1
EXHIBIT 1.1
2,900,000 Shares
HARBINGER CORPORATION
Common Stock
(Par Value $.0001 per share)
UNDERWRITING AGREEMENT
July __, 1997
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX, XXXXXXXX & COMPANY LLC
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
INTERSTATE XXXXXXX XXXX CORPORATION
As the Representatives of the Several Underwriters
c/o ALEX. XXXXX & SONS INCORPORATED
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Harbinger Corporation, a Georgia corporation (the "Company") and certain
shareholders of the Company named in Schedule II hereto (the "Selling
Shareholders"), propose to sell to the several underwriters (the
"Underwriters") named in Schedule I hereto for whom you are acting as
representatives (the "Representatives") an aggregate of 2,900,000 shares of the
Company's Common Stock, par value $.0001 per share (the "Firm Shares") of
which 1,800,000 shares will be sold by the Company and 1,100,000 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. Certain Selling Shareholders named in Schedule II and
the Company also propose to sell at the Underwriters' option an aggregate of up
to 435,000 additional shares of the Company's Common Stock (the "Option
Shares") as set forth on Schedule II. The Selling Shareholders have executed
Custody Agreements (the "Custody Agreement") and certain of them have executed
Powers of Attorney, the forms of which have been previously delivered to you,
pursuant to which the Selling Shareholders have
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placed their respective Selling Shareholder Shares in custody with the Company
and agreed to take certain other actions with respect thereto and hereto.
As the Representatives of the Underwriters, 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 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 of the Option Shares if you elect to exercise the over-allotment
option in whole or in part. The Firm Shares and the Option Shares (to the
extent the aforementioned option is exercised) are herein collectively called
the "Shares."
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
Shareholders.
(a) The Company represents and warrants 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 the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission under
the Act. 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 contained therein and
the exhibits, financial statements and schedules, as finally amended and
revised, have heretofore been delivered by the Company to you. 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 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 (i) the form of prospectus first filed by the Company
with the Commission pursuant to its Rule 424(b) or (ii) 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 any 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
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effective is herein referred to as a "Preliminary Prospectus." Except as
specifically set forth herein, (i) any reference herein to any
Preliminary Prospectus or the Prospectus, as the case may be, and (ii)
in the case of any reference herein to any Prospectus, 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 Rules 424(b) and 430A, and prior
to the termination of the offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Georgia,
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 listed on Schedule III hereto
(collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation or limited liability company, as the
case may be, in good standing under the laws of the jurisdiction of its
organization, with power and authority to own or lease their respective
properties and conduct their respective businesses 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 except where the
failure to so qualify would not, in the aggregate, have a material
adverse effect on the Company or any of its Subsidiaries; the
outstanding capital shares of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and the
outstanding capital shares of each of the Subsidiaries owned by the
Company as described in the Registration Statement are owned free and
clear of all liens, encumbrances and security interests except as
described the Registration Statement 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. Except for its
investment in securities of the Subsidiaries as described in the
Registration Statement, the Company has no equity or other interest in,
or right to acquire, an equity or other interest in, any corporation,
partnership, trust or other entity.
(iii) The authorized shares of Common Stock of the Company have
been duly authorized. 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 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
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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) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms.
(v) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. The Shares conform with the
statements concerning them in the Registration Statement.
(vi) The Commission has not issued an order preventing or
suspending the use of any Prospectus or Preliminary 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 in all respects conform
or will conform, as the case may be, to the requirements of, the Act and
the Rules and Regulations. The documents incorporated by reference in
the Prospectus, at the time they were filed with the Commission
conformed in all material 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. Neither the Registration
Statement nor any amendment thereto, and neither the Prospectus nor any
supplement thereto, including any documents incorporated by reference
therein, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will 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 no
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment
or supplement, or any documents incorporated by reference therein, 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.
(vii) The financial statements of the Company, together with
related notes and schedules as set forth and incorporated by reference
in the Registration Statement, present fairly the financial position and
the results of operations of the Company, at the indicated dates and for
the indicated periods. Such financial statements have been prepared in
accordance with generally accepted principles of accounting,
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such
periods have been made. The summary financial and statistical data
included in the Registration
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Statement present fairly the information shown therein and have been
compiled on a basis consistent with the financial statements presented
therein.
