THE JUDGE GROUP, INC.
3,650,000 Common Shares
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UNDERWRITING AGREEMENT
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Philadelphia, Pennsylvania
December__, 1996
XXXXXX XXXXXXXXXX XXXXX INC.
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As Representatives of the Several
Underwriters Named in Schedule I
Hereto
c/o Janney Xxxxxxxxxx Xxxxx Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The Judge Group, Inc., a Pennsylvania corporation (the "Company"),
proposes to sell to Xxxxxx Xxxxxxxxxx Xxxxx Inc. and ______________ (the
"Representatives") and the several other underwriters named in Schedule I hereto
(collectively, with the Representatives, the "Underwriters") 3,000,000 shares of
the Company's $.01 par value common stock ("Common Shares"); and the selling
shareholders of the Company named in Table 1 of Schedule II hereto
(collectively, the "Selling Shareholders") propose to sell severally to the
Underwriters an aggregate of 650,000 Common Shares. Such Common Shares to be
sold to the Underwriters by the Company and the Selling Shareholders are
referred to collectively herein as the "Firm Shares." The respective amounts of
the Firm Shares to be purchased by the several Underwriters are set forth
opposite their names in Schedule I hereto. The respective amounts of the Firm
Shares to be sold by Selling Shareholders are set forth opposite their names in
Table 1 of Schedule II hereto. The Firm Shares shall be offered to the public at
an initial public offering price of $________ per Firm Share (the "Offering
Price").
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may purchase for the Underwriters' own accounts,
ratably in proportion to the amounts set forth opposite their respective names
in Schedule I hereto, up to 250,000 additional Common Shares from the Selling
Shareholders and up to 297,500 additional
Common Shares from the Company. Such 547,500 additional Common Shares are
referred to collectively herein as the "Optional Shares." If any Optional Shares
are purchased: (i) all the Optional Shares of the Selling Shareholders shall be
purchased before any Optional Shares of the Company may be purchased; (ii) all
the Optional Shares of the Selling Shareholders listed in Section A of Table 2
of Schedule II hereto shall be purchased (prorata in proportion to the amounts
set forth opposite their names) before any shares are purchased (prorata in
proportion to the amounts set forth opposite their names) from the Selling
Shareholders listed in Section B of Table 2 of Schedule II; and (iii) the
Optional Shares shall be purchased for offering to the public at the Offering
Price and in accordance with the terms and conditions set forth herein. The Firm
Shares and the Optional Shares are referred to collectively herein as the
"Shares."
The Company and the Selling Shareholders, intending to be legally
bound, hereby confirm their agreement with the Underwriters as follows:
1. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company
and each of the Company's subsidiaries (the "Subsidiaries") set forth on
Schedule III hereto, jointly and severally represent and warrant to, and agree
with, the several Underwriters that (all references to the Company herein shall
be deemed to include reference to the Company and the Subsidiaries collectively,
unless the context indicates otherwise):
(i) the Company has prepared, in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Regulations") of the Securities and Exchange
Commission (the "SEC") under the Act in effect at all applicable times, and has
filed with the SEC a registration statement on Form S-1 (File No. 333-13109) and
one or more amendments thereto for the purpose of registering the Shares (or a
portion of the Shares if a "Rule 462(b) Registration Statement," as defined
below, has been or is to be filed) under the Act. The Company similarly may have
prepared or may prepare an additional registration statement on Form S-1 with
respect to a portion of the Shares pursuant to Rule 462(b) of the Regulations,
and if so prepared or if to be so prepared, such additional registration
statement has been or will be filed pursuant to Rule 462(b) of the Regulations.
The term "Rule 462(b) Registration Statement" means such additional registration
statement, if any, filed pursuant to Rule 462(b) of the Regulations, including,
without limitation, all exhibits thereto, the contents of the earlier
registration statement incorporated therein by reference, and any price-related
information included therein, but omitted from the earlier registration
statement in reliance on Rule 430A of the Regulations. Copies of all such
registration statements (or the form thereof in the case of a Rule 462(b)
Registration Statement that has not yet been filed) and any amendments thereto,
and all forms of the related prospectus contained therein, have been delivered
to the Representatives. Each prospectus included in any such registration
statement before it became effective under the Act and any prospectus filed with
the SEC pursuant to Rule 424(a) of the Regulations is hereinafter called a
"Preliminary Prospectus." The various parts of the first registration statement
referenced in this Section 1(a)(i), including all exhibits thereto and the
information contained in the form of final prospectus filed with the SEC
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pursuant to Rule 424(b) of the Regulations in accordance with Section
5(a)(ii) of this Agreement and deemed by virtue of Rule 430A(b) of the
Regulations to be part of the registration statement at the time it was declared
effective, each as amended at the time the registration statement became
effective, as well as the information contained in the Rule 462(b) Registration
Statement, if any, deemed to be a part of the registration statement pursuant to
General Instruction V of Form S-1, are hereinafter collectively called the
"Primary Registration Statement." The term "Registration Statements" means both
the Primary Registration Statement and the Rule 462(b) Registration Statement
collectively. The term "Term Sheet" means the term sheet, if any, containing the
information required pursuant to Rule 434(b) or (c), as applicable, of the
Regulations, and filed pursuant to Rule 424(b)(7) of the Regulations. The term
"Prospectus" means the Prospectus relating to the Shares included in the
Registration Statement at the time it became effective (including, if the
Company omitted information from the Primary Registration Statement pursuant to
Rule 430A(a) of the Regulations, the information deemed to be a part of the
Primary Registration Statement at the time it became effective pursuant to Rule
430A(b) of the Regulations); provided, however, that, if with the consent of the
Representatives, the Company provides a Term Sheet prior to the time any
confirmation is sent or given for purposes of Section 2(10)(a) of the Act, the
term "Prospectus" shall mean the "prospectus subject to completion" (as defined
in Rule 434(g) of the Regulations) last provided to the Underwriters by the
Company and circulated by the Underwriters to all prospective purchasers of the
Shares, plus and including the information contained in the Term Sheet.
Notwithstanding the foregoing, if any revised Prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of the
Shares that differs from the Prospectus referred to in the immediately preceding
sentence (whether or not such revised Prospectus is required to be filed with
the SEC pursuant to Rule 424(b) of the Regulations), the term "Prospectus" shall
refer to such revised Prospectus from and after the time it is first provided to
the Underwriters for such use. If, with the consent of the Representatives, the
Company shall have provided to the Underwriters a Term Sheet prior to the time
any confirmation is sent or given for purposes of Section 2(10)(a) of the Act,
the Prospectus and the Term Sheet together will not be materially different from
the prospectus in the Registration Statements;
(ii) the Primary Registration Statement has become effective
under the Act and the SEC has not issued any stop order suspending the
effectiveness of the Registration Statements or preventing or suspending the use
of any Preliminary Prospectus, nor has the SEC instituted or threatened to
institute proceedings with respect to such an order. No stop order suspending
the sale of the Shares in any jurisdiction designated by the Representatives as
provided for in Section 5(a)(x) hereof has been issued, and no proceedings for
that purpose have been instituted or threatened. The Company has complied in all
material respects with all requests of the SEC, or requests of which the Company
has been advised of any state securities commission in a state designated by the
Representatives as provided for in Section 5(a)(x) hereof, for additional
information to be included in the Registration Statements, any Preliminary
Prospectus or the Prospectus. Each Preliminary Prospectus conformed to all the
requirements of the Act and the Regulations as of its date in all material
respects and did not as of its date contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not
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misleading, except the foregoing shall not apply to statements in, or omissions
from, any Preliminary Prospectus in reliance upon and in conformity with
information supplied to the Company in writing by or on behalf of any
Underwriter through the Representatives expressly for use therein. The Primary
Registration Statement, on the date on which it was declared effective by the
SEC (the "Effective Date") and when any post-effective amendment thereof shall
become effective, the Rule 462(b) Registration Statement when filed with the
SEC, and the Prospectus, at the time it is filed with the SEC and on the Closing
Date (as defined in Section 3 hereof) and any Option Closing Date (as defined in
Section 4(b) hereof), conformed and will conform in all material respects to all
the requirements of the Act and the Regulations, and did not and will not, on
any of such dates, 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, except that this representation and warranty
does not apply to statements in or omissions from the Primary Registration
Statement (including the information contained in the rule 462(b) Registration
Statement after it is filed with the SEC) or the Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
or on behalf of any Underwriter through the Representatives expressly for use
therein;
(iii) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania, with all necessary corporate power and authority, and all required
licenses, permits, clearances, certifications, registrations, approvals,
consents and franchises, to own or lease and operate its properties and to
conduct its business as described in the Prospectus, and to execute, deliver and
perform this Agreement. Each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation (which jurisdiction is set forth in Schedule
III hereto), with all necessary corporate power and authority, and all required
licenses, permits, clearances, certifications, registrations, approvals,
consents and franchises, to own or lease and operate its properties and to
conduct its business as described in the Prospectus. The Company and each of the
Subsidiaries is duly qualified to do business as a foreign corporation, and is
in good standing, in all jurisdictions in which such qualification is required,
except where the failure to so qualify would not have a material adverse effect
on the general affairs, properties, condition (financial or otherwise), results
of operations, stockholders' equity, business or prospects of the Company and
the Subsidiaries taken as a whole (a "Material Adverse Effect"). No proceeding
has been instituted in any jurisdiction revoking, limiting or curtailing, or
seeking to revoke, limit or curtail the Company's or any of the Subsidiaries'
corporate power and authority or qualification or ability to own or lease and
operate its properties and to conduct its business as described in the
Prospectus;
(iv) the outstanding shares of capital stock or other
evidence of ownership of the respective Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and, except for the
securities owned by third parties as described specifically below in this
Section 1(a)(iv), are owned by the Company free and clear of all liens,
encumbrances and security interests. Except for the common stock of the
Subsidiaries owned by the Company and the . . . [describe non-common and
derivative equity owned by Company in each sub, and common, non-common and
derivative equity owned by
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third parties in each sub] . . ., there are no shares of capital stock of any
Subsidiary outstanding, and no options, warrants or other rights to purchase,
agreements or other obligations to issue, or other rights to convert any
obligations into, shares of capital stock or ownership interests in any
Subsidiary or securities convertible into or exchangeable for capital stock of,
or other ownership interests in, any Subsidiary are outstanding. The Company
owns no stock or other interest whatsoever, whether equity or debt, in any
corporation, partnership or other entity other than the Subsidiaries;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiaries and constitutes, with respect to
each, its legal, valid and binding obligation, enforceable against the Company
and the Subsidiaries in accordance with its terms;
(vi) the execution, delivery and performance of this
Agreement by the Company and each Subsidiary not and will not, with or
without the giving of notice or the lapse of time, or both, (A) conflict with
any term or provision of the Company's Articles of Incorporation or Bylaws or
such Subsidiary's Articles (or Certificate) of Incorporation or Bylaws; (B)
result in a breach of, constitute a default under, result in the termination or
modification of, result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the assets of the Company or any
Subsidiary under, or require any payment by the Company or any Subsidiary or
impose any liability on the Company or any Subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement or instrument
to which the Company or any Subsidiary is a party or by which any of the
Company's or any Subsidiary's assets are bound or affected; (C) assuming
compliance with Blue Sky laws and regulations applicable to the offer and sale
of the Shares, violate any law, rule, regulation, judgment, order or decree of
any government or governmental agency, instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of the
Company's or any Subsidiary's properties or business; or (D) result in a breach,
