EXHIBIT 1.1
12,500,000 Shares
INTEGRATED CIRCUIT SYSTEMS, INC.
Common Stock, Par Value $.01 Per Share
UNDERWRITING AGREEMENT
----------------------
May , 2000
CREDIT SUISSE FIRST BOSTON CORPORATION
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC. and
PENNSYLVANIA MERCHANT GROUP
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Integrated Circuit Systems, Inc., a Pennsylvania
corporation ("Company"), proposes to issue and sell 12,500,000 shares of its
Common Stock, par value $.01 per share ("Securities") (such 12,500,000 shares of
Securities being hereinafter referred to as the "Firm Securities") and the
stockholders listed in Schedules ▇-▇, ▇-▇, ▇-▇, ▇-▇ and A-5 hereto ("Selling
Stockholders") propose severally to sell to the Underwriters, at the option of
the Underwriters, an aggregate of not more than 1,875,000 additional outstanding
shares of the Company's Securities, as set forth below (such 1,875,000
additional shares being hereinafter referred to as the "Optional Securities").
The Firm Securities and the Optional Securities are herein collectively called
the "Offered Securities". As part of the offering contemplated by this
Agreement, Credit Suisse First Boston Corporation ("CSFBC") (the "Designated
Underwriter") has agreed to reserve out of the Firm Securities purchased by it
under this Agreement, up to 625,000 shares, for sale to the Company's directors,
officers, employees and other parties associated with the Company (collectively,
"Participants"), as set forth in the Prospectus (as defined herein) under the
heading "Underwriting" (the "Directed Share Program"). The Firm Securities to be
sold by the Designated Underwriter pursuant to the
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Directed Share Program (the "Directed Shares") will be sold by the Designated
Underwriter pursuant to this Agreement at the public offering price. Any
Directed Shares not subscribed for by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus. The Company and the Selling Stockholders hereby agree
with the several Underwriters named in Schedule B hereto ("Underwriters") as
follows:
2. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-33318) relating to the
Offered Securities, including a form of prospectus, has been filed
with the Securities and Exchange Commission ("Commission") and either
(A) has been declared effective under the Securities Act of 1933, as
amended ("Act") and is not proposed to be amended or (B) is proposed
to be amended by amendment or post-effective amendment. If such
registration statement (the "initial registration statement") has been
declared effective, either (A) an additional registration statement
(the "additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule
462(b) ("Rule 462(b)") under the Act and, if so filed, has become
effective upon filing pursuant to such Rule and the Offered Securities
all have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional registration
statement or (B) such an additional registration statement is proposed
to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such
filing the Offered Securities will all have been duly registered under
the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to
amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment
(if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case
of the additional registration statement, Rule 462(b). For purposes
of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and
delivery of this Agreement, the additional registration statement,
means (A) if the Company has advised the Representatives that it does
not propose to amend such
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registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (B) if the Company
has advised the Representatives that it proposes to file an amendment
or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it
proposes to file one, "Effective Time" with respect to such additional
registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the
date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all information
contained in the additional registration statement (if any) and deemed
to be a part of the initial registration statement as of the Effective
Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the Offered Securities,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter
referred to as the "Prospectus". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all respects to the requirements
of the Act and the rules and regulations of the
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Commission ("Rules and Regulations") and did not include 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, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed
or will conform, in all respects to the requirements of the Act and
the Rules and Regulations and did not include, or will not include,
any untrue statement of a material fact and did not omit, or will not
omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on
the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior
to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required)
at the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement and the
Prospectus will conform, in all respects to the requirements of the
Act and the Rules and Regulations, and neither of such documents
includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. If
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date
of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and no
Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be
so qualified and in good standing would not reasonably be expected to
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individually or in the aggregate (x) result in a material adverse
effect on the properties, business, result of operations, condition
(financial or other), affairs or prospects of the Company and its
subsidiaries taken as a whole, (y) interfere with or adversely affect
the issuance or marketability of the Offered Securities or (z) in any
manner draw into question the validity of this Agreement (any of the
events set forth in clauses (x), (y) or (z), a "Material Adverse
Effect").
(iv) Each subsidiary of the Company that (A) generates 5% or
more of the revenues, (B) generates 5% or more of the operating
income, or (C) holds 5% or more of the assets, in each case, of the
Company and its subsidiaries on a consolidated basis as reflected in
the financial statements included in the Prospectus under the heading
"Unaudited Pro Forma Consolidated Financial Data" (each, a
"Significant Subsidiary") of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus; and each Significant Subsidiary of the Company is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing could
not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect; all of the issued and outstanding capital
stock of the Company and of each Significant Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable; and
except for pledges in favor of Credit Suisse First Boston, as
collateral agent, under the secured global credit facility consisting
of an aggregate of $70 million of term loan facilities and an
aggregate $25 million revolving credit facility, the capital stock of
each Significant Subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized by all
necessary corporate action and validly issued, fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Securities.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
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(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act, and to the extent any such rights are
applicable in respect of a Registration Statement, such rights have
been fully satisfied or waived in accordance with their terms.
(viii) The Offered Securities have been approved for listing
subject to notice of issuance on The Nasdaq Stock Market's National
Market (the "Nasdaq National Market").
(ix) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court or other
person is required to be obtained or made by the Company for the
execution and delivery of this Agreement and consummation of the
transactions contemplated by this Agreement in connection with the
sale of the Offered Securities (including the reclassification (the
"Reclassification") and stock-split (the "Stock-Split"), as described
in the Prospectus under the caption "The Reclassification"), except
such as have been obtained and made under the Act and such as may be
required under state securities or "Blue Sky" laws.
(x) The execution, delivery and performance of this Agreement,
and the consummation of the transactions herein contemplated
(including the Reclassification and the Stock-Split) will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, (A) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, (B) any agreement or instrument to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
properties of the Company or any of its subsidiaries is subject, or
(C) or the charter or by-laws of the Company or any of its
subsidiaries, except (1) in each case, that any rights to indemnity
and contribution may be limited by federal and state securities laws
and public policy considerations and (2) in the case of clauses (A)
and (B) for such breaches, violations or defaults as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and the
6
Company has full corporate power and authority to authorize, issue and
sell the Offered Securities as contemplated by this Agreement, and the
Company has full corporate power and authority to execute, deliver and
perform this Agreement.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them that are material to the
Company and its subsidiaries taken as a whole, in each case free from
liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or proposed to be
made thereof by them; and except as disclosed in the Prospectus, the
Company and its subsidiaries hold any leased real or personal property
that is material to the Company and its subsidiaries taken as a whole
under valid and enforceable leases with no exceptions that would
materially interfere with the use made or proposed to be made thereof
by them.
