<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 13, 1997
REGISTRATION NO. 333-13109
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
THE JUDGE GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Pennsylvania 6710 23-1726661
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation of Organization) Classification Code Number) Identification Number)
</TABLE>
TWO BALA PLAZA, SUITE 800, BALA CYNWYD, PENNSYLVANIA 19004, (610) 667-7700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MARTIN E. JUDGE, JR., CHIEF EXECUTIVE OFFICER, THE JUDGE GROUP, INC.
TWO BALA PLAZA, SUITE 800, BALA CYNWYD, PENNSYLVANIA 19004, (610) 667-7700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies to:
Robert H. Strouse, Esq. Charles C. Zall, Esq.
Drinker Biddle & Reath Saul, Ewing, Remick & Saul
1000 Westlakes Drive, Suite 300 3800 Centre Square
Berwyn, Pennsylvania 19312 Philadelphia, Pennsylvania 19102
(610) 993-2200 (215) 972-7777
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective and the
Underwriting Agreement is executed.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Registrant in
connection with this Registration Statement. All of such expenses are estimates,
other than the filing and listing fees payable to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. The Selling
Shareholders will not bear any expenses of this Offering.
Filing Fee -- Securities and Exchange Commission................ $ 15,922
Filing Fee -- National Association of Securities Dealers, Inc... 5,117
Listing Fees -- Nasdaq Stock Market............................. 50,000
Fees and Expenses of Accountants................................ 300,000
Fees and Expenses of Counsel.................................... 300,000
Printing Expenses............................................... 100,000
Blue Sky Fees and Expenses...................................... 10,000
Investment Advisory Fee......................................... 300,000
Miscellaneous Expenses.......................................... 18,961
-------------
Total......................................................... $ 1,100,000
=============
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation provide that no director or officer
of the Company shall be personally liable for monetary damages except to the
extent that by law a director's or officer's liability for monetary damages may
not be limited. The effect of this provision is to prevent the Company and its
shareholders (through shareholder derivative suits on behalf of the Company)
from recovering monetary damages against a director for breach of certain
fiduciary duties as a director (including breaches resulting from grossly
negligent conduct). This provision does not, however, exonerate the directors
from liability (i) pursuant to any criminal statute, (ii) for the payment of
taxes pursuant to federal, state or local law, or (iii) for self-dealing,
willful misconduct or recklessness. The By-laws of the Company provide for
indemnification of the officers and directors of the Company to the fullest
extent permitted by applicable law. Applicable law permits indemnification for
all matters (including those asserted in derivative actions) except for those
determined by a court to have constituted willful misconduct or recklessness.
The Registrant has obtained directors' and officers' liability insurance.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
On September 6, 1996, the Company issued 3,265 Common Shares (171,739
post-split Common Shares) to The Gemstone Group, Inc. upon exercise of its
warrant issued by the Company on July 8, 1993. This transaction was exempt from
the registration requirements of the Securities Act pursuant to Section 4(2)
thereof.
Pursuant to a stock purchase agreement dated September 26, 1996, the
Company agreed to issue 30,000 Common Shares (assuming an Offering price of
$10.00 per share) to Sandy Mayer and Gregory McCarthy in connection with the
purchase of Berkeley. This transaction was exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof.
On September 30, 1996, the Company issued promissory notes in the amount of
$472,252 to Systems Automation, Inc. in connection with the purchase of certain
assets of Systems Automation. This transaction was exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
- -------- -----------------------
1.1* Form of Underwriting Agreement.
2.1** Agreement and Plan of Merger, among the Company, Judge Acquisition,
Inc. and Judge Imaging Systems, Inc. Incorporated by reference to
Exhibit 2.1 to the Registrant's Form S-4 (File No. 333-13753).
3.1** Amended and Restated Articles of Incorporation of the Company.
3.2** Amended and Restated By-Laws of the Company.
4.1** 10% Convertible Senior Subordinated Note Purchase Agreement.
4.2** Form of common stock certificate for Company Common Shares.
4.3** Fourth Amended and Restated Loan and Security Agreement, dated
December 10, 1996, between the Company and PNC Bank, N.A.
5.1** Opinion of Drinker Biddle & Reath.
10.1** Lease of Two Bala Plaza, Bala Cynwyd, Pennsylvania, dated January
21, 1994, between The Prudential Insurance Company of America, as
landlord, and Judge, Inc., as tenant.
10.2** Stock Purchase Agreement by and among the Company, The Berkeley
Associates Corporation, Sandy Mayer and Gregory McCarthy, as amended.
10.3** Asset Purchase Agreement by and among the Company, Systems
Automation, Inc. and Edward Haskell.
10.4** 1996 Incentive Stock Option and Non-Qualified Stock Option Plan for
Key Employees and Non-Employee Directors.
10.5** Professional Services Agreement between Merck & Co., Inc. and
Judge Technical Services, Inc.
10.6** Split-Dollar Agreement by and between Judge, Inc. and Dennis F.
Judge, Trustee of the Irrevocable Agreement of Trust of Martin E.
Judge, Jr., Settlor, dated December 28, 1995.
10.7** Split-Dollar Agreement by and between Judge, Inc. and Kathleen Dunn,
Trustee of the Irrevocable Agreement of Trust of Michael Dunn,
Settlor, date June 19, 1996.
10.8** Split-Dollar Agreement by and between Judge, Inc. and Ann L. Judge,
Trustee of the Irrevocable Agreement of Trust of Martin E. Judge,
Jr., Settlor, dated December 20, 1995.
10.9** Split-Dollar Agreement by and between Judge, Inc. and D. Michael
Carmody, Trustee of the Irrevocable Agreement of Trust of Michael
Dunn, Settlor, dated June 19, 1996.
10.10** Employment Agreement, by and between Judge Imaging Systems, Inc. and
Jeff Andrews. Previously filed as Exhibit 10.11 to this Registration
Statement.
11.1** Computation of Earnings Per Share.
21.1* Subsidiaries of the Company.
23.1** Consent of Drinker Biddle & Reath (included in their opinion filed as
Exhibits 5.1).
23.2** Consent of Rudolph, Palitz LLP.
23.3** Consent of Janney Montgomery Scott Inc.
24.1** Powers of Attorney.
27.1** Financial Data Schedule.
99.1** Consent of Director Nominee.
- ----------
* Filed herewith.
II-2
<PAGE>
** Previously filed.
(B) FINANCIAL STATEMENT SCHEDULES: None
All schedules of Judge for which provision is made in the applicable
accounting regulations of the Commission are not required, are inapplicable or
have been disclosed in the Notes to the Consolidated Financial Statements and
therefore have been omitted.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
2. For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
II-4
<PAGE>
SIGNATURES AND POWERS OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned and hereunto duly authorized in the Town of Bala Cynwyd,
Commonwealth of Pennsylvania, on the 13th day of February, 1997.
THE JUDGE GROUP, INC.
By: /s/ Martin E. Judge, Jr.
----------------------------------
Martin E. Judge, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Martin E. Judge, Jr. Chief Executive Officer February 13, 1997
- ----------------------------- and Chairman of the Board
Martin E. Judge, Jr.
(Principal Executive Officer)
/s/ Jeffrey J. Andrews Chief Financial Officer February 13, 1997
- ----------------------------- and Treasurer
Jeffrey J. Andrews
(Principal Financial and
Accounting Officer)
/s/ Michael A. Dunn Executive Vice President February 13, 1997
- ----------------------------- and Director
Michael A. Dunn
/s/ Richard T. Furlano President and Director February 13, 1997
- -----------------------------
Richard T. Furlano
II-5
THE JUDGE GROUP, INC.
3,650,000 Common Shares
---------------
UNDERWRITING AGREEMENT
--------------
Philadelphia, Pennsylvania
February __, 1997
JANNEY MONTGOMERY SCOTT INC.
UNTERBERG HARRIS
As Representatives of the Several
Underwriters Named in Schedule I
Hereto
c/o Janney Montgomery Scott Inc.
1801 Market Street
Philadelphia, PA 19103
Ladies and Gentlemen:
The Judge Group, Inc., a Pennsylvania corporation (the "Company"),
proposes to sell to Janney Montgomery Scott Inc. and Unterberg Harris (the
"Representatives") and the several other underwriters named in Schedule I hereto
(collectively, with the Representatives, the "Underwriters") 3,000,000 shares of
the Company's $.01 par value common stock ("Common Shares"); and the selling
shareholders of the Company named in Table 1 of Schedule II hereto
(collectively, the "Selling Shareholders") propose to sell severally to the
Underwriters an aggregate of 650,000 Common Shares. Such Common Shares to be
sold to the Underwriters by the Company and the Selling Shareholders are
referred to collectively herein as the "Firm Shares." The respective amounts of
the Firm Shares to be purchased by the several Underwriters are set forth
opposite their names in Schedule I hereto. The respective amounts of the Firm
Shares to be sold by Selling Shareholders are set forth opposite their names in
Table 1 of Schedule II hereto. The Firm Shares shall be offered to the public at
an initial public offering price of $________ per Firm Share (the "Offering
Price").
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may purchase for the Underwriters' own accounts,
ratably in proportion to the amounts set forth opposite their respective names
in Schedule I hereto, up to 250,000 additional Common Shares from the Selling
Shareholders and up to 297,500 additional Common Shares from the Company. Such
547,500 additional Common Shares are referred to collectively herein as the
"Optional Shares." If any Optional Shares are purchased: (i) all the Optional
Shares of the Selling Shareholders shall be purchased before any Optional Shares
of the Company may be purchased; (ii) all the Optional Shares of the Selling
Shareholders listed in Section A of Table 2 of Schedule II hereto shall be
purchased (pro rata in proportion
<PAGE>
to the amounts set forth opposite their names) before any shares are purchased
(pro rata in proportion to the amounts set forth opposite their names) from the
Selling Shareholders listed in Section B of Table 2 of Schedule II; and (iii)
the Optional Shares shall be purchased for offering to the public at the
Offering Price and in accordance with the terms and conditions set forth herein.
The Firm Shares and the Optional Shares are referred to collectively herein as
the "Shares."
The Company and the Selling Shareholders, intending to be legally
bound, hereby confirm their agreement with the Underwriters as follows:
1. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that (all
references to the Company herein shall be deemed to include reference to the
Company and each of the Company's subsidiaries set forth on Schedule III hereto
(the "Subsidiaries") collectively or taken as a whole, unless the context
clearly indicates otherwise):
(i) the Company has prepared, in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Regulations") of the Securities and Exchange
Commission (the "SEC") under the Act in effect at all applicable times, and has
filed with the SEC a registration statement on Form S-1 (File No. 333-13109) and
one or more amendments thereto for the purpose of registering the Shares (or a
portion of the Shares if a "Rule 462(b) Registration Statement," as defined
below, has been or is to be filed) under the Act. The Company similarly may have
prepared or may prepare an additional registration statement on Form S-1 with
respect to a portion of the Shares pursuant to Rule 462(b) of the Regulations,
and if so prepared or if to be so prepared, such additional registration
statement has been or will be filed pursuant to Rule 462(b) of the Regulations.
