Draft 5/5/96
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2,500,000 Shares
CRA Managed Care, Inc.
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
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May ___, 1996
Alex. Brown & Sons Incorporated
Dean Witter Reynolds Inc.
J.P. Morgan & Co.
Montgomery Securities
As Representatives of the
Several Underwriters
c/o Alex. Brown & Sons Incorporated
135 East Baltimore Street
Baltimore, Maryland 21202
Gentlemen:
CRA Managed Care, Inc., a Massachusetts corporation (the "Company"), and
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certain shareholders of the Company (the "Selling Shareholders") propose to sell
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to the several underwriters (the "Underwriters") named in Schedule I hereto for
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whom you are acting as representatives (the "Representatives") an aggregate of
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2,500,000 shares of the Company's Common Stock, $.01 par value (the "Firm
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Shares") , of which 1,100,000 shares will be sold by the Company and 1,400,000
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shares will be sold by the Selling Shareholders. The respective amounts of the
Firm Shares to be so purchased by the several Underwriters are set forth
opposite their names in Schedule I hereto, and the respective amounts to be sold
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by the Selling Shareholders are set forth opposite their names in Schedule II
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hereto. The Company and the Selling Shareholders are sometimes referred to
herein collectively as the "Sellers." Certain Selling Shareholders also propose
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to sell at the Underwriters' option an aggregate of up to 375,000 additional
shares of the Company's Common Stock (the "Option Shares") as set forth below.
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As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
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of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the
several Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein collectively called the "Shares."
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In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company and the Selling
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Shareholders.
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(a) The Company represents and warrants to each of the Underwriters
as follows:
(i) A registration statement on Form S-3 (File No. 333-______) with
respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the Rules and Regulations (the "Rules and Regulations") of
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the Securities and Exchange Commission (the "Commission") thereunder and
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has been filed with the Commission. The Company has complied with the
conditions for the use of Form S-3. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses (meeting the
requirements of the Rules and Regulations) contained therein and the
exhibits, financial statements and schedules, as finally amended and
revised, have heretofore been delivered by the Company to you and, to the
extent applicable, were identical to the electronically transmitted copies
thereof filed with the Commission pursuant to the Commission's Electronic
Data Gathering, Analysis and Retrieval System ("EDGAR"), except to the
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extent permitted by Regulation S-T. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule 462
(b) of the Act, herein referred to as the "Registration Statement," which
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shall be deemed to include all information omitted therefrom in reliance
upon Rule 430A and contained in the Prospectus referred to below, has been
declared effective by the Commission under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date of
this Agreement. "Prospectus" means (a) the form of prospectus first fi led
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by the Company with the Commission pursuant to Rule 424(b) and 430A or (b)
the last preliminary prospectus included in the Registration Statement
filed prior to the time it becomes effective or filed pursuant to Rule
424(a) under the Act that is delivered by the Company to the Underwriters
for delivery to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule 424(b)(7)
under the Act. Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein referred to as a
"Preliminary Prospectus." Any reference herein to the Registration
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Statement, any Preliminary Prospectus or to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein,
and, in the case of any reference herein to any Prospectus, also shall be
deemed to include any documents incorporated by reference therein, and any
supplements or amendments thereto, filed with the Commission after the date
of filing of the Prospectus under Rule 424(b) or Rule 430A, and prior to
the termination of the offering of the Shares by the Underwriters. For
purposes of this Agreement, all references to the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
to any of the foregoing, shall be deemed to include the respective copies
thereof filed with the Commission pursuant to EDGAR.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Massachusetts, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. Each of the subsidiaries of the Company as listed in Exhibit A
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hereto (collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
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corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. The Subsidiaries are the only subsidiaries, direct or indirect,
of the Company. The Company and each of the Subsidiaries are duly qualified
to transact business in all jurisdictions in which the conduct of their
business requires such qualification and where the failure to be so
qualified would have a material adverse effect on the business or results
of operations of the Company and the Subsidiaries, taken as a whole. The
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and
are owned by the Company free and clear of all liens, encumbrances and
equities and claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; the
portion of the Shares to be issued and sold by the Company have been duly
authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue and sale
thereof. Neither the filing of the Registration Statement nor the offering
or sale of the Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock.
(iv) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. All of the Shares conform to the
description thereof contained in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation.
(v) The Commission has not issued an order preventing or suspending
the use of any Prospectus relating to the proposed offering of the Shares
nor instituted proceedings for that purpose. The Registration Statement
contains, and the Prospectus and any amendments or supplements thereto will
contain, all statements which are required to be stated therein by, and
will conform to, the requirements of the Act and the Rules and Regulations.
The documents incorporated by reference in the Prospectus, at the time
filed with the Commission conformed, in all respects to the requirements of
the Securities Exchange Act of 1934 or the Act, as applicable, and the
rules and regulations of the Commission thereunder. The Registration
Statement and any amendment thereto do not contain, and will not contain,
any untrue statement of a material fact and do not omit, and will not omit,
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any
amendments and supplements thereto do not contain, and will not contain,
any untrue statement of material fact; and do not omit, and will not omit,
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
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no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly the
financial position and the results of operations and cash flows of the
Company and the consolidated Subsidiaries, at the indicated dates and for
the indicated periods. Such financial statements and related schedules have
been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, except as
disclosed herein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary financial and
statistical data included or incorporated by reference in the Registration
Statement presents fairly the information shown therein and such data have
been compiled on a basis consistent with the financial statements presented
therein and the books and records of the Company. The pro forma financial
statements and other pro forma financial information included in the
Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements, have been
properly compiled on the pro forma bases described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(vii) Arthur Andersen LLP, who have certified certain of the
financial statements filed with the Commission as part of, or incorporated
by reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which,
if determined adversely to the Company or any of its Subsidiaries, might
result in any material adverse change in the business or financial
condition of the Company and its Subsidiaries, taken as a whole, or to
prevent the consummation of the transactions contemplated hereby, except as
set forth in the Registration Statement.
