AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1995
REGISTRATION NO. 33-59103
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COMPUTER HORIZONS CORP.
(Exact name of registrant as specified in its charter)
NEW YORK 13-2638902
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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49 OLD BLOOMFIELD AVENUE
MOUNTAIN LAKES, NEW JERSEY 07046-1495
(201) 402-7400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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JOHN J. CASSESE
COMPUTER HORIZONS CORP.
49 OLD BLOOMFIELD AVENUE
MOUNTAIN LAKES, NEW JERSEY 07046-1495
(201) 402-7400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
ROBERT A. CANTONE, ESQ. ERIC D. MARTINS, ESQ.
PROSKAUER ROSE GOETZ & MENDELSOHN LLP IVAN W. DREYER, ESQ.
1585 BROADWAY BAER MARKS & UPHAM
NEW YORK, NEW YORK 10036 805 THIRD AVENUE
NEW YORK, NEW YORK 10022
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
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 the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box: / /
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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.
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<PAGE>
This amendment No. 1 is being filed solely to complete Item 14 and to file
additional or amended Exhibits pursuant to Item 16. Consequently, Part I,
Information Required In Prospectus, has been omitted.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of all expenses in
connection with the issuance and distribution of the securities being registered
hereby other than the Underwriters' discounts and commissions.
SEC registration fee........................................... $ 5,561.62
NASD additional registration fee............................... 2,112.88
NASDAQ additional listing fee.................................. 17,500.00
Accounting fees and expenses................................... 75,000.00
Legal fees and expenses........................................ 250,000.00
Blue sky expenses and counsel fees............................. 10,000.00
Cost of printing and engraving................................. 75,000.00
Transfer agent's fees.......................................... 5,000.00
Miscellaneous.................................................. 50,000.00
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Total.................................................... $490,174.50*
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* All amounts except the registration fees and Nasdaq additional listing fee are
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation, as amended (the "Certificate of
Incorporation") provides, as permitted by Section 402(b) of the New York
Business Corporation Law (the "BCL"), that no director shall be personally
liable to the Company or any shareholder for damages for any breach of duty as a
director, provided that the Certificate of Incorporation does not eliminate or
limit the liability of any director if a judgment or other final adjudication
adverse to him establishes that (i) his acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law, (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled or (iii) his acts violated Section 719 of the BCL.
The Certificate of Incorporation also provides, in accordance with Section
722 of the BCL, that each person who was or is made a party or is threatened to
be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he, or a person of whom he is the legal
representative, (1) is or was a director or officer of the Company or (2) is or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans (whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent), shall be indemnified and held harmless by
the Company to the fullest extent authorized or permitted by applicable law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company to provide
prior to such amendment), against all expense, liability and loss (including
attorneys' fees, judgements, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his heirs, executors and administrators, provided,
however, that, except for actions brought to enforce such indemnification
rights, the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the
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<PAGE>
Company. The right to indemnification conferred in the Certificate of
Incorporation is a contract right and includes the rights to be paid by the
Company the expenses incurred in defending any such proceeding in advance of its
final disposition, provided, however, that, if the BCL requires, the payment of
such expenses incurred by a director or officer in his capacity as such (and not
in any other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service with respect to an
employee benefit plan) in advance of the final disposition of a proceeding,
shall be made only upon delivery to the Company of an undertaking by or on
behalf of such director or officer to repay all amounts so advanced as to which
it shall ultimately be determined that such director or officer is not entitled
to be indemnified.
The Certificate of Incorporation further provides, in accordance with the
BCL, that the indemnification rights provided therein are not exclusive of any
other rights that any person may have, and that the Company may, subject to
certain restrictions imposed by the BCL, maintain insurance to protect itself
and its officers and directors against expenses, liabilities and losses, whether
or not the Company would be permitted to indemnify such person against such
expenses, liabilities and losses under the BCL.
The Company currently has a $5,000,000 directors' and officers' liability
insurance policy.
ITEM 16. EXHIBITS
<TABLE><CAPTION>
EXHIBIT DESCRIPTION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
1.1 Revised Form of Underwriting Agreement
Among the Company and Janney Montgomery
Scott Inc. and Robert W. Baird & Co.
Incorporated as Representatives of the
Underwriters
1.2* Form of Agreement Among Underwriters
1.3* Form of Selected Dealers Agreement
3.1 Certificate of Incorporation of the Exhibit 3(a) to the Company's
Company as amended through 1971. Registration Statement on Form S-1,
File No. 2-42259.
3.2 Certificate of Amendment dated May 16, Exhibit 3(a-2) to the Company's Annual
1983 to Certificate of Incorporation of Report on Form 10-K for the year ended
the Company. February 28, 1983.
3.3 Certificate of Amendment dated June 15, Exhibit 3(a-3) to the Company's Annual
1988 to Certificate of Incorporation of Report on Form 10-K for the year ended
the Company. December 31, 1988.
3.4 Certificate of Amendment dated July 6, Exhibit 3(a-4) to the Company's Annual
1989 to Certificate of Incorporation of Report Form 10-K for the year ended
the Company. December 31, 1994.
3.5 Certificate of Amendment dated February Exhibit 3(a-4) to the Company's Annual
14, 1990 to Certificate of Report on Form 10-K for the year ended
Incorporation of the Company. December 31, 1989.
3.6 Certificate of Amendment dated May 1, Exhibit 3(a-6) to the Company's Annual
1991 to the Certificate of Report on Form 10-K for the year ended
Incorporation of the Company. December 31, 1994.
3.7 Certificate of Amendment dated July 12, Exhibit 3(a-7) to the Company's Annual
1994 to the Certificate of Report on Form 10-K for the year ended
Incorporation of the Company. December 31, 1994.
3.8 Bylaws of the Company, as amended. Exhibit 3(b) to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1988.
</TABLE>
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<PAGE>
<TABLE><CAPTION>
EXHIBIT DESCRIPTION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
4.1 Rights Agreement dated as of July 6, 1989 Exhibit 1 to the Company's Registration
between the Company and Chemical Bank, Statement on Form 8-A dated July 7,
as Rights Agent ("Rights Agreement")
which includes the form of Rights
Certificate as Exhibit B.
4.2 Amendment No. 1 dated as of February 13, Exhibit 1 to the Company's Amendment No.
1990 to Rights Agreement. 1 on Form 8 dated February 13, 1990 to
the Company's Registration Statement on
Form 8-A.
4.3 Amendment No. 2 dated as of August 10, Exhibit 4(c) to the Company's Annual
1994 to Rights Agreement. Report on Form 10-K for the year ended
December 31, 1994.
5 Opinion of Proskauer Rose Goetz &
Mendelsohn LLP.
10.1 Employment Agreement dated as of February Exhibit 10(a) to the Company's Annual
16, 1990 between the Company and John Report on Form 10-K for the year ended
J. Cassese. December 31, 1989.
10.2 Employment Agreement dated as of February Exhibit 10(c) to the Company's Annual
16, 1990 between the Company and Report on Form 10-K for the year ended
Bernhard Hubert. December 31, 1989.
10.3 Employment Agreement dated as of January Exhibit 10(d) to the Company's Annual
1, 1992 between the Company and David Report on form 10-K for the year ended
W. Bialick. December 31, 1991.
10.4 Note Agreement dated as of March 15, 1988 Exhibit 10(i) to the Company's Annual
between the Company and Massachusetts Report on Form 10-K for the year ended
Mutual Life Insurance Company December 31, 1988.
10.5 Lease ("Lease") dated September 21, 1989 Exhibit 12(a) to the Company's Annual
between Glen Properties and the Report on Form 10-K for the year ended
Company. December 31, 1989.
10.6 Modification to Lease, dated September Exhibit 12(b) to the Company's Annual
28, 1989. Report on Form 10-K for the year ended
December 31, 1989.
10.7 1991 Directors' Stock Option Plan, as Exhibit 10(g) to the Company's Annual
amended Report on Form 10-K for the Year ended
December 31, 1994.
10.8 1994 Incentive Stock Option and Exhibit 10(h) to the Company's Annual
Appreciation Plan Report on Form 10-K for the Year ended
December 31, 1994.
10.9 $5,000,000 Promissory Note payable to Exhibit 10(i) to the Company's Annual
The Bank of New York, N.A. Report on Form 10-K for the Year ended
December 31, 1994.
10.9(a) $10,000,000 Promissory Note payable to
The Bank of New York, N.A.
10.10 $7,000,000 Commercial Purpose Loan Note Exhibit 10(j) to the Company's annual
payable to Chemical Bank New Jersey Report on Form 10-K for the Year ended
N.A. December 31, 1994.
11* Statement regarding computation of per
share earnings (for the years ended
December 31, 1992, 1993 and 1994)
23.1 Consent of Grant Thornton LLP
23.2 Consent of Proskauer Rose Goetz &
Mendelsohn LLP (included in Exhibit 5)
</TABLE>
II-3
<PAGE>
<TABLE><CAPTION>
EXHIBIT DESCRIPTION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
24* Power of Attorney (included on the
signature page of the Registration
Statement).
27* Financial Data Schedule
</TABLE>
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* Previously filed.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act") 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 Securities
and Exchange 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 Act, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a 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 purpose of determining any liability under the Act, 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Amendment No. 1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Mountain Lakes, State of New Jersey, on the 5th day of June, 1995.
COMPUTER HORIZONS CORP.
By /s/ JOHN J. CASSESE
...................................
John J. Cassese
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities indicated on June 5, 1995.
<TABLE>
<S> <C>
/s/ JOHN J. CASSESE Chairman of the Board and President
.............................................
John J. Cassese
* Executive Vice President and Chief Financial
............................................. Officer (Principal Financial Officer)
Bernhard Hubert
* Chief Accounting Officer and Controller
............................................. (Principal Accounting Officer)
Michael Shea, CPA
* Director
.............................................
Thomas J. Berry
* Director
.............................................
Wilfred R. Plugge
</TABLE>
*By: /s/ JOHN J. CASSESE
.............................................
John J. Cassese
Attorney-in-fact
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<PAGE>
INDEX TO EXHIBITS
<TABLE><CAPTION>
EXHIBIT DESCRIPTION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
1.1 Revised Form of Underwriting Agreement Among
the Company and Janney Montgomery Scott
Inc. and Robert W. Baird & Co.
Incorporated as Representatives of the
Underwriters
1.2* Form of Agreement Among Underwriters
1.3* Form of Selected Dealers Agreement
3.1 Certificate of Incorporation of the Exhibit 3(a) to the Company's
Company as amended through 1971. Registration Statement on Form S-1,
File No. 2-42259.
3.2 Certificate of Amendment dated May 16, Exhibit 3(a-2) to the Company's Annual
1983 to Certificate of Incorporation of Report on Form 10-K for the year ended
the Company. February 28, 1983.
3.3 Certificate of Amendment dated June 15, Exhibit 3(a-3) to the Company's Annual
1988 to Certificate of Incorporation of Report on Form 10-K for the year ended
the Company. December 31, 1988.
3.4 Certificate of Amendment dated July 6, Exhibit 3(a-4) to the Company's Annual
1989 to Certificate of Incorporation of Report Form 10-K for the year ended
the Company. December 31, 1994.
3.5 Certificate of Amendment dated Exhibit 3(a-4) to the Company's Annual
February 14, 1990 to Certificate of Report on Form 10-K for the year ended
Incorporation of the Company. December 31, 1989.
3.6 Certificate of Amendment dated May 1, Exhibit 3(a-6) to the Company's Annual
1991 to the Certificate of Report on Form 10-K for the year ended
Incorporation of the Company. December 31, 1994.
3.7 Certificate of Amendment dated July 12, Exhibit 3(a-7) to the Company's Annual
1994 to the Certificate of Report on Form 10-K for the year ended
Incorporation of the Company. December 31, 1994.
3.8 Bylaws of the Company, as amended. Exhibit 3(b) to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1988.
4.1 Rights Agreement dated as of July 6, 1989 Exhibit 1 to the Company's Registration
between the Company and Chemical Bank, Statement on Form 8-A dated July 7,
as Rights Agent ("Rights Agreement") 1989.
which includes the form of Rights
Certificate as Exhibit B.
4.2 Amendment No. 1 dated as of February 13, Exhibit 1 to the Company's Amendment No.
1990 to Rights Agreement. 1 on Form 8 dated February 13, 1990 to
the Company's Registration Statement on
Form 8-A.
4.3 Amendment No. 2 dated as of August 10, Exhibit 4(c) to the Company's Annual
1994 to Rights Agreement. Report on Form 10-K for the year ended
December 31, 1994.
5 Opinion of Proskauer Rose Goetz &
Mendelsohn LLP.
10.1 Employment Agreement dated as of February Exhibit 10(a) to the Company's Annual
16, 1990 between the Company and John Report on Form 10-K for the year ended
J. Cassese. December 31, 1989.
</TABLE>
<PAGE>
<TABLE><CAPTION>
EXHIBIT DESCRIPTION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
10.2 Employment Agreement dated as of February Exhibit 10(c) to the Company's Annual
16, 1990 between the Company and Report on Form 10-K for the year ended
Bernhard Hubert. December 31, 1989.
10.3 Employment Agreement dated as of January Exhibit 10(d) to the Company's Annual
1, 1992 between the Company and David Report on form 10-K for the year ended
W. Bialick. December 31, 1991.
10.4 Note Agreement dated as of March 15, 1988 Exhibit 10(i) to the Company's Annual
between the Company and Massachusetts Report on Form 10-K for the year ended
Mutual Life Insurance Company December 31, 1988.
10.5 Lease ("Lease") dated September 21, 1989 Exhibit 12(a) to the Company's Annual
between Glen Properties and the Report on Form 10-K for the year ended
Company. December 31, 1989.
10.6 Modification to Lease, dated September Exhibit 12(b) to the Company's Annual
28, 1989. Report on Form 10-K for the year ended
December 31, 1989.
