424B1 1 EIS INTERNATIONAL INC. PROSPECTUS Rule 424(b) File No. 333-3350 PROSPECTUS 96,509 Shares EIS INTERNATIONAL, INC. Common Stock ______________________ This Prospectus covers the resale of 96,509 shares of Common Stock of EIS International, Inc. ("EIS" or the "Company") by certain stockholders of the Company (the "Selling Stockholders"). See "Selling Stockholders." The shares of Common Stock covered by this Prospectus were issued or are issuable to the Selling Stockholders upon exercise of certain warrants of Cybernetics Systems International Corp. ("Cybernetics") that were assumed by the Company pursuant to its acquisition of Cybernetics in a transaction completed on March 1, 1996. All of the shares offered hereunder are to be sold by the Selling Stockholders. The Company will not receive any of the proceeds from the sale of the shares by the Selling Stockholders. The Selling Stockholders may from time to time sell the shares covered by this Prospectus on the Nasdaq Stock Market in ordinary brokerage transactions, in negotiated transactions, or otherwise, at market prices prevailing at the time of sale or at negotiated prices. See "Plan of Distribution." The Common Stock is quoted on the Nasdaq Stock Market under the symbol EISI. See "Price Range of Common Stock and Dividend Policy." ______________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is May 16, 1996 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such documents can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional offices: Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such material may be obtained from the Commission's public reference section at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common Stock is traded on the Nasdaq National Market. Reports and other information concerning the Company may be inspected at the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information with respect to the Company and its Common Stock, reference is hereby made to such Registration Statement, exhibits and schedules. Statements contained in this Prospectus as to the contents of any contract or any other document are not necessarily complete, and in each instance reference is hereby made to the copy of such contract or document (if any) filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. The Registration Statement and the exhibits and schedules thereto may be examined without charge at the public reference section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of all or any part thereof may be obtained from the Commission upon payment of prescribed fees. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995; 2. The Company's Current Report on Form 8-K dated February 8, 1996; 3. The Company's Current Report on Form 8-K dated March 1, 1996; 4. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996; and 5. The description of the Company's capital stock contained in EIS's Registration Statement on Form 8-A dated June 22, 1992. All documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to May 16, 1996 and prior to the termination of the offering of the Common Stock registered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be - 2 - incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom this Prospectus is delivered, upon written or oral request of such person, a copy of any or all of the foregoing documents incorporated by reference into this Prospectus (without exhibits to such documents other than exhibits specifically incorporated by reference into such documents). Requests for such copies should be directed to the Investor Relations Department of the Company, 1351 Washington Boulevard, Stamford, Connecticut 06902; telephone (203) 351-4800. No person has been authorized to give any information or to make any representations in connection with this offering other than those contained in this Prospectus and, if given or made, such other information and representations must not be relied upon as having been authorized by the Company. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to its date. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the registered securities to which it relates. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. - 3 - The Company EIS International, Inc. (the "Company" or "EIS") designs, manufactures, markets and supports full-featured call center management systems for businesses that use the telephone in organized campaigns to reach large target audiences. These systems are used in a broad range of business-to-consumer and business-to- business direct marketing applications including direct sales, fundraising, market research, and customer service; for telephone credit and collections activities, as well as for the integration of inbound and outbound call center activities. EIS is one of the world's largest suppliers of call center technology and is the industry's leading provider of outbound call center systems. EIS customers include many telemarketing service bureaus, financial institutions, major telecommunications companies, universities, cable operators, direct response marketers and publishing companies, among others. EIS systems employ computer telephony integration ("CTI") technology to add efficiency to the management of call centers and substantially increase the productivity of telephone agents engaged in calling campaigns. Systems software features provide for outbound intelligent/predictive dialing, database and calling list management, scripting, real-time and historical reporting, and the integration of the EIS software with the customers' computer and telephone systems. Through the use of the Company's state-of-the-art dialing technology which includes high speed call switching and patented voice detection technology, sophisticated pacing algorithms and call classification, EIS systems increase the time agents have available to speak with called parties as non-productive activities are automated, leaving the agent free to spend 45-50 minutes per hour in talk time compared to 15-20 minutes in a non-automated environment. The systems automate the management of