DRAFT 1/28/97
THE REGISTRY, INC.
3,450,000 Shares/*/
Common Stock
(no par value per share)
--------------
Underwriting Agreement
___________, 1997
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxxxxxx Securities
X.X. Xxxxxxxx & Co.
As representatives of the several
Underwriters named in Schedule I hereto,
x/x Xxxxx, Xxxxxxxx & Xxxx, Xxx.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Sirs:
The Registry, Inc., a Massachusetts corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you and the several Underwriters named in Schedule I hereto (collectively,
the "Underwriters"), for whom you are acting as representatives (the
"Representatives") an aggregate of 1,234,166 shares (the "Company Firm Shares")
and, at the election of the Underwriters, up to 450,000 additional shares (the
"Optional Shares") of common stock of the Company, without par value per share
("Common Stock"), and, the Selling Stockholders named in Schedule II hereto (the
"Selling Stockholders") propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of 1,765,834 shares (the
"Selling Stockholder Firm Shares", and together with the Company Firm Shares,
the "Firm Shares") of Common Stock. The Firm Shares and the Optional Shares
which the Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Shares".
-------------------------
/*/ Includes 450,000 shares subject to an option to purchase additional
shares to cover over-allotments.
1. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-19991) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement including any pre-effective amendments thereto and any
post-effective amendments thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has been
initiated or, to the Company's knowledge, threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement and
incorporated by reference in the Rule 462(b) Registration Statement, if any,
or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto, including any exhibits incorporated by reference in the
Initial Registration Statement and the Rule 462(b) Registration Statement, and
including the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 6(a) hereof and deemed by virtue of Rule 430A under the Act to be part
of the Initial Registration Statement at the time it was declared effective or
the Rule 462(b) Registration Statement, if any, at the time it became
effective, each as amended at the time such part of such registration
statement became effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein. The Company
-2-
acknowledges that the statements set forth in the last paragraph on the front
cover page, in the first two paragraphs on page 2 and under the heading
"Underwriting" in the Prospectus constitute the only information relating to
any Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through you
expressly for use therein;
(d) There are no contracts or other documents required to be described
in the Registration Statement or to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations thereunder which have not
been described or filed, or incorporated by reference in the Registration
Statement, as required; the contracts so described in the Prospectus to which
the Company or any of its subsidiaries is a party have been duly authorized,
executed and delivered by the Company or its subsidiaries, constitute valid
and binding agreements of the Company or its subsidiaries and are enforceable
against and by the Company or its subsidiaries in accordance with their
respective terms, and are in full force and effect on the date hereof; and
neither the Company nor any of its subsidiaries, nor, to the best of the
Company's knowledge, any other party is in breach of or default under any of
such contracts, except to the extent that such breach or default would not
have a material adverse effect on the business, operating results or financial
condition of the Company and its subsidiaries taken as a whole;
(e) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the Prospectus
any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
issuances of Common Stock pursuant to Company stock option and stock purchase
plans described in the Registration Statement and Prospectus) or long-term
debt of the Company or any of its subsidiaries or any material adverse change,
or
-3-
any development that is reasonably likely to result in a material adverse
change, in or affecting the business, assets, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(f) Neither the Company nor any subsidiary of the Company owns any real
property; any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries; the
Company owns or leases all such properties as are necessary to its operations
as now conducted or as proposed to be conducted, except where the failure to
so own or lease would not result in a material adverse change in or affecting
the business, assets, management, financial position, stockholders' equity or
results of operations of the Company;
(g) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its respective jurisdiction of organization, each with full power and
authority (corporate and otherwise) to own its properties and conduct its
business as described in the Prospectus, and each has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, or
is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Common Stock contained in the
Prospectus; 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; except as disclosed in or
contemplated by the Prospectus and the financial statements of the Company,
and the related notes thereto, included in the Prospectus, neither the Company
nor any subsidiary has outstanding any options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, shares of its capital stock or any such options, rights, convertible
securities or obligations; and the description of the Company's stock option
and stock purchase plans and the options or other rights granted and exercised
thereunder set forth in the Prospectus accurately and fairly presents in all
material respects the information required to be shown with respect to such
plans, options and rights;
-4-
(i) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Common Stock contained in the Prospectus; no preemptive
rights or other rights to subscribe for or purchase exist with respect to the
issuance and sale of the Shares by the Company pursuant to this Agreement;
except as set forth in the Prospectus, no stockholder of the Company has any
right, which has not been waived, to require the Company to register the sale
of any shares of capital stock owned by such stockholder under the Act in the
public offering contemplated by this Agreement; and no further approval or
authority of the stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares to be sold by the Company as
contemplated herein;
(j) The Company has full corporate power and authority to enter into
this Agreement; this Agreement has been duly authorized, executed and
delivered by the Company, constitutes a valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms;
(k) The issue and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or material instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Articles of Organization or By-laws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Company of the transactions contemplated by
this Agreement, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws or the by-laws and rules of
the National Association of Securities Dealers, Inc. ("NASD") in connection
with the purchase and distribution of the Shares by the Underwriters;
(l) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened to which the Company or any of its
subsidiaries is or may be a party or of which property owned or leased by the
Company or any of its subsidiaries is or may be the subject, or related to
environmental or discrimination matters, which
-5-
actions, suits or proceedings, are required to be described in the
Registration Statement by the Act or the rules and regulations thereunder or
which might, individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a material adverse