10.7 1991 Directors' Stock Option Plan, as Exhibit 10(g) to the Company's Annual
amended Report on Form 10-K for the Year ended
December 31, 1994.
10.8 1994 Incentive Stock Option and Exhibit 10(h) to the Company's Annual
Appreciation Plan Report on Form 10-K for the Year ended
December 31, 1994.
10.9 $5,000,000 Promissory Note payable to The Exhibit 10(i) to the Company's Annual
Bank of New York, N.A. Report on Form 10-K for the Year ended
December 31, 1994.
10.9(a) $10,000,000 Promissory Note payable to
The Bank of New York, N.A.
10.10 $7,000,000 Commercial Purpose Loan Note Exhibit 10(j) to the Company's Annual
payable to Chemical Bank New Jersey Report on Form 10-K for the Year ended
N.A. December 31, 1994.
11* Statement regarding computation of per
share earnings (for the years ended
December 31, 1992, 1993 and 1994)
23.1 Consent of Grant Thornton LLP
23.2 Consent of Proskauer Rose Goetz &
Mendelsohn LLP (included in Exhibit 5)
24 Power of Attorney (included on the
signature page of the Registration
Statement).
27* Financial Data Schedule
</TABLE>
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* Previously filed
1,265,000 Shares of Common Stock
COMPUTER HORIZONS CORP.
UNDERWRITING AGREEMENT
June 7, 1995
JANNEY MONTGOMERY SCOTT INC.
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
Attention: Syndicate Department
ROBERT W. BAIRD & CO. INCORPORATED
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Syndicate Department
Ladies and Gentlemen:
Computer Horizons Corp., a New York corporation (the "Company") ,
proposes to issue and sell to the several underwriters named in Schedule I
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hereto (the "Underwriters") 1,025,000 shares of Common Stock of the Company
(the "Company Firm Shares"), and Mr. John J. Cassese, Chairman of the
Board, President and Chief Executive Officer of the Company (the "Selling
Shareholder") proposes to sell to the Underwriters 75,000 shares of Common
Stock of the Company (the "Selling Shareholder Firm Shares" and, together
with the Company Firm Shares, the "Firm Shares"). In addition, the Selling
Shareholder and the Company each propose to grant severally to the
Underwriters, solely for the purpose of covering over-allotments, the
option described in Section 5 of this Agreement to purchase up to 165,000
additional shares of Common Stock of the Company (the "Additional Shares").
The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares."
You, as representatives of the Underwriters (the "Representatives"),
have advised the Company and the Selling Shareholder that you and the other
Underwriters desire to purchase, severally, the Firm Shares and you
represent and warrant to the Company that you have been authorized by the
Underwriters to execute this agreement (this "Agreement") on their behalf.
The Company and the Selling Shareholder hereby severally confirm the
agreement made by them with respect to the purchase of the Shares by the
several Underwriters on whose behalf you are signing this Agreement, as
follows:
<PAGE>
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) Registration Statement and Prospectus. The Company has
filed with the Securities and Exchange Commission ("Commission") a
registration statement on Form S-2 (No. 33-59103) for the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Shares and may have filed one or more amendments thereto, copies of which
have heretofore been delivered to you. The registration statement,
including the prospectus, financial statements and exhibits and documents
and information incorporated by reference therein, when it shall become
effective, and such additional information, if any, with respect to the
offering permitted to be omitted from such registration statement when it
becomes effective if subsequently filed with the Commission pursuant to
Rule 430A of the General Rules and Regulations of the Commission under the
Securities Act (the "Rules under the Securities Act"), is hereinafter
called the "Registration Statement" and the final prospectus included as
part of the Registration Statement is herein called the "Prospectus,"
except that, if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Shares which differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective (whether or not such
revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the Rules under the Securities Act) , the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use. The term "Preliminary
Prospectus" as used in this Agreement means a preliminary prospectus as
defined in Rule 430 of the Rules under the Securities Act. The Securities
Act, the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
the rules and regulations promulgated thereunder are sometimes collectively
referred to in this Agreement as the "Acts."
(b) Compliance with Securities Act, etc. When the Registration
Statement shall become effective and at all times subsequent thereto, up to
and including the Closing Date and the Option Closing Date (as such terms
are herein defined), and during such longer period until any post-effective
amendment to the Registration Statement shall become effective, the
Registration Statement (and any post-effective amendment to the
Registration Statement) (i) will contain all statements which are required
to be stated therein in accordance with the Securities Act and the Rules
under the Securities Act, (ii) will fully comply in all material respects
with the applicable provisions of the Securities Act and the Rules under
the Securities Act, and (iii) will not contain any untrue statement of a
material fact and will not omit to state any material fact required to be
stated therein or necessary in order
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<PAGE>
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and the Prospectus and any amendment
or supplement thereto will at all times up to and including the Closing
Date and the Option Closing Date, and during such longer period as the
Prospectus may be required to be delivered in connection with sales of Firm
Shares or Additional Shares by the Underwriters or any dealer, fully comply
in all material respects with the provisions of the Securities Act and the
Rules under the Securities Act and will not contain any untrue statement of
a material fact and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
- -------- -------
as to the information contained in or omitted from the Registration
Statement or any post-effective amendment to the Registration Statement or
the Prospectus or any amendment of, or supplement to, either of them in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representatives
or by the Selling Shareholder specifically for use in connection with the
preparation of the Registration Statement or of the Preliminary Prospectus
or the Prospectus. It is understood that, except for such information as
may hereafter be identified by the Representatives in writing as being so
furnished, the statements set forth in the Prospectus on page 2 with
respect to stabilization, under the section entitled "Underwriting" and the
identity of counsel for the Underwriters under the section entitled "Legal
Matters" constitute the only information furnished in writing by or on
behalf of the Underwriters for inclusion in the Registration Statement and
Prospectus, as the case may be.
(c) No Stop Order, etc. The Company has not received from the
Commission any order preventing or suspending the use of any Preliminary
Prospectus, and each Preliminary Prospectus, at the time of filing thereof,
fully complied in all material respects with the provisions of the
Securities Act and the Rules under the Securities Act and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
-----------------
warranties as to the information contained in or omitted from any
Preliminary Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives or by the Selling Shareholder specifically for
use in connection with the preparation of such Preliminary Prospectus.
(d) Accountants. Grant Thorton LLP, independent certified
public accountants, have audited the audited financial statements filed as
part of the Registration Statement and those included in the Prospectus, to
the extent set forth in their reports in the Registration Statement and
Prospectus, and are independent public accountants as required by the
Securities Act and the Rules under the Securities Act.
(e) Reports and Financial Statements. (i) The Company has
previously furnished the Underwriters with true and correct copies of (i)
the Company's Annual Report on Form 10-K for each of the two fiscal years
ended December 31, 1994 and 1993 as filed with the Commission; (ii) its
Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 1994,
September 30, 1994 and March 30, 1995, each as filed with the Commission;
and (iii) all other proxy statements, reports or registration statements
filed by the Company with the Commission since January 1, 1994
(collectively, the "Publicly Filed Documents"). As of their respective
dates, the Company's Publicly Filed Documents did not contain any untrue
statement of a material fact, or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not
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<PAGE>
misleading. The audited consolidated financial statements and unaudited
interim financial statements included in any Publicly Filed Document have
been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis (except as may be indicated therein
or in the notes thereto and except that note disclosures regarding any
interim period may have been omitted in accordance with the applicable
rules of the Commission promulgated under the Exchange Act) and fairly
present the financial condition, the results of operations and consolidated
cash flows of the Company and the Subsidiaries (as hereinafter defined), at
the dates and for the periods indicated subject, in the case of unaudited
interim financial statements, to normal year-end adjustments. The Company
has filed with the Commission all reports and other filings required to be
filed by it since January 1, 1992.
(ii) The consolidated financial statements included in the
Registration Statement and Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Securities Act
and the Rules under the Securities Act. The audited consolidated financial
statements and unaudited interim financial statements included in the
Registration Statement have been prepared in accordance with GAAP applied
on a consistent basis (except as may be indicated therein or in the notes
thereto and except that note disclosures regarding any interim period may
have been omitted in accordance with the applicable rules of the Commission
promulgated under the Exchange Act) and fairly present the financial
condition, the results of operations and consolidated cash flows of the
Company and the Subsidiaries, at the dates and for the periods indicated
subject, in the case of unaudited interim financial statements, to normal
year-end adjustments.
(f) Subsidiaries; Commonly Controlled Entities. The Company
presently has no significant subsidiaries as that term is defined in Rule
405 of the Rules under the Securities Act, other than Computer Knowledge
Corporation, Horizons Consulting, Inc., Strategic Outsourcing Services,
Inc., Unified Systems Solutions, Inc. and Worldwide Computer Services, Inc.
(the "Subsidiaries"); provided, however, that no representation or warranty
is made that each subsidiary meets any of the conditions for being a
significant subsidiary set forth in Rule 405. All of the outstanding
shares of capital stock of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
beneficially by the Company, free and clear of any liens, encumbrances,
security interests or other restrictions, and there are no outstanding
rights to acquire any of the capital stock of the Subsidiaries and the
Company has no obligation to issue any such rights. Except as described
herein, neither the Company nor any of the Subsidiaries owns any securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity other than Birla Horizons International Ltd., a
corporation formed under the laws of India in which the Company has a 50%
interest, inactive subsidiaries and cash equivalents.
(g) No Material Adverse Change. Subsequent to the respective
dates as of which information is given in the Registration Statement and
the Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, and there has not
been any material change in the capital stock (including any dividend or
distribution of any kind declared, paid,
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or made on any class of capital stock of the Company) or long term debt or
obligations under capital leases of the Company, or any material adverse
change or any development involving a prospective material adverse change,
which, if enacted or adopted, could reasonably be expected to have a
material adverse change, in the condition (financial or otherwise) , or in
the earnings, business affairs or business prospects of the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement and the Prospectus.
(h) Capitalization; Descriptions of Securities. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under "Capitalization"; the issued and outstanding Common Stock,
including the Additional Shares which may be purchased by the Underwriters
from the Selling Shareholder, have been duly authorized and validly issued
and are fully paid and non-assessable; the Firm Shares (and, if issued and
sold hereunder by the Company, the Additional Shares) when issued and
delivered by the Company pursuant to this Agreement, will be validly
issued, fully paid and non-assessable (subject to Section 630 of the New
York Business Corporation Law (the "BCL")). The Common Stock and the
preferred stock of the Company conform to the descriptions of them
contained in the Prospectus, and the descriptions of the Common Stock and
preferred stock conform to the rights set forth in the Company's
Certificate of Incorporation, as amended, defining the same. There are no
outstanding rights to acquire any of the capital stock of the Company and
the Company has no obligations to issue any such rights, except as set
forth on the Registration Statement and as provided in the Agreement dated
as of January 13, 1993 among Unified Solutions, Inc., the Company and the
Shareholders, as defined therein (the "USS Agreement"). The issuance of
the Firm Shares (and, if issued and sold hereunder by the Company, the
Additional Shares) is not subject to, or in violation of, any preemptive or
other similar rights.
(i) Organization, Qualification, etc. The Company is a duly
organized and validly existing corporation in good standing under the laws
of the State of New York, and has all of the corporate power to own and
lease its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement. Each of the Subsidiaries is a duly organized and validly
existing corporation in good standing under the laws of the state of its
incorporation, each with the corporate power to own and lease its
properties and to conduct its business as described in the Prospectus.
Each of the Company and the Subsidiaries is duly qualified to do business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have
a material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and the
Subsidiaries taken as a whole.
(j) Regulatory Compliance. The Company and each of the
Subsidiaries hold all material licenses, certificates, permits and other
evidence of regulatory compliance issued by appropriate federal, state or
local governmental agencies or bodies necessary for the conduct of its
business as described in the Prospectus, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, permit or
other evidence of compliance which, singly or in the aggregate, if the
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subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and the Subsidiaries
taken as a whole.
(k) Authority. The Company has full power and lawful authority,
and has taken all corporate action necessary, to enter into this Agreement
and to authorize, issue and sell the Company Firm Shares and the Additional
Shares on the terms and conditions set forth in this Agreement, and this
Agreement has been duly authorized, executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and similar laws relating to or affecting
creditors' rights and remedies in general and by general principles of
equity (regardless of whether enforcement is sought in a proceeding brought
in law or in equity) and limitations on the enforceability of
indemnification and contribution provisions under Federal or state
securities laws or public policy.
(l) Compliance with Other Instruments; Consents. Neither the
Company nor any Subsidiary is in violation of its charter or bylaws or in
default in the performance or observation of any obligation, agreement,
covenant or condition contained in any rights agreement, indenture,
mortgage, deed of trust, note, bank loan or credit agreement, or any other
material agreement or instrument to which it is a party or by which it is
bound, or to which any of its property or assets are subject (collectively,
"Contracts"), which default or defaults, singly or in the aggregate, are
material to the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and the Subsidiaries
taken as a whole, and each such Contract is in full force and effect and is
the legal, valid and binding obligation of the Company or a Subsidiary, as
the case may be, and is enforceable against the Company or a Subsidiary, as
the case may be, in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization and similar laws relating to or affecting creditors' rights
and remedies in general and by general principles of equity (regardless of
whether enforcement is sought in a proceeding brought in law or in equity)
and limitations on the enforceability of indemnification and contribution
provisions under Federal or state securities laws or public policy. The
execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated herein (i)
will not conflict with, result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give rise to the rights
of termination under, any Contract to which the Company or any Subsidiary
is a party or by which any of their respective properties or assets are
bound, or the charter or bylaws of the Company or any of the Subsidiaries,
or any material law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction over
the Company, the Subsidiaries or their respective properties or operations,
and (ii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
of any of the transactions contemplated hereby, except such as have been
obtained and such as may be required under the Acts, under state securities
or "Blue Sky" laws or the rules and regulations of the National Association
of Securities Dealers, Inc.
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<PAGE>
(the "NASD") in connection with the purchase and distribution of the Shares
by the several Underwriters.
