Cypress Semiconductor Corporation Sends Letter To CFO Of Integrated Silicon Solution, Inc. Regarding Impasse In Negotiating An Acceptable Confidentiality Agreement

SAN JOSE, Calif., May 18, 2015 — (PRNewswire) —  Cypress Semiconductor Corp. (NASDAQ: CY) today announced that it had sent the following letter to the Chief Financial Officer of Integrated Silicon Solution, Inc.

Cypress Semiconductor Corp. logo

May 18, 2015

John M. Cobb
Chief Financial Officer and Vice President of
Finance and Administration
Integrated Silicon Solution, Inc.
1623 Buckeye Drive
Milpitas, California 95035

Mr. Cobb,

On behalf of Cypress Semiconductor Corporation ("Cypress"), I am writing to formally convey our frustration and disappointment with the position Integrated Silicon Solution, Inc. ("ISSI") is taking with respect to the terms of an "Acceptable Confidentiality Agreement," as defined in your Agreement and Plan of Merger entered into with the "Consortium" on March 12, 2015 (the "Consortium Merger Agreement").  Cypress and its financial and legal advisors have provided a reasonable draft of a Confidentiality Agreement (the "Proposed Confidentiality Agreement"), which we executed as well, in an effort to expedite completion of necessary and customary due diligence.  Our Proposed Confidentiality Agreement, which we have attached to this letter, appropriately protects ISSI and is fully in accordance with the Consortium Merger Agreement.

The Consortium Merger Agreement clearly states that an Acceptable Confidentiality Agreement "need not contain any 'standstill' or other similar provisions."  Consequently, the fact that ISSI is now insisting on a standstill as a part of an Acceptable Confidentiality Agreement with Cypress is troubling.  A standstill clause is not in Cypress's best interest as it significantly restricts our flexibility to fully pursue a transaction.  You also informed us that even if you were willing to sign a confidentiality agreement without an express standstill provision, you would not be permitted to do so under the Consortium Merger Agreement because it requires that any Acceptable Confidentiality Agreement prohibit the use of confidential information in any situation other than a negotiated transaction (a so-called "back door" standstill provision).  We think this an erroneous reading of the Consortium Merger Agreement given the express permission for you to enter into an agreement not containing any "standstill" or similar provisions.

As we clearly indicated in our letter dated May 13th, Cypress is committed to expeditiously moving forward with due diligence.  As such, we ask that ISSI immediately countersign and return the Proposed Confidentiality Agreement.  We look forward to working with you toward completion of a successful transaction. 


                                                                                /s/ Thad Trent

                                                                                Thad Trent
                                                                                Executive Vice President & Chief 
                                                                                Financial Officer


May 16, 2015

Cypress Semiconductor Corporation
198 Champion Court
San Jose, California 95134

Attention:  Pamela L. Tondreau, General Counsel

Re:      Confidentiality Agreement

Ladies and Gentlemen:

1.    In connection with the possible acquisition ("Proposed Transaction") of Integrated Silicon Solution, Inc., a Delaware corporation ("ISSI") by Cypress Semiconductor Corporation ("Company"), and to allow ISSI and Company to evaluate the Proposed Transaction, each of ISSI and Company have and will deliver to the other party hereto, upon the execution and delivery of this letter agreement by such other party, certain information about its properties, employees, finances, businesses and operations (such party when disclosing such information being the "Disclosing Party" and when receiving such information being the "Receiving Party").  All information (i) about the Disclosing Party or (ii) about any third party (which information was provided to the Disclosing Party subject to an applicable confidentiality obligation to such third party), furnished by the Disclosing Party or its Representatives (as defined below) to the Receiving Party or its Representatives, furnished after the date hereof in connection with the evaluation of the Proposed Transaction, and regardless of the manner in which it is furnished, is referred to in this letter agreement as "Proprietary Information."  Proprietary Information shall not include, however, information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party or its Representatives in violation of this letter agreement; (ii) was available to the Receiving Party on a nonconfidential basis prior to its disclosure by the Disclosing Party or its Representatives; (iii) becomes available to the Receiving Party on a nonconfidential basis from a person other than the Disclosing Party or its Representatives, provided that such person, to the Recipient's knowledge, is not otherwise bound by a confidentiality agreement with the Disclosing Party or any of its Representatives, or is otherwise not under an obligation to the Disclosing Party or any of its Representatives not to transmit the information to the Receiving Party; or (iv) was independently developed by the Receiving Party without reference to or use of the Proprietary Information.  For purposes of this letter agreement, (i) "Representative" shall mean, as to any person, its affiliates and its affiliates' directors, officers, employees, agents and advisors (including, without limitation, financial advisors, attorneys and accountants) and debt financing sources; (ii) "person" shall be broadly interpreted to include, without limitation, any corporation, company, partnership, other entity or individual; and (iii) "affiliates" shall mean, with respect to any person, any other person that is directly or indirectly controlling, controlled by or under common control with such person, where "control" and derivative terms mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

2.    Subject to the immediately succeeding paragraph and to paragraph 4, unless otherwise agreed to in writing by the Disclosing Party, the Receiving Party (i) except as required by law, shall keep all Proprietary Information confidential, shall not disclose or reveal any Proprietary Information to any person other than its Representatives who are actively and directly participating in its evaluation of the Proposed Transaction or who otherwise need to know the Proprietary Information for the purpose of evaluating the Proposed Transaction and shall cause those persons to observe the terms of this letter agreement; (ii) shall not use Proprietary Information for any purpose other than in connection with its evaluation of the Proposed Transaction or the consummation of the Proposed Transaction; and (iii) except as required by law, shall not disclose to any person (other than those of its Representatives who are actively and directly participating in its evaluation of the Proposed Transaction or who otherwise need to know for the purpose of evaluating the Proposed Transaction and, in the case of its Representatives, whom it will cause to observe the terms of this letter agreement) any information about the Proposed Transaction, or the terms or conditions or any other facts relating thereto or the status thereof, or the fact that the Proprietary Information has been made available to the Receiving Party or its Representatives (collectively, the "Transaction Information").  The Receiving Party shall direct its Representatives to comply with the provisions hereof applicable to its Representatives.

3.    In the event that the Receiving Party or any of its Representatives are requested pursuant to, or required by, applicable law or regulation (including, without limitation, any rule, regulation or policy statement of any national securities exchange, market or automated quotation system on which any of the Receiving Party's securities are listed or quoted) or by legal process to disclose any Proprietary Information or any other information concerning the Disclosing Party or the Proposed Transaction, the Receiving Party shall provide the Disclosing Party with prompt notice of such request or requirement in order to enable the Disclosing Party (i) to seek an appropriate protective order or other remedy, (ii) to consult with the Receiving Party with respect to the Disclosing Party's taking steps to resist or narrow the scope of such request or legal process or (iii) to waive compliance, in whole or in part, with the terms of this letter agreement.  In the event that such protective order or other remedy is not obtained, or the Disclosing Party waives compliance, in whole or in part, with the terms of this letter agreement, the Receiving Party or its Representative shall use commercially reasonable efforts to disclose only that portion of the Proprietary Information which is legally required to be disclosed and to ensure that all Proprietary Information that is so disclosed will be accorded confidential treatment.  In the event that the Receiving Party or its Representatives shall have complied fully with the provisions of this paragraph, such disclosure may be made by the Receiving Party or its Representatives without any liability hereunder.

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