termination or lapse of the Company's or any Subsidiary's corporate power and
authority to own or lease and operate its assets and properties and conduct its
business as described in the Prospectus;
(vii) at the date or dates indicated in the Prospectus, the
Company had the duly authorized and outstanding capitalization set forth in the
Prospectus under the caption "Capitalization" and will have, as of the issuance
of the Firm Shares on the Closing Date, the pro forma adjusted capitalization
set forth therein. The description of the Company's capitalization in the
Prospectus conforms in all material respects with the instruments defining the
same. On the Effective Date, the Closing Date and any Option Closing Date, there
will be no options or warrants for the purchase of, other outstanding rights to
purchase, agreements or obligations to issue or agreements or other rights to
convert or exchange any obligation or security into, capital stock of the
Company or securities convertible into or exchangeable for capital stock of the
Company, except as expressly described in the Prospectus. The information in the
Prospectus insofar as it relates to all outstanding options and other rights to
acquire securities of the Company as of the Effective Date and immediately prior
to the Closing Date and any Option Closing Date is true and correct in all
material respects;
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(viii) the currently outstanding shares of the Company's
capital stock, including the Shares to be purchased by the Underwriters from the
Selling Shareholders, have been duly authorized and are validly issued, fully
paid and non-assessable, and none of such outstanding shares of the Company's
capital stock has been issued in violation of any preemptive rights of any
security holder of the Company. The holders of the outstanding shares of the
Company's capital stock are not subject to personal liability solely by reason
of being such holders. All previous offers and sales of the outstanding shares
of the Company's capital stock, whether described in the Registration Statement
or otherwise, were made in conformity with applicable federal and state
securities laws;
(ix) when the Shares have been duly delivered against
payment therefor as contemplated by this Agreement, the Shares will be validly
issued, fully paid and non-assessable, and the holders thereof will not be
subject to personal liability solely by reason of being such holders. The
certificates representing the Shares are in proper legal form under, and conform
in all respects to the requirements of, the Pennsylvania Business Corporation
Law, as amended (the "BCL"). Except such rights with which the Company has
complied or which have been waived, neither the filing of the Registration
Statement nor the offering or sale of Shares as contemplated by this Agreement
gives any security holder of the Company any rights for or relating to the
registration of any Common Shares or any other capital stock of the Company;
(x) no consent, approval, authorization, order,
registration, license or permit of, or filing or registration with, any court,
government, governmental agency, instrumentality or other regulatory body or
official is required for the valid and legal execution, delivery and performance
by the Company and each Subsidiary of this Agreement and the consummation of the
transactions contemplated hereby and described in the Prospectus, except such as
may be required for the registration of the Shares under the Act, the
Regulations and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and for compliance with the applicable state securities or Blue Sky laws
or the Bylaws, rules and other pronouncements of the National Association of
Securities Dealers, Inc. (the "NASD");
(xi) the Common Shares (including the Shares) are registered
pursuant to Section 12(g) of the Exchange Act and are included for quotation in
the Nasdaq Stock Market, and neither the Company nor any Selling Shareholder has
taken any action designed to cause, or likely to result in, the termination of
the registration of the Common Shares under the Exchange Act or the termination
of the inclusion thereof in the Nasdaq Stock Market. Neither the Company nor any
Selling Shareholder has received any notification that the SEC or the Nasdaq
Stock Market is contemplating terminating such registration or inclusion. On the
Effective Date, the Closing Date and any Option Closing Date, the Shares shall
be included for quotation in the Nasdaq Stock Market;
(xii) the statements in the Registration Statements and
Prospectus, insofar as they are descriptions of or references to contracts,
agreements or other documents, are accurate in all material respects and present
or summarize fairly, in all material respects, the information required to be
disclosed under the Act and/or the Regulations, and there are no contracts,
agreements or other documents, instruments or transactions of any character
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required to be described or referred to in the Registration Statements or
Prospectus or to be filed as exhibits to the Registration Statements that have
not been so described, referred to or filed, as required;
(xiii) each contract or other instrument (however
characterized or described) to which the Company or any Subsidiary is a party or
by which any of its properties or business is bound or affected and which is
material to the conduct of the Company's business as described in the Prospectus
has been duly and validly executed by the Company and each Subsidiary, as
applicable, and, to the knowledge of the Company, by the other parties thereto.
Each such contract or other instrument is in full force and effect and is
enforceable against the parties thereto in accordance with its terms and neither
the Company nor any Subsidiary is, and to the knowledge of the Company, no other
party is, in default thereunder, and no event has occurred that, with the lapse
of time or the giving of notice, or both, would constitute a default under any
such contract or other instrument. All necessary consents under such contracts
or other instruments to disclosure in the Prospectus with respect thereto have
been obtained;
(xiv) the consolidated financial statements of the Company
(including the notes thereto) filed as part of any Preliminary Prospectus, the
Prospectus and the Registration Statements present fairly, in all material
respects, the financial position of the Company and the Subsidiaries as of the
respective dates thereof, and the results of operations and cash flows of the
Company and the Subsidiaries for the periods indicated therein, all in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved, except as may be otherwise stated expressly
therein. The supporting notes and schedules included in the Registration
Statements fairly state in all material respects the information required to be
stated therein in relation to the financial statements taken as a whole. The
selected and summary financial and statistical information in the Prospectus
including, but not limited to, that under the captions "Summary Consolidated
Historical and Pro Forma Financial Information," "Selected Consolidated
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and "Pro Forma Consolidating Financial Statements"
presents fairly the information shown therein and has been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statements. The unaudited pro forma financial statements included
in the Registration Statements comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X under the
Act and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements. No financial statements or
schedules or other information other than that which appears in the Prospectus
is required to be included in the Registration Statement;
(xv) since the respective dates as of which information is
given in the Registration Statements and the Prospectus, except as otherwise
stated therein, there has not been (A) any material adverse change (including,
whether or not insured against, any material loss or damage to any material
assets), or development involving a prospective material adverse change, in the
general affairs, properties, assets, management, condition (financial or
otherwise), results of operations, stockholders' equity, business or prospects
of
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the Company and the Subsidiaries taken as a whole; (B) any material adverse
change, loss, reduction, termination or non-renewal of any contract to which the
Company or any Subsidiary is a party; (C) any transaction entered into by the
Company or any Subsidiary not in the ordinary course of its business that is
material to the Company and the Subsidiaries taken as a whole, (D) any dividend
or distribution of any kind declared, paid or made by the Company on its capital
stock, (E) any liabilities or obligations, direct or indirect, incurred by the
Company or any Subsidiary that are material to the Company and the Subsidiaries
taken as a whole; (F) any change in the capitalization or stock ownership of the
Company or any Subsidiary; or (G) any change in the indebtedness of the Company
or any Subsidiary that is material to the Company and the Subsidiaries taken as
a whole. Neither the Company nor any Subsidiary has any contingent liabilities
or obligations that are material to the Company and the Subsidiaries taken as a
whole and that are not expressly disclosed in the Prospectus;
(xvi) the Company has not distributed, and will not
distribute, any offering material in connection with the offering and sale of
the Shares other than the Registration Statements, a Preliminary Prospectus, the
Prospectus and other material, if any, permitted by the Act and the Regulations.
Neither the Company nor any of its officers, directors or affiliates has taken,
nor shall the Company or such persons take, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Shares;
(xvii) except for . . . [describe IRS problem and
settlement] . . ., and except where the failure to do so would not have a
Material Adverse Effect, the Company has filed with the appropriate federal,
state and local governmental agencies, and all foreign countries and political
subdivisions thereof, all tax returns that are required to be filed or has duly
obtained extensions of time for the filing thereof and has paid all taxes shown
on such returns or otherwise due and all material assessments received by it to
the extent that the same have become due. Except as described above in this
Section 1(a)(xvii), the Company has not executed or filed with any taxing
authority, foreign or domestic, any agreement extending the period for
assessment or collection of any income or other tax and is not a party to any
pending action or proceeding by any foreign or domestic governmental agency for
the assessment or collection of taxes, and no claims for assessment or
collection of taxes have been asserted against the Company that might have a
Material Adverse Effect;
(xviii) Xxxxxxx, Xxxxxx LLP, which has given its reports on
certain financial statements included as part of the Registration Statements, is
a firm of independent certified public accountants as required by the Act and
the Regulations;
(xix) except where the failure to do so would not have a
Material Adverse Effect, neither the Company nor any Subsidiary is in
violation of, or in default under, any of the terms or provisions of (A) its
Articles or Certificate of Incorporation or Bylaws or similar governing
instruments, or (B) any indenture, mortgage, deed of trust, contract, commitment
or other agreement or instrument to which it is a party or by which it or any of
its properties is bound or affected, (C) any law, rule, regulation, judgment,
order or decree of any government or governmental agency, instrumentality or
court, domestic or foreign,
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having jurisdiction over it or any of its properties or business, or (D) any
license, permit, certification, registration, approval, consent or franchise
referred to in Section l(a)(iii) hereof;
(xx) except as expressly disclosed in the Prospectus, there
are no claims, actions, suits, protests, proceedings, arbitrations,
investigations or inquiries pending before, or to the Company's knowledge
threatened or contemplated by, any governmental agency, instrumentality, court
or tribunal, domestic or foreign, or before any private arbitration tribunal to
which the Company or any Subsidiary is or may be made a party that could
reasonably be expected to affect the validity of any of the outstanding Common
Shares, or that, if determined adversely to the Company or the Subsidiary,
would, in any case or in the aggregate, result in any Material Adverse Effect,
nor is there any reasonable basis for any such claim, action, suit, protest,
proceeding, arbitration, investigation or inquiry. Except as expressly disclosed
in the Prospectus, there are no outstanding orders, judgments or decrees of any
court, governmental agency, instrumentality or other tribunal enjoining the
Company or any Subsidiary from, or requiring the Company or any Subsidiary to
take or refrain from taking, any action, or to which the Company or any
Subsidiary, their properties, assets or business are bound or subject;
(xxi) each of the Company and the Subsidiaries owns, or
possesses adequate rights to use, all patents, patent applications, trademarks,
trademark registrations, applications for trademark registration, trade names,
service marks, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
technology, information, systems, design methodologies and devices or procedures
developed or derived from or for the Company's or the Subsidiaries' business),
trade secrets, confidential information, processes and formulations and other
proprietary information necessary for, used in, or proposed to be used in, the
conduct of its business as described in the Prospectus (collectively, the
"Intellectual Property"). All patents owned by the Company and/or the
Subsidiaries are listed on Schedule IV hereto. The Company and the Subsidiary
have not infringed, are not infringing and, except as expressly and specifically
disclosed in the Prospectus, neither the Company nor any Subsidiary has received
any notice of conflict with, the asserted rights of others with respect to the
Intellectual Property that, individually or in the aggregate, if the subject or
an unfavorable decision, ruling or finding, would have a Material Adverse
Effect, and neither the Company nor any Subsidiary knows of any reasonable basis
therefore. To the knowledge of the Company and the Subsidiaries, no other
parties have infringed upon or are in conflict with the Intellectual Property.
