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EXHIBIT 2.1
Draft of 7/16/97
$180,000,000
CORESTAFF, INC.
___% Convertible Subordinated Notes due 2004
UNDERWRITING AGREEMENT
__________, 1997
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_____________, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxx. Xxxxx & Sons
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxxxxxx Securities
The Xxxxxxxx-Xxxxxxxx Company, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
CORESTAFF, Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") $180,000,000 principal amount at maturity of its ____%
Convertible Subordinated Notes due 2004 (the "FIRM SECURITIES") to be issued
pursuant to the provisions of an Indenture dated as of __________, 1997 (the
"INDENTURE") between the Company and The Bank of New York, as Trustee (the
"TRUSTEE").
The Company also proposes to issue and sell to the several
Underwriters not more than an additional $27,000,000, (the "ADDITIONAL
SECURITIES") if and to the extent that the Representatives shall have
determined to exercise, on behalf of the Underwriters, the right to purchase
such shares of common stock granted to the Underwriters in Section 2 hereof.
The Firm Securities and the Additional Securities are hereinafter collectively
referred to as the "SECURITIES."
The ___% Convertible Subordinated Notes due 2004 to be issued
pursuant to the Indenture after giving effect to the sales contemplated hereby
are hereinafter referred to as the "SECURITIES." The shares of common stock,
par value $.01 per share, of the Company (the "COMMON STOCK") issuable upon
conversion of the Securities are hereinafter referred to as the "SHARES."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement relating to the Securities. The
registration statement as amended at the time it becomes effective, including
the information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), is hereinafter referred to as the
"Registration
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Statement"; the U.S. prospectus and the international prospectus in the
respective forms first used to confirm sales of Shares are hereinafter
collectively referred to as the "PROSPECTUS" (including, in the case of all
references to the Registration Statement or the Prospectus, documents
incorporated therein by reference). The terms "supplement" and "amendment" or
"amend" as used in this Agreement with respect to the Registration Statement or
Prospectus shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), that are deemed to be incorporated by reference in the
Prospectus. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such
Rule 462 Registration Statement.
1. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) the Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iv)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph 1(b) do not apply to (A) statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein or (B) that part of
the Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the "TRUST
INDENTURE ACT"), of the Trustee.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the
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conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectus)
are owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its term, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity; and the Indenture will be
substantially in the same form as filed as an exhibit to the
Registration Statement.
(g) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(h) The Company has duly authorized and reserved for issuance
a number of shares of Common Stock equal to the number of Shares to be
issued upon the conversion of the Securities, and when issued pursuant
to conversion of the Securities in accordance with the Indenture, the
Shares will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not violate any preemptive or similar
rights.
(i) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and general principles of equity.
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(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities will not contravene any provision of
applicable law or the Certificate of Incorporation or By-laws of the
Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
the Indenture and the Securities except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Securities.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(l) There are no legal or governmental proceedings pending or,
to the Company's knowledge after due inquiry, threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(o) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
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failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement, except for rights
under such contracts or agreements that have been waived by all persons
holding such rights.
(r) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
(s) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound.
(t) The statements set forth in the Prospectus under the
caption "Description of the Notes," insofar as they purport to
constitute a summary of the terms of the Securities, are accurate,
complete and fair.
(u) Ernst & Young LLP who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(v) The Company owns or possesses adequate licenses or other
rights to use all trademarks, service marks, trade names, copyrights,
and know-how necessary to conduct the business now or proposed to be
conducted by the Company as described in the Prospectus, and, except as
disclosed in the Prospectus, the Company has not received any notice of
infringement of or conflict with (and knows of no such infringement of
or conflict with) asserted rights of others with respect to trademarks,
service marks, trade names, copyrights,
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or know-how which, individually or in the aggregate, is reasonably
likely to result in any material adverse effect upon the financial
position, stockholders' equity or results of operations of the Company;
and, except as disclosed in the Prospectus and to the knowledge of the
Company, the Company does not, in the conduct of its business as now or
proposed to be conducted as described in the Prospectus, infringe or
conflict with any right of any third party, known to the Company, where
such infringement or conflict is reasonably likely to result in any
material adverse effect upon the financial position, stockholders'
equity or results of operations of the Company.