(ix) The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements
(or as described in the Registration Statement) hereinabove described,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind
except those reflected in such financial statements (or as described in the
Registration Statement) or which are not material in amount. The Company
and the Subsidiaries occupy all their leased properties under valid and
binding leases conforming in all material respects to the description
thereof set forth in the Registration Statement.
(x) The Company and the Subsidiaries have filed all Federal, State,
local and foreign income tax returns which have been required to be filed
and have paid all taxes indicated by said returns and all assessments
received by them or any of them to the extent that such taxes have become
due. All tax liabilities have been adequately provided for in the financial
statements of the Company.
(xi) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there has
not been any material adverse change in or affecting the condition,
financial or otherwise of the Company or the earnings, business affairs,
management or business prospects of the Company and its Subsidiaries, taken
as a whole, whether or not occurring in the ordinary course of business,
and there has not been any material transaction entered into by the Company
or the Subsidiaries, other than transactions
in the ordinary course of business and changes and transactions described
in the Registration Statement, as it may be amended or supplemented. The
Company and the Subsidiaries have no material contingent obligations which
are not disclosed in the Registration Statement, as it may be amended or
supplemented.
(xii) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Charter or By-laws or under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it, or any of its properties, is bound and which default
is of material significance in respect of the business or financial
condition of the Company and its Subsidiaries, taken as a whole. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any
Subsidiary is a party, or of the Charter or By-laws of the Company or any
order, rule or regulation applicable to the Company or any Subsidiary of
any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
Commission, the National Association of Securities Dealers, Inc. (the
"NASD") or such additional steps as may be necessary to qualify the Shares
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for public offering by the Underwriters under state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries owns or possesses
adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service mark
applications, trade names, copyrights, manufacturing processes, formulae,
trade secrets and know-how or other information (collectively,
"Intellectual Property") described in the Prospectus as owned by or used by
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the Company or the Subsidiaries or which is necessary to the conduct of its
business as now conducted by the Company or the Subsidiaries as described
in the Prospectus. The Company is not aware of any infringement of or
conflict with the rights of claims or others with respect to any of the
products or Intellectual Property of the Company or the Subsidiaries which
could have a material adverse effect on the business or financial condition
of the Company s and its Subsidiaries, taken as a whole. The Company is not
aware of any infringement of any of the Intellectual Property rights of the
Company or the Subsidiaries by any third party which could have a material
adverse effect on the business or financial condition of the Company and
the Subsidiaries, taken as a whole.
(xv) The Company and each the Subsidiaries is conducting its business
in compliance with all the laws, rules and regulations of the jurisdictions
in which it is conducting business, except where the failure to so comply
would not have, singly or in the aggregate, a material adverse effect on
the business or financial condition of the Company or the Subsidiaries,
taken as a whole. Without limiting the foregoing, the Company and each of
the Subsidiaries holds and is operating in compliance with all licenses,
authorizations, consents, approvals, certificates and permits
(individually, a "Permit") from any regulatory body or administrative
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agency or other governmental body having jurisdiction including, without
limitation, those Federal and state
workers' compensation laws that are applicable to the operations of the
Company or the Subsidiaries as now conducted or proposed to be conducted as
described in the Prospectus, all of which Permits are current, except where
the failure to so hold or comply with any Permit would not have, singly or
in the aggregate, a material adverse effect on the business or financial
condition of the Company and the Subsidiaries, taken as a whole. The
Company is not aware, nor has it received any notice of, any pending or
threatened proceedings, or any circumstances which could lead them to
believe that any such proceedings are imminent, relating to the revocation
or modification of any such Permit or Approval which, singly or in the
aggregate if the subject of an unfavorable decision, ruling or finding,
could have a material adverse effect on the business or financial condition
of the Company and the Subsidiaries, taken as a whole.
(xvi) Neither the Company, nor to the Company's knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of the shares of Common Stock to facilitate the sale or resale of
the Shares. The Company acknowledges that the Underwriters may engage in
passive market making transactions in the Shares on the Nasdaq National
Market in accordance with Rule 10b-6A under the Exchange Act.
(xvii) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 (the "1940 Act") and the rules and regulations of the Commission
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thereunder.
(xviii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xix) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(xx) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
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ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
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liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(xxi) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, An Act Relating to Disclosure of doing Business with Cuba, and the
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Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported or
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incorporated by reference in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form acceptable to
the Department.
(b) Each of the Selling Shareholders severally represents and
warrants as follows:
(i) Such Selling Shareholder now has and at the Closing Date and the
Option Closing Date, as the case may be (as such dates are hereinafter
defined) will have good and marketable title to the Firm Shares and the
Option Shares to be sold by such Selling Shareholder, free and clear of any
liens, encumbrances, equities and claims, and full right, power and
authority to effect the sale and delivery of such Firm Shares and Option
Shares (provided that with respect to any Selling Shareholder who is
exercising a stock option, such representation need only be true as of the
Closing Date and Option Closing Date, as the case may be); and upon the
delivery of, against payment for, such Firm Shares and Option Shares
pursuant to this Agreement, the Underwriters will acquire good and
marketable title thereto, free and clear of any liens, encumbrances,
equities and claims.
