EXHIBIT 1.1
PHYSICIANS CARE FOR CONNECTICUT, INC.
1520 Highland Avenue
Cheshire, Connecticut 06410
UNDERWRITING AGREEMENT
________________, 1997
NEWBURY, PIRET & CO., INC.
One Boston Place
Twenty-Sixth Floor
Boston, Massachusetts 02108
and
Legg Mason Wood Walker, Incorporated,
111 South Calvert Street
Baltimore, MD 21202
Dear Sirs:
Physicians Care for Connecticut, Inc., a Connecticut corporation (the
"Company") hereby confirms its agreement with you (the "Underwriter") as
follows. All capitalized terms not defined herein shall have the meanings set
forth in the Prospectus (as hereinafter defined).
SECTION 1
DESCRIPTION OF SECURITIES
The Company proposes to issue and sell to Eligible Purchasers up to
3,000 shares of its Class A Common Stock ("Class A Common Stock") and up to
3,000 shares of its Class B Common Stock ("Class B Common Stock" and together
with the Class A Common Stock, the "Common Stock"). The Common Stock which
the Company proposes to issue and sell (the "Shares") shall be sold at an
offering price of $4,000 per Share, subject to a prompt subscription price of
$3,000 per Share as set forth in the Prospectus and on other terms and
conditions set forth in the Prospectus and as hereinafter set forth. The
Company's authorized and outstanding capitalization, when the offering of the
securities contemplated hereby is permitted to commence and is completed,
will be as set forth in the Registration Statement (as hereinafter defined)
and Prospectus described hereinafter.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Underwriter to enter into this Agreement, the
Company hereby represents and warrants to and agrees with the Underwriter as
of the date hereof and as of the Closing Date as follows:
2.01 REGISTRATION STATEMENT AND PROSPECTUS. A Registration Statement
on Form SB-2 (File No. 333-22999) with respect to the Shares, including the
related Prospectus, copies of which have heretofore been delivered by the
Company to the Underwriter, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and said Registration
Statement has been filed with the Commission under the Act; all necessary
amendments to said Registration Statement, a copy of which has heretofore
been delivered to the Underwriter, has been filed; and the Company may file
on or after the effective date of such Registration Statement additional
amendments to said Registration Statement, including the final Prospectus.
As used in this Agreement, the term "Registration Statement" refers
to and means said Registration Statement and all amendments thereto,
including the Prospectus, all exhibits and financial statements, as it
becomes effective; the term "Prospectus" refers to and means the Prospectus
included in the Registration Statement when it becomes effective, and as
amended thereafter; and the term "Preliminary Prospectus" refers to and means
any prospectus included in said Registration Statement before it becomes
effective.
2.02 ACCURACY OF REGISTRATION STATEMENT AND PROSPECTUS. The Commission
has not issued any order preventing or suspending the use of any Preliminary
Prospectus with respect to the Shares, and each Preliminary Prospectus has
conformed in all material respects with the requirements of the Act and the
applicable Rules and Regulations of the Commission thereunder and has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein not misleading. When
the Registration Statement becomes effective, until and on the Closing Date
(as hereinafter defined), the Registration Statement and Prospectus and any
further amendments or supplements thereto will contain all statements which
are required to be stated therein in accordance with the Act and the Rules
and Regulations for the purposes of the proposed public offering of the
Shares, and all statements of material fact contained in the Registration
Statement and Prospectus will be true and correct, and neither the
Registration Statement nor the Prospectus will include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, the Company does not make any representations or warranties as to
information contained in or omitted from the Registration Statement or the
Preliminary Prospectus or the Prospectus in reliance upon written information
furnished on behalf of the Underwriter specifically for use therein.
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2.03 FINANCIAL STATEMENTS. The financial statements of the Company,
together with related schedules and notes as set forth in the Registration
Statement and Prospectus, will present fairly the financial position and the
results of operations of the Company at the represented dates and for the
represented periods to which they apply; such financial statements have been
prepared in accordance with generally accepted accounting principles which
have been consistently applied throughout the periods concerned except as
otherwise stated therein.
2.04 INDEPENDENT PUBLIC ACCOUNTANT. Arthur Anderson LLP, which has
audited the financial statements as of and for the period ended March 31,
1997, filed with the Commission as part of the Registration Statement, and
which has reviewed certain other information of a financial or accounting
nature contained in the Registration Statement and the Prospectus, are
independent certified public accountants with respect to the Company as
required by the Rules and Regulations.
2.05 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in or
contemplated by the Registration Statement and the Prospectus, subsequent to
the dates as of which information is given in the Registration Statement and
Prospectus, and through the Closing Date, (i) there has not been any material
adverse change in the condition, financial or otherwise, or management of the
Company, or in the Company's business taken as a whole, (ii) there has not
been any material transaction entered into by the Company other than
transactions in the ordinary course of business; (iii) the Company has not
incurred any material obligations, contingent or otherwise, which are not
disclosed in the Prospectus; (iv) there has not been any change in the
capital stock or long-term debt (except current payments) of the Company; and
(v) the Company has not paid or declared any dividends or other distributions.
2.06 NO DEFAULTS. The Company is not in default in the performance of
any obligation, agreement or condition contained in any debenture, note or
other evidence of indebtedness or any indenture or loan agreement of the
Company, other than as set forth in the Prospectus. The execution and
delivery of this Agreement and the consummation of the transaction herein
contemplated, and compliance with the terms of this Agreement will not
conflict with or result in a breach of any of the terms, articles of
incorporation of the Company or its bylaws, any note, indenture, mortgage,
deed of trust, or other agreement or instrument to which the Company is a
party or by which it or any of its property is bound, or any existing law,
order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body, arbitrator, tribunal or court,
domestic or foreign, having jurisdiction over the Company or its property.
The consent, approval, authorization, or order of any court or governmental
instrumentality, agency or body is not required for the consummation of the
transactions herein contemplated except such as may be required under the Act
or under the securities laws of any state or jurisdiction.
2.07 INCORPORATION AND STANDING. The Company has no interest in any
other corporation, partnership, joint venture or other entity. The Company
is, and at the Closing Date will be duly incorporated and validly existing in
good standing as a corporation under the laws of the State of Connecticut,
with an authorized and outstanding capital stock as set forth in the
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Registration Statement and the Prospectus, and with full corporate power and
authority to own its property and conduct its business as described in the
Registration Statement and Prospectus; the Company has full power and
authority to enter into this Agreement and to issue the Shares; and the
Company is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which it owns or leases real property or transacts
business requiring such qualification. The Company has paid all fees
required by the jurisdiction of incorporation and any jurisdiction in which
it is qualified as a foreign corporation.
2.08 LEGALITY OF OUTSTANDING STOCK. The outstanding common stock of
the Company has been duly and validly authorized and issued, and is fully
paid and nonassessable and will conform to all statements with regard thereto
contained in the Registration Statement and Prospectus. No offers to sell,
offers to buy, sales or purchases of securities have been made by the Company
in violation of the Act or in violation of any state law, regulation, rule or
order.
2.09 LEGALITY OF SHARES. The Shares have been duly and validly
authorized and, when issued or sold and delivered against payment therefore
as provided in this Agreement, will be validly issued, fully paid and
nonassessable. The Shares, upon issuance, will not be subject to preemptive
rights or contractual rights to purchase and the certificates for the Shares
will be valid and in proper legal form. The Shares will conform to all
statements with regard thereto in the Registration Statement and Prospectus.