Neither the Company nor any Subsidiary is a party to, or bound by, any agreement
pursuant to which royalties, honorariums or fees are payable by the Company or
any Subsidiary to any person by reason of the ownership or use of any
Intellectual Property that is material to the business of the Company or any
Subsidiary;
(xxii) each of the Company and the Subsidiaries has good and
marketable title to all property described in the Prospectus as being owned by
it, free and clear of all liens, security interests, charges or encumbrances and
the like, except such as are expressly described or referred to in the
Prospectus or such as do not materially affect the value of such property and do
not interfere in any material respect with the use made, or proposed to be made,
of such property by the Company or such Subsidiary. Each of the
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Company and the Subsidiaries has adequately insured its property against
loss or damage by fire or other casualty and maintains, in amounts reasonably
believed by it to be adequate, insurance against such other risks as management
of the Company deems appropriate. All real and personal property leased by the
Company or any Subsidiary, as described or referred to in the Prospectus, is
held by the Company or the Subsidiary under valid leases. The executive offices
and the other facilities of the Company and the Subsidiaries (the "Premises"),
and all operations presently or formerly conducted thereon by the Company or any
Subsidiary, are now and, since the Company or any such Subsidiary began to use
such Premises, always have been and, to the knowledge of the Company, prior to
when the Company or any such Subsidiary began to use such Premises, always had
been, in compliance with all federal, state and local statutes, ordinances,
regulations, rules, standards and requirements of common law concerning or
relating to industrial hygiene and the protection of health and the environment
(collectively, "the Environmental Laws"), except to the extent that any failure
to be in such compliance would not have a Material Adverse Effect. There are no
conditions on, about, beneath or arising from the Premises or at any other
location that might give rise to liability, the imposition of a statutory lien
or require a "Response," "Removal" or "Remedial Action," as defined herein,
under any of the Environmental Laws, and that would have a Material Adverse
Effect. Except as expressly disclosed in the Prospectus, which disclosed items
will not result in any Material Adverse Effect, (A) neither the Company nor any
Subsidiary has received notice or has knowledge of any claim, demand,
investigation, regulatory action, suit or other action instituted or threatened
against the Company or any Subsidiary or any portion of the Premises relating to
any of the Environmental Laws and (B) neither the Company nor any Subsidiary has
received any notice of material violation, citation, complaint, order,
directive, request for information or response thereto, notice letter, demand
letter or compliance schedule to or from any governmental or regulatory agency
arising out of or in connection with "hazardous substances" (as defined by
applicable Environmental Laws) on, about, beneath, arising from or generated at
the Premises or at any other location. As used in this subsection, the terms
"Response," "Removal" and "Remedial Action" shall have the respective meanings
assigned to such terms under Sections 101(23) - 101(25) of the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act, 42 U.S.C. 9601(23)-9601(25);
(xxiii) each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that: (A) transactions are executed in accordance with management's
general or specific authorization; (B) transactions are recorded as necessary in
order to permit preparation of financial statements in accordance 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 existing assets at reasonable intervals and appropriate action is
taken with respect to any differences;
(xxiv) no unregistered securities of the Company have been
sold by the Company or on behalf of the Company by any person or persons
controlling, controlled by,
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or under common control with the Company within the three years prior to the
date hereof, except as expressly disclosed in the Registration Statements;
(xxv) except for the disability, health and life insurance
plans and the benefit and such other plans that are expressly disclosed in the
Prospectus, the Company and the Subsidiaries have not had and do not now have
any employee benefit plan, profit sharing plan, employee pension benefit plan or
employee welfare benefit plan or deferred compensation arrangements ("Plans")
that are subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended, or the rules and regulations thereunder ("ERISA"). All
Plans that are subject to ERISA are in compliance with ERISA, in all material
respects, and, to the extent required by the Internal Revenue Code of 1986, as
amended (the "Code"), in compliance with the Code in all material respects.
Neither the Company nor any Subsidiary has had any employee pension benefit plan
that is subject to Part 3 of Subtitle B of Title I of ERISA or any defined
benefit plan or multi-employer plan. The Company has not maintained retired life
and retired health insurance plans that are employee welfare benefit plans
providing for continuing benefit or coverage for any employee or any beneficiary
of any employee after such employee's termination of employment, except as
required by Section 4980B of the Code. No fiduciary or other party in interest
with respect to any of the Plans has caused any of such Plans to engage in a
prohibited transaction as defined in Section 406 of ERISA. As used in this
subsection, the terms "defined benefit plan," "employee benefit plan," "employee
pension benefit plan," "employee welfare benefit plan," "fiduciary" and
"multiemployer plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA;
(xxvi) no labor dispute exists with the Company's or any
Subsidiary's employees, and to the Company's knowledge no such labor dispute is
threatened. The Company has no knowledge of any existing or threatened labor
disturbance by the employees of any of its principal suppliers, contractors or
customers that would have a Material Adverse Effect;
(xxvii) neither the Company nor any Subsidiary has incurred
any liability for any finder's fees or similar payments in connection with the
transactions contemplated herein other than as disclosed in the Prospectus;
(xxviii) the Company and the Subsidiaries are familiar with
the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations thereunder, and have in the past conducted, and each of the
Company and the Subsidiaries intends to conduct, its affairs in such a manner as
to ensure that it will not be an "investment company" within the meaning of the
1940 Act and the rules and regulations thereunder;
(xxix) no statement, representation, warranty or covenant
made by the Company or any Subsidiary in this Agreement or in any certificate or
document required by this Agreement to be delivered to the Representatives is,
was when made, or as of the Closing Date or any Option Closing Date will be,
inaccurate, untrue or incorrect in any material respect. No transaction has
occurred or is proposed between or among the Company
-11-
(or any Subsidiary) and any of its (or any of its Subsidiaries') officers,
directors or stockholders or any affiliate of any such officer, director or
stockholder that is required to be described in and is not described in the
Registration Statements and the Prospectus;
(xxx) neither the Company, nor any Subsidiary, nor any
officer, director, employee, agent or other person acting on behalf of the
Company or any Subsidiary has, directly or indirectly, given or agreed to give
any money, property or similar benefit or consideration to any customer or
supplier (including any employee or agent of any customer or supplier) or
official or employee of any agency or instrumentality of any government (foreign
or domestic) or political party or candidate for office (foreign or domestic) or
any other person who was, is or in the future may be in a position to affect the
general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and/or
any Subsidiary or any actual or proposed business transaction of the Company
and/or any Subsidiary that could (A) subject the Company or any Subsidiary
to any liability (including, but not limited to, the payment of monetary
damages) or penalty in any civil, criminal or governmental action or proceeding
that would have a Material Adverse Effect, or (B) violates any law, rule or
regulation to which the Company or any Subsidiary is subject, which violation if
proven would have a Material Adverse Effect; and
(xxxi) each officer and director of the Company and each of
its Subsidiaries and all other persons listed on Schedule V hereto has executed
an agreement in a form reasonably satisfactory to the Representatives that such
person will not, for the period specified in such agreement (the "Lock-up
Period"), offer to sell, contract to sell, or otherwise sell, dispose of, loan,
pledge or grant any rights with respect to (collectively, a "Disposition") any
Common Shares, any options or warrants to purchase any Common Shares or any
securities convertible into or exchangeable for Common Shares (collectively,
"Securities") now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of disposition,
otherwise then as specified in such agreement or with the prior written consent
of the Representatives. The Company has provided to counsel for the Underwriters
a complete and accurate list of all securityholders of the Company and the
number and type of securities held by each securityholder. The Company has
provided to counsel for the Underwriters true, accurate and complete copies of
all of the agreements pursuant to which its officers, directors and shareholders
have agreed to such or similar restrictions (the "Lock-Up Agreements").
Any certificate signed by any officer of the Company or any Subsidiary
in such capacity and delivered to the Representatives or to counsel for the
Underwriters pursuant to this Agreement shall be deemed a representation and
warranty by the Company or the Subsidiary to the several Underwriters as to the
matters covered thereby.
[Supplemental representations and warranties may be requested in
connection with completion of the underwriters' due diligence.]
-12-
(b) Representations and Warranties of the Selling
Shareholders. Each of the Selling Shareholders represents and warrants to, and
agrees with, the several Underwriters that:
(i) each Selling Shareholder has duly executed and delivered
a power of attorney in the form heretofore delivered to the Representatives,
(the "Power of Attorney") appointing __________________ and ___________________
as such Selling Shareholder's attorneys-in-fact (the "Attorneys-in-Fact"). Such
Selling Shareholder also has duly executed and delivered or caused to be
executed and delivered on his, her or its behalf by the Attorneys-in-Fact, a
Custody Agreement (the "Custody Agreement"), in the form heretofore delivered to
the Representatives, with ___________________ as custodian (the "Custodian").