The term "Rule 462(b) Registration Statement" means such additional registration
statement, if any, filed pursuant to Rule 462(b) of the Regulations, including,
without limitation, all exhibits thereto, the contents of the earlier
registration statement incorporated therein by reference, and any price-related
information included therein, but omitted from the earlier registration
statement in reliance on Rule 430A of the Regulations. Copies of all such
registration statements (or the form thereof in the case of a Rule 462(b)
Registration Statement that has not yet been filed) and any amendments thereto,
and all forms of the related prospectus contained therein, have been delivered
to the Representatives. Each prospectus included in any such registration
statement before it became effective under the Act and any prospectus filed with
the SEC pursuant to Rule 424(a) of the Regulations is hereinafter called a
"Preliminary Prospectus." The various parts of the first registration statement
referenced in this Section 1(a)(i), including all exhibits thereto and the
information contained in the form of final prospectus filed with the SEC
pursuant to Rule 424(b) of the Regulations in accordance with Section 5(a)(ii)
of this Agreement and deemed by virtue of Rule 430A(b) of the Regulations to be
part of the registration statement at the time it was declared effective, each
as amended at the time the registration statement became effective, as well as
the information contained in the Rule 462(b) Registration Statement, if any,
deemed to be a part of the registration statement pursuant to General
Instruction V of Form S-1, are hereinafter collectively called the "Primary
Registration Statement." The term "Registration Statements" means both the
Primary Registration Statement and the Rule 462(b) Registration
-2-
<PAGE>
Statement collectively. The term "Term Sheet" means the term sheet, if any,
containing the information required pursuant to Rule 434(b) or (c), as
applicable, of the Regulations, and filed pursuant to Rule 424(b)(7) of the
Regulations. The term "Prospectus" means the Prospectus relating to the Shares
included in the Registration Statement at the time it became effective
(including, if the Company omitted information from the Primary Registration
Statement pursuant to Rule 430A(a) of the Regulations, the information deemed to
be a part of the Primary Registration Statement at the time it became effective
pursuant to Rule 430A(b) of the Regulations); provided, however, that, if with
the consent of the Representatives, the Company provides a Term Sheet prior to
the time any confirmation is sent or given for purposes of Section 2(10)(a) of
the Act, the term "Prospectus" shall mean the "prospectus subject to completion"
(as defined in Rule 434(g) of the Regulations) last provided to the Underwriters
by the Company and circulated by the Underwriters to all prospective purchasers
of the Shares, plus and including the information contained in the Term Sheet.
Notwithstanding the foregoing, if any revised Prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of the
Shares that differs from the Prospectus referred to in the immediately preceding
sentence (whether or not such revised Prospectus is required to be filed with
the SEC pursuant to Rule 424(b) of the Regulations), the term "Prospectus" shall
refer to such revised Prospectus from and after the time it is first provided to
the Underwriters for such use. If, with the consent of the Representatives, the
Company shall have provided to the Underwriters a Term Sheet prior to the time
any confirmation is sent or given for purposes of Section 2(10)(a) of the Act,
the Prospectus and the Term Sheet together will not be materially different from
the prospectus in the Registration Statements;
(ii) the Primary Registration Statement has become
effective under the Act and the SEC has not issued any stop order suspending the
effectiveness of the Registration Statements or preventing or suspending the use
of any Preliminary Prospectus, nor has the SEC instituted or threatened to
institute proceedings with respect to such an order. No stop order suspending
the sale of the Shares in any jurisdiction designated by the Representatives as
provided for in Section 5(a)(x) hereof has been issued, and no proceedings for
that purpose have been instituted or threatened. The Company has complied in all
material respects with all requests of the SEC, or requests of which the Company
has been advised of any state securities commission in a state designated by the
Representatives as provided for in Section 5(a)(x) hereof, for additional
information to be included in the Registration Statements, any Preliminary
Prospectus or the Prospectus. Each Preliminary Prospectus conformed to all the
requirements of the Act and the Regulations as of its date in all material
respects and did not as of its date contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except the foregoing shall not apply to statements
in, or omissions from, any Preliminary Prospectus in reliance upon and in
conformity with information supplied to the Company in writing by or on behalf
of any Underwriter through the Representatives expressly for use therein. The
Primary Registration Statement, on the date on which it was declared effective
by the SEC (the "Effective Date") and when any post-effective amendment thereof
shall become effective, the Rule 462(b) Registration Statement when filed with
the SEC, and the Prospectus, at the time it is filed with the SEC and on the
Closing Date (as defined in Section 3 hereof) and any Option Closing Date (as
defined in Section 4(b) hereof), conformed and will conform in all material
respects to all the requirements of the Act and the Regulations, and did not and
will
-3-
<PAGE>
not, on any of such dates, include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Primary
Registration Statement (including the information contained in the rule 462(b)
Registration Statement after it is filed with the SEC) or the Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of any Underwriter through the Representatives expressly
for use therein;
(iii) the Company is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania, with all necessary corporate power and authority, and all required
licenses, permits, clearances, certifications, registrations, approvals,
consents and franchises, to own or lease and operate its properties and to
conduct its business as described in the Prospectus, and to execute, deliver and
perform this Agreement. Each of the Subsidiaries (except Judge Hospitality
Services, Inc., Judge Electronics Services of Boston, Inc., Judge Electronic
Services, Inc. and Judge Electronics Services of Philadelphia, Inc., each of
which is inactive and has no material operations, assets or liabilities) has
been duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation (which jurisdiction is
set forth in Schedule III hereto), with all necessary corporate power and
authority, and all required licenses, permits, clearances, certifications,
registrations, approvals, consents and franchises, to own or lease and operate
its properties and to conduct its business as described in the Prospectus. The
Company and each of the Subsidiaries is duly qualified to do business as a
foreign corporation, and is in good standing, in all jurisdictions in which such
qualification is required, except where the failure to so qualify would not have
a material adverse effect on the properties, condition (financial or otherwise),
results of operations, stockholders' equity, business or prospects of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"). No
proceeding has been instituted in any jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail the Company's or any of the
Subsidiaries' corporate power and authority or qualification or ability to own
or lease and operate its properties and to conduct its business as described in
the Prospectus;
(iv) the outstanding shares of capital stock or other
evidence of ownership of the respective Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and, except for the
securities owned by third parties as described specifically below in this
Section 1(a)(iv), are owned by the Company free and clear of all liens,
encumbrances and security interests. Except for the common stock of the
Subsidiaries owned by the Company, as of the Closing Date there will be no
shares of capital stock of any Subsidiary outstanding, and no options, warrants
or other rights to purchase, agreements or other obligations to issue, or other
rights to convert any obligations into, shares of capital stock or ownership
interests in any Subsidiary or securities convertible into or exchangeable for
capital stock of, or other ownership interests in, any Subsidiary are, or as of
the Closing Date will be, outstanding. The Company owns no stock or other
interest whatsoever, whether equity or debt, in any corporation, partnership or
other entity other than the Subsidiaries;
(v) this Agreement has been duly authorized, executed
and delivered by the Company and constitutes its legal, valid and binding
obligation, enforceable against the Company in accordance with its terms;
-4-
<PAGE>
(vi) the execution, delivery and performance of this
Agreement by the Company does not and will not, with or without the giving of
notice or the lapse of time, or both, (A) conflict with any term or provision of
the Company's Articles of Incorporation or Bylaws; (B) result in a breach of,
constitute a default under, result in the termination or modification of, result
in the creation or imposition of any lien, security interest, charge or
encumbrance upon any of the assets of the Company under, or require any payment
by the Company or impose any liability on the Company pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement or instrument
to which the Company is a party or by which any of the Company's assets are
bound or affected; (C) assuming compliance with Blue Sky laws and regulations
applicable to the offer and sale of the Shares, violate any applicable law,
rule, regulation, judgment, order or decree of any government or governmental
agency, instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of the Company's properties or business; or (D) result in a
breach, termination or lapse of the Company's corporate power and authority to
own or lease and operate its assets and properties and conduct its business as
described in the Prospectus;
(vii) at the date or dates indicated in the
Prospectus, the Company had the duly authorized and outstanding capitalization
set forth in the Prospectus under the caption "Capitalization" and will have, as
of the issuance of the Firm Shares on the Closing Date, the pro forma adjusted
capitalization set forth therein. The description of the Company's
capitalization in the Prospectus conforms in all material respects with the
instruments defining the same. On the Effective Date, the Closing Date and any
Option Closing Date, there will be no options or warrants for the purchase of,
other outstanding rights to purchase, agreements or obligations to issue or
agreements or other rights to convert or exchange any obligation or security
into, capital stock of the Company or securities convertible into or
exchangeable for capital stock of the Company, except as expressly described in
the Prospectus. The information in the Prospectus insofar as it relates to all
outstanding options and other rights to acquire securities of the Company as of
the Effective Date and immediately prior to the Closing Date and any Option
Closing Date is true and correct in all material respects;
(viii) the currently outstanding shares of the
Company's capital stock, including the Shares to be purchased by the
Underwriters from the Selling Shareholders, have been duly authorized and are
validly issued, fully paid and non-assessable, and none of such outstanding
shares of the Company's capital stock has been issued in violation of any
preemptive rights of any security holder of the Company. All previous offers and
sales of the outstanding shares of the Company's capital stock, whether
described in the Registration Statement or otherwise, were made in conformity
with applicable federal and state securities laws;
(ix) when the Shares have been duly delivered against
payment therefor as contemplated by this Agreement, the Shares will be validly
issued, fully paid and non-assessable. The certificates representing the Shares
are in proper legal form under, and conform in all respects to the requirements
of, the Pennsylvania Business Corporation Law, as amended (the "BCL"). Except
for such rights with which the Company has complied or which have been waived,
neither the filing of the Registration Statement nor the offering or sale of
Shares as contemplated by this Agreement gives any security holder of the
Company
-5-
<PAGE>
any rights for or relating to the registration of any Common Shares or any other
capital stock of the Company;
(x) no consent, approval, authorization, order,
registration, license or permit of, or filing or registration with, any court,
government, governmental agency, instrumentality or other regulatory body or
official is required for the valid and legal execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby and described in the Prospectus, except such as may be
required for the registration of the Shares under the Act, the Regulations and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and for
compliance with the applicable state securities or Blue Sky laws or the Bylaws,
rules and other pronouncements of the National Association of Securities
Dealers, Inc. (the "NASD");
(xi) the Common Shares (including the Shares) are
registered pursuant to Section 12(g) of the Exchange Act and have been approved
for quotation in the Nasdaq Stock Market subject to notice of issuance, and
neither the Company nor any Selling Shareholder has taken any action designed to
cause, or likely to result in, the termination of the registration of the Common
Shares under the Exchange Act or the termination of the inclusion thereof in the
Nasdaq Stock Market. Neither the Company nor any Selling Shareholder has
received any notification that the SEC or the Nasdaq Stock Market is
contemplating terminating such registration or inclusion. On the Effective Date,
the Closing Date and any Option Closing Date, the Shares shall be included for
quotation in the Nasdaq Stock Market;
(xii) the statements in the Registration Statements
and Prospectus, insofar as they are descriptions of or references to contracts,
agreements or other documents, are accurate in all material respects and present
or summarize fairly, in all material respects, the information required to be
disclosed under the Act and/or the Regulations, and there are no contracts,
agreements or other documents, instruments or transactions of any character
required to be described or referred to in the Registration Statements or
Prospectus or to be filed as exhibits to the Registration Statements that have
not been so described, referred to or filed, as required;
(xiii) the consolidated financial statements of the
Company (including the notes thereto) filed as part of any Preliminary
Prospectus, the Prospectus and the Registration Statements present fairly, in
all material respects, the financial position of the Company and the
Subsidiaries as of the respective dates thereof, and the results of operations
and cash flows of the Company and the Subsidiaries for the periods indicated
therein, all in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as may be otherwise
stated expressly therein. The supporting notes and schedules included in the
Registration Statements fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken as a
whole. The selected and summary financial and statistical information in the
Prospectus including, but not limited to, that under the captions "Summary
Consolidated Historical and Pro Forma Financial Information," "Selected
Consolidated Financial Data," and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" presents fairly the information
shown therein and has been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statements. The
unaudited pro forma
-6-
<PAGE>
financial statements included in the Registration Statements comply as to form
in all material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X under the Act and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements. No financial statements or schedules or other information other than
that which appears in the Prospectus is required to be included in the
Registration Statement;
(xiv) since the respective dates as of which
information is given in the Registration Statements and the Prospectus, except
as otherwise stated therein, there has not been (A) any material adverse change
(including, whether or not insured against, any material loss or damage to any
material assets), or development involving a prospective material adverse
change, in the properties, assets, management, condition (financial or
otherwise), results of operations, stockholders' equity, business or prospects
of the Company and the Subsidiaries taken as a whole; (B) any material adverse
change, loss, reduction, termination or non-renewal of any contract to which the
Company is a party; (C) any transaction entered into by the Company not in the
ordinary course of its business that is material to the Company, (D) any
dividend or distribution of any kind declared, paid or made by the Company on
its capital stock, (E) any liabilities or obligations, direct or indirect,
incurred by the Company that are material to the Company; (F) any change in the
capitalization or stock ownership of the Company; or (G) any change in the
indebtedness of the Company that is material to the Company. The Company has no
contingent liabilities or obligations that are material to the Company that are
not expressly disclosed in the Prospectus;
(xv) the Company has not distributed, and will not
distribute, any offering material in connection with the offering and sale of
the Shares other than the Registration Statements, a Preliminary Prospectus, the
Prospectus and other material, if any, permitted by the Act and the Regulations.