2.10 PRIOR SALES. No securities of the Company have been sold by the
Company or by, or on behalf of, or for the benefit of, any person or persons
controlling, controlled by, or under common control with the Company at any
time prior to the date hereof, except as set forth in the Registration
Statement and Prospectus.
2.11 LITIGATION. Except as set forth in the Registration Statement and
Prospectus, there is, and at the Closing Date there will be, no action, suit
or proceeding before any court or governmental agency, authority or body
pending or to the knowledge of the Company, or its officers, directors,
employees or agents which the Company is obligated to indemnify, not
adequately covered by insurance and which collectively might result in any
material adverse change in the condition (financial or otherwise), the
business or the prospects of the Company, or would materially affect the
properties or assets of the Company.
2.12 FINDER. No person has acted as a finder in connection with the
transactions contemplated herein and the Company will indemnify the
Underwriter with respect to any claim for finder's fees in connection
herewith. The Company further represents that it has no management or
financial consulting or advisory agreement with anyone except as set forth in
the Registration Statement and Prospectus. The Company additionally
represents that, to the best of the knowledge of its officers, no promoter,
officer, director or shareholder of the Company is, directly or indirectly,
associated with a National Association of Securities Dealers, Inc. member
broker-dealer, other than such persons as the Company has advised the
Underwriter in writing are so associated.
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2.13 EXHIBITS. There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the Act or
by the Rules and Regulations which have not been so filed and each contract
to which the Company is a party and to which reference is made in the
Registration Statement or Prospectus has been duly and validly executed, is
in full force and effect in all material respects in accordance with their
respective terms, and none of such contracts has been assigned by the
Company; and the Company knows of no present situation or condition or fact
which would prevent compliance with the terms of such contracts, as amended
to date. Except for amendments or modifications of such contracts in the
ordinary course of business, the Company has no intention of exercising any
right which it may have to cancel any of its obligations under any of such
contracts, and has no knowledge that any other party to any of such contract
has any intention not to render full performance under such contracts.
2.14 TAX RETURNS. The Company has filed all federal, state and
municipal tax returns which are required to be filed, and has paid all taxes
shown on such returns and on all assessments received by it to the extent
such taxes have become due. All other taxes with respect to which the
Company is obligated have been paid or adequate accruals have been set up to
cover any such unpaid taxes.
2.15 PROPERTY. Except as otherwise set forth in the Registration
Statement and Prospectus, the Company has good title, free and clear of all
liens, encumbrances and defects, except liens for current taxes not due and
payable, to all property and assets which are described in the Registration
Statement and the Prospectus as being owned by the Company, subject only to
such exceptions as are described in the Registration Statement or Prospectus
and as are not material and do not materially adversely affect the present or
prospective business of the Company. All of the claims, leases and subleases
material to the real or personal property, including those described or
referred to in the Registration Statement and Prospectus, are in full force
and effect, and the provisions of any such claims, leases or subleases, and
no claim of any sort has been asserted by anyone adverse to the Company's
rights under any such claims, leases or subleases or affecting or questioning
the Company's rights to the continued possession of the claimed, leased or
subleased property covered by such claim, lease or sublease.
2.16 PATENTS, LICENSES AND TRADEMARKS. Except as set forth in the
Registration Statement and Prospectus, the Company owns or possesses or can
acquire on reasonable terms, adequate patent rights or licenses or other
rights to use patent rights, inventions, trademarks, service marks, trade
names, government permits and copyrights necessary to conduct the business
now or expected to be operated by it and the Company has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any patent, names or copyrights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
materially adversely affect the conduct of the business, operations,
financial condition or income of the Company.
2.17 OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company in his capacity as such and delivered to the Underwriter or to
counsel for the Underwriter shall be
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deemed a representation and warranty by the Company to the Underwriter as to
the matters covered thereby.
2.18 AUTHORITY. The execution and delivery by the Company of this
Agreement has been duly authorized by all necessary corporate action and this
Agreement is the valid, binding and legally enforceable obligation of the
Company.
SECTION 3
ISSUE, SALE AND DELIVERY OF THE SHARES
3.01 UNDERWRITER APPOINTMENT. The Company hereby appoints the
Underwriter as its exclusive agent for a period of 180 days, which period may
be extended for an additional 60 days at the sole discretion of the Board of
Directors, from the effective date of the Registration Statement (the
"Effective Date") to sell 3,000 Shares of Class A Common Stock and 3,000
Shares of Class B Common Stock on a $8,000,000 gross proceeds minimum "best
efforts, all-or-none," $24,000,000 gross proceeds maximum "best efforts"
basis (the "Offering"). On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth,
the Underwriter accepts such appointment and agrees to use its best efforts
to find purchasers for the Shares. The Underwriter shall receive as a
commission seven percent (7%) of the total proceeds resulting from the sale
of Shares. Such commissions shall be paid directly from the escrow
established by the Escrow Agreement referred to hereinafter. Once
subscriptions for Shares with an aggregate gross sales price of $8,000,000
are received, the agency between the Company and the Underwriter shall
continue until all the Shares are sold, or until the above described offering
period expires, including any extension thereof, or the Underwriter
unilaterally terminates the offering, whichever event first occurs. The
period of time during which the Shares are being offered by the Underwriter
as agent hereinafter shall be referred to as the "Offering Period." If the
Offering is abandoned by the Company prior to the date 240 days after the
Effective Date because of an inability to sell sufficient Shares to result in
an aggregate gross proceeds of $8,000,000, than the Company shall pay to the
Underwriter the sum plus all actual expenses pursuant to Section 3.05 hereof,
provided, however, that the amount of such legal fees and expenses shall be
capped at $50,000. If the Offering is abandoned by the Company for any other
reason prior to the date 240 days after the Effective Date, then the Company
shall pay to the Underwriter the sum of $420,000 plus all actual expenses
pursuant to Section 3.05 plus the amount of Underwriter's legal fees and
expenses incurred in connection with the Offering.
The Company agrees that the obligations of the Underwriter under this
Agreement shall not preclude the Underwriter from contemporaneously
participating in or underwriting the offering of securities of other issuers.
3.02 CERTIFICATES. Certificates evidencing the Shares, in such form
that they can be negotiated by the purchasers thereof, subject to such
restrictions on transfer as are set forth in the Prospectus, (issued in such
denominations and in such names as the Underwriter may direct the transfer
agent to issue), shall be made available by the Company to the Underwriter
for
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checking and packaging at the offices of the Company's counsel at least three
full business days prior to any Closing Date. The Company shall make
available for delivery such certificates on the subject Closing Date, with
any transfer taxes thereon duly paid by the Company, against payment of the
purchase price therefor by certified or bank cashier's check or other Boston
clearing house funds payable to the order of the Company.
3.03 ESCROW. It hereby is agreed between the Company and the
Underwriter that unless Shares with an aggregate sales price of $8,000,000
are sold during the Offering Period, this Agreement shall automatically be
terminated and the entire proceeds received from the sale of securities shall
be returned to subscribers of the Company's Shares, plus accrued interest
and less $450 per Share subscribed. During the Offering Period, the proceeds
from the sale of the Shares shall be forwarded promptly to the escrow agent
(the "Escrow Agent") in accordance with Rule 15c2-4 of the Rules and
Regulations and the escrow agreement (the "Escrow Agreement"), which will be
substantially in the form filed as an exhibit to the Registration Statement,
or if not so filed, as mutually agreed upon by the Underwriter and the
Company.