change in or affecting the business, assets, management, financial position,
stockholders' equity or results of operations of the Company; no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or, to the knowledge of the Company, is imminent which is reasonably likely to
affect materially and adversely such business, assets, management, financial
position, stockholders' equity or results of operations; and neither the
Company nor any of its subsidiaries is a party or subject to the provisions of
any material injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body;
(m) The Company and its subsidiaries possess all licenses, certificates,
authorizations or permits issued by the appropriate governmental or regulatory
agencies or authorities that are necessary to enable them to own, lease and
operate their respective properties and to carry on their respective
businesses as presently conducted and which are material to the Company and
its subsidiaries, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification
of any such license, certificate, authority or permit which, singly or in the
aggregate, would be expected to materially and adversely affect the business,
assets, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries;
(n) Price Waterhouse LLP, who have audited certain financial statements
of the Company, and Ernst & Young LLP and Graves, McKenna, Xxxxxxx & Xxxxxxxx,
P.L.L.P., who have audited certified certain financial statements of certain
subsidiaries of the Company, have advised the Company that they are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(o) The financial statements and schedules of the Company and certain of
its subsidiaries, and the related notes thereto, included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and such subsidiaries as of the respective dates of such financial
statements and schedules, and the results of operations and cash flows of the
Company and such subsidiaries for the respective periods covered thereby; such
statements, schedules and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis as
certified by the independent public accountants named in paragraph (n) above;
no other financial statements or schedules are required to be included in the
Registration Statement; and the selected financial data set forth in the
Prospectus under the captions "Capitalization" and "Selected Consolidated
Financial Data" fairly present in all material respects the information set
forth therein on the basis stated in the Registration Statement;
-6-
(p) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals and governmental
authorizations to conduct their business as now conducted; the Company has no
knowledge of any material infringement by the Company of trademark, trade name
rights, patent rights, copyrights, licenses, trade secret or other similar
rights of others; and there is no claim of infringement being made against the
Company regarding trademark, trade name, patent, copyright, license, trade
secret or other similar rights which could have a material adverse effect on
the general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries;
(q) The Company and each of its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown as due thereon; and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company or any of its subsidiaries which could materially and adversely affect
the general affairs, management, financial position, stockholders' equity or
results of operations of the Company;
(r) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts which it deems adequate for its business, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of
which insurance is in full force and effect;
(t) Neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation
of law, or (ii) made any payment to any foreign, federal or state governmental
officer or official, or other person charged with similar public or quasi-
public duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof;
(u) The Company has not taken and will not take, directly or indirectly
through any of its directors, officers or controlling persons, any action
which is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares;
and
-7-
(v) The Common Stock of the Company has been registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Company is not required to take any further action
for the inclusion of the Shares on the Nasdaq National Market.
2. Representations of the Selling Stockholders. Each of the Selling
-------------------------------------------
Stockholders, severally and not jointly, represents and warrants to, and agrees
with, each of the Underwriters that:
(a) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and the
Power-of-Attorney and Custody Agreement (the "Custody Agreement") hereinafter
referred to, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into this Agreement
and the Custody Agreement and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Stockholder hereunder;
(b) This Agreement and the Custody Agreement have each been duly
authorized, executed and delivered by such Selling Stockholder and each such
document constitutes a valid and binding obligation of such Selling
Stockholder, enforceable in accordance with its terms;
(c) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body with respect to
such Selling Stockholder is required in connection with the sale of the Shares
by such Selling Stockholder or the consummation by such Selling Stockholder of
the transactions on his or its part contemplated by this Agreement and the
Custody Agreement, except such as have been obtained under the Act or the
rules and regulations thereunder and such as may be required under state
securities or Blue Sky laws or the by-laws and rules of the NASD in connection
with the purchase and distribution by the Underwriters of the Shares;
(d) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the performance by such Selling Stockholder of this Agreement
and the Custody Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement or other material agreement or material
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder or any of his or its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to
such Selling Stockholder;
-8-
(e) Such Selling Stockholder has, and at the First Time of Delivery (as
defined in Section 5 hereof) will have, good and valid title to the Shares to
be sold by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant hereto, good and valid title to such Shares, free
and clear of all liens, encumbrances, equities or claims, will pass to each of
the several Underwriters who have purchased such Shares in good faith and
without notice of any such lien, encumbrance, equity or claim or any other
adverse claim within the meaning of the Uniform Commercial Code;
(f) Such Selling Stockholder will not, directly or indirectly, offer,
sell or otherwise dispose of any shares of Common Stock within 90 days or, in
the case of G. Xxxx Xxxxxx (the "Management Selling Stockholder"), 180 days,
after the date of the Prospectus otherwise than hereunder, as a bona fide gift
or gifts to, or in trust for, a person or entity who or which agrees in
writing to be bound by this restriction or with your written consent;
(g) Such Selling Stockholder has not taken and will not at any time
take, directly or indirectly, any action designed, or which might reasonably
be expected, to cause or result in, or which will constitute, stabilization of
the price of shares of Common Stock to facilitate the sale or resale of any of
the Shares; and
(h) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling Stockholder
expressly for use therein, as set forth in Section 10(b) hereof, such
Preliminary Prospectus and the Registration Statement did, and the Prospectus
and any further amendments or supplements to the Registration Statement and
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and 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, in the light of the circumstances under which they were
made, not misleading.