(viii) The statements of operations of EDI, a former business unit
of Texas Instruments Incorporated ("EDI"), together with related notes
and schedules as set forth in the Registration Statement, present fairly
the results of operations of EDI for the indicated periods. Such
statements of operations have been prepared in accordance with generally
accepted principles of accounting, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation
of results for such periods have been made. Supply Tech
(ix) The Pro Forma Financial Statements of the Company incorporated
by reference in the Prospectus and in the Registration Statement have
been prepared in conformity with the requirements of Article 11 of
Regulation S-X and present fairly the information shown therein.
(x) There is no action 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 by any
regulatory authority which might result in any material adverse change
in the business or financial condition of the Company, except as set
forth in the Registration Statement.
(xi) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial
statements herein above described (or as described in the Registration
Statement), 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 their leased properties
under valid and binding leases conforming to the description thereof set
forth in the Registration Statement.
(xii) The Company and the Subsidiaries have filed all Federal,
State 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 and are not being contested in good faith.
(xiii) 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 or any development
involving a prospective material adverse change in or affecting the
earnings, business, management, assets, rights, operations, condition
(financial or otherwise) 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
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ordinary course of business and changes and transactions contemplated by
the Registration Statement, as it may be amended or supplemented. None
of the Company or the Subsidiaries have any material contingent
obligations which are not disclosed in the Registration Statement, as it
may be amended or supplemented.
(xiv) Neither the Company nor any of the Subsidiaries is, nor with
the giving of notice, lapse of time or both, will be, in default under
their respective Articles of Incorporation or Bylaws (or in the case of
HNS, its Articles of Organization or its Operating Agreement) 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 the
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 Articles of Incorporation or Bylaws of the Company or any order,
rule or regulation applicable to the Company or the Subsidiaries of any
court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(xv) 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 National Association of Securities Dealers, Inc. (the
"NASD") or may be necessary to qualify the Shares 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.
(xvi) The Company and each of the Subsidiaries hold all material
licenses, certificates and permits from governmental authorities which
are necessary to the conduct of its business; and neither the Company
nor any of the Subsidiaries has reason to believe that it has, and has
not received notice of any claim that it has, infringed any patents,
patent rights, trade names, trademarks or copyrights, which infringement
if successfully prosecuted, would have a material adverse effect on the
business or financial condition of the Company.
(xvii) KPMG Peat Marwick LLP, Xxxxxx Xxxxxxxx LLP, Xxxxx & Xxxxx
LLP, Xxxxxx, Xxxxx & Xxxx, LLP, Xxxxx Xxxxx & Xxxxx Accountants, KPMG
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Deutsche TreuhandGesellschaft AG and KPMG Accountants N.V., who have
certified certain of the financial statements incorporated by reference
in the Registration Statement and the Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.
(xviii) Neither the Company, nor to the Company's knowledge, any of
the Subsidiaries, 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 NYSE in accordance (and in compliance) with Regulation M
under the Exchange Act.
(xix) Neither the Company nor any Subsidiary has ever been, is now,
and immediately after the sale of the Shares under this Agreement will
be, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(b) Each Selling Shareholder severally and not jointly represents and
warrants to the Underwriters as follows:
(i) Such Selling Shareholder now has and at the Closing Date or 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 or the
Option Shares to be sold by such Selling Shareholder, as applicable, free
of any liens, encumbrances, equities and claims, and full right, power
and authority to effect the sale and delivery of such Firm Shares or
Option Shares; and upon the delivery of and payment for such Firm Shares
and Option Shares pursuant to this Agreement, the Underwriters will
acquire good and marketable title thereto, free of any liens,
encumbrances, security interests, rights, subscriptions, warrants, calls,
preemptive rights, options or other agreements of any kind.
(ii) Such Selling Shareholder has full right, power and authority to
execute and deliver this Agreement, the Custodian Agreement and the Power
of Attorney referred to below, and to perform its obligations under such
agreements. The consummation by such Selling Shareholder of the
transactions herein contemplated and the fulfillment by such Selling
Shareholder of the terms hereof will not (A) 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) or (ii)
result in a breach of any of the terms and provisions of, or constitute
a default under, 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
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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 stabilization
or manipulation of the price of the Common Stock of the Company.