(xiii) The Company and its subsidiaries possess all certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(xiv) No labor strike, slowdown, stoppage or dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent that would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect. None of the Company or any of its subsidiaries has violated
(A) any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees, (B) any
applicable wage or hour laws of, or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended, or the rules and
regulations thereunder, except those violations that could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(xv) The Company and its subsidiaries own, possess, have the
right to use or can acquire on reasonable terms, adequate trademarks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property
7
rights") used in the conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect. To the knowledge of the Company after due inquiry, the
use of the intellectual property rights in connection with the
business and operations of the Company or any of its subsidiaries does
not infringe on the rights of any person, except such infringements as
would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(xvi) Neither the Company nor any of its subsidiaries (A) is in
violation of any statute, any rule, regulation, decision or order of
any govern mental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), (B) owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, (C) is liable for any off-site disposal or
contamination pursuant to any environmental laws, or (D) is subject to
any claim relating to any environmental laws, in each case, which
violation, contamination, liability or claim would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the
Company, any of its subsidiaries or any of their respective properties
that, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement, or which are otherwise material in the context
of the sale of the Offered Securities; and no such actions, suits or
proceedings are, to the Company's knowledge, threatened or
contemplated.
(xviii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown
(subject in the case of interim financial statements to the normal
year-end adjustments) and their results of operations and cash flows
for the periods shown, and such financial statements have been
prepared in conformity with the generally accepted accounting
8
principles in the United States applied on a consistent basis and the
schedules included in each Registration Statement present fairly the
information required to be stated therein. The assumptions used in
preparing the pro forma financial data included in each Registration
Statement and the Prospectus provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(xix) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been (A) no material adverse change, nor any development or
event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, (B)
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock, (C) none of the Company
or any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are material, individually or
in the aggregate, to the Company and its subsidiaries, taken as a
whole, nor entered into any transaction not in the ordinary course of
business, and (D) none of the Company or any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, that
are material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, and that are required to be disclosed
on a balance sheet or notes thereto in accordance with generally
accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Prospectus.
(xx) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "Investment Company Act"); and the
Company is not and, after giving effect to the offering and sale of
the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act.
(xxi) Each of the Company and its subsidiaries maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that: (A) transactions are executed in accordance
with management's general or specific authorizations; (B) transactions
are recorded as necessary to permit
9
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect
thereto.
(xxii) Each of the Company and its subsidiaries maintains
insurance covering its properties, operations, personnel and
businesses, insuring against such losses and risks as are consistent
with industry practice to protect the Company and its subsidiaries and
their respective businesses. None of the Company or any of its
subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures
will have to be made in order to continue such insurance.
(xxiii) The statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company
believes to be accurate and reliable in all material respects.
(xxiv) The Company has not, directly or indirectly, (A) taken
any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (B) since the
filing of the Registration Statement (1) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the
Securities or (2) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Stockholders under
this Agreement).
(xxv) Each certificate signed by any officer of the Company or
any of its subsidiaries and delivered to the Underwriters or counsel
for the Underwriters shall be deemed to be a representation and
warranty by the Company or such subsidiary to the Underwriters as to
the matters covered thereby.
(xxvi) The Company represents and warrants to the Underwriters
that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that
(ii) no authorization, approval, consent, license, order, registration
or
10
qualification of or with any government, governmental instrumentality
or court, other than such as have been obtained, is necessary under
the securities law and regulations of foreign jurisdictions in which
the Directed Shares are offered outside the United States.
(xxvii) The Company has not offered, or caused the Underwriters
to offer, any offered Securities to any person pursuant to the
Directed Share Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company or
(ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind; such Selling
Stockholder has full right, power and authority to enter into this
Agreement, the Custody Agreement (the "Custody Agreement") and the
Irrevocable Power of Attorney (the "Power of Attorney") entered into
by such Selling Stockholder in connection with the transactions
contemplated hereby and to sell, assign, transfer and deliver the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date hereunder; and upon the delivery of and payment for the
Offered Securities on each Closing Date hereunder such Selling
Stockholder will pass valid and unencumbered title to the Offered
Securities to be delivered by such Selling Stockholder to the several
Underwriters on such Closing Date.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(A) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement did not include 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, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement did not include, or
will not include, any untrue statement of a material fact and did not
omit, or will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement, and at the time of
filing of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the
11
Effective Date of the Additional Registration Statement in which the
Prospectus is included, and on each Closing Date neither each
Registration Statement nor the Prospectus includes, or will include,
any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading. If the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement and on each Closing Date, neither the Initial
Registration Statement nor the Prospectus will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The two preceding sentences apply only to the
extent that any statements in or omissions from a Registration
Statement or the Prospectus are based on written information furnished
to the Company by such Selling Stockholder specifically for use
therein.
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling
Stockholder and any third party that would give rise to a valid claim
against the Company or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with the transactions
contemplated by this Agreement, the Custody Agreement and the Power of
Attorney.
(iv) This Agreement, the Custody Agreement and the Power of
Attorney have each been duly authorized, executed and delivered by or
on behalf of such Selling Stockholder and this Agreement, the Custody
Agreement and the Power of Attorney each constitute the legal, valid
and binding obligations of such Selling Stockholder enforceable
against such Selling Stockholder in accordance with their respective
terms (except as rights to indemnification and contribution may be
limited by applicable federal or state law).
(v) No consent, approval, authorization, order, registration
or qualification of, or filing with, any third party (whether acting
in an individual, fiduciary or other capacity) or any governmental or
regulatory agency or body or court is required to be obtained or made
by such Selling Stockholder for the consummation of the transactions
contemplated by this Agreement, the Custody Agreement and the Power of
Attorney in connection with the sale of the Offered Securities, except
such as have been obtained and made under the Act and such as may be
required under state securities laws.
(vi) The execution, delivery and performance of this Agreement,
the Custody Agreement and the Power of Attorney by such Selling
Stockholder and the consummation of the transactions herein and
therein contemplated
12
(including the Reclassification and the Stock-Split) will not conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under (A) any statute, any
rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over such Selling
Stockholder or any of its properties or operations, or any agreement
or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the properties or
operations of such Selling Stockholder is subject, or (B) if
applicable, the charter, by-laws or other organizational documents of
such Selling Stockholder, except, in the case of clause (A), for such
conflicts, breaches, violations or defaults which could not reasonably
be expected to, individually or in the aggregate, have a material
adverse effect on the consummation of the transactions contemplated by
this Agreement (including the Reclassification and the Stock-Split),
the Custody Agreement or the Power of Attorney.