In addition to the foregoing representations, the Management Selling
Stockholder, joins in and makes each of the representations and warranties of
the Company contained in Section 1 hereof.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated, each Selling Stockholder
agrees to deliver to you prior to or at the First Time of Delivery a properly
completed and executed United States Treasury
-9-
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
Each of the Selling Stockholders represents and warrants that a certificate in
negotiable form representing all of the Shares to be sold by such Selling
Stockholder has been placed in custody under the Custody Agreement, in the form
heretofore furnished to you, duly executed and delivered by such Selling
Stockholder to the Custodian (as defined in the Custody Agreement), and that
such Selling Stockholder has duly executed and delivered a power-of-attorney, in
the form heretofore furnished to you and included in the Custody Agreement (the
"Power-of-Attorney"), appointing Xxxxxx X. Xxxxx and Xxxxx X. Xxxxxxx, Esq., and
each of them, as such Selling Stockholder's attorney-in-fact (the "Attorney-in-
Fact") with authority to execute and deliver this Agreement on behalf of such
Selling Stockholder, to determine (subject to the provisions of the Custody
Agreement) the purchase price to be paid by the Underwriters to such Selling
Stockholder as provided in Section 3 hereof, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement.
Each of the Selling Stockholders specifically agrees that the Shares
represented by the certificates held in custody for such Selling Stockholder
under the Custody Agreement are subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Stockholder for such
custody, and the appointment by such Selling Stockholder of the Attorneys-in-
Fact by the Power-of-Attorney, are to that extent irrevocable. Each of the
Selling Stockholders specifically agrees that the obligations of such Selling
Stockholder hereunder shall not be terminated by operation of law, whether by
the death or incapacity of such Selling Stockholder or, in the case of an estate
or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or by the occurrence of any other event.
If such Selling Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be dissolved, or if any
other such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares to be sold by such Selling Stockholder
shall be delivered by or on behalf of such Selling Stockholder in accordance
with the terms and conditions of this Agreement and of the Custody Agreement,
and actions taken by the Attorneys-in-Fact pursuant to the Powers-of-Attorney
shall be as valid as if such death, incapacity, termination or other event had
not occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact,
or any of them, shall have received notice of such death, incapacity,
termination or other event.
3. Shares Subject to Sale. (a) On the basis of the representations,
----------------------
warranties and agreements of the Company and the Selling Stockholders contained
herein, and subject to the terms and conditions of this Agreement, (i) the
Company agrees to issue and sell the Company Firm Shares to the several
Underwriters, (ii) each of the Selling Stockholders agrees to sell its Selling
Stockholder Firm Shares to the several Underwriters, and (iii) each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders, at a purchase price per share of $______, the
respective number of Firm Shares
-10-
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares by a fraction, the numerator of
which is the aggregate number of Firm Shares to be purchased by such Underwriter
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all the Underwriters and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as provided
below, the Company agrees to issue and sell the Company Optional Shares to the
several Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 3, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of the Optional Shares which all of the
Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at their
election up to 450,000 Optional Shares at the purchase price per share set forth
in the paragraph above, for the sole purpose of covering overallotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised on one occasion by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement and setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery or, unless you and the Company
otherwise agree in writing, earlier than two or later than three business days
after the date of such notice.
4. Offering. Upon the authorization by you of the release of the Firm
--------
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
5. Closing. Certificates in definitive form for the Shares to be purchased
-------
by each Underwriter hereunder, and in such denominations and registered in such
names as Xxxxx, Xxxxxxxx & Xxxx, Inc. may request upon at least forty-eight
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by (i) certified or
official bank check or checks, payable to the order of the Company and each
Selling Stockholder, respectively, in New York Clearing House (next day) funds
or (ii) wire transfer of same day funds, all at the office of Xxxxx, Xxxxxxxx &
Xxxx, Inc., 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
Boston time, on ________, 1997 or such other time and date as you and the
Company may agree upon in writing, and, with respect to the Optional Shares,
9:30 a.m., Boston time, on the date specified by you in the written notice given
by you of the Underwriters' election to purchase such Optional Shares, or
-11-
at such other time and date as you and the Company may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery," such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of Delivery,"
and each such time and date for delivery is herein called a "Time of Delivery."
Such certificates will be made available for checking and packaging at least
twenty four hours prior to each Time of Delivery at such location as you may
specify.