(iv) Such Selling Shareholder has executed and delivered this
Agreement and the Custody Agreement, and in connection herewith, such
Selling Shareholder further represents, warrants and agrees that such
Selling Shareholder has deposited with ____________, pursuant to the
Custody Agreement, the certificates in negotiable form representing such
Selling Shareholder Shares for the purpose of further delivery pursuant
to this Agreement; and the form of the Custody Agreement has been
previously delivered to you.
(v) No offering, sale or other disposition of any Common Stock of
the Company will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by such Seller otherwise than
hereunder or with the prior written consent of the Underwriters.
(vi) The Power of Attorney appointing certain individuals as such
Selling Shareholder's attorney-in-fact to the extent set forth therein
and in the Custodian Agreement (as defined in Section 2) have been duly
executed and delivered by such Selling Shareholder and are the valid and
binding agreements of such Selling Shareholder.
(viii) To the best knowledge and 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, 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 Subsidiary; and the sale of the Firm Shares by such Selling
Shareholder pursuant hereto is not prompted by any information concerning
the Company or any Subsidiary which is not set forth in the Registration
Statement. The information pertaining to such Selling Shareholder under
the caption "Principal and Selling Shareholders" in the Prospectus is
complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading.
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2. Purchase, Sale and Delivery of the Firm Shares.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company and the
Selling Shareholders agree to sell to the Underwriters and each Underwriter
agrees, severally and not jointly, to purchase, at a price of $____ 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 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 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 ___________ (the "Custodian") pursuant to the Custodian Agreement executed
by each Selling Shareholder for delivery of all Shares to be sold hereunder by
the Selling Shareholders. Each Selling Shareholder specifically agrees that
the Firm Shares represented by the certificates held in custody for such
Selling Shareholder under the Custody Agreement are subject to the interest of
the Underwriters hereunder, and that the arrangements made by such Selling
Shareholder for such custody are to that extent irrevocable, and that the
obligations of such Selling Shareholder hereunder shall not be terminable by
any act or deed of the Selling Shareholder (or by any other person, firm or
corporation, including the Company, the Custodian or the Underwriters) or by
operation of law or by the occurrence of any other event or events, except as
set forth in the Custody Agreement. If any such event should occur prior to the
delivery to the Underwriters of the Firm Shares hereunder, certificates for the
Firm Shares shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such event had not occurred. The
Custodian is authorized to receive and acknowledge receipt of the proceeds of
the sale of the Selling Shareholder Shares held by it against the delivery of
such Shares. The Attorneys or either of them are 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 by wire
transfer of immediately available funds to the order of the Company for the
shares to be sold by it and to the order of the Custodian for the shares to be
sold by the Selling Shareholders, in each case against delivery of certificates
therefor to the Underwriters. Such payment and delivery are to be made at the
offices of Alex. Xxxxx & Sons Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, 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 three
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 day"
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means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and are 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 of the Underwriters 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 Underwriters 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, the Company
and the Selling Shareholders listed on Schedule II hereto hereby grant an
option to the 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 Company and the Selling Shareholders is set
forth opposite their respective names on Schedule II hereto. The option
granted hereby may be exercised in whole or in part but only once and at any
time upon written notice given within 30 days after the date of this Agreement,
by you, the Underwriters, to the Company 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 Company and each of the Option Selling Shareholders listed in
Schedule II hereto shall 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 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 Underwriters 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 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
Underwriters, may cancel such option at any time prior to its expiration by
giving written notice of such cancellation to the Company. To the extent, if
any, that the option is exercised, payment for the Option Shares shall be made
on the Option Closing Date by wire transfer of immediately available funds to
the order of "___________, Custodian for Harbinger Selling Shareholders" for
the Option Shares to be sold by the Selling Shareholders against delivery of
certificates therefor at the offices of Alex. Xxxxx & Sons Incorporated, 0
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
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3. Offering by the Underwriters. It is understood that the 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 and on the selling terms 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.
(a) The Company covenants and agrees with the several Underwriters that:
(i) The Company will (i) 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, (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus or documents incorporated by reference
therein 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 and (iii) file on a timely basis all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Shares by the
Underwriters.
(ii) The Company will advise the Representatives promptly of any
request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, or 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, and 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 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
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reasonably request. The Company will deliver to the Underwriters 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 Underwriters such number of copies of the Registration
Statement, but without exhibits, and of all amendments thereto, as the
Representatives may reasonably request.