(vii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Offered Securities to facilitate the
sale or resale of the Offered Securities, and such Selling Stockholder
has not distributed and will not distribute any offering material in
connection with the offering and sale of the Offered Securities other
than any preliminary prospectus filed with the Commission or the
Prospectus or other materials, if any, permitted by the Act or the
Rules and Regulations.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $[ ] per share, that number of Firm
Securities (rounded up or down, as determined by CSFBC in its discretion, in
order to avoid fractions) obtained by multiplying the number of Firm Securities
by a fraction the numerator of which is the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule B hereto and the denominator
of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with [ ] (the "Custodian").
Each Selling Stockholder agrees that the shares represented by the certificates
held in custody for the Selling Stockholders under such Custody Agreements are
subject to the interests of the Underwriters hereunder, that the arrangements
made by the Selling Stockholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death of any
individual Selling Stockholder or
13
the occurrence of any other event, or in the case of a trust, by the death of
any trustee or trustees or the termination of such trust. If any individual
Selling Stockholder or any such trustee or trustees should die, or if any other
such event should occur, or if any of such trusts should terminate, before the
delivery of the Offered Securities hereunder, certificates for such Offered
Securities shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death or other event or termination had
not occurred, regardless of whether or not the Custodian shall have received
notice of such death or other event or termination.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to CSFBC drawn to the order of the Company in the case of
12,5000,000 shares of Firm Securities, at the office of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("▇▇▇▇▇▇▇ ▇▇▇▇"), at 9:00 A.M., New York time, on [ ], 2000,
or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date". The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at the office of ▇▇▇▇▇▇▇ ▇▇▇▇ at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 days subsequent to the
date of the Prospectus, the Underwriters may purchase all or less than all of
the Optional Securities at the purchase price per Security to be paid for the
Firm Securities. The Selling Stockholders agree, severally and not jointly, to
sell to the Underwriters the respective numbers of Optional Securities obtained
by multiplying the number of Optional Securities specified in such notice by a
fraction the numerator of which is the number of shares set forth opposite the
names of such Selling Stockholders in Schedules ▇-▇, ▇-▇, ▇-▇, ▇-▇ and A-5
hereto under the caption "Number of Optional Securities to be Sold" and the
denominator of which is the total number of Optional Securities (subject to
adjustment by CSFBC to eliminate fractions). Such Optional Securities shall be
purchased from each Selling Stockholder for the account of each Underwriter in
the same proportion as the number of Firm Securities set forth opposite such
Underwriter's name bears to the total number of Firm Securities (subject to
adjustment by CSFBC to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or
delivered unless the Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by CSFBC to the Company and the Selling Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First
14
Closing Date and each Optional Closing Date, if any, being sometimes referred to
as a "Closing Date"), shall be determined by CSFBC but shall be not later than
five full business days after written notice of election to purchase Optional
Securities is given. The Custodian will deliver the Optional Securities being
purchased on each Optional Closing Date to the Representatives for the accounts
of the several Underwriters, against payment of the purchase price therefor in
Federal (same day) funds by official bank check or checks or wire transfer to an
account or accounts at a bank(s) acceptable to CSFBC drawn to the order of the
respective Selling Stockholders in amounts relating to the number of Optional
Securities being sold by each such Selling Stockholder as determined pursuant to
the preceding paragraph, at the above office of ▇▇▇▇▇▇▇ ▇▇▇▇. The certificates
for the Optional Securities being purchased on each Optional Closing Date will
be in definitive form, in such denominations and registered in such names as
CSFBC requests upon reasonable notice prior to such Optional Closing Date and
will be made available for checking and packaging at the office of ▇▇▇▇▇▇▇ ▇▇▇▇
at a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company and the several Selling Stockholders, to the extent such covenants
relate to their performance, agree with the several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to register
a portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 A.M., New York time, on
the business day following the date of this Agreement or, if earlier, on or
prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall have been
consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation
15
without CSFBC's consent; and the Company will also advise CSFBC promptly of
the effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings in
respect of a Registration Statement and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs 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
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will promptly
notify CSFBC of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (five of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFBC requests. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other such
documents shall be so furnished as soon as available. The Company and the
Selling Stockholders will pay the expenses of printing and distributing to
the Underwriters all such documents.
16
(f) The Company will cooperate with the Underwriters and their
counsel in connection with the registration and qualification of the
Offered Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as CSFBC designates and do
all things necessary to continue such qualifications in effect so long as
required for the resale of the Offered Securities by the Underwriters,
provided that the Company will not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or mailed to stockholders, and (ii) from time to time, such
other information concerning the Company as CSFBC may reasonably request.
(h) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Act relating to, any additional shares of its Securities or securities
convertible into or exchangeable or exercisable for any shares of its
Securities, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, without the prior written consent of
CSFBC, except grants of employee stock options pursuant to the terms of a
plan in effect on the date hereof, issuances of Securities pursuant to the
exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof.
(i) The Company and each Selling Stockholder agree with the
several Underwriters that the Company and such Selling Stockholder will pay
all expenses incident to the performance of the obligations of the Company
and such Selling Stockholder, as the case may be, under this Agreement, for
any filing fees and other expenses (including fees and disbursements of
counsel) in connection with qualification of the Offered Securities for
sale under the laws of such jurisdictions as CSFBC designates and the
printing of memoranda relating thereto, for the filing fee incident to, and
the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities
Dealers, Inc.("NASD") of the Offered Securities, for any travel expenses of
the Company's officers and employees and any other expenses of the Company
in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities, for any transfer taxes on the sale by
the Selling Stockholders of the Offered Securities to the Underwriters and
for expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
17
(j) Each Selling Stockholder agrees to deliver to CSFBC,
attention: Transactions Advisory Group, on or prior to the first Optional
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(k) Each Selling Stockholder agrees, for a period of 180 days
after the date of the initial public offering of the Offered Securities,
not to offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any additional shares of the Securities of the
Company or securities convertible into or exchangeable or exercisable for
any shares of Securities, enter into a transaction which would have the
same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Securities, whether any such aforementioned transaction is
to be settled by delivery of the Securities or such other securities, in
cash or otherwise, or publicly disclose the intention to make any such
offer, sale, pledge or disposition, or enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of CSFBC.
(l) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement. The Designated
Underwriter will notify the Company as to which Participants will need to
be so restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(m) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program
and stamp duties, similar taxes or duties or other taxes, if any, incurred
by the underwriters in connection with the Directed Share Program.
