage, deed of trust, bank loan or
any other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or their respective properties
may be bound or affected or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company or
any of its Subsidiaries;
(xiv) to the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character which are
required to be filed as exhibits to the Registration Statement or to be
summarized or described in the Prospectus which have not been so filed,
summarized or described;
(xv) to the best of such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending, threatened or
contemplated to which the Company or any of its Subsidiaries is subject or of
which any of their respective properties, is subject at law or in equity or
before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which are required to be described
in the Prospectus but are not so described;
(xvi) the documents incorporated by reference in the Registration
Statement and Prospectus, when they were filed (or, if an amendment with respect
to any such document was filed when such amendment was filed) with the
Commission, complied as to form in all material respects with the Exchange Act
(except as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein as to which such
counsel need express no opinion);
(xvii) the Company will not, upon consummation of the
transactions contemplated by this Agreement, be an "investment company," or a
"promoter" or "principal underwriter" for, a "registered investment company," as
such terms are defined in the Investment Company Act of 1940, as amended;
(xviii) such counsel have participated in conferences with
officers and other representatives of the Company, representatives of the
independent
<PAGE> 18
-17-
public accountants of the Company and representatives of the Underwriter at
which the contents of the Registration Statement and Prospectus were discussed
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (vi) and (viii) above), on the basis of the
foregoing nothing has come to the attention of such counsel that causes them to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of purchase or
additional time of purchase, as the case may be, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data included in
the Registration Statement or Prospectus).
(b) You shall have received from PricewaterhouseCoopers LLP, letters
dated, respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriter in the forms heretofore approved by you.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Gibson, Dunn Crutcher LLP, counsel for the Underwriter, dated the time of
purchase or the additional time of purchase, as the case may be, as to the
matters referred to in subparagraphs (iv), (v), (viii) (with respect to the
Shares only), (ix) and (x) of paragraph (a) of this Section 8. In addition, such
counsel shall state that such counsel have participated in conferences with
officers and other representatives of the Company, counsel for the Company,
representatives of the independent public accountants of the Company and
representatives of the Underwriter at which the contents of the Registration
Statement and Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as to matters referred to with
respect to the Shares under subparagraph (viii) of paragraph (a) of
<PAGE> 19
-18-
this Section 8), on the basis of the foregoing, no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement or
amendment became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of its date
or any supplement thereto as of its date contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel need
express no comment with respect to the financial statements and schedules and
other financial and statistical data included in the Registration Statement or
Prospectus).
(d) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time the Registration Statement becomes effective to
which you object in writing.
(e) The Registration Statement shall become effective, or if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act, at or before 5:00 P.M., New
York City time, on the date of this Agreement, unless a later time (but not
later than 5:00 P.M., New York City time, on the second full business day after
the date of this Agreement) shall be agreed to by the Company, the Selling
Stockholders and you in writing or by telephone, confirmed in writing; provided,
however, that the Company, the Selling Stockholders and you may from time to
time agree on a later date.
(f) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall not 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) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not 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, in the light of the circumstances
under which they are made, not misleading.
<PAGE> 20
-19-
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business, condition or prospects
of the Company and its Subsidiaries taken as a whole shall occur or become known
and (ii) no transaction which is material and unfavorable to the Company shall
have been entered into by the Company or any of its Subsidiaries.
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such
date, that the Company shall perform such of its obligations under this
Agreement as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be and the conditions
set forth in paragraphs (g) and (h) of this Section 8 have been met.
(i) The Company and the Selling Stockholder shall have furnished to
you such other documents and certificates as to the accuracy and completeness of
any statement in the Registration Statement and the Prospectus as of the time of
purchase and the additional time of purchase, as the case may be, as you may
reasonably request.
(j) The Shares shall have been approved for listing on the Exchange,
subject only to notice of issuance at or prior to the time of purchase.
(k) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization", as that term is defined
in Rule 436(g)(2) under the Act.
9. Effective Date of Agreement; Termination. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
<PAGE> 21
-20-
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of you if, since the time of execution of
this Agreement or the respective dates as of which information is given in the
Registration Statement and Prospectus, (y) there has been any material adverse
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and its Subsidiaries taken as a whole, which would,
in your judgment make it impracticable to market the Shares or (z) there shall
have occurred any downgrading, or any notice shall have been given of (i) any
intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization", as that term is defined in Rule 436(g)(2)
under the Act or, if, at any time prior to the time of purchase or, with respect
to the purchase of any Additional Shares, the additional time of purchase, as
the case may be, trading in securities on the New York Stock Exchange, the
American Stock Exchange or the NASDAQ National Market shall have been suspended
or limitations or minimum prices shall have been established on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or if
a banking moratorium shall have been declared either by the United States or New
York State authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment, to make it
impracticable to market the Shares.
If the sale to the Underwriter of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriter for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholders, as the case may be, shall be unable to comply with any of
the terms of this Agreement, the Company or the Selling Stockholders, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(a), 7 and 11 hereof), and the
Underwriter shall be under no obligation or liability to the Company and the
Selling Stockholders under this Agreement (except to the extent provided in
Section 10 hereof).
10. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the
Selling Stockholders, the Underwriter, their respective partners, directors and
officers, and any person who controls any Selling Stockholder or the Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons (the "indemnified
persons") from and against any loss, damage, expense, liability or claim
<PAGE> 22
-21-
(including the reasonable cost of investigation) which, jointly or severally,
any such indemnified person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof) or in
a Prospectus (the term Prospectus for the purpose of this Section 11 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by the Underwriter to the Company expressly for
use with reference to the Underwriter in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in such Registration Statement or Prospectus or necessary to make such
information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against any such indemnified person in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, such indemnified person
shall promptly notify the Company in writing of the institution of such
Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
persons and payment of all fees and expenses; provided, however, that the
omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any such indemnified person or
otherwise. Such indemnified persons shall have the right to employ their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified persons unless the employment of such counsel
shall have been authorized in writing by the Company in connection with the
defense of such Proceeding or the Company shall not have, within a reasonable
period of time in light of the circumstances employed counsel to have charge of
the defense of such Proceeding or such indemnified person or persons shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to the
Company (in which case the Company shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified persons), in any of
which events such fees and expenses shall be borne
<PAGE> 23
-22-
by the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified persons who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any such Proceeding effected without its written consent but if
settled with the written consent of the Company, the Company agrees to indemnify
and hold harmless any Underwriter and any such indemnified person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified person shall have requested an
indemnifying party to reimburse the indemnified person for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified persons in accordance with such request prior to the date of
such settlement and (iii) such indemnified person shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified
persons, effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified person is or could have been a party and
indemnity could have been sought hereunder by such indemnified person, unless
such settlement includes an unconditional release of such indemnified person
from all liability on claims that are the subject matter of such Proceeding and
does not include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified person.
(b) The Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company or any such person may incur under the Act, the Exchange Act or
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by the Underwriter to the Company expressly for use with
reference to the Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof) or in
a Prospectus, or arises out of or is based upon any omission or alleged omission
to
<PAGE> 24
-23-
state a material fact in connection with such information required to be stated
in such Registration Statement or Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against the Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Underwriter in writing of the institution of such Proceeding and the Underwriter
shall assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses, provided, however, that the omission to so notify the Underwriter
shall not relieve the Underwriter from any liability which the Underwriter may
have to the Company or any such person or otherwise. The Company or such person
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or such
person unless the employment of such counsel shall have been authorized in
writing by the Underwriter in connection with the defense of such Proceeding or
the Underwriter shall not have employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to the Underwriter (in
which case the Underwriter shall not have the right to direct the defense of
such Proceeding on behalf of the indemnified party or parties, but the
Underwriter may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of the Underwriter),
in any of which events such fees and expenses shall be borne by the Underwriter
and paid as incurred (it being understood, however, that the Underwriter shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Underwriter shall not be liable for any settlement of any such
Proceeding effected without the written consent of the Underwriter but if
settled with the written consent of the Underwriter, the Underwriter agrees to
indemnify and hold harmless the Company and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid
<PAGE> 25
-24-
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 10 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 10 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriter on the
other shall be deemed to be in the same respective proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriter, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriter on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses
<PAGE> 26
-25-
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any claim or Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 10, the Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by the Underwriter and distributed to the
public were offered to the public exceeds the amount of any damage which the
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 10 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 10 and the covenants, warranties and representations of the Company and
the Selling Stockholder contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Underwriter, its directors and officers or any person (including each partner,
officer or director of such person) who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors or officers, any Selling Stockholder or any
person who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company, each Selling
Stockholder and the Underwriter agree promptly to notify each other commencement
of any Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or Prospectus.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Warburg Dillon Read LLC, 299 Park Avenue, New York, NY 10171-0026, Attention:
Syndicate Department, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at
<PAGE> 27
-26-
3901 North First Street, San Jose, CA 95134-1599, Attention: ____________ and,
if to any of the Selling Stockholders, shall be sufficient in all respects if
delivered or sent to such Selling Stockholder at its address set forth on
Schedule A hereto.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against Warburg Dillon Read LLC or any
indemnified party. Each of Warburg Dillon Read LLC and the Company (on its
behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and may be enforced
in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriter, the Company, the Selling
Stockholders and to the extent provided in Section 10 hereof the controlling
persons, directors and officers referred to in Such Section, and their
respective successors, assigns, heirs, pursuant representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from the Underwriter) shall acquire
or have any right under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
<PAGE> 28
-27-
16. Successors and Assigns. This Agreement shall be binding upon
the Underwriter, the Selling Stockholders and the Company and their successors
and assigns and any successor or assign of any substantial portion of the
Company's and the Underwriter's respective businesses and/or assets.