(ii) Such Selling Shareholder has full right, power and authority to
execute and deliver this Agreement, the Power of Attorney and Custody
Agreement referred to below and to perform its obligations under such
Agreements. The execution and delivery of this Agreement and the
consummation by such Selling Shareholder of the transactions herein
contemplated and the fulfillment by such Selling Shareholder of the terms
hereof will not require any consent, approval, authorization, or other
order of any court, regulatory body, administrative agency or other
governmental body (except as may be required under the Act, state
securities laws or Blue Sky laws) and will not result in a breach of any of
the terms and provisions of, or constitute a default under, organizational
documents of such Selling Shareholder, if not an individual, or any
indenture, mortgage, deed of trust or other agreement or instrument to
which such Selling Shareholder is a party, or of any order, rule or
regulation applicable to such Selling Shareholder of any court or of any
regulatory body or administrative agency or other governmental body having
jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock of the
Company and, other than as permitted by the Act, the Selling Shareholder
will not distribute any prospectus or other offering material in connection
with the offering of the Shares.
(iv) Without having undertaken to determine independently the accuracy
or completeness of either the representations and warranties of the Company
contained herein or the information contained in the Registration
Statement, such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1
are not true and correct, is familiar with the Registration Statement and
has no knowledge of any
material fact, condition or information not disclosed in the Registration
Statement which has adversely affected or may adversely affect the business
of the Company or any of the Subsidiaries; and the sale of the Firm Shares
and the Option Shares by such Selling Shareholder pursuant hereto is not
prompted by any information concerning the Company or any of the
Subsidiaries which is not set forth in the Registration Statement or the
documents incorporated by reference therein. The information pertaining to
such Selling Shareholder under the caption "Principal and Selling
Stockholders" in the Prospectus is complete and accurate in all material
respects.
2. Purchase, Sale and Delivery of the Firm Shares.
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(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the
Sellers agree to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $_____ [net price]
per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
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Section 9 hereof. The number of Firm Shares to be purchased by each
Underwriter from each Seller shall be as nearly as practicable in the same
proportion to the total number of Firm Shares being sold by each Seller as
the number of Firm Shares being purchased by each Underwriter bears to the
total number of Firm Shares to be sold hereunder. The obligations of the
Company and of each of the Selling Shareholders shall be several and not
joint.
(b) Certificates in negotiable form for the total number of the Shares
to be sold hereunder by the Selling Shareholders have been placed in
custody with the Company as custodian (the "Custodian") pursuant to the
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Power of Attorney and Custody Agreement executed by each Selling
Shareholder for delivery of all Firm Shares and any Option Shares to be
sold hereunder by the Selling Shareholders. Each of the Selling
Shareholders specifically agrees that the Firm Shares and any Option Shares
represented by the certificates held in custody for the Selling
Shareholders under the Power of Attorney and Custody Agreement are subject
to the interests of the Underwriters hereunder, that the arrangements made
by the Selling Shareholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Shareholders hereunder
shall not be terminable by any act or deed of the Selling Shareholders (or
by any other person, firm or corporation including the Company, the
Custodian or the Underwriters) or by operation of law (including the death
of an individual Selling Shareholder or the dissolution of a corporate
Selling Shareholder) or by the occurrence of any other event or events,
except as set forth in the Power of Attorney and Custody Agreement. If any
such event should occur prior to the delivery to the Underwriters of the
Firm Shares or the Option Shares hereunder, certificates for the Firm
Shares or the Options Shares, as the case may be, shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as
if such event has not occurred. The Custodian is authorized to receive and
acknowledge receipt of the proceeds of sale of the Shares held by it
against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made in
New York Clearing House funds by certified or bank cashier's checks drawn
to the order of the Company for the shares to be sold by it and to the
order of the Company, "as Custodian" for the shares to be sold by the
Selling Shareholders, in each case against delivery of certificates
therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of
Alex. Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore,
Maryland, at 10:00 a.m., Baltimore time, on the third business day after
the date of
this Agreement or at such other time and date not later than five business
days thereafter as you and the Company shall agree upon, such time and date
being herein referred to as the "Closing Date." (As used herein, "business
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day" means a day on which the New York Stock Exchange is open for trading
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and on which banks in New York are open for business and not permitted by
law or executive order to be closed.) The certificates for the Firm Shares
will be delivered in such denominations and in such registrations as the
Representatives request in writing not later than the second full business
day prior to the Closing Date, and will be made available for inspection by
the Representatives at least one business day prior to the Closing Date.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
certain Selling Shareholders listed on Schedule III hereto hereby grant a n
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option to the several Underwriters to purchase the Option Shares at the
price per share as set forth in the first paragraph of this Section 2. The
maximum number of Option Shares to be sold by the Selling Shareholders is
set forth opposite their respective names on Schedule III hereto. The
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option granted hereby may be exercised in whole or in part by giving
written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company, the Attorney-
in-Fact, and the Custodian setting forth the number of Option Shares as to
which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time
and date at which such certificates are to be delivered. If the option
granted hereby is exercised in part, the respective number of Option Shares
to be sold by the Selling Shareholders listed in Schedule III hereto shall
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be determined on a pro rata basis in accordance with the percentages set
forth opposite their names on Schedule II hereto, adjusted by you in such
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manner as to avoid fractional shares. The time and date at which
certificates for Option Shares are to be delivered shall be determined by
the Representatives but shall not be earlier than three nor later than 10
full business days after the exercise of such option, nor in any event
prior to the Closing Date (such time and date being herein referred to as
the "Option Closing Date"). If the date of exercise of the option is three
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or more days before the Closing Date, the notice of exercise shall set the
Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to the total number of Firm Shares,
adjusted by you in such manner as to avoid fractional shares. The option
with respect to the Option Shares granted hereunder may be exercised only
to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Company and the Attorney-in-Fact. To
the extent, if any, that the option is exercised, payment for the Option
Shares shall be made on the Option Closing Date in New York Clearing House
funds by certified or bank cashier's check drawn to the order of the
Company for the Option Shares to be sold by it and to the order of "CRA
Managed Care, Inc., as Custodian" for the Option Shares to be sold by the
Selling Shareholders against delivery of certificates therefor at the
offices of Alex. Brown & Sons Incorporated, 135 East Baltimore Street,
Baltimore, Maryland.