Neither the Company nor any of its officers, directors or affiliates has taken,
nor shall the Company or such persons take, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Shares;
(xvi) except as set forth in Note 13 of the Notes to
Consolidated Financial Statements of the Judge Group, Inc. for the Six Months
ended June 30, 1996 and 1995, and except where the failure to do so would not
have a Material Adverse Effect, the Company has filed with the appropriate
federal, state and local governmental agencies, and all foreign countries and
political subdivisions thereof, all tax returns that are required to be filed or
has duly obtained extensions of time for the filing thereof and has paid all
taxes shown on such returns or otherwise due and all material assessments
received by it to the extent that the same have become due. Except as described
above in this Section 1(a)(xvii), the Company has not executed or filed with any
taxing authority, foreign or domestic, any agreement extending the period for
assessment or collection of any income or other tax and is not a party to any
pending action or proceeding by any foreign or domestic governmental agency for
the assessment or collection of taxes, and no claims for assessment or
collection of taxes have been asserted against the Company that might have a
Material Adverse Effect;
(xvii) Rudolph, Palitz LLP, which has given its
reports on certain financial statements included as part of the Registration
Statements, is a firm of independent certified public accountants as required by
the Act and the Regulations;
-7-
<PAGE>
(xviii) except where the failure to do so would not
have a Material Adverse Effect, the Company is not in violation of, or in
default under, any of the terms or provisions of (A) its Articles or Certificate
of Incorporation or Bylaws or similar governing instruments, or (B) any
indenture, mortgage, deed of trust, contract, commitment or other agreement or
instrument to which it is a party or by which it or any of its properties is
bound or affected, (C) any law, rule, regulation, judgment, order or decree of
any government or governmental agency, instrumentality or court, domestic or
foreign, having jurisdiction over it or any of its properties or business, or
(D) any license, permit, certification, registration, approval, consent or
franchise referred to in Section l(a)(iii) hereof;
(xix) except as expressly disclosed in the
Prospectus, there are no claims, actions, suits, protests, proceedings,
arbitrations, investigations or inquiries pending before, or to the Company's
knowledge threatened or contemplated by, any governmental agency,
instrumentality, court or tribunal, domestic or foreign, or before any private
arbitration tribunal to which the Company is or may be made a party that could
reasonably be expected to affect the validity of any of the outstanding Common
Shares, or that, if determined adversely to the Company, would, in any case or
in the aggregate, result in any Material Adverse Effect, nor is the Company
aware of any reasonable basis for any such claim, action, suit, protest,
proceeding, arbitration, investigation or inquiry. Except as expressly disclosed
in the Prospectus, there are no outstanding orders, judgments or decrees of any
court, governmental agency, instrumentality or other tribunal enjoining the
Company from, or requiring the Company to take or refrain from taking, any
action, or to which the Company, its properties, assets or business are bound or
subject;
(xx) the Company owns, or possesses adequate rights
to use, all patents, patent applications, trademarks, trademark registrations,
applications for trademark registration, trade names, service marks, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential technology, information,
systems, design methodologies and devices or procedures developed or derived
from or for the Company's business), trade secrets, confidential information,
processes and formulations and other proprietary information necessary for, used
in, or proposed to be used in, the conduct of its business as described in the
Prospectus (collectively, the "Intellectual Property"). The Company owns no
rights in or to any patents. The Company has not infringed, is not infringing
and, except as expressly and specifically disclosed in the Prospectus, has not
received any notice of conflict with, the asserted rights of others with respect
to the Intellectual Property that, individually or in the aggregate, if the
subject or an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, and the Company knows of no reasonable basis therefore. To the
knowledge of the Company, no other parties have infringed upon or are in
conflict with the Intellectual Property. The Company is not a party to, or bound
by, any agreement pursuant to which royalties, honorariums or fees are payable
by the Company to any person by reason of the ownership or use of any
Intellectual Property that is material to the business of the Company;
(xxi) The Company has good and marketable title to
all property described in the Prospectus as being owned by it, free and clear of
all liens, security interests, charges or encumbrances and the like, except such
as are expressly described or referred to in the Prospectus or such as would not
have a Material Adverse Effect. The Company has adequately insured its property
against loss or damage by fire or other casualty and maintains,
-8-
<PAGE>
in amounts reasonably believed by it to be adequate, insurance against such
other risks as management of the Company deems appropriate. All real and
personal property leased by the Company, as described or referred to in the
Prospectus, is held by the Company under valid leases. The executive offices and
the other facilities of the Company (the "Premises"), and all operations
presently or formerly conducted thereon by the Company, are now and, since the
Company began to use such Premises, always have been and, to the knowledge of
the Company, prior to when the Company began to use such Premises, always had
been, in compliance with all federal, state and local statutes, ordinances,
regulations, rules, standards and requirements of common law concerning or
relating to industrial hygiene and the protection of health and the environment
(collectively, "the Environmental Laws"), except to the extent that any failure
to be in such compliance would not have a Material Adverse Effect. There are no
conditions on, about, beneath or arising from the Premises or at any other
location that might give rise to liability, the imposition of a statutory lien
or require a "Response," "Removal" or "Remedial Action," as defined herein,
under any of the Environmental Laws, and that would have a Material Adverse
Effect. Except as expressly disclosed in the Prospectus, or where such items
will not result in any Material Adverse Effect, (A) neither the Company nor any
Subsidiary has received notice or has knowledge of any claim, demand,
investigation, regulatory action, suit or other action instituted or threatened
against the Company or any portion of the Premises relating to any of the
Environmental Laws and (B) the Company has not received any notice of material
violation, citation, complaint, order, directive, request for information or
response thereto, notice letter, demand letter or compliance schedule to or from
any governmental or regulatory agency arising out of or in connection with
"hazardous substances" (as defined by applicable Environmental Laws) on, about,
beneath, arising from or generated at the Premises or at any other location. As
used in this subsection, the terms "Response," "Removal" and "Remedial Action"
shall have the respective meanings assigned to such terms under Sections
101(23) - 101(25) of the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act,
42 U.S.C. 9601(23)-9601(25);
(xxii) the Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that: (A)
transactions are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(xxiii) no unregistered securities of the Company
have been sold by the Company or on behalf of the Company by any person or
persons controlling, controlled by, or under common control with the Company
within the three years prior to the date hereof, except as expressly disclosed
in the Registration Statements;
(xxiv) the Company has not had and does not now have
any employee benefit plan, profit sharing plan, employee pension benefit plan or
employee welfare benefit plan or deferred compensation arrangements ("Plans")
that are subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended, or the rules and regulations thereunder ("ERISA") and
that are not in compliance with ERISA, in all material respects, and,
-9-
<PAGE>
to the extent required by the Internal Revenue Code of 1986, as amended (the
"Code"), in compliance with the Code in all material respects. The Company has
not had any employee pension benefit plan that is subject to Part 3 of Subtitle
B of Title I of ERISA or any defined benefit plan or multi-employer plan. The
Company has not maintained retired life and retired health insurance plans that
are employee welfare benefit plans providing for continuing benefit or coverage
for any employee or any beneficiary of any employee after such employee's
termination of employment, except as required by Section 4980B of the Code. No
fiduciary or other party in interest with respect to any of the Plans has caused
any of such Plans to engage in a prohibited transaction as defined in Section
406 of ERISA. As used in this subsection, the terms "defined benefit plan,"
"employee benefit plan," "employee pension benefit plan," "employee welfare
benefit plan," "fiduciary" and "multiemployer plan" shall have the respective
meanings assigned to such terms in Section 3 of ERISA;
(xxv) no labor dispute exists with the Company's
employees, and to the Company's knowledge no such labor dispute is threatened.
The Company has no knowledge of any existing or threatened labor disturbance by
the employees of any of its principal suppliers, contractors or customers that
would have a Material Adverse Effect;
(xxvi) the Company has not incurred any liability for
any finder's fees or similar payments in connection with the transactions
contemplated herein other than as disclosed in the Prospectus;
(xxvii) the Company is familiar with the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and have in the past conducted, and the Company intends to conduct,
its affairs in such a manner as to ensure that it will not be an "investment
company" within the meaning of the 1940 Act and the rules and regulations
thereunder;
(xxviii) no statement, representation, warranty or
covenant made by the Company in this Agreement or in any certificate or document
required by this Agreement to be delivered to the Representatives is, was when
made, or as of the Closing Date or any Option Closing Date will be, inaccurate,
untrue or incorrect in any material respect. No transaction has occurred or is
proposed between or among the Company (or any Subsidiary) and any of its (or any
of its Subsidiaries') officers, directors or stockholders or any affiliate of
any such officer, director or stockholder that is required to be described in
and is not described in the Registration Statements and the Prospectus;
(xxix) neither the Company nor any officer, director,
employee, agent or other person acting on behalf of the Company has, directly or
indirectly, given or agreed to give any money, property or similar benefit or
consideration to any customer or supplier (including any employee or agent of
any customer or supplier) or official or employee of any agency or
instrumentality of any government (foreign or domestic) or political party or
candidate for office (foreign or domestic) or any other person who was, is or in
the future may be in a position to affect the general affairs, properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or prospects of the Company or any actual or proposed business
transaction of the Company that (A) could subject the Company to any liability
(including, but not limited to, the payment of monetary damages) or penalty in
any civil, criminal or governmental action or proceeding that would have a
Material Adverse
-10-
<PAGE>
Effect, or (B) violates any law, rule or regulation to which the Company is
subject, which violation if proven would have a Material Adverse Effect; and
(xxx) each person listed on Schedule IV hereto has
executed an agreement in a form reasonably satisfactory to the Representatives
that such person will not, for the period specified in such agreement (the
"Lock-up Period"), offer to sell, contract to sell, or otherwise sell, dispose
of, loan, pledge or grant any rights with respect to (collectively, a
"Disposition") any Common Shares, any options or warrants to purchase any Common
Shares or any securities convertible into or exchangeable for Common Shares
(collectively, "Securities") now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires the power
of disposition, otherwise then as specified in such agreement or with the prior
written consent of the Representatives; provided, however, that the forgoing
language shall not prohibit the purchase of Common Stock from the Company
pursuant to the exercise of stock options. The Company has provided to counsel
for the Underwriters a complete and accurate list of all securityholders of the
Company and the number and type of securities held by each securityholder. The
Company has provided to counsel for the Underwriters true, accurate and complete
copies of all of the agreements pursuant to which its officers, directors and
shareholders have agreed to such or similar restrictions (the "Lock-Up
Agreements").
Any certificate signed by any officer of the Company in such capacity
and delivered to the Representatives or to counsel for the Underwriters pursuant
to this Agreement shall be deemed a representation and warranty by the Company
to the several Underwriters as to the matters covered thereby.
(b) Representations and Warranties The Selling Shareholders.
Certain of the Selling Shareholders own 10% Convertible Senior Subordinated
Notes issued by the Company (the "Notes"), and such Selling Shareholders have
deposited the Notes owned by them with the Custodian (as defined below) with
instructions, inter alia, to convert the Notes into Common Shares. Each of the
Selling Shareholders represents and warrants to, and agrees with, the several
Underwriters that:
(i) such Selling Shareholder (other than The Gemstone
Group, Inc. ("Gemstone")) has duly executed and delivered a Custody Agreement
and Power of Attorney (the "Custody Agreement") (which term shall also include
the custody agreement enetered into by Gemstone and the Custodian (as defined
below)), in the form heretofore delivered to the Representatives, appointing
either Edward Rosen and Marvin Demchick or martin E. Judge, Jr. as such Selling
Shareholder's attorneys-in-fact (the "Attorneys-in-Fact"), and appointing
StockTrans, Inc. as custodian (the "Custodian"). The Attorneys-in-Fact are
authorized to execute, deliver and perform the Custody Agreement and this
Agreement on behalf of such Selling Shareholder, including, without limitation,
the authority to determine the purchase price to be paid to each Selling
Shareholder by the Underwriters as set forth in Section 2 of this Agreement.