<PAGE> 29
-28-
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholder and the Underwriters, please so indicate in the
space provided below for the purpose, whereupon this letter and your acceptance
shall constitute a binding agreement among the Company, the Selling Stockholder
and the Underwriters, severally.
Very truly yours,
CYPRESS SEMICONDUCTOR CORPORATION
By:
---------------------------------------
Title:
------------------------------------
[NAME OF SELLING STOCKHOLDER]
By:
---------------------------------------
[NAME OF SELLING STOCKHOLDER]
By:
---------------------------------------
Accepted and agreed to as of the date first above written
WARBURG DILLON READ LLC
By:
---------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Title:
------------------------------------
<PAGE> 1
EXHIBIT 5.1
March 29, 1999
Cypress Semiconductor Corporation
3901 North First Street
San Jose, CA 95134
RE: CYPRESS SEMICONDUCTOR CORPORATION -- REGISTRATION STATEMENT ON FORM
S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 (No. 333-67203), including Amendment No. 1, Amendment No. 2, Amendment No. 3
and Amendment No. 4 thereto (the "Registration Statement"), filed or to be filed
by Cypress Semiconductor Corporation, a Delaware corporation (the "Company"),
with the Securities and Exchange Commission in connection with the registration
pursuant to the Securities Act of 1933, as amended (the "Act"), of the Company's
debt securities (the "Debt Securities"), shares of the Company's Common Stock,
$0.01 par value per share (the "Common Stock"), and shares of the Company's
Preferred Stock, $0.01 par value per share (the "Preferred Stock"), with an
aggregate offering price of up to $300,000,000 or the equivalent thereof in one
or more foreign currencies or composite currencies. The Debt Securities, the
Common Stock and the Preferred Stock are to be sold from time to time as set
forth in the Registration Statement, the prospectus contained therein and the
supplements to the prospectus (such prospectus together with the applicable
prospectus supplement, herein the Prospectus). The Debt Securities may be either
senior debt securities (the "Senior Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities").
The Senior Debt Securities are to be issued pursuant to a Senior
Indenture, which has been filed as an exhibit to the Registration Statement (the
"Senior Indenture"), to be entered into between the Company and State Street
Bank and Trust Company of California, N.A., as Trustee (the "Senior Trustee").
The Subordinated Debt Securities are to be issued pursuant to a Subordinated
Indenture, which has been filed as an exhibit to the Registration Statement (the
"Subordinated Indenture", together with the Senior Indenture, the "Indentures"),
to be entered into between the Company and State Street Bank and Trust Company
of California, N.A., as Trustee (the "Subordinated Trustee"). The shares of
Common Stock may be issued and sold by the Company or may be sold by certain
stockholders of the Company (the "Selling Stockholders") who are named in the
Registration Statement or the Prospectus. The Debt Securities are to be issued
in the forms of Debt Securities included in the Indentures filed as exhibits to
the Registration Statement.
<PAGE> 2
Cypress Semiconductor Corporation
March 29, 1999
Page 2
We have examined instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed (a) the authenticity of original documents and
the genuineness of all signatures, (b) the conformity to the originals of all
documents submitted to us as copies and (c) the truth, accuracy and completeness
of the information, representations and warranties contained in the records,
documents, instruments and certificates we have reviewed.
Based on such examination, we are of the opinion that:
1. When the issuance of Senior Debt Securities has been duly authorized
by appropriate corporate action and the Senior Debt Securities, in the form
included in the Senior Indenture filed as an exhibit to the Registration
Statement, have been duly completed, executed, authenticated and delivered in
accordance with the Senior Indenture and sold and delivered as described in the
Registration Statement and the Prospectus, the Senior Debt Securities will be
legal, valid and binding obligations of the Company, entitled to the benefits of
the Senior Indenture.
2. When the issuance of Subordinated Debt Securities has been duly
authorized by appropriate corporate action and the Subordinated Debt Securities,
in the form included in the Subordinated Indenture filed as an exhibit to the
Registration Statement, have been duly completed, executed, authenticated and
delivered in accordance with the Subordinated Indenture and sold and delivered
as described in the Registration Statement and the Prospectus, the Subordinated
Debt Securities will be legal, valid and binding obligations of the Company,
entitled to the benefits of the Subordinated Indenture.
3. When (i) the terms of any particular series of Preferred Stock have
been established in accordance with the resolutions of the Company's Board of
Directors authorizing the issuance and sale of such series of Preferred Stock,
(ii) a Certificate of Designation conforming to the Delaware General Corporation
Law regarding such series of Preferred Stock has been filed with the Secretary
of State of the State of Delaware, and (iii) shares of such series of Preferred
Stock have been issued, sold and delivered
<PAGE> 3
Cypress Semiconductor Corporation
March 29, 1999
Page 3
as described in the Registration Statement and the Prospectus, and in accordance
with the terms of the particular series as established by the Company's Board of
Directors, the shares of Preferred Stock will be legally issued, fully paid and
nonassessable.
4. When the issuance of the shares of Common Stock has been duly
authorized by appropriate corporate action, including any Common Stock that may
be issuable pursuant to the conversion of any Preferred Stock or Debt
Securities, and the shares of Common Stock have been duly issued, sold and
delivered as described in the Registration Statement and the Prospectus, the
shares of Common Stock will be legally issued, fully paid and nonassessable.
5. When the shares of Common Stock have been duly sold and delivered
by Selling Stockholders as described in the Registration Statement and the
Prospectus, such shares of Common Stock will be validly issued, fully paid and
nonassessable.
Our opinion that any document is legal, valid and binding is qualified
as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting the rights of creditors generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, including without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance or injunctive relief and
limitation of rights of acceleration, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
<PAGE> 4
Cypress Semiconductor Corporation
March 29, 1999
Page 4
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and the use of our name wherever it
appears in the Registration Statement, the Prospectus, the Prospectus
Supplement, and in any amendment of supplement thereto. In giving such consent,
we do not believe that we are "experts" within the meaning of such term used in
the Act or the rules and regulations of the Securities and Exchange Commission
issued thereunder with respect to any part of the Registration Statement,
including this opinion as an exhibit or otherwise.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati, P.C.
<PAGE> 1
EXHIBIT 10.1
================================================================================
FORM OF REGISTRATION RIGHTS AGREEMENT
among
CYPRESS SEMICONDUCTOR CORPORATION
and
UBS AG, London Branch
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into as of
the 29th day of March, 1999, between Cypress Semiconductor Corporation, a
Delaware corporation (the "Company"), and UBS AG, a Swiss banking corporation,
acting by and through its London Branch ("UBS").
WHEREAS, the Company has issued to UBS, and UBS acquired from the Company,
the Put Options, as defined in Section 1.1; and
WHEREAS, pursuant to the terms and conditions of each of the Put Options,
if such Put Option is In-the-Money (as defined in therein), the Company has the
right, at its election, to deliver to UBS a number of shares of Common Stock
having a value equal to the Cash Settlement amount referred to in the relevant
Put Option ("Net Share Settlement"); and
WHEREAS, as a condition to the Company settling its obligations under the
Put Options by Net Share Settlement, the Company and UBS shall enter into this
Agreement; and
WHEREAS, the Company has elected to discharge its obligations under the Put
Options by Net Share Settlement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the Company and UBS hereby agree as follows:
ARTICLE I DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 Put Options. "Put Options" shall mean the options to sell shares of
Common Stock issued by the Company to UBS pursuant to the terms and conditions
of the Confirmations.
1.2 Agent. "Agent" shall mean Warburg Dillon Read LLC and any other
dealer, broker, agent or underwriter appointed by UBS to participate in the
resale of the shares by UBS
1.3 Commission. "Commission" shall mean the United States Securities and
Exchange Commission or any successor agency thereto.