(iv) 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
counsel for 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
Securities Exchange Act of 1934 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 law.
(v) 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.
(vi) 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 Securities Exchange Act of 1934, as amended.
(vii) No offering, sale, short sale or other disposition of any
Common Stock or other securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company 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 the Representatives 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
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13
option plans, issued as consideration for future acquisitions or issued
pursuant to the Company's dividend reinvestment plan.
(ix) The Company will use its best efforts to list, subject to notice
of issuance, the Shares on the Nasdaq National Market ("Nasdaq National
Market").
(b) The Selling Shareholders covenant and agree with the Underwriters and
the Company that:
(i) No offering, sale or other disposition of any Common Stock of
the Company held by such Selling Shareholder will be made for a period of
90 days after the date of this Agreement otherwise than under this
Agreement or with the prior written consent of the Representatives.
(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, the
Selling Shareholders agree 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).
5. Costs and Expenses. The Company will pay all costs, expenses and fees
incident to the performance of the obligations of the Company 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; 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 Invitation Letter, the Power of Attorney; the filing fees of
the Commission; and the filing fees and expenses incident to securing any
required review by the NASD of the terms of the sale of the Shares; the listing
on the Nasdaq National Market. To the extent, if at all, that any of the other
Selling Shareholders 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 Company and the
Selling Shareholders pro rata. The Selling Shareholders shall not, however,
be required to pay for any of the Underwriters' expenses except that, if this
Agreement shall not be consummated because the conditions in Section 7 hereof
are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 6 hereof, or by reason of any failure,
refusal or inability on the part of any Seller to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its 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
- 13 -
14
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 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 of 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 contained herein, and to the
performance by the Company of its 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 Underwriters 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, shall be contemplated by the
Commission.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxxx, Xxxxxxx &
Xxxxxx, 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 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 State of Georgia, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; each of the Subsidiaries has been
duly organized and is validly existing as a corporation (or, in the case
of HNS, as a limited liability company) in good standing under the laws of
the jurisdiction of its incorporation or organization, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; 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 or any of the Subsidiaries; and the outstanding
capital shares of each of the Subsidiaries have been validly issued, are
fully paid and non-assessable; and, to such counsel's knowledge, the
outstanding capital shares of each of the Subsidiaries owned by the
Company as described in the Registration Statement are owned free and
clear of all
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15
liens, encumbrances and security interests, and no options, warrants or
other rights to purchase, such shares 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 its Common Stock, have been duly authorized.
(iii) 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; and the certificates for the Shares are in due and proper
form.
(iv) The shares of Common Stock 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 no preemptive rights of stockholders exist with respect to
any of the Shares or the issue and sale thereof.
(v) The Registration Statement has become effective under the Act
and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(vi) The Registration Statement, all Preliminary Prospectuses, the
Prospectus and each amendment or supplement thereto and documents
incorporated by reference therein (each as amended to date) comply as to
form in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the
financial statements, schedules and other financial information included
or incorporated by reference therein).
(vii) The statements under the caption "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 in
all material respects and fairly present the information called for with
respect to such documents and matters.
(viii) The statements under the caption "Business - Recent
Developments" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein, are accurate summaries in all
material respects.
(ix) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are not so
filed or described as required, and
- 15 -
16
such contracts and documents as are summarized in the Registration
Statement or the Prospectus are fairly summarized in all material respects.
(x) Such counsel knows of no material legal proceedings or regulatory
or other claims pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
(xi) 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 Articles of Incorporation or Bylaws of
the Company, or any agreement or instrument known to such counsel to which
the Company is a party or by which the Company may be bound.
(xii) This Agreement has been duly authorized, executed and delivered
by the Company.
(xiii) 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.
(xiv) To such counsel's knowledge, the Company is not, and will not
become as a result of the consummation of the transactions contemplated by
this Agreement, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and has not been an
"investment company" at any time since 1988.
(xv) This Agreement has been duly authorized, executed and delivered
on behalf of the Selling Shareholders.