the calling list, including campaign list segmentation, time zone controls and callback handling. The systems include multi-page scripting capabilities that allow for conversation branching and for account history, product information, order forms and calculations to be presented to the agent on-line. In addition, reporting and agent monitoring capabilities allow supervisors and managers to track up-to-the- minute activities in the call center so that they can modify and improve the effectiveness of the campaign in real-time. EIS' systems are based on an open-architecture design to allow them to interface with a variety of third party switches and software products and to integrate easily with customers' host computers and databases. Systems are designed to be modular, expandable and flexible to respond to the customers changing environment and expansion needs. EIS' systems include the EIS Call Processing System , a full-featured solution for outbound call centers involved predominantly in direct marketing activities; OCM Gold , a product licensed from AT&T in 1991 and enhanced to work seamlessly with the AT&T Definity G3 switching platform; System 7000 , the system acquired in the merger with International Telesystems Corporation in 1993 and directed at the credit and collections market, and Centenium, a powerful client server solution for corporate call centers. The Company also markets SmartAgent Manager , a systems enhancement that blends outbound campaigns with inbound number operations, and Star Trainer , an interactive call simulation training system. Star Trainer is a trademark of Advertech, Ltd. - 4 - EIS acquired Surefind Information, Inc. ("Surefind") by merging Surefind into a subsidiary of EIS on February 29, 1996. Pursuant to the merger, EIS agreed to issue up to a total of approximately 549,577 shares of EIS' Common Stock in exchange for all outstanding shares of Surefind stock including options and warrants to purchase up to 48,173 shares of Surefind stock. The merger will be accounted for as a pooling-of-interests. Surefind is engaged in marketing a technology service that is designed to automatically back up, transmit, store, and recover data from local area networks ("LANs") and personal computers at a remote, secure location. EIS acquired Cybernetics Systems International Corp. ("Cybernetics") on March 1, 1996, by a merger of Cybernetics with and into EIS-CSI Corp., a wholly- owned subsidiary of EIS (the "Merger"), whereby Cybernetics became a wholly-owned subsidiary of EIS. In payment of the purchase price for this acquisition, EIS issued to certain stockholders of Cybernetics a total of 494,660 shares of its common stock (of which 47,647 shares were placed in escrow to secure indemnification obligations of Cybernetics stockholders). EIS also paid to certain stockholders cash in an aggregate amount of approximately $9,266,000 (of which approximately $713,000 was placed in escrow to secure indemnification obligations of certain Cybernetics stockholders). EIS also assumed certain obligations of Cybernetics, including its obligations under its employee stock option plan and to certain holders of warrants to purchase Cybernetics Common Stock. Cybernetics specializes in "Computerized Workforce Management Systems", a family of software products that assist Fortune 1000 companies in managing the workforce in their Call Centers. EIS is a Delaware corporation organized in 1988. It is the successor by merger to a Connecticut corporation founded in 1980 to engage in software consulting. The Company sold its first commercial call center system in 1989 and became a publicly traded company in July of 1992. EIS' headquarters are located at 1351 Washington Boulevard, Stamford, Connecticut 06902. Its telephone number at that location is (203) 351-4800. EIS operates its National Service Center in Herndon, Virginia, and has facilities in Pittsburgh, Pennsylvania and Miami, Florida. - 5 - RISK FACTORS In addition to the other information in this Prospectus, the following factors should be considered carefully by potential investors in evaluating an investment in the Common Stock offered hereby. Fluctuations in Quarterly Operating Results. Although EIS has demonstrated consistent financial performance, a variety of factors influence the level of EIS's net sales in a particular quarter, including general economic conditions in the call processing industry, the timing of significant orders, shipment delays, specific feature requests by customers, the introduction of new products by EIS, the introduction of new products by EIS's competitors, acquisitions by EIS, production and quality problems, changes in the cost of materials, disruption in sources of supply, seasonal patterns of capital spending by customers and other factors, many of which are beyond EIS's control. Since a substantial portion of the expenses of EIS do not vary relative to sales levels, if net sales levels in a particular quarter do not meet expectations, operating results will be adversely affected, which may have an adverse impact on the market price of EIS's Common Stock. EIS's system sales typically involve a three to six month selling process for sales to direct consumer marketing customers and a longer process for sales to certain other customers. EIS normally ships systems within 30 days after order and does not customarily have a significant backlog of orders at any time. EIS derives a substantial portion of its revenues from the sale of products in which a single transaction may exceed $150,000. As a result, the closing, or failure to close, of a small number of transactions could have a significant impact on EIS's net revenues and operating results in any given quarter. New Products and Technological Change. The market for call processing systems is based upon sophisticated technologies and is subject to rapid technological change. There can be no assurance that EIS's new products will gain market acceptance. Current or new competitors may introduce new products, features or services that could adversely affect EIS's competitive position. To