Gemstone has not appointed an attorney-in-fact, but has entered into a custody
agreement with the Custodian. Notes or Certificates in negotiable form
representing the Shares to be sold by each Selling Shareholder hereunder have
been deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery pursuant to this Agreement. Such Selling Shareholder agrees
that the Shares into which the Notes are convertible or the Shares represented
by the certificates on deposit with the Custodian are
-11-
<PAGE>
subject to the interests of the Underwriters hereunder, that the arrangements
made for such custody and the appointment of the Attorneys-in-Fact are to that
extent irrevocable, and that the obligations of such Selling Shareholder
hereunder shall not be terminated, except as provided in this Agreement, by any
act of such Selling Shareholder, by operation of law or otherwise, whether by
the dissolution, reorganization, death or incapacity of such Selling Shareholder
or the occurrence of any other event. If any such dissolution, reorganization,
death, incapacity or other such event should occur before the delivery of the
Shares to be sold by the affected Selling Shareholder hereunder, and
certificates for such Shares shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement, as if such dissolution,
reorganization, death, incapacity, or other event had not occurred, regardless
of whether or not the Custodian or Attorneys-in-Fact shall have received notice
thereof;
(ii) such Selling Shareholder has all requisite
right, power and authority to enter into this Agreement and the Custody
Agreement, and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder hereunder, and this Agreement and the Custody Agreement have
been duly authorized, executed and delivered by such Selling Shareholder and
constitute the legal, valid and binding obligations of such Selling Shareholder
enforceable in accordance with their respective terms;
(iii) the execution, delivery and performance, and
the consummation of the transactions contemplated hereby and by the Prospectus
and the Custody Agreement do not and shall not, with or without the giving of
notice or lapse of time or both, (A) conflict with any term or provision of such
Selling Shareholder's charter, bylaws or other organic or governing documents,
if applicable, (B) conflict with or result in a breach or a violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder or any of his, her or its Shares is
bound, or (C) violate any existing, applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over such Selling Shareholder or any of
his, her or its Shares;
(iv) all authorizations, approvals and consents
necessary for the valid execution and delivery by such Selling Shareholder of
the Custody Agreement have been obtained and are in full force and effect, and
the sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder (other than, at the time of the execution hereof, the issuance of the
order of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under the state
securities or Blue Sky laws and the Bylaws, rules and pronouncements of the
NASD), have been obtained and are in full force and effect;
(v) such Selling Shareholder now is, and on the
Closing Date and any Option Closing Date will be, the lawful owner of the Shares
to be sold by such Selling Shareholder pursuant to this Agreement. On the
Closing Date and any option Closing Date, such Selling Shareholder will have
good and marketable title to such Shares, free and clear of all liens,
encumbrances, security interests or other restrictions (other than those created
under the Custody Agreement). Upon proper delivery of, and payment for, such
Shares as provided herein, the Underwriters will acquire good and marketable
title thereto, free and clear of all liens, encumbrances, security interests and
other restrictions and defects whatsoever;
(vi) to the knowledge of such Selling Shareholder,
the representations and warranties of the Company contained in Section l(a)
hereof are true and correct. Such Selling Shareholder has examined the Primary
Registration Statement and the Prospectus and has no knowledge of any fact,
condition or information not disclosed therein that has had or could reasonably
be expected to have a Material Adverse Effect. To the knowledge of such Selling
Shareholder, neither the Primary Registration Statement nor the Prospectus
-12-
<PAGE>
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Such Selling Shareholder is not prompted to sell the Shares to be sold by such
Selling Shareholder hereunder by any information concerning the Company or the
Subsidiary that is not set forth in the Prospectus;
(vii) such Selling Shareholder has examined the
Primary Registration Statement and the Prospectus and the information relating
to such Selling Shareholder set forth therein and, as to such information,
neither the Primary Registration Statement nor the Prospectus contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(viii) such Selling Shareholder has not incurred any
liability for any finder's fee or similar payment in connection with the sale of
such Selling Shareholder's Shares hereunder; and
(ix) such Selling Shareholder has not distributed and
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statements, a Preliminary
Prospectus, the Prospectus and other material, if any, permitted by the Act and
the Regulations. Neither such Selling Shareholder nor any affiliate of such
Selling Shareholder has taken or shall take any action designed, or that might
be reasonably expected, to cause or result in stabilization or manipulation of
the price of the Shares.
2. Purchase and Sale of Firm Shares. On the basis of the
representations, warranties, covenants and agreements contained herein, and
subject to the terms and conditions set forth herein, the Company shall sell
3,000,000 of the Firm Shares, and each Selling Shareholder, severally and not
jointly, shall sell the number of Firm Shares set forth opposite his name in
Table 1 of Schedule II hereto, to the several Underwriters, and each of the
Underwriters, severally and not jointly, shall purchase the number of Firm
Shares set forth opposite its name in Schedule I hereto. The purchase price of
the Firm Shares hereunder shall be the Offering Price less the Underwriting
Discounts and Commissions shown on the cover page of the Prospectus. Each
Underwriter shall be obligated to purchase from the Company, and from each
Selling Shareholder, that number of Firm Shares that represents the same
proportion of the number of Firm Shares to be sold by the Company, and by each
Selling Shareholder, as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto represents of the total number of Firm
Shares to be purchased by all of the Underwriters pursuant to this Agreement.
The respective purchase obligations of the Underwriters with respect to the Firm
Shares shall be rounded among the Underwriters to avoid fractional shares, as
the Representatives may determine. In making this Agreement, each Underwriter is
contracting severally and not jointly, and except as provided in Sections 4 and
11 hereof, the agreement of each Underwriter is to purchase only that number of
shares specified with respect to that Underwriter in Schedule I hereto. The
several Underwriters intend to offer the Shares to the public as set forth in
the Prospectus; provided, however, that no Shares registered pursuant to the
Rule 462(b) Registration Statement, if any, will be offered prior to the filing
of such
-13-
<PAGE>
registration statement with the SEC. After the initial public offering, the
several Underwriters may, in their discretion, vary the public offering price.
3. Payment and Delivery.
(a) Delivery of and payment for the Firm Shares shall be made
at the offices of Janney Montgomery Scott Inc., 1801 Market Street,
Philadelphia, Pennsylvania at 10:00 a.m., Philadelphia, Pennsylvania time (i) on
the third full business day following the first day that the Firm Shares are
traded, (ii) if this Agreement is executed and delivered after 4:30 p.m.,
Philadelphia, Pennsylvania time, the fourth full business day following the day
this Agreement is executed and delivered, or (iii) at such other time and date
not later than seven full business days following the first day the Firm Shares
are traded as the Representatives and the Company may determine (or at such time
and date to which delivery and payment shall have been postponed pursuant to
Section 11 hereof). Such date and time of delivery and payment are referred to
collectively herein as the "Closing Date." Notwithstanding the foregoing, if the
Company has not made available to the Representatives copies of the Prospectus
in the quantities and within the time provided for in Section 5(a)(vii) hereof,
the Representatives may, in their sole discretion, postpone the Closing Date
until no later than two full business days following delivery of such copies of
the Prospectus to the Representatives.
(b) On the Closing Date, the Company and the Selling
Shareholders shall deliver or cause to be delivered certificates representing
the Firm Shares to the Representatives for the account of each Underwriter
against payment to or upon the order of the Company (with respect to the Firm
Shares sold by it) and the Custodian (with respect to the Firm Shares sold by
the Selling Shareholders) of the purchase price (i) by certified or official
bank check or checks payable in New York Clearing House (next-day) funds, or
(ii) in immediately available funds wired to such accounts as the Company and/or
the Custodian may specify (with all costs and expenses incurred by the
Underwriters in connection with such settlement in immediately available funds,
including, but not limited to, interest or cost of funds expense, to be borne by
the Company and/or the Selling Shareholders, as the case may be). Time is of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of each Underwriter's obligation hereunder.
(c) The certificates representing the Firm Shares to be sold
and delivered will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and will be made available to the Representatives for inspection,
checking and packaging at the offices of Janney Montgomery Scott Inc., 26
Broadway, New York, New York, not less than one full business day prior to the
Closing Date. If the Representatives so elect, delivery of the Firm Shares may
be made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representatives.
(d) The Company and the Selling Shareholders shall not be
obligated to deliver any Firm Shares to be delivered on the Closing Date, except
upon payment for all the Firm Shares to be purchased on such date.
-14-
<PAGE>
4. Option to Purchase Optional Shares.
(a) For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, subject to the terms and conditions herein set forth, the
several Underwriters are hereby granted an option by the Company and the Selling
Shareholders to purchase all or any part of the Optional Shares (the
"Over-allotment Option"). The purchase price to be paid for the Optional Shares
shall be the Offering Price less the Underwriting Discounts and Commissions
shown on the cover page of the Prospectus. The Over-allotment Option granted
hereby may be exercised by the Representatives on behalf of the several
Underwriters as to all or any part of the Optional Shares at any time and from
time to time within 30 days after the date of the Prospectus. No Underwriter
shall be under any obligation to purchase any Optional Shares prior to an
exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be exercised
by the Representatives on behalf of the several Underwriters by giving notice to
the Company and the Selling Shareholders by a letter delivered by hand or sent
by registered or certified mail, postage prepaid, or by courier, telex,
telegraph, telegram or facsimile (such notice to be effective when received),
addressed as provided in Section 13 hereof, setting forth the number of Optional
Shares to be purchased, the date and time for delivery of, and payment for, such
Optional Shares and stating that the Optional Shares referred to therein are to
be used for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given at least two
full business days prior to the Closing Date, the date set forth therein for
such delivery and payment shall be the Closing Date. If such notice is given
less than two full business days prior to the Closing Date, the date set forth
therein for such delivery and payment shall be a date selected by the
Representatives that is not more than three full business days after the date
the notice is effective. The date and time set forth in such a notice is
referred to herein as an "Option Closing Date," and a closing held pursuant to
such a notice is referred to herein as an "Option Closing." Upon each exercise
of the Over-allotment Option, and on the basis of the representations,
warranties, covenants and agreements herein contained, and subject to the terms
and conditions herein set forth, the several Underwriters shall become
severally, but not jointly, obligated to purchase from the Selling Shareholders
and the Company the number of Optional Shares specified in each notice of
exercise of the Over-allotment Option (allocated among the several Underwriters
in accordance with Section 4(c) hereof).
(c) To the extent any Optional Shares are purchased, then the
Underwriters shall purchase all the Optional Shares of the Selling Shareholders,
as reflected in Table 2 of Schedule II hereto, before they purchase any Optional
Shares of the Company. Further, the Underwriters shall purchase all the Optional
Shares of the Selling Shareholders listed in Section A of Table 2 of Schedule II
hereto before they purchase any Optional Shares from the Selling Shareholders
listed in Section B of Table 2 of Schedule II hereto. To the extent the number
of Optional Shares to be purchased by the Underwriters at any Option Closing
accounts for some but not all of the Optional Shares of the Selling Shareholders
listed in either Section A or Section B of Table 2 of Schedule II hereto, then
the Underwriters shall purchase Optional Shares from such group of Selling
Shareholders pro rata in proportion to the amounts set forth opposite their
names in the relevant section of Table 2 of Schedule II hereto. At each Option
Closing, the Selling Shareholders will be obligated, severally and not
-15-
<PAGE>
jointly, to sell their Optional Shares to the Underwriters in accordance with
the foregoing sentences. Subject to the foregoing, at each Option Closing, each
Underwriter shall be obligated, severally and not jointly, to purchase from each
Selling Shareholder, and from the Company, that number of Optional Shares that
represents the same proportion of the number of Optional Shares to be sold by
each Selling Shareholder, and by the Company, as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto represents of
the total number of Firm Shares to be purchased by all of the Underwriters
pursuant to this Agreement. Notwithstanding the foregoing, the number of
Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and shall be subject to the
provisions for the allocation of Optional Shares purchased for the purpose of
covering over-allotments set forth in the agreement entered into by and among
the Underwriters in connection herewith (the "Agreement Among Underwriters").