(m) Compliance With Laws. Neither the Company nor any
Subsidiary is in violation of any applicable order, injunction, award,
citation, decree, or writ (collectively, "Orders"), or any applicable law,
statute, code, ordinance, rule, regulation or other requirement
(collectively, "Laws"), of any government or political subdivision thereof,
whether federal, state, local or foreign, or any agency or instrumentality
of any such government or political subdivision, or any court or arbitrator
(collectively, "Governmental Bodies") affecting its assets, affairs or
business, where the effect of any such violation, individually or in the
aggregate, would have a material adverse affect on the business or
financial condition of the Company and the Subsidiaries, taken as a whole.
(n) Litigation. Except as set forth in the Prospectus, there is
no action, suit or proceeding before or by any court or governmental agency
or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting the Company or any of the
Subsidiaries that is required to be disclosed in the Registration Statement
(other than as disclosed therein), or that if adversely affected, would
have a material adverse effect on the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company and
the Subsidiaries, taken as a whole, or that would have a material adverse
effect on the properties or assets of the Company and the Subsidiaries,
taken as a whole, or that would materially or adversely affect the
transactions contemplated by this Agreement.
(o) Payment of Taxes. The Company has filed all United States
federal, state and local tax returns which are required to be filed by it.
All taxes and all assessments to the extent that they have become due have
been paid. The Company has made adequate accruals for all taxes which may
be owed but have not been paid.
(p) Real and Personal Property. Except as disclosed in the
Prospectus, the Company owns outright, in fee simple, title to the real and
personal property purported to be owned by it, free and clear of all liens,
mortgages, charges or encumbrances of any nature, except those which do not
materially diminish the value of the property subject to them or interfere
with or impair the present and continued use of that property in the usual
and normal conduct of its business. All of the leases under which the
Company holds properties or assets as lessee are, in all material respects,
as described in the Prospectus (to the extent so described) and are valid
and in full force and effect and enforceable against the Company in
accordance with their terms, (except to the extent enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and similar
laws relating to or affecting creditors' rights and remedies in general and
by general principles of equity (regardless of whether enforcement is
sought in a proceeding brought in law or in equity) and limitations on the
enforceability of indemnification and contribution provisions under Federal
or state securities laws or public policy) and the Company is not in
default in any respect under any of the terms or provisions of any such
leases, except for any default which would not have a material adverse
effect on the business of the Company and the Subsidiaries, taken as a
whole, and no claim has been asserted
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<PAGE>
by anyone adverse to the rights of the Company as lessee under any of the
leases mentioned above, or affecting or questioning the right of the
Company to continued possession of the leased premises or assets under any
such lease.
(q) Intellectual Property. The Company owns or possesses
adequate licenses or other rights to use all patents, trade secrets,
trademarks, trade names and copyrights necessary to enable it to conduct
its business as now operated (the "Intellectual Property") and such
Intellectual Property (other than Intellectual Property rights acquired as
licensee) is owned free and clear of any liens, security interests,
mortgages, charges, encumbrances and adverse rights of every kind, nature
and description; and the Company does not have knowledge of any claim and
has not received any notice of infringement of or conflict with asserted
rights of others or have knowledge of infringement by others of its rights
with respect to any of the foregoing which, singly or in the aggregate,
could reasonably be expected to have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and the Subsidiaries, taken as a whole.
The Company has the right to make, copy, sell, exploit and provide to
others the use of the Intellectual Property in connection with its business
as currently conducted. The Company has taken or is taking all actions
necessary in its reasonable judgment to protect the Intellectual Property.
No third party has any interest in or right to compensation from the
Company by reason of the use, exploitation or sale of the Intellectual
Property, and the Company has not received notice or knowledge of any
complaint, assertion, threat or allegation that would contradict the
foregoing.
(r) Insurance. The Company has its property adequately insured
against loss or damage by fire, maintains adequate insurance against
liability for negligence, and maintains such other insurance in such nature
and amounts of coverage as is usually maintained by companies engaged in
the same or similar business.
(s) No Stabilization or Manipulation of Price. Neither the
Company nor any officer or director of the Company has taken, and the
Company and each officer and director of the Company have agreed not to
take, directly or indirectly, any action designed to stabilize or
manipulate the price of any security of the Company, or which has
constituted or which might in the future reasonably be expected to
constitute stabilization or manipulation of the price of the Shares in
connection with the offering contemplated by the Registration Statement.
(t) Related Transactions. There are no business relationships
or related party transactions of the nature described in Item 404 of
Regulation S-K involving the Company and any other persons referred to in
said Item 404 that are required to be described in the Company's Annual
Report on Form 10-K for its fiscal year ended December 31, 1994 and which
have not been so disclosed.
(u) No Registration Rights. There are no contracts,
arrangements, or understandings between the Company and any person granting
such person or entity the right to require registration of Common Stock or
other securities of the Company or to require the
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Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(v) Lock-up Agreements. The Company has obtained and delivered
to the Underwriters a written agreement, in substantially the form annexed
hereto as Exhibit A, from each executive officer and director of the
Company as of the effective date of the Registration Statement (the
"Effective Date"), restricting the disposition of shares of Common Stock on
the terms provided therein.
(w) No Broker or Finder Engaged by the Company. Except for an
obligation to pay JMS $75,000 for certain services, including in connection
with the offer and sale of the Shares, the Company has not incurred any
liability for any finder's fees or similar payments in connection with any
of the transactions herein contemplated.
(x) Labor Relations. Neither of the Company nor any Subsidiary
is involved in any labor dispute which could reasonably be expected to have
a material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and the
Subsidiaries, taken as a whole, and no such dispute is, to the Company's
knowledge, threatened.
(y) Dealings. None of the Company, the Subsidiaries, any of
their respective officers or directors, nor any of their respective
employees, agents or any other person acting on behalf of the Company or
the Subsidiaries has, directly or indirectly, given or agreed to give any
money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier,
employee or an agent of a customer or supplier, or official or employee of
any governmental agency or instrumentality of any government (domestic or
foreign) or any political party or candidate for office (domestic or
foreign) or other person who was, is, or may be in a position to help or
hinder the business of the Company (or assist in connection with any actual
or proposed transaction) which (a) could reasonably be expected to subject
the Company to any material damage or penalty in any civil, criminal or
governmental litigation or proceeding, (b) if not given in the past, could
reasonably be expected to have had a materially adverse effect on the
assets, business or operations of the Company and the Subsidiaries, taken
as a whole, as reflected in any of the consolidated financial statements
contained in the Prospectus, or (c) if not continued in the future, could
reasonably be expected to have a material adverse effect on the assets,
business, operations or prospects of the Company and the Subsidiaries,
taken as a whole. The Company's internal accounting controls and
procedures are sufficient to cause the Company to comply with the Foreign
Corrupt Practices Act of 1977, as amended.
(z) Investment Company. The Company is not an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
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2. Representations and Warranties of the Selling Shareholder. The
Selling Shareholder represents and warrants to, and agrees with, each of
the Underwriters and the Company that:
(a) Authority; Compliance with Other Instruments. The Selling
Shareholder has the full right, power and authority to enter into this
Agreement and to sell, transfer and deliver the Selling Shareholder Firm
Shares and the Additional Shares which may be sold by the Selling
Shareholder hereunder. This Agreement has been duly executed and delivered
by the Selling Shareholder and constitutes the legal, valid and binding
obligation of the Selling Shareholder enforceable against him in accordance
with its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization and similar laws
relating to or affecting creditors' rights and remedies in general and by
general principles of equity (regardless of whether enforcement is sought
in a proceeding brought in law or in equity) and limitations on the
enforceability of indemnification and contribution provisions under Federal
or state securities laws or public policy. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
will not result in a breach by such Selling Shareholder of, or constitute a
default by the Selling Shareholder under, any material indenture, mortgage,
deed of trust, note, bank loan or credit agreement or any other material
agreement or instrument to which the Selling Shareholder is a party or by
which the Selling Shareholder is bound, or any statute, judgment, decree,
order, rule or regulation of any court or governmental agency or body
applicable to the Selling Shareholder.
(b) Consents. All authorizations, approvals and consents
necessary for the execution and delivery by the Selling Shareholder of this
Agreement, and the sale and delivery of Shares which may be sold by the
Selling Shareholder hereunder (other than, at the time of the execution
thereof, the issuance of the order of the Commission declaring the
Registration Statement effective and such authorizations, approvals or
consents as may be necessary under state securities or "Blue Sky" laws or
the rules and regulations of the NASD) have been obtained and are in full
force and effect.
(c) Title to Shares. The Selling Shareholder is, and on the
Closing Date will be, the lawful owner of the Selling Shareholder Firm
Shares, and, in the event of the exercise of the over-allotment option
granted to the Underwriters under Section 5 of this Agreement, on the
Option Closing Date (as hereinafter defined) the Selling Shareholder will
be, the lawful owner of the Additional Shares which may be sold by the
Selling Shareholder hereunder. The Selling Shareholder has, and on the
Closing Date will have, valid and marketable title to the Selling
Shareholder Firm Shares, in each case free and clear of all liens,
encumbrances, security interests or other restrictions (collectively,
"Liens") and, upon proper delivery of and payment for such Shares, the
Underwriters will acquire valid and marketable title thereto, free and
clear of all Liens. The Selling Shareholder has, and, in the event of the
exercise of the over-allotment option granted to the Underwriters under
Section 5 of this Agreement, on the Option Closing Date the Selling
Shareholder will have, valid and marketable title to the Additional Shares
which may be sold by the Selling Shareholder hereunder, in each case free
and clear of all Liens and,
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upon proper delivery of and payment for such Additional Shares as provided
herein, the Underwriters will acquire valid and marketable title thereto,
free and clear of all Liens.
(d) Accuracy of Registration Statement and Prospectus. The
Selling Shareholder has examined the Registration Statement and the
Prospectus, and all information furnished by or on behalf of the Selling
Shareholder for use in the Registration Statement and Prospectus is, and,
on the Option Closing Date, if any, will be, true, correct and complete,
and, with respect to such information, the Registration Statement and the
Prospectus do not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(e) No Broker or Finder. The Selling Shareholder has not
incurred any liability for any finder's fee or similar payments in
connection with the possible sale of the Selling Shareholder's Shares
hereunder.
3. Purchase and Sale of Shares. On the basis of the representations
and warranties herein contained and subject to the terms and conditions
herein set forth, (i) the Company hereby agrees to issue and sell to the
several Underwriters, the Company Firm Shares and each Underwriter,
severally and not jointly, hereby agrees to purchase from the Company, the
number of Company Firm Shares set forth opposite the name of the
Underwriter in Schedule I hereto, and (ii) the Selling Shareholder agrees
to sell to the several Underwriters, the Selling Shareholder Firm Shares
and each Underwriter, severally and not jointly, hereby agrees to purchase
from the Selling Shareholder, the number of Selling Shareholder Firm Shares
set forth opposite the name of the Underwriter in Schedule I hereto, at a
purchase price of $___ per Firm Share.
4. Delivery and Payment. (a) The Company shall deliver the Company
Firm Shares at the office of Janney Montgomery Scott Inc., 26 Broadway, New
York, New York, on June 12, 1995, at 10:00 A.M., New York City time, or at
such other time, not more than ten (10) full business days thereafter, as
the Company and you shall determine, the date and time of such delivery
being hereinafter called the "Closing Date." On the Closing Date, delivery
of the Firm Shares shall be made to you, for the respective accounts of the
several Underwriters, against payment by the several Underwriters through
you of the purchase price for the Firm Shares. The purchase price for the
Company Firm Shares will be paid to or upon the order of the Company in a
bank check in New York Clearing House funds. Certificates for the Firm
Shares shall be made available to you for inspection, checking and
packaging at the office of Janney Montgomery Scott Inc., 26 Broadway, New
York, New York, not less than one full business day prior to the Closing
Date. Time shall be of the essence and delivery at the time and place
specified in this Agreement is a further condition to the obligations of
each Underwriter.
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<PAGE>
(b) The Selling Shareholder shall deliver the Selling
Shareholder Firm Shares at the office of Janney Montgomery Scott Inc. 26
Broadway, New York, New York on the Closing Date. Pursuant to the terms
and conditions of an escrow agreement (the "Escrow Agreement") dated the
date hereof by and among the Selling Shareholder, the Representatives and
Proskauer Rose Goetz & Mendelsohn LLP (the "Escrow Agent"), the Selling
Shareholder has, on the date hereof, delivered to the Escrow Agent
certificates representing the Selling Shareholder Firm Shares, together
with stock transfer powers, duly endorsed in blank, with his signature
guaranteed by any member firm of the NASD or a commercial bank or trust
company having an office in the United States. Pursuant to the Escrow
Agreement, the Selling Shareholder has authorized and directed the Escrow
Agent to deliver the Selling Shareholder Firm Shares to the Underwriters on
the Closing Date in accordance with the terms of Section 4(a). The
purchase price for the Selling Shareholder Firm Shares will be paid to or
upon the order of the Selling Shareholder in a bank check in New York
Clearing House funds.
5. Option to Purchase Additional 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, the Company and the
Selling Shareholder hereby grant an option to the Underwriters to purchase
165,000 Additional Shares from the Company and the Selling Shareholder, in
each case at a price per Additional Share identical to the price per Firm
Share set forth in Section 3 of this Agreement, in accordance with the
following sentence. The Selling Shareholder shall have the right to sell
all of the Additional Shares to the Underwriters and, to the extent the
Selling Shareholder does not so elect, the Company shall sell the remaining
Additional Shares to the Underwriters in accordance with Section 5(b)
below. The option granted hereby may be exercised by the Underwriters as
to all or any part of the Additional Shares at any time, but only once,
prior to the end of the close of business on the thirtieth day following
the Closing Date. Subject to such adjustments to eliminate fractional
shares as you, as the Representatives of the Underwriters, may determine,
the number of Additional Shares to be purchased by each Underwriter shall
bear the same ratio to the total number of Additional Shares to be sold as
the total number of Firm Shares to be purchased by such Underwriter bears
to the total number of Firm Shares to be purchased by the Underwriters.