In rendering such opinion, Xxxxxx, Xxxxxxx & Xxxxxx may rely as to matters
governed by the laws of states other than Georgia or Federal laws on local
counsel in such jurisdictions and as to matters set forth in subparagraphs
(xiv), (xv) and (xvi) on an opinion of other counsel representing the Selling
Shareholders, provided that in each case Xxxxxx, Xxxxxxx & Xxxxxx shall state
that they believe that they and the Underwriters are justified in relying on
such other counsel and such other counsel's opinion is also addressed to the
Underwriters. 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 the Registration Statement, as
of the time it
- 16 -
17
became effective under the Act, the Prospectus or any amendment
or supplement thereto, on the date it was filed pursuant to Rule 424(b), as of
the date of effectiveness of the Registration Statement, as the case may be,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading (except that such counsel need express no view as to financial
statements, schedules and other financial information included or incorporated
by reference therein). With respect to such statement, Xxxxxx, Xxxxxxx &
Xxxxxx may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.
(c) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of _____________________,
counsel for the Selling Shareholders, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Underwriters to the effect
that:
(i) Each Selling Shareholder 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
execute and deliver this Agreement.
(ii) The execution and delivery of this Agreement and the Custodian
Agreement executed by each Selling Shareholder and the consummation of the
transactions contemplated herein and therein 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 Articles of Incorporation or Bylaws of any
Selling Shareholder, or any agreement or instrument known to such counsel
to which the Selling Shareholder is a party or by which the Selling
Shareholder may be bound.
(iii) 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.
(iv) The Custodian Agreement and Power of Attorney executed and
delivered by each Selling Shareholder are valid, irrevocable instruments
legally sufficient for the respective purposes intended.
(v) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) will have acquired good
and marketable title to the Shares being sold by each of the Selling
Shareholders on the Closing Date or the Option Closing Date, as the case
may be, free and clear of all claims, liens, encumbrances and security
interests whatsoever.
- 17 -
18
(d) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Representatives, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect specified
in subparagraphs (ii), (iv), (v) and (xii) of Paragraph (b) of this Section 6,
and that the Company is a validly organized and existing corporation under the
laws of the State of Georgia. In rendering such opinion Piper & Marbury L.L.P.
may rely as to all matters governed other than by the laws of the State of
Maryland 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 the Registration
Statement, as of the time it became effective under the Act, and the Prospectus
or any amendment or supplement thereto, on the date it was filed pursuant to
Rule 424(b) and the Registration Statement and the Prospectus, or any amendment
or supplement thereto, as of the Closing Date or the Option Closing Date, as
the case may be, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except that such counsel need express no
view as to financial statements, schedules and other financial information
included or incorporated by reference therein). With respect to such
statement, Piper & Marbury L.L.P. may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(e) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from KPMG Peat Marwick
LLP and Xxxxxx, Xxxxx & Xxxx, LLP, dated the Closing Date or the Option Closing
Date, as the case may be, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter signed by such firm and
dated and delivered to the Representatives on the date hereof that nothing has
come to their attention during the period from the date five days prior to the
date hereof, to a date not more than five days prior to the Closing Date or the
Option Closing Date, as the case may be, which would require any change in
their letter dated the date hereof if it were required to be dated and
delivered on the Closing Date or the Option Closing Date, as the case may be.
All such letters shall be in form and substance reasonably satisfactory to the
Representatives.
(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 President and Chief Operating Officer of the
Company 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 Registration Statement
has been issued, and no proceedings for such purpose have been taken or
are, to such officer's knowledge, contemplated by the Commission.
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19
(ii) Such officer 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; such officer 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) Such officer has carefully examined the Registration Statement
and the Prospectus and, in such officer's 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 such officer's 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.
(g) The Selling Shareholders shall have furnished to the Representatives
such further certificates and documents confirming the representations and
warranties contained herein and related matters as the Representatives may
reasonably have requested.
(h) The Firm Shares, and Option Shares, if any, have been approved for
listing upon official notice of issuance on the Nasdaq National Market System.
(i) The Representatives shall have received from each officer and director
of the Company and each Selling Shareholder, a letter or letters, in form and
substance satisfactory to the Underwriters, pursuant to which such person shall
agree not to offer, sell, sell short or otherwise dispose of any shares of
Common Stock of the Company or other capital stock of the Company, or any other
securities convertible, exchangeable or exercisable for Common Stock or
derivative of Common Stock owned by such person (or as to which such person has
the right to direct the disposition of) for a period of 90 days after the date
of this Agreement, except with the prior written consent of the Underwriters.
