-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OkXPGZf4jsv659fftFC25w1gYorVRIyC5Aqn7WEMAEJlH58U2mMd0O2IVMvWjUAh VzGav5lH6ErjPujdhI8q3Q== 0000950144-96-005933.txt : 19960828 0000950144-96-005933.hdr.sgml : 19960828 ACCESSION NUMBER: 0000950144-96-005933 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19960827 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARBINGER CORP CENTRAL INDEX KEY: 0000947116 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 581817306 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-10893 FILM NUMBER: 96621475 BUSINESS ADDRESS: STREET 1: 1055 LENOX PARK BLVD CITY: ATLANTA STATE: GA ZIP: 30319 BUSINESS PHONE: 4048414334 S-3 1 HARBINGER CORPORATION 1 As filed with the Securities and Exchange Commission on August 27, 1996 Registration No. --------- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- HARBINGER CORPORATION (Exact name of issuer as specified in its charter) GEORGIA 58-1817306 (State of Incorporation) (I.R.S. Employer Identification Number) 1055 LENOX PARK BOULEVARD ATLANTA, GEORGIA 30319 (404) 841-4334 (Address, including zip code and telephone number, including area code, of registrant's principal executive offices and principal place of business) ------------------------------------ C. TYCHO HOWLE CHIEF EXECUTIVE OFFICER HARBINGER CORPORATION 1055 LENOX PARK BOULEVARD ATLANTA, GEORGIA 30319 (404) 841-4334 (404) 841-4399 (FAX) (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: JOHN C. YATES, ESQ. LARRY W. SHACKELFORD, ESQ. MORRIS, MANNING & MARTIN, L.L.P. 1600 ATLANTA FINANCIAL CENTER 3343 PEACHTREE ROAD, N.E. ATLANTA, GEORGIA 30326 (404) 233-7000 (404) 365-9532 (FAX) ------------------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such time or times after the effective date of this Registration Statement as the Selling Shareholders shall determine. If any of the securities being registered on this Form are offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
====================================================================================================================== Amount Proposed maximum Proposed maximum Amount of Title of each class of securities to be offering price per aggregate offering registration to be registered registered share (1) price (1) fee - ---------------------------------------------------------------------------------------------------------------------- Common Stock, $.0001 par value 743,125 shares $25.75 $19,135,468.75 $6,598.44 ======================================================================================================================
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the amount of registration fee, based upon the average of the high and low prices reported on August 21, 1996, as reported on the Nasdaq Stock Market. -------------------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE. The Index to Exhibits is located at Page II-5. 2 PROSPECTUS 743,125 SHARES [HARBINGER LOGO] COMMON STOCK --------------- This Prospectus relates to up to 743,125 shares of common stock (the "Shares") of Harbinger Corporation, a Georgia corporation (the "Company"), which may be offered from time to time by the selling shareholders named herein (the "Selling Shareholders"). See "Selling Shareholders." The Company will not directly receive any of the proceeds from the sale of the Shares, but may benefit indirectly from the sale of certain of the Shares. See "Risk Factors - -- SSA Relationship." The Shares being registered were issued in connection with the acquisitions (the "Acquisitions") of substantially all of the assets of each of INOVIS GmbH & Co. computergestutze Informationssysteme ("INOVIS") and NTEX Holding B.V. ("NTEX") by the Company, the acquisition of certain minority interests in Harbinger NV, and the acquisition of certain assets from System Software Associates, Inc. ("SSA"). Pursuant to the terms of the Acquisitions, the Company agreed to register the Shares received by each Selling Shareholder in connection with the Acquisitions. The Company has been advised by each Selling Shareholder that he expects to offer his Shares through brokers or dealers to be selected by him from time to time. The Shares may be offered for sale through the Nasdaq Stock Market, in the over-the-counter market, in one or more private transactions, or a combination of such methods of sale, at prices and on terms then prevailing, at prices related to such prices, or at negotiated prices. Each Selling Shareholder may pledge all or a portion of the Shares owned by him as collateral in loan transactions. Upon default by such Selling Shareholder the pledgee in such loan transaction would have the same rights of sale as such Selling Shareholder under this Prospectus to the extent it remains part of an effective registration statement. Each Selling Shareholder may also transfer Shares owned by him by gift and upon any such transfer the donee would have the same rights of sale as such Selling Shareholder under this Prospectus. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 of the Securities Act of 1933, as amended (the "1933 Act"), may be sold under Rule 144 rather than pursuant to this Prospectus. Finally, each Selling Shareholder and any brokers and dealers through whom sales of the Shares are made may be deemed to be "underwriters" within the meaning of the 1933 Act, and the commissions or discounts and other compensation paid to such persons may be regarded as underwriters' compensation. The Shares are traded on the Nasdaq Stock Market. The average of the high and low prices of the Shares as reported on the Nasdaq Stock Market on August 21, 1996, was $25.75 per share. SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
======================================================================================================================= Price to Underwriting Discounts and Proceeds to Selling Public Commissions (1) Shareholders (2) - ----------------------------------------------------------------------------------------------------------------------- Per Share. . . . $25.75 $.64 $25.11 Total . . . . . . $19,135,468.75 $478,386.72 $18,657,082.03 =======================================================================================================================