(b) The option granted hereby may be exercised by you, as the
Representatives of the Underwriters, by giving written notice (the
"Representatives's Notice") to the Company and the Selling Shareholder
setting forth the number of Additional Shares to be purchased, the date and
time for delivery of payment for the Additional Shares, and stating that
the Additional Shares being purchased are to be used for the purpose of
covering over-allotments in connection with the distribution and sale of
the Firm Shares. Within two (2) business days after such notice is given
by the Representatives, the Selling Shareholder shall notify the Company
and the Representatives of the amount, if any, of the Additional Shares
that shall be sold by him to the Underwriters (the "Selling Shareholder
Notice"). The Company shall sell to the Underwriters that amount of
Additional Shares, if any, which the Selling Shareholder has indicated in
the Selling Shareholder Notice that he will not sell to the Underwriters.
If the Representatives's Notice is given prior to the Closing Date, the
date for delivery and payment for the Additional
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Shares shall not be earlier than the later of two (2) full business days
after the Representatives's Notice is given, or the Closing Date. If the
Representatives's Notice is given on or after the Closing Date, the date
for delivery of and payment for the Additional Shares shall not be earlier
than five full business days after the day on which the notice is given.
In either event, the date shall not be more than fifteen (15) full business
days after the day on which the notice is given. The date and time for
delivery and payment is called the "Option Closing Date." Upon exercise of
the option, the Company and the Selling Shareholder shall become obligated
to sell to the Underwriters and, subject to the terms and conditions set
forth in Section 5(c) of this Agreement, the Underwriters shall become
obligated to purchase the number of Additional Shares described in Section
5(a) above, on the terms described herein. On the Option Closing Date,
delivery of the Additional Shares shall be made against payment of the
purchase price to the Company and/or the Selling Shareholder, as the case
may be, in a bank check payable in New York Clearing House funds.
(c) The obligation of the Underwriters to purchase and pay for
any of the Additional Shares is subject to the accuracy as of the date of
this Agreement, the Closing Date and the Option Closing Date of, and the
compliance by the Company and the Selling Shareholder in all material
respects with, their respective representations and warranties in this
Agreement, to the accuracy of the statements of the officers of the Company
made pursuant to this Agreement, to the performance in all material
respects by the Company and the Selling Shareholder of their respective
obligations under this Agreement, to the satisfaction by the Company and
the Selling Shareholder as of the Option Closing Date of the conditions set
forth in Section 11 of this Agreement, and to the delivery to you of
opinions, certificates, and letters addressed to you and dated the Option
Closing Date substantially similar in scope to those specified in Section
11 of this Agreement, but with each reference to "Firm Shares" to be to the
Additional Shares being sold, and "Closing Date" to be to the "Option
Closing Date."
6. Offering by Underwriters. After the Registration Statement
becomes effective, the Underwriters propose to offer for sale to the public
the Firm Shares and any Additional Shares which may be sold at the price
and upon the terms set forth in the Prospectus.
7. Expenses. (a) The Company agrees to pay all fees, taxes and
expenses incident to the performance of the obligations of the Company and
the Selling Shareholder under this Agreement and under any other written
agreement entered into by either or both of them in connection with the
offer, sale and issuance of the Firm Shares and Additional Shares, and any
fees, taxes and expenses, including transfer taxes, incident to the
issuance and delivery of the Firm Shares and Additional Shares to the
Underwriters as may be required by this Agreement (other than the fees and
disbursements of the Underwriters' counsel, except as provided below),
including, without limitation: (i) accounting, legal printing, any state
or local transfer or other taxes (excluding any income taxes assessed with
respect to Shares sold by the Selling Shareholder), Nasdaq listing fees,
"road show" costs, advertising and other costs incurred in connection with
the preparation, printing, filing and delivery to the Representatives of
the
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Registration Statement, the Preliminary Prospectus, the Prospectus, and all
amendments or supplements to them, preliminary and final Blue Sky
Memoranda, this Agreement, the Agreement Among Underwriters and Selected
Dealer Agreement, Underwriters' Questionnaires, powers of attorney and any
other agreements or similar items reasonably used by you or reasonably
required or desirable in connection with the offering and sale of the Firm
Shares and Additional Shares; (ii) the costs of furnishing by messenger, by
overnight delivery, other expedited delivery service or by mail copies of
the Preliminary Prospectus, the Prospectus and all supplements and
amendments thereto to the several Underwriters, Selected Dealers and their
respective customers; (iii) all filing fees to the Commission and the NASD
payable in connection with this offering; (iv) the fees and expenses of the
transfer agent; and (v) all legal fees, disbursements, filing fees and
other costs of compliance with or registration and qualification under
applicable state securities or Blue Sky laws, and all reasonable expenses
incident thereto (including fees of Underwriter's counsel solely as it
relates to the foregoing). In the event that the proposed offering does
not proceed and the Closing does not occur for any reason, including the
failure of the Company to perform any covenant or agreement or satisfy any
of the conditions under this Agreement to be performed or satisfied by it,
the Company shall reimburse the Representatives for their out-of-pocket
expenses up to $25,000, and will, in addition, reimburse the
Representatives for fees and expenses of counsel for the Underwriters based
on actual time charges and disbursements, but not to exceed $50,000
(exclusive of Blue Sky fees), for which expenses the Representatives shall
account to the Company.
(b) The Selling Shareholder shall pay all stock transfer taxes
payable with respect to the Shares sold by him.
8. Covenants of the Company. In further consideration of the
agreements of the Underwriters contained in this Agreement, the Company
covenants and agrees with each of the several Underwriters as follows:
(a) The Company will not at any time submit or make any
amendment or supplement to the Prospectus or Registration Statement which
shall not have been submitted to you within a reasonable time prior to the
proposed submission thereof, or to which you shall reasonably and timely
object in writing, or which is not in compliance with the Acts.
(b) The Company will use its reasonable best efforts to cause
the Registration Statement and any post-effective amendments thereto to
comply with the requirements of the Securities Act and the Rules under the
Securities Act and to become effective, and will promptly advise you and
confirm in writing (i) when the Registration Statement shall become
effective; (ii) when any post-effective amendment to the Registration
Statement becomes effective; (iii) when the Commission shall request any
amendment to the Registration Statement or Prospectus, or request any
additional information; (iv) of the necessity of amending or supplementing
the Registration Statement or any post-effective amendment in order to then
meet the requirements of the Securities Act and the Rules under the
Securities Act; and (v) of the issuance by the Commission, any "Blue Sky"
authority or any other governmental agency with
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jurisdiction over the Company or its securities, of any stop order or
similar order with regard to the Registration Statement or the Prospectus,
or any order preventing or suspending the use of any Preliminary Prospectus
or the Registration Statement or Prospectus, or of the suspension of the
qualification of the Firm Shares and Additional Shares for offer or sale in
any jurisdiction, or of the institution of any proceedings for any such
purpose. The Company will use its reasonable best efforts to prevent the
issuance of any stop order or of any order preventing or suspending such
use and if such an order shall be issued, the Company will use its
reasonable best efforts to obtain its withdrawal as soon as possible.
(c) The Company will prepare and file with the Commission, upon
your reasonable request, any amendments or supplements to the Registration
Statement or Prospectus, in form and substance reasonably satisfactory to
counsel for the Company, as in the opinion of Baer Marks & Upham, counsel
for the Underwriters, may be necessary or advisable in connection with the
distribution of the Firm Shares and Additional Shares, and will use its
best efforts to cause the same to become effective as promptly as possible.
(d) The Company consents to the use of any Preliminary
Prospectus by the several Underwriters and by dealers for the purposes
contemplated by this Agreement and in accordance with the Acts. The
Company will deliver to you, without charge, on or before the Closing Date,
three executed copies of the Registration Statement and all amendments
thereto (including all financial statements, exhibits thereto, and
documents incorporated by reference therein) and copies of all written
communications between the Company, its representatives and agents and the
Commission, and will deliver to you such number of copies of the
Registration Statement (including all financial statements and documents
incorporated by reference, but without exhibits), and all amendments
thereto as you may reasonably request. The Company will deliver or mail to
you and, upon your request, to the Underwriters, from time to time, during
the period when delivery of the Prospectus relating to the Firm Shares
and/or Additional Shares shall be required under the Acts, as many copies
of the Prospectus (as amended or supplemented) as you may reasonably
request.
(e) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the Rules under the Securities Act, then, promptly and
timely thereafter, the Company will prepare and file or transmit for filing
with the Commission in accordance with such Rule 430A and Rule 424(b) of
the Rules under the Securities Act copies of the amended Prospectus or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus) containing all information so
omitted.
(f) The Company will comply with the requirements of the Acts
and any other applicable rules and regulations of any governmental
authority having jurisdiction over this offering so as to permit the
continuance of sales or dealing in the Shares. Subject to the provisions
of subsection (a) of this Section 8, if, at any time when a Prospectus is
required to be delivered under the Acts, (i) an event relating to or
affecting the Company shall have occurred which, in the judgment of the
Company and its counsel, or in the opinion of counsel
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for the Underwriters, would cause the Registration Statement as then in
effect to include an untrue statement of a material fact or to omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or in order to make the Registration
Statement comply with the Acts, or (ii) in the opinion of Counsel to the
Company or counsel for the Underwriters, it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with
applicable laws, the Company will promptly notify you of the foregoing and
will promptly prepare, file and deliver to you (or to the Underwriters and
such dealers as you shall direct) without charge, such number of copies of
the amended or supplemented Registration Statement or Prospectus as you
shall reasonably request, and will use its best efforts to cause the
Commission and appropriate "Blue Sky" authorities to take all required
action with regard to any such amendment as may be necessary to permit the
lawful use of the Registration Statement and Prospectus in connection with
the distribution of the Firm Shares and Additional Shares.
(g) The Company will supply all necessary documents, exhibits
and information and execute all applications, instruments and papers as may
be necessary or desirable in the opinion of Baer Marks & Upham, counsel for
the Underwriters, to qualify the Shares for sale under the Blue Sky or
other securities laws in such jurisdictions as the Underwriters may
reasonably request; provided, however, that the Company shall not be
obligated to qualify the Shares or the Additional Shares for offer and sale
under the securities or Blue Sky laws of any jurisdiction where, as a
result thereof, the Company would be subject to service of general process
or to taxation as a foreign corporation doing business in such jurisdiction
to which it is not then subject. The Company will take any reasonable
measures requested by you and such action, if any, which is necessary under
such laws in order to qualify the Firm Shares and Additional Shares for
sale.
(h) The Company will make generally available to its security
holders as soon as practicable after the expiration of one year after the
date the Registration Statement becomes effective, and in all events not
later than March 30, 1997, an earnings statement of the Company (which will
be in such detail and form as you may reasonably request and which need not
be audited) covering a period of at least 12 months beginning after the
date the Registration Statement becomes effective, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
Compliance by the Company with the provisions of Rule 158 promulgated under
the Act shall satisfy the provisions of this Section 8(h).
(i) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company shall furnish to its
shareholders annual reports containing financial statements of the Company
audited by its independent certified public accountants and quarterly
reports for the first three quarters of its fiscal year containing
financial information which may be unaudited.
(j) The Company will, from time to time, after the date the
Registration Statement becomes effective, file with the Commission such
reports as are required by the Acts and with state securities commissions
in states where the Shares have been sold by the
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Representatives (as the Representatives shall have advised the Company in
writing) such reports as are required to be filed by the securities acts
and the regulations of those states.
(k) The Company shall furnish to you as early as practicable
prior to the Closing Date, but no later than three (3) full business days
prior thereto, a copy of the latest available unaudited interim financial
statements of the Company which have been reviewed by the Company's
independent certified public accountants, as stated in their letters to be
furnished pursuant to Section 11(h) of this Agreement.
(l) During the period of five (5) years from the date the
Registration Statement becomes effective, the Company will furnish to the
Representatives copies of all reports and other communications (financial
or other) furnished by the Company to its shareholders and, as soon as
reasonably practicable, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission, Nasdaq, or any
national exchange on which any class of securities of the Company may be
listed.
(m) During the period of 180 days after the date the
Registration Statement becomes effective, the Company will not, directly or
indirectly, without the prior written consent of the Representatives,
offer, sell, grant any option to purchase or otherwise dispose of any
Common Stock or any securities convertible into or exchangeable for Common
Stock except pursuant to this Agreement, and upon exercise or conversion of
securities (including stock options) of the Company outstanding prior to
the effective date of the Registration Statement or granted under the
Company's stock option plan under which not more than 1,056,481 shares of
Common Stock are reserved for issuance upon exercise of stock options
granted thereunder.
(n) The Company will reasonably enforce, for your benefit, the
written agreements referred to in Section 1(v) hereof.