1.4 Confirmations. "Confirmations" shall mean the Equity Option
Confirmations (UBS Reference Numbers: 1278705, 1284119, 1284374, 1286219,
1289134, 1289269, 1289392 and 1289393) setting forth the terms of each of the
Put Options, together with the Master Agreement incorporated therein.
1.5 Exchange Act. "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as amended.
2
<PAGE> 3
1.6 Initial Date. "Initial Date" shall mean the Expiration Date or Early
Exercise Date (as defined in the Confirmations), as applicable.
1.7 Local Business Day. "Local Business Day" shall mean a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) in New York, New York.
1.8 Preliminary Prospectus. "Preliminary Prospectus" shall mean any
preliminary prospectus relating to the Shares, including all documents
incorporated by reference therein, included in the Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Securities Act; any reference to any amendment or
supplement to the Preliminary Prospectus shall be deemed to include any
documents filed under the Exchange Act after the date of such Preliminary
Prospectus and incorporated by reference therein; and any reference to the
Preliminary Prospectus as amended or supplemented shall be deemed to include the
Preliminary Prospectus as amended or supplemented by any such documents filed
under the Exchange Act after the date of such Preliminary Prospectus and
incorporated by reference therein.
1.9 Prospectus. "Prospectus" shall mean any prospectus relating to the
Shares, including any prospectus supplement relating to the Shares and all
documents incorporated by reference therein, (i) included in the Registration
Statement as of the time that the Registration Statement is declared effective
or (ii) filed with the Commission in connection with the Registration Statement
pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act; any reference to any amendment or supplement to the Prospectus
shall be deemed to include any documents filed under the Exchange Act after the
date of such Prospectus and incorporated by reference therein; and any reference
to the Prospectus as amended or supplemented shall be deemed to include the
Prospectus as amended or supplemented by any such documents filed under the
Exchange Act after the date of such Prospectus and incorporated by reference
therein.
1.10 Registration Statement. "Registration Statement" shall mean a
registration statement on Form S-3 (or any applicable successor form then in
effect; provided that if, at the time a registration statement is to be filed,
the Company is not eligible to use Form S-3 or applicable successor form for a
primary offering by or on behalf of the Company, "Registration Statement" shall
mean a registration statement on such form as is then available to the Company),
which is to be filed with the Commission pursuant to Section 4.1 hereof,
covering the resale of the Shares from time to time, including all exhibits
thereto and all documents incorporated by reference in the Prospectus contained
in such Registration Statement at the time it is declared effective, each as
amended at the time the Registration Statement is declared effective.
1.11 Securities Act. "Securities Act" shall mean the United States
Securities Act of 1933, as amended.
3
<PAGE> 4
1.12 Shares. "Shares" shall mean the shares of Common Stock deliverable by
the Company pursuant to the Net Share Settlement election upon exercise of the
Put Option including any Make-whole Shares as defined in the Put Options.
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to UBS and to each Agent that the
following are true and correct as of the date hereof and as of the "Settlement
Date" (as that term is defined in the Confirmations):
2.1 Organization and Existence of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the 1934 Act Reports
(as defined in Section 2.4), and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which the ownership or leasing of properties
or the conduct of its business requires such qualification, except to the extent
the failure to be so qualified would not have a material adverse effect on the
Company and its subsidiaries taken as a whole (a "Material Adverse Effect"); and
each subsidiary of the Company has been duly organized and is validly existing
as a corporation and is in good standing under the laws of its jurisdiction of
incorporation, except where the failure to be so would not have a Material
Adverse Effect.
2.2 Authorization of Transactions and Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by the board of
directors of the Company. Assuming due execution hereof by UBS, this Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any action,
legal or equitable, and except as rights to indemnity or contribution may be
limited by applicable law). The Company has the corporate power to execute and
deliver this Agreement and to consummate the transactions contemplated herein.
2.3 Capitalization. (a) As of the date of this Agreement, the Company has
an authorized capitalization as set forth in the Consolidated Balance Sheet and
Consolidated Statements of Stockholders' Equity contained in the Company's
Annual Report on Form 10-K for the fiscal year ended January 3, 1999
incorporated by reference in the Registration Statement and the Prospectus.
(b) The outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and non-assessable. The Company's
stockholders have no preemptive rights with respect to the Shares. All of the
issued shares of capital stock of each subsidiary of the Company that is a
"significant subsidiary" (as defined in Rule 12b-2 under the Exchange Act) have
been duly and validly authorized and issued, are fully paid and non-assessable
and all such shares
4
<PAGE> 5
that are owned directly or indirectly by the Company are free and clear of all
liens, encumbrances, equities or claims, with such exceptions as would not have
a Material Adverse Effect.
(c) The Shares have been duly authorized and, when delivered upon
exercise of the Put Options in accordance with the terms and conditions thereof,
will be validly issued, fully paid and nonassessable.
(d) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus and the certificates for the Shares are in
due and proper form
2.4 SEC Filings and Financial Statements. (a) The Company has heretofore
delivered to UBS copies of the Company's (i) Annual Report on Form 10-K for the
fiscal year ended January 3, 1999, (ii) the proxy statement for its 1998 Annual
Meeting of Stockholders, and (iii) each Quarterly Report on Form 10-Q, or
amended thereto, that the Company has filed with the Commission after the date
of the aforementioned Annual Report on Form 10-K, in each case, substantially in
the form filed by the Company with the Commission (collectively, together with
any other reports filed, as of the date of this Agreement, by the Company under
the Exchange Act and the rules and regulations of the Commission since January
1, 1998, the "1934 Act Reports"). All of the 1934 Act Reports complied in all
material respects, as ultimately amended as of the effective date of the
Registration Statement with all applicable requirements of the Exchange Act and
the related rules and regulations thereunder. As ultimately amended as of the
effective date of the Registration Statement, none of the 1934 Act Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements and unaudited
interim financial statements of the Company contained or incorporated by
reference in the Company's 1934 Act Reports have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis and,
together with the notes thereto, present fairly the consolidated financial
position of the Company and its subsidiaries at the dates shown and the
consolidated results of their operations, changes in stockholders' equity and
cash flows for the periods then ended.
2.5 No Material Adverse Change. Neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the 1934 Act Reports any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the 1934 Act Reports. Since the date of the latest audited
financial statements included or incorporated by reference in the 1934 Act
Reports, and except as may be set forth or contemplated in the 1934 Act Reports,
there has not been (i) any material change in the capital stock of the Company
(other than a change solely attributable to, or resulting from, the issuance of
Common Stock pursuant to a director, officer or employee stock option, benefit
or compensation plan), (ii) any material increase in the long-term consolidated
debt of the Company and its consolidated subsidiaries on a consolidated basis or
(iii) any change, in the general affairs, management, financial position,
5
<PAGE> 6
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, that could reasonably be expected to have a
Material Adverse Effect .
2.6 No Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement, similar financing agreement or
instrument or other agreement or instrument to which the Company or any of its
significant subsidiaries is a party or by which the Company or any of its
significant subsidiaries is bound or to which any of the property or assets of
the Company or any of its significant subsidiaries is subject, except for such
conflicts, breaches or violations as would not have a material adverse effect on
the Company and its subsidiaries taken as a whole or on the transactions
contemplated by this Agreement or the Confirmations; nor will such actions
result in any violation of the provisions of the Certificate of Incorporation or
by-laws of the Company or any statute applicable to the Company or any of its
significant subsidiaries or any order, judgment, decree, rule or regulation
applicable to the Company or any of its significant subsidiaries of any court or
governmental agency or body having jurisdiction over the Company or any of its
significant subsidiaries or any of their properties, except such violations as
would not have a Material Advance Effect on the Company and its subsidiaries
taken as a whole or on the transactions completed by this Agreement or the
Confirmations; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the consummation by the Company of the transactions contemplated by
this Agreement, except such as may be required under the Securities Act prior to
the resale of Shares and any such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the resale of Shares.
2.7 (a) Litigation. Other than as set forth or contemplated in the 1934
Act Reports, there are no actions, suits, claims, investigations or proceedings
pending or threatened to which the Company or any of its Subsidiaries or any of
their respective officers is a party or of which any of their respective
properties is subject at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency which could reasonably be expected to result in a judgment, decree or
order having a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby;
(b) All legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filled as an exhibit to the Registration Statement
have been so described or filed as required;
2.8 Independence of Public Accountants. Price Waterhouse Coopers, whose
reports on the consolidated financial statements of the Company and its
subsidiaries are filed with the Commission as part of the Registration State
went and Prospectus are independent public accountants as required by the
Securities Act and the Exchange Act and the rules and regulations of the
Commission thereunder.