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 Piper & Marbury L.L.P.,
counsel for the Underwriters.
If any of the conditions herein above 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, by
facsimile, or by telegram at or prior to the
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20
Closing Date or the Option Closing Date, as the case may be. In such event,
the Company and the Selling Shareholders 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 of the Obligations of the Selling Shareholders. The
obligations of 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 each Selling Shareholder agrees 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 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 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,
liability, action or proceeding; provided, however, that the Company and the
Selling Shareholders will not be liable in any such case to the extent that (i)
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 or, (ii) such statement or
omission was contained or made in any Preliminary Prospectus and corrected in
the Prospectus and (a) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (b) such
Underwriter failed to deliver or provide a copy of the Prospectus to such
person at or prior to the confirmation of the sale of such Shares in any case
where such delivery is required by the Act. In no event, however, shall the
aggregate liability of any Selling Shareholder for indemnification under this
Section 8(a) exceed the lesser of (i) that proportion of the total of such
losses, claims, damages or liabilities indemnified against equal to the
proportion of the total Shares sold hereunder which is being sold by such
Selling Shareholder, or (ii) the net proceeds after underwriters discounts and
commissions
- 20 -
21
received by such Selling Shareholder from the Underwriters in the offering.
This indemnity agreement will be in addition to any liability which the Company
or the Selling Shareholders may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement,
each of the Selling Shareholders, and each person, if any, who controls the
Company 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 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 arise out of or are based upon 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
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22
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 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.
(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 and the Selling Shareholders on
the one
- 22 -
23
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, (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, and (iii) no Selling Shareholder
shall be required to contribute any amount in excess of the lesser of (A) that
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 (B) the net
proceeds after underwriting discounts and commissions received by such Selling
Shareholder from the Underwriters in the offering. 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.
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 the Selling Shareholders), you, as the Representatives of the
Underwriters, shall use your best efforts to procure within 24 hours thereafter
one or more 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
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24
such 24 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 or you
as the Representatives of the Underwriters will have the right, by written
notice given within the next 24-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 and 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 or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. Xxxxx & Sons
Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx
Xxxxxx, Principal; if to the Company or the Selling Shareholders, to Harbinger
Corporation, 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: C.
Xxxxx Xxxxx, Chairman of the Board.
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 or the earnings, business
affairs, management or business
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prospects of the Company, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or declaration of war
or national emergency after the date hereof 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 the offering or delivery of the Shares impracticable, (iii)
trading in securities on the New York Stock Exchange or the American Stock
Exchange shall have been suspended or materially limited (other than
limitations on hours or numbers of days of trading) or minimum prices shall
have been established 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 reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities, (vi) the taking of any action by any 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
elsewhere, or (vii) any litigation or proceeding is pending or threatened
against the Underwriters which seeks to enjoin or otherwise restrain, or seeks
damages in connection with, or questions the legality or validity of this
Agreement or the transactions contemplated hereby; 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 and
the Selling Shareholders, 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. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
13. 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.
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26
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 Company, the Selling
Shareholders and the several Underwriters in accordance with its terms.
Very truly yours,
HARBINGER CORPORATION
By
---------------------------------
C. Xxxxx Xxxxx
Chairman
Selling Shareholders listed on Schedule II
By
-----------------------------------
[Xxxx X. Xxxx, Attorney-in-Fact]
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX, XXXXXXXX & COMPANY LLC
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
INTERSTATE XXXXXXX XXXX CORPORATION
As Representatives of the Several Underwriters listed
on Schedule I
By ALEX. XXXXX & SONS INCORPORATED
By
---------------------------------
Authorized Officer
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Alex. Xxxxx & Sons Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Xxxxxxxxx, Xxxxxxxx & Company, L.P.
Interstate/Xxxxxxx Lane Corporation
---------
Total 2,900,000
=========
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SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
Number of Maximum Number
of Option Shares
Name of Seller Shares to be Sold
-------------- ------ ----------------
Harbinger Corporation 1,800,000 270,000
Vulcan Ventures, Inc. 500,000 75,000
AXA Equity & Law Assurance
Society Plc 300,000 45,000
Orbis Pension Trustees Limited 300,000 45,000
Total 2,900,000 435,000
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