3.04 CLOSING. The sale of any of the Company's securities pursuant
hereto and payment to the Company therefore is called herein a "Closing."
The time and date of delivery of securities sold and payment to the Company
hereunder is called herein a "Closing Date." Notwithstanding any provision
hereof to the contrary, "Closing" and "Closing Date" shall refer to and mean
each sale of securities and payment to the Company pursuant to this Agreement
if the sale of all 6,000 Shares does not occur at a single Closing on one
Closing Date. Subject to subscriptions to purchase Shares with an aggregate
sales price of $8,000,000, the first Closing shall take place at the office
of the Underwriter at the address set forth at the beginning of this
Agreement on such date and after such time as will be fixed by notice in
writing to be given by the Underwriter to the Company, such date to be not
less than two (2) full business days after the date on which the conditions
allowing the release of proceeds from the escrow account (the "Escrow
Account") to the Company and Underwriter as provided in the Escrow Agreement
shall have occurred. The Closing Date and place may be changed by the
agreement of the Underwriter and the Company. To the extent that any of the
remaining Shares to be offered by the Underwriter are not closed upon with
the Shares subscribed to satisfy the minimum $8,000,000 aggregate sales
price, the Underwriter shall establish additional Closings at such times as
the conditions allowing the release of additional proceeds from the escrow
account shall have occurred.
3.05 EXPENSE ALLOWANCE. The Company shall reimburse the Underwriter
its expenses on a nonaccountable basis in an amount equal to the sum of 1.5%
of the gross dollar amount of the Shares sold, less $50,000 which the
Underwriter acknowledges has been paid, such amount to be due and payable
only after the Closing. Additionally, the Company shall reimburse the
Underwriter all actual expenses of Newbury, Piret & Co., Inc. on an
accountable basis including, without limitation, advertising, postage,
travel, printing, research, courier, telephone and facsimile costs but
excluding the fees and expenses of the Underwriter's legal counsel (except
such fees and expenses related solely to blue sky qualification of the
Shares.) The accountable expenses shall exclude the fees of the Company's
counsel, but shall include fees of
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legal counsel retained to perform state filings, Commission and state filing
fees, National Association of Securities Dealers, Inc. filing fees, and any
and all other expenses customarily paid by the Company. The Company shall
pay the Underwriter the balance of the nonaccountable expense allowance and
all actual expenses on an accountable basis as described above on the release
to the Company by the Escrow Agent of the proceeds from the sale of the
Shares, such amounts to be paid directly from the Escrow Account.
3.06 REPRESENTATIONS AND WARRANTIES. The parties hereto each represent
that as of the Closing Date the representations and warranties herein
contained and the statements contained in all the certificates heretofore or
simultaneously delivered by any party to another, pursuant to this Agreement,
shall in all material respects be true and correct.
SECTION 4
OFFERING OF THE SHARES ON BEHALF OF THE COMPANY
4.01 AGENCY. In offering the Shares for sale, the Underwriter shall
offer the Shares solely as an agent for the Company and such offer shall be
made upon the terms and subject to the conditions set forth in the
Registration Statement and Prospectus. The Underwriter shall commence making
such offer as an agent for the Company as soon after the Effective Date of
the Registration Statement as the Underwriter in its sole discretion deems
advisable; provided, however, that if the Underwriter does not commence such
offering within three business days after the Effective Date, it shall so
advise the Company. With respect to the sale of the Shares, customer checks
will be made payable to the Escrow Agent in accordance with Rule 15c2-4 of
the Securities Exchange Act of 1934 and customer funds will be transmitted to
the Escrow Agent by participating dealers by noon of the next business day
following their receipt in accordance with rule 15c2-4 of the Securities
Exchange Act. The Company agrees to appoint no other agents in offering the
Shares for sale, except as herein provided.
SECTION 5
REGISTRATION STATEMENT AND PROSPECTUS
5.01 UNDERWRITER'S COPIES. The Company shall deliver to the
Underwriter, without charge, three manually signed copies of the Registration
Statement, including all financial statements and exhibits filed therewith
and any amendments or supplements thereto, and shall deliver without charge
to the Underwriter a minimum of seven conformed copies of the Registration
Statement and any amendment or supplement thereto, including such financial
statements and exhibits. The signed copies of the Registration Statement so
furnished to the Underwriter will include signed copies of any and all
consents and certificates of the independent public accountant certifying to
the financial statements included in the Registration Statement and
Prospectus and signed copies of any and all consents and certificates of any
other persons whose profession gives authority to statements made by them and
who are named in the Registration Statement and Prospectus as having
prepared, certified, or reviewed any part thereof.
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5.02 COPIES OF PRELIMINARY PROSPECTUS. The Company will deliver to the
Underwriter, without charge, as many copies of each Preliminary Prospectus
filed with the Commission bearing in red ink the statement required by the
Commission's Regulation S-B, Item 501(a)(5), as may be required by the
Underwriter. The Company consents to the use of the Preliminary Prospectus
by the Underwriter and by Co-Managers prior to the Effective Date. The
Company will procure, at its expense, as many printed copies of the
Prospectus as the Underwriter may require for the purposes contemplated by
this Agreement and shall deliver said printed copies of the Prospectus within
two business days after the Effective Date. The Company, at its expense,
will deliver as many printed copies of the Preliminary Prospectus and final
(definitive) Prospectus to the Underwriter at addresses, and in the quantity
at each address, as specified by the Underwriter, and each Preliminary
Prospectus and Prospectus shall be suitable for mailing and other
distribution.
5.03 POST-EFFECTIVE AMENDMENTS. If during such period of time as in
the opinion of the Underwriter or its counsel a prospectus related to this
Offering is required to be delivered under the Act, any event occurs or any
event known to the Company relating to or affecting the Company shall occur
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any time
after the Effective Date to amend or supplement the Prospectus to comply with
the Act, the Company will immediately notify the Underwriter thereof and the
Company will immediately prepare and file with the Commission such further
amendment to the Registration Statement or supplemental or amended Prospectus
as may be required and furnish and deliver to the Underwriter and to others
whose names and addresses are designated by the Underwriter, all at the cost
of the Company, a reasonable number of copies of the amended or supplemented
Prospectus which as so amended or supplemented will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the Prospectus not misleading in the light of the circumstances
when it is delivered to a purchaser or prospective purchaser, and which will
comply in all respects with the Act; and in the event the Underwriter is
required to deliver a prospectus 90 days or more after the date of
commencement of the Offering, upon request the Company will prepare promptly
such Prospectus or Prospectuses as may be necessary to permit compliance with
the requirements of Section 10 of the Act.
5.04 USE OF PROSPECTUS. The Company authorizes the Underwriter, in
connection with the distribution of the Shares and all dealers to whom any of
the Shares may be sold by the Underwriter, to use the Prospectus as from time
to time amended or supplemented in connection with applicable provisions of
the Act and the applicable rules and Regulations thereunder and applicable
state securities laws.