The Attorneys-in-Fact are authorized to execute, deliver and perform (the
Custody Agreement and) this Agreement on behalf of such Selling Shareholder,
including, without limitation, the authority to determine the purchase price to
be paid to each Selling Shareholder by the Underwriters as set forth in Section
2 of this Agreement. Certificates in negotiable form representing the Shares to
be sold by each Selling Shareholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery pursuant
to this Agreement. Such Selling Shareholder agrees that the Shares represented
by the certificates on deposit with the Custodian are subject to the interests
of the Underwriters hereunder, that the arrangements made for such custody and
the appointment of the Attorneys-in-Fact are to that extent irrevocable, and
that the obligations of such Selling Shareholder hereunder shall not be
terminated, except as provided in this Agreement, by any act of such Selling
Shareholder, by operation of law or otherwise, whether by the dissolution,
reorganization, death or incapacity of such Selling Shareholder or the
occurrence of any other event. If any such dissolution, reorganization, death,
incapacity or other such event should occur before the delivery of the Shares to
be sold by the affected Selling Shareholder hereunder, the certificates for such
Shares shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement, as if such dissolution, reorganization, death,
incapacity, or other event had not occurred, regardless of whether or not the
Custodian or Attorneys-in-Fact shall have received notice thereof;
(ii) such Selling Shareholder has all requisite right, power
and authority to enter into this Agreement, the Custody Agreement and the Power
of Attorney and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder hereunder, and this Agreement, the Custody Agreement and the
Power of Attorney have been duly authorized, executed and delivered by such
Selling Shareholder and constitute the legal, valid and binding obligations of
such Selling Shareholder enforceable in accordance with their respective terms;
(iii) the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby and by
the Prospectus, the Custody Agreement and the Power of Attorney do not and shall
not, with or without the giving of notice or lapse of time or both, (A)
conflict with any term or provision of such Selling Shareholder's charter,
bylaws or other organic or governing documents, if applicable, (B) conflict with
or result in a breach or a violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage or other agreement or
instrument to
-13-
which such Selling Shareholder is a party or by which such Selling Shareholder
or any of his, her or its Shares is bound, or (C) violate any existing,
applicable law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over such Selling Shareholder or any of his, her or its Shares;
(iv) all authorizations, approvals and consents necessary
for the valid execution and delivery by such Selling Shareholder of the Power of
Attorney, the execution and delivery by or on behalf of such Selling Shareholder
of the Custody Agreement and this Agreement, and the sale and delivery of the
Shares to be sold by such Selling Shareholder hereunder (other than, at the time
of the execution hereof, the issuance of the order of the Commission declaring
the Registration Statement effective and such authorizations, approvals or
consents as may be necessary under the state securities or Blue Sky laws and the
Bylaws, rules and pronouncements of the NASD), have been obtained and are in
full force and effect;
(v) such Selling Shareholder now is, and on the Closing
Date and any Option Closing Date will be, the lawful owner of the Shares to be
sold by such Selling Shareholder pursuant to this Agreement. On the Closing Date
and any option Closing Date, such Selling Shareholder will have good and
marketable title to such Shares, free and clear of all liens, encumbrances,
security interests or other restrictions (other than those created under the
Custody Agreement). Upon proper delivery of, and payment for, such Shares as
provided herein, the Underwriters will acquire good and marketable title
thereto, free and clear of all liens, encumbrances, security interests and other
restrictions and defects whatsoever;
(vi) to the knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section l(a) hereof
are true and correct. Such Selling Shareholder has examined the Primary
Registration Statement and the Prospectus and has no knowledge of any fact,
condition or information not disclosed therein that has had or could reasonably
be expected to have a Material Adverse Effect. To the knowledge of such Selling
Shareholder, neither the Primary Registration Statement nor the Prospectus
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Such Selling Shareholder is not prompted to sell the Shares to be sold by such
Selling Shareholder hereunder by any information concerning the Company or the
Subsidiary that is not set forth in the Prospectus;
(vii) such Selling Shareholder has examined the Primary
Registration Statement and the Prospectus and the information relating to such
Selling Shareholder set forth therein and, as to such information, neither the
Primary Registration Statement nor the Prospectus contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(viii) such Selling Shareholder has not incurred any
liability for any finder's fee or similar payment in connection with the sale of
such Selling Shareholder's Shares hereunder; and
-14-
(ix) such Selling Shareholder has not distributed and will
not distribute any offering material in connection with the offering and sale of
the Shares other than the Registration Statements, a Preliminary Prospectus, the
Prospectus and other material, if any, permitted by the Act and the Regulations.
Neither such Selling Shareholder nor any affiliate of such Selling Shareholder
has taken or shall take any action designed, or that might be reasonably
expected, to cause or result in stabilization or manipulation of the price of
the Shares.
2. Purchase and Sale of Firm Shares. On the basis of the
representations, warranties, covenants and agreements contained herein, and
subject to the terms and conditions set forth herein, the Company shall sell
3,000,000 of the Firm Shares, and each Selling Shareholder, severally and not
jointly, shall sell the number of Firm Shares set forth opposite his name in
Table 1 of Schedule II hereto, to the several Underwriters, and each of the
Underwriters, severally and not jointly, shall purchase the number of Firm
Shares set forth opposite its name in Schedule I hereto. The purchase price of
the Firm Shares hereunder shall be the Offering Price less the Underwriting
Discounts and Commissions shown on the cover page of the Prospectus. Each
Underwriter shall be obligated to purchase from the Company, and from each
Selling Shareholder, that number of Firm Shares that represents the same
proportion of the number of Firm Shares to be sold by the Company, and by each
Selling Shareholder, as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto represents of the total number of Firm
Shares to be purchased by all of the Underwriters pursuant to this Agreement.
The respective purchase obligations of the Underwriters with respect to the Firm
Shares shall be rounded among the Underwriters to avoid fractional shares, as
the Representatives may determine. In making this Agreement, each Underwriter is
contracting severally and not jointly, and except as provided in Sections 4 and
11 hereof, the agreement of each Underwriter is to purchase only that number of
shares specified with respect to that Underwriter in Schedule I hereto. The
several Underwriters intend to offer the Shares to the public as set forth in
the Prospectus; provided, however, that no Shares registered pursuant to the
Rule 462(b) Registration Statement, if any, will be offered prior to the filing
of such registration statement with the SEC. After the initial public offering,
the several Underwriters may, in their discretion, vary the public offering
price.
3. Payment and Delivery.
(a) Delivery of and payment for the Firm Shares shall be made at
the offices of the Xxxxxx Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx at 10:00 a.m., Philadelphia, Pennsylvania time (i) on
the third full business day following the first day that the Firm Shares are
traded, (ii) if this Agreement is executed and delivered after 4:30 p.m.,
Philadelphia, Pennsylvania time, the fourth full business day following the day
this Agreement is executed and delivered, or (iii) at such other time and date
not later than seven full business days following the first day the Firm Shares
are traded as the Representatives and the Company may determine (or at such time
and date to which delivery and payment shall have been postponed pursuant to
Section 11 hereof). Such date and time of delivery and payment are referred to
collectively herein as the "Closing Date." Notwithstanding the foregoing, if the
Company has not made available to the Representatives copies of the Prospectus
in the quantities and within the time provided for in Section 5(a)(vii) hereof,
the
-15-
Representatives may, in their sole discretion, postpone the Closing Date until
no later than two full business days following delivery of such copies of the
Prospectus to the Representatives.
(b) On the Closing Date, the Company and the Selling Shareholders
shall deliver or cause to be delivered certificates representing the Firm Shares
to the Representatives for the account of each Underwriter against payment to or
upon the order of the Company (with respect to the Firm Shares sold by it) and
the Custodian (with respect to the Firm Shares sold by the Selling Shareholders)
of the purchase price (i) by certified or official bank check or checks payable
in New York Clearing House (next-day) funds, or (ii) in immediately available
funds wired to such accounts as the Company and/or the Custodian may specify
(with all costs and expenses incurred by the Underwriters in connection with
such settlement in immediately available funds, including, but not limited to,
interest or cost of funds expense, to be borne by the Company and/or the Selling
Shareholders, as the case may be). Time is of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
each Underwriter's obligation hereunder.
(c) The certificates representing the Firm Shares to be sold and
delivered will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and will be made available to the Representatives for inspection,
checking and packaging at the Philadelphia correspondent office of the Company's
transfer agent not less than one full business day prior to the Closing Date. If
the Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives.
(d) The Company and the Selling Shareholders shall not be
obligated to deliver any Firm Shares to be delivered on the Closing Date, except
upon payment for all the Firm Shares to be purchased on such date.
4. Option to Purchase Optional Shares.
(a) For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as
contemplated by the Prospectus, subject to the terms and conditions herein set
forth, the several Underwriters are hereby granted an option by the Company and
the Selling Shareholders to purchase all or any part of the Optional Shares (the
"Over-allotment Option"). The purchase price to be paid for the Optional Shares
shall be the Offering Price less the Underwriting Discounts and Commissions
shown on the cover page of the Prospectus. The Over-allotment Option granted
hereby may be exercised by the Representatives on behalf of the several
Underwriters as to all or any part of the Optional Shares at any time and from
time to time within 30 days after the date of the Prospectus. No Underwriter
shall be under any obligation to purchase any Optional Shares prior to an
exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be exercised by
the Representatives on behalf of the several Underwriters by giving notice to
the Company and
-16-
the Selling Shareholders by a letter delivered by hand or sent by registered or
certified mail, postage prepaid, or by courier, telex, telegraph, telegram or
facsimile (such notice to be effective when received), addressed as provided in
Section 13 hereof, setting forth the number of Optional Shares to be purchased,
the date and time for delivery of, and payment for, such Optional Shares and
stating that the Optional Shares referred to therein are to be used for the
purpose of covering over-allotments in connection with the distribution and sale
of the Firm Shares. If such notice is given at least two full business days
prior to the Closing Date, the date set forth therein for such delivery and
payment shall be the Closing Date. If such notice is given less than two full
business days prior to the Closing Date, the date set forth therein for such
delivery and payment shall be a date selected by the Representatives that is not
more than three full business days after the date the notice is effective. The
date and time set forth in such a notice is referred to herein as an "Option
Closing Date," and a closing held pursuant to such a notice is referred to
herein as an "Option Closing." Upon each exercise of the Over-allotment Option,
and on the basis of the representations, warranties, covenants and agreements
herein contained, and subject to the terms and conditions herein set forth, the
several Underwriters shall become severally, but not jointly, obligated to
purchase from the Selling Shareholders and the Company the number of Optional
Shares specified in each notice of exercise of the Over-allotment Option
(allocated among the several Underwriters in accordance with Section 4(c)
hereof).
(c) To the extent any Optional Shares are purchased, then the
Underwriters shall purchase all the Optional Shares of the Selling Shareholders,
as reflected in Table 2 of Schedule II hereto, before they purchase any Optional
Shares of the Company. Further, the Underwriters shall purchase all the Optional
Shares of the Selling Shareholders listed in Section A of Table 2 of Schedule II
hereto before they purchase any Optional Shares from the Selling Shareholders
listed in Section B of Table 2 of Schedule II hereto. To the extent the number
of Optional Shares to be purchased by the Underwriters at any Option Closing
accounts for some but not all of the Optional Shares of the Selling Shareholders
listed in either Section A or Section B of Table 2 of Schedule II hereto, then
the Underwriters shall purchase Optional Shares from such group of Selling
Shareholders prorata in proportion to the amounts set forth opposite their names
in the relevant section of Table 2 of Schedule II hereto. At each Option
Closing, the Selling Shareholders will be obligated, severally and not jointly,
to sell their Optional Shares to the Underwriters in accordance with the
foregoing sentences. Subject to the foregoing, at each Option Closing, each
Underwriter shall be obligated, severally and not jointly, to purchase from each
Selling Shareholder, and from the Company, that number of Optional Shares that
represents the same proportion of the number of Optional Shares to be sold by
each Selling Shareholder, and by the Company, as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto represents of
the total number of Firm Shares to be purchased by all of the Underwriters
pursuant to this Agreement. Notwithstanding the foregoing, the number of
Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and shall be subject to the
provisions for the allocation of Optional Shares purchased for the purpose
of covering over-allotments set forth in the agreement entered into by and among
the Underwriters in connection herewith (the "Agreement Among Underwriters").