6. Covenants of the Company. The Company agrees with each of the
------------------------
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus unless after reasonable notice you shall have approved such
amendment or supplement (such approval not to be unreasonably withheld or
delayed); to advise you, promptly after it receives notice thereof, of the
time when the Registration Statement, or any amendment thereto, has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you copies thereof; to
advise you, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus, of the suspension of
the qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and, if the
delivery of a prospectus is required by law at any time prior to the
expiration of nine months after the time of issuance of the Prospectus in
connection with the offering or sale of the
-12-
Shares and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus in order to comply
with the Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required by law to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time
of issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than the forty-fifth (45th) day
following the end of the full fiscal quarter first occurring after the
first anniversary of the effective date of the Registration Statement (as
defined in Rule 158(c)), an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of any securities of the
Company which are substantially similar to the Shares, without your prior
written consent other than (i) the sale of the Shares to be sold by the
Company hereunder, (ii) the Company's issuance of options under its option
plans in amounts not in excess of the amount shown as available for future
grant in the Prospectus and (iii) shares of capital stock issued in
connection with the acquisition by the Company of the assets or capital
stock of another person or entity, whether directly, through merger or
consolidation or otherwise, if the terms of such issuance provide that such
shares of capital stock shall not be resold for a period of 180 days
following the date of the Prospectus; provided, however, that the Company
-------- -------
shall not release any party from such resale restriction without the prior
written consent of the Representatives;
(f) Not to grant options to purchase shares of Common Stock which
would become exercisable during a period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus;
-13-
(g) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flow of the Company and
its consolidated subsidiaries certified by independent public accountants)
and to make available (within the meaning of Rule 158(b) under the Act) as
soon as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such quarter
in reasonable detail;
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders generally,
and deliver to you as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission, the Nasdaq
National Market or any national securities exchange on which any class of
securities of the Company is listed (such financial statements to be on a
combined or consolidated basis to the extent the accounts of the Company
and its subsidiaries are combined or consolidated in reports furnished to
its stockholders generally or to the Commission);
(i) To use the net proceeds acquired by it from the sale of the
Shares in the manner specified in the Prospectus under the caption "Use of
Proceeds" and in a manner such that the Company will not become an
"investment company" as that term is defined in the Investment Company Act;
and
(j) Not to accelerate the vesting of any option issued under any
stock option plan such that any such option may be exercised within 180
days from the date of the Prospectus.
7. Covenants of the Selling Stockholders. Each Selling Stockholder
-------------------------------------
agrees to pay or cause to be paid all taxes, if any, on the transfer and sale of
the Shares to be sold by such Selling Stockholder hereunder and the fees and
expenses, if any, of counsel and accountants retained by such Selling
Stockholders (except that the Company shall pay for the fees and expenses of
Ropes & Xxxx, as special counsel to the Selling Stockholders). The Company
agrees with the Selling Stockholder to pay all costs and expenses incident to
the performance of the obligations of the Selling Stockholders under this
Agreement (except as set forth above), including, but not limited to, all
expenses incident to the delivery of the certificates for the Shares to be sold
by such Selling Stockholder, the costs and expenses incident to the preparation,
printing and filing of the Registration Statement (including all exhibits
thereto) and the Prospectus and any amendments or supplements thereto, the
expenses of qualifying the Shares to be sold by the Selling Stockholders under
the state securities or Blue Sky laws, all filing fees and the reasonable fees
and expenses of counsel for the Underwriters payable in connection with the
review of the offering of the Shares by the National Association of Securities
Dealers, Inc. ("NASD"), and the cost of furnishing to the Underwriters the
required copies of the Registration Statement and Prospectus and any
-14-
amendments or supplements thereto; provided that each Selling Stockholder agrees
--------
to pay or cause to be paid its pro rata share (based on the percentage which the
number of Shares sold by such Selling Stockholder bears to the total number of
Shares sold) of all underwriting discounts and commissions.