2.9 Not an Investment Company. The Company is not subject to regulation
under the Investment Company Act of 1940, as amended.
6
<PAGE> 7
2.10 No Registration Rights. Except as disclosed on Schedule 2.10, no
person has any right to request or demand to have any shares of Common Stock or
other securities of the Company registered pursuant to the Registration
Statement or another registration statement pursuant to the Securities Act.
2.11 Registrant's Requirements for Form S-3. The Company meets the
registrant requirements of General Instruction I.A. of Form S-3 under the
Securities Act, as in effect on the date of this Agreement, or any successor
form then in effect; or if the Company is not then eligible to use Form S-3 or
other applicable successor form, such other form as is then available.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF UBS
UBS represents and warrants to the Company that the following are true and
correct as of the date hereof and as of the Settlement Date:
3.1 Organization and Existence of UBS. UBS is a banking corporation
organized and existing under the laws of Switzerland, with power and authority
(corporate and other) to own its properties and conduct its business.
3.2 Authorization of Transactions and Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by UBS. Assuming the
due execution thereof by the Company, this Agreement constitutes the legal,
valid and binding obligation of UBS, enforceable against UBS in accordance with
its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors' rights and the
application of equitable principles in any action, legal or equitable, and
except as rights to indemnity or contribution may be limited by applicable law).
UBS has the corporate power to execute and deliver this Agreement and to
consummate the transactions contemplated herein.
3.3 No Conflicts. No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is required
for the consummation by UBS of the transactions contemplated by this Agreement.
3.4 Availability of Exemption. UBS is aware of no reason that the issuance
of the Shares would not be exempt from registration under the Securities Act in
reliance on Section 3(a)(9) thereof.
ARTICLE IV AGREEMENTS OF THE COMPANY
The Company agrees as follows:
4.1 Filing of Registration Statement. (a) The Company has filed or shall
expeditiously file with the Commission a registration statement covering the
resale of the Shares from time to time by UBS and such affiliated entities as
UBS may designate on securities exchanges or over-the-counter market or in such
other lawful manner as UBS may specify, in a form previously reviewed by UBS.
7
<PAGE> 8
(b) If such registration statement has not yet become effective, the
Company shall use its best efforts to cause such registration statement to
become effective no later than the Initial Date. The Company shall (i) use its
best efforts to cause such registration statement to remain in effect from its
effective date until the date on which the Company receives written notice from
UBS that all of the Shares have been resold (the "Effective Period"), (ii)
inform UBS promptly upon notice from the Commission that the Registration
Statement or any amendment has been declared effective, (iii) advise UBS
promptly of any proposed amendment or supplement to the Prospectus after the
effective date thereof and furnish UBS with a draft prior to the filing thereof,
(iv) during the Effective Period, (A) unless the Company is legally required to
so amend or supplement the Prospectus, make no further amendment or any
supplement to the Prospectus (other than any such amendment or supplement
resulting from the filing of reports or statements under the Exchange Act which
are incorporated by reference in the Prospectus) after the effective date
thereof to which UBS reasonably objects within two business days after receipt
of a draft of the proposed amendment or supplement and (B) file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, (v) during the Effective Period, advise UBS, promptly after the Company
receives notice thereof, (A) of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, (B) of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares, (C) of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, (D) of the initiation or threatening of any proceeding for any
such purpose, or (E) of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information, and (vi) in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating to
the Shares or suspending any such qualification, use promptly its best efforts
to obtain the withdrawal of such order.
4.2 Qualification of the Shares under State Securities Laws. The Company
shall promptly take, from time to time, such action as UBS may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such of the United States as UBS may reasonably request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions during the Effective Period; provided that, the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction.
4.3 Preparation of Registration Statement; Reasonable Investigation. The
Company shall (a) give UBS, any Agent designated by UBS and their
representatives the opportunity to participate in the preparation of the
Registration Statement and, to the extent practicable, each amendment or
supplement thereto and document incorporated by reference therein which is filed
with the Commission after the filing of the Registration Statement (other than
any such amendment or supplement resulting from the filing of reports or
statements under the Exchange Act which are
8
<PAGE> 9
incorporated by reference in the Prospectus), (b) give UBS, any Agent designated
by UBS and their representatives such access to the books, records and
properties of the Company and its subsidiaries (to the extent customarily given
to those who are underwriters of the Company's securities) and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements and
will have such officers and accountants supply such information as shall be
reasonably requested by UBS, any Agent designated by UBS or their
representatives in connection with a "reasonable investigation" within the
meaning of Section 11(b) of the Securities Act and (c) promptly furnish UBS with
copies of any press release or other public announcement which it intends to
issue, or any report or document which it intends to file under the Exchange Act
with the Commission or other regulatory agency, insofar as such press release,
public announcement, report or other document regards this Agreement and the Put
Options and consider in good faith any comments received from UBS concerning the
timing and content of such press release, public announcement, report or other
document.
4.4 Compliance with Applicable Law and Commission Requirements. (a) The
Registration Statement and Prospectus and all amendments or supplements thereto
shall conform in all material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder and shall not, as of
the applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date of the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this covenant shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by UBS expressly for use in
the Prospectus or any amendment or supplement thereto.
(b) All of the documents incorporated by reference in the
Registration Statement and Prospectus, or any amendment or supplement thereto,
whether previously filed with the Commission or filed with the Commission
following the date hereof, at their respective times of filing, (i) shall have
conformed or shall conform, as applicable, in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and (ii) shall not have
contained or shall not contain, as applicable, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to (A) any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of UBS expressly for use in the Prospectus or any
amendment or supplement thereto or (B) statements or omissions that have been
superseded or otherwise corrected by an amendment, supplement or other filing
under the Exchange Act, but only with respect to the period after such
correction.
4.5 Furnishing of Prospectuses; Notice to UBS of Need for Amendment. The
Company shall furnish UBS with copies of the Prospectus, including any
amendments or supplements thereto, in such quantities as UBS may from time to
time reasonably request. If during the
9
<PAGE> 10
Effective Period any event shall have occurred as a result of which the
Prospectus as then amended or supplemented, would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Securities Act or the Exchange Act, the Company shall notify
UBS in writing and, as soon as reasonably practicable, shall amend or supplement
the Prospectus or file such document so as to correct such statement or omission
or effect such compliance and shall promptly prepare and furnish to UBS without
charge as many copies as UBS may from time to time reasonably request of any
amended Prospectus or supplement to the Prospectus provided that if the filing
of an incorporated document is required solely to comply with the periodic
reporting provisions under the Exchange Act, such report need not be filed
sooner than required by such provisions and no such written notice to UBS shall
be required.
4.6 Listing of the Shares. The Company shall use its best efforts to have
the Shares listed on the New York Stock Exchange as of the Expiration Date (as
defined in the Confirmation).
4.7 Delivery of Opinion and Comfort Letter. On the effective date of the
Registration Statement, the Company shall cause to be furnished to UBS and to
any Agent (i) an opinion of counsel for the Company, dated the effective date of
the Registration Statement, in substantially the form of Exhibit A hereto and
(ii) "comfort" letters signed by the Company's independent public accountants
who have examined and reported on the Company's financial statements included in
the Registration Statement, to the extent permitted by the standards of the
American Institute of Certified Public Accountants, covering substantially the
same matters with respect to the Registration Statement (and the Prospectus) and
with respect to events subsequent to the date of the financial statements, as
are customarily covered in accountants' "comfort" letters delivered to the
underwriters in underwritten public offerings of securities.
4.8 Furnishing of Additional Information. Until the earlier of the
Termination Date or completion of resale of the Shares, the Company shall
furnish to UBS copies of all reports or other communications (financial or
other) generally furnished to stockholders.
4.9 Payment of Expenses. The Company shall pay or cause to be paid the
following: (i) the reasonable fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, the Prospectus and any amendments and supplements
thereto and the mailing and delivering of copies thereof, (ii) any fees incurred
in connection with listing or approval for quotation of the Shares on the Nasdaq
National Market, (iii) all expenses in connection with the qualification of the
Shares for offering and sale under Section 4.2 hereof, (iv) the cost of
preparing certificates for the Shares, (v) the cost and charges of any transfer
agent or registrar or dividend disbursing agent, (vi) reasonable brokerage
charges, commissions or underwriting discounts charged by an Agent in connection
with the resale of the Shares and any transfer taxes payable by UBS in
connection with the resale of the Shares, and (vii) all other costs incident to
the performance of the Company's obligations under Article IV hereof
10
<PAGE> 11
which are not otherwise specifically provided for in this Section. It is
understood, however, that except as provided in this Section 4.9, UBS will pay
all of its own costs and expenses, including the fees of its counsel.