(1) Estimated brokerage commissions to be paid by selling shareholders. (2) Before deducting estimated expenses of the offering estimated at $36,598.44, all of which will be paid by the Company. --------------- THE DATE OF THIS PROSPECTUS IS AUGUST ____, 1996. 3 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and files reports and other information with the Securities and Exchange Commission (the "Commission") in accordance therewith. Such reports, proxy statements, and other information filed by the Company are available for inspection and copying at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's Regional Offices located at Room 1028, Jacob K. Javits Federal Building, 26 Federal Plaza, New York, New York 10278 and Room 3190, Kluczynski Federal Building, 230 South Dearborn Street, Chicago, Illinois 60604. Copies of such material may be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. The Commission maintains a World Wide Web site on the Internet that contains reports, proxy and information statements and other information regarding registrants which file electronically with the Commission at http:\\www.sec.gov. The Company's common stock is listed on the Nasdaq Stock Market. In addition to the addresses listed above, reports, proxy statements, and other information concerning the Company can be inspected at the offices of the Nasdaq Stock Market. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The following documents filed by the Company with the Commission are incorporated by reference in this Prospectus: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. The Company's Proxy Statement dated May 8, 1996. 3. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. 4. The Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996. 5. The description of the Common Stock of the Company which is contained in the Company's Form 8-A/A Amendment No. 1 dated August 21, 1995, as incorporated by reference therein from the Company's Pre-Effective Amendment No. 4 to its Registration Statement on Form S-1 dated August 18, 1995. 6. The Company's Current Report on Form 8-K/A Amendment No. 1 dated December 26, 1995, and filed January 24, 1996. 7. The Company's Current Report on Form 8-K dated January 2, 1996, and filed on January 3, 1996. 8. The Company's Current Report on Form 8-K dated April 4, 1996, and filed on April 18, 1996, as amended by it's Current Report on Form 8-K/A Amendment No. 1 dated April 4, 1996, and filed June 17, 1996. 9. The Company's Current Report on Form 8-K dated April 19, 1996, and filed on May 2, 1996, as amended by it's Current Report on Form 8-K/A Amendment No. 1 dated April 19, 1996, and filed July 1, 1996. 10. The Company's Current Report on Form 8-K dated April 20, 1996, and filed on May 3, 1996, as amended by it's Current Report on Form 8-K/A Amendment No. 1 dated April 20, 1996, and filed July 2, 1996. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Shares offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof. The Company hereby undertakes to provide without charge to each person to whom this Prospectus has been delivered, upon the written or oral request of any such person, a copy of any and all of the foregoing documents incorporated herein by reference (other than exhibits to such documents which are not specifically incorporated by reference into the information that this Prospectus incorporates). Written or telephone requests should be directed to Investor Relations Department, Harbinger Corporation, 1055 Lenox Park Boulevard, Atlanta, Georgia 30319, telephone number (404) 841-4334. This Prospectus constitutes a part of a Registration Statement which the Company has filed with the Commission under the 1933 Act, with respect to the Shares. This Prospectus omits certain of the information contained in the Registration Statement, and reference is hereby made to the Registration Statement and related Exhibits thereto for further information with respect to the Company and the securities offered hereby. Such additional information can be obtained from the Commission's office in Washington, D.C. Any statements contained herein concerning the provisions of any documents are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. 4 THE COMPANY Harbinger Corporation ("Harbinger" or the "Company") develops, markets and supports software products worldwide and provides computer communications network and consulting services which enable businesses to engage in electronic commerce. Businesses exchange information and documents and complete business transactions through electronic commerce, which includes electronic data interchange (EDI), electronic mail (E-Mail), electronic funds transfer (EFT), electronic forms, bulletin boards and electronic catalogue services. The Company's objective is to be a leading worldwide provider of electronic commerce products and services to businesses by offering comprehensive, customizable, standards-based electronic commerce solutions. Harbinger offers software products that operate on multiple computer platforms, a secure and reliable computer network to facilitate the transmission of business information and transactions, and value-added products and services to enable businesses of all sizes to maximize the number and value of their electronic trading relationships. The Company's products and services facilitate electronic commerce by businesses and financial institutions by providing the ability to electronically transmit and receive routine business information and documents in a standard format. The Harbinger value-added network (VAN) serves as an electronic communications link for computer systems by receiving, storing and forwarding electronically transmitted business documents and data for re-transmission in a form that can be received and interpreted by the computer of another commercial business. Harbinger facilitates the electronic link to its computer communications network through the sale of electronic commerce software packages for use in a broad range of computing environments, including DOS, Windows, Windows NT, UNIX, IBM AS/400 midrange and IBM MVS mainframe platforms. The Company's principal executive offices are located at 1055 Lenox Park Boulevard, Atlanta, Georgia 30319 and its telephone number is (404) 841-4334. RISK FACTORS Factors Affecting Operating Results; Potential Fluctuations in Quarterly Results. The Company's quarterly operating results have in the past and may in the future vary or decrease significantly depending on factors such as revenue from software sales, the timing of new product and service announcements, changes in pricing policies by the Company and its competitors, market acceptance of new and enhanced versions of the Company's products, the size and timing of significant orders, changes in operating expenses, changes in Company strategy, personnel changes, the