(e) If on the Closing Date or Option Closing Date, as the case may
be, any Selling Shareholder fails to sell the Firm Shares or Option Shares
which such Selling Shareholder has agreed to sell on such date as set forth
in Schedule II or Schedule III hereto, as the case may be, the Company
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may, at its option, agree that it will sell or arrange for the sale of that
number of shares of Common Stock to the Underwriters which represents Firm
Shares or the Option Shares
which such Selling Shareholder has failed to so sell, as set forth in
Schedule II or Schedule III hereto, as the case may be or such lesser
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number as may be requested by the Representatives.
3. Offering by the Underwriters.
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It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the
public at the initial public offering price set forth in the Prospectus.
The Representatives may from time to time thereafter change the public
offering price and other selling terms. To the extent, if at all, that any
Option Shares are purchased pursuant to Section 2 hereof, the Underwriters
will offer them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with
a Master Agreement Among Underwriters entered into by you and the several
other Underwriters.
4. Covenants of the Company and the Selling Shareholders.
-----------------------------------------------------
(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, and (B) not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not
in compliance with the Rules and Regulations. To the extent applicable,
the copies of the Registration Statement and each amendment thereto
(including all exhibits filed therewith), any Preliminary Prospectus or
Prospectus (in each case, as amended or supplemented) furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(ii) The Company will advise the Representatives promptly (A) when
the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission,
(C) of any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of
the Prospectus or of the institution of any proceedings for that purpose.
The Company will use its best efforts to prevent the issuance of any such
stop order preventing or suspending the use of the Prospectus and to obtain
as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports, and
other
documents, as are or may be required to continue such qualifications in
effect for so long a period as the Representatives may reasonably request
for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period
when delivery of a Prospectus is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to
the Representatives at or before the Closing Date, four signed copies of
the Registration Statement and all amendments thereto including all
exhibits filed therewith, and will deliver to the Representatives such
number of copies of the Registration Statement, but without exhibits, and
of all amendments thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations, and the Securities Exchange Act of 1934 (the "Exchange Act"),
------------
and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus
is required by law to be delivered by an Underwriter or dealer, any event
shall occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading, or, if it is necessary at any time to amend
or supplement the Prospectus to comply with any law, the Company promptly
will either (i) prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus or
(ii) prepare and file with the Commission an appropriate filing under the
Exchange Act which shall be incorporated by reference in the Prospectus so
that the Prospectus as so amended or supplemented will not, in the light of
the circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earning statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earning statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise you in writing when such statement
has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of
all other documents, reports and information furnished by the Company to
its stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or
the Exchange Act. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements. To the extent applicable, such reports or documents
shall be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(viii) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible into
or exchangeable or exercisable for shares of Common Stock or derivative of
Common Stock (or agreement for such) will be made for a period of 90 days
after the date of this Agreement, directly or indirectly, by the Company
otherwise than hereunder or with the prior written consent of Alex. Brown &
Sons Incorporated, except that the Company may, without such consent, issue
shares upon the exercise of options outstanding on the date of this
Agreement issued pursuant to the Company's stock option plans.
(ix) The Company will use its best efforts to list, subject to notice
of issuance, the Shares on the National Association of Securities Dealers
Automated Quotations ("Nasdaq") National Market.
------
(x) The Company has caused each officer and director and certain
specified shareholders of the Company to furnish to you, on or prior to the
date of this agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person shall
agree not to: (A) offer to sell, contract to sell, transfer or otherwise
dispose of, directly or indirectly, any shares of Common Stock, any
options, rights or warrants to purchase any shares of Common Stock
(including any stock appreciation right, or similar right with an exercise
or conversion privilege at a price related to, or derived from, the market
price of the Common Stock) or any securities convertible into or
exchangeable for shares of Common Stock owned directly by such person or
with respect to which such person has the power of disposition (including,
without limitation, shares of Common Stock which such person may be deemed
to beneficially own in accordance with the rules and regulations
promulgated under the Exchange Act); or (B) engage in any hedging
transactions with respect to the Common Stock that may have an impact on
the market price of the Common Stock for a period beginning on the date of
such letters and expiring 90 days following the date the Registration
Statement is declared effective by the Commission (the "Lockup Period"),
-------------
directly or indirectly ("Lockup Agreements"); provided, however, such
----------------- -------- -------
officers, directors and specified shareholders shall be permitted to make
the following transfers: (i) transfers of up to an aggregate of 50,000
shares of Common Stock made by gift, provided the donee thereof agrees in
--------
writing to be bound by the terms hereof; (ii) transfers to the transferor's
affiliates, as such term is defined in Rule 405 promulgated under the
Securities Act, provided that each transferee agrees in writing to be bound
--------
by the terms hereof; (iii) transfers made with the prior written consent of
Alex. Brown & Sons Incorporated and (iv) transfers to the Underwriters
pursuant to this Agreement.
(xi) The Company shall apply the net proceeds of its sale of the
Shares as set forth in the Prospectus and shall file such reports with the
Commission with respect to the sale of the Shares and the application of
the proceeds therefrom as may be required in accordance with Rule 463 under
the Act.
(xii) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
(xiv) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any securities of the Company.