ARTICLE V AGREEMENTS OF UBS
UBS agrees, with respect to the period beginning on the date hereof through
and including the Termination Date, as follows:
5.1 Information for Use in the Prospectus. As soon as practicable but in
no event later than the third Local Business Day following the receipt of a
request from the Company, UBS shall furnish the Company with such information
and materials regarding UBS and its proposed dispositions of Shares as the
Company may from time to time reasonably request for use in preparing the
Registration Statement and Prospectus, including any amendments or supplements
thereto, obtaining any desired acceleration of the effective date of the
Registration Statement, and qualifying the Shares under state securities laws.
Such provision of information and materials is a condition precedent to the
obligations of the Company pursuant to this Agreement.
5.2 Suspension of Disposition of Shares. Upon receipt of any notice from
the Company (i) of the happening of any event which makes any statements made in
the Registration Statement or Prospectus, or any documents which requires the
making of any changes in such Registration Statement, or prospectus to that, in
the case of such Registration Statement it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (ii) that, in the judgment of the Company's Board of
Directors, it is advisable to suspend use of the prospectus for a discrete
period of time due to pending corporate developments, public filings with the
Commission or that there exists material nonpublic information about the Company
that the Board of Directors, acting in good faith, determines not to disclose in
the Registration Statement, then UBS will forthwith discontinue, for a period
not to exceed sixty (60) days, disposition of such Shares covered by such
Registration Statement or Prospectus until it is advised in writing by the
Company that use of the applicable Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus. The Company shall use its
reasonable commercial efforts to ensure that the use of the Prospectus may be
resumed as soon as practicable. The Termination Date shall be extended for an
additional number of Exchange Business Days during which UBS's right to sell the
Shares was suspended pursuant to the foregoing provision of this section 5.2
5.3 Notice of Completion. UBS shall notify the Company within three Local
Business Days of completion of its disposition of the Shares.
11
<PAGE> 12
ARTICLE VI INDEMNIFICATION
6.1 Indemnification with Respect to the Registration Statement. (a) The
Company will indemnify and hold harmless UBS and any Agent against any losses,
claims, damages or liabilities, joint or several, to which UBS and any Agent may
become subject, under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and will reimburse UBS and
any Agent for any reasonable legal or other expenses reasonably incurred by UBS
and any Agent in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any supplement thereto, the Registration Statement, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by UBS expressly for use therein.
The indemnity agreement contained in this Section 6.1(a) will not apply to
amounts paid in settlement of any such loss, claim, damage or liability if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld).
(b) UBS will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus and any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus and any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by UBS expressly for use therein
and will reimburse the Company for any reasonable legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred, provided, however, that
the obligations of UBS under this Section 6.1(b) shall not apply to amounts paid
in settlement of any such loss, claim, damage or liability if such settlement is
effected without the consent of UBS (which consent shall not be unreasonably
withheld).
12
<PAGE> 13
(c) Each party entitled to indemnification under this Section 6.1
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6.1 to the extent such
failure is not prejudicial to the Indemnifying Party. No Indemnifying Party in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 6.1 is
unavailable to or insufficient to hold harmless an Indemnified Party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault 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 Indemnifying Party on the
one hand or the Indemnified Party on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and UBS agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any reasonable legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. 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 who was not
guilty of such fraudulent misrepresentation.
13
<PAGE> 14
(e) The obligations of the Company under this Section 6.1 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each "affiliate" (as defined under the
Securities Act) of UBS, to each director and each officer of UBS and of its
affiliates, to each person, if any, who controls UBS, any Agent or any of their
respective affiliates within the meaning of the Securities Act; and the
obligations of UBS under this Section 6.1 shall be in addition to any liability
which UBS may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Securities Act.
ARTICLE VII GENERAL
7.1 Notices. (a) Any notice in respect of this Agreement shall be in
writing and may be given in any manner set forth below to the appropriate
address specified in paragraph (b) of this Section 7.1 and will be effective on
the earliest to occur of the dates indicated: (i) if delivered in person by an
employee or agent of the party giving the notice, on the date it is delivered;
(ii) if sent by Federal Express or other courier service, on the delivery date
designated by the sender to the courier service, or if such date is a Saturday,
Sunday or holiday in the location where notice is to be given, the next
following day that is not a Saturday, Sunday or such holiday; or (iii) if sent
by certified or registered mail or the equivalent, on the date it is delivered
or its delivery is refused, as reflected in the records of the relevant postal
service or on a return receipt.
(b) Notices shall be given to the addresses reflected below:
If to UBS, to: UBS AG, London Branch
c/o Warburg Dillon Read LLC
677 Washington Blvd.
Stamford, CT 06912
Facsimile: (203) 719-0680
Attention: Legal & External Affairs
If to the Company, to: Cypress Semiconductor Corporation
3901 North First Street
San Jose, CA 95134
Facsimile (408)943-2796
Attention: Neil Weiss
With a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Facsimile (650)493-6811
Attention: John Fore
14
<PAGE> 15
(c) Either party may by notice to the other change the address or
facsimile number at which notices or other communications are to be given to it.
7.2 Entire Agreement. This Agreement, together with the Confirmation and
the Master Agreement referred to therein, constitute the entire agreement and
understanding of the parties with respect to their subject matter and supersede
all oral communications and prior writings with respect thereto.
7.3 Governing Law and Jurisdiction. (a) This Agreement shall be governed
by and construed in accordance with New York law (without reference to choice of
law doctrine).
(b) With respect to any suit, action or proceedings relating to this
Agreement ("Proceedings"), each party irrevocably (i) submits to the
non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York City, and
(ii) waives any objection which it may have at any time to the laying of venue
of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not have
any jurisdiction over such party. Nothing in this Agreement precludes either
party from bringing Proceedings in any other jurisdiction, nor will the bringing
of Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) UBS hereby appoints UBS AG, Stamford Branch, 677 Washington
Blvd., Stamford, CT, Attention: Legal Affairs, to receive, for it and on its
behalf, service of process of any Proceedings. The parties irrevocably consent
to service of process given in the manner provided for notices in Section 7.1.
Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by law.
7.4 Amendments and Waivers. No amendment, modification or waiver in
respect of this Agreement shall be effective unless in writing and executed by
each of the parties. A failure or delay in exercising any right, power or
privilege in respect of this Agreement shall not be presumed to preclude any
subsequent or further exercise of that right, power or privilege or the exercise
of any other right, power or privilege.
7.5 Remedies Cumulative. The rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.
7.6 Headings. The headings used in this Agreement are for convenience of
reference only and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
15
<PAGE> 16
7.7 No Third-Party Beneficiaries. Except as expressly provided in Section
6.1(e), nothing in this Agreement is intended or shall be construed to confer
upon any person other than the parties hereto any right, remedy or claim under
or by reason of this Agreement.
7.8 Survival. The representations, warranties, indemnities and agreements
contained in this Agreement shall remain in full force and effect, regardless of
any investigation by or on behalf of any party, and shall survive delivery of
the Shares to UBS and resale of the Shares by UBS or any affiliated entity.
7.9 Counterparts. This Agreement may be executed in one or more
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
7.10 Assignability. This Agreement is not assignable by either party
without the prior written consent of the other; provided that the Company may
assign this Agreement to a successor in interest pursuant to a transfer of all
or substantially all of its assets or pursuant to a consolidation or merger.
7.11 Confidential Information. Each party shall keep confidential and shall
not disclose or use for any purpose other than as provided for in this Agreement
any data or information designated as confidential by the providing party.
16
<PAGE> 17
IN WITNESS WHEREOF, Cypress Semiconductor Corporation and UBS AG, London
Branch, by their duly authorized representatives, have executed this Agreement
as of the day and year first written above.
CYPRESS SEMICONDUCTOR CORPORATION
By:
--------------------------------------
Title:
-----------------------------------
UBS AG, LONDON BRANCH
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
<PAGE> 1
Exhibit 10.2
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
among
CYPRESS SEMICONDUCTOR CORPORATION
and
Deutsche Bank Securities Inc.
- --------------------------------------------------------------------------------
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into as of
the 29th day of March, 1999, between Cypress Semiconductor Corporation, a
Delaware corporation (the "Company"), andDeutsche Bank Securities Inc., a
Delaware corporation ("DBSI").
WHEREAS, the Company has issued to DBSI, and DBSI acquired from the
Company, the Put Options, as defined in Section 1.1; and
WHEREAS, pursuant to the terms and conditions of each of the Put Options,
if such Put Option is In-the-Money (as defined in therein), the Company has the
right, at its election, to deliver to DBSI a number of shares of Common Stock
having a value equal to the Cash Settlement amount referred to in the relevant
Put Option ("Net Share Settlement"); and
WHEREAS, as a condition to the Company settling its obligations under the
Put Options by Net Share Settlement, the Company and DBSI shall enter into this
Agreement; and
WHEREAS, the Company has elected to discharge its obligations under the Put
Options by Net Share Settlement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the Company and DBSI hereby agree as follows:
ARTICLE I DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 Put Options. "Put Options" shall mean the options to sell shares of
Common Stock issued by the Company to DBSI pursuant to the terms and conditions
of the Confirmations.