(n) The Company covenants with the Underwriters that the
Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
(o) The Company agrees that it will use the net proceeds to it
from the Offered Securities in the manner described in the Prospectus under
the caption "Use of Proceeds".
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the
18
Optional Securities to be purchased on each Optional Closing Date will be
subject to the accuracy of the representations and warranties on the part of the
Company and the Selling Stockholders herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company and the Selling Stockholders of their obligations hereunder and
to the following additional conditions precedent:
(a) The Representatives shall have received a letter, dated the
date of this Agreement, of PricewaterhouseCoopers LLP in agreed form
confirming that they are independent public accountants within the meaning
of the Act and the published Rules and Regulations and stating to the
effect that:
(i) in their opinion the financial statements and schedules,
for all periods after July 3, 1999, examined by them and included in
the Registration Statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements, for all periods after July 3, 1999, and certain
specified financial information included in the Registration
Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company and of all subsidiaries of the Company for which such
interim financial statements are provided, inquiries of officials of
the Company and of such subsidiaries who have responsibility for
financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) with respect to the unaudited financial statements, for all
periods after July 3, 1999, included in the Registration
Statements, that any material modifications should be made
to such unaudited financial statements for them to be in
conformity with generally accepted accounting principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not
more than three business days prior to the date of this
Agreement, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of
the Company and its
19
consolidated subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net
assets, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(C) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of
the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the
period of corresponding length ended the date of the
latest income statement included in the Prospectus, in
consolidated net sales or net operating income or net
income;
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter;
(iv) they have performed the procedures specified therein on the
pro forma financial statements included in the Prospectus;
(v) on the basis of the review referred to in clause (iv) above,
nothing came to their attention that caused them to believe that the
pro forma financial data included in the Prospectus (not including
specified supplemental adjustments thereto) do not comply as to form
in all material respects with the applicable accounting requirements
of the Securities Act and the related published Rules and Regulations
or that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;
(vi) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter; and
20
(vii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
management's discussion and analysis of financial condition and
results of operations as described in Statement of Auditing Standards
No. 86, Management's Discussion and Analysis, on certain specified
portions of the Management's Discussion and Analysis of Financial
Condition and Results of Operations section of the Registration
Statement.
For purposes of this subsection (a) and subsection (b) below, (i) if the
Effective Time of the Initial Registration Statements is subsequent to the
execution and delivery of this Agreement, "Registration Statements" shall
mean the initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statements is prior to the execution and delivery of this Agreement but the
Effective Time of the Additional Registration Statement is subsequent to
such execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration
Statements.
(b) The Representatives shall have received a letter, dated the
date of this Agreement, of KPMG LLP in agreed form confirming that they are
independent public accountants within the meaning of the Securities Act and
the Rules and Regulations and to the effect that:
(i) in their opinion the financial statements and
schedules, for all periods prior to and including July 3, 1999,
examined by them and included in the Registration Statements for
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements, for all periods prior to and including July 3,
1999, and certain specified financial information included in the
Registration Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, and of all subsidiaries of the Company for which such
interim financial statements are provided, inquiries of officials of
the Company and of such subsidiaries
21
who have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that with respect to the unaudited financial statements,
for all periods prior to and including July 3, 1999, included in the
Registration Statement, that any material modifications should be made
to such unaudited financial statements for them to be in conformity
with generally accepted accounting principles;
(iv) they have performed the procedures specified therein on the
pro forma financial statements included in the Prospectus;
(v) on the basis of the review referred to in clause (iv)
above, nothing came to their attention that caused them to believe
that the pro forma financial data included in the Prospectus (not
including specified supplemental adjustments thereto) do not comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published Rules and
Regulations or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(vi) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statement (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter; and
(vii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
management's discussion and analysis of financial condition and
results of operations as described in Statement of Auditing Standards
No. 86, Management's Discussion and Analysis, on certain specified
portions of the Management's Discussion and Analysis of Financial
Condition and Results of Operations section of the Registration
Statement.
(c) If the Effective Time of the Initial Registration Statement
is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 A.M., New York
time, on the business day following the date of
22
this Agreement or such later date as shall have been consented to by CSFBC.
If the Effective Time of the Additional Registration Statement (if any) is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or, if earlier, the time the Prospectus is printed
and distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by CSFBC. If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery of
this Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of any Selling Stockholder, the Company or the Representatives,
shall be contemplated by the Commission.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its
subsidiaries which, in the reasonable judgment of a majority in interest of
the Underwriters including the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or material limitation
of trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market, or any establishment
of minimum or maximum prices for trading, or any requirement of maximum
ranges for prices for securities, on such exchange or the Nasdaq National
Market, or by such exchange or other regulatory body or governmental
authority having jurisdiction (other than limitations on price fluctuations
or minimums or maximums in effect as of the date of this Agreement); (iv)
any banking moratorium declared by federal or state authorities, or any
moratorium declared in foreign exchange trading by major international
banks or persons; or (v) any outbreak or escalation of armed hostilities
involving the United States on or after the date hereof, or if there has
been a declaration by the United States of a national emergency or war, the
effect of which shall be, in the Underwriters' reasonable judgment, to make
it inadvisable or impracticable to proceed with the public offering or
delivery of the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
23
(e) The Underwriters shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, that:
(i) ICS Technologies, Inc. ("Delaware Sub") (A) is duly incorpo
rated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, (B) has all requisite
corporate power and authority to carry on its business as it is
currently being conducted and as described in the Prospectus and to
own, lease and operate its properties, and (C) is duly qualified and
in good standing as a foreign corporation, authorized to do business
in each jurisdiction set forth beside such entity's name on a schedule
to such opinion;
(ii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act;
(ii) To such counsel's knowledge, all of the outstanding shares
of capital stock of Delaware Sub have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free
and clear of any adverse claim. The term "adverse claim" as used in
such opinion has the meaning given such term in Article 8 of the
Uniform Commercial Code and does not include (i) any claim which
arises through you or any person claiming through you (such as any
security interest you may have granted in the shares) and (ii) any
adverse interest which would not be extinguished upon the purchase of
the Offered Securities by a person who qualifies as a "bona fide
purchase" or "protected purchase" under Section 8-303 of the Uniform
Commercial Code. We advise you that we have no actual knowledge of the
existence of any interest of the kind specified in clause (ii) of the
preceding sentence.