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SECTION 6
COVENANTS OF THE COMPANY
The Company covenants and agrees with the Underwriter that:
6.01 FILING OF AMENDMENTS. After the date hereof, the Company will not
at any time, whether before or after the Effective Date, file any amendment
or supplement to the Registration Statement or Prospectus unless the
Underwriter shall have previously been advised of the filing of such
amendment or supplement and a copy of such amendment or supplement shall have
previously been furnished to the Underwriter a reasonable time period prior
to the proposed filing thereof, and the Underwriter or counsel for the
Underwriter shall not have reasonably objected to the filing of such
amendment or supplement on the grounds that such amendment or supplement is
not in compliance with the Act or the Rules and Regulations.
6.02 EFFECTIVENESS OF REGISTRATION STATEMENT. The Company will use its
best efforts to cause the Registration Statement, and any post-effective
amendment subsequently filed, to become effective as promptly as reasonably
practicable and will promptly advise the Underwriter, and will confirm such
advise in writing, (i) when the Registration Statement shall have become
effective, when any amendment thereto shall have become effective, and when
any amendment of or supplement to the Prospectus shall be filed with the
Commission, (ii) when the Commission shall make a request or suggestion for
any additional information, and the nature and substance thereof, (iii) when
the Commission shall issue an order temporarily suspending the effectiveness
of the Registration Statement pursuant to Section 8 of the Act or of the
initiation of any proceedings for that purpose, (iv) upon the happening of
any event which, in the judgment of the Company, makes any material statement
in the Registration Statement and Prospectus untrue or which requires the
making of any changes in the Registration Statement and Prospectus in order
to make the statements therein not misleading, and (v) upon the refusal of
any state securities administrators to qualify, or the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of
the institution of any proceedings for any of such purposes. The Company
will use every reasonable effort to prevent the issuance of any such order
suspending the effectiveness of the Registration Statement, to prevent any
such refusal to qualify or any such suspension and to obtain as soon as
possible the lifting of any such order, the reversal of any such refusal, and
the termination of any such suspension.
6.03 AMENDMENTS TO REGISTRATION STATEMENT. The Company will prepare
and file promptly with the Commission, upon request of the Underwriter, such
amendments or supplements to the Registration Statement and Prospectus, in
form reasonably satisfactory to counsel to the Company, as in the opinion of
the Underwriter may be necessary or advisable in connection with the offering
or distribution of the Shares.
6.04 BLUE SKY FILINGS. As a condition of closing, the Company, at its
own expense, will qualify the Shares or such part thereof for sale under the
applicable laws of Connecticut, Rhode Island, New York and Massachusetts and
such other states as are mutually agreed to by
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the Company and the Underwriter, and continue such qualifications in effect
so long as required for the purpose of distribution of the Shares.
6.05 ADDITIONAL INFORMATION. The Company, at its own expense, will
prepare and give and will continue to give such financial statements and
other information to and as may be required by the Commission or the
governmental authorities of states in which the Shares may be qualified.
6.06 REPORTS TO UNDERWRITER. During the Offering Period, the Company
will deliver to the Underwriter: (i) within 90 days after the close of each
fiscal year of the Company, a financial report of the Company and its
subsidiaries, if any, on a consolidated basis, and a similar financial report
of all unconsolidated subsidiaries, if any, all such reports to include a
balance sheet as of the end of the preceding fiscal year, an income
statement, a statement of changes in financial condition and a statement of
stockholders' equity covering such fiscal year, and all to be in reasonable
detail and audited by independent public accountants who may, however, be the
regularly employed independent public accountants, of the Company; (ii)
within 45 days after the end of each quarterly fiscal period of the Company
other than the last quarterly fiscal period in any fiscal year, copies of the
income statement and statement of changes in financial condition for that
period, and the balance sheet as of the end of that period statement,
statement of changes in financial condition and the balance sheet of each
unconsolidated subsidiary, if any, of the Company for that period, all
subject to year-end adjustment, signed by the principal executive or
principal financial or accounting officer of the Company; (iii) copies of all
other statements, documents, or other information which the Company shall
mail or otherwise make available to any class of its security holders, to the
press or to the public or shall file with the Commission, including, but not
limited to periodic reports required to be filed under Sections 13 and 15 of
the Securities Exchange Act of 1934, as amended, in particular Forms 10-KSB,
10-QSB and 8-K (which shall be provided within the same period such reports
are required to be filed with the Commission); and (iv) upon request in
writing from the Underwriter, furnish to the Underwriter such other
information as may reasonably be requested with reference to the property,
business and affairs to the Company and its subsidiaries, if any.
If the Company shall fail to furnish the Underwriter with financial
statements as herein provided, within the times specified herein, the
Underwriter, at the Company's expense, shall have the right to have such
financial statements prepared by independent public accountants of its own
choosing, subject to the Company's approval, which will not be unreasonably
withheld, and the Company agrees to furnish to such independent public
accountants such data and assistance and access to such records as they may
reasonably require to enable them to prepare such statements.
6.07 EXPENSES OF THE OFFERING. The Company will pay, whether or not
the transactions contemplated hereunder are consummated or this Agreement is
prevented from becoming effective or is terminated, all costs and expenses
incident to the performance of its obligations under this Agreement,
including all expenses incident to the authorization of the Shares and its
issue and delivery to the Underwriter, any original issue taxes in connection
therewith, all
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transfer taxes, if any, incident to the initial sale of the Shares to the
public, the fees and expenses of the Company's counsel and accountants, the
costs and expenses incident to the preparation, printing and filing under the
Act and with the National Association of Securities Dealers, Inc. of the
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto, the cost of preparing for filing and
filing all exhibits to the Registration Statement, this Agreement, the
Participating Dealers Agreement and any Blue Sky Memorandum and any
underwriter's questionnaire, the cost of printing and furnishing to the
Underwriter copies of the Registration Statement and copies of the Prospectus
as herein provided, and the cost of qualifying the Shares under the state
securities laws as provided in Section 6.04 herein including filing fees.
6.08 SHAREHOLDER REPORTS. During the Offering Period, the Company, as
promptly as possible after each annual fiscal period, will prepare and
distribute reports to its shareholders which will include audited statements
of its operation and changes of financial position during such period and its
balance sheet as of the end of such period.
6.09 EARNINGS STATEMENT. Not later than the 45th day following the end
of the first fiscal quarter first occurring after the first anniversary of
the Effective Date, the Company will make generally available to its security
holders in accordance with Section 11(a) of the Act, and will deliver to the
Underwriter, an earnings statement, which need not be audited, covering a
twelve-month period beginning after the Effective Date.
6.10 COMPLIANCE WITH THE ACT. Within the time during which the
Prospectus is required to be delivered under the Act, the Company will
comply, at its own expense, with all requirements imposed on it by the Act,
as now or hereafter amended, by the Rules and Regulations promulgated
thereunder, and applicable state laws as from time to time may be in force,
and by any order of the Commission and state authorities so far as necessary
to permit the continuance of sales or dealings in the Shares.
6.11 USE OF PROCEEDS. The Company will apply the proceeds from the
sale of Shares to the purposes set forth in the Registration Statement and
Prospectus. To the extent the Registration Statement and Prospectus contain
a provision that the Board of Directors may change the priority or purpose
for which the proceeds are applied, the Company, through its Board of
Directors, will establish procedures reasonably designed to ensure compliance
with such provision.