(d) Delivery of and payment for the Optional Shares to be
purchased by the several Underwriters pursuant to any exercise of the
Over-allotment Option shall be made at the offices of Janney Montgomery Scott
Inc., 1801 Market Street, Philadelphia, Pennsylvania, or such other place as
shall be agreed upon by the Company and the Representatives at 10:00 a.m.,
Philadelphia, Pennsylvania time on the Option Closing Date set forth in the
notice of such exercise. On such Option Closing Date, the Selling Shareholders
(who are obligated to sell Optional Shares pursuant to Section 4(c) hereof) and
the Company, if applicable, shall deliver or cause to be delivered certificates
representing the Optional Shares to the Representatives for the account of each
Underwriter against payment to or upon the order of the Custodian (with respect
to Optional Shares sold by Selling Shareholders) and the Company (with respect
to Optional Shares sold by it, if any), (i) by certified or official bank check
or checks payable in New York Clearing House (next-day) funds, or (ii) in
immediately available funds wired to such accounts as the Custodian and the
Company may specify (with all costs and expenses incurred by the Underwriters in
connection with such settlement in immediately available funds, including, but
not limited to, interest or cost of funds expense, to be borne by the Selling
Shareholders and the Company). Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder.
(e) The certificates representing the Optional Shares to be
issued and delivered will be in such denominations and registered in such names
as the Representatives request not less than two full business days prior to the
Option Closing Date, and will be made available to the Representatives for
inspection, checking and packaging at the Philadelphia correspondent office of
the Company's transfer agent not less than one full business day prior to the
Option Closing Date. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives.
-16-
<PAGE>
5. Certain Covenants and Agreements.
(a) Certain Covenants and Agreements of the Company. The
Company covenants and agrees with the several Underwriters as follows:
(i) if the Rule 462(b) Registration Statement has not
been filed at the time this Agreement is executed and delivered by the parties
hereto and such Rule 462(b) Registration Statement is required to be filed, the
Company will use its best efforts to cause such registration statement to be
filed and become effective as promptly as possible;
(ii) if the Company omitted information from the
Primary Registration Statement at the time it was declared effective in reliance
upon Rule 430A of the Regulations, the Company will timely file the Prospectus
pursuant to and in compliance with Rule 424(b)(1) or (4) and Rule 430A(a)(3) of
the Regulations and will advise the Representatives of the time and manner of
such filing; provided, however, that if the Representatives shall agree to the
utilization of Rule 434 of the Regulations, the Company will timely file
pursuant to and in compliance with Rule 424(b)(7) and Rule 430A(a)(3) of the
Regulations the information required to be included in the Term Sheet, and will
advise the Representatives of the time and manner of such filing;
(iii) if for any reason the filing of a form of
Prospectus is required under Rule 424(b)(3) of the Regulations, the Company will
timely file such Prospectus pursuant to and in compliance with such Rule and
will advise the Representatives of the time and manner of such filing;
(iv) the Company will not file or publish any Rule
462(b) Registration Statement or any amendment or supplement to the Registration
Statement(s), Preliminary Prospectus or Prospectus at any time before the
completion (in the opinion of the Underwriters' counsel) of the distribution of
the Shares by the Underwriters that is not (A) in compliance with the
Regulations and (B) approved by the Representatives (such approval not to be
unreasonably withheld or delayed);
(v) the Company will advise the Representatives
immediately, and confirm such advice in writing, (A) when any Rule 462(b)
Registration Statement or post-effective amendment to the Registration
Statements is filed with the SEC, (B) of the receipt of any comments from the
SEC concerning the Registration Statements, (C) when any post-effective
amendment to the Registration Statements becomes effective, or when any
supplement to the Prospectus or any amended Prospectus has been filed, (D) of
any request of the SEC for amendment or supplementation of the Registration
Statements or Prospectus or for additional information, (E) during the period
when the Prospectus is required to be delivered under the Act and Regulations,
of the happening of any event as a result of which the Registration Statements
would include an untrue statement of a material fact or omit to state a material
fact required therein or necessary to make the statements therein not
misleading, or as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
(F) during the period noted in clause (E) above, of the need to amend the
Registration Statements or supplement the Prospectus to comply with the Act,
-17-
<PAGE>
(G) of the issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statements or of any order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus, and (H) of the suspension of the
qualification of any of the Shares for offering or sale in any jurisdiction in
which the Underwriters intend to make such offers or sales, or of the initiation
or threatening of any proceedings for any of such purposes known to the Company.
The Company will use its reasonable best efforts to prevent the issuance of any
such stop order or of any order preventing or suspending such use, and if any
such order is issued, to obtain as soon as possible the lifting thereof;
(vi) in case of any event (occurring at any time
within the period during which, in the opinion of Saul, Ewing, Remick & Saul,
counsel for the Underwriters ("Underwriters' Counsel"), a prospectus is required
to be delivered under the Act and Regulations), as a result of which any
Preliminary Prospectus or the Prospectus, as then amended or supplemented, would
contain, in the opinion of Underwriters' Counsel, an untrue statement of a
material fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act and Regulations or any
applicable securities or Blue Sky laws, the Company promptly will prepare and
file with the SEC, and any applicable state securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters such number of
copies of such amendments, supplements or documents (in form and substance
satisfactory to the Representatives and counsel for the Underwriters) as the
Representatives may reasonably request. For purposes of this Section 5(a)(vi),
the Company will provide such information to the Representatives, the
Underwriters' Counsel and counsel to the Company as shall be necessary to enable
such persons to consult with the Company with respect to the need to amend or
supplement the Registration Statements, Preliminary Prospectus or Prospectus or
file any document, and shall furnish to the Representatives and the
Underwriters' Counsel such further information as each may from time to time
reasonably request;
(vii) from time to time during the nine-month period
following the effective date of the Primary Registration Statement, the Company
will, without charge, deliver to the Representatives, as soon as such documents
are available (but in the case of the Prospectus, including the Term Sheet, if
any, no later than 10:00 a.m., Philadelphia, Pennsylvania time, on the first
full business day following the execution and delivery of this Agreement, and in
the case of any amended or supplemented Prospectus, no later than 10:00 a.m.,
Philadelphia, Pennsylvania time, on the first full business day following the
date of such amendment or supplement), copies of the following documents in such
quantities as the Representatives shall request (ten copies to be furnished
automatically in the absence of or pending a quantity specification by the
Representatives): (A) the Registration Statements, at least one of each of which
will be manually executed and will include all exhibits, and all amendments and
supplements thereto (B) each Preliminary Prospectus; (C) if Rule 434 of the
Regulations is utilized with the consent of the Representatives, the Preliminary
Prospectus updated in all respects through the date specified by the
Representatives; and (D) the Prospectus and any amendment or supplement thereto,
including any prospectus prepared to comply with Section 10(a)(3) of the Act.
The Company hereby consents to the use of such copies of the Preliminary
Prospectus and the Prospectus for purposes permitted by the Act,
-18-
<PAGE>
the Regulations and the securities or Blue Sky laws of the states in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act and
Regulations to be delivered in connection with sales by any Underwriter or
dealer;
(viii) if any Underwriter is required to deliver a
Prospectus nine months or more after the effective date of the Registration
Statements in connection with the sale of the Shares, the Company will prepare
promptly upon request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statements and such Prospectus or Prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act;
(ix) the Company will comply with the Act, the
Regulations, the Exchange Act and the rules and regulations thereunder so as to
permit the continuance of sales of, and dealings in, the Shares for as long as
may be necessary to complete the distribution of the Shares as contemplated
hereby;
(x) the Company will furnish such information and pay
such filing fees and other expenses as may be required, and otherwise cooperate
in the registration or qualification of the Shares, or exemption therefrom, for
offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions in which the Representatives
determine to offer the Shares, after consultation with the Company, and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided,
however, that no such qualification shall be required in any jurisdiction where,
solely as a result thereof, the Company would be subject to taxation or
qualification as a foreign corporation doing business in such jurisdiction where
it is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject. The
Company will, from time to time, prepare and file such statements and reports as
are or may be required to continue such qualification in effect for so long a
period as is required under the laws of such jurisdictions for such offering and
sale;
(xi) the Company will make generally available to its
security holders, as soon as practicable, but not later than 45 days after the
end of the period covered thereby, an earnings statement of the Company (which
need not be audited unless required by the Act or the Regulations) that shall
comply with Section 11(a) of the Act and the Regulations (including, at the
option of the Company, Rule 158) and cover a period of at least 12 consecutive
months beginning not later than the first day of the Company's fiscal quarter
next following the Effective Date;
(xii) for a period of two years from the Effective
Date, the Company will deliver to the Representatives: (A) a copy of each report
or document, including, without limitation, reports on Forms 8-K, 10-C, 10-K and
10-Q (or such similar forms as may be designated by the SEC), registration
statements and any exhibits thereto, filed with or furnished to the SEC or any
securities exchange or the Nasdaq Stock Market or the NASD, on the date each
such report or document is so filed or furnished; (B) as soon as practicable,
-19-
<PAGE>
copies of any reports or communications (financial or other) of the Company
mailed to its security holders; and (C) every material press release in respect
of the Company or its affairs that is released or prepared by the Company.
(xiii) during the course of the distribution of the
Shares, the Company will not take, directly or indirectly, any action designed
to, or that could reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Shares;
(xiv) for a period of no less than three years from
the Effective Date, the Company will not engage in any transactions with
affiliates (as defined in the Regulations) without the prior approval of a
majority of the disinterested members of its Board of Directors;
(xv) for a period of no less than three years from
the Effective Date, the Company will use all reasonable efforts to maintain the
inclusion of the Common Shares (including, without limitation, the Shares) for
quotation on the Nasdaq Stock Market;
(xvi) the Company shall, at its sole cost and
expense, supply and deliver to the Representatives and the Underwriters'
Counsel, within a reasonable period from the Closing Date, six transaction
binders, each of which shall include the Registration Statements, as amended or
supplemented, all exhibits to the Registration Statements, the Prospectus, as
amended or supplemented, the Preliminary Blue Sky Memorandum and any supplement
thereto, all underwriting and closing documents and all other correspondence,
filings and applications with the SEC, the NASD and the Nasdaq Stock Market;
(xvii) the Company will use the net proceeds from the
sale of the Shares to be sold by it hereunder substantially in accordance with
the description set forth under the caption "Use of Proceeds" in the Prospectus
and shall file such reports with the SEC with respect to the sale of such Shares
and the application of the proceeds therefrom as may be required under the
Regulations, including, but not limited to, Rule 463;
(xviii) the Company will maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for its Common
Shares;
(xix) the Company will take such steps, during the
three-year period after the Effective Date, as shall be necessary to insure that
neither it nor any subsidiary shall become an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the SEC thereunder;
(xx) during the Lock-Up Period, the Company will not,
without the prior written consent of the Representatives, effect the Disposition
of, directly or indirectly, any Securities other than the sale of the Firm
Shares and the Optional Shares hereunder and the Company's issuance of options
or Common Shares under warrants or other rights to purchase outstanding as of
the date hereof and expressly described in the Prospectus and the Company's
stock option and stock purchase plans that are either presently authorized (and
expressly described in the Prospectus) or hereafter approved by the Shareholders
of the Company (the "Stock Plans"); and
-20-
<PAGE>
(xxi) the Company will consummate its acquisition of
all of the outstanding shares of capital stock of Judge Imaging Systems, Inc., a
publicly held Delaware corporation (the "JIS Acquisition"), which acquisition is
the subject of a registration statement on Form S-4 (File No. 333-13753)
declared effective by the SEC on December 23, 1996 on or before the Closing
Date.