(iv) To the knowledge of such counsel, the Company was not
required under any New York or federal law to obtain any consent,
approval, authorization or order of any governmental agency for the
consummation of the transactions contemplated by this Agreement
(including the Reclassifica tion and the Stock-Split) in connection
with the sale of the Offered Securities, except for any such consent,
approval, authorization or order which may be required under the so-
called "Blue Sky" or securities laws of any states (as to which such
counsel need express no opinion or advice);
24
(v) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein (including the
Reclassification and the Stock-Split) contemplated will not constitute
a violation by the Company of any applicable provision of any New York
or federal law, statute or regulation (except that such counsel need
express no opinion in this paragraph as to compliance with any
disclosure requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the indemnification
or contribution provisions in this Agreement would be permitted);
(vi) The Company's execution and delivery of this Agreement and
the performance of its agreements in this Agreement and the
consummation of the sale of the Offered Securities to you in
accordance with this Agreement do not (i) constitute a violation by
the Company or Delaware Sub of any applicable provision of any
Delaware, New York or federal law, statute or regulation (except that
we express no opinion in this paragraph as to compliance with any
disclosure requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the indemnification
or contribution provisions in this Agreement would be permitted) or
(ii) breach, or result in a default under, any existing obligation of
the Company or Delaware Sub under any of the agreements listed on a
schedule to an officers' certificate relating to such opinion
(provided that such counsel need not express any opinion as to
compliance with any financial test or cross default provision in any
such agreement).
(vii) Except as listed on a schedule to an officers' certificate
relating to such opinion, to such counsel's knowledge, there is no
action, suit, proceeding or investigation before or by any federal or
Delaware court or governmental agency or body, domestic or foreign,
pending or threatened against, the Company that (i) has caused such
counsel to conclude that such action, suit, proceeding or
investigation is required by Regulation S-K under the Securities Act
to be described in the Registration Statement but is not described in
the Prospectus or (ii) would be reasonably likely to adversely affect
the consummation of any of the transactions contemplated by this
Agreement.
(viii) The Company is not an "investment company" within the
meaning of the Investment Company Act;
(ix) To such counsel's knowledge, there is no stop order
preventing the use of the Prospectus or the Registration Statements,
or any amendments or supplements thereto; and
25
(x) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and the descriptions in the
Registration Statements and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown; and
such counsel do not know of any legal or governmental proceedings
required to be described in a Registration Statement or the Prospectus
which are not described as required or of any contracts or documents
of a character required to be described in a Registration Statement or
the Prospectus or to be filed as exhibits to a Registration Statement
which are not described and filed as required; it being understood
that such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration
Statements or the Prospectus.
Such counsel's opinion letter shall also contain the following language:
"Based upon our participation in the conferences identified in the
preceding paragraph, our understanding of applicable law and the
experience we have gained in our practice thereunder and relying as to
materiality to a large extent upon the opinions and statements of
officers of the Company, we can, however, advise you that nothing has
come to our attention that has caused us to conclude that (i) the
Registration Statement at its effective date and the Closing 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 or (ii) the Prospectus at the date it bears
or on the date of this letter contained an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading or (iii) as of the effective date
either the Registration Statement or the Prospectus appeared on its
face not to be responsive in all material respects to the requirements
of the Act and the Rules and Regulations; it being understood that we
make no such statement in the case of clauses (i)-(iii) with respect
to the financial statements and schedules and other financial or
related statistical data
26
included in the Registration Statement or the Prospectus or omitted
therefrom."
(f) The Underwriters shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP counsel for the Company, that:
(i) Each of the Company and ICST, Inc. (A) is duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, (B) has all requisite
corporate power and authority to carry on its business as it is
currently being conducted and as described in the Prospectus and to
own, lease and operate its properties, and (C) is duly qualified and
in good standing as a foreign corporation, authorized to do business
in each jurisdiction set forth beside such entity's name on a schedule
to such opinion;
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
(ii) The Offered Securities delivered on such Closing Date have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus, and the issuance of the Offered Securities is not subject
to preemptive or other similar rights arising under the Pennsylvania
Business Corporation Law of 1988;
(iv) Neither (A) the execution, delivery or performance by the
Company of this Agreement or (B) the issuance and sale of the Offered
Securities violates, conflicts with or constitutes a breach of any of
the terms or provisions of, or a default under (or an event that with
notice or the lapse of time, or both, would constitute a default
under), or requires consent under, or results in the imposition of a
lien or encumbrance on any properties of the Company or any of the
Significant Subsidiaries, or an acceleration of any indebtedness of
the Company or any of the Significant Subsidiaries pursuant to, (1)
the articles of incorporation or bylaws of the Company, (2) any
statute, rule or regulation of the Commonwealth of Pennsylvania
applicable to the Company or any of the Significant Subsidiaries or
any of their assets or properties or (3) to the best of such counsel's
knowledge, any judgment, order or decree known to such counsel of any
court or governmental agency or authority of the Commonwealth of
Pennsylvania having jurisdiction over the Company or any of the
Significant Subsidiaries or any of their assets or properties.
Assuming compliance with applicable federal, state and foreign
securities and Blue Sky laws, as to which no opinion is rendered
hereby, to the best of such counsel's knowledge, no consent, approval,
authorization or order of, or filing, registration, qualification,
license or permit of or with, (A) any
27
Pennsylvania court or governmental agency, body or administrative
agency or (B) any other person is required for (1) the execution,
delivery and perfor ▇▇▇▇▇ by the Company or any of the Significant
Subsidiaries of this Agree ment or (2) the issuance and sale of the
Offered Securities, except such as have been obtained and made or have
been disclosed in the Prospectus; and
Such counsel shall also state that because the primary purpose of
such counsel's engagement was not to establish or confirm factual
matters or financial or accounting matters and because of the wholly
or partially non-legal character of many of the statements contained
in the Prospectus, such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Prospectus and such counsel has not
independently verified the accuracy or completeness of such
statements. Without limiting the foregoing, such counsel assumes no
responsibility for and such counsel has not independently verified the
accuracy, completeness or fairness of the financial statements and any
schedules and other financial data included in the Prospectus and has
not examined the accounting or financial records from which such
financial statements, schedules (if any) and relevant financial data
are derived. However, such counsel participated in conferences with
officers and other representatives and legal counsel of the Company,
representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Prospectus were discussed. Based on such participation and review, and
relying as to materiality in part upon the statements of officers and
other representatives of the Company, no facts have come to such
counsel's attention that have caused such counsel to believe that the
Prospectus as of its date and at the Closing 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, except that such counsel need not express any comment or
belief with respect to the financial statements or schedules, if any,
or any other financial information included in the Prospectus.