(w) The Company has obtained any permits, consents and
authorizations required to be obtained by it under laws or regulations
relating to its business, including, without limitation, laws or
regulations relating to the operation and sales of franchises
(collectively, "LAWS"), and any such permits, consents and
authorizations remain in full force and effect, except as to any of the
foregoing the absence of which (individually or in the aggregate) will
not have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company; and the
Company is in compliance with the Laws in all material respects, and
there is no pending or, to the Company's knowledge, threatened, action
or proceeding against the Company for violation of any Law, other than
any such actions or proceedings which, individually or in the aggregate,
if adversely determined, is not reasonably likely to have a material
adverse effect on the financial position, stockholders' equity or
results of operations of the Company.
(x) The Company (i) has timely and properly prepared and filed
all federal, state and local income and franchise tax returns required
to be filed through the date hereof and has paid all taxes due thereon,
and has furnished all information returns it is required to furnish
pursuant to the Internal Revenue Code of 1986, as amended, (ii) the
charges, accruals and reserves on the consolidated books of the Company
in respect of any income, franchise or corporation tax liability for any
years not fully determined are reasonable and have been recorded on a
basis in conformance with generally accepted accounting principles, and
(iii) does not have any tax deficiency or claims outstanding, assessed
or to its knowledge, proposed against it which is reasonably likely to
result in any material adverse effect upon the financial position,
stockholders' equity or results of operations of the Company.
(y) The Company maintains insurance of the types and in the
amounts which the Company reasonably believes are adequate for its
business and consistent with insurance coverage maintained by similar
companies in similar businesses, including but not limited to, workers'
compensation insurance, insurance covering real and personal property
owned or leased by the Company against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of
which insurance is in full force and effect.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees, severally and not jointly,
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to purchase from the Company the respective principal amounts at maturity of
Securities set forth in Schedule I hereto opposite its name at _____% of their
principal amount at maturity plus (the "PURCHASE PRICE") accrued interest, if
any, from _____________, 1997 to the date of payment and delivery.
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Securities, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to $27,000,000
Additional Securities at the Purchase Price. If the Representatives, on
behalf of the Underwriters, elect to exercise such option, the Representatives
shall so notify the Company in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Securities
to be purchased by the Underwriters and the date on which such Securities are
to be purchased. Such date may be the same as the Closing Date (as defined
below) but not earlier than the Closing Date nor later than ten business days
after the date of such notice. Additional Securities may be purchased as
provided in Section 4 hereof solely for the purpose of covering over-allotments
made in connection with the offering of the Firm Securities. If any Additional
Securities are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the principal amount at maturity of Additional Securities
that bears the same proportion to the total number of Additional Securities to
be purchased as the number of Firm Securities set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total principal amount at
maturity of Firm Securities.
The Company hereby agrees that, without the prior written consent
of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will
not, during the period ending 90 days after the date of the Prospectus, (i)
offer, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, loan or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to, with respect to the Company: (A) the Shares to be sold
hereunder; (B) the issuance by the Company of shares of Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Underwriters have been advised in writing; or (C)
any shares of Common Stock issued as payment of any part of the purchase price
for acquisitions of businesses by the Company. The Company further agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf
of the Underwriters, it will not, during the period beginning on the date hereof
and continuing to and including the Closing Date, not offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company or warrants to
purchase
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or otherwise acquire debt securities of the Company substantially similar to
the Securities (other than (i) the Securities and (ii) commercial paper issued
in the ordinary course of business).
3. TERMS OF PUBLIC OFFERING. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the Securities are to be offered to the public
initially at ____% of their principal amount at maturity (the "PUBLIC OFFERING
PRICE") plus accrued interest, if any, from __________________, 1997 to the
date of payment and delivery and to certain dealers selected by you at a price
that represents a concession not in excess of ____% of their principal amount
at maturity, and that any Underwriter may allow, and such dealers may reallow,
a concession, not in excess of ____% of their principal amount at maturity, to
any Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Securities to
be sold by the Company shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such Firm Securities
for the respective accounts of the several Underwriters at 10:00 A.M., New York
City time, on ____________, 1997, or at such other time on the same or such
other date, not later than _________, 1997, as shall be designated in writing
by you. The time and date of such payment are hereinafter referred to as the
"CLOSING DATE."