-17-
(d) Delivery of and payment for the Optional Shares to be
purchased by the several Underwriters pursuant to any exercise of the
Over-allotment Option shall be made at the offices of Xxxxxx Xxxxxxxxxx Xxxxx
Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as
shall be agreed upon by the Company and the Representatives at 10:00 a.m.,
Philadelphia, Pennsylvania time on the Option Closing Date set forth in the
notice of such exercise. On such Option Closing Date, the Selling Shareholders
(who are obligated to sell Optional Shares pursuant to Section 4(c) hereof) and
the Company, if applicable, shall deliver or cause to be delivered certificates
representing the Optional Shares to the Representatives for the account of each
Underwriter against payment to or upon the order of the Custodian (with respect
to Optional Shares sold by Selling Shareholders) and the Company (with respect
to Optional Shares sold by it, if any), (i) by certified or official bank check
or checks payable in New York Clearing House (next-day) funds, or (ii) in
immediately available funds wired to such accounts as the Custodian and the
Company may specify (with all costs and expenses incurred by the Underwriters in
connection with such settlement in immediately available funds, including, but
not limited to, interest or cost of funds expense, to be borne by the Selling
Shareholders and the Company). Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder.
(e) The certificates representing the Optional Shares to be
issued and delivered will be in such denominations and registered in such names
as the Representatives request not less than two full business days prior to the
Option Closing Date, and will be made available to the Representatives for
inspection, checking and packaging at the Philadelphia correspondent office of
the Company's transfer agent not less than one full business day prior to the
Option Closing Date. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives.
5. Certain Covenants and Agreements.
(a) Certain Covenants and Agreements of the Company. The Company
covenants and agrees with the several Underwriters as follows:
(i) if the Rule 462(b) Registration Statement has not been
filed at the time this Agreement is executed and delivered by the parties
hereto, the Company will use its best efforts to cause such registration
statement to be filed and become effective as promptly as possible;
(ii) if the Company omitted information from the Primary
Registration Statement at the time it was declared effective in reliance upon
Rule 430A of the Regulations, the Company will timely file the Prospectus
pursuant to and in compliance with Rule 424(b)(1) or (4) and Rule 430A(a)(3) of
the Regulations and will advise the Representatives of the time and manner of
such filing; provided, however, that if the Representatives shall agree to the
utilization of Rule 434 of the Regulations, the Company will timely file
pursuant to and in compliance with Rule 424(b)(7) and Rule 430A(a)(3) of the
-18-
Regulations the information required to be included in the Term Sheet, and will
advise the Representatives of the time and manner of such filing;
(iii) if for any reason the filing of a form of Prospectus
is required under Rule 424(b)(3) of the Regulations, the Company will timely
file such Prospectus pursuant to and in compliance with such Rule and will
advise the Representatives of the time and manner of such filing;
(iv) the Company will not file or publish any Rule 462(b)
Registration Statement or any amendment or supplement to the Registration
Statement(s), Preliminary Prospectus or Prospectus at any time before the
completion (in the opinion of the Underwriters' counsel) of the distribution of
the Shares by the Underwriters that is not (A) in compliance with the
Regulations and (B) approved by the Representatives (such approval not to be
unreasonably withheld or delayed);
(v) the Company will advise the Representatives immediately,
and confirm such advice in writing, (A) when any Rule 462(b) Registration
Statement or post-effective amendment to the Registration Statements is filed
with the SEC, (B) of the receipt of any comments from the SEC concerning the
Registration Statements, (C) when any post-effective amendment to the
Registration Statements becomes effective, or when any supplement to the
Prospectus or any amended Prospectus has been filed, (D) of any request of the
SEC for amendment or supplementation of the Registration Statements or
Prospectus or for additional information, (E) during the period when the
Prospectus is required to be delivered under the Act and Regulations, of the
happening of any event as a result of which the Registration Statements would
include an untrue statement of a material fact or omit to state a material fact
required therein or necessary to make the statements therein not misleading, or
as a result of which the Prospectus, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (F) during the period
noted in clause (E) above, of the need to amend the Registration Statements or
supplement the Prospectus to comply with the Act, (G) of the issuance by the SEC
of any stop order suspending the effectiveness of the Registration Statements or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, and (H) of the suspension of the qualification of any of the
Shares for offering or sale in any jurisdiction in which the Underwriters intend
to make such offers or sales, or of the initiation or threatening of any
proceedings for any of such purposes known to the Company. The Company will use
its best efforts to prevent the issuance of any such stop order or of any order
preventing or suspending such use, and if any such order is issued, to obtain as
soon as possible the lifting thereof;
(vi) in case of any event (occurring at any time within the
period during which, in the opinion of Saul, Ewing, Xxxxxx & Xxxx, counsel for
the Underwriters ("Underwriters' Counsel"), a prospectus is required to be
delivered under the Act and Regulations), as a result of which any Preliminary
Prospectus or the Prospectus, as then amended or supplemented, would contain, in
the opinion of Underwriters' Counsel, an untrue statement of a material fact, or
omit to state any material fact necessary in order to make the
-19-
statements therein, in light of the circumstances under which they were made,
not misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act and Regulations or any
applicable securities or Blue Sky laws, the Company promptly will prepare and
file with the SEC, and any applicable state securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters such number of
copies of such amendments, supplements or documents (in form and substance
satisfactory to the Representatives and counsel for the Underwriters) as the
Representatives may reasonably request. For purposes of this Section 5(a)(vi),
the Company will provide such information to the Representatives, the
Underwriters' Counsel and counsel to the Company as shall be necessary to enable
such persons to consult with the Company with respect to the need to amend or
supplement the Registration Statements, Preliminary Prospectus or Prospectus or
file any document, and shall furnish to the Representatives and the
Underwriters' Counsel such further information as each may from time to time
reasonably request;
(vii) from time to time during the nine-month period
following the effective date of the Primary Registration Statement, the
Company will, without charge, deliver to the Representatives, as soon as such
documents are available (but in the case of the Prospectus, including the Term
Sheet, if any, no later than 10:00 a.m., Philadelphia, Pennsylvania time, on the
first full business day following the execution and delivery of this Agreement,
and in the case of any amended or supplemented Prospectus, no later than 10:00
a.m., Philadelphia, Pennsylvania time, on the first full business day following
the date of such amendment or supplement), copies of the following documents in
such quantities as the Representatives shall request (ten copies to be furnished
automatically in the absence of or pending a quantity specification by the
Representatives): (A) the Registration Statements, at least three of each of
which will be manually executed and will include all exhibits, and all
amendments and supplements thereto; (B) each Preliminary Prospectus; (C) if Rule
434 of the Regulations is utilized with the consent of the Representatives, the
Preliminary Prospectus updated in all respects through the date specified by the
Representatives; and (D) the Prospectus and any amendment or supplement thereto,
including any prospectus prepared to comply with Section 10(a)(3) of the Act.
The Company hereby consents to the use of such copies of the Preliminary
Prospectus and the Prospectus for purposes permitted by the Act, the Regulations
and the securities or Blue Sky laws of the states in which the Shares are
offered by the several Underwriters and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act and
Regulations to be delivered in connection with sales by any Underwriter or
dealer;
(viii) if any Underwriter is required to deliver a
Prospectus nine months or more after the effective date of the Registration
Statements in connection with the sale of the Shares, the Company will prepare
promptly upon request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statements and such Prospectus or Prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act;
-20-
(ix) the Company will comply with the Act, the Regulations,
the Exchange Act and the rules and regulations thereunder so as to permit the
continuance of sales of, and dealings in, the Shares for as long as may be
necessary to complete the distribution of the Shares as contemplated hereby;
(x) the Company will furnish such information and pay such
filing fees and other expenses as may be required, and otherwise cooperate in
the registration or qualification of the Shares, or exemption therefrom, for
offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions in which the Representatives
determine to offer the Shares, after consultation with the Company, and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided,
however, that no such qualification shall be required in any jurisdiction where,
solely as a result thereof, the Company would be subject to taxation or
qualification as a foreign corporation doing business in such jurisdiction where
it is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject. The
Company will, from time to time, prepare and file such statements and reports as
are or may be required to continue such qualification in effect for so long a
period as is required under the laws of such jurisdictions for such offering and
sale;
(xi) if at any time during the 90-day period after the
Primary Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which in
the opinion of the Representatives the market price of the Common Shares has
been or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising the
Company to the effects set forth above, forthwith prepare, consult with the
Representatives concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Representatives,
responding to or commenting on such rumor, publication or event;
(xii) the Company will make generally available to its
security holders, as soon as practicable, but not later than 45 days after the
end of the period covered thereby, an earnings statement of the Company (which
need not be audited unless required by the Act or the Regulations) that shall
comply with Section 11(a) of the Act and the Regulations (including, at the
option of the Company, Rule 158) and cover a period of at least 12 consecutive
months beginning not later than the first day of the Company's fiscal quarter
next following the Effective Date;
(xiii) for a period of five years from the Effective Date,
the Company will deliver to the Representatives: (A) a copy of each report or
document, including, without limitation, reports on Forms 8-K, 10-C, 10-K and
10-Q (or such similar forms as may be designated by the SEC), registration
statements and any exhibits thereto, filed with or furnished to the SEC or any
securities exchange or the Nasdaq Stock Market or the NASD, on the date each
such report or document is so filed or furnished; (B) as soon as practicable,
-21-
copies of any reports or communications (financial or other) of the Company
mailed to its security holders; and (C) every material press release in respect
of the Company or its affairs that is released or prepared by the Company.
During such five-year period, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the Company and its
subsidiaries are consolidated, and shall be accompanied by similar financial
statements by any significant subsidiary that is not so consolidated.