1.2 Agent. "Agent" shall mean Warburg Dillon Read LLC and any other
dealer, broker, agent or underwriter appointed by DBSI to participate in the
resale of the shares by DBSI
1.3 Commission. "Commission" shall mean the United States Securities and
Exchange Commission or any successor agency thereto.
1.4 Confirmations. "Confirmations" shall mean the Equity Option
Confirmations (Reference Numbers: ) setting forth the terms of each of the Put
Options, together with the Master Agreement incorporated therein.
1.5 Exchange Act. "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as amended.
2
<PAGE> 3
1.6 Initial Date. "Initial Date" shall mean the Expiration Date or Early
Exercise Date (as defined in the Confirmations), as applicable.
1.7 Local Business Day. "Local Business Day" shall mean a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) in New York, New York.
1.8 Preliminary Prospectus. "Preliminary Prospectus" shall mean any
preliminary prospectus relating to the Shares, including all documents
incorporated by reference therein, included in the Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Securities Act; any reference to any amendment or
supplement to the Preliminary Prospectus shall be deemed to include any
documents filed under the Exchange Act after the date of such Preliminary
Prospectus and incorporated by reference therein; and any reference to the
Preliminary Prospectus as amended or supplemented shall be deemed to include the
Preliminary Prospectus as amended or supplemented by any such documents filed
under the Exchange Act after the date of such Preliminary Prospectus and
incorporated by reference therein.
1.9 Prospectus. "Prospectus" shall mean any prospectus relating to the
Shares, including any prospectus supplement relating to the Shares and all
documents incorporated by reference therein, (i) included in the Registration
Statement as of the time that the Registration Statement is declared effective
or (ii) filed with the Commission in connection with the Registration Statement
pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act; any reference to any amendment or supplement to the Prospectus
shall be deemed to include any documents filed under the Exchange Act after the
date of such Prospectus and incorporated by reference therein; and any reference
to the Prospectus as amended or supplemented shall be deemed to include the
Prospectus as amended or supplemented by any such documents filed under the
Exchange Act after the date of such Prospectus and incorporated by reference
therein.
1.10 Registration Statement. "Registration Statement" shall mean a
registration statement on Form S-3 (or any applicable successor form then in
effect; provided that if, at the time a registration statement is to be filed,
the Company is not eligible to use Form S-3 or applicable successor form for a
primary offering by or on behalf of the Company, "Registration Statement" shall
mean a registration statement on such form as is then available to the Company),
which is to be filed with the Commission pursuant to Section 4.1 hereof,
covering the resale of the Shares from time to time, including all exhibits
thereto and all documents incorporated by reference in the Prospectus contained
in such Registration Statement at the time it is declared effective, each as
amended at the time the Registration Statement is declared effective.
1.11 Securities Act. "Securities Act" shall mean the United States
Securities Act of 1933, as amended.
3
<PAGE> 4
1.12 Shares. "Shares" shall mean the shares of Common Stock deliverable by
the Company pursuant to the Net Share Settlement election upon exercise of the
Put Option including any Make-whole Shares as defined in the Put Options.
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to DBSI and to each Agent that the
following are true and correct as of the date hereof and as of the "Settlement
Date" (as that term is defined in the Confirmations):
2.1 Organization and Existence of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the 1934 Act Reports
(as defined in Section 2.4), and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which the ownership or leasing of properties
or the conduct of its business requires such qualification, except to the extent
the failure to be so qualified would not have a material adverse effect on the
Company and its subsidiaries taken as a whole (a "Material Adverse Effect"); and
each subsidiary of the Company has been duly organized and is validly existing
as a corporation and is in good standing under the laws of its jurisdiction of
incorporation, except where the failure to be so would not have a Material
Adverse Effect.
2.2 Authorization of Transactions and Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by the board of
directors of the Company. Assuming due execution hereof by DBSI, this Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any action,
legal or equitable, and except as rights to indemnity or contribution may be
limited by applicable law). The Company has the corporate power to execute and
deliver this Agreement and to consummate the transactions contemplated herein.
2.3 Capitalization. (a) As of the date of this Agreement, the Company has
an authorized capitalization as set forth in the Consolidated Balance Sheet and
Consolidated Statements of Stockholders' Equity contained in the Company's
Annual Report on Form 10-K for the fiscal year ended January 3, 1999
incorporated by reference in the Registration Statement and the Prospectus.
(b) The outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and non-assessable. The Company's
stockholders have no preemptive rights with respect to the Shares. All of the
issued shares of capital stock of each subsidiary of the Company that is a
"significant subsidiary" (as defined in Rule 12b-2 under the Exchange Act) have
been duly and validly authorized and issued, are fully paid and non-assessable
and all such shares
4
<PAGE> 5
that are owned directly or indirectly by the Company are free and clear of all
liens, encumbrances, equities or claims, with such exceptions as would not have
a Material Adverse Effect.
(c) The Shares have been duly authorized and, when delivered upon
exercise of the Put Options in accordance with the terms and conditions thereof,
will be validly issued, fully paid and nonassessable.
(d) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus and the certificates for the Shares are in
due and proper form
2.4 SEC Filings and Financial Statements. (a) The Company has heretofore
delivered to DBSI copies of the Company's (i) Annual Report on Form 10-K for the
fiscal year ended January 3, 1999 (ii) the proxy statement for its 1998 Annual
Meeting of Stockholders, and (iii) each Quarterly Report on Form 10-Q, or
amendment thereto, that the Company has filed with the Commission after the date
of the aforementioned Annual Report on Form 10-K, in each case, substantially in
the form filed by the Company with the Commission (collectively, together with
any other reports filed, as of the date of this Agreement, by the Company under
the Exchange Act and the rules and regulations of the Commission since January
1, 1998, the "1934 Act Reports"). All of the 1934 Act Reports complied in all
material respects, as ultimately amended as of the effective date of the
Registration Statement with all applicable requirements of the Exchange Act and
the related rules and regulations thereunder. As ultimately amended as of the
effective date of the Registration Statement, none of the 1934 Act Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements and unaudited
interim financial statements of the Company contained or incorporated by
reference in the Company's 1934 Act Reports have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis and,
together with the notes thereto, present fairly the consolidated financial
position of the Company and its subsidiaries at the dates shown and the
consolidated results of their operations, changes in stockholders' equity and
cash flows for the periods then ended.
2.5 No Material Adverse Change. Neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the 1934 Act Reports any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the 1934 Act Reports. Since the date of the latest audited
financial statements included or incorporated by reference in the 1934 Act
Reports, and except as may be set forth or contemplated in the 1934 Act Reports,
there has not been (i) any material change in the capital stock of the Company
(other than a change solely attributable to, or resulting from, the issuance of
Common Stock pursuant to a director, officer or employee stock option, benefit
or compensation plan), (ii) any material increase in the long-term consolidated
debt of the Company and its consolidated subsidiaries on a consolidated basis or
(iii) any change, in the general affairs, management, financial position,
5
<PAGE> 6
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, that could reasonably be expected to have a
Material Adverse Effect .
2.6 No Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement, similar financing agreement or
instrument or other agreement or instrument to which the Company or any of its
significant subsidiaries is a party or by which the Company or any of its
significant subsidiaries is bound or to which any of the property or assets of
the Company or any of its significant subsidiaries is subject, except for such
conflicts, breaches or violations as would not have a material adverse effect on
the Company and its subsidiaries taken as a whole or on the transactions
contemplated by this Agreement or the Confirmations; nor will such actions
result in any violation of the provisions of the Certificate of Incorporation or
by-laws of the Company or any statute applicable to the Company or any of its
significant subsidiaries or any order, judgment, decree, rule or regulation
applicable to the Company or any of its significant subsidiaries of any court or
governmental agency or body having jurisdiction over the Company or any of its
significant subsidiaries or any of their properties, except such violations as
would not have a Material Advance Effect on the Company and its subsidiaries
taken as a whole or on the transactions completed by this Agreement or the
Confirmations; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the consummation by the Company of the transactions contemplated by
this Agreement, except such as may be required under the Securities Act prior to
the resale of Shares and any such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the resale of Shares.