9. Indemnification. (a) Subject to the terms and conditions set
forth below, the Company agrees to indemnify and hold harmless, and,
subject to Section 9 (c), the Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless, each Underwriter (including
specifically each person who may be substituted for an Underwriter as
provided in Section 13 of this Agreement) and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages, expenses or liabilities (collectively,
"Losses"), joint or several, to which they or any of them may become
subject under the Acts, state securities laws or under any other statute or
at common law or otherwise, and, except as hereinafter provided, will
reimburse each of the Underwriters and each such controlling person, if
any, for any legal or other expenses reasonably incurred by them or any of
them in connection with investigating or defending any claim or action
whether or not resulting in any liability, insofar as such Losses or
actions arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, in any Preliminary Prospectus or in the Prospectus (or the
Registration Statement or Prospectus as from time to time
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amended or supplemented by the Company) or in any application or other
document (hereinafter "Application") executed by the Company or based upon
written information furnished by or on behalf of the Company, filed in any
jurisdiction in order to qualify the Shares under the securities laws of
that jurisdiction, or which arise out of or are based upon the omission or
alleged omission to state in any of the foregoing any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the indemnity agreement contained in
-------- -------
this subsection shall not apply to any Loss, to the extent arising out of
any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, Preliminary Prospectus or
Prospectus (or the Registration Statement or Prospectus as from time to
time amended or supplemented by the Company) or Application in reliance
upon and in conformity with information furnished in writing to the Company
in connection therewith by the Representatives or any Underwriter directly
or through you expressly for use therein; provided, further that the
-----------------
indemnity agreement contained in this subsection is subject to the
condition that, insofar as it relates to any such untrue statement or
alleged untrue statement or omission or alleged omission in any Preliminary
Prospectus or the Prospectus but eliminated or remedied in the Prospectus
or the Prospectus as supplemented or amended by the Company, such indemnity
agreement shall not inure to the benefit of any Underwriter or any person
controlling such Underwriter from whom the person asserting any such Loss
or action purchased the Shares if (i) prior to the time such Prospectus was
required under the Securities Act to be furnished to such person the
Company had furnished copies of the Prospectus or the Prospectus as
supplemented or amended, as the case may be, to such Underwriter, (ii) a
copy of such Prospectus, as then supplemented or amended, if applicable,
was not furnished to such person at or prior to the time required under the
Securities Act, and (iii) the delivery of such Prospectus would have cured
the defect giving rise to such Losses or action. Promptly after receipt by
any Underwriter or any person controlling such Underwriter of notice of the
commencement of any action in respect of which indemnity may be sought
against the Company or the Selling Shareholder under this subsection (a),
such Underwriter or controlling person shall notify the Company and the
Selling Shareholder in writing of the commencement of the action and,
subject to the provisions hereinafter stated, the Company and/or the
Selling Shareholder shall assume the defense of that action (including the
employment of counsel, who shall be reasonably satisfactory to the
Representatives, and the payment of expenses) insofar as such action shall
relate to any alleged liability in respect of which indemnity may be sought
against the Company and/or the Selling Shareholder hereunder. Any
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense, but the
fees and expenses of such counsel shall not be at the expense of the
Company or the Selling Shareholder, unless (i) the employment of such
counsel has been specifically authorized by the Company or the Selling
Shareholder, as the case may be or, (ii) the indemnified party or parties
reasonably conclude there may be defenses available to it or them which
were not available to the Company or the Selling Shareholder and that such
defenses makes representation by counsel employed by the Company
inappropriate (in which case the Company or the Selling Shareholder, as the
case may be, will not have the right to direct the defense of the action on
behalf of the indemnified parties), in which event the reasonable expenses
of one additional counsel for the Underwriters will be borne by the
Company. Neither the Company nor the Selling Shareholder
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shall be liable to indemnify any person for any settlement of any such
action effected without the written consent of the Company and/or the
Selling Shareholder, as the case may be. The obligations of the Company
and the Selling Shareholder under the indemnity agreement set forth in this
subsection (a) shall be in addition to any liability the Company and the
Selling Shareholder may otherwise have under this Agreement.
(b) Each Underwriter (including specifically each person who may
be substituted for any Underwriter as provided in Section 13 of this
Agreement), severally and not jointly, agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
Selling Shareholder, from and against any and all Losses, joint or several,
to which they or any of them may become subject under the Acts, state
securities laws or under any other statute or at common law or otherwise,
and, except as hereinafter provided, will reimburse the Company and each
such director, officer or controlling person and the Selling Shareholder
for any legal or other expenses reasonably incurred by them or any of them
in connection with investigating or defending any claim or action whether
or not resulting in any liability, insofar as such Losses, or actions arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, in any
Preliminary Prospectus or in the Prospectus (or the Registration Statement
or Prospectus as from time to time amended or supplemented) or in any
Application, or arise out of or are based upon the omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only insofar
as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in
connection therewith by the Representatives or such Underwriter directly or
through the Representatives expressly for use therein. For all purposes of
this Agreement, except for such information as may hereafter be identified
by the Representatives in writing as being so furnished, the information
contained in the section entitled "Underwriting", set forth in the
Prospectus constitutes the only information furnished in writing by or on
behalf of the Underwriters expressly for inclusion in any Preliminary
Prospectus, any Rule 430A Prospectus, the Registration Statement or the
Prospectus (as from time to time amended or supplemented), or any amendment
or supplement thereto, or in any application, as the case may be. Promptly
after receipt of notice of the commencement of any action in respect of
which indemnity may be sought against one or more Underwriters under this
subsection (b), the indemnified party shall notify all Underwriters in
writing of the commencement of the action and the Underwriter or
Underwriters against whom indemnity may be sought shall, subject to the
provisions hereinafter stated, assume the defense of such action (including
the employment of counsel who shall be reasonably satisfactory to the
Company and the Selling Shareholder, and the payment of expenses) insofar
as such action shall relate to an alleged liability in respect of which
indemnity may be sought against such Underwriter or Underwriters. The
Company and each such director, officer or controlling person and the
Selling Shareholder shall have the right to employ separate counsel in any
such action and participate in the defense, but the fees and expenses of
such counsel shall not be at the expense of any Underwriter unless (i) the
employment of such counsel has been specifically authorized by the
Underwriters obligated to
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defend such or action, or (ii) the indemnified party or parties reasonably
conclude there may be defenses available to it or them which are not
available to the Underwriters against whom indemnification is sought and
that such defenses makes representation by counsel employed by the
Underwriters inappropriate (in which case those Underwriters will not have
the right to direct the defense of the action an behalf of the indemnified
party or parties), in which event the reasonable expenses of one additional
counsel for all the indemnified parties will be borne by the indemnifying
Underwriters. The Underwriters against whom indemnity may be sought shall
not be liable to indemnify any person for any settlement of any action
effected without such Underwriter's written consent. The obligations of
each Underwriter under the indemnity agreement set forth in this subsection
(b) shall be in addition to any liability each of them may otherwise have
under this Agreement.
(c) In the event of a claim for indemnity pursuant to the
provisions of this Section 9, each Underwriter severally agrees to seek
such indemnity in full from the Company. If, after seeking such indemnity,
any Underwriter is unable, for any reason, to obtain such indemnity from
the Company, such Underwriter may seek indemnity from the Selling
Shareholder in accordance with the provisions of subsection (a) of this
Section; provided, however, that the Selling Shareholder's aggregate
liability under this Section shall be limited to an amount equal to the net
proceeds (after deducting the Underwriter's discount but before deducting
expenses) received by the Selling Shareholder from the sale of Shares
pursuant to this Agreement.
10. Contribution. To the extent the indemnification provided for in
Section 9 is unavailable to an indemnified party or insufficient in respect
of any Losses referred to therein, then each indemnifying party under
Section 9, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties, on the
one hand, and the indemnified party or parties, on the other hand, from the
offering of the Shares or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above, but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand
in connection with the statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholder on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the Selling Shareholder and
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the tables on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Company and the Selling Shareholder on the one hand
and the Underwriters on the other hand shall be determined by reference to
, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
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relates to information supplied by the Company and the Selling Shareholder
or by the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Section 10 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
The Company, the Selling Shareholder and the Underwriters agree that
it would not be just or equitable if contribution pursuant to this Section
10 were determined by pro rata allocation (even if the Underwriters were
--- ----
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the Losses referred to in
the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Section 10 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in Section 9 and
this Section 10 and the representations and other statements of the Company
and the Selling Shareholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Selling
Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
11. Conditions of Obligations of Underwriters. The obligations of
the Underwriters to purchase and pay for the Shares are subject (as of the
date hereof and the Closing Date, and with respect to the Additional
Shares, the Option Closing Date) to the accuracy in all material respects
of and the compliance with the representations and warranties of the
Company and the Selling Shareholder, the accuracy of the statements of
officers and directors of the Company made pursuant to the provisions of
this Agreement, the performance by the Company and the Selling Shareholder
of their respective obligations under this Agreement and to the following
additional conditions:
(a) The Registration Statement shall become effective with the
Commission no later than 10:00 A.M., New York City time, on the day
following the date of this
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Agreement, or such later time and date as shall have been consented to by
the Underwriters (including you) who are obligated to purchase the Firm
Shares to be purchased by the Underwriters pursuant to this Agreement; the
Commission shall have taken all required action, if any, with regard to the
Registration Statement, and, prior to the Closing Date, no stop order or
similar order with regard to the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
shall be pending or, to the knowledge of the Underwriters, the Company or
the Selling Shareholder, shall be contemplated by the Commission or by any
securities, Blue Sky or other regulatory authority of any jurisdiction, and
any request on the part of the Commission or such other securities, Blue
Sky or regulatory authorities for additional information shall have been
complied with to the reasonable satisfaction of Baer Marks & Upham, counsel
for the Underwriters.
(b) Prior to the date of this Agreement, the issuance and sale
of the Firm Shares to be sold by the Company, and the Additional Shares
which may be sold by the Company hereunder shall have been approved by all
requisite corporate action of the Company.
(c) The NASD shall have indicated that it had no objection to
the underwriting arrangements pertaining to the sale of the Shares and the
participation by the Underwriters in the sale of the Shares.
(d) No action shall have been taken by the Commission or the
NASD, the effect of which would make it improper, at any time prior to the
Closing Date, for members of the NASD to execute transactions (as principal
or agent) in any of the Shares, and no proceedings for the taking of such
action shall have been instituted or shall be pending or, to the knowledge
of the Underwriters or the Company, shall be contemplated by the Commission
or the NASD. The Company represents that at the date hereof it has no
knowledge that any such action is in fact contemplated by the Commission or
the NASD.
(e) Between the date of this Agreement and the Closing Date (and
the Option Closing Date, if any), the Company (i) shall not have sustained
any material loss outside the ordinary course of its business or of such
character as would have a material adverse effect on the business or
property of the Company and the Subsidiaries, taken as a whole, whether or
not that loss is covered by insurance; and (ii) shall have conducted its
business in the usual and ordinary manner and, except as disclosed in the
Prospectus or except in the ordinary course of its business, there shall
not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and the Subsidiaries, taken as a
whole, which, in the reasonable judgment of the Representatives, is
material and adverse and that makes it, in the reasonable judgment of the
Representatives, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(f) At the Closing Date, there shall have been delivered to you
a signed opinion of Proskauer Rose Goetz & Mendelsohn LLP addressed to the
Underwriters, dated as of the Closing Date, in form and substance
reasonably satisfactory to Baer Marks & Upham,
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<PAGE>
counsel for the Underwriters, together with a signed or photostatic copy of
that opinion for each of the other Underwriters, substantially to the
effect that:
(i) Each of the Company and the Subsidiaries is validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has full corporate power and authority to own and lease its
properties and to conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where it owns or
leases properties, except where the failure to so qualify would not have a
material adverse effect on the earnings, business affairs or business
prospects of the Company and the Subsidiaries, taken as a whole.
(ii) All of the outstanding shares of capital stock of the
Subsidiaries are owned of record and, to such counsel's knowledge,
beneficially by the Company, free and clear, to such counsel's knowledge,
of any liens, encumbrances, security interests or other restrictions, and,
to such counsel's knowledge, no one has the right, upon the passage of time
or otherwise, to acquire any of the stock of the Subsidiaries owned by the
Company.
(iii) The Shares to be sold by the Company as contemplated by
this Agreement have been duly authorized, and, when issued as provided in
this Agreement will be, validly issued, fully paid and non-assessable
(subject to Section 630 of the BCL), and to such counsel's knowledge, no
preemptive rights will be applicable to any of the Shares to be sold by the
Company under this Agreement when issued and sold as contemplated in this
Agreement, and in the Registration Statement and the Prospectus.
(iv) Each of this Agreement and the Escrow Agreement has
been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and similar
laws relating to or affecting creditors' rights and remedies in general,
now or hereinafter in effect, and general principles of equity (regardless
of whether enforcement is sought in a proceeding brought in law or in
equity) and by limitations on the enforceability of indemnification and
contribution provisions under federal or state securities laws or public
policy. All corporate action required to be taken by the Board of Directors
of the Company in connection with the authorization, issuance and sale of
the Shares to be sold by the Company as contemplated in this Agreement, the
Registration Statement and the Prospectus have been duly taken.
(v) The issuance by the Company of the Shares to be sold by
it under this Agreement, the execution and delivery of this Agreement, the
undertakings contained in the Registration Statement or the Prospectus, and
the consummation of the transactions contemplated in this Agreement and
compliance with the terms of this Agreement, will not conflict with or
result in a breach of any of the terms or provisions of the Certificate of
Incorporation, as amended, or the By-laws of the Company or the
Subsidiaries, or any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other agreement or instrument known to
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such counsel to which the Company or the Subsidiaries is a party or by
which any of its properties or assets are bound and which is material to
the Company and the Subsidiaries, taken as a whole, or any applicable law
(other than Blue Sky laws), rule or regulation, or (without search of any
court dockets) any judgment, order or decree of any government,
governmental agency or instrumentality or court, domestic or foreign,
having jurisdiction over the Company or its properties or assets, known to
such counsel.
(vi) To the knowledge of such counsel, except as described
in the Prospectus, each of the Company and the Subsidiaries holds all
licenses, certificates, permits and other evidence of regulatory compliance
issued by appropriate federal, state or local governmental agencies or
bodies necessary for the conduct of its business as described in the
Prospectus and which is material to the Company and the Subsidiaries, taken
as a whole.
(vii) Each of this Agreement and the Escrow Agent has been
executed and delivered by or on behalf of the Selling Shareholder and
constitutes a valid and legally binding agreement of the Selling
Shareholder in accordance with its terms.
(viii) To the knowledge of such counsel, no authorizations,
approvals and consents necessary for the execution and delivery by the
Selling Shareholder of this Agreement, and the sale and delivery of Shares
which may be sold by the Selling Shareholder hereunder (other than, at the
time of the execution thereof, the issuance of the order of the Commission
declaring the Registration Statement effective and such authorizations,
approvals or consents as may be necessary under state securities or Blue
Sky laws or under the rules and regulations of the NASD).