8. Expenses. The Company covenants and agrees with the several Under-
--------
writers that the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of reproducing any
Agreement among Underwriters, this Agreement, the Blue Sky Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
6(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) the filing fees and, subject to a maximum of $2,500, the
reasonable fees and expenses of counsel to the Underwriters incident to securing
any required review by the NASD of the terms of the sale of the Shares; (v) the
cost of preparing stock certificates; (vi) the cost and charges of any transfer
agent or registrar; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 10 and Section 13 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, stock transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
9. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriters hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and each
Selling Stockholder herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company and each Selling Stockholder shall each
have performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
-15-
(b) Xxxx and Xxxx LLP, counsel to the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to this Agreement, the Registration Statement, the Prospectus,
and other related matters as you may reasonably request;
(c) Ropes & Xxxx, counsel to the Company and special counsel to the
Selling Stockholders, shall have furnished to you their written opinion,
dated such Time of Delivery, in form and substance satisfactory to you,
with respect to the matters set forth in Annex I hereto;
(d) At 10:00 a.m., Boston time, on the effective date of the
Registration Statement and the effective date of the most recently filed
post-effective amendment to the Registration Statement and also at each
Time of Delivery, Price Waterhouse LLP, Ernst & Young LLP and Graves,
McKenna, Xxxxxxx & Xxxxxxxx, P.L.L.P., shall have furnished to you a letter
or letters, dated the respective date of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex II hereto;
(e) (i) Neither the Company nor any of its subsidiaries have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock
(other than issuances of Common Stock pursuant to Company stock option and
stock purchase plans described in the Registration Statement and
Prospectus) or long-term debt of the Company or any change, or any
development that is reasonably likely to result in a prospective change, in
or affect the business, assets, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i)
or (ii), is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(f) On or after the date hereof there shall not have occurred any of
the following: (i) additional material governmental restrictions, not in
force and effect on the date hereof, shall have been imposed upon trading
in securities generally or minimum or maximum prices shall have been
generally established on the New York Stock Exchange or on the American
Stock Exchange or in the over the counter market by the NASD, or trading in
securities generally shall have been suspended on either such Exchange or
in the over the counter market by the NASD, or a general banking moratorium
shall have been established by federal or New York authorities, (ii) an
outbreak of major hostilities or other national or international calamity
or any
-16-
substantial change in political, financial or economic conditions shall
have occurred or shall have accelerated or escalated to such an extent, as,
in the judgment of the Representatives, to affect adversely the
marketability of the Shares, or (iii) there shall be any action, suit or
proceeding pending or threatened, or there shall have been any development
or prospective development involving particularly the business or
properties or securities of the Company or any of its subsidiaries or the
transactions contemplated by this Agreement, which, in the judgment of the
Representatives, has materially and adversely affected the Company's
business or earnings and makes it impracticable or inadvisable to offer or
sell the Shares;
(g) The Shares to be sold by the Company at such Time of Delivery
shall have been accepted for quotation, subject to notice of issuance, on
the Nasdaq National Market System;
(h) The Company and each Selling Stockholder shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of such Selling Stockholder, respectively, in
their capacities as such, satisfactory to you, stating, limited in the case
of the Company only to the best of their knowledge after due inquiry, as to
the accuracy of the representations and warranties of the Company and of
such Selling Stockholder, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and of such Selling
Stockholder, respectively, of all of its or his obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other
matters as you may reasonably request and the Company shall have furnished
or caused to be furnished certificates as to the matters set forth in
subsections (a) and (e) of this Section, and as to such other matters as
you may reasonably request; and
(i) Each director, executive officer and stockholder holding more
than 100,000 shares of the Company's Common Stock shall have executed and
delivered to you agreements in which such holder undertakes, for 90 days
or, in the case of the Management Selling Stockholder, 180 days, after the
date of the Prospectus, not to offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock, or any securities convertible into
or exchangeable for, or any rights to purchase or acquire, shares of Common
Stock, without the prior written consent of Xxxxx, Xxxxxxxx & Xxxx, Inc.
10. Indemnification and Contribution. (a) The Company and the Management
--------------------------------
Selling Stockholder, jointly and severally, will indemnify and hold harmless
each Underwriter and each person, if any, who controls such Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are
-17-
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company and the Management Selling Stockholder shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through you expressly for use therein.
(b) Each of the Selling Stockholders other than the Management Selling
Stockholder (each a "Non-Management Selling Stockholder"), severally and not
jointly, will indemnify and hold harmless each Underwriter and any person, if
any, who controls such Underwriter, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Non-Management Selling Stockholder expressly
for use therein, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred. The Underwriters acknowledge that the only information relating to
any Non-Management Selling Stockholder furnished in writing to the Company by
such Non-Management Selling Stockholder specifically for inclusion in the
Registration Statement consists of the following (i) the information relating to
such Non-Management Selling Stockholder set forth under the heading "Principal
and Selling Stockholders"; (ii) insofar as such Non-Management Selling
Stockholder was formerly a stockholder of Application Resources, Inc. ("ARI")
(as indicated on Schedule II hereto), the information set forth on page 4 under
the heading "Prospectus Summary - The Company -Recent Acquisitions", in the
first sentence of paragraph 2 on page 17 under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations -Recent
Acquisitions", and the financial statements of ARI audited by Ernst & Young LLP
and included in pages F-40 through F-48 of the Registration Statement, in
each case only insofar as they relate to ARI; and (iii) insofar as such Non-
Management Selling Stockholder was formerly a stockholder of Shamrock Computer
Resources, Ltd. ("Shamrock") (as indicated on Schedule II hereto), the
information set forth on page 4 under the heading
-18-
"Summary - The Company - Recent Acquisitions", in the first sentence of
paragraph 3 on page 17 under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Recent Acquisitions" and the
financial statements of Shamrock audited by Graves, McKenna, Xxxxxxx & Xxxxxxxx,
P.L.L.P., and included in pages F-65 through F-72 of the Registration Statement,
in each case only insofar as they relate to Shamrock.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or each Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use therein; and will reimburse the Company and the Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or the Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; no indemnification shall be available
hereunder to any party who shall fail to give notice as provided in the
preceding sentence if, and only to the extent that, the party to whom such
notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the notice would have related and was prejudiced by the
failure to give such notice, but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection
-19-
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. No
Indemnifying Party shall be liable for any settlement of any action or claim
effected without its written consent, which consent shall not be unreasonably
withheld.