6.12 DELIVERY OF DOCUMENTS. Prior to the Closing Date, the Company
will deliver to the Underwriter true and correct copies of the Articles of
Incorporation of the Company and all amendments thereto, all such copies to
be certified by the Secretary of State or other appropriate officers of the
state or other jurisdiction of incorporation; true and current copies of the
By-Laws of the Company and of the minutes of all meetings of the directors
and shareholders of the Company held since inception of the Company through
the Closing Date and all minutes which in any way relate to the subject
matter of this Agreement, all certified by the Chief Executive Officer of the
Company as to accuracy and completeness; and true and correct copies of all
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material contracts to which the Company is a party, other than contracts for
the sale of products or services in the normal course of business.
6.13 UNDERWRITER'S DUE DILIGENCE. Up to and through the last Closing
Date, the Company and its officers and directors will cooperate with the
Underwriter in such investigation as the Underwriter may make or cause to be
made of the properties, business, management and operations of the Company in
connection with the public offering of the Shares, and the Company will make
available to the Underwriter in connection therewith such information in its
possession as the Underwriter may reasonably request.
6.14 NEWS RELEASES. Up to and through the last Closing Date, no
discussions will be held by officers and directors of the Company with any
member of the news media and no news release or other publicity about the
Company will be permitted without the approval of the Company's and the
Underwriter's respective legal counsel.
6.15 SALES OF SECURITIES. No offering, sale or other disposition of
any equity securities will be made during the Offering Period, directly or
indirectly by the Company, otherwise than hereunder or with the Underwriter's
consent, which shall not be unreasonably withheld.
6.16 TRANSFER AGENT. The Company has appointed Boston EquiService,
Inc. as Transfer Agent for the Shares. The Company will not change or
terminate such appointment during the Offering Period without first obtaining
the written consent of the Underwriter, which consent shall not be
unreasonably withheld.
6.17 COMPLIANCE. The Company will use all reasonable efforts to comply
or cause to be complied with the conditions precedent to the several
obligations of the Underwriter specified in this Agreement.
6.18 FORM 8-A. The Company shall register the classes of equity
securities of which the Stock is a part by filing with the Securities and
Exchange Commission a registration statement (and such copies thereof as the
Commission may require) with respect to such security containing such
information and documents as the Commission may specify, pursuant to Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and will
use its best efforts to have such registration statement declared effective
by the Commission concurrently with the Registration Statement being declared
effective. Copies of such filing shall be provided to the Underwriter and
its counsel.
6.19 MANUAL FILINGS. Immediately after the first Closing Date, the
Company shall apply for listing in Moody's OTC Guide or Standard and Poor's
Standard Corporation Reports and use its best efforts to have the Company
listed in such report provided, however, that the Company shall apply for
both such listings if requested in writing by the Underwriter.
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6.20 CLOSING BINDERS. The Company, at its expense, shall provide two
sets of hard back, book bound copies of all SEC, NASD and blue sky filings
and all related corporate documents to each of the Underwriter and its legal
counsel.
SECTION 7
INDEMNIFICATION
7.01 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
defend and hold harmless the Underwriter and each person who controls the
Underwriter within the meaning of either Section 15 of the Act or Section 20
of the Securities Exchange Act from and against any and all losses, claims,
damages, liabilities or expenses, joint or several, (including reasonable
legal or other expenses incurred by each such person in connection with
investigating, preparing or defending against any such litigation, commenced
or threatened, or claims or liabilities, whether or not resulting in any
liability to such person) which they or any of them may incur under the Act,
or any state securities law and the Rules and Regulations or the rules and
regulations under any state securities laws or any other statute or at common
law or otherwise and to reimburse persons indemnified as above for any legal
or other expense (including the cost of any investigation and preparation)
incurred by any of them in connection with any litigation, whether or not
resulting in any liability, but only insofar as such losses, claims, damages,
liabilities and litigation arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereto or any application or other
document filed in any state or other jurisdiction in order to qualify the
Shares under the securities laws thereof, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, all as of the date when the
Registration Statement or such amendment, as the case may be, becomes
effective, or any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (as amended or supplemented if the Company
shall have filed with the Commission any amendments thereof or supplements
thereto), or the omission or alleged omission to state therein a material
fact 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 Section 7.01 shall not apply
to amounts paid in settlement of any such litigation if such settlements are
effected without the consent of the Company, nor shall it apply to the
Underwriter or any person controlling the Underwriter in respect of any such
losses, claims, damages, liabilities or actions arising out of or based upon
any such untrue statements or alleged untrue statement, or any such omission
or alleged omission, if such statement or omission was made in reliance upon
information furnished in writing to the Company by such Underwriter
specifically for use in connection with the preparation of the Registration
Statement and Prospectus or any such amendment or supplement thereto. This
indemnity agreement is in addition to any other liability which the Company
may otherwise have to the Underwriter.
7.02 NOTIFICATION TO THE COMPANY OF PROCEEDINGS. The Underwriter
agrees to notify the Company promptly of the commencement of any litigation
or proceeding against it or against
14
any such controlling person, of which it may be advised, in connection with
the offer and sale of any of the Shares of the Company, and to furnish to the
Company at its request copies of all pleadings therein and permit the Company
to be an observer therein and apprise it of all the developments therein. In
case of commencement of any action in which indemnity may be sought from the
Company on account of the indemnity agreement contained in Section 7.01, the
Underwriter agrees within a reasonable time after the receipt by it of
written notice of the commencement of any action against the Underwriter or
against any person controlling it as aforesaid, to notify the Company in
writing of the commencement thereof. The omission of the Underwriter so to
notify the Company of any such action shall relieve the Company from any
liability which it may have to the Underwriter or any person controlling it.
In case any such action shall be brought against the Underwriter or any such
controlling person of which the Underwriter shall have notified the Company
of the commencement thereof, the Company shall be entitled to participate in
the defense thereof at its own expense, but such defense shall be conducted
by counsel of recognized standing and reasonably satisfactory to the
Underwriter or such controlling person or persons, defendant or defendants in
such litigation.
7.03 INDEMNIFICATION BY THE UNDERWRITER. The Underwriter agrees in the
same manner and to the same extent as set forth in Section 7.01 above, to
indemnify and hold harmless the Company, the directors of the Company, each
officer who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Act or
Section 20 of the Securities Exchange Act with respect to any statement in or
omission from the Registration Statement or any amendment thereto, and the
Prospectus, or any amendment thereto, or any application or other document
filed in any state or other jurisdiction in order to qualify the Shares under
the securities laws thereof, or any information furnished pursuant to Section
3.04 hereof, if such statements or omissions were made in reliance upon
information furnished in writing to the Company by the Underwriter on its
behalf specifically for use in connection with the preparation thereof or
amendment thereto, or with respect to any failure of the Underwriter to
deliver a Prospectus in accordance with the requirements of Section 5 of the
Act, or with respect to any untrue statement or alleged untrue statement of a
material fact made by the Underwriter or its agents not based on statements
in the Prospectus or authorized in writing by the Company, or with respect to
any misleading statement or alleged misleading statement made by the
Underwriter or its agents resulting from the omission of material facts which
misleading statement is not based upon the Prospectus, or information
furnished in writing by the Company. This indemnity agreement is in addition
to any other liability which the Underwriter may otherwise have to the
Company.