(xiv) for a period of three years from the Effective Date,
the Company will deliver to the Representatives, subject to execution of an
appropriate confidentiality agreement, such additional information concerning
the business and financial condition of the Company as the Representatives may
from time to time reasonably request in writing, and which can be prepared or
obtained by the Company without unreasonable effort or expense;
(xv) during the course of the distribution of the Shares,
the Company 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 Common Shares;
(xvi) the Company will not engage in any transactions with
affiliates (as defined in the Regulations) without the prior approval of a
majority of the disinterested members of its Board of Directors;
(xvii) the Company will use all reasonable efforts to
maintain the inclusion of the Common Shares (including, without limitation, the
Shares) for quotation on the Nasdaq Stock Market;
(xviii) the Company shall, at its sole cost and expense,
supply and deliver to the Representatives and the Underwriters' Counsel (in the
form they require), within a reasonable period from the Closing Date, six
transaction binders, each of which shall include the Registration Statements, as
amended or supplemented, all exhibits to the Registration Statements, the
Prospectus, as amended or supplemented, the Preliminary Blue Sky Memorandum and
any supplement thereto, all underwriting and closing documents and all other
correspondence, filings and applications with the SEC, the NASD and the Nasdaq
Stock Market;
(xix) the Company will use the net proceeds from the sale of
the Shares to be sold by it hereunder substantially in accordance with the
description set forth under the caption "Use of Proceeds" in the Prospectus and
shall file such reports with the SEC with respect to the sale of such Shares and
the application of the proceeds therefrom as may be required under the
Regulations, including, but not limited to, Rule 463;
(xx) the Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Shares;
-22-
(xxi) the Company will take such steps as shall be necessary
to ensure that neither it nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the SEC thereunder;
(xxii) during the Lock-Up Period, the Company will not,
without the prior written consent of the Representatives, effect the Disposition
of, directly or indirectly, any Securities other than the sale of the Firm
Shares and the Optional Shares hereunder and the Company's issuance of options
or Common Shares under warrants or other rights to purchase outstanding as of
the date hereof and expressly described in the Prospectus and the Company's
stock option and stock purchase plans that are either presently authorized (and
expressly described in the Prospectus) or hereafter approved by the Shareholders
of the Company (the "Stock Plans"); and
(xxiii) the Company will exercise best efforts to consummate
its acquisition of all of the outstanding shares of capital stock of Judge
Imaging Systems, Inc., a publicly held Delaware corporation (the "JIS
Acquisition"), which acquisition is the subject of a registration statement on
Form S-4 (File No. 333-13753) filed with the SEC on October 9, 1996 on or before
the Closing Date.
[Supplemental covenants may be requested in connection with
the completion of the Underwriters' due diligence]
(b) Certain Covenants and Agreements of the Selling Shareholders.
Each Selling Shareholder covenants and agrees with the several Underwriters as
follows:
(i) during the course of the distribution of the Shares,
such Selling Shareholder shall 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 market price of the Shares;
(ii) during the Lock-Up Period, such Selling Shareholder
will not, without the prior written consent of the Representatives, effect the
Disposition of, directly or indirectly, any Securities other than such Selling
Shareholder's Firm Shares and Optional Shares hereunder; and
(iii) such Selling Shareholder will deliver to the
Representatives prior to the Closing Date a properly completed and executed
United States Treasury Department Form W-8 (if the Selling Shareholder is a
non-United States person) or Form W-9 (if the Selling Shareholder is a United
States person).
6. Payment of Fees and Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated and regardless of the reason this Agreement is
terminated, the Company will pay or cause to be paid, and bear or cause to be
borne, all costs and expenses incident to the
-23-
performance of the obligations of the Company and the Selling Shareholders under
this Agreement, including:
(i) the fees and expenses of the accountants and counsel for
the Company incurred in the preparation of the Registration Statements and any
post-effective amendments thereto (including financial statements and exhibits),
Preliminary Prospectuses and the Prospectus and any amendments or supplements
thereto;
(ii) printing and mailing expenses associated with the
Registration Statements and any post-effective amendments thereto, Preliminary
Prospectus, the Prospectus, this Agreement, the Agreement Among Underwriters,
the Underwriters' Questionnaire submitted to each of the Underwriters by the
Representatives in connection herewith, the Power of Attorney executed by each
of the Underwriters in favor of the Representatives in connection herewith, the
Selected Dealer Agreement and related documents and the preliminary Blue Sky
memorandum (collectively with any supplement thereto, the "Blue Sky
Memorandum");
(iii) the costs (other than fees and expenses of the
Underwriters' Counsel, except such fees incurred in connection with Blue Sky and
NASD filings or exemptions as provided herein) incident to the authentication,
insurance, sale and delivery of the Shares to the Underwriters;
(iv) the fees, expenses and all other costs of qualifying
the Shares for sale under the securities or Blue Sky laws of those states in
which the Shares are to be offered or sold, including, without limitation, the
reasonable fees and expenses (up to $20,000) of Underwriters' Counsel and such
local counsel as may have been reasonably required and retained for such
purpose;
(v) the fees, expenses and other costs of, or incident to,
securing any review or approvals by or from the NASD, including the reasonable
fees and expenses of the Underwriters' Counsel;
(vi) the filing fees of the SEC;
(vii) the cost of furnishing to the Underwriters copies of
the Registration Statements, Preliminary Prospectuses and Prospectuses as herein
provided;
(viii) the Company's travel expenses in connection with
meetings with the brokerage community and institutional investors;
(ix) the costs and expenses associated with settlement in
same day funds (including, but not limited to, interest or cost of funds
expenses), if desired by the Company;
-24-
(x) any fees or costs payable to the Nasdaq Stock Market as
a result of the offering;
(xi) the cost of printing certificates for the Shares;
(xii) the cost and charges of any transfer agent;
(xiii) the costs (up to $25,000) of advertising the
offering, including, without limitation, with respect to the placement of
"tombstone" advertisements in publications selected by the Representatives;
(xiv) all taxes, if any, on the issuance, delivery and
transfer of the Shares sold by the Company; and
(xv) all other costs and expenses reasonably incident to the
performance of the Company's and the Selling Shareholders' obligations hereunder
that are not otherwise specifically provided for in this Section 6(a); provided,
however, that, except as specifically set forth in Section 6(c) hereof, (A) the
Underwriters shall be responsible for their out-of-pocket expenses, including
those associated with meetings with the brokerage community and institutional
investors, other than the Company's travel expenses, and the fees and expenses
of their counsel for other than Blue Sky and NASD matters, and (B) the Selling
Shareholders shall be responsible for any transfer or income taxes assessed with
respect to the Shares sold by the Selling Shareholders and any fees and expenses
of the Selling Shareholders' counsel and such other expenses as are agreed to by
the Company and the Selling Shareholders or as may be required by law or
regulation.
(b) The Company shall pay as due any state registration,
qualification and filing fees and any accountable out-of-pocket disbursements in
connection with such registration, qualification or filing in the states in
which the Representatives determine to offer or sell the Shares.
(c) If the Underwriters are willing to proceed with the offering,
and the transactions contemplated by this Agreement are not consummated because
the Company or the Selling Shareholders elect not to proceed with the offering
for any reason or if the Representatives terminate this Agreement pursuant to
Section 10(b) hereof, then the Company will reimburse the Representatives for
their out-of-pocket expenses, including, without limitation, fees and
disbursements of Underwriters' Counsel, incurred in connection with
investigating, marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder, in an amount not to exceed $150,000.
7. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
option Closing Date, to the continuing accuracy and fulfillment of the
representations and warranties of the Company and the Selling Shareholders, to
the
-25-
performance by the Company and the Selling Shareholders of their covenants and
obligations hereunder, and to the following additional conditions:
(a) if required by the Regulations, the Prospectus shall have
been filed with the SEC pursuant to Rule 424(b) of the Regulations within the
applicable time period prescribed for such filing by the Regulations. On or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Primary Registration Statement or the Rule 462(b) Registration Statement, if
any, or the sale of any of the Shares shall have been issued under the Act or
any state securities law, and no proceedings for that purpose shall have been
initiated or shall be pending or, to the Representatives' knowledge or the
knowledge of the Company, shall be contemplated by the SEC or by any authority
in any jurisdiction designated by the Representatives pursuant to Section
[5(a)(x)] hereof. Any request on the part of the SEC for additional information
shall have been complied with to the reasonable satisfaction of Underwriters'
Counsel;
(b) all corporate proceedings and other matters incident to the
authorization, form and validity of this Agreement, the Shares and the form of
the Registration Statements and the Prospectus, as amended and supplemented, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all material respects to
Underwriters' Counsel. The Company and the Selling Shareholders shall have
furnished to such counsel all documents and information that they may have
reasonably requested to enable them to pass upon such matters. The
Representatives shall have received from the Underwriters' Counsel an opinion,
dated as of the Closing Date and any Option Closing Date, as the case may be,
and addressed to the Representatives individually and as representatives of the
several Underwriters, which opinion shall be satisfactory in all respects to the
Representatives;
(c) the NASD shall have indicated it has no objection to the
underwriting arrangements pertaining to the sale of any Shares;
(d) the Representatives shall have received a copy of an executed
Lock-up Agreement from each person described on Schedule IV hereto;
(e) the Representatives shall have received at or prior to the
Closing Date from the Underwriters' counsel a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the securities or
Blue Sky laws of such jurisdictions designated by the Representatives pursuant
to Section [5(a)(x)] hereof;
(f) on the Closing Date and any Option closing Date, there shall
have been delivered to the Representatives signed opinions of Drinker, Xxxxxx &
Xxxxx, counsel for the Company, dated as of each such date and addressed to the
Representatives individually and as representatives of the several Underwriters
to the effect set forth in Exhibit "A" hereto or to such effect as is otherwise
reasonably satisfactory to the Representatives;
-26-
(g) on the Closing Date and any option closing Date, there shall
have been delivered to the Representatives signed opinions of ______________,
counsel for the Selling Shareholders, dated as of each such date and addressed
to the Representatives individually and as representatives of the several
Underwriters to the effect set forth in Exhibit "B" hereto or to such effect as
is otherwise reasonably satisfactory to the Representatives;
(h) at the Closing Date and any Option Closing Date: (i) the
Registration Statements and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and the Registration Statements and any
post-effective amendment thereto shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Prospectus,
as amended or supplemented, shall not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (ii) since the respective dates as of which information is
given in the Registration Statements and any post-effective amendment thereto
and the Prospectus and any amendments or supplements thereto, except as
otherwise expressly stated therein, there shall have been no material adverse
change in the properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or management of the Company and the
Subsidiary taken as a whole, from that set forth therein, whether or not arising
in the ordinary course of business; (iii) since the respective dates as of which
information is given in the Registration Statements and any post-effective
amendment thereto and the Prospectus or any amendment or supplement thereto,
there shall have been no event or transaction, contract or agreement entered
into by the Company or any Subsidiary, other than in the ordinary course of
business and as set forth in the Registration Statements or Prospectus, that has
not been, but would be required to be, set forth in the Registration Statements
or Prospectus; (iv) since the respective dates as of which information is given
in the Registration Statements and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto, there shall have been no