date, EIS's research and development programs have periodically produced system features and enhancements to address customer requirements and to respond to competitive conditions. However EIS believes that to remain competitive it must continue to improve its products and related services and develop and successfully market new products and services. There can be no assurance that EIS will be able to do so. The success of new products depends on a variety of factors, including product selection, successful and timely completion of product development and EIS's ability to offer products at competitive prices. Furthermore, there can be no assurance that EIS will be able to identify new product opportunities successfully and develop and bring to market such new products or that EIS will be able to respond effectively to technological change or product announcements by others. Competition. The market for call processing systems is highly competitive. EIS believes that competition will intensify as more companies enter the market. EIS's principal competitors at present include Davox Corporation, Digital Systems International, Inc., Melita International Corporation and Intervoice. EIS may encounter increased competition from existing competitors and from new market entrants, including companies which have historically competed primarily in the inbound call processing market such as Aspect, Rockwell and Northern Telecom. In addition, for sales of applications software operating in call centers, EIS may compete with software providers and system integrators such as Andersen Consulting and Electronic Data Systems Corporation. Many of EIS's current or potential competitors have greater financial, technical and marketing resources than EIS and there can be no assurance that EIS will be able to continue to - 6 - compete successfully with existing or new competitors. As EIS expands its offering of call center applications, EIS may also encounter increased competition from call center application providers. As the call processing market matures and new and existing companies compete for the same customers, price competition is likely to intensify, and such price competition could adversely affect EIS's operating results. Risks Associated with Acquisitions. EIS has grown significantly through acquisitions and EIS intends to continue to use acquisitions to grow. EIS's ability to expand successfully by acquisition depends on many factors, including the successful identification and acquisition of businesses and management's ability to integrate and operate the new businesses effectively. The consideration paid for such acquisitions, the diversion of the attention of management to integrate any acquired businesses and any difficulties encountered in the integration process could have an adverse effect on EIS's operations and financial results. Intellectual Property Risks. EIS's success will depend in part on its ability to obtain and maintain patent protection for its products, to preserve its trade secrets and to operate without infringing on the proprietary rights of third parties. EIS attempts to protect its technology by, among other things, investing significant financial resources in obtaining and maintaining patents, copyrights and trade secrets. The call processing industry is characterized by vigorous protection and pursuit of intellectual property rights or positions, which have resulted in significant and often protracted and expensive litigation. EIS has from time to time received notices of potential intellectual property infringement claims against it and has settled one such claim. Any assertions of intellectual property claims could require EIS to discontinue the use of certain processes or cease the manufacture, use and sale of infringing products, to incur significant litigation costs and damages, and to develop non-infringing technology or to acquire licenses to the alleged infringed technology. There can be no assurance that EIS would be able to obtain such licenses on acceptable terms or to develop noninfringing technology. In addition, there can be no assurance that any patents issued to EIS will not be challenged, invalidated or circumvented or that rights granted thereunder will provide competitive advantages to EIS. Furthermore, the laws of certain countries do not protect EIS's intellectual property rights to the same extent as do the laws of the United States. Dependence on Subcontractors and Availability of Components. EIS's call processors (digital switches) are manufactured, assembled and tested by independent subcontractors under supply contracts. Any adverse development affecting EIS's current subcontractors could result in delays in the production and delivery of EIS's systems and could have an adverse impact on manufacturing quality and EIS's operating results. Except for some of the integrated circuit boards provided by the subcontractors, EIS's systems are manufactured from standard industry components. To date, adequate stocks of the components have been available in a timely manner from a variety of suppliers. However, a delay or lack of supply of these components from existing sources or an inability to obtain alternative sources, if and when required in the future, could adversely affect EIS's operating results. The personal computers used in the EIS's call center system are supplied through two manufacturers. An interruption in supply of such personal computers or the required peripherals could disrupt or delay the shipment of call center systems. - 7 - Leasing Activities. EIS has offered lease financing to its international and United States customers and intends to continue this practice in the future. Typically, EIS offers these payment terms to entrepreneurial businesses with limited capitalization which may not be considered "credit worthy" by financial institutions. EIS has an agreement with a third party leasing company to finance some of its systems which provides, among other things, that some leases financed under the agreement are subject to a 10% recourse from EIS. EIS plans to continue