(ix) To such counsel's knowledge upon the delivery of
certificates for Shares being sold by the Selling Shareholder hereunder
against payment therefor as provided herein, the Underwriters will acquire
title to such Shares free and clear of any "adverse claim" (as such term is
used in Section 8.302 of the Uniform Commercial Code as in effect in the
State of New York), assuming the Underwriters purchased such Shares in good
faith without notice of any such adverse claim.
(x) Except for registration or qualification under the
Securities Act or under state securities or Blue sky laws, no
authorization, approval, consent or license of any regulatory body or
authority is required for the valid authorization, issuance, sale and
delivery of the Firm Shares and Additional Shares, or, if required, all
such authorizations, approvals, consents and licenses have been obtained
and are in force and effect.
(xi) The Registration Statement has become effective, and,
to such counsel's knowledge, no stop order or similar order has been issued
with regard to the Registration Statement or the Prospectus, no proceedings
for that purpose have been instituted or are pending, and such counsel has
not been notified that any such proceedings are contemplated under the Acts
or under any Blue Sky or other securities laws of any jurisdiction.
-24-
<PAGE>
(xii) The Registration Statement, the Prospectus and each
post-effective amendment or supplement thereto, and each document filed
pursuant to the Exchange Act and incorporated by reference into the
Registration Statement and the Prospectus, complies (or, with respect to
documents incorporated by reference, complied when so filed) as to form in
all material respects with the requirements of the Acts (except that no
opinion shall be expressed as to the financial statements, notes related
thereto, and other financial or statistical data included therein and
information supplied by you) , and, to such counsel's knowledge, all
contracts or other documents of a character required by the Securities Act
and the Rules under the Securities Act to be summarized or disclosed in the
Prospectus or filed as exhibits to the Registration Statement have been so
summarized, disclosed or filed.
(xiii) To such counsel's knowledge, all statutes or
regulations or legal or governmental proceedings required to be described
in the Registration Statement or Prospectus are described therein as
required, and all such descriptions in the Registration Statement or
Prospectus are accurate in all material respects and present fairly the
information purported to be shown.
(xiv) To such counsel's knowledge, there are no outstanding
options, warrants or other rights to purchase or acquire any shares of
capital stock of the Company, except as set forth in the Registration
Statement or the Prospectus and except pursuant to the USS Agreement.
(xv) The authorized capital stock of the Company conform as
to legal matters in all material respects with the statements concerning
them made in the Registration Statement and the Prospectus under the
section entitled "Description of Capital Stock," and such statements
present fairly the matters respecting the authorized capital stock of the
Company required to be set forth in the Registration Statement or the
Prospectus.
(xvi) Except as set forth in the Registration Statement and
Prospectus, to such counsel's knowledge, there is no pending or threatened
action, suit or proceeding before any court or before or by any
governmental agency or body to which the Company is a party, or of which
any of its properties or assets are the subject, which is required to be
disclosed in the Registration Statement or Prospectus or which would have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole.
(xvii) The Company is not an "investment company" or an entity
"controlled" by and "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
In addition, such counsel shall also include a statement to the
effect that in the course of the preparation of the Registration Statement
and the Prospectus, such counsel has participated in conferences with
officers and representatives of the Company and with the Company's
independent public accountants, at which conferences such counsel made
inquiries of such officers, representatives and accountants and discussed
the contents of the Registration
-25-
<PAGE>
Statement and the Prospectus and (without taking any further action to
verify independently the statements made in the Registration Statement and
the Prospectus and, except as stated in the foregoing opinions, without
assuming responsibility for the accuracy, completeness or fairness of such
statements) nothing has come to the attention of such counsel that causes
such counsel to believe that (i) the Registration Statement as of the
Effective Date and as of the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits 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
(it being understood that such counsel need not express any statement with
respect to the financial statements, schedules and other financial
information included in the Registration Statement or the Prospectus).
The opinions set forth in such opinion may be limited to the laws
of the State of New York, the General Corporation Law of the State of
Delaware and the Federal laws of the United States.
In rendering such opinion, such counsel may rely (a) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and (b) to the extent they deem proper, on
certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing or qualification to do business of the Company,
provided that copies of any such statements or certificates shall be
delivered to counsel for the Underwriters, and on the representations and
warranties of the Company and the Selling Shareholder contained in this
Agreement.
(g) At the Closing Date, you shall have received a Certificate
signed by the Chairman of the Board, the President and the Vice President-
Finance of the Company, dated as of the Closing Date, to the effect that:
(i) Each officer signing the Certificate has carefully
examined the Registration Statement and the Prospectus and, in his or her
opinion, as of the date of the Prospectus, and as of the date of the
Certificate, neither the Registration Statement nor the Prospectus, nor any
amendment or supplement, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and, since the date of the
Prospectus, no event has occurred which should have been set forth in an
amendment or a supplement to the Registration Statement or Prospectus which
has not been so set forth, and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any material adverse change in the condition of the
Company and the Subsidiaries, taken as a whole.
(ii) No stop order or similar order with regard to the
Registration Statement or Prospectus has been issued and to the knowledge
of such officer, no proceedings for that purpose have been taken or are
contemplated by the Commission or any other agency having jurisdiction with
respect to the issuance, sale or distribution of the Shares.
-26-
<PAGE>
(iii) The Company has complied in all material respects with
its obligations under this Agreement, and the representations and
warranties set forth in Section 1 of this Agreement are true and correct as
of the date of the Certificate with the same force and effect as though
made on that date.
(h) On the date of this Agreement, you shall have received a
letter addressed to the Underwriters, with a signed or photostatic copy for
each of the several Underwriters, dated the date it is delivered, in form
and substance satisfactory to you and Baer Marks & Upham, from Grant
Thornton LLP, independent certified public accountants, concerning their
examination and review of financial statements and various other data
contained in the Registration Statement, containing the following:
(i) confirming that they are, and during the periods
covered by their report(s) included in the Registration Statement and the
Prospectus were, independent certified public accountants with respect to
the Company and the Subsidiaries within the meaning of the Act and the
Rules under the Act and stating that the answer to Item 13 of the
Registration Statement is correct insofar as it relates to them;
(ii) stating that, in their opinion, the consolidated
statements and schedules of the Company and the Subsidiaries included in
the Registration Statement and Prospectus and covered by their opinion
therein comply in form in all material respects with the applicable
accounting requirements of the Act and the Rules under the Act;
(iii) stating that, on the basis of procedures (but not an
examination made in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim financial
statements of the Company and the Subsidiaries (with an indication of the
date of the latest available unaudited interim financial statements), a
reading of the latest available minutes (and consents) of the stockholders
and Boards of Directors of the Company and the Subsidiaries and committees
of such Boards of Directors, inquiries to certain officers and other
employees of the Company and the Subsidiaries responsible for financial and
accounting matters, and other specified procedures and inquiries to a date
not more than five (5) business days prior to the date of such letter,
nothing has come to their attention that caused them to believe that:
(A) the unaudited consolidated financial statements and schedules of the
Company and the Subsidiaries included in the Registration Statement and
Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Acts or are not fairly presented
in conformity with generally accepted accounting principles (except to the
extent that certain footnote disclosures regarding any stub period may have
been omitted in accordance with the applicable rules of the Commission
under the Exchange Act) applied on a basis consistent with that of the
audited financial statements appearing therein; (B) the unaudited pro forma
adjustments, if any, have not been properly applied; (C) there was any
change in the capital stock or long-term debt of the Company or any
decrease in the net current assets or stockholders' equity of the Company
as of the date of the latest available monthly financial statements of the
Company and the Subsidiaries or as of a specified date not more than five
business days prior to the date of such letter, each as compared with the
amounts shown in
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<PAGE>
the most recent balance sheet included in the Registration Statement and
Prospectus, other than as described in the Registration Statement and
Prospectus or any change or decrease (which shall be set forth therein)
which you, in your sole discretion, shall accept, or (D) there was any
decrease in combined net sales, net earnings, or net earnings per share of
Common Stock of the Company and the Subsidiaries, during the period from
March 30, 1995 to the date of the latest available combined monthly
financial statements of the Company and the Subsidiaries or to a specified
date not more than five business days prior to the date of such letter,
each as compared with the corresponding period in 1993, other than as
described in the Registration Statement and Prospectus or any decrease
(which shall be set forth therein) which the Underwriters in the
Underwriters sole discretion shall accept; and
(iv) stating that they have compared specific numerical data
and financial information pertaining to the Company and the Subsidiaries
set forth in the Registration Statement, which have been specified by you
prior to the date of this Agreement, to the extent that such data and
information may be derived from the general accounting records of the
Company, and excluding any questions requiring an interpretation by legal
counsel, with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do
not constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter, and found them to be in
agreement.
At the Closing Date, you shall have received a letter addressed to
you, dated as of the Closing Date, with a signed or photostatic copy for
each of the several Underwriters from Grant Thornton LLP, confirming, as of
the Closing Date, the statements made in the letter furnished by them at
the date of this Agreement and advising that as of a date no earlier than
three business days prior to the Closing Date, they have no reason to
believe that there has been any change in the matters described in the
prior letter.
(i) At the Closing Date there shall have been delivered to you,
with a photostatic copy for each of the several Underwriters, a signed
opinion of Baer Marks & Upham, counsel for the Underwriters, dated as of
the Closing Date, with respect to the sufficiency of corporate proceedings
and other legal matters in connection with this Agreement, the Shares,
Registration Statement, Prospectus and related matters as the
Representatives may request, and the Company and the Selling Shareholder
shall have furnished to such counsel all documents as such counsel may have
requested for the purpose of enabling them to pass upon those matters.
(j) All proceedings in connection with the authorization,
issuance and sale of the Shares shall be reasonably satisfactory in form
and substance to you and to your counsel, and your counsel shall have been
furnished with all documents, certificates and opinions, including
resolutions of the Board of Directors of the Company and minutes of any
shareholders' meetings, as may have been reasonably requested in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements of the Company or the Selling Shareholder, and the
performance of any of the covenants of the Company or the Selling
Shareholder or the compliance with any of the conditions contained in this
Agreement.
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<PAGE>
(k) The Selling Shareholder shall have complied with the
requirements of the Company's transfer agent relating to the sale by him of
the Selling Shareholder Shares including, without limitation, the timely
delivery to it of (i) the certificates for such shares accompanied by stock
transfer powers duly signed and guaranteed in accordance with the
provisions of Section 4(b) hereof and (ii) a legal opinion of counsel to
the Company, in form and substance satisfactory to such transfer agent,
relating to the transfer of such shares.
(l) The "lock up" agreements between you and the officers and
directors of the Company relating to the sales and certain other
dispositions of shares of Common Stock or other securities, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date.
(m) The Shares shall have been approved for listing on the
Nasdaq National Market.
12. Conditions of Obligations of Company and Selling Shareholder.
The obligations of the Company and the Selling Shareholder to sell and
deliver the Shares to the several Underwriters is subject to the condition
that the Registration Statement shall become effective with the Commission
not later than 10: 00 A.M., New York City time, on the day following the
date of this Agreement, or such later date as shall have been consented to
by the Underwriters (including you) who are obligated to purchase a
majority of the Shares to be purchased by all of the Underwriters pursuant
to this Agreement, and prior to the Closing Date (and, with respect to the
Additional Shares, prior to the Option Closing Date), no stop order or
similar order with regard to the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
shall be pending or, to your knowledge or to the knowledge of the Company,
shall be contemplated by the Commission or any other regulatory agency
having jurisdiction with respect to the offer and sales of the Shares.
13. Substitution of Underwriters. (a) If one or more Underwriters
default in its or their obligations to purchase and pay for Firm Shares
under this Agreement and if the aggregate amount of the Firm Shares which
all Underwriters so defaulting shall have agreed to purchase does not
exceed 10% of the Firm Shares, each nondefaulting Underwriter shall have
the right and is obligated, severally, to purchase and pay for (in addition
to the number of Firm Shares set forth opposite its name in Schedule I)
that proportion of the Firm Shares agreed to be purchased by all the
defaulting Underwriters which the percentage of Firm Shares set forth
opposite its name in Schedule I bears to the aggregate of the percentage of
Firm Shares set forth opposite the names of all the nondefaulting
Underwriters. In that event, the Representatives, for the accounts of the
several nondefaulting Underwriters, shall take up and pay for all or any
part of the Firm Shares to be purchased by each nondefaulting Underwriter
under this subsection (a), and may postpone the Closing Date to a time not
exceeding three full business days after the Closing Date determined as
provided in Section 4 of this Agreement; and
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<PAGE>
(b) If one or more Underwriters default in its or their
obligations to purchase and pay for Firm Shares under this Agreement and if
the aggregate amount of the Firm Shares which all Underwriters so
defaulting shall have agreed to purchase exceeds 10% of the Firm Shares, or
if one or more Underwriters for any reason permitted under this Agreement
cancel its or their obligations to purchase and pay for Firm Shares under
this Agreement, the noncancelling and nondefaulting Underwriters
(hereinafter called the "Remaining Underwriters") shall have the right to
purchase such Firm Shares on the Closing Date in the proportion as may be
agreed among them. If the Remaining Underwriters do not purchase and pay
for all such Firm Shares at the Closing Date, the Closing Date shall be
postponed by two business days and the Remaining Underwriters shall have
the right to purchase the Firm Shares, or to substitute another person or
persons to purchase them, or both, at the postponed Closing Date. If
purchasers are not found for such Firm Shares by the postponed Closing
Date, the Closing Date shall be postponed for a further five business days
and the Company shall have the right (but shall not be obligated) to
substitute another person or persons, satisfactory to the Representatives,
to purchase those Firm Shares at the second postponed Closing Date. If the
Company does not find the purchasers for those Firm Shares by the second
postponed Closing Date, then this Agreement shall automatically terminate
and neither the Company nor the Remaining Underwriters shall be under any
obligation under this Agreement (except that the Company shall remain
liable to the extent provided in Sections 7 and 9(a) and 10 and the
Underwriters shall remain liable to the extent provided in Sections 9(b)
and 10). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 13. Nothing in
this Section will relieve a defaulting Underwriter from liability for its
default or obligate any Underwriter to purchase or find purchasers for any
Firm Shares in excess of those agreed to be purchased by the Underwriter in
Section 3 and Section 13(a) of this Agreement.