material adverse change, loss, reduction, termination or non-renewal of any
contract to which the Company or any Subsidiary is a party; and (v) no action,
suit or proceeding at law or in equity shall be pending or threatened against
the Company or any Subsidiary that would be required to be set forth in the
Prospectus, other than as set forth therein, and no proceedings shall be pending
or threatened against or directly affecting the Company or any Subsidiary before
or by any federal, state or other commission, board or administrative agency
wherein an unfavorable decision, ruling or finding would have a Material Adverse
Effect other than as set forth in the Prospectus;
(i) the Representatives shall have received at the Closing Date
and any Option Closing Date certificates of the Chief Executive Officer and the
Chief Financial Officer of the Company dated as of the date of the Closing Date
or option Closing Date, as the case may be, and addressed to the
Representatives, individually and as representatives of the several
Underwriters, to the effect that (i) the signers of the certificate have read
this Agreement, and the representations and warranties of the Company in this
Agreement are
-27-
true and correct in all material respects, as if made at and as of the Closing
Date or the Option Closing Date, as the case may be, and the Company has
complied in all material respects with all the agreements, fulfilled in all
material respects all the covenants and satisfied all the conditions on its part
to be performed, fulfilled or satisfied at or prior to the Closing Date or the
Option Closing Date, as the case may be, and (ii) the signers of the
certificate have examined the Registration Statement and the Prospectus and any
amendments or supplements thereto, and the conditions set forth in Section 7(h)
hereof have been satisfied;
(j) the Representatives shall have received at the Closing Date
and any Option Closing Date certificates of or on behalf of the Selling
Shareholders dated as of the date of the Closing Date or Option Closing Date, as
the case may be, and addressed to the Representatives, individually and as
representatives of the several Underwriters, to the effect that (i) the Selling
Shareholders have read this Agreement, and the representations and warranties of
the Selling Shareholders in this Agreement are true and correct in all material
respects, as if made at and as of the Closing Date or the Option Closing Date,
as the case may be, and (ii) the Selling Shareholders have examined the
Registration Statement and the Prospectus and any amendments or supplements
thereto, and the conditions set forth in Section 7(h) hereof have been satisfied
with respect to the Selling Shareholders;
(k) at the time this Agreement is executed and at the Closing
Date and any Option Closing Date, the Representatives shall have received a
letter addressed to the Representatives, individually and as representatives of
the several Underwriters, in form and substance satisfactory to the
Representatives in all respects (including, without limitation, the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
from Xxxxxxx, Xxxxxx LLP dated as of the date of this Agreement, the Closing
Date or the Option Closing Date, as the case may be:
(i) confirming they are independent certified public
accountants within the meaning of the Act and the Regulations, and stating that
the section of the Primary Registration Statement under the caption "Experts" is
correct insofar as it relates to them;
(ii) stating that, in their opinion, the consolidated
financial statements, schedules and notes of the Company and the Subsidiary
audited by them and included in the Registration Statements comply in form in
all material respects with the applicable accounting requirements of the Act and
the Regulations;
(iii) stating that, on the basis of specified procedures,
which included the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information, as described
in SAS No. 71, Interim Financial Information (with respect to the latest
unaudited consolidated financial statements of the Company included in the
Registration Statement), a reading of the latest available unaudited interim
consolidated financial statements of the Company (with an indication of the date
of the latest available unaudited interim financial statements), a reading of
the minutes of the meetings of the stockholders and the Boards of Directors of
the Company and the Subsidiaries, and audit and compensation committees of such
Boards, if any, and inquiries
-28-
to certain officers and other employees of the Company and the Subsidiaries
responsible for operational, financial and accounting matters and other
specified procedures and inquiries, nothing has come to their attention that
would cause them to believe that (A) the unaudited consolidated financial
statements of the Company and the Subsidiary included in the Registration
Statements, (1) do not comply in form and all material respects with the
applicable accounting requirements of the Act and the Regulations, or (2) should
be materially modified in order for such unaudited financial statements to be in
conformity with generally accepted accounting principles; (B) at a specified
date not more than five business days prior to the date of such letter, there
was any change in the capital stock or debt of the Company or any decrease in
net current assets, total assets or stockholders' equity of the Company as
compared with the amounts shown in the September 30, 1996 unaudited balance
sheet of the Company included the Registration Statements, or that for the
periods from October 1, 1996 to the date of the latest available unaudited
financial statements of the Company and to a specified date not more than five
days prior to the date of the letter, there were any decreases, as compared to
the corresponding periods in the prior year, in sales, operating income or total
or per share amounts of net income, except in all instances for changes,
decreases or increases that the Registration Statements disclose have occurred
or may occur and except for such other changes, decreases or increases which the
Representatives shall in their sole discretion accept; or (C) the unaudited pro
forma financial statements included in the Registration Statements do not comply
as to form in all material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X under the Act and that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements; and
(iv) stating that they have compared specific dollar
amounts, numbers of shares and other numerical data and financial information
set forth in the Registration Statement that have been specified by the
Representatives prior to the date of this Agreement (to the extent that such
information is derived from the accounting records subject to the internal
control structure, policies and procedures of the Company's of the Subsidiary's
accounting system, or has been derived directly from such accounting records by
analysis or comparison or has been derived from other records and analyses
maintained or prepared by the Company or the Subsidiary) with the results
obtained from the application of readings, inquiries and other appropriate
procedures (which procedures do not constitute an audit in accordance with
generally accepted auditing standards) set forth in the letter, and found them
to be in agreement;
(l) the Representatives shall have received from Xxxxxxx Xxxxxx
LLP a letter addressed to the Company and made available to the Representatives
for the use of the Underwriters stating that their review of the Company's
system of internal accounting controls, to the extent they deem necessary in
establishing the scope of their audit of the Company's consolidated financial
statements as of June 30, 1996, did not disclose any weaknesses in internal
controls that they considered to be material weaknesses;
(m) there shall have been duly tendered to the Representatives
for the respective accounts of the Underwriters certificates representing all of
the Shares to be
-29-
purchased by the Underwriters on the Closing Date or any Option Closing Date, as
the case may be;
(n) at the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates as they shall have reasonably requested;
(o) the issuance and sale of the Shares shall be legally
permitted under applicable Blue Sky or state securities laws so long as such
sales are made in accordance with the Blue Sky Memorandum;
(p) the Representatives shall have received copies of the
executed Custody Agreement and Power of Attorney provided for in Section 1(b)(i)
hereof for each Selling Shareholder, and such documents shall have been approved
in form and substance by the Underwriters' Counsel, such approval not to be
withheld unreasonably;
(q) the JIS Acquisition shall have been consummated or all
actions necessary to be taken and all documents necessary to be delivered (other
than the consummation of the public offering contemplated hereby) in order to
consummate fully the JIS Acquisition shall have been taken or delivered, such
that the only remaining condition to the full consummation of the JIS
Acquisition shall be consummation of the public offering of the Firm Shares as
contemplated hereby, and upon the consummation of such public offering the JIS
Acquisition will be fully consummated automatically; and
(r) all corporate and other proceedings and other matters
incident to the authorization, form and validity of this Agreement and the form
of the Registration Statements and Prospectus and all other legal matters
related to this Agreement and the transactions contemplated hereby shall be
satisfactory in all respects to Underwriters' Counsel. The Company and the
Selling Shareholders shall have furnished to such counsel all documents and
information that they shall have reasonably requested to enable them to pass
upon such matters.
[Additional closing conditions may be requested in connection with the
completion of the Underwriters' due diligence.]
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives and the Underwriters' Counsel. The Company and
the Selling Shareholders shall furnish the Representatives with such conformed
copies of such opinions, certificates, letters and other documents as they shall
reasonably request. If any condition to the Underwriters' obligations hereunder
to be fulfilled prior to or at the Closing Date or any Option Closing Date, as
the case may be, is not fulfilled, the Representatives may on behalf of the
several Underwriters, terminate this Agreement with respect to the Closing Date
or such Option Closing Date, as applicable, or, if they so elect, waive any such
conditions that have not been fulfilled or extend the time for their
fulfillment. Any such termination shall be without liability of the Underwriters
to the Company or the Selling Shareholders.
-30-
8. Indemnification and Contribution.
(a) The Company and each Selling Shareholder, severally and not
jointly, shall indemnify and hold harmless each Underwriter, and each person, if
any, who controls each Underwriter within the meaning of the Act, against any
and all loss, liability, claim, damage and expense whatsoever, including, but
not limited to, any and all reasonable expenses incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever or in connection with any investigation or inquiry of, or
action or proceeding that may be brought against, the respective indemnified
parties, arising out of or based upon any breach of the Company's or such
Selling Shareholder's respective representations and warranties made in this
Agreement or any untrue statements or alleged untrue statements of material fact
contained in any Preliminary Prospectus, the Registration Statements or the
Prospectus, or any amendment or supplement thereto, any application or other
document (in this Section 8 collectively called "application") executed by the
Company and based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify all or any part of the
Shares under the securities laws thereof or filed with the SEC or the NASD, or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing indemnity:
(i) shall not apply in respect of any statement or omission
made in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives expressly for use in
any Preliminary Prospectus, the Registration Statements or Prospectus, or any
amendment or supplement thereto, or in any application or in any communication
to the SEC, as the case may be; and
(ii) with respect to any Preliminary Prospectus, shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities or expenses purchased the Shares if, at or
prior to the written confirmation of the sale of such Shares, a copy of an
amended Preliminary Prospectus or the Prospectus (or the Prospectus as amended
or supplemented) was delivered to such Underwriter, but was not sent, or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the amended
Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented), unless such failure on the part of such Underwriter is the result
of noncompliance by the Company with Section 5(a)(vi) hereof.
The obligations of the Company and the Selling Shareholders under this
Section 8(a) will be in addition to any liability the Company and the Selling
Shareholders may otherwise have.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, each
Selling Shareholder, and each other person, if any, who controls the Company or
a Selling Shareholder within the meaning of the Act to the same extent as the
foregoing indemnities from the Company and
-31-
the Selling Shareholders to the several Underwriters, but only with respect to
any loss, liability, claim, damage or expense resulting from statements or
omissions, or alleged statements or omissions, if any, made in any Preliminary
Prospectus, the Registration Statements or Prospectus or any amendment or
supplement thereto, or any application in reliance upon, and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives expressly for use in any Preliminary Prospectus, the
Registration Statements or Prospectus, or any amendment or supplement thereto,
or any application, as the case may be. The obligations of each Underwriter
under this Section 8(a) will be in addition to any liability such Underwriter
may otherwise have.