its practice of providing lease financing for its customers, and may enter into additional agreements with third party leasing companies to finance its systems, which may also include certain recourse arrangements. In addition, EIS from time to time sells portions of its lease portfolio to third parties, on terms which may include recourse provisions and at a discount. EIS recognized a loss of $106,000 on the sale of a lease portfolio in August 1994. There can be no assurance that lessee defaults will not have an adverse affect on EIS's future operating results or that EIS will be able to sell its leases on acceptable terms in the future. Government Regulation. Certain uses of outbound call processing systems are regulated by federal and state law, including the Telephone Consumer Protection Act of 1991 and the Federal Fair Debt Collection Practices Act. Although compliance with these laws may limit the potential uses of EIS's systems in some respects, EIS believes that each system can be programmed to operate automatically in full compliance with these laws through the use of appropriate calling lists and calling campaign time parameters. There can be no assurance, however, that future legislation further restricting telephone solicitation practices, if enacted, would not adversely affect EIS. A number of technical elements of EIS's systems are subject to and conform with Federal Communications Commission regulations under the Federal Communications Act of 1934. Future products developed by EIS may also be subject to compliance with similar or even more restrictive regulations before they can be sold in the United States. To the extent EIS markets its products in foreign countries, it is required to comply with applicable foreign laws, including certification of its products by appropriate government regulatory organizations. There can be no assurance that EIS will not encounter delays or difficulty in obtaining such certifications and approvals. Developing Market. The market for call processing systems is relatively new and evolving. The future financial performance of EIS will depend in part on the development and continuing growth of this market. EIS believes that such growth will require expansion of current applications of existing customers, development of new markets for these systems and increased user acceptance. A number of factors, such as the continuing development of an already generally negative consumer perception of telephone solicitation, could adversely impact the growth of various applications segments of EIS's markets. Therefore, there can be no assurance that these markets will grow. International Sales. EIS's net sales to international markets represented approximately 6%, 6%, 4% and 6% of EIS's net revenues for the years ended December 31, 1992, 1993, 1994 and 1995 respectively. International sales are subject to various risks, including changes in foreign currency exchange rates, political and economic instability, the greater difficulty of administering business abroad and the need to comply with a wide variety of foreign and U.S. export laws and regulatory requirements. EIS does not currently engage in foreign currency hedging transactions. To the extent that EIS expands its international operations, exposure to changes in foreign currency exchange rates and to the other risks described above could increase and, in any event, could have a material adverse effect on EIS. - 8 - Attraction and Retention of Key Personnel. EIS's ability to develop marketable products and maintain a competitive position in light of continuing technological developments will depend, in large part, on its ability to attract and retain highly qualified personnel. Competition for the services of these key employees is likely to be intense, and there can be no assurance that EIS will be able to attract or retain the personnel necessary for EIS's growth. Possible Volatility of Stock Price. As is frequently the case with the stock of high technology companies, the market price of EIS's Common Stock has been and may continue to be quite volatile. Factors such as quarterly fluctuations in results of operations, announcements of technological innovations or the introduction of new products by EIS or its competitors, and macroeconomic conditions in the call processing industry generally, may have a significant impact on the market price of EIS's Common Stock. In addition, at various times the stock market has experienced extreme price and volume fluctuations that particularly affected the market price for many high technology companies, often without regard to a particular company's operating results. These broad fluctuations may adversely affect the market price of the Common Stock of EIS. Significant Stockholders; Antitakeover Considerations. As of January 31, 1996, the directors and executive officers of EIS and their affiliates beneficially owned in the aggregate approximately 20% of EIS's outstanding Common Stock (including shares subject to outstanding options and warrants). If these stockholders vote together as a group, they will be able to substantially influence the business and affairs of EIS, including the election of individuals to EIS's Board of Directors, and to otherwise affect the outcome of certain actions that require stockholder approval, including the adoption of amendments to EIS's Restated Certificate of Incorporation, and certain mergers, sales of assets and other business acquisitions or dispositions. EIS also has authorized a class of 2,000,000 shares of Preferred Stock, $.10 par value, which may be issued by EIS's Board of Directors on such terms, and with such rights, preferences and designations, as EIS's Board of Directors may determine. EIS's Restated Certificate of Incorporation provides for a classified Board of Directors elected to staggered terms, restricts the ability of stockholders to call stockholders meetings and provides that stockholders may not act by written consent in lieu of a meeting. Delaware law imposes restrictions on certain transactions not approved by EIS's Board of Directors involving certain persons who hold or acquire 15% or more of EIS's voting securities. Some or all of the foregoing factors may have the effect of delaying, deterring or preventing a change in control of EIS. - 9 - USE OF PROCEEDS The Company will not receive any proceeds from the sale of Common Stock by the Selling Stockholders. SELLING STOCKHOLDERS The following table sets forth certain information with respect to the beneficial ownership of the Company's Common Stock by each Selling Stockholder as of March 1, 1996. Number of Number of Name of Shares of Shares of Selling Common Stock Common Stock Stockholder(1) Beneficially Owned Offered Hereby UNC Partners, Inc.