14. Effective Date of Agreement. This Agreement shall become
effective at whichever of the following times shall first occur: (i) at
9:30 A.M., New York City time, on the next full business day following the
date on which the Registration Statement becomes effective or (ii) at such
time after the Registration Statement has become effective and the
Underwriters shall release the Firm Shares for sale to the public;
provided, however, that the provisions of Sections 7, 9, 10, 14 and 18
hereof shall at all times be effective. For purposes of this Section 14,
the Firm Shares shall be deemed to have been so released upon the release
by the Underwriters for publication, at any time after the Registration
Statement has become effective, of any newspaper advertisement relating to
the Firm Shares or upon the release by the Underwriters of telegrams
offering the Firm Shares for sale to securities dealers, whichever may
occur first.
15. Termination of Agreement. (a) This Agreement may be
terminated at any time prior to the Closing Date by you by giving written
notice to the Company and the Selling Shareholder upon the occurrence of
any of the following events:
(i) the Company shall have sustained a loss, by reason of
fire, flood, accident or other calamity which, in your reasonable judgment,
materially affects the aggregate
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<PAGE>
value of the property owned or leased by the Company or which materially
interferes with the operation of the business of the Company, regardless of
whether or not that loss shall have been insured;
(ii) the Company has encountered or been threatened with a
strike or other labor dispute or been subjected to governmental action or
fluctuations in currency or major political upheaval which materially
affects the aggregate value of the property owned or leased or which
materially interferes with the operation of its business or which in your
reasonable judgment makes it impracticable or inadvisable to offer for sale
or to enforce contracts made by the Underwriters for the resale of the Firm
Shares;
(iii) except as set forth in the Prospectus, there shall be
pending or threatened against the Company or notification has been received
by the Company, of the threat of any material legal or governmental
proceeding or action relating generally to the business or prospects of the
Company, as the case may be, which could materially adversely affect the
Company (including action with respect to credit or interest rates) or
which in your reasonable opinion makes it impracticable or inadvisable to
proceed with the offering;
(iv) any of the certificates, opinions or other documents to
be delivered on the date of this Agreement or at the Closing Date are not
in form reasonably satisfactory to counsel to the Underwriters;
(v) any conditions set forth in Section 11 of this
Agreement shall not have been satisfied;
(vi) the Company is merged or consolidated or all or
substantially all of the capital stock or assets of the Company are
acquired by another company or group, or there exists a binding legal
commitment for the foregoing or any other material change of ownership or
control occurs;
(vii) there has occurred any outbreak of hostilities or
escalation of any existing hostilities or other calamity or crisis, the
effect of which on the financial markets of the United States is such as to
make it impracticable, in your reasonable judgment, to offer for sale or to
enforce contracts made by the Underwriters for the sale of the Shares;
(viii) a banking moratorium shall have been declared by either
federal or New York state authorities;
(ix) if trading generally on either the American Stock
Exchange, the New York Stock Exchange, or Nasdaq has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges
for prices for securities generally have been required, by either of said
Exchanges or Nasdaq or by order of the Commission or any other governmental
authority;
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(x) trading of any securities of the Company shall have
been suspended on any exchange or in the over-the-counter market; or
(xi) any law shall be enacted or any regulation promulgated
relating to the business of the Company which could materially adversely
affect the Company.
(b) This Agreement may be terminated at any time prior to the
Closing Date by the Company by giving written notice to you (i) at any time
before this Agreement becomes effective in accordance with section 14
hereof, or (ii) if the conditions set forth in Section 12 shall not have
been satisfied at or prior to the Closing Date.
16. Notices. All communications under this Agreement shall be in
writing and, except as otherwise provided shall be delivered at or mailed,
registered or certified, return receipt requested, or telecopied to the
addresses set forth below. Any notices given in accordance with this
paragraph shall be effective when received.
If to you or any other Underwriter:
Janney Montgomery Scott Inc.
26 Broadway
New York, New York 10004
Attention: William J. Barrett, Senior Vice President
Copy to:
Janney Montgomery Scott Inc.
As Representatives of the Several Underwriters
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
Attention: Richard A. Thompson, Senior Vice President
and
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Peter S. Kies, Vice President
and
Baer Marks & Upham
805 Third Avenue
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<PAGE>
New York, New York 10022
Attention: Eric D. Martins, Esq.
If to the Company:
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07064-1495
Attention: John J. Cassese, President
Copy to:
Proskauer Rose Goetz & Mendelsohn
1585 Broadway
New York, New York 10036
Attention: Robert A. Cantone, Esq.
If to the Selling Shareholder:
John J. Cassese, President
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07064-1495
Any party may change its address by giving notice in accordance with
this Section.
17. Parties in Interest. This Agreement is made solely for the
benefit of the Underwriters, the Company, the directors and officers of the
Company, the Selling Shareholder and their respective executors,
administrators, successors and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term
"successor" and "successor and assigns" shall not include any purchaser, as
such purchaser, from the Company, the Selling Shareholder or any of the
several Underwriters of the Shares. All of the obligations of the
Underwriters under this Agreement are several and not joint.
18. Survival Clause. The representations, warranties, indemnities,
agreements and other statements of the Underwriters and the Company and the
Selling Shareholders set forth in this Agreement and made pursuant to this
Agreement will remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or
controlling person thereof or by or on behalf of the Company, any of its
officers and directors the Selling Shareholders, an Underwriter or any
controlling person thereof, (ii) any termination of this Agreement and
(iii) delivery of and payment for the Shares.
19. Authority of Representatives. You will act for the several
Underwriters in connection with this offering, and any action under or in
respect of this Agreement taken by you
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<PAGE>
as Representatives on behalf of the Underwriters will be binding upon all
of the Underwriters. In addition, any provision herein requiring the
decision or consent of the Representatives shall be deemed to have been
validly decided or given if decided or given by Janney Montgomery Scott
Inc.
20. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
21. Counterparts. This Agreement may be signed in one or more
counterparts and shall be deemed effective when each party hereto has
signed a counterpart.
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<PAGE>
If the foregoing is in accordance with your understanding of our
Agreement, kindly sign and return to the Company the enclosed duplicate
hereof, whereupon it will become a binding Agreement among the Company and
the Underwriters in accordance with its terms.
Very truly yours,
COMPUTER HORIZONS CORP.
By:
------------------------------------------
Name:
Title:
----------------------------------------------
John J. Cassese, Selling Shareholder
The foregoing Agreement is hereby confirmed and
delivered as of the date first above written
JANNEY MONTGOMERY SCOTT INC.
By:
--------------------------------
(Authorized Signature)
ROBERT W. BAIRD & CO. INCORPORATED
By:
--------------------------------
(Authorized Signature)
Acting on their own behalf and as Representatives
of the several Underwriters named in Schedule I
attached hereto.
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<PAGE>
EXHIBIT A
---------
COMPUTER HORIZONS CORP.
Lock-Up Agreement
-----------------
June 1, 1995
Janney Montgomery Scott Inc.
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046-1495
Ladies and Gentlemen:
The undersigned understands that Janney Montgomery Scott Inc.
("Janney") and Robert W. Baird & Co. Incorporated (together with Janney,
------
the "Representatives"), propose to enter into an Underwriting Agreement
---------------
(the "Underwriting Agreement") with Computer Horizons Corp. (the "Company")
---------------------- -------
providing for the public offering (the "Offering") of shares of Common
--------
Stock of the Company (the "Common Stock"). The undersigned acknowledges
------------
the Offering will benefit the undersigned by, among other things, providing
substantial capital to the Company and strengthening the market for the
Company's securities.
In order to induce the Representatives, on behalf of the
underwriters (the "Underwriters"), to enter into the Underwriting Agreement
------------
and effect the Offering, the undersigned hereby agrees that for a period
commencing on the date that the Company's registration statement on file
with the Securities and Exchange Commission ("SEC") (File No. 33-59103) is
---
declared effective by the SEC and ending 180 days from such date, the
undersigned will not, notwithstanding any registration or other rights that
the undersigned may have, directly or indirectly, offer, sell, contract to
sell, grant any option with respect to, transfer, assign, pledge or
otherwise dispose of (either pursuant to Rule 144 under the Securities Act
of 1933, as amended, or otherwise) any Common Stock, any warrants, any
Common Stock issuable upon the exercise of such warrants or any securities
convertible into or exchangeable or exercisable for Common Stock
(collectively, the "Securities"), unless the undersigned has theretofore
----------
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<PAGE>
received the written consent of Janney. The foregoing shall not be deemed
to restrict the exercise by the undersigned of options to purchase shares
of Common Stock and the surrender of such options pursuant thereto.
In order to enable the Underwriters to enforce the aforesaid
covenants, the undersigned hereby consents to the placing of legends and
stop-transfer orders with the transfer agent of the Company's securities
with respect to any of the Securities registered in the undersigned's name
or beneficially owned by the undersigned.
If the undersigned is an officer or director of the Company, he
or she represents that he or she has not taken, and further agrees not to
take, directly or indirectly, any action designed to stabilize or
manipulate the price of any security of the Company, or which has
constituted or which might in the future reasonably be expected to
constitute stabilization or manipulation of the price of the Common Stock
in connection with the Offering.
This Agreement is to be governed by and construed in accordance
with the laws of the State of New York. This Agreement shall be binding
upon the successors and assigns of the undersigned.
The undersigned understands that the Company and the Underwriters
will proceed with the Offering in reliance upon this Agreement.
Very truly yours,
_____________________________ ______________________________
Name of Corporation, Signature of Individual Holder
Partnership or other Entity
By:__________________________ ______________________________
Signature Name (Please Print)
_____________________________
Name of Above Signatory
(Please Print)
_____________________________
Title of Signatory
<PAGE>
SCHEDULE I
----------
LIST OF UNDERWRITERS
Underwriters Number of
Firm Shares
-----------
Janney Montgomery Scott Inc.
Robert W. Baird & Co. Incorporated
Total . . . . . . . . . . . . . . . . 1,100,000
-38-
Exhibit 5
Proskauer Rose Goetz & Mendelsohn, LLP
1585 Broadway
New York, New York 10036
June 5, 1995
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046
Re; Registration Statement on From S-2
Registration No. 33-59103
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Computer Horizons Corp.,
a New York corporation (the "Company"), in connection with the
preparation and filing with the Securities and Exchange
Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), of the above-captioned
Registration Statement, as amended, and the prospectus
included therein (the "Prospectus"), relating to the proposed
underwritten public offering of 1,265,000 shares of the Company's
Common Stock, par value $.10 per share (the "Common Stock"),
including the issuance and sale by the Company of up to 1,025,000
shares of Common Stock (the "Firm Shares"), the sale by John J.
Cassesse (the "Selling Shareholder") of up to 75,000 shares of
Common Stock (the "Selling Shareholder Shares"), and the sale of
up to 165,000 shares of Common Stock by the Selling Shareholder
and the Company pursuant to an over-allotment option granted to
the Underwriters (the "Over-allotment Shares").
In so acting, we have examined and relied upon the
originals, or copies certified or otherwise identified to our
satisfaction, of such records, documents and other instruments
as in our judgment are necessary or appropriate to enable us
to render the opinion expressed below.
Based on the foregoing, we are of the opinion that (a)
the Firm Shares and the Over-allotment Shares (to the extent
issued and sold by the Company) have been duly authorized and,
when issued in accordance with the underwriting agreement as
described in the Registration Statement, will be validly issued,
fully paid and non-assessable, and that (b) the Selling
Shareholder Shares and the Over-allotment Shares (to the
extent sold by the Selling Shareholder) have been duly authorized
and validly issued and are fully paid and non-assessable.
<PAGE>
Computer Horizons Corp.
June 5, 1995
Page 2
Our opinion expressed above is limited to the
federal law of the United States of America and the law of the
State of New York.
We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the use of our
name under the heading "Legal Matters" in the Prospectus. In
giving such consent, we do not thereby concede that we are
within the category of persons whose consent is required under
Section 7 of the Act or the Rules and Regulations of the
Commission thereunder.
Very truly yours,
PROSKAUER ROSE GOETZ & MENDELSOHN LLP
By: /s/ Robert A. Cantone, Esq.
-----------------------------------
Robert A. Cantone, Esq.,
a member of the firm
Exhibit 10.9(a)
PROMISSORY NOTE
$10,000,000.00 May 24, 1995
For Value Received, COMPUTER HORIZONS CORP., a corporation formed under the
laws of the State of New York (the "Borrower"), hereby promises to pay to the
order of THE BANK OF NEW YORK NATIONAL ASSOCIATION (the "Bank"), at its 385
Rifle Camp Road, West Paterson, New Jersey Office, the principal sum of Ten
Million and 00/100 Dollars ($10,000,000.00) or the aggregate unpaid principal
amount of all advances made by the Bank to the Borrower (which aggregate unpaid
principal amount shall be equal to the amount duly endorsed and set forth
opposite the date last appearing on the schedule attached hereto), whichever is
less.
Each advance hereunder (an "Advance") shall bear interest at a rate per
annum equal to (1) the Alternate Base Rate (as hereinafter defined), or (2) such
rate (a "Eurodollar Rate") as is equal to, during each Eurodollar Interest
Period (as hereinafter defined), the sum of one percent (1%) plus the quotient
of LIBOR (as hereinafter defined) for such Eurodollar Interest Period divided by
one (1) minus the Eurodollar Reserve (as hereinafter defined), which Eurodollar
Rate shall change on the effective date of any change in the Eurodollar Reserve,
(3) such rate (a "Note Rate") as shall be agreed to between the Bank and the
Borrower at the time of such Advance, which Note Rate shall remain fixed until
the maturity date of such Advance as shall be agreed to between the Bank and the
Borrower at the time of such Advance, or (4) such rate (a "Daily Rate") as shall
be agreed to between the Bank and the Borrower each day such Advance is
outstanding, but, in each case, in no event in excess of the maximum rate
permitted by law. Any Advance hereunder which shall not be paid when due shall
bear interest at a rate per annum equal to the Alternate Base Rate plus two
percent (2%), but in no event in excess of the maximum rate permitted by law.