Payment for any Additional Securities shall be made to the
Company in Federal or other funds immediately available in New York City
against delivery of such Additional Securities for the respective accounts of
the several Underwriters at 10:00 A.M., New York City time, on the date
specified in the notice described in Section 2 or at such other time on the
same or on such other date, in any event not later than _______, 1997, as shall
be designated in writing by the Representatives. The time and date of such
payment are hereinafter referred to as the "OPTION CLOSING DATE."
The Firm Securities and Additional Securities shall be prepared
in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer of the Securities to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Company to sell the Securities to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Securities
on the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than 5:00 P.M. (New York City
time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
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(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering such certificate may
rely upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxx & Xxxxxx, L.L.P., outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the State of
Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
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incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof contained
in the Prospectus;
(iv) the shares of Common Stock outstanding prior to the
issuance of the Securities have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity.
(vi) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters
in accordance with the terms of this Agreement, will be entitled
to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and general principles
of equity.
(vii) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(viii) the Shares have been duly authorized and reserved
for issuance upon conversion of the Securities and, when issued
and delivered in accordance with the terms of the Indenture and
the Securities, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights;
(ix) this Agreement has been duly authorized, executed
and delivered by the Company;
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(x) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to
the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge, any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Securities by the Underwriters;
(xi) the statements (A) in the Prospectus under the
captions "Description of Capital Stock," "Description of the
Notes" and, with respect to the summary of this Agreement and
Exhibit A hereto, "Underwriters" and (B) in the Registration
Statement in Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(xii) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described
or of any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(xiii) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xiv) except as described in the Prospectus or as have
been waived at the Closing Date, there are no persons with
registration or similar rights to have any securities of the
Company registered pursuant to the Registration Statement or
otherwise registered by the Company under the Securities Act or
the Exchange Act pursuant to any agreement or instrument known to
us after due inquiry to which the Company is a party; and
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(xv) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and schedules as to which such counsel need not
express any opinion) complied when so filed as to form in all
material respects with the Exchange Act and the rules and
regulations of the Commission thereunder, (B) is of the opinion
that the Registration Statement and Prospectus (except for
financial statements and schedules and other financial and
statistical data included therein as to which such counsel need
not express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (C) has no reason to
believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel
need not express any belief and except for that part of the
Registration Statement that constitutes the Form T-1 heretofore
referred to) the Registration Statement and the prospectus
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (D)
has no reason to believe that (except for financial statements
and schedules and other financial and statistical data as to
which such counsel need not express any belief) the Prospectus
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(vi), 5(c)(xi) (but without limitation to "Underwriters") and
5(c)(xv)(B)-(D) above.
With respect to subparagraph (xv) of paragraph (c) above, Xxxxxx
& Xxxxxx, L.L.P. and Xxxxxxx & Xxxxx L.L.P., may state that their
opinion and belief are based upon their participation and preparation of
the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof,
but are without independent check or verification, except as specified.
The opinion of Xxxxxx & Xxxxxx, L.L.P. on behalf of the Company
shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
(e) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Ernst & Young LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in or incorporated by reference into the
Registration
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Statement and the Prospectus; provided that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date
hereof.
(f) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain stockholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date; provided, such agreement with respect to
certain stockholders selling shares of Common Stock in a contemporanous
offering shall deliver agreements with a period of 90 days.
(g) The Securities to be sold on the Closing Date shall have
been duly approved, subject to notice of issuance, for quotation on the
Nasdaq National Market.
(h) The several obligations of the Underwriters to purchase
Additional Securities hereunder are subject to the delivery to the
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and issuance of the Additional Securities and other
matters related to the issuance of the Additional Securities.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, 13 signed copies of the
Registration Statement (including exhibits thereto and any documents
incorporated therein by reference) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto but including documents incorporated therein by
reference) and to furnish to you in New York City, without charge, prior
to 10:00 A.M. New York City time on the business day next succeeding the
date of this Agreement and during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any documents incorporated
therein by reference and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file with
the Commission within the applicable period specified in Rule 424(b)
under the Securities Act any prospectus required to be filed pursuant to
such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus
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in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which
Securities may have been sold by you on behalf of the Underwriters and
to any other dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending September 30, 1998 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) To apply the net proceeds from the sale of the Securities
as set forth in the Prospectus.
(g) The Company has reserved and will continue to reserve, as
long as any Securities are outstanding, a sufficient number of shares of
Common Stock for issuance upon conversion of the Securities.
(h) The Company will not voluntarily claim and will actively
resist any attempts to claim, the benefit of any usury laws against
holders of the Securities.