(b) Certain Covenants and Agreements of the Selling
Shareholders. Each Selling Shareholder covenants and agrees with the several
Underwriters as follows:
(i) during the course of the distribution of the
Shares, such Selling Shareholder shall not take, directly or indirectly, any
action designed to, or that could reasonably be expected to, cause or result in
stabilization or manipulation of the market price of the Shares;
(ii) during the Lock-Up Period, such Selling
Shareholder will not, without the prior written consent of the Representatives,
effect the Disposition of, directly or indirectly, any Securities other than
such Selling Shareholder's Firm Shares and Optional Shares hereunder; and
(iii) such Selling Shareholder will deliver to the
Representatives prior to the Closing Date a properly completed and executed
United States Treasury Department Form W-8 (if the Selling Shareholder is a
non-United States person) or Form W-9 (if the Selling Shareholder is a United
States person).
6. Payment of Fees and Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated and regardless of the reason this Agreement is
terminated, the Company will pay or cause to be paid, and bear or cause to be
borne, all costs and expenses incident to the performance of the obligations of
the Company and the Selling Shareholders under this Agreement, including:
(i) the fees and expenses of the accountants and
counsel for the Company incurred in the preparation of the Registration
Statements and any post-effective amendments thereto (including financial
statements and exhibits), Preliminary Prospectuses and the Prospectus and any
amendments or supplements thereto;
(ii) printing and mailing expenses associated with
the Registration Statements and any post-effective amendments thereto,
Preliminary Prospectus, the Prospectus, this Agreement, the Agreement Among
Underwriters, the Underwriters' Questionnaire submitted to each of the
Underwriters by the Representatives in connection herewith, the Power of
Attorney executed by each of the Underwriters in favor of the Representatives in
connection herewith, the Selected Dealer Agreement and related documents and the
preliminary Blue Sky memorandum (collectively with any supplement thereto, the
"Blue Sky Memorandum");
-21-
<PAGE>
(iii) the costs (other than fees and expenses of the
Underwriters' Counsel, except such fees incurred in connection with Blue Sky and
NASD filings or exemptions as provided herein) incident to the authentication,
insurance, sale and delivery of the Shares to the Underwriters;
(iv) the fees, expenses and all other costs of
qualifying the Shares for sale under the securities or Blue Sky laws of those
states in which the Shares are to be offered or sold, including, without
limitation, the reasonable fees and expenses (up to $10,000) of Underwriters'
Counsel and such local counsel as may have been reasonably required and retained
for such purpose;
(v) the fees, expenses and other costs of, or
incident to, securing any review or approvals by or from the NASD, including the
reasonable fees and expenses of the Underwriters' Counsel;
(vi) the filing fees of the SEC;
(vii) the cost of furnishing to the Underwriters
copies of the Registration Statements, Preliminary Prospectuses and Prospectuses
as herein provided;
(viii) the Company's travel expenses in connection
with meetings with the brokerage community and institutional investors;
(ix) the costs and expenses associated with
settlement in same day funds (including, but not limited to, interest or cost of
funds expenses), if desired by the Company;
(x) any fees or costs payable to the Nasdaq Stock
Market as a result of the offering;
(xi) the cost of printing certificates for the
Shares;
(xii) the cost and charges of any transfer agent;
(xiii) the costs (up to $25,000) of advertising the
offering, including, without limitation, with respect to the placement of
"tombstone" advertisements in publications selected by the Representatives;
(xiv) all taxes, if any, on the issuance, delivery
and transfer of the Shares sold by the Company; and
(xv) all other costs and expenses reasonably incident
to the performance of the Company's and the Selling Shareholders' obligations
hereunder that are not otherwise specifically provided for in this Section 6(a);
provided, however, that, except as specifically set forth in Section 6(c)
hereof, (A) the Underwriters shall be responsible for their out-of-pocket
expenses, including those associated with meetings with the brokerage community
and institutional investors, other than the Company's travel expenses, and the
fees and expenses of their counsel for other than Blue Sky and NASD matters, and
(B) the Selling
-22-
<PAGE>
Shareholders shall be responsible for any transfer or income taxes assessed with
respect to the Shares sold by the Selling Shareholders and any fees and expenses
of the Selling Shareholders' counsel and such other expenses as are agreed to by
the Company and the Selling Shareholders or as may be required by law or
regulation.
(b) The Company shall pay as due any state registration,
qualification and filing fees and any accountable out-of-pocket disbursements in
connection with such registration, qualification or filing in the states in
which the Representatives determine to offer or sell the Shares.
(c) If the Underwriters are willing to proceed with the
offering, and the transactions contemplated by this Agreement are not
consummated because the Company or the Selling Shareholders elect not to proceed
with the offering for any reason or if the Representatives terminate this
Agreement pursuant to Section 10(b) hereof, then the Company will reimburse the
Representatives for their out-of-pocket expenses, including, without limitation,
fees and disbursements of Underwriters' Counsel, incurred in connection with
investigating, marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder, in an amount not to exceed $150,000.
7. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
option Closing Date, to the continuing accuracy and fulfillment of the
representations and warranties of the Company and the Selling Shareholders, to
the performance by the Company and the Selling Shareholders of their covenants
and obligations hereunder, and to the following additional conditions:
(a) if required by the Regulations, the Prospectus shall have
been filed with the SEC pursuant to Rule 424(b) of the Regulations within the
applicable time period prescribed for such filing by the Regulations. On or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Primary Registration Statement or the Rule 462(b) Registration Statement, if
any, or the sale of any of the Shares shall have been issued under the Act or
any state securities law, and no proceedings for that purpose shall have been
initiated or shall be pending or, to the Representatives' knowledge or the
knowledge of the Company, shall be contemplated by the SEC or by any authority
in any jurisdiction designated by the Representatives pursuant to Section
[5(a)(x)] hereof. Any request on the part of the SEC for additional information
shall have been complied with to the reasonable satisfaction of Underwriters'
Counsel;
(b) all corporate proceedings and other matters incident to
the authorization, form and validity of this Agreement, the Shares and the form
of the Registration Statements and the Prospectus, as amended and supplemented,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all material respects to
Underwriters' Counsel. The Company and the Selling Shareholders shall have
furnished to such counsel all documents and information that they may have
reasonably requested to enable them to pass upon such matters;
-23-
<PAGE>
(c) the NASD shall have indicated it has no objection to the
underwriting arrangements pertaining to the sale of any Shares;
(d) the Representatives shall have received a copy of an
executed Lock-up Agreement from each person described on Schedule IV hereto;
(e) the Representatives shall have received at or prior to the
Closing Date from the Underwriters' counsel a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the securities or
Blue Sky laws of such jurisdictions designated by the Representatives pursuant
to Section 5(a)(x) hereof;
(f) on the Closing Date and any Option closing Date, there
shall have been delivered to the Representatives signed opinions of Drinker
Biddle & Reath, counsel for the Company, dated as of each such date and
addressed to the Representatives individually and as representatives of the
several Underwriters to such effect as is reasonably satisfactory to the
Representatives;
(g) on the Closing Date and any option closing Date, there
shall have been delivered to the Representatives signed opinions of one or more
counsel for the Selling Shareholders, dated as of each such date and addressed
to the Representatives individually and as representatives of the several
Underwriters to such effect as is reasonably satisfactory to the
Representatives;
(h) at the Closing Date and any Option Closing Date: (i) the
Registration Statements and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and the Registration Statements and any
post-effective amendment thereto shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Prospectus,
as amended or supplemented, shall not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (ii) since the respective dates as of which information is
given in the Registration Statements and any post-effective amendment thereto
and the Prospectus and any amendments or supplements thereto, except as
otherwise expressly stated therein, there shall have been no material adverse
change in the properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or management of the Company and the
Subsidiary taken as a whole, from that set forth therein, whether or not arising
in the ordinary course of business; (iii) since the respective dates as of which
information is given in the Registration Statements and any post-effective
amendment thereto and the Prospectus or any amendment or supplement thereto,
there shall have been no event or transaction, contract or agreement entered
into by the Company or any Subsidiary, other than in the ordinary course of
business and as set forth in the Registration Statements or Prospectus, that has
not been, but would be required to be, set forth in the Registration Statements
or Prospectus; and (iv) no action, suit or proceeding at law or in equity shall
be pending or threatened against the Company or any Subsidiary that
-24-
<PAGE>
would be required to be set forth in the Prospectus, other than as set forth
therein, and no proceedings shall be pending or threatened against or directly
affecting the Company or any Subsidiary before or by any federal, state or other
commission, board or administrative agency wherein an unfavorable decision,
ruling or finding would have a Material Adverse Effect other than as set forth
in the Prospectus;
(i) the Representatives shall have received at the Closing
Date and any Option Closing Date certificates of the Company signed by the Chief
Executive Officer and the Chief Financial Officer of the Company dated as of the
date of the Closing Date or option Closing Date, as the case may be, and
addressed to the Representatives, individually and as representatives of the
several Underwriters, to the effect that (i) the signers of the certificate have
read this Agreement, and the representations and warranties of the Company in
this Agreement are true and correct in all material respects, as if made at and
as of the Closing Date or the Option Closing Date, as the case may be, and the
Company has complied in all material respects with all the agreements, fulfilled
in all material respects all the covenants and satisfied in all material
respects all the conditions on its part to be performed, fulfilled or satisfied
at or prior to the Closing Date or the Option Closing Date, as the case may be,
and (ii) the signers of the certificate have examined the Registration Statement
and the Prospectus and any amendments or supplements thereto, and the conditions
set forth in Section 7(h) hereof have been satisfied;
(j) the Representatives shall have received at the Closing
Date and any Option Closing Date certificates of or on behalf of the Selling
Shareholders dated as of the date of the Closing Date or Option Closing Date, as
the case may be, and addressed to the Representatives, individually and as
representatives of the several Underwriters, to the effect that (i) the Selling
Shareholders have read this Agreement, and the representations and warranties of
the Selling Shareholders in this Agreement are true and correct in all material
respects, as if made at and as of the Closing Date or the Option Closing Date,
as the case may be, and (ii) the Selling Shareholders have examined the
Registration Statement and the Prospectus and any amendments or supplements
thereto, and the conditions set forth in Section 7(h) hereof have been satisfied
with respect to the Selling Shareholders;
(k) at the time this Agreement is executed and at the Closing
Date and any Option Closing Date, the Representatives shall have received a
letter addressed to the Representatives, individually and as representatives of
the several Underwriters, in form and substance satisfactory to the
Representatives in all respects (including, without limitation, the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
from Rudolph, Palitz LLP dated as of the date of this Agreement, the Closing
Date or the Option Closing Date, as the case may be:
(i) confirming they are independent certified public
accountants within the meaning of the Act and the Regulations, and stating that
the section of the Primary Registration Statement under the caption "Experts" is
correct insofar as it relates to them;
-25-
<PAGE>
(ii) stating that, in their opinion, the consolidated
financial statements, schedules and notes of the Company and the Subsidiary
audited by them and included in the Registration Statements comply in form in
all material respects with the applicable accounting requirements of the Act and
the Regulations;
(iii) stating that, on the basis of specified
procedures, which included the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information, as
described in SAS No. 71, Interim Financial Information (with respect to the
latest unaudited consolidated financial statements of the Company included in
the Registration Statement), a reading of the latest available unaudited interim
consolidated financial statements of the Company (with an indication of the date
of the latest available unaudited interim financial statements), a reading of
the minutes of the meetings of the stockholders and the Boards of Directors of
the Company and the Subsidiaries, and audit and compensation committees of such
Boards, if any, and inquiries to certain officers and other employees of the
Company and the Subsidiaries responsible for operational, financial and
accounting matters and other specified procedures and inquiries, nothing has
come to their attention that would cause them to believe that (A) the unaudited
consolidated financial statements of the Company and the Subsidiary included in
the Registration Statements, (1) do not comply in form and all material respects
with the applicable accounting requirements of the Act and the Regulations, or
(2) should be materially modified in order for such unaudited financial
statements to be in conformity with generally accepted accounting principles;
(B) at a specified date not more than five business days prior to the date of
such letter, there was any change in the capital stock or debt of the Company or
any decrease in net current assets, total assets or stockholders' equity of the
Company as compared with the amounts shown in the September 30, 1996 unaudited
balance sheet of the Company included the Registration Statements, or that for
the periods from October 1, 1996 to the date of the latest available unaudited
financial statements of the Company and to a specified date not more than five
days prior to the date of the letter, there were any decreases, as compared to
the corresponding periods in the prior year, in sales, operating income or total
or per share amounts of net income, except in all instances for changes,
decreases or increases that the Registration Statements disclose have occurred
or may occur and except for such other changes, decreases or increases which the
Representatives shall in their sole discretion accept; or (C) the unaudited pro
forma financial statements included in the Registration Statements do not comply
as to form in all material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X under the Act and that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements; and
(iv) stating that they have compared specific dollar
amounts, numbers of shares and other numerical data and financial information
set forth in the Registration Statement that have been specified by the
Representatives prior to the date of this Agreement (to the extent that such
information is derived from the accounting records subject to the internal
control structure, policies and procedures of the Company's of the Subsidiary's
accounting system, or has been derived directly from such accounting records by
analysis or comparison or has been derived from other records and analyses
maintained or prepared by the Company or the Subsidiary) with the results
obtained from the application of readings, inquiries and other appropriate
procedures (which procedures do not constitute an audit in accordance with
-26-
<PAGE>
generally accepted auditing standards) set forth in the letter, and found them
to be in agreement;
(l) the Representatives shall have received from Rudolph
Palitz LLP a letter addressed to the Company and made available to the
Representatives for the use of the Underwriters stating that their review of the
Company's system of internal accounting controls, to the extent they deem
necessary in establishing the scope of their audit of the Company's consolidated
financial statements as of June 30, 1996, did not disclose any weaknesses in
internal controls that they considered to be material weaknesses;
(m) there shall have been duly tendered to the Representatives
for the respective accounts of the Underwriters certificates representing all of
the Shares to be purchased by the Underwriters on the Closing Date or any Option
Closing Date, as the case may be;
(n) at the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates as they shall have reasonably requested;
(o) the issuance and sale of the Shares shall be legally
permitted under applicable Blue Sky or state securities laws so long as such
sales are made in accordance with the Blue Sky Memorandum;
(p) the Representatives shall have received copies of the
executed Custody Agreement provided for in Section 1(b)(i) hereof for each
Selling Shareholder, and such documents shall have been approved in form and
substance by the Underwriters' Counsel, such approval not to be withheld
unreasonably;
(q) the JIS Acquisition shall have been consummated or all
actions necessary to be taken and all documents necessary to be delivered (other
than the consummation of the public offering contemplated hereby) in order to
consummate fully the JIS Acquisition shall have been taken or delivered, such
that the only remaining condition to the full consummation of the JIS
Acquisition shall be consummation of the public offering of the Firm Shares as
contemplated hereby, and upon the consummation of such public offering the JIS
Acquisition will be fully consummated automatically; and
(r) all corporate and other proceedings and other matters
incident to the authorization, form and validity of this Agreement and the form
of the Registration Statements and Prospectus and all other legal matters
related to this Agreement and the transactions contemplated hereby (including
but not limited to all opinions, certificates, letters and documents required or
permitted hereunder) shall be reasonably satisfactory in all respects to
Underwriters' Counsel. The Company and the Selling Shareholders shall have
furnished to such counsel all documents and information that they shall have
reasonably requested to enable them to pass upon such matters.