Interest shall be computed on the basis of a 360 day year for the actual number
of days elapsed.
As used in this note:
(a) "Alternate Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (i) the prime commercial lending rate of the Bank as
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate,
and (ii) the Federal Funds Rate in effect on such day plus one-half of one
percent (1/2%);
(b) "Alternate Base Rate Advance" shall mean any Advance which bears
interest at the Alternate Base Rate;
<PAGE>
(c) "Business Day" shall mean (i) any day other than a day on which
commercial banks in New York, New York are required or permitted by law to close
and (ii) with respect to Eurodollar Rate Advances, any day specified in clause
(i) of this definition which is also a day on which commercial banks are open
for domestic and international business, including dealings in Dollar deposits,
in London, England and New York, New York;
(d) "Daily Rate Advance" shall mean any Advance which bears interest at a
Daily Rate.
(e) "Dollar" and "$" shall mean lawful money of the United States of
America;
(f) "Eurodollar Interest Period" shall mean, with respect to any
Eurodollar Rate Advance, a period selected by the Borrower on not less than two
Business Days' prior notice to the Bank commencing on the date such Eurodollar
Rate Advance is made and ending one (1) month, two (2) months or three (3)
months thereafter; provided, however, that (i) any Eurodollar Interest Period
-------- -------
which would otherwise end on a day which is not a Business Day shall be extended
to the immediately succeeding Business Day unless such Business Day falls in
another calendar month (in which case such Eurodollar Interest Period shall end
on the immediately preceding Business Day), (ii) no Eurodollar Interest Period
shall end after the date until which the line of credit under which Advances may
be made is held available to the Borrower, (iii) if any Eurodollar Interest
Period begins on a day for which there is no numerically corresponding day in
the calendar month during which such Eurodollar Interest Period is to end, such
Eurodollar Interest Period shall end on the last Business Day of such calendar
month, and (iv) no Eurodollar Interest Period shall be less than one (1) month;
(g) "Eurodollar Rate Advance" shall mean any Advance which bears interest
at a Eurodollar Rate;
(h) "Eurodollar Reserve" shall mean the aggregate of the rates (expressed
as a decimal) of reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) under any regulation promulgated
by the Board of Governors of the Federal Reserve System (or any other
governmental authority having jurisdiction over the Bank) as in effect from time
to time, dealing with reserve requirements prescribed for eurocurrency funding
(including, without limitation, any reserve requirements with respect to
"Eurocurrency liabilities" under Regulation D of the Board of Governors of the
Federal Reserve System);
(i) "Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with the members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if
2
<PAGE>
such day is not a Business Day, for the immediately preceding Business Day) by
the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day, the average of quotations for such day on such
transactions received by the Bank from three Federal funds brokers of recognized
standing selected by the Bank;
(j) "LIBOR" shall mean, with respect to any Eurodollar Rate Advance for
the then current Eurodollar Interest Period relating thereto, the rate per annum
quoted by the Bank two (2) Business Days prior to the first day of such
Eurodollar Interest Period for the offering by the Bank to prime commercial
banks in the London interbank Eurodollar market of Dollar deposits in
immediately available funds for a period equal to such Eurodollar Interest
Period and in an amount equal to the amount of such Eurodollar Rate Advance; and
(k) "Maturity Date" shall mean, (x) with respect to any Eurodollar Rate
Advance, the last Business Day of the Eurodollar Interest Period applicable to
such Eurodollar Rate Advance, and (y) with respect to any Note Rate Advance, the
date agreed to between the Bank and the Borrower at the time of such Note Rate
Advance.
(l) "Note Rate Advance" shall mean any Advance which bears interest at a
Note Rate.
Each Alternate Base Rate Advance shall be payable ON DEMAND and may be
prepaid in whole at any time or in part from time to time. Each Eurodollar Rate
Advance shall be payable on the Maturity Date of such Eurodollar Rate Advance
and, except as otherwise provided herein, the Borrower shall not have the right
to prepay such Eurodollar Rate Advance. Each Note Rate Advance shall be payable
on the Maturity Date of such Advance, and the Borrower shall not have the right
to prepay such Note Rate Advance. Each Daily Rate Advance shall be payable ON
DEMAND and may be prepaid in whole at any time or in part from time to time and
shall be prepaid in the event that the Bank and the Borrower shall not be able
to agree on any day on the Daily Rate applicable thereto.
Interest on each Alternate Base Rate Advance shall be payable monthly on
the last day of each month, and at maturity. Interest on each Eurodollar Rate
Advance and each Note Rate Advance shall be payable on the Maturity Date
thereof. Interest on each Daily Rate Advance shall be payable daily. Upon any
prepayment of Alternate Base Rate Advances or Daily Rate Advances, the Borrower
shall pay interest on the amount so prepaid to the date of such prepayment.
In any payment hereof becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day; provided, however, that in the case of a payment in respect of the
-------- -------
principal amount of a Eurodollar Rate Advance, if such next succeeding Business
Day falls in another calendar month, such payment shall be due on the
immediately
3
<PAGE>
preceding Business Day. If the date for any payment of principal is so
extended, interest thereon shall be payable for the extended time.
The Borrower agrees to indemnify the Bank and to hold the Bank harmless
from and against all losses and expenses that the Bank may sustain or incur (x)
if the Borrower makes any payment of the principal of any Eurodollar Rate
Advance on a day other than the Maturity Date thereof or (y) if the Borrower,
for any reason whatsoever, fails to complete a borrowing of any Eurodollar Rate
Advance on the date specified therefor after notice thereof has been given and
the Bank has determined to make such Eurodollar Rate Advance (including, without
limitation, in each case, any interest payable by the Bank to lenders of funds
obtained by the Bank in order to make or maintain such Eurodollar Rate Advance).
In the event that any applicable law, treaty or governmental regulation
(whether now or hereafter in effect), or any change therein or in the
interpretation or application thereof, or compliance by the Bank with any
request or directive (whether or not having the force of law) form any central
bank or other financial, monetary or other authority, shall (I) subject the Bank
to any tax of any kind whatsoever with respect to this note or any Eurodollar
Rate Advance or change the basis of taxation of payments to the Bank of
principal, interest, fees or any other amount payable under this note (except
for changes in the rate of tax on the overall net income of the Bank by the
jurisdiction in which the Bank maintains its principal office), (II) impose,
modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of,
advances or loans by, or other credit extended by, any office of the Bank,
including (without limitation) pursuant to Regulation D of the Board of
Governors of the Federal Reserve System, or (III) impose on the Bank or the
London interbank Eurodollar market any other condition with respect to this note
or any Eurodollar Rate Advance, and the result of any of the foregoing is to
increase the cost to the Bank of making or maintaining any Eurodollar Rate
Advance by an amount that the Bank deems to be material or to reduce the amount
of any payment (whether of principal, interest or otherwise) in respect of any
Eurodollar Rate Advance by an amount that the Bank deems to be material, then,
in any such case, the Borrower shall promptly pay to the Bank, upon its demand,
such additional amount as will compensate the Bank for such additional cost or
such reduction, as the case may be; provided, however, that the foregoing shall
-------- -------
not apply to increased costs which are reflected in a Eurodollar Rate.
Notwithstanding any other provision hereof, if any applicable law, treaty,
regulation or directive of any government or any agency, instrumentality or
authority thereof, or any change therein or in the interpretation or application
thereof, shall make it unlawful for the Bank (or the office or branch where the
Bank makes or maintains any Eurodollar Rate Advance) to maintain any
4
<PAGE>
Eurodollar Rate Advance, the Borrower shall, if any Eurodollar Rate Advance is
then outstanding, promptly upon request from the Bank, either prepay such
Eurodollar Rate Advance, together with accrued interest on the amount prepaid to
the date of prepayment, or, at the Borrower's option, convert such Eurodollar
Rate Advance into an Alternate Base Rate Advance. If any such prepayment or
conversion of any Eurodollar Rate Advance is made on a day that is not the
Maturity Date thereof, the Borrower shall also pay to the Bank, upon the Bank's
request, such amount or amounts as may be necessary to compensate the Bank for
any loss or expense sustained or incurred by the Bank in respect of such
Eurodollar Rate Advance as a result of such prepayment or conversion, including
(without limitation) any interest or other amounts payable by the Bank to
lenders of funds obtained by the Bank in order to make or maintain such
Eurodollar Rate Advance.
A certificate of the Bank setting forth such amount or amounts as shall be
necessary to compensate the Bank as specified in the immediately preceding three
paragraphs, submitted by the Bank to the Borrower, shall be conclusive absent
manifest error, and the obligations of the Borrower under the immediately
preceding three paragraphs shall survive payment of this note and all Advances.
If the Bank shall make a new Advance on a day on which the Borrower is to
repay an Advance, the Bank shall apply the proceeds of the new Advance to make
such repayment and only the amount by which the amount being advanced exceeds
the amount being repaid shall be made available to the Borrower in accordance
with the terms of this note.
The Borrower hereby authorizes the Bank to accept telephonic instructions
from a duly authorized representative of the Borrower to make an Advance or
receive a payment hereof, and to endorse on the schedule attached hereto the
amount of all Advances and all principal payments hereof received by the Bank,
the interest rate applicable to each Advance and the Maturity Date of each
Eurodollar Rate Advance and each Note Rate Advance.
The Bank is hereby authorized to charge the Borrower's deposit account
maintained at the Bank for each principal prepayment hereof on the date made,
and for each principal payment and for each interest payment due hereunder on
the due date thereof. The Bank shall credit the Borrower's deposit account
maintained at the Bank in the amount of each Advance on the date of such
Advance, which credit shall be confirmed to the Borrower by standard advice of
credit. The Borrower agrees that the actual crediting of the amount of any
Advance to the Borrower's deposit account shall constitute conclusive evidence
that such Advance was made, and neither the failure of the Bank to endorse on
the schedule attached hereto the amount of any Advance, the interest rate
applicable to any Advance or the Maturity Date of any Eurodollar Rate Advance or
any Note Rate Advance, nor the failure of the Bank to forward an
5
<PAGE>
advice of credit to the Borrower, shall affect the Borrower's obligations
hereunder.
All payment hereof shall be made in lawful money of the United States of
America and in immediately available funds.
All Advances, together with all accrued interest thereon, shall become
immediately and automatically due and payable, without demand, presentment,
protest or notice of any kind, upon the insolvency, general assignment,
receivership, bankruptcy or dissolution of the Borrower. The Borrower does
hereby forever waive presentment, demand, protest, notice of protest and notice
of nonpayment or dishonor of this note.
The Borrower hereby agrees to pay all costs and expenses incurred by the
Bank incidental to or in any way relating to the Bank's enforcement of the
obligations of the Borrower hereunder or the protection of the Bank's rights
hereunder, including, but not limited to, reasonable attorneys' fees and
expenses incurred by the Bank.
No failure on the part of the Bank to exercise, and no delay in exercising,
any right, remedy or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by the Bank of any right, remedy or power
hereunder preclude any other or future exercise thereof or the exercise of any
other right, remedy or power.
Each and every right, remedy and power hereby granted to the Bank or
allowed it by law or other agreement shall be cumulative and not exclusive the
one of any other, and may be exercised by the Bank from time to time.
Every provision of this note is intended to be severable; if any term or
provision of this note shall be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired.
This note is an amendment and restatement of the Borrower's promissory note
dated June 14, 1994, payable to the order of the Bank in the original principal
-------
amount of $5,000,000 (the "Existing Note") and is not being given by the
Borrower nor accepted by the Bank in payment of the Existing Note. All advances
outstanding under the Existing Note (the "Existing Advances") together with
interest accrued thereon, shall on the date hereof be deemed to be outstanding
under this note; provided that interest on Existing Advances shall continue to
accrue at the rate provided in the Existing Note until the maturity date of each
Existing Advance.
*Wherever in this Note reference is made to payable "on or upon demand", it
shall be changed to read "as long as Computer Horizons
6
<PAGE>
Corp. is not in default, there must be a minimum of two weeks written notice".
THE BORROWER WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING OUT OF, BASED UPON, OR IN ANY WAY CONNECTED TO, THIS NOTE.
THE PROVISIONS OF THIS NOTE SHALL BE CONSTRUED AND INTERPRETED AND ALL
RIGHTS AND OBLIGATIONS HEREUNDER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW JERSEY.
COMPUTER HORIZONS CORP.
By:
-------------------------
Title:
-----------------
7
<PAGE>
<TABLE>
<CAPTION>
Schedule to
Promissory Note - COMPUTER HORIZONS CORP.
Date of Amount Type of Maturity Interest Amount of Aggregate
Advance of Advance* Date of Rate*** Payment Unpaid
------- Advance ------- -- ---- ------- Principal
------- Advance** ---------
------- Amount
------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
--------------------
* Insert "Alternate Base Rate" (or "ABR") "Eurodollar Rate", "Note Rate"
or Daily Rate" as applicable.
** Only applicable for Eurodollar Rate Advances and Note Rate Advances.
*** For Alternate Base Rate Advances, insert "ABR". For Eurodollar Rate
Advances, Note Rate Advances and Daily Rate Advances, insert the actual
interest rate.
8
Exhibit 23.1
Consent of Independent Certified Public Accountants
---------------------------------------------------
We have issued our report dated January 31, 1995, accompanying the
consolidated financial statements and schedule of Computer Horizons Corp. and
Subsidiaries contained in the Registration Statement and Prospectus. We consent
to the use of the aforementioned report in the Registration Statement and
Prospectus, and to the use of our name as it appears under the caption
"Experts."
GRANT THORNTON LLP
Parsippany, New Jersey
June 2, 1995