(b) Each of the Selling Shareholders covenants and agrees with the
several Underwriters that:
(i) Such Selling Shareholder will not: (A) offer to sell, contract to
sell, transfer or otherwise dispose of, directly or indirectly, any shares
of Common Stock, any options, rights or warrants to purchase any shares of
Common Stock (including any stock appreciation right, or similar right with
an exercise or conversion privilege at a price related to, or derived from,
the market price of the Common Stock) or any securities convertible into or
exchangeable for shares of Common Stock owned directly by such Selling
Shareholder or with respect to which such Selling Shareholder has the power
of disposition (including, without limitation, shares of Common Stock which
such Selling Shareholder may be deemed to beneficially own in accordance
with the rules and regulations promulgated under the Exchange Act; or (B)
engage in any hedging transactions with respect to the Common Stock that
may have an impact on the market price of the Common Stock during the
Lockup Period, directly or indirectly, by such Selling Shareholder
otherwise than hereunder or with the prior written consent of Alex. Brown &
Sons Incorporated; provided, however, such Selling Shareholder shall be
-------- -------
permitted to make the following transfers: (i) transfers of up to an
aggregate of 50,000 shares of Common Stock made by gift, provided the donee
--------
thereof agrees in writing to be bound by the terms hereof; (ii) transfers
to the transferor's affiliates, as such term is defined in Rule 405
promulgated under the Securities Act, provided that each transferee agrees
--------
in writing to be bound by the terms hereof; (iii) transfers made with the
prior written consent of Alex. Brown & Sons Incorporated and (iv) transfers
to the Underwriters pursuant to this Agreement.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act
of 1983 with respect to the transactions herein contemplated, each of the
Selling Shareholders agrees to deliver to you prior to or at the Closing
Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
5. Costs and Expenses.
------------------
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company and the Selling Shareholders
under this Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company and the Selling Shareholders that
are entitled thereto pursuant to a separate written agreement with the
Company; the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary
Prospectuses, the Prospectus, this Agreement, the Agreement among
Underwriters, the Underwriters' Selling Memorandum, the Underwriters'
Questionnaire, the Underwriters' Invitation Letter, the Power of Attorney,
the Additional Listing Application, the Blue Sky Survey
and any supplements or amendments thereto; the filing fees of the
Commission; the filing fees and expenses (including fees and disbursements
of counsel to the Underwriters) incident to securing any required review by
the NASD of the terms of the sale of the Shares; the Additional Listing Fee
of the Nasdaq National Market; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with
the qualification of the Shares under State securities or Blue Sky laws. To
the extent, if at all, that any of the Selling Shareholders (other than
those referred to above) engage special legal counsel to represent them in
connection with this offering, the fees and expenses of such counsel shall
be borne by such Selling Shareholder. Any transfer taxes imposed on the
sale of the Shares to the several Underwriters will be paid by the Sellers
pro rata. The Company agrees to pay all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, incident to the offer and sale of directed shares of the
Common Stock by the Underwriters to employees and persons having business
relationships with the Company and its Subsidiaries. The Company shall not,
however, be required to pay for any of the Underwriters' expenses (other
than those related to qualification under NASD regulation and State
securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied or
by reason of any failure, refusal or inability on the part of the Company
or the Selling Shareholders to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on
their part to be performed, unless such failure to satisfy said condition
or to comply with said terms be due to the default or omission of any
Underwriter, then the Company shall reimburse the several Underwriters for
reasonable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with investigating, marketing
and proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Company and the Selling Shareholders shall
not in any event be liable to any of the several Underwriters for damages
on account of loss of anticipated profits from the sale by them of the
Shares.
6. Conditions to Obligations of the Underwriters.
---------------------------------------------
The several obligations of the Underwriters to purchase the Firm
Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the
Option Closing Date, as the case may be, of the representations and
warranties of the Company and the Selling Shareholders contained herein,
and to the performance by the Company and the Selling Shareholders of their
covenants and obligations hereunder and to the following additional
conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made,
and any request of the Commission for additional information (to be
included in the Registration Statement or otherwise) shall have been
disclosed to the Representatives and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been taken or, to the
knowledge of the Company or the Selling Shareholders, shall be contemplated
by the Commission and no injunction, restraining order, or order of any
nature by a Federal or State court of competent jurisdiction shall have
been issued as of the Closing Date or Option Closing Date, as the case may
be, which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Hutchins,
Wheeler & Dittmar, A Professional Corporation, counsel for the Company and
the Selling Shareholders, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and stating that
it may be relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the Commonwealth
of Massachusetts, with corporate power and authority to own or lease
its properties and conduct its business as now conducted and described
in the Registration Statement; each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and
conduct its business now conducted and as described in the
Registration Statement; the Company and each of the Subsidiaries are
duly qualified to transact business in all jurisdictions in which the
conduct of their business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon the
business of the Company and the Subsidiaries, taken as a whole; and
the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Subsidiary; and, such
counsel's knowledge, the outstanding shares of capital stock of each
of the Subsidiaries is owned free and clear of all liens, encumbrances
and equities and claims, and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of
ownership interests in the Subsidiaries are outstanding.
(ii) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus; the
authorized shares of the Company's Common Stock have been duly
authorized; the outstanding shares of the Company's Common Stock,
including the Shares to be sold by the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and non-
assessable; all of the Shares conform to the description thereof
contained in the Prospectus; the certificates for the Shares, assuming
they are in the form of the specimen filed with the Commission, are
in due and proper form; the shares of Common Stock, including the
Option Shares, if any, to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly issued, fully
paid and non-assessable when issued and paid for as contemplated by
this Agreement; and, to such counsel's knowledge, no preemptive rights
of stockholders exist with respect to any of the Shares or the issue
or sale thereof.
(iii) Except as described in or contemplated by the Prospectus,
to the knowledge of such counsel, there are no outstanding securities
of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of capital stock of the
Company and there are no outstanding or authorized options, warrants
or rights of any character obligating the Company to issue any shares
of its capital stock or any securities convertible or exchangeable
into or evidencing the right to purchase or subscribe for any shares
of such stock; and except as described in the Prospectus, to the
knowledge of such counsel, no holder of any securities of the Company
or any other person has the right, contractual or otherwise, which has
not been
satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of,
any of the Shares or the right to have any Common Shares or other
securities of the Company included in the Registration Statement or
the right, as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common Stock or
other securities of the Company.