(g) The Representatives shall have received the opinion contemplated
in the Power of Attorney executed and delivered by each Selling Stockholder
and an opinion, dated such Closing Date, dated the applicable Optional
Closing Date, of one or more counsel for the respective Selling
Stockholders, to the effect that:
(i) To such counsel's knowledge, all of the outstanding shares
of capital stock of such Selling Stockholder have been duly authorized
and validly issued and are fully paid and non-assessable, and are
owned by such Selling Stockholder, directly or indirectly through one
or more subsidiaries, free and clear of any adverse claim. The term
"adverse claim" as used in such
28
opinion has the meaning given such term in Article 8 of the Uniform
Commercial Code and does not include (i) any claim which arises
through you or any person claiming through you (such as any security
interest you may have granted in the shares) and (ii) any adverse
interest which would not be extinguished upon the purchase of the
Offered Securities by a person who qualifies as a "bona fide purchase"
or "protected purchase" under Section 8-303 of the Uniform Commercial
Code. We advise you that we have no actual knowledge of the existence
of any interest of the kind specified in clause (ii) of the preceding
sentence.
(i) This Agreement has been duly authorized, executed and
delivered on behalf of such Selling Stockholder;
(ii) The Custody Agreement and the Power of Attorney with
respect to such Selling Stockholder have been duly authorized (if such
selling shareholder is not an individual), executed and delivered by
such Selling Stockholder and constitute valid and legally binding
obligations of such Selling Stockholder enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(iii) To the knowledge of such counsel such Selling Stockholder
was not required under any New York or federal law to obtain any
consent, approval, authorization or order of any governmental agency
for the consum mation of the transactions contemplated by this
Agreement (including the Reclassification and the Stock-Split) or the
Custody Agreement in connection with the sale of the Offered
Securities, except for any such consent, approval, authorization or
order which may be required under the so-called "Blue Sky" or
securities laws of any states (as to which such counsel need express
no opinion or advice);
(iv) No consent, approval, authorization, order, registration or
qualification of, or filing with, any third party (whether acting in
an individual, fiduciary or other capacity) or any governmental agency
or body or any court is required to be obtained or made by such
Selling Stockholder for the consummation of the transactions
contemplated by this Agreement, the Custody Agreement and the Power of
Attorney in connection with the sale of the Offered Securities, except
such as have been obtained and made under the Act and such as may be
required under state securities laws; and
(v) The execution, delivery and performance of this Agreement,
the Custody Agreement and the Power of Attorney by such Selling
Stockholder
29
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under
(A) to the knowledge of such counsel, any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over such Selling Stockholder
or any of its properties or operations, or any agreement or instrument
to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the properties or operations
of such Selling Stockholder is subject, or (B) if applicable, the
charter, by-laws or other organizational documents of such Selling
Stockholder, except, in the case of clause (A), for such conflicts,
breaches, violations or defaults which could not reasonably be
expected to, individually or in the aggregate, have a material adverse
effect on the consummation of the transactions contemplated by this
Agreement, the Custody Agreement or the Power of Attorney.
(h) The Representatives shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated as of the
Closing Date, with respect to the validity of the Offered Securities
delivered on such Closing Date, the Registration Statements, the
Prospectus and other related matters as the Representatives may require,
and the Selling Stockholders and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(i) The Representatives shall have received from each stockholder
of the Company listed on Schedule C, in the form attached as Exhibit I
hereto, a letter agreement stating that such stockholder agrees, for a
period of 180 days after the date of the initial public offering of the
Offered Securities, not to offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any additional shares of the
Securities of the Company or securities convertible into or exchangeable or
exercisable for any shares of Securities, or publicly disclose the
intention to make any such offer, sale, pledge or disposal, without the
prior written consent of CSFBC, except as stated in such letter.
(j) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers shall
state that: the representations and warranties of the Company in this
Agreement are true and correct; the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; no stop order
suspending the effectiveness of any Registration Statement has been issued
and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was filed pursuant to Rule 462(b), including payment of the
30
applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any
Underwriter; and, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as described in
such certificate.
(k) The Representatives shall have received a letter, dated the
Closing Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three business days prior
to the Closing Date for the purposes of this subsection.
(l) The Representatives shall have received a letter, dated as
of the Closing Date, of KPMG LLP which meets the requirements of subsection
(b) of this Section, except that the specified date referred to in such
subsection will be a date not more than three business days prior to the
Closing Date for the purposes of this subsection.
(m) The Securities to be delivered on such Closing Date shall
have been approved for listing on the Nasdaq National Market, subject, in
the case of the Offered Securities, only to official notice of issuance.
(n) On or prior to the First Closing Date, the consummation of
the Reclassification and the Stock-Split, on the terms described in the
Prospectus under the caption "The Reclassification", shall have occurred.
The Selling Stockholders and the Company will furnish the
Representatives with such conformed copies of such opinions, certificates,
letters and documents as the Representatives reasonably request. CSFBC may in
its sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder, whether in respect
of an Optional Closing Date or otherwise.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter,
its partners, directors and officers and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or
31
arise out of or are based upon the omission or alleged omission to state
therein or necessary to make the statements therein not misleading,
including any losses, claims, damages or liabilities arising out of or
based upon the Company's failure to perform its obligations under Section
5(a) of this Agreement, and will reimburse each Underwriter for any legal
or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that (i) the
Company will 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 in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (c) below and (ii) that
the Company shall not be liable to any such Underwriter with respect to any
untrue statement or alleged untrue statement or omission or alleged
omission in the preliminary prospectus to the extent that any such loss,
liability, claim, damage or expense of such Underwriter results from the
fact that such Underwriter sold Offered Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such Underwriter and the
loss, liability, claim, damage or expense of such Underwriter results from
an untrue statement or omission of a material fact contained in the
preliminary prospects which was corrected in the Prospectus.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act (the "Designated Entities"), from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) (i)
caused by any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the consent of the
Company for distribution to Participants in connection with the Directed
Share Program or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of Directed Shares that the
Participant agreed to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross
negligence of the Designated Entities.
Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in Section 2(a)(ii), may permit indemnification
for liabilities
32
under the Act of any person who is an Underwriter or a partner or controlling
person of an Underwriter within the meaning of Section 15 of the Act and who,
at the date of this Agreement, is a director, officer or controlling person of
the Company, the Company has been advised that in the opinion of the
Commission such provisions may contravene Federal public policy as expressed
in the Act and may therefore be unenforceable. In the event that a claim for
indemnification under such agreement or such representations and warranties
for any such liabilities (except insofar as such agreement provides for the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or
proceeding) is asserted by such a person, the Company will submit to a court
of appropriate jurisdiction (unless in the opinion of counsel for the Company
the matter has already been settled by controlling precedent) the question of
whether or not indemnification by it for such liabilities is against public
policy as expressed in the Act and therefore unenforceable, and the Company
will be governed by the final adjudication of such issue.