(c) If any action, inquiry, investigation or proceeding is
brought against any person in respect of which indemnification may be sought
pursuant to Section 8(a) or (b) hereof, such person (hereinafter called the
"indemnified party") shall, promptly after notification of, or receipt of
service of process for, such action, inquiry, investigation or proceeding,
notify in writing the party or parties against whom indemnification is to be
sought (hereinafter called the "indemnifying party") of the institution of such
action, inquiry, investigation or proceeding. The indemnifying party, upon the
request of the indemnified party, shall assume the defense of such action,
inquiry, investigation or proceeding, including, without limitation, the
employment of counsel (reasonably satisfactory to such indemnified party) and
payment of expenses. No indemnification provided for in this Section 8 shall be
available to any indemnified party who shall fail to give such notice if the
indemnifying party does not have knowledge of such action, inquiry,
investigation or proceeding, to the extent that such indemnifying party has been
materially prejudiced by the failure to give such notice, but the omission to so
notify the indemnifying party shall not relieve the indemnifying party otherwise
than under this Section 8. Such indemnified party or controlling person thereof
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action. If such indemnified party or parties shall have been advised by
counsel that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties or that there may be
legal defenses available to such indemnified party or parties different from or
in addition to those available to the indemnifying party or parties, the
indemnified party or parties shall be entitled to select counsel to conduct the
defense to the extent determined by such counsel to be necessary to protect the
interests of the indemnified party or parties, and the reasonable fees and
expenses of such counsel shall be borne by the indemnifying party. Expenses
covered by the indemnification in this Section 8 shall be paid by the
indemnifying party as they are incurred by the indemnified party. Anything in
this Section 8 to the contrary notwithstanding, the indemnifying party shall not
be liable for any settlement of any such claim effected without its written
consent.
(d) Each Selling Shareholder's aggregate liability under this
Section 8 shall be limited to an amount equal to the net proceeds (before
deducting expenses) received by such Selling Shareholder from the sale of such
Selling Shareholder's Shares pursuant to this Agreement.
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(e) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or (b) hereof in respect of any losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) referred to herein, except by reason of the provisos set forth in
Section 8(a) hereof or the failure to give notice as required in Section 8(c)
hereof (provided that the indemnifying party does not have knowledge of the
action, inquiry, investigation or proceeding and to the extent such party has
been materially prejudiced by the failure to give such notice), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company or the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company or each Selling Shareholder on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, liabilities, claims or reasonable expenses (or actions, inquiries,
investigations or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company or each
Selling Shareholder 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 or each Selling Shareholder
bears to the total underwriting discount and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. 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
suppliedor a Selling Shareholder on the one hand or the Underwriters on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by prorata allocation (even if the Selling
Shareholders or the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, liabilities, claims,
damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(e), the provisions of
the Agreement Among Underwriters shall govern contribution among Underwriters,
no Underwriter (except as provided in the Agreement Among Underwriters) shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, and no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall
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be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' and the Selling Shareholders'
obligations in this Section 8(e) to contribute are several in proportion to
their individual underwriting obligations and number of Shares sold,
respectively, and not joint.
9. Representations and Agreements to Survive Delivery. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date. All such
representations, warranties and agreements of the Underwriters, the Company and
the Selling Shareholders, including, without limitation, the indemnity and
contribution agreements contained in Section 8 hereof and the agreements
contained in Sections 6, 9, 10 and 13 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person, and shall survive delivery of the Shares
and termination of this Agreement, whether before or after the Closing Date or
any Option Closing Date.
10. Effective Date of This Agreement and Termination Hereof.
(a) This Agreement shall become effective at the earlier of (i)
10:00 a.m., Philadelphia, Pennsylvania time, on the first business day following
the Effective Date or (ii) at the time of the public offering by the
Underwriters of the Shares, whichever is earlier, except that the provisions of
Sections 6, 8, 9, 10 and 13 hereof shall be effective upon execution hereof. The
time of the public offering, for the purpose of this Section 10, shall mean the
time when any of the Shares are first released by the Underwriters for offering
by dealers. The Representatives may prevent the provisions of this Agreement
(other than those contained in Sections 6, 8, 9, 10 and 13) hereof from becoming
effective without liability of any party to any other party, except as provided
in Sections 6 and 8 hereof, by giving the notice indicated in Section 10(c)
hereof before the time the other provisions of this Agreement become effective.
(b) The Representatives shall have the right to terminate this
Agreement at any time prior to the Closing Date as provided in Sections 7 and 11
hereof or if any of the following have occurred:
(i) since the respective dates as of which information is
given in the Registration Statements and the Prospectus, any material adverse
change or any development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the Company, or the
earnings, business affairs, management or business prospects of the Company,
whether or not arising in the ordinary course of business, that would, in the
Representatives' reasonable judgment, make the offering or delivery of the
Shares impracticable;
(ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic, political or financial
market conditions if the effect on the financial markets of the United States of
such outbreak, calamity, crisis or change
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would, in the Representatives' reasonable judgment, make the offering or
delivery of the Shares impracticable;
(iii) suspension of trading generally in securities on the
New York Stock Exchange, the American Stock Exchange, or the over-the-counter
market (including, without limitation, the Nasdaq Stock Market) or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities or the promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority that in the
Representatives' reasonable opinion materially and adversely affects trading on
such exchange or the over-the-counter market;
(iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in the Representatives' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company;
(v) declaration of a banking moratorium by either federal or
Pennsylvania, Massachusetts or Virginia commonwealth or New Jersey or Florida
state authorities;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that in the
Representatives' reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(vii) trading in any securities of the Company shall have
been suspended or halted by the Nasdaq Stock Market or the SEC.
(c) If the Representatives elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this Section
10, the Representatives shall notify the Company and the Selling Shareholders
thereof promptly by telephone, telex, telegraph, telegram or facsimile,
confirmed by letter.
11. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Optional Shares hereunder, and if
the Firm Shares or Optional Shares with respect to which such default relates do
not exceed in the aggregate 10% of the number of Firm Shares or Optional Shares,
as the case may be, that all Underwriters have agreed to purchase hereunder,
then such Firm Shares or Optional Shares to which the default relates shall be
purchased severally by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.
(b) If such default relates to more than 10% of the Firm Shares
or Optional Shares, as the case may be, the Representatives may in their
discretion arrange for another party or parties (including a non-defaulting
Underwriter) to purchase such Firm Shares or Optional Shares to which such
default relates, on the terms contained herein. In the event
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that the Representatives do not arrange for the purchase of the Firm Shares or
Optional Shares to which a default relates as provided in this Section 11(b),
this Agreement may be terminated by the Representatives or by the Company
without liability on the part of the several Underwriters (except as provided in
Section 8 hereof) or the Company (except as provided in Sections 6 and 8
hereof), but nothing herein shall relieve a defaulting Underwriter of its
liability, if any, to the other several Underwriters and to the Company for
damages occasioned by its default hereunder.
(c) If the Firm Shares or Optional Shares to which the default
relates are to be purchased by the nondefaulting Underwriters, or are to be
purchased by another party or parties, the Representatives or the Company shall
have the right to postpone the Closing Date or any Option Closing Date, as the
case may be, for a reasonable period, but not in any event exceeding seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statements or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment to the
Registration Statements or supplement to the Prospectus that in the opinion of
Underwriters' Counsel may thereby be made necessary. The terms "Underwriters"
and "Underwriter" as used in this Agreement shall include any party substituted
under this Section 11 with like effect as if it had originally been a party to
this Agreement with respect to the Firm Shares and/or Optional Shares
purchased by it.
(d) It is understood that the Representatives (or either of
them), individually and not as the representatives of the several Underwriters,
may (but shall not be obligated to) make payment of the purchase price on behalf
of any Underwriter or Underwriters whose check or checks shall not have been
received by them prior to the Closing Date or the Option Closing Date for the
Firm Shares or Optional Shares, as the case may be, to be purchased by such
Underwriter or Underwriters. Any such payment by the Representatives shall not
relieve any such Underwriter or Underwriters of any of its or their obligations
hereunder.
12. Information Furnished by Underwriters. The statement set forth
on the inside cover page regarding stabilization and in the second and eighth
paragraphs under the caption "Underwriting" in any Preliminary Prospectus and
the Prospectus constitute the only written information furnished by or on behalf
of any Underwriter referred to in Sections l(a)(ii) and 8 hereof.
13. Notice. All communications hereunder, except as otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed, telegrammed, telegraphed,
telecopied or faxed and confirmed to such Underwriter, c/o Janney Xxxxxxxxxx
Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Xx. Xxxxxxx
X. Xxxxx-Xxxxxx, with a copy to Saul, Ewing, Xxxxxx & Xxxx, 0000 Xxxxxx Xxxxxx
Xxxx, Xxxxxxxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxx, Esquire; if sent to
the Company, shall be mailed, delivered, telexed, telegrammed, telegraphed,
telecopied or faxed and confirmed to The Judge Group, Inc., Xxx Xxxx Xxxxx,
Xxxxx 000, Xxxx Xxxxxx, XX 00000, Attention: Xx. Xxxxxx E. Judge, Jr., Chief
Executive Officer, with a copy to Drinker, Xxxxxx & Xxxxx, 0000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxxx, Esquire; and if
sent to the Selling Shareholders', shall be mailed, delivered,
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telexed, telegrammed, telegraphed, telecopied or faxed and confirmed to
[Attorney-in-Fact], with a copy to [Selling Shareholders' counsel].
14. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Company, the Selling
Shareholders and the controlling persons, directors and officers thereof, and
their respective successors, assigns, heirs, legatees and legal representatives,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. The terms "successors" and "assigns" shall not
include any purchaser of the Shares merely because of such purchase.
15. Definition of Business Day. For purposes of this Agreement,
"business day" means any day on which the Nasdaq Stock Market is opened for
trading.
16. Counterparts. This Agreement may be executed in one or more
counterparts, and all such counterparts will constitute one and the same
instrument.
17. Construction. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and performed entirely within the Commonwealth.
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If the foregoing correctly sets forth your understanding of our
agreement, please sign and return to the Company the enclosed duplicate hereof,
whereupon it will become a binding agreement in accordance with its terms.
Very truly yours,
THE JUDGE GROUP, INC.
By:____________________________________
Xxxxxx X. Judge, Jr.
Chief Executive Officer
[List all Subs]
THE SELLING SHAREHOLDERS
By: ____________________________________
Attorney-in-Fact, acting on behalf
of each of the Selling Shareholders
named in Schedule II hereto.
The foregoing Agreement is hereby confirmed
and accepted as of the date first
above written.
XXXXXX XXXXXXXXXX XXXXX INC.
--------------------------------------------
As Representatives of the Several Underwriters
named in Schedule I hereto
By: XXXXXX XXXXXXXXXX XXXXX INC.
By:_____________________________________
Authorized Representative
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