(e) If the indemnification provided for in this Section 10 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders 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 or if the indemnified party failed to give the notice required
under subsection (d) above, 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 and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Stockholders, respectively, bear to the total
underwriting discounts 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 statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or any Selling Stockholder on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) 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 which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses
-20-
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Selling Stockholder shall be liable for contribution under this
Section 10 in circumstances where such Selling Stockholder would not be required
to provide indemnification if indemnification were available. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section 10 shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriter under this Section 10
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act. In addition
to the indemnification obligations set forth in this Section 10, any
indemnification obligation that the Company may have to any Selling Stockholder
under a registration rights or other agreement shall remain in full force and
effect.
(g) Notwithstanding anything to the contrary contained herein, (i) in the
event that the offering contemplated by this Agreement does not commence as
contemplated herein, (A) the aggregate liability of the Management Selling
Stockholder under this Agreement shall be limited to an amount equal to the net
proceeds which such Management Selling Stockholder would have received from the
sale of such Management Selling Stockholder's Firm Shares had the offering
contemplated by this Agreement commenced and (B) no other Selling Stockholder
shall have any liability hereunder and (ii) from and after the First Time of
Delivery, and provided that the offering contemplated by this Agreement has
commenced, the aggregate liability of each Selling Stockholder under this
Agreement shall be limited to an amount equal to the net proceeds received by
such Selling Stockholder from the sale of the Selling Stockholder Firm Shares
sold by such Selling Stockholder to the Underwriters. The Underwriters shall
seek to collect the amount of any loss, claim, damage or liability covered by
this Section 10 for which a Selling Stockholder is liable from the Company prior
to taking any action against any Selling Stockholder hereunder; provided, that
--------
the Underwriters shall not be required to delay acting against any Selling
Stockholder if such delay may materially prejudice the Underwriters' rights
under this Agreement.
-21-
11. Termination. (a) If any Underwriter shall default in its obligation
-----------
to purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company and the Selling Stockholders shall
be entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the event that, within the respective prescribed periods, you
notify the Company and the Selling Stockholders that you have so arranged for
the purchase of such Shares, or the Company and the Selling Stockholders notify
you that they have so arranged for the purchase of such Shares, you or the
Company and the Selling Stockholders shall have the right to postpone such Time
of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-tenth of the aggregate number of all the
Shares to be purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-tenth of the aggregate number of all the Shares
to be purchased at such Time of Delivery, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter, the Company or any Selling Stockholder, except for
the expenses to be borne by the Company, any Selling Stockholder and the
Underwriters as provided in Section 8 hereof and the indemnity and contribution
agreements in Section 10 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
-22-
12. Survival. The respective indemnities, agreements, representations,
--------
warranties and other statements of the Company, each Selling Stockholder and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company or any Selling Stockholder, or any officer or
director or controlling person of the Company or any Selling Stockholder, and
shall survive delivery of and payment for the Shares.
13. Expenses of Termination. If this Agreement shall be terminated
-----------------------
pursuant to Section 11 hereof, neither the Company nor any Selling Stockholder
shall then have any liability to any Underwriter except as provided in Section 8
and Section 10 hereof; but, if for any other reason this Agreement is
terminated, the Company will reimburse the Underwriters through you for all out-
of-pocket expenses approved in writing by you, including fees and disbursements
of counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Shares not so delivered, but neither the
Company nor any Selling Stockholder shall have any further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Section 8 and Section 10 hereof.
14. Notice. In all dealings hereunder, you shall act on behalf of each of
------
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxx, Xxxxxxxx & Xxxx, Inc. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of Xxxxx, Xxxxxxxx
& Xxxx, Inc., 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: President and if to any Selling Stockholder shall be
delivered or sent by mail, telex or facsimile transmission to the address of
such Selling Stockholder set forth in Schedule II hereto; provided, however,
that any notice to an Underwriter pursuant to Section 10(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriter's Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
by you on request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
14. Miscellaneous. (a) This Agreement shall be binding upon, and inure
-------------
solely to the benefit of, the Underwriters, the Company and the Selling
Stockholders and, to the extent provided in Sections 10 and 12 hereof, the
officers and directors of the Company and each person who controls the Company,
any Selling Stockholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the
-23-
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
(b) 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.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
(d) This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
the Selling Stockholders. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on your part as
to the authority of the signors thereof.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
-24-
Any person executing and delivering this Agreement as Attorney-in-Fact for the
Selling Stockholders represents by so doing that he has been duly appointed as
Attorney-in-Fact by each Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
THE REGISTRY, INC.
By:
-------------------------
G. Xxxx Xxxxxx
President
SELLING STOCKHOLDERS
(Named in Schedule II to the Agreement)
By:
-------------------------
Name:
Title: Attorney-in-Fact
----------------------------
G. Xxxx Xxxxxx
Accepted as of the date
hereof at Boston, Massachusetts
XXXXX, XXXXXXXX & XXXX, INC.
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO.
By:
------------------------------
(Xxxxx, Xxxxxxxx & Xxxx, Inc.