(b) Each Selling Stockholder will severally and not jointly indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, 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, not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred in each case only 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 in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished by such Selling Stockholder specifically for use
therein; provided, however, that the Selling Stockholders will 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
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Company by an
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (c)
below; provided, further, that no Selling Stockholder shall be liable to any
such Underwriter with respect to any untrue statement or alleged untrue
statement or omission or alleged omission in the preliminary prospectus to the
extent that any such loss, liability, claim, damage or expense of such
Underwriter results from the
33
fact that such Underwriter sold Offered Securities to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented if the Company had
previously furnished copies thereof to such Underwriter and the loss,
liability, claim, damage or expense of such Underwriter results from an untrue
statement or omission of a material fact contained in the preliminary
prospects which was corrected in the Prospectus. Notwithstanding the
foregoing, the aggregate liability of any Selling Stockholder pursuant to the
provisions of this paragraph shall be limited to an amount equal to the
aggregate gross proceeds received by such Selling Stockholder from the sale of
such Selling Stockholder's shares hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, 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 reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company and each Selling Stockholder in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred, it being understood and agreed that the only
such information furnished by any Underwriter consists of (i) the following
information in the Prospectus furnished on behalf of each Underwriter: the
last paragraph at the bottom of the cover page concerning the terms of the
offering by the Underwriters, the concession and reallowance figures appearing
in the fourth paragraph under the caption "Underwriting" and the over-
allotments and stabilizing descriptions appearing in the fourteenth and
fifteenth paragraphs under the caption "Underwriting" and (ii) the following
information in the Prospectus furnished on behalf of CSFBC, Bear ▇▇▇▇▇▇▇ &
Co., Inc. and Pennsylvania Merchant Group: Credit Suisse First Boston
Corporation, Bear, ▇▇▇▇▇▇▇ & Co. Inc. and
["Bear, ▇▇▇▇▇▇▇ & Co. Inc., one of our underwriters, is an affiliate of
our company. The offering, therefore, is being conducted in accordance
with the applicable provisions of Rule 2720 of the National Association
of Securities Dealers, Inc. Conduct Rules. Rule 2720
34
requires that the initial public offering price of the shares of common
stock not be higher than that recommended by a "qualified independent
underwriter" meeting certain standards. Accordingly, FleetBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. is assuming the responsibilities of acting as the
qualified independent underwriter in pricing the offering and conducting
due diligence. The initial public offering price of the shares of common
stock is no higher than recommended by FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Inc."
"Pennsylvania Merchant Group and their respective affiliates have
performed and expect to continue to perform financial advisory and
investment and commercial banking services for us for which they have
received and will receive customary compensation. We intend to use a
portion of the net proceeds to repay in full all outstanding obligations
under our senior credit facility. Credit Suisse First Boston, an
affiliate of Credit Suisse First Boston Corporation, is a lender and the
administrative agent under the senior credit facility and will receive
some of the proceeds of this offering used to repay our outstanding
indebtedness under our senior credit facility. In addition, Credit Suisse
First Boston Corporation and Bear, ▇▇▇▇▇▇▇ & Co. Inc. were the initial
purchasers in the offering of our senior subordinated notes. An affiliate
of Credit Suisse First Boston Corporation and an affiliate of Bear,
▇▇▇▇▇▇▇ & Co. Inc. each own common stock of the company and each is a
selling shareholder in the offering. ▇▇▇▇ ▇. ▇▇▇▇▇▇, a director of our
company, is a senior managing director of Bear, ▇▇▇▇▇▇▇ & Co. Inc."]
(d) Promptly after receipt by an indemnified party under this Section or
Section 9 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party under subsection (a), (b) or (c) above or Section 9, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof; but the failure so to notify an indemnifying party shall not relieve
it from any liability which it may have under this Section except to the
extent that it has been prejudiced in any material respect by such failure or
from any liability which it may have otherwise than under subsection (a), (b)
or (c) above or Section 9. In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and
to the extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party
or parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such
35
counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel shall have been authorized in writing by
the indemnifying parties in connection with the defense of such action, (ii)
the indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement
of the action, or (iii) 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 those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
of counsel shall be borne by the indemnifying parties; provided, however, that
the indemnifying party under subsection (a) or (b) above shall only be liable
for the legal expenses of one counsel (in addition to any local counsel) for
all indemnified parties in each jurisdiction in which any claim or action is
brought. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to the last paragraph in Section 7 (a) hereof
in respect of such action or proceeding, then in addition to such separate
firm for the indemnified parties, the indemnifying party shall be liable for
the reasonable fees and expenses of not more than one separate firm (in
addition to any local counsel) for the Designated Underwriter for the defense
of any losses, claims, damages and liabilities arising out of the Directed
Share Program, and all persons, if any, who control the Designated Underwriter
within the meaning of either Section 15 of the Act of Section 20 of the
Exchange Act. No indemnifying party shall, without prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action 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 any claims that are the subject matter of such
action and does not include a statement as to and an admission of fault,
culpability or failure to act by or on behalf of any indemnified party.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its prior written consent, provided that such consent was not
unreasonably withheld, and that if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees it shall be liable for
any settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a), (b) or (c)
36
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other from the offering of the Securities 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 and the Selling Stockholders on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters. 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 Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence
of this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission and (ii) no
Selling Stockholder shall be required to contribute any amount in excess of
the amount by which the aggregate gross proceeds received by such Selling
Stockholder from the sale of the Offered Securities hereunder exceeds the
amount of any damages or indemnification which such Selling Stockholder has
otherwise been required to pay by reason of such untrue 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 in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint. The Selling Stockholders' obligations in this
subsection (e) to contribute are several and not joint.
37
(f) The obligations of the Company and the Selling Stockholders under
this Section or Section 9 shall be in addition to any liability which the
Company and the Selling Stockholders may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls
any Underwriter or the QIU (as hereinafter defined) within the meaning of
the Act; and the obligations of the Underwriters under this Section shall
be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has signed
a Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date,
CSFBC may make arrangements satisfactory to the Company and the Selling
Stockholders for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to CSFBC, the Company and the Selling Stockholders
for the purchase of such Offered Securities by other persons are not made within
36 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter, the Company or the Selling
Stockholders, except as provided in Section 10 (provided that if such default
occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
9. Qualified Independent Underwriter. The Company hereby confirms
that at its request FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. has without compensation
acted as "qualified independent underwriter" (in such capacity, the "QIU")
within the meaning of Rule 2710 of the Conduct Rules of the NASD in connection
with the offering of the Offered Securities. The Company will indemnify and
hold harmless the QIU against any losses, claims, damages or liabilities, joint
or several, to which the QIU may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon the QIU's acting (or alleged failing to
act) as such "qualified independent
38
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred.
10. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Selling Stockholders, of the Company or its officers and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 and the obligations of
the Company and the Selling Stockholders pursuant to Section 9 shall remain in
effect, and if any Offered Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (iii), (iv) or (v) of Section 6(d), the Company and
the Selling Stockholders will, jointly and severally, reimburse the Underwriters
for all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
11. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Integrated Circuit Systems,
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer, with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, Citicorp Center, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, or, if sent
to the Selling Stockholders or any of them, will be mailed, delivered or
telegraphed and confirmed to [ ] at [ ]; provided, however, that any notice
to an Underwriter pursuant to Section 7 or Section 9 will be mailed, delivered
or telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
39
13. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFBC will be binding upon all the Underwriters. [ ] will act for the Selling
Stockholders in connection with such transactions, and any action under or in
respect of this Agreement taken by [ ] will be binding upon [all] the Selling
Stockholders.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement. Delivery by
telecopy or facsimile transmission of an executed counterpart of this Agreement
shall be considered due and sufficient delivery.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
THE COMPANY AND EACH OF THE SELLING STOCKHOLDER HEREBY SUBMIT TO THE NON-
EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
40
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement among the
Selling Stockholders, the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
INTEGRATED CIRCUIT SYSTEMS, INC.
_____________________________________
Name:
Title:
▇▇▇▇ CAPITAL FUND VI, L.P.
BCIP TRUST ASSOCIATES II
BCIP TRUST ASSOCIATES II-B
BCIP ASSOCIATES II
BCIP ASSOCIATES II-B
BCIP ASSOCIATES II-C
PEP INVESTMENT PTY LTD.
By:__________________________________
Name:
Title:
Under Power of Attorney for Each of the Above
Persons
ICST ACQUISITION CORP.
By:__________________________________
Name:
Title:
INTEGRATED CIRCUIT SYSTEMS EQUITY INVESTORS,
L.L.C.
By:__________________________________
Name:
Title:
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS I
▇▇▇▇▇▇▇▇ STREET PARTNERS II
▇▇▇▇▇▇▇▇ STREET PARTNERS 1998
DIF, L.L.C.
By:__________________________________
Name:
Title:
Under Power of Attorney for Each of the Above
Persons
By:__________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION,
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC. and
PENNSYLVANIA MERCHANT GROUP
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
________________________________________
Name:
Title:
42
SCHEDULE A
Number of Optional
1) Bain Option Selling Stockholders Securities to be Sold
-------------------------------- ----------------------
▇▇▇▇ Capital Fund VI, L.P. [ ]
BCIP Trust Associates II [ ]
BCIP Trust Associates II-B [ ]
BCIP Associates II [ ]
BCIP Associates II-B [ ]
BCIP Associates II-C [ ]
PEP Investment PTY Ltd. [ ]
---------
Total.....................
2) Bear ▇▇▇▇▇▇▇ Option Selling Stockholder
---------------------------------------
ICST Acquisition Corp.
3) CSFB Option Selling Stockholder
-------------------------------
Integrated Circuit Systems Equity
Investors, L.L.C.
4) ▇▇▇▇▇▇▇▇ Street Option Selling Stockholders
-------------------------------------------
▇▇▇▇▇▇▇▇ Street Partners I [ ]
▇▇▇▇▇▇▇▇ Street Partners II [ ]
---------
Total...........................
5) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------
TOTAL OPTION SHARES 1,875,000
=========
A-1
SCHEDULE B
Number of
Firm Securities
Underwriter to be Purchased
----------- ----------------
Credit Suisse First Boston Corporation.........
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.............
▇▇▇▇▇▇ Brothers Inc............................
Bear, ▇▇▇▇▇▇▇ & Co. Inc........................
Pennsylvania Merchant Group....................
----------------
Total...............................
================
B-2
SCHEDULE C
Intel Corporation
[Asustek]
[Gigabite]
Alayleh, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, K
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. Vi, ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ M Vongo, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Malek M Gopal, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇.
▇▇▇, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Way, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ Wei, ▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, Siyou
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ L.K.K.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ W ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇, ▇▇▇▇ ▇. Hon, Pikyue ▇. ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ ▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇ Huat
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ bin Mohd ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇ Hui ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Ram ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇ Moi Eng
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Low Min ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ Yin Har
▇▇▇▇, ▇▇▇▇▇▇▇ Q ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ Kah ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. Jing, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇, Guy ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇ ▇▇▇, Ordin
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. Self, ▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. Hiroake Shimauchi
Do, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, Dockjai ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇, Rocky ▇-▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇ ▇▇, Hanzhong
▇▇▇▇▇, ▇▇▇ Limoun, ▇▇▇▇▇▇ M Sun, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
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▇▇▇▇▇, ▇▇▇▇▇ Lo, Yong-Chou ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. Look, Kock C. Tat, ▇▇▇▇▇▇▇ ▇.
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EXHIBIT I
May , 2000
Integrated Circuit Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
CREDIT SUISSE FIRST BOSTON CORPORATION
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC. and
PENNSYLVANIA MERCHANT GROUP
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made that is intended to result
in the establishment of a public market for the Common Stock, par value $.01 per
share (the "Securities") of Integrated Circuit Systems, Inc. (the "Company"),
the undersigned hereby agrees that from the date hereof and until 180 days after
the public offering date set forth on the final prospectus used to sell the
Securities (the "Public Offering Date") pursuant to the Underwriting Agreement,
to which you are or expect to become parties, the undersigned will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any shares of Securities or securities convertible into or exchangeable or
exercisable for any shares of Securities, enter into a transaction which would
have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Securities, whether any such aforementioned transaction is to be settled by
delivery of the Securities or such other securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of Credit Suisse
First Boston Corporation.
The undersigned shall not be restricted by the terms of this Agreement
from exercising any options granted to the undersigned; provided, however, that
any Securities received upon exercise of options granted to the undersigned will
be subject to this Agreement. Any Securities acquired by the undersigned in the
open market will not be subject to this Agreement. A transfer of Securities to
a family member or trust may be made, provided the transferee agrees to be bound
in writing by the terms of this Agreement.
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In furtherance of the foregoing, the Company and its transfer agent
and registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Agreement
shall lapse and become null and void if the Public Offering Date shall not have
occurred on or before November 30, 2000.
Very truly yours,
-------------------------------
[Name of non-selling stockholder]
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