7.04 NOTIFICATION TO THE UNDERWRITER OF PROCEEDINGS. The Company
agrees to notify the Underwriter promptly of commencement of any litigation
or proceedings against it or any of its officers or directors, of which it
may be advised, in connection with the offer and sale of any of its Shares
and to furnish to the Underwriter, at its request, copies of all pleadings
therein and permit the Underwriter to be an observer therein and apprise the
Underwriter of all developments therein, all at the Company's expense. In
case of commencement of any action in which indemnity may be sought from the
Underwriter on account of the indemnity agreement contained in Section 7.03,
each person agreed to be indemnified by the Underwriter shall notify
15
the Underwriter of the commencement thereof in writing within 10 days. The
omission of the Company to so notify the Underwriter of any such action shall
relieve the Underwriter from any liability which it may have to the Company
or any person controlling it on account of the indemnity agreement contained
in Section 7.03 or otherwise. In case any such action shall be brought
against the Company or any such controlling person of which the Company shall
have notified the Underwriter of the commencement thereof, the Underwriter
shall be entitled to participate in (and to the extent that it shall wish, to
direct) the defense thereto at its own expense. The Underwriter shall not be
liable for amounts paid in settlement of any litigation if such settlement
was effected without its consent.
7.05 CONTRIBUTION. If the indemnification provided for in paragraphs
7.01 and 7.03 is unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under either such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriter on
the other 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 Company on the one hand
and of the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other
shall be deemed to be in the same proportion as the total net proceeds from
the Offering (before deducting expenses) received by the Company bears to the
total underwriting discounts and commissions received by the Underwriter, as
in each case set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and of the Underwriter shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the Company or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation which 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, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 7, the
Underwriter shall not 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 exceeds the amount of any damages which such
Underwriter otherwise has been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
16
of fraudulent misrepresentation (within the meaning of Section ll(f) of the
Act) shall be entitled to contribution hereunder from any person who was not
guilty of such fraudulent misrepresentation.
SECTION 8
EFFECTIVENESS OF AGREEMENT
This Agreement shall be effective as of 9:00 A.M., Boston local time, on
the Effective Date.
SECTION 9
CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS
The Underwriter's obligations to act as agent of the Company hereunder
and to solicit purchasers for the Shares and to make payment to the Company
hereunder shall be subject to the accuracy of the representations and
warranties on the part of the Company herein contained, to the performance by
the Company of all their respective agreements herein contained, to the
fulfillment of or compliance by the Company with all covenants and conditions
hereof, and to the following additional conditions:
9.01 EFFECTIVE REGISTRATION STATEMENT; NO STOP ORDER. The Registration
Statement shall have become effective and you shall have received notice
thereof not later than 5:00 p.m., Boston local time, on the date of this
Agreement, or at such later time or on such later date as to which you may
agree in writing. In addition, on each Closing Date, (i) no stop order
denying or suspending the effectiveness of the Registration Statement shall
be in effect and no proceedings for that or any similar 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, and (ii) all
requests on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of Sullivan & Worcester,
LLP, counsel to the Underwriter.
9.02 OPINION OF COMPANY COUNSEL. On each Closing Date, you shall have
received the opinion, dated as of each Closing Date, of Hutchins, Wheeler &
Dittmar, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Connecticut with full corporate power and authority to own its properties
and conduct its business as described in the Prospectus and is current in
the payment of all corporate fees due and owing to its state of
incorporation. Hutchins, Wheeler & Dittmar may rely on the opinion of
Fabriani & Kane, P.C. with respect to the matters set forth in this
paragraph 9.02(i).
(ii) the Company is duly authorized to transact business in which it
is engaged and is in good standing in each jurisdiction in which its
ownership of property
17
or its conduct of business requires such authorization, specifying each
such jurisdiction, and is current in the payment of all corporate fees
due and owning in each such jurisdiction.
(iii) to the best knowledge of such counsel: (A) the Company has
obtained, or is in the process of obtaining, all necessary licenses,
permits and other governmental authorizations currently required for the
conduct of its business or the ownership of its property; (B) such
obtained licenses, permits and other governmental authorizations are in
full force and effect; and (C) the Company is in all material respects
complying therewith;
(iv) (A) the authorized capitalization of the Company as of the date
of the Prospectus was as set forth under the "CAPITALIZATION" Section of
the Prospectus; (B) all of the shares of the Company's Common Stock now
outstanding have been duly authorized and validly issued, are fully paid
and non-assessable and conform to the description thereof contained in
the Prospectus, have not been issued in violations of the pre-emptive
rights of any stockholder and, except as described in the Prospectus, to
the best knowledge of such counsel, are not subject to any restrictions
upon the voting or transfer thereof; (C) the Shares to be issued as
contemplated in the Registration Statement have been duly authorized and,
when issued and delivered against payment therefor as provided herein,
will be validly issued, fully paid and nonassessable, will not have been
issued in violation of the pre-emptive rights of any stockholder, and no
personal liability will attach to the ownership thereof; (D) except as
described in the Prospectus, the security holders of the Company do not
have any pre-emptive rights or other rights to subscribe for or purchase,
and there are no restrictions imposed by the Company upon the voting or
transfer of, any shares of Common Stock owned by them, except for transfer
restrictions imposed by federal or state securities laws; (E) the Shares
conform in all material respects to the respective descriptions thereof
contained in the Prospectus; (F) all prior sales of the Company's
securities have been made in compliance with, or under an exemption form,
the Act and applicable state securities laws; and to the best of such
counsel's knowledge, except as described in the Prospectus, neither the
filing of the Registration Statement nor the offering or sale of the
Shares as contemplated by this Agreement gives rise to any registration
rights or other rights, other than those which have been waived or
satisfied or described in the Prospectus, for or relating to the
registration of any securities of the Company;
(v) this Agreement has been duly and validly authorized, executed
and delivered by the Company, and assuming due execution and delivery by
you, all of such agreements are, or when duly executed will be, the valid
and legally binding obligations of the Company; provided, however, that no
opinion need be expressed as to the enforceability of the indemnity
provisions contained in Section 7 of this Agreement;
(vi) the certificates evidencing the Shares are in valid and proper
legal form;
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(vii) to the best knowledge of such counsel, except as required to be
described in the Prospectus: (A) there is no pending or threatened legal
or governmental proceeding affecting the Company which could materially
and adversely affect the business, property, operations, condition
(financial or otherwise) or results of operations of the Company, or which
questions the validity of the Shares or this Agreement or any action taken
or to be taken by the Company pursuant thereto; and (B) there is no legal
or governmental proceeding or regulation required to be described or
referred to in the Registration Statement which is not so described or
referred to;
(viii) to the best knowledge of such counsel: (A) the Company is not
in violation of or default under this Agreement; and (B) and the execution
and delivery hereof and thereof and the incurrence of the obligations
herein and therein set forth and the consummation of the transactions
herein or therein contemplated will not result in a violation of, or
constitute a default under, the Certificate of Incorporation or By-laws of
the Company, or any material obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness
or in any material contract, indenture, mortgage, loan agreement, lease,
joint venture, other agreement or instrument filed as an Exhibit to the
Registration Statement and to which the Company is a party or by which its
assets are bound or any material order, rule, regulation, writ, injunction
or decree of any government, governmental instrumentality or court,
domestic or foreign;
(ix) the Registration Statement has become effective under the Act,
and to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement is in effect, and to the best
knowledge of such counsel no proceeding for that or any similar purpose
have been instituted or are pending before, or threatened by, the
Commission;
(x) the Registration Statement and the prospectus (except for the
financial statements and other financial data contained therein, or
omitted therefrom, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the Rules and Regulations;
(xi) all descriptions contained in the Registration Statement and the
Prospectus, and any amendment or supplement thereto, of contracts and other
documents are accurate and fairly present the information required to be
described, and such counsel is familiar with all contracts and other
documents referred to in the Registration Statement and the Prospectus and
any such amendment or supplement, or filed as exhibits to the Registration
Statement, and such counsel does not know of any contracts, documents,
licenses or permits of a character required to be summarized or described
therein or to be filed as exhibits thereto which are not so summarized,
described or filed;
(xii) no authorization, approval, consent or license of any
governmental or regulatory authority or agency is necessary in connection
with the authorization, issuance, transfer, sale or delivery of the Shares
by the Company, in connection with the
19
execution, delivery and performance by the Company of this Agreement or
in connection with the taking by the Company of any action contemplated
herein, other than registration or qualification of the Shares under
applicable state or foreign securities or blue sky laws and registration
under the Act; and
(xiii) the statements in the Registration Statement under the captions
"BUSINESS," "USE OF PROCEEDS," "MANAGEMENT," "DESCRIPTION OF SECURITIES"
and "CONFLICTS OF INTEREST" have been reviewed by such counsel and insofar
as they refer to descriptions of agreements, statements of laws,
descriptions of statutes, licenses, rules or regulations or legal
conclusions, are correct in all material respects.