(iv) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order proceedings
with respect thereto have been instituted or are pending or threatened
under the Act.
(v) The Registration Statement, all Preliminary Prospectuses, the
Prospectus and each amendment or supplement thereto and document
incorporated by reference therein comply as to form in all material
respects with the requirements of the Act or the Securities Exchange
Act of 1934, as applicable and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the
financial statements and related schedules included or incorporated by
reference therein). The conditions for the use of Form S-3, set forth
in the General Instructions thereto, have been satisfied.
(vi) The statements under the captions "Risk Factors-Government
Regulation," "Risk Factors-Potential Adverse Impact of Shares
Eligible for Future Sale," "Business-Government Regulation" and
"Description of Capital Stock" in the Prospectus, insofar as such
statements constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly and correctly
present the information called for with respect to such documents and
matters; and such counsel does not know of any Federal or state laws,
rules or regulations relating to the provisions of workers'
compensation managed care services by the Company in the jurisdictions
in which the Company or any Subsidiaries conduct their business which
are required to be described in the Registration Statement or the
Prospectus that are not described as required.
(vii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement
or the Prospectus which are not so filed, incorporated by reference or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly
summarized in all material respects.
(viii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Charter or By-laws
of the Company, or any agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries may be bound which were filed as an exhibit to any of
the Company's registration statements, reports or forms filed pursuant
to the Securities Act or the Exchange Act.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by the
NASD or as required by State securities and Blue Sky laws as to which
such counsel need express no opinion) except such as have been
obtained or made, specifying the same.
(xii) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.
(xiii) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Shareholders.
(xiv) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by
State securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the portion
of the Shares to be sold by such Selling Shareholder.
(xv) The Power of Attorney and Custody Agreement executed and
delivered by each Selling Shareholder is valid and binding.
(xvi) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code who
acquire the Firm Shares and the Option Shares without notice of any
adverse claim) have acquired good and marketable title to the Shares
being sold by each Selling Shareholder on the Closing Date, and the
Option Closing Date, as the case may be, free of any adverse claims.
(xvii) Such counsel has not been advised, and based on (i) a
review of the Company's files, (ii) inquiry of senior management of
the Company and (iii) a review of the published workers' compensation
rules and regulations of the states set forth on Schedule II hereto,
-----------
such counsel has no reason to believe that the Company or any of its
Subsidiaries does not hold all Permits from any regulatory body or
administrative agency or other governmental body having jurisdiction
that are applicable to the operations of the Company or its
Subsidiaries as now conducted or proposed to be conducted as described
in the Prospectus, all of which Permits are current, except where the
failure to so hold or comply with any Permit would not have, singly or
in the aggregate, a material adverse effect on the business or
financial condition of the Company and its Subsidiaries, taken as a
whole. To the knowledge of such counsel, there are no proceedings,
pending or threatened, relating to the revocation or modification of
any such Permit which, singly or in the aggregate if the subject of an
unfavorable decision, ruling or finding, could have a material adverse
effect on the business or financial condition of the Company and its
Subsidiaries, taken as a whole.
In rendering such opinion Hutchins, Wheeler & Dittmar, A Professional
Corporation, may rely as to matters governed by the laws of states other
than Massachusetts or Federal laws on local counsel in such jurisdictions
and as to the matters set forth in subparagraphs (xiii), (xiv), (xv) and
(xvi) on opinions of other counsel representing the respective Selling
Shareholders, provided that in each case Hutchins, Wheeler & Dittmar, A
Professional Corporation, shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In addition
to the matters set forth above, such opinion shall also include a statement
to the effect that nothing has come to the attention of such counsel which
leads them to believe that (i) the Registration Statement, at the time it
became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) and
as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial statements,
schedules and other financial information included therein). With respect
to such statement, Hutchins, Wheeler & Dittmar, A Professional Corporation,
may state that their belief is based upon the procedures set forth therein,
but is without independent check and verification, and that during the
course of preparation of the Registration Statement, there can be no
assurance that all possible material facts were disclosed.
(c) The Representatives shall have received from Testa, Hurwitz &
Thibeault, LLP, counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially to the
effect specified in subparagraphs (ii), (iii), and (iv) of Paragraph (b) of
this Section 6, and that the Company is a duly organized and validly
existing corporation under the laws of the Commonwealth of Massachusetts.
In rendering such opinion Testa, Hurwitz & Thibeault, LLP, may rely as to
all matters governed other than by the laws of the Commonwealth of
Massachusetts or Federal laws on the opinion of counsel referred to in
Paragraph (b) of this Section 6. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them to
believe that (i) the Registration Statement, or any amendment thereto, as
of the time it became effective under the Act (but after giving effect to
any modifications incorporated therein pursuant to Rule 430A under the Act)
as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements therein,
in the light of the circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial statements,
schedules and statistical information therein). With respect to such
statement Testa, Hurwitz & Thibeault, LLP, may state that their belief is
based upon the procedures set forth therein, but is without independent
check and verification.
(d) The Representatives shall have received at or prior to the
Closing Date from Testa, Hurwitz & Thibeault, LLP a memorandum or summary,
in form and substance satisfactory to the Representatives, with respect to
the qualification for offering and sale by the Underwriters of the
Shares under the State securities or Blue Sky laws of such jurisdictions as
the Representatives may reasonably have designated to the Company.