2.7 (a) Litigation. Other than as set forth or contemplated in the 1934
Act Reports, there are no actions, suits, claims, investigations or proceedings
pending or threatened to which the Company or any of its Subsidiaries or any of
their respective officers is a party or of which any of their respective
properties is subject at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency which could reasonably be expected to result in a judgment, decree or
order having a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby;
(b) All legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filled as an exhibit to the Registration Statement
have been so described or filed as required;
2.8 Independence of Public Accountants. Price Waterhouse Coopers, whose
reports on the consolidated financial statements of the Company and its
subsidiaries are filed with the Commission as part of the Registration State
went and Prospectus are independent public accountants as required by the
Securities Act and the Exchange Act and the rules and regulations of the
Commission thereunder.
2.9 Not an Investment Company. The Company is not subject to regulation
under the Investment Company Act of 1940, as amended.
6
<PAGE> 7
2.10 No Registration Rights. Except as disclosed on Schedule 2.10, no
person has any right to request or demand to have any shares of Common Stock or
other securities of the Company registered pursuant to the Registration
Statement or another registration statement pursuant to the Securities Act.
2.11 Registrant's Requirements for Form S-3. The Company meets the
registrant requirements of General Instruction I.A. of Form S-3 under the
Securities Act, as in effect on the date of this Agreement, or any successor
form then in effect; or if the Company is not then eligible to use Form S-3 or
other applicable successor form, such other form as is then available.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF DBSI
DBSI represents and warrants to the Company that the following are true and
correct as of the date hereof and as of the Settlement Date:
3.1 Organization and Existence of DBSI. DBSI is a corporation organized
and existing under the laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its business.
3.2 Authorization of Transactions and Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by DBSI. Assuming
the due execution thereof by the Company, this Agreement constitutes the legal,
valid and binding obligation of DBSI, enforceable against DBSI in accordance
with its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors' rights and the
application of equitable principles in any action, legal or equitable, and
except as rights to indemnity or contribution may be limited by applicable law).
DBSI has the corporate power to execute and deliver this Agreement and to
consummate the transactions contemplated herein.
3.3 No Conflicts. No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is required
for the consummation by DBSI of the transactions contemplated by this Agreement.
3.4 Availability of Exemption. DBSI is aware of no reason that the
issuance of the Shares would not be exempt from registration under the
Securities Act in reliance on Section 3(a)(9) thereof.
ARTICLE IV AGREEMENTS OF THE COMPANY
The Company agrees as follows:
4.1 Filing of Registration Statement. (a) The Company has filed or shall
expeditiously file with the Commission a registration statement covering the
resale of the Shares from time to time by DBSI and such affiliated entities as
DBSI may designate on securities exchanges or over-
7
<PAGE> 8
the-counter market or in such other lawful manner as DBSI may specify, in a form
previously reviewed by DBSI.
(b) If such registration statement has not yet become effective, the
Company shall use its best efforts to cause such registration statement to
become effective no later than the Initial Date. The Company shall (i) use its
best efforts to cause such registration statement to remain in effect from its
effective date until the date on which the Company receives written notice from
DBSI that all of the Shares have been resold (the "Effective Period"), (ii)
inform DBSI promptly upon notice from the Commission that the Registration
Statement or any amendment has been declared effective, (iii) advise DBSI
promptly of any proposed amendment or supplement to the Prospectus after the
effective date thereof and furnish DBSI with a draft prior to the filing
thereof, (iv) during the Effective Period, (A) unless the Company is legally
required to so amend or supplement the Prospectus, make no further amendment or
any supplement to the Prospectus (other than any such amendment or supplement
resulting from the filing of reports or statements under the Exchange Act which
are incorporated by reference in the Prospectus) after the effective date
thereof to which DBSI reasonably objects within two business days after receipt
of a draft of the proposed amendment or supplement and (B) file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, (v) during the Effective Period, advise DBSI, promptly after the Company
receives notice thereof, (A) of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, (B) of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares, (C) of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, (D) of the initiation or threatening of any proceeding for any
such purpose, or (E) of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information, and (vi) in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating to
the Shares or suspending any such qualification, use promptly its best efforts
to obtain the withdrawal of such order.
4.2 Qualification of the Shares under State Securities Laws. The Company
shall promptly take, from time to time, such action as DBSI may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such of the United States as DBSI may reasonably request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions during the Effective Period; provided that, the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction.
4.3 Preparation of Registration Statement; Reasonable Investigation. The
Company shall (a) give DBSI, any Agent designated by DBSI and their
representatives the opportunity to participate in the preparation of the
Registration Statement and, to the extent practicable, each amendment or
supplement thereto and document incorporated by reference therein which is filed
with the Commission after the filing of the Registration Statement (other than
any such amendment or supplement resulting from the filing of reports or
statements under the Exchange Act which are incorporated by reference in the
Prospectus), (b) give DBSI, any Agent designated by DBSI and
8
<PAGE> 9
their representatives such access to the books, records and properties of the
Company and its subsidiaries (to the extent customarily given to those who are
underwriters of the Company's securities) and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements and will have such officers and
accountants supply such information as shall be reasonably requested by DBSI,
any Agent designated by DBSI or their representatives in connection with a
"reasonable investigation" within the meaning of Section 11(b) of the Securities
Act and (c) promptly furnish DBSI with copies of any press release or other
public announcement which it intends to issue, or any report or document which
it intends to file under the Exchange Act with the Commission or other
regulatory agency, insofar as such press release, public announcement, report or
other document regards this Agreement and the Put Options and consider in good
faith any comments received from DBSI concerning the timing and content of such
press release, public announcement, report or other document.
4.4 Compliance with Applicable Law and Commission Requirements. (a) The
Registration Statement and Prospectus and all amendments or supplements thereto
shall conform in all material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder and shall not, as of
the applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date of the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this covenant shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by DBSI expressly for use
in the Prospectus or any amendment or supplement thereto.
(b) All of the documents incorporated by reference in the
Registration Statement and Prospectus, or any amendment or supplement thereto,
whether previously filed with the Commission or filed with the Commission
following the date hereof, at their respective times of filing, (i) shall have
conformed or shall conform, as applicable, in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and (ii) shall not have
contained or shall not contain, as applicable, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to (A) any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of DBSI expressly for use in the Prospectus or any
amendment or supplement thereto or (B) statements or omissions that have been
superseded or otherwise corrected by an amendment, supplement or other filing
under the Exchange Act, but only with respect to the period after such
correction.
4.5 Furnishing of Prospectuses; Notice to DBSI of Need for Amendment. The
Company shall furnish DBSI with copies of the Prospectus, including any
amendments or supplements thereto, in such quantities as DBSI may from time to
time reasonably request. If during the Effective Period any event shall have
occurred as a result of which the Prospectus as
9
<PAGE> 10
then amended or supplemented, would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Securities Act or the Exchange Act, the Company shall notify
DBSI in writing and, as soon as reasonably practicable, shall amend or
supplement the Prospectus or file such document so as to correct such statement
or omission or effect such compliance and shall promptly prepare and furnish to
DBSI without charge as many copies as DBSI may from time to time reasonably
request of any amended Prospectus or supplement to the Prospectus provided that
if the filing of an incorporated document is required solely to comply with the
periodic reporting provisions under the Exchange Act, such report need not be
filed sooner than required by such provisions and no such written notice to DBSI
shall be required.
4.6 Listing of the Shares. The Company shall use its best efforts to have
the Shares listed on the New York Stock Exchange as of the Expiration Date (as
defined in the Confirmation).
4.7 Delivery of Opinion and Comfort Letter. On the effective date of the
Registration Statement, the Company shall cause to be furnished to DBSI and to
any Agent (i) an opinion of counsel for the Company, dated the effective date of
the Registration Statement, in substantially the form of Exhibit A hereto and
(ii) "comfort" letters signed by the Company's independent public accountants
who have examined and reported on the Company's financial statements included in
the Registration Statement, to the extent permitted by the standards of the
American Institute of Certified Public Accountants, covering substantially the
same matters with respect to the Registration Statement (and the Prospectus) and
with respect to events subsequent to the date of the financial statements, as
are customarily covered in accountants' "comfort" letters delivered to the
underwriters in underwritten public offerings of securities.
4.8 Furnishing of Additional Information. Until the earlier of the
Termination Date or completion of resale of the Shares, the Company shall
furnish to DBSI copies of all reports or other communications (financial or
other) generally furnished to stockholders.