Such opinion shall also state that Company counsel's examination of the
Registration Statement and its discussions with the Company and its
independent auditors did not disclose any information which gives Company
counsel reason to believe that the Registration Statement (other than the
Underwriting Information, the financial statements and other financial and
statistical information as to which counsel need not express an opinion) at
the time it became effective contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (other than the Underwriting Information, the schedules, financial
statements and other financial and statistical information as to which no
view is expressed) at the time it became effective contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein not misleading, or that the Prospectus (other than the
Underwriting Information, the financial statements and other financial and
statistical information as to which counsel need not express an opinion)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In addition, such opinion shall also cover such matters incident to the
transactions contemplated hereby as you or your counsel shall reasonably
request. In rendering such opinion, such counsel may rely upon certificates
of any officer of the Company or public officials as to matters of fact; and
may rely as to all matters of law other than the law of the United States, or
the Commonwealth of Massachusetts upon opinions of counsel satisfactory to
you, in which case the opinion shall state that they have no reason to
believe that you and they are not entitled to so rely.
9.03 CORPORATE PROCEEDINGS. All corporate proceedings and other legal
matters relating to this Agreement, the Registration Statement, the
Prospectus, and other related matters shall be satisfactory to or approved by
Sullivan & Worcester, LLP, counsel to the Underwriters, and you shall have
received from such counsel a signed opinion, dated as of the date of the
first Closing Date, with respect to the validity the issuance of the Shares,
the form of the Registration Statement and Prospectus (other than the
financial statements and other financial data contained therein), the
execution of this Agreement and other related matters. With respect to
matters of Connecticut law, Sullivan & Worcester, LLP may rely on the opinion
of Connecticut counsel.
20
The Company shall have furnished to counsel for the Underwriters such
documents as they may reasonably request for the purpose of enabling them to
render such opinion.
9.04 COMFORT LETTER. You shall have received a letter on and as of the
Effective Date and again on and as of the each Closing Date, from Arthur
Andersen LLP, certified public accountants for the Company, in each instance
describing the procedures carried out to a date within five (5) days of the
date of the letter and substantially in the form approved by you.
9.05 BRING DOWN. At each of the Closing Dates, (i) the representations
and warranties of the Company contained in this Agreement shall be true and
correct with the same effect as if made on and as of such Closing Date, and
the Company shall have performed all of its obligations hereunder and
satisfied all the conditions on its part to be satisfied at or prior to such
Closing Date; (ii) the Registration Statement and the Prospectus shall
contain all statements which are required to be stated therein in accordance
with the Act and the Rules and Regulations, and shall in all material
respects conform to the requirements thereof, and neither the Registration
Statement nor the Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make he statements therein not misleading; (iii) there shall
have been, since the respective dates of which information is given, no
material adverse change in the business, properties, condition (financial or
otherwise), results of operations, capital stock, long-term or short-term
debt or general affairs or operations of the Company from that set forth in
the Registration Statement and the Prospectus, except changes which the
Registration Statement and Prospectus indicate might occur after the
Effective Date, and the Company shall not have incurred any material
liabilities nor entered into any agreement not in the ordinary course of
business other than as referred to in the Registration Statement and
Prospectus; and (iv) except as set forth in the Prospectus, no action, suit
or proceeding at law or at equity shall be pending or threatened against the
Company which would be required to be disclosed in the Registration
Statement, and no proceedings shall be pending or threatened against the
Company before or by any commission, board or administrative agency in the
United States or elsewhere, wherein an unfavorable decision, ruling or
finding would materially and adversely affect the business, property,
condition (financial or otherwise), results of operations or general affairs
of the Company. In addition, you shall have received at each Closing, a
certificate signed by the principal executive officer and the principal
financial or accounting officer of the Company, dated as of such Closing
Date, evidencing compliance with the provisions of this Section 9.05.
9.06 TRANSFER AGENT. The Company shall have appointed Boston EquiServe
(or other agent mutually acceptable to the Company and you), as its transfer
agent to transfer all of the Shares issued in the Offering, as well as to
transfer other shares of the Common Stock outstanding from time to time.
9.07 CERTAIN FURTHER MATTERS. On each Closing Date, Underwriter's
counsel shall have been furnished with all such other documents and
certificates as they may reasonably request for the purpose of enabling them
to render their legal opinion to the Underwriter and in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements,
21
the performance of any of the covenants, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company on or
prior to each of the Closing Dates in connection with the authorization,
issuance and sale of the Shares as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriter's counsel.
9.08 NO UNTRUE MATERIAL FACTS. The Underwriter shall not have advised
the Company that the Registration Statement and the Prospectus or any
amendment thereof or supplement thereto contains an untrue statement of a
fact which, in the opinion of counsel to the Underwriter, is material, or
omits to state a fact which, in the opinion of such counsel, is or may be
material and is or may be required to be stated therein, or is necessary to
make the statements therein not misleading.
9.09 NO LITIGATION. Between the date hereof and the Closing Date,
there shall be no litigation instituted or threatened against the Company
which shall have a materially adverse affect upon the Company in the opinion
of the Underwriter and there shall be no proceeding instituted or threatened
against the Company before or by any federal or state commission, regulatory
body or administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would materially
adversely affect the business, franchises, licenses, operations or financial
condition or income of the Company considered as an entirety.
9.10 CUSIP NUMBERS. The Company shall have obtained and furnished to
the Underwriter CUSIP numbers for each class of Shares.
9.11 DELIVERY OF CERTIFICATES. All of the certificates for the Shares
being offered by the Company shall be tendered for delivery in accordance
with the terms and provisions of this Agreement.
9.12 BLUE SKY. The Shares shall be qualified in Connecticut,
Massachusetts, New York and Rhode Island and such other states as the
Underwriter reasonably may request, and each qualification shall be in effect
and not subject to any stop order or other proceeding on the Closing Date.
9.13 COUNSEL'S APPROVAL. All opinions, letters, certificates and
evidence mentioned above or elsewhere in this Agreement shall be deemed to be
in compliance with the provisions hereof only if they are in form and
substance satisfactory to counsel to the Underwriter, whose approval shall
not be unreasonably withheld.