(e) You shall have received, on each of the date hereof, the Closing
Date and the Option Closing Date, as the case may be, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may
be, in form and substance satisfactory to you, of Arthur Andersen LLP
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating that in their opinion the financial statements and schedules
examined by them and included in the Registration Statement comply in form
in all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations; and containing such
other statements and information as is ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial and statistical information contained in the
Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or certificates
of the Chief Executive Officer and the Chief Financial Officer of the
Company, in their official capacities, to the effect that, as of the
Closing Date or the Option Closing Date, as the case may be, each of them
severally represents as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the
Registrations Statement has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by the
Commission;
(ii) He does not know of any litigation instituted or threatened
against the Company of a character required to be disclosed in the
Registration Statement which is not so disclosed; he does not know of
any material contract required to be filed as an exhibit to the
Registration Statement which is not so filed; and the representations
and warranties of the Company contained in Section 1 hereof are true
and correct as of the Closing Date or the Option Closing Date, as the
case may be;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration Statement and
the Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and
Prospectus did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, and, in his opinion, since the effective date of the
Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which
has not been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is given
in the Registration Statement and Prospectus, there has not been any
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole, or
the earnings, business affairs, management or business prospects of
the Company and the Subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business;
(vi) All of the representations and warranties of the Company
contained in this Underwriting Agreement are true and correct in all
material respects on and as of the date hereof and on and as of the
Closing Date or the Option Closing Date, as the case may be, with the
same force and effect as if made on and as of the Closing Date or the
Option Closing Date, as the case may be, except for representations
and warranties made as of a specific date, which were true and correct
as of such date;
(vii) Each of the conditions specified in Section 6 of this
Underwriting Agreement has been, as of the Closing Date or the Option
Closing Date, as the case may be, satisfied in all material respects;
and
(viii) The Company has performed and/or complied in all material
respects with all of its agreements and covenants required to be
performed or complied with under this Underwriting Agreement as of or
prior to the Closing Date or the Option Closing Date, as the case may
be.
(g) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate of each Selling
Shareholder (or Attorney-in-Fact) to the effect that, as of the Closing
Date or the Option Closing Date, as the case may be, each Selling
Shareholder shall represent as follows:
(i) All of the representations and warranties of such Selling
Shareholder contained in this Underwriting Agreement are true and
correct, in all material respects, on and as of the date hereof and on
and as of the Closing Date or the Option Closing Date, as the case may
be, with the same force and effect as if made on and as of the Closing
Date or the Option Closing Date, as the case may be, except for
representations and warranties made as of a specific date, which were
true and correct as of such date; and
(ii) Such Selling Shareholder has performed and/or complied, in
all material respects, with all of such Selling Shareholder's
agreements and covenants required to be performed or complied with
under this Underwriting Agreement as of or prior to the Closing Date
or the Option Closing Date, as the case may be.
(h) The Company and the Selling Shareholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein
and related matters as the Representatives may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been approved for
designation upon notice of issuance on the Nasdaq National Market.
(j) The Lockup Agreements described in Section 4 (a)(x) are in full
force and effect.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in
all material respects satisfactory to the Representatives and to Testa,
Hurwitz & Thibeault, LLP counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company of such termination in
writing or by telegram at or prior to the Closing Date or the Option
Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. Conditions to the Obligations of the Company and the Selling
-------------------------------------------------------------
Shareholders.
-------------
The obligations of the Company and the Selling Shareholders to sell
and deliver the portion of the Shares required to be delivered as and when
specified in this Agreement are subject to the conditions that at the
Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. Indemnification.
---------------
(a) The Company and the Selling Shareholders, severally and not
jointly, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) 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; and
will reimburse each Underwriter and each such controlling person upon
demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding
and expenses reasonably incurred in responding to a subpoena or
governmental inquiry related to the offering of the Shares, whether or not
such Underwriter or controlling person is a party to any action or
proceeding; provided, however, that the Company and the Selling
-------- -------
Shareholders will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through
the Representatives specifically for use in the preparation thereof; and
provided further that if the statement or omission has been corrected in
the Prospectus with respect to any untrue statement or omission or alleged
untrue statement or omission made in any Preliminary Prospectus, the
indemnity agreement contained in this paragraph shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Shares concerned (or
to the benefit of any person controlling such Underwriter) to the extent
that any such loss, claim, damage, liability or
expense of such copy of the Prospectus was not sent or given to such person
at or prior to the written confirmation of sale of such Shares to such
person as required by the Act, unless such failure to deliver the
Prospectus was a result of non-compliance by the Company with its
obligations under Section 4(a)(iv) hereof. This indemnity agreement will be
in addition to any liability which the Company or the Selling Shareholders
may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and
hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, the Selling Shareholders, and each
person, if any, who controls the Company or the Selling Shareholders within
the meaning of the Act, against any losses, claims, damages or liabilities
to which the Company or any such director, officer, Selling Shareholder or
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer, Selling Shareholder or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action
or proceeding; provided, however, that each Underwriter will be liable in
-------- -------
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission has been made
in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to this Section 8, such person (the "indemnified party")
-----------------
shall promptly notify the person against whom such indemnity may be sought
(the "indemnifying party") in writing. No indemnification provided for in
------------------
Section 8(a) or (b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of Section 8(a)
or (b). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and
expenses of the counsel retained by the indemnified party in the event (i)
the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm for all
such indemnified parties. Such firm shall be designated in writing by you
in the case of parties indemnified pursuant to Section 8(a) and by the
Company and the Selling Shareholders in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. In addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action or
proceeding of which indemnification may be sought hereunder (whether or not
any indemnified party is an actual or potential party to such claim, action
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice
required under Section 8(c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Selling Shareholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Shareholders on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
Section 8(d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to
above in this Section 8(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to above in this Section 8(d)
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(d), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the
Shares purchased by such Underwriter, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in this
Section 8(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process issuing
from such court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees that any other
contributing party may join him or it as an additional defendant in any
such proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party
on a quarterly basis as such losses, claims, damages, liabilities or
expenses are incurred. The indemnity and contribution agreements contained
in this Section 8 and the representations and warranties of the Company set
forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its
directors or officers or any persons controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
(g) In no event shall the liability of any Selling Shareholder for
indemnification under Section 8(a), contribution under Section 8(d) or
liability for breach of Section 1(b)(iv) hereof, exceed the lesser of (i)
proportion of the total of such losses, claims, damages or liabilities
indemnified or contributed against equal to the proportion of the total
Shares sold hereunder which is being sold by such Selling Shareholder, or
(ii) the net proceeds received by such Selling Shareholder from the
Underwriters in the offering.
9. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such
date (otherwise than by reason of any default on the part of the Company or
a Selling Shareholder), you, as Representatives of the Underwriters, shall
use your reasonable efforts to procure within 36 hours thereafter one or
more of the other Underwriters, or any others, to purchase from the Company
and the Selling Shareholders such amounts as may be agreed upon and upon
the terms set forth herein, the Firm Shares or Option Shares, as the case
may be, which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours you, as such Representatives, shall not
have procured such other Underwriters, or any others, to purchase the Firm
Shares or Option Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate number
of shares with respect to which such default shall occur does not exceed
10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion
to the respective numbers of Firm Shares or Option Shares, as the case may
be, which they are obligated to purchase hereunder, to purchase the Firm
Shares or Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate
number of shares of Firm Shares or Option Shares, as the case may be, with
respect to which such default shall occur exceeds 10% of the Firm Shares or
Option Shares, as the case may be, covered hereby, the Company and the
Selling Shareholders or you as the Representatives of the Underwriters will
have the right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without
liability on the part of the non-defaulting Underwriters or of the Company
or of the Selling Shareholders except to the extent provided in Section 8
hereof. In the event of a default by any Underwriter or Underwriters, as
set forth in this Section 9, the Closing Date or Option Closing Date, as
the case may be, may be postponed for such period, not exceeding seven
days, as you, as Representatives, may determine in order that the required
changes in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter" includes
-----------
any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
10. Notices.
-------
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to Alex.
Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland
21202, Attention: Steven R. Schuh; with a copy to Alex. Brown & Sons
Incorporated, 135 East Baltimore Street, Baltimore, Maryland 21202.
Attention: General Counsel; if to the Company or the Selling Shareholders,
to CRA Managed Care, Inc., 312 Union Wharf, Boston, Massachusetts 02109,
Attention: Donald J. Larson, with a copy to James Westra, Hutchins,
Wheeler & Dittmar, A Professional Corporation, 101 Federal Street, Boston,
Massachusetts 02110; if to the Sellling Stockholders, to the such
stockholders last address of record in the Company's stock transfer
records, with a copy to James Westra, Hutchins, Wheeler & Dittmar, A
Professional Corporation, 101 Federal Street, Boston, Massachusetts 02110.
11. Termination.
-----------
This Agreement may be terminated by you by notice to the Company as
follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m.
on the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material
adverse change or any development involving a prospective material adverse
change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries, taken as a whole, or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a
whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or change
in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment,
make it impracticable to market the Shares or to enforce contracts for the
sale of the Shares, or (iii) suspension of trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or limitation
on prices (other than limitations on hours or numbers of days of trading)
for securities on either such Exchange, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation,
rule or order of any court or other governmental authority which in your
opinion materially and adversely affects or may materially and adversely
affect the business or operations of the Company, (v) declaration of a
banking moratorium by United States or New York State authorities, (vi) the
suspension of trading of the Company's common stock by the Commission on
the Nasdaq National Market or (vii) the taking of any action by any Federal
or state or local governmental body or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse
effect on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option
Shares, upon the occurrence at any time prior to the Option Closing Date of
any of the events described in subparagraph (b) above or as provided in
Sections 6 and 9 of this Agreement.
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters ,the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person
will have any right or obligation hereunder. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign merely
because of such purchase.
13. Information Provided by Underwriters.
------------------------------------
The Company, the Selling Shareholders and the Underwriters acknowledge
and agree that the only information furnished or to be furnished by any
Underwriter to the Company for inclusion in any Prospectus or the
Registration Statement consists of the information set forth in the last
paragraph on the front cover page (insofar as such information relates to
the Underwriters), information provided in connection with Item 502(d) of
Regulation S-K under the Act and the information under the caption
"Underwriting" in the Prospectus.
14. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in
full force and effect regardless of (a) any termination of this Agreement,
(b) any investigation made by or on behalf of any Underwriter or
controlling person thereof, or by or on behalf of the Company or its
directors or officers and (c) delivery of and payment for the Shares under
this Agreement; the other covenants of the Company and the Selling
Shareholders in this Agreement shall remain in full force and effect
regardless of (a) any investigation made by or on behalf of any underwriter
or controlling person and (b) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms.
It is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact for a
Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
CRA MANAGED CARE, INC.
By ________________________________________
Donald J. Larson, President
Selling Shareholders listed on Schedule II
-----------
By ________________________________________
, Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. BROWN & SONS INCORPORATED
DEAN WITTER REYNOLDS INC.
MONTGOMERY SECURITIES
J.P. MORGAN & CO.
As Representatives of the several
Underwriters listed on Schedule I
By: Alex. Brown & Sons Incorporated
By: ___________________________________
Authorized Officer
SCHEDULE I
----------
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Alex. Brown & Sons Incorporated
Dean Witter Reynolds Inc.
Montgomery Securities
J.P. Morgan & Co.
Total 2,500,000
=========
SCHEDULE II
-----------
Schedule of Selling Shareholders
Number of Firm Shares
Selling Shareholder to be Sold
------------------- ---------------------
Total
=========
SCHEDULE III
------------
Schedule of Option Shares
Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
-------------- ---------------- ----------------
Total 100%
======= ====
EXHIBIT A
---------
Subsidiaries
------------
Alta Pacific Corporation
FOCUS Healthcare Management, Inc.
QMC3, Inc.