The Company and the Selling Shareholders shall furnish the
Representatives with such conformed copies of such opinions, certificates,
letters and other documents as they shall reasonably request. If any condition
to the Underwriters' obligations hereunder to be fulfilled prior to or at the
Closing Date or any Option Closing Date, as the case may be, is not fulfilled,
-27-
<PAGE>
the Representatives may on behalf of the several Underwriters, terminate this
Agreement with respect to the Closing Date or such Option Closing Date, as
applicable, or, if they so elect, waive any such conditions that have not been
fulfilled or extend the time for their fulfillment. Any such termination shall
be without liability of the Underwriters to the Company or the Selling
Shareholders.
8. Indemnification and Contribution.
(a) The Company and each Selling Shareholder, severally and
not jointly, shall indemnify and hold harmless each Underwriter, and each
person, if any, who controls each Underwriter within the meaning of the Act,
against any and all loss, liability, claim, damage and expense whatsoever,
including, but not limited to, any and all reasonable expenses incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever or in connection with any investigation or
inquiry of, or action or proceeding that may be brought against, the respective
indemnified parties, arising out of or based upon (x) in the case of each
Selling Shareholder, any breach of such Selling Shareholder's representation and
warranties made in this Agreement, and (y) in the case of the Company, any
breach of representations and warranties made in this Agreement or any untrue
statements or alleged untrue statements of material fact contained in any
Preliminary Prospectus, the Registration Statements or the Prospectus, or any
amendment or supplement thereto, any application or other document (in this
Section 8 collectively called "application") executed by the Company and based
upon written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify all or any part of the Shares under the
securities laws thereof or filed with the SEC or the NASD, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the foregoing indemnity:
(i) shall not apply in respect of any statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
expressly for use in any Preliminary Prospectus, the Registration Statements or
Prospectus, or any amendment or supplement thereto, or in any application or in
any communication to the SEC, as the case may be; and
(ii) with respect to any Preliminary Prospectus,
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages, liabilities or expenses purchased the Shares
if, at or prior to the written confirmation of the sale of such Shares, a copy
of an amended Preliminary Prospectus or the Prospectus (or the Prospectus as
amended or supplemented) was delivered to such Underwriter, but was not sent, or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the amended
Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented), unless such failure on the part of such Underwriter is the result
of noncompliance by the Company with Section 5(a)(vi) hereof.
The obligations of the Company and the Selling Shareholders
under this Section 8(a) will be in addition to any liability the Company and the
Selling Shareholders may otherwise have.
-28-
<PAGE>
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statements, each Selling Shareholder, and each other person, if any, who
controls the Company or a Selling Shareholder within the meaning of the Act to
the same extent as the foregoing indemnities from the Company and the Selling
Shareholders to the several Underwriters, but only with respect to any loss,
liability, claim, damage or expense resulting from statements or omissions, or
alleged statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statements or Prospectus or any amendment or supplement thereto, or
any application in reliance upon, and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
expressly for use in any Preliminary Prospectus, the Registration Statements or
Prospectus, or any amendment or supplement thereto, or any application, as the
case may be. The obligations of each Underwriter under this Section 8(a) will be
in addition to any liability such Underwriter may otherwise have.
(c) If any action, inquiry, investigation or proceeding is
brought against any person in respect of which indemnification may be sought
pursuant to Section 8(a) or (b) hereof, such person (hereinafter called the
"indemnified party") shall, promptly after notification of, or receipt of
service of process for, such action, inquiry, investigation or proceeding,
notify in writing the party or parties against whom indemnification is to be
sought (hereinafter called the "indemnifying party") of the institution of such
action, inquiry, investigation or proceeding. The indemnifying party, upon the
request of the indemnified party, shall assume the defense of such action,
inquiry, investigation or proceeding, including, without limitation, the
employment of counsel (reasonably satisfactory to such indemnified party) and
payment of expenses. No indemnification provided for in this Section 8 shall be
available to any indemnified party who shall fail to give such notice if the
indemnifying party does not have knowledge of such action, inquiry,
investigation or proceeding, to the extent that such indemnifying party has been
materially prejudiced by the failure to give such notice, but the omission to so
notify the indemnifying party shall not relieve the indemnifying party otherwise
than under this Section 8. Such indemnified party or controlling person thereof
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action. If such indemnified party or parties shall have been advised by
counsel that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties or that there may be
legal defenses available to such indemnified party or parties different from or
in addition to those available to the indemnifying party or parties, the
indemnified party or parties shall be entitled to select counsel to conduct the
defense to the extent determined by such counsel to be necessary to protect the
interests of the indemnified party or parties, and the reasonable fees and
expenses of such counsel shall be borne by the indemnifying party. Expenses
covered by the indemnification in this Section 8 shall be paid by the
indemnifying party as they are incurred by the indemnified party. Anything in
this Section 8 to the contrary notwithstanding, the indemnifying party shall not
be liable for any settlement of any such claim effected without its written
consent.
(d) Each Selling Shareholder's aggregate liability under this
Section 8 shall be limited to an amount equal to the net proceeds (before
deducting expenses) received by such Selling Shareholder from the sale of such
Selling Shareholder's Shares pursuant to this Agreement.
-29-
<PAGE>
(e) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or (b) hereof in respect of any losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) referred to herein, except by reason of the provisos set forth in
Section 8(a) hereof or the failure to give notice as required in Section 8(c)
hereof (provided that the indemnifying party does not have knowledge of the
action, inquiry, investigation or proceeding and to the extent such party has
been materially prejudiced by the failure to give such notice), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company or the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company or each Selling Shareholder on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, liabilities, claims or reasonable expenses (or actions, inquiries,
investigations or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company or each
Selling Shareholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company or each Selling Shareholder
bears to the total underwriting discount and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or a Selling Shareholder on the one hand or the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Selling
Shareholders or the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, liabilities, claims,
damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(e), (i) the
provisions of the Agreement Among Underwriters shall govern contribution among
Underwriters, (ii) no Underwriter (except as provided in the Agreement Among
-30-
<PAGE>
Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, and (iii) 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' and the Selling Shareholders' obligations
in this Section 8(e) to contribute are several in proportion to their individual
underwriting obligations and number of Shares sold, respectively, and not joint.
9. Representations and Agreements to Survive Delivery. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date. All such
representations, warranties and agreements of the Underwriters, the Company and
the Selling Shareholders, including, without limitation, the indemnity and
contribution agreements contained in Section 8 hereof and the agreements
contained in Sections 6, 9, 10 and 13 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person, and shall survive delivery of the Shares
and termination of this Agreement, whether before or after the Closing Date or
any Option Closing Date.
10. Effective Date of This Agreement and Termination Hereof.
(a) This Agreement shall become effective at the earlier of
(i) 10:00 a.m., Philadelphia, Pennsylvania time, on the first business day
following the Effective Date or (ii) at the time of the public offering by the
Underwriters of the Shares, whichever is earlier, except that the provisions of
Sections 6, 8, 10 and 13 hereof shall be effective upon execution hereof. The
time of the public offering, for the purpose of this Section 10, shall mean the
time when any of the Shares are first released by the Underwriters for offering
by dealers. The Representatives may prevent the provisions of this Agreement
(other than those contained in Sections 6, 8, 10 and 13) hereof from becoming
effective without liability of any party to any other party, except as provided
in Sections 6 and 8 hereof, by giving the notice indicated in Section 10(c)
hereof before the time the other provisions of this Agreement become effective.
(b) The Representatives shall have the right to terminate this
Agreement at any time prior to the Closing Date as provided in Sections 7 and 11
hereof or if any of the following have occurred:
(i) since the respective dates as of which
information is given in the Registration Statements and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company, or the earnings, business affairs, management or business prospects of
the Company, whether or not arising in the ordinary course of business, that
would, in the Representatives' reasonable judgment, make the offering or
delivery of the Shares impracticable;
(ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic, political or financial
market conditions if the effect on the financial markets of the United States of
such outbreak, calamity, crisis or change would, in the Representatives'
reasonable judgment, make the offering or delivery of the Shares impracticable;
-31-
<PAGE>
(iii) suspension of trading generally in securities
on the New York Stock Exchange, the American Stock Exchange, or the
over-the-counter market (including, without limitation, the Nasdaq Stock Market)
or limitation on prices (other than limitations on hours or numbers of days of
trading) for securities or the promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority that in
the Representatives' reasonable opinion materially and adversely affects trading
of the Shares on such exchange or over-the-counter market;
(iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in the Representatives' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company;
(v) the taking of any action by any federal, state or
local government or agency in respect of monetary or fiscal affairs that in the
Representatives' reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(vi) trading in any securities of the Company shall
have been suspended or halted by the Nasdaq Stock Market or the SEC.
(c) If the Representatives elect to prevent this Agreement
from becoming effective or to terminate this Agreement as provided in this
Section 10, the Representatives shall notify the Company and the Selling
Shareholders thereof promptly by telephone, telex, telegraph, telegram or
facsimile, confirmed by letter.
11. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Optional Shares hereunder, and if
the Firm Shares or Optional Shares with respect to which such default relates do
not exceed in the aggregate 10% of the number of Firm Shares or Optional Shares,
as the case may be, that all Underwriters have agreed to purchase hereunder,
then such Firm Shares or Optional Shares to which the default relates shall be
purchased severally by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.
(b) If such default relates to more than 10% of the Firm
Shares or Optional Shares, as the case may be, the Representatives may in their
discretion arrange for another party or parties (including a non-defaulting
Underwriter) to purchase such Firm Shares or Optional Shares to which such
default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 11(b), this
Agreement may be terminated by the Representatives or by the Company without
liability on the part of the several Underwriters (except as provided in Section
8 hereof) or the Company (except as provided in Sections 6 and 8 hereof), but
nothing herein shall relieve a defaulting Underwriter of its liability, if any,
to the other several Underwriters and to the Company for damages occasioned by
its default hereunder.
-32-
<PAGE>
(c) If the Firm Shares or Optional Shares to which the default
relates are to be purchased by the nondefaulting Underwriters, or are to be
purchased by another party or parties, the Representatives or the Company shall
have the right to postpone the Closing Date or any Option Closing Date, as the
case may be, for a reasonable period, but not in any event exceeding seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statements or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment to the
Registration Statements or supplement to the Prospectus that in the opinion of
Underwriters' Counsel may thereby be made necessary. The terms "Underwriters"
and "Underwriter" as used in this Agreement shall include any party substituted
under this Section 11 with like effect as if it had originally been a party to
this Agreement with respect to the Firm Shares and/or Optional Shares purchased
by it.
(d) It is understood that the Representatives (or either of
them), individually and not as the representatives of the several Underwriters,
may (but shall not be obligated to) make payment of the purchase price on behalf
of any Underwriter or Underwriters whose check or checks shall not have been
received by them prior to the Closing Date or the Option Closing Date for the
Firm Shares or Optional Shares, as the case may be, to be purchased by such
Underwriter or Underwriters. Any such payment by the Representatives shall not
relieve any such Underwriter or Underwriters of any of its or their obligations
hereunder.
12. Information Furnished by Underwriters. The statement set forth on
the inside cover page regarding stabilization and in the second and eighth
paragraphs under the caption "Underwriting" in any Preliminary Prospectus and
the Prospectus constitute the only written information furnished by or on behalf
of any Underwriter referred to in Sections l(a)(ii) and 8 hereof.
13. Notice. All communications hereunder, except as otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed, telegrammed, telegraphed,
telecopied or faxed and confirmed to such Underwriter, c/o Janney Montgomery
Scott Inc., 1801 Market Street, Philadelphia, PA 19103, Attention: Mr. William
L. Rulon-Miller, with a copy to Saul, Ewing, Remick & Saul, 3800 Centre Square
West, Philadelphia, PA 19102, Attention: Charles C. Zall, Esquire; if sent to
the Company, shall be mailed, delivered, telexed, telegrammed, telegraphed,
telecopied or faxed and confirmed to The Judge Group, Inc., Two Bala Plaza,
Suite 800, Bala Cynwyd, PA 19004, Attention: Mr. Martin E. Judge, Jr., Chief
Executive Officer, with a copy to Drinker Biddle & Reath, 1000 Westlakes Drive,
Suite 300, Berwyn, PA 19312, Attention: Robert H. Strouse, Esquire; and if sent
to the Selling Shareholders (other than Gemstone, Martin E. Judge, Jr., Michael
A. Dunn or Arthur Kania) shall be mailed, delivered, telexed, telegrammed,
telegraphed, telecopied or faxed and confirmed to Edward Rosen or Marvin
Demchick, with a copy to Theodore A. Young, Esquire, Fox, Rothschild, O'Brien &
Frankel, 2000 Market Street, Tenth Floor, Philadelphia, PA 19103-3291, and if
sent to Gemstone, to The Gemstone Group, Inc.,______________, Attention: Gary D.
Kleiman; and if sent to Martin E. Judge, Jr., Michael A. Dunn or Arthur Kania,
shall be mailed, delivered, telexed, telegrammed, telegraphed, telecopied or
faxed and confirmed to such person with a copy to _____________________________.
14. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Company, the Selling
Shareholders and the controlling persons, directors and officers thereof, and
-33-
<PAGE>
their respective successors, assigns, heirs, legatees and legal representatives,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. The terms "successors" and "assigns" shall not
include any purchaser of the Shares merely because of such purchase.
15. Definition of Business Day. For purposes of this Agreement,
"business day" means any day on which the Nasdaq Stock Market is opened for
trading.
16. Counterparts. This Agreement may be executed in one or more
counterparts, and all such counterparts will constitute one and the same
instrument.
17. Construction. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and performed entirely within the Commonwealth.
If the foregoing correctly sets forth your understanding of our
agreement, please sign and return to the Company the enclosed duplicate hereof,
whereupon it will become a binding agreement in accordance with its terms.
Very truly yours,
THE JUDGE GROUP, INC.
By:
----------------------------------
Martin E. Judge, Jr.
Chief Executive Officer
THE SELLING SHAREHOLDERS
By:
-----------------------------------
Attorney-in-Fact, acting on behalf
of each of the Selling Shareholders
other than Martin E. Judge, Jr.,
Michael A. Dunn and Arthur Kania.
By:
----------------------------------
Attorney-in-Fact, acting on behalf
of Michael A. Dunn and Arthur Kania
-----------------------------------
MARTIN E. JUDGE, JR.
-34-
<PAGE>
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
JANNEY MONTGOMERY SCOTT INC.
UNTERBERG HARRIS
As Representatives of the Several Underwriters
named in Schedule I hereto
By: JANNEY MONTGOMERY SCOTT INC.
By:
-------------------------------------------
Authorized Representative
BY: UNTERBERG HARRIS
By:
------------------------------------------
Authorized Representative
-35-
<PAGE>
SCHEDULE I
Underwriters
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriter to be Purchased
- ----------- ----------------------
<S> <C>
Janney Montgomery Scott Inc.........................................
Unterberg Harris....................................................
Total............................................................... 3,650,000
</TABLE>
I-1
<PAGE>
SCHEDULE II
SELLING SHAREHOLDERS
TABLE 1. FIRM SHARES
<TABLE>
<CAPTION>
Number of Firm Shares
Selling Shareholder to be Sold
- ------------------- ----------------------
<S> <C>
Martin E. Judge, Jr.......................................................... 270,000
Michael A. Dunn.............................................................. 150,000
Lawrence Chimerine........................................................... 8,000
Marvin N. Demchick........................................................... 16,000
DGA Investments.............................................................. 8,000
Edwin T. Johnson............................................................. 8,000
Robert and Margot Keith...................................................... 8,000
Max H. Kraus................................................................. 8,000
Ira Lubert................................................................... 16,000
Edward H. and Evelyn B. Rosen................................................ 32,000
Trust Under Will of Maurice L. Strauss for Thomas S. Rosen................... 16,000
Ernest Scheller, Jr......................................................... 8,000
A. Richard Sloan .................................................. 16,000
Milton S. Stearns, Jr........................................................ 11,200
Milton S. Stearns, Jr., Trustee.............................................. 4,800
The Gemstone Group, Inc...................................................... 40,000
Arthur Kania................................................................. 30,000
Total........................................................................ 650,000
=======
</TABLE>
II-1
<PAGE>
TABLE 2. OPTIONAL SHARES
<TABLE>
<CAPTION>
Number of Optional Shares
Selling Shareholders to be Sold
- -------------------- --------------------------
<S> <C> <C> <C>
A. All shares of these persons to be sold pro rata
before any of those listed in Section B below:
Martin E. Judge, Jr. 30,000
Michael A. Dunn 20,000
Total 50,000
======
B. All Shares of these persons to be sold pro rata after all shares in Section
A above are sold, and before those listed in Section C below:
Lawrence Chimerine 7,554
Marvin N. Demchick 15,111
DGA Investments 7,554
Edwin T. Johnson 7,556
Robert and Margot Keith 7,556
Max H. Kraus 7,556
Ira Lubert - 15,111
Edward H. and Evelyn B. Rosen 30,222
Trust Under Will of Maurice L. Strauss
for Thomas S. Rosen 4,000
Ernest Scheller, Jr. 7,556
A. Richard Sloan 15,111
Milton S. Stearns, Jr. 10,578
Milton S. Stearns, Jr., Trustee 4,533
The Gemstone Group, Inc. 60,000
Arthur Kania 30,000
Total 200,000
B. All Shares of these persons to be sold pro rata
after all shares in Section A and B above are sold:
The Judge Group, Inc. 297,500
TOTAL: 547,500 Shares
</TABLE>
II-2
<PAGE>
SCHEDULE III
The Company's Subsidiaries
<TABLE>
<CAPTION>
Name Jurisdiction in Which Incorporated
- ---- ----------------------------------
<S> <C>
Judge, Inc. Pennsylvania
Judge Technical Services, Inc. Pennsylvania
Judge Imaging Systems, Inc. Delaware
The Berkeley Associates Corporation Delaware
Judge Inc. of New Jersey New Jersey
Judge Electronics Services of Florida, Inc. Florida
Judge Hospitality Services, Inc. Pennsylvania
Judge Electronics Services of Boston, Inc. Massachusetts
Judge Technical Services of N.J., Inc. New Jersey
Judge Professional Services, Inc. Pennsylvania
Judge Electronics Services, Inc. Pennsylvania
Judge Electronics Services of Philadelphia, Inc. Pennsylvania
Judge Acquisition, Inc. Delaware
</TABLE>
III-1
<PAGE>
SCHEDULE IV
Persons Who Are to Deliver Lock-Up Agreements
The Judge Group, Inc.
Lock-up obligations included in Underwriting Agreement.
The Selling Shareholders
Lock-up obligations included in Underwriting Agreement.*
Non-selling Shareholders
The Abbotts Organization (by Richard Gwinn, CEO)
Jeffrey J. Andrews
Randolph J. Angerman
Vincent G. Bell, Jr.
Canaan group
John T. Fries
Richard T. Furlano
Wendy Greenberg-Marcelli
James C. Hahn
Jirair S. Hovnanian
David H. Kleiman
Robert H. Koen
Thomas Lefevre
Marvin Levin
Sandra Mayer
Greggory McCarthy
Philip Pecar
Joseph Pool
Michael Sanyour
Ray Sozzi
William J. Spiegel
Elaine Sulpazo
Jay H. Tolson
George Tratjenberg
David M. Warden
John B. Warden, III
Katharine A. Wiercinski
David Wood
- ---------------
* The following Selling Shareholders have, nonetheless delivered separate
Lock-Up Agreements: (1) Lawrence Chimerine, (2) Marvin N. Demchick, (3) DGA
Investments, (4) Edwin T. Johnson, (5) Ira Lubert, (6) Edward H. Rosen, (7)
Evelyn B. Rosen, (8) Ernest Scheller, Jr., (9) Milton S. Stearns, (10)
Maurice L. Strauss Trust FBO Thomas Rosen
IV-1
Exhibit 21.1
Subsidiaries
=============================================================================
Subsidiary Name State of
Incorporation
- -----------------------------------------------------------------------------
Judge Technical Services, Inc. Pennsylvania
- -----------------------------------------------------------------------------
Judge Imaging Systems, Inc. Delaware
- ----------------------------------------------------------------------------
Judge Inc. of New Jersey New Jersey
- -----------------------------------------------------------------------------
Judge Acquisition, Inc. Delaware
- -----------------------------------------------------------------------------
Judge, Inc. Pennsylvania
- -----------------------------------------------------------------------------
Judge Electronics Services of Florida
Florida, Inc.
- -----------------------------------------------------------------------------
Judge Professional Services, Inc. Pennsylvania
- -----------------------------------------------------------------------------
Judge Technical Services of N.J., New Jersey
Inc.
- -----------------------------------------------------------------------------
The Berkeley Associates Corp. Delaware
=============================================================================