SECTION 10
TERMINATION
10.01 TERMINATION BY THE UNDERWRITER. This Agreement may be terminated
by the Underwriter by notice to the Company in the event that the Company
shall have failed or been
22
unable to comply substantially with any of the terms, conditions or
provisions of this Agreement on the part of the Company to be performed,
complied with or fulfilled (including but not limited to those specified in
Sections 2, 3, 5, 6 and 9 hereof) within the respective times herein provided
for, unless compliance therewith or performance or satisfaction thereof shall
have been expressly waived by the Underwriter in writing.
10.02 TERMINATION DUE TO CERTAIN CONDITIONS. This Agreement may be
terminated by the Underwriter by notice to the Company at any time if, in the
sole judgment of the Underwriter, the sale, payment for or delivery of the
Shares is rendered impractical or inadvisable for any reason, including
without limitation because (i) of the occurrence of the enactment,
publication, regulation, rule or order of any court or other governmental
authority which in the sole judgment of the Underwriter adversely affects or
will adversely affect the business or operations of the Company, or (ii) the
declaration of a banking moratorium by federal, Connecticut or Massachusetts
authorities, or (iii) an outbreak of hostilities or other national or
international calamity or crisis shall have occurred, or (iv) the condition
of the market (either generally or with reference to the sale of the Shares
to be offered hereby), investor acceptability, or the condition of any matter
affecting the Company or any other circumstances is such that it would be
undesirable, impracticable or inadvisable to proceed with this Agreement or
with the public offering in the sole determination of the Underwriter, which
determination shall be conclusive, or (v) the present or future business or
reputation of the Underwriter would be adversely affected, or (vi) there is
an adverse change or development including a prospective adverse change in or
affecting the condition financial or otherwise, or obligations of the Company
or the earnings, affairs or business prospects of the Company whether or not
arising in the ordinary course of business.
10.03 SURVIVAL OF OBLIGATIONS AFTER TERMINATION. Any termination of
this Agreement pursuant to this Section 10 shall be without liability of any
character (including, but not limited to, loss of anticipated profits or
consequential damages) on the part of any party hereto, except that the
Company shall remain obligated to pay the fees, costs and expenses provided
to be paid by it so specified in Section 3.05 for the Underwriter's expenses
on an accountable basis only. The Company and the Underwriter shall remain
obligated to pay, respectively, all losses, claims, damages or liabilities,
joint or several, under Section 7.
SECTION 11
UNDERWRITER'S REPRESENTATIONS AND WARRANTIES
The Underwriter represents and warrants to and agrees with the Company
that:
11.01 REGISTERED BROKER-DEALER. It is registered as a broker-dealer
with the Commission and as a broker-dealer in the states in which the Shares
are to be offered, and it is a member in good standing of the National
Association of Securities Dealers, Inc.
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11.02 PROCEEDINGS INVOLVING THE UNDERWRITER. There is not now pending
or, to the knowledge of the Underwriter, threatened against the Underwriter
any action or proceeding of which the Underwriter has been advised, either in
any court of competent jurisdiction, before the Commission or any state
securities commission concerning the Underwriter's activities as a broker or
dealer, nor has the Underwriter been named in any action or proceeding which
may be expected to have a material adverse effect upon the Underwriter's
ability to act as agent to the Company as contemplated herein (except as set
forth in the Registration Statement or by letter to the Company from the
Underwriter).
11.03 NO IMPAIRMENT OF UNDERWRITER. In the event any action or
proceeding of the type referred to in subparagraph 11.02 above (except for
actions referred to in the Registration Statement) shall be instituted or, to
the knowledge of the Underwriter, threatened against the Underwriter at any
time prior to the Effective Date, or in the event there shall be filed by or
against the Underwriter in any court pursuant to any federal, state, local or
municipal statute, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee of its assets
or if the Underwriter makes an assignment for the benefit of creditors, the
Company shall have the right on three (3) days' written notice to the
Underwriter to terminate this Agreement without any liability to the
Underwriter of any kind except for the payment of expenses as provided herein.
SECTION 12
NOTICES
Except as otherwise expressly provided in this Agreement, notices,
demands and all other communications provided for in this Agreement shall be
in writing and shall be deemed to have been duly given when delivered or two
days after the date when mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the address listed for each
party below or to such other address as any party may have furnished to all
the others in writing in accordance herewith whichever is earlier, except the
notices of change of address shall be effective only upon receipt:
To the Company as follows:
Physicians Care for Connecticut, Inc.
Attention: Chief Executive Officer
1520 Highland Avenue
Cheshire, Connecticut 06410
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With Copy to:
Hutchins, Wheeler & Dittmar
Attention: Richard Trembowicz, Esq.
101 Federal Street
Boston, Massachusetts 02110
To the Underwriters as follows:
Legg Mason Wood Walker, Incorporated
Attention: Scott R. Cousino
111 South Calvert Street
Baltimore, Maryland 21202
Newbury, Piret & Co., Inc.
Attention: Marguerite A. Piret
One Boston Place
Boston, Massachusetts 02108
With Copy to:
Sullivan & Worcester LLP
Attention: John A. Piccione, Esq.
One Post Office Square
Boston, Massachusetts 02109
SECTION 13
MISCELLANEOUS
13.01 BENEFITS. This Agreement is made solely for the benefit of the
Underwriter, the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Act or Section 20 of the
Securities Exchange Act, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successor" or the term "successors and assigns" as used
in this Agreement shall not include any purchaser, as such, of any of the
Shares.
13.02 SURVIVAL. The respective indemnities, agreements,
representations, warranties, covenants and other statements of the Company or
its officers as set forth in or made pursuant to this Agreement and the
indemnity agreements of the Company and the Underwriter contained in Section
7 hereof shall survive and remain in full force and effect, regardless of (i)
any investigation made by or on behalf of the Company or the Underwriter or
any such officer or director thereof or any controlling person of the Company
or of the Underwriter, (ii) delivery of or payment for the Shares, or (iii)
the Closing Date, and any successor of the Company, the
25
Underwriter and Co-Managers, or any controlling person, officer or director
thereof, as the case may be, shall be entitled to the benefits hereof.
13.03 GOVERNING LAW. The validity, interpretation and construction of
this Agreement and of each part hereof will be governed by the laws of the
Commonwealth of Massachusetts.
13.04 UNDERWRITER'S INFORMATION. The statements in the last paragraph
under the caption "Underwriting" in the Prospectus, and in the risk factor
entitled "Underwriter's Experience." therein constitute the written
information furnished by or on behalf of the Underwriter referred to in
Sections 2.02 and 7 hereof.
13.05 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will constitute an original.
13.06 All obligations of Legg Mason Wood Walker, Incorporated and
Newbury, Piret & Co., Inc. hereunder shall be several and not joint.
Please confirm that the foregoing correctly sets forth the Agreement
between you and the Company.
Very truly yours,
PHYSICIAN'S CARE FOR CONNECTICUT,
INC.
By_______________________________
Joseph R. Coffey, Chief Executive
Officer
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WE HEREBY CONFIRM AS OF THE DATE HEREOF THAT THE ABOVE LETTER SETS FORTH
THE AGREEMENT BETWEEN THE COMPANY AND US:
LEGG MASON WOOD WALKER, INCORPORATED
By_________________________________
Scott R. Cousino, Managing Partner
NEWBURY, PIRET & CO., INC.
By________________________________
Marguerite A. Piret, President
27