(2) 6,949 2,779 UNC Ventures II, L.P.(3) 77,189 17,031 Westford Technology Ventures, L.P.(4) 235,282 29,015 TSG Ventures, Inc.(5) 68,462 12,681 Harry Peisach(6) 195,455 24,898 Thomas Yianilos(7) 61,622 7,166 William Yianilos(8) 7,041 735 Peter Yianilos(9) 5,283 735 Beatrice Yianilos and Thomas Yianilos, Co-Trustees, under the Will of Nicholas P. Yianilos(10) 8,016 1,469 TOTALS 665,299 96,509 ______________________________________________________________________ (1) Sales of the shares of Common Stock offered hereby may also be made by permitted persons or entities to whom such shares are gifted by the Selling Stockholders listed herein. (2) Includes 4,170 shares issued to UNC Partners, Inc. in connection with the acquisition of Cybernetics by EIS on March 1, 1996. (3) Includes 60,158 shares issued to UNC Ventures II, L.P. in connection with the acquisition of Cybernetics by EIS on March 1, 1996. (4) Includes 206,267 shares issued to Westford Technology Ventures, L.P. in connection with the acquisition of Cybernetics by EIS on March 1, 1996. (5) Includes 55,781 shares issued to TSG Ventures, Inc. in connection with the acquisition of Cybernetics by EIS on March 1, 1996. (6) Includes 98,292 shares issued to Harry Peisach in connection with the acquisition of Cybernetics by EIS on March 1, 1996 and 72,265 shares issuable upon the exercise of stock options that are exercisable within 60 days of March 1, 1996. - 10 - (7) Includes 17,438 shares issued to Thomas Yianilos in connection with the acquisition of Cybernetics by EIS on March 1, 1996 and 37,058 shares issuable upon the exercise of stock options that are exercisable within 60 days of March 1, 1996. (8) Includes 6,306 shares issued to William Yianilos in connection with the acquisition of Cybernetics by EIS on March 1, 1996. (9) Includes 4,548 shares issued to Peter Yianilos in connection with the acquisition of Cybernetics by EIS on March 1, 1996. (10) Includes 6,547 shares issued to Beatrice and Thomas Yianilos as Co- Trustees, under the Will of Nicholas P. Yianilos in connection with the acquisition of Cybernetics by EIS on March 1, 1996. - 11 - PLAN OF DISTRIBUTION The shares of Common Stock covered by this Prospectus may be offered and sold from time to time by the Selling Stockholders. The Selling Stockholders will act independently of the Company in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on the Nasdaq National Market or otherwise, at prices related to the then-current market price or in negotiated transactions, including pursuant to one or more of the following methods: (a) purchases by a broker-dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (b) ordinary brokerage transactions and transactions in which the broker solicits purchasers; and (c) block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction. The Company has not been advised by the Selling Stockholders that they have made any particular arrangements relating to the distribution of the shares covered by this Prospectus. In effecting sales, broker-dealers engaged by the Selling Stockholders may arrange for the other broker-dealers to participate. Broker-dealers will receive commissions or discounts from the Selling Stockholders in amounts to be negotiated immediately prior to the sale. The Company has agreed to indemnify the Selling Stockholders against certain liabilities, including certain liabilities under the Securities Act. Additionally, the Company will pay the expenses incurred by it in connection with this offering, other than discounts, commissions, fees or expenses of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Stock, or legal expenses of any person other than the Company. In offering the shares of Common Stock covered hereby, the Selling Stockholder and any broker-dealers and any other participating broker-dealers who execute sales for the Selling Stockholder may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales, and any profits realized by the Selling Stockholders and the compensation of such broker-dealer may be deemed to be underwriting discounts and commissions. The Company has advised the Selling Stockholders that during such time as they may be engaged in a distribution of Common Stock covered hereby they are required to comply with Rules 10b-6 and 10b-7 under the Exchange Act, as those Rules are described in more detail below, and, in connection therewith, that they may not engage in any stabilization activity in connection with the Company's securities, are required to furnish to each broker-dealer through which Common Stock covered hereby may be offered copies of this Prospectus, and may not bid for or purchase any of the Company's securities except as permitted under the Exchange Act. Rule 10b-6 under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Rule 10b-7 governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. - 12 - LEGAL MATTERS The validity of the shares of Common Stock offered hereby will be passed upon for the Company by Hale and Dorr, Boston, Massachusetts. EXPERTS The consolidated financial statements and schedule of the Company as of December 31, 1994 and 1995, and for each of the years in the three-year period ended December 31, 1995, have been incorporated by reference in this Prospectus and in the registration statement on Form S-3 to which this Prospectus relates in reliance upon the reports of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. - 13 -