On behalf of each of
the Underwriters)
-25-
SCHEDULE I
Number of
Optional
Total Shares to be
Number of Purchased if
Firm Maximum
Shares to be Option
Purchased Exercised
--------- ---------
Xxxxx, Xxxxxxxx & Xxxx, Inc. ........
Xxxxxxxxxx Securities ...............
X.X. Xxxxxxxx & Co. .................
----------- -------------
Total ......... 3,000,000 450,000
=========== =============
SCHEDULE II
Total
Total Number of
Number of Optional
Firm Shares Shares to
to be Sold be Sold
----------- ---------
The Company..................................... 1,234,166 450,000
The Selling Stockholders:
G. Xxxx Xxxxxx.................................. 700,000 --
Xxxxx X. Xxxxxxxx(1)............................ 61,471 --
XX Xxxxxx Trust Company of Delaware TTEE
UA made by Xxxxxxx X. Xxxxxxxx &
Xxxxxxxx X. Xxxxxx FBO The Xxxxxxxx
1997 Charitable Trust dtd 1-16-97(1)........... 200,000 --
Xxxxxxx X. Xxxxxxxx & Xxxxxxxx X. Xxxxxx
TTEES FBO The Xxxxxxxx/Xxxxxx Revocable
Trust U/A dtd 8/17/94(1)....................... 153,463 --
Xxxxxxx X. Xxxxxxxx, Xx.(1)..................... 131,725 --
Essex Performance Fund L.P.(1).................. 18,523 --
Essex Special Growth Opportunities
Fund L.P.(1).................................. 2,401 --
Essex High Tech. Foreign Fund L.P.(1)........... 5,831 --
Essex New Discovery Fund L.P.(1)................ 10,977 --
Xxxxxx X. Xxxx(1)............................... 6,311 --
Xxxxx X. Xxxxxxxx(2)............................ 58,333 --
Xxxxxxx X. Xxxxxxxx(2).......................... 58,333 --
Xxxxxxx X. Xxxxxxxx(2).......................... 58,333 --
Xxxxxx Xxxxxxxx(1).............................. 6,311 --
Xxxxxxx X. Xxxxxxxx(2).......................... 58,333 --
Luke Family Trust(1)............................ 12,623 --
Xxxxxxx Xxxxxxxx(1)............................... 823 --
Xxxxxx X. Xxxxxxxx(2)............................. 58,333 --
Xxx Xxxxxxxxxx(2)................................. 58,333 --
Xxxx X. Xxxxxx(1)................................. 6,311 --
Xxx X. Xxxxxxxxxxxx(1)............................ 3,018 --
Xxxxxx Xxxxxxxxx(1)............................... 89,737 --
Xxxxxxx Xxxxx(1).................................. 6,311 --
--------- --------
TOTAL............................................. 3,000,000 450,000
========= ========
(1) Formerly a stockholder of Application Resources, Inc.
(2) Formerly a stockholder of Shamrock Computer Resources, Ltd.
ANNEX I
Form of Ropes & Xxxx Opinion
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of The Commonwealth of Massachusetts with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus. The Company is duly
qualified to do business and is in good standing in each jurisdiction within the
United States in which it owns or leases real property or maintains an office.
2. The authorized, issued and outstanding capitalization of the
Company as of December 31, 1996 is as set forth under the caption
"Capitalization" in the Prospectus. All of the issued and outstanding shares of
capital stock have been duly authorized and validly issued and are fully paid
and nonassessable and have not been issued in violation of any statutory
preemptive right or, to such counsel's knowledge, any other similar right. The
Shares have been duly authorized and, when issued and delivered in accordance
with the Underwriting Agreement, will be validly issued, fully paid and
nonassessable and will conform in all material respects to the description of
the capital stock contained in the Prospectus.
3. Each subsidiary of the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its organization. All of the issued and outstanding shares of capital stock
of each such subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable and are owned of record and, to such counsel's
knowledge, beneficially by the Company or another subsidiary of the Company,
free and clear of all liens, encumbrances, equities or claims other than those
imposed by applicable securities laws (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company and its
subsidiaries, provided that such counsel shall state that they believe that both
you and they are justified in relying upon such opinions and certificates).
Each subsidiary of the Company is duly qualified to do business and is in good
standing in each jurisdiction within the United States in which it owns or
leases real property or maintains an office.
4. The Company has the corporate power and authority to enter into
the Underwriting Agreement and the Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
5. The issuance and sale by the Company of the Shares and the
performance by the Company of its obligations under the Underwriting Agreement
does not and will not (i) violate the articles of organization or by-laws of the
Company, (ii) breach or result in a default under any agreement, indenture or
other instrument filed as an exhibit to the
I-1
Registration Statement to which the Company is a party or by which it is bound,
or to which any of its properties is subject, or (iii) violate any existing
Massachusetts or federal law, rule, administrative regulation or any decree
known to us of any court or any governmental agency or body having jurisdiction
over the Company or any of its properties, except that we express no opinion as
to state securities or "Blue Sky" laws or as to compliance with the antifraud
provisions of federal and state securities laws.
6. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States or The Commonwealth of Massachusetts is required for the issuance and
sale of the Shares by the Company or the consummation by the Company of the
transactions contemplated by the Underwriting Agreement, except the registration
under the Act of the Shares.
7. The Company is not subject to regulation as an "investment
company" under the Investment Company Act of 1940, as amended.
8. The Shares have been authorized for inclusion on the Nasdaq
National Market System, subject to notice of issuance.
9. The Underwriting Agreement has been duly authorized, executed and
delivered by each of the Selling Stockholders (by such Selling Stockholder or
his or its duly authorized attorney-in-fact).
10. A Custody Agreement has been duly authorized, executed and
delivered by each of the Selling Stockholders and, pursuant to such Custody
Agreement, each Selling Stockholder has authorized its attorney-in-fact to carry
out the transactions contemplated in the Underwriting Agreement on its behalf
and to deliver the Shares being sold by such Selling Stockholder pursuant to the
Underwriting Agreement.
11. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States or The Commonwealth of Massachusetts is required to be obtained by any
Selling Stockholder to sell, assign, transfer and deliver the Shares to be sold
by such Selling Stockholder in the manner provided in the Underwriting Agreement
and the Custody Agreement, other than as have been obtained or made under the
Act.
12. Immediately prior to the Closing Date, each Selling Stockholder
was the registered owner of the Shares to be sold by such Selling Stockholder.
Upon registration of the Shares in the names of the Underwriters in the stock
records of the Company, assuming the Underwriters purchase the Shares in good
faith and without notice of any adverse claim within the meaning of Section 8-
302 of the Massachusetts Uniform Commercial Code, the Underwriters will have
acquired the Shares free of any adverse claim, any lien in favor of the Company,
and any restrictions on transfer imposed by the Company.
I-2
In the course of the preparation by the Company of the Registration
Statement and the Prospectus, we have participated in discussions with your
representatives and those of the Company and its independent accountants in
which the business and affairs of the Company and the contents of the
Registration Statement and Prospectus were discussed. On the basis of
information that we have gained in the course of our representation of the
Company in connection with its preparation of the Registration Statement and
Prospectus and our participation in the discussions referred to above, we
believe that the Registration Statement, as of its effective date, and the
Prospectus, as of its date, complied as to form in all material respects with
the requirements of the Act and the published rules and regulations of the
Commission thereunder and we do not know of any legal or governmental
proceedings pending to which the Company is a party or of which any property of
the Company is the subject that are required to be described in the Registration
Statement or Prospectus that are not so described or of any contracts or any
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or Prospectus that are not filed or described as required. Further, based on
such information and participation, nothing came to our attention that caused us
to believe that (i) the Registration Statement as of its effective date
contained an untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) that the Prospectus as of its date contained or as of the
date hereof contains any untrue statement of a material fact or omitted or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (iii)
it is necessary to amend the Registration Statement. We express no opinion,
however, as to the financial statements, including the notes and schedules
thereto, or any other financial or accounting information set forth or referred
to in the Registration Statement and Prospectus.
The limitations inherent in the independent verification of factual
matters and the character of the determinations involved in our review are such
that we do not assume any responsibility for the accuracy, completeness or
fairness of the statements made or the information contained in the Registration
Statement and Prospectus except for those made under the captions "Description
of Capital Stock" and "Underwriting", which accurately summarize in all material
respects the provisions of the laws and documents referred to therein.
Such counsel shall also include a statement in such opinion as to the
matters set forth in this paragraph. The Registration Statement has become
effective under the Act. To the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued by
the Commission nor has any proceeding been instituted or contemplated for that
purpose under the Act. The Prospectus has been filed with the Commission
pursuant to Rule 424(b) of the rules and regulations under the Act within the
time period required thereby.
I-3
ANNEX II
Pursuant to Section 9(d) of the Underwriting Agreement, Price Waterhouse LLP
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, pro forma financial
information) examined by them and included in the Prospectus or the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) the unaudited consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with the basis for the
audited consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included in the Prospectus;
II-1
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial statements
included in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the published rules
and regulations thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest financial statements included in the Prospectus) or any increase in
the combined long-term debt of the Company and its subsidiaries, or any
decreases in combined net current assets or net assets or other items specified
by the representatives, or any increases in any items specified by the
representatives, in each case as compared with amounts shown in the latest
balance sheet included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (E) there
were any decreases in consolidated net revenues or operating profit or the total
or per share amounts of consolidated net income or other items specified by the
representatives, or any increases in any items specified by the representatives,
in each case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the representatives,
except in each case for decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (iv) above,
they have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
representatives, and have compared certain of such amounts, percentages and
financial information with the
II-2
accounting records of the Company and its subsidiaries and have found them to be
in agreement.
Pursuant to Section 9(d) of the Underwriting Agreement, Ernst & Young LLP and
Graves, McKenna, Xxxxxxx & Xxxxxxxx, P.L.L.P., shall furnish letters to the
Underwriters with respect to the matters set forth in paragraphs (i) and (ii)
above.
II-3