4.9 Payment of Expenses. The Company shall pay or cause to be paid the
following: (i) the reasonable fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, the Prospectus and any amendments and supplements
thereto and the mailing and delivering of copies thereof, (ii) any fees incurred
in connection with listing or approval for quotation of the Shares on the Nasdaq
National Market, (iii) all expenses in connection with the qualification of the
Shares for offering and sale under Section 4.2 hereof, (iv) the cost of
preparing certificates for the Shares, (v) the cost and charges of any transfer
agent or registrar or dividend disbursing agent, (vi) reasonable brokerage
charges, commissions or underwriting discounts charged by an Agent in connection
with the resale of the Shares and any transfer taxes payable by DBSI in
connection with the resale of the Shares, and (vii) all other costs incident to
the performance of the Company's obligations under Article IV hereof which are
not otherwise specifically provided for in this Section. It is understood,
however, that
10
<PAGE> 11
except as provided in this Section 4.9, DBSI will pay all of its own costs and
expenses, including the fees of its counsel.
ARTICLE V AGREEMENTS OF DBSI
DBSI agrees, with respect to the period beginning on the date hereof
through and including the Termination Date, as follows:
5.1 Information for Use in the Prospectus. As soon as practicable but in
no event later than the third Local Business Day following the receipt of a
request from the Company, DBSI shall furnish the Company with such information
and materials regarding DBSI and its proposed dispositions of Shares as the
Company may from time to time reasonably request for use in preparing the
Registration Statement and Prospectus, including any amendments or supplements
thereto, obtaining any desired acceleration of the effective date of the
Registration Statement, and qualifying the Shares under state securities laws.
Such provision of information and materials is a condition precedent to the
obligations of the Company pursuant to this Agreement.
5.2 Suspension of Disposition of Shares. Upon receipt of any notice from
the Company (i) of the happening of any event which makes any statements made in
the Registration Statement or Prospectus, or any documents which requires the
making of any changes in such Registration Statement or prospectus to that, in
the case of such Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (ii) that, in the judgment of the Company's Board of
Directors, it is advisable to suspend use of the prospectus for a discrete
period of time due to pending corporate developments, public filings with the
Commission or that there exists material nonpublic information about the Company
that the Board of Directors, acting in good faith, determines not to disclose in
the Registration Statement, then DBSI will forthwith discontinue, for a period
not to exceed sixty (60) days, disposition of such Shares covered by such
Registration Statement or Prospectus until it is advised in writing by the
Company that use of the applicable Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus. The Company shall use its
reasonable commercial efforts to ensure that the use of the Prospectus may be
resumed as soon as practicable. The Termination Date shall be extended for an
additional number of Exchange Business Days during which DBSI's right to sell
the Shares was suspended pursuant to the foregoing provision of this section 5.2
5.3 Notice of Completion. DBSI shall notify the Company within three Local
Business Days of completion of its disposition of the Shares.
11
<PAGE> 12
ARTICLE VI INDEMNIFICATION
6.1 Indemnification with Respect to the Registration Statement. (a) The
Company will indemnify and hold harmless DBSI and any Agent against any losses,
claims, damages or liabilities, joint or several, to which DBSI and any Agent
may become subject, under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and will reimburse DBSI
and any Agent for any reasonable legal or other expenses reasonably incurred by
DBSI and any Agent in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any supplement thereto, the Registration Statement, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by DBSI expressly for use therein.
The indemnity agreement contained in this Section 6.1(a) will not apply to
amounts paid in settlement of any such loss, claim, damage or liability if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld).
(b) DBSI will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus and any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus and any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by DBSI expressly for use therein and will
reimburse the Company for any reasonable legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred, provided, however, that the
obligations of DBSI under this Section 6.1(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage or liability if such settlement is
effected without the consent of DBSI (which consent shall not be unreasonably
withheld).
12
<PAGE> 13
(c) Each party entitled to indemnification under this Section 6.1
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6.1 to the extent such
failure is not prejudicial to the Indemnifying Party. No Indemnifying Party in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 6.1 is
unavailable to or insufficient to hold harmless an Indemnified Party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault 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 Indemnifying Party on the
one hand or the Indemnified Party on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and DBSI agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any reasonable legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. 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 who was not
guilty of such fraudulent misrepresentation.
13
<PAGE> 14
(e) The obligations of the Company under this Section 6.1 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each "affiliate" (as defined under the
Securities Act) of DBSI, to each director and each officer of DBSI and of its
affiliates, to each person, if any, who controls DBSI, any Agent or any of their
respective affiliates within the meaning of the Securities Act; and the
obligations of DBSI under this Section 6.1 shall be in addition to any liability
which DBSI may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Securities Act.
ARTICLE VII GENERAL
7.1 Notices. (a) Any notice in respect of this Agreement shall be in
writing and may be given in any manner set forth below to the appropriate
address specified in paragraph (b) of this Section 7.1 and will be effective on
the earliest to occur of the dates indicated: (i) if delivered in person by an
employee or agent of the party giving the notice, on the date it is delivered;
(ii) if sent by Federal Express or other courier service, on the delivery date
designated by the sender to the courier service, or if such date is a Saturday,
Sunday or holiday in the location where notice is to be given, the next
following day that is not a Saturday, Sunday or such holiday; or (iii) if sent
by certified or registered mail or the equivalent, on the date it is delivered
or its delivery is refused, as reflected in the records of the relevant postal
service or on a return receipt.
(b) Notices shall be given to the addresses reflected below:
If to DBSI, to:
Facsimile:
Attention:
If to the Company, to: Cypress Semiconductor Corporation
3901 North First Street
San Jose, CA 95134
Facsimile (408)943-2796
Attention: Neil Weiss
With a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Facsimile (650)493-6811
Attention: John Fore
14
<PAGE> 15
(c) Either party may by notice to the other change the address or
facsimile number at which notices or other communications are to be given to it.
7.2 Entire Agreement. This Agreement, together with the Confirmation and
the Master Agreement referred to therein, constitute the entire agreement and
understanding of the parties with respect to their subject matter and supersede
all oral communications and prior writings with respect thereto.
7.3 Governing Law and Jurisdiction. (a) This Agreement shall be governed
by and construed in accordance with New York law (without reference to choice of
law doctrine).
(b) With respect to any suit, action or proceedings relating to this
Agreement ("Proceedings"), each party irrevocably (i) submits to the
non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York City, and
(ii) waives any objection which it may have at any time to the laying of venue
of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not have
any jurisdiction over such party. Nothing in this Agreement precludes either
party from bringing Proceedings in any other jurisdiction, nor will the bringing
of Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) The parties irrevocably consent to service of process given in
the manner provided for notices in Section 7.1. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
7.4 Amendments and Waivers. No amendment, modification or waiver in
respect of this Agreement shall be effective unless in writing and executed by
each of the parties. A failure or delay in exercising any right, power or
privilege in respect of this Agreement shall not be presumed to preclude any
subsequent or further exercise of that right, power or privilege or the exercise
of any other right, power or privilege.
7.5 Remedies Cumulative. The rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.
7.6 Headings. The headings used in this Agreement are for convenience of
reference only and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
7.7 No Third-Party Beneficiaries. Except as expressly provided in Section
6.1(e), nothing in this Agreement is intended or shall be construed to confer
upon any person other than the parties hereto any right, remedy or claim under
or by reason of this Agreement.
15
<PAGE> 16
7.8 Survival. The representations, warranties, indemnities and agreements
contained in this Agreement shall remain in full force and effect, regardless of
any investigation by or on behalf of any party, and shall survive delivery of
the Shares to DBSI and resale of the Shares by DBSI or any affiliated entity.
7.9 Counterparts. This Agreement may be executed in one or more
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
7.10 Assignability. This Agreement is not assignable by either party
without the prior written consent of the other; provided that the Company may
assign this Agreement to a successor in interest pursuant to a transfer of all
or substantially all of its assets or pursuant to a consolidation or merger.
7.11 Confidential Information. Each party shall keep confidential and shall
not disclose or use for any purpose other than as provided for in this Agreement
any data or information designated as confidential by the providing party.
16
<PAGE> 17
IN WITNESS WHEREOF, Cypress Semiconductor Corporation and Deutsche Bank
Securities Inc., by their duly authorized representatives, have executed this
Agreement as of the day and year first written above.
CYPRESS SEMICONDUCTOR CORPORATION
By:
--------------------------------------
Title:
-----------------------------------
DEUTSCHE BANK SECURITIES INC.
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
17
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
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 25, 1999, appearing on page 50 of Cypress Semiconductor Corporation's
Annual Report on Form 10-K for the year ended January 3, 1999. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Jose, California
March 23, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the use of our reports dated September 12, 1998, with respect
to the consolidated financial statement of IC Works, Inc., included in the
Current Report on Form 8-K/A, of Cypress Semiconductor Corporation, dated March
24, 1999 and incorporated by reference in this Amendment No. 4 to the
Registration Statement (Form S-3) and related Prospectus of Cypress
Semiconductor Corporation.
/s/ ERNST & YOUNG LLP
San Jose, California
March 26, 1999