(i) the outstanding shares of Common Stock are quoted on the
Nasdaq National Market, and prior to the Closing Date, the Company will
have accomplished the inclusion, subject only to notice of issuance, of
the Securities and the Shares for quotation on the Nasdaq National
Market.
7. EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, (a) the Company
agrees to pay or cause to be paid all expenses incident to the performance of
the Company and its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs
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and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Securities under state securities
laws and all expenses in connection with the qualification of the Securities
for offer and sale under state securities laws as provided in Section 7(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Securities by the
National Association of Securities Dealers, Inc., (v) all costs and expenses
incident to listing the Securities and Shares issuable upon conversion of the
Securities on the Nasdaq National Market, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
trustee, transfer agent, registrar or depositary, (viii) all fees and expenses
in connection with the preparation and filing of the registration statement on
Form 8-A relating to the Securities, (ix) any fees or expenses charged by
investment rating agencies for the rating of the Securities and (x) all other
costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.
8. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter
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through you expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a) or (b) of this Section 8,
such person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnity the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement
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includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an indemnified party
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the indemnifying party or parties on the one hand
and of the indemnified party or parties on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Securities. The
relative fault of Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective number of Securities
they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if 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 in paragraph (e) of this Section 8.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, 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 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of
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such fraudulent misrepresentation. The remedies provided for in this Section 8
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
9. TERMINATION. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange or the Nasdaq National Market, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York or Texas shall have been declared by
either Federal or New York or Texas State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities involving the United States
or any change in financial markets or any calamity or crisis that, in your
judgment, is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event, singly or together with
any other such event, makes it, in your judgment, impracticable or inadvisable
to market the Securities on the terms and in the manner contemplated in the
Prospectus.
10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
the Securities that it has or they have agreed to purchase hereunder on such
date, and the aggregate principal amount at maturity of Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount at maturity of
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the aggregate principal amount at
maturity of Securities of Firm Securities set forth opposite their respective
names in Schedule I bears to the aggregate principal amount at maturity of Firm
Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount at maturity of Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section by an
amount in excess of one-ninth of such aggregate principal amount at maturity of
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Securities and the aggregate principal amount at maturity of Firm Securities
with respect to which such default occurs
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is more than one-tenth of the aggregate principal amount at maturity of Firm
Securities to be purchased, and arrangements satisfactory to you and the
Company for the purchase of such Firm Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional
Securities and the aggregate principal amount at maturity of Additional
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount at maturity of Additional Securities to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Securities or (ii)
purchase not less than the principal amount at maturity of Additional
Securities that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
14. TIME OF THE ESSENCE. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
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Very truly yours,
CORESTAFF, INC.
By
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXX. BROWN & SONS
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXXXXX, XXXXX & CO.
XXXXXXXXXX SECURITIES
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By Xxxxxx Xxxxxxx & Co. Incorporated
By
--------------------------
Name:
Title:
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Schedule I
Underwriters
Aggregate
Principal Amount
at Maturity of
Firm Securities
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated $
Xxxx. Xxxxx & Sons
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxxxxxx Securities
The Xxxxxxxx-Xxxxxxxx Company, Inc.
----------------
Total Firm Securities . . . . . . . . . . . . . . $ 180,000,000
================
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Exhibit A
FORM OF LOCK-UP LETTER
____________, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Xxxxx & Co.
Xxxx. Xxxxx & Sons
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxxxxxx Securities
The Xxxxxxxx-Xxxxxxxx Company, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Xxxxxxx
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting
Agreement (the "Underwriting Agreement") with CORESTAFF, Inc., a Delaware
corporation (the "Company") providing for the public offering (the "Public
Offering") by the several Underwriters, including Xxxxxx Xxxxxxx and MSIL (the
"Underwriters") of ___% Convertible Subordinated Notes due 2004, which are
convertible into shares of Common Stock, par value $.01 per share, of the
Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 45 days after the date of the final
prospectus relating to the Public Offering (the "Prospectus"), (1) offer, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, loan or
otherwise transfer or dispose of, directly or indirectly, any shares of
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Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
the sale of any Shares to the Underwriters pursuant to the Underwriting
Agreement. In addition, the undersigned agrees that, without the prior written
consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending 45 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.
Very truly yours,
------------------------------
(Name)
------------------------------
(Address)
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