introduction of alternative technologies, the effect of potential acquisitions and general economic factors. The Company has limited or no control over many of these factors. The Company has experienced losses in the past, and at June 30, 1996, had an accumulated deficit of approximately $14.1 million. The Company operates with virtually no network services or software product order backlog because its network services are purchased on demand and its software products typically are shipped shortly after orders are received. As a result, revenues in any quarter are substantially dependent on the quantity of purchases of services requested and product orders received in that quarter. Quarterly revenues also are difficult to forecast because the market for electronic commerce and EDI software products is rapidly evolving and the Company's revenues in any period are significantly affected by the announcements and product offerings of the Company's competitors as well as alternative technologies. The Company's expense levels are based, in part, on its expectations as to future revenues. If revenue levels are below expectations, the Company may be unable or unwilling to reduce expenses proportionately and operating results are likely to be adversely affected. As a result, the Company believes that period-to-period comparisons of its results of operations are not necessarily meaningful and should not be relied upon as indications of future performance. Due to all of the foregoing factors, it is likely that in some future quarter the Company's operating results will be below the expectations of public market analysts and investors. In such event, the price of the Company's Common Stock will likely be adversely affected. The Company recognizes revenues for its software products at the time of installation in the case of PC-based EDI software and upon the later of shipment or fulfillment of all significant post-contract vendor obligations in the case of other software products. Customers using the Company's PC products are permitted to return products after delivery for a specified period, generally 60 days. The Company generally has experienced returns of approximately 20% of the PC product sales, and the Company records revenues after a deduction for estimated returns. Any material increase in the Company's return experience could have an adverse effect on its operating results. 3 5 Investment in Harbinger NET Services. The Company has invested $8.4 million to date in Harbinger NET Services, LLC ("HNS"). HNS was established in 1995, has had no substantial revenues, and has incurred and is expected to continue producing substantial losses in its initial years of operations. It is expected that into 1997 the Company will report its interest in the income or losses of HNS by the equity method of accounting and will provide any summarized financial information concerning HNS and separate audited financial statements of HNS as may be required by applicable accounting rules and regulations. The Company's interest in HNS's losses have and will continue to reduce the Company's operating and net income and may cause the Company to report losses in future periods. Depending on operating results in the next year, it is anticipated that HNS will require additional financing in future periods. There can be no assurance that this additional financing will be available or that this financing will not dilute or otherwise affect the Company's interest in HNS. HNS was organized to develop software products and provide related services for conducting electronic commerce over the Internet. There can be no assurance that HNS will overcome the substantial technological issues that will be faced in developing acceptable technologies for conducting electronic commerce over the Internet. These technological issues include the ability to provide secure communication of commercial data over the Internet by encryption or other means, and the ability to assure the integrity, accuracy and reliability of data sent and received over the Internet. HNS will face other significant risks inherent in a start-up enterprise, including the likelihood of significant operating losses, risk of product development and market acceptance, intense competition, risk of the effect of technological change on the introduction of new products and technologies, and the likelihood of the need for substantial equity capital in addition to the capital already invested by the Company. The Company's investment in HNS involves considerable risk and the Company may lose its entire investment in HNS. The Company has several agreements with HNS governing certain transactions between them, including the use of personnel, the management and operation of HNS, the use by HNS of the Company's products and services, the Company's right to license and distribute HNS products, if any, derived from the Company's products and the payment by HNS and the Company of royalties and other amounts. There is no assurance that the Company will receive ongoing royalties or other fees from HNS, that the Company will be able to license and distribute the products developed by HNS, or that the agreements with HNS will continue in effect. The Company's revenues and business could be adversely affected by the development of the electronic commerce business over the Internet by HNS. There is no assurance that the Company's contractual relationships with HNS or ownership interest in HNS will compensate for any such adverse effect. The Operating Agreement among the Company, HNS and its shareholders grants certain designated shareholders, presently including the Company and BellSouth Corporation ("BellSouth"), the right after December 1, 1996 to initiate a buy-sell procedure with respect to the shares owned by such designated shareholders. Under this buy-sell arrangement, any such designated shareholder may offer to buy or sell the HNS shares held by the other designated shareholders at a specified price, in which case the other designated shareholders will be required either to buy or sell their shares. Under this arrangement, the Company could be required to make a decision whether to sell its HNS shares or to purchase the HNS shares held by other designated shareholders at a point in time when the Company has insufficient funds to purchase such HNS shares. Upon such occurrence, and if the Company desires to purchase HNS shares from the designated shareholders, there is no assurance the Company will be able to obtain financing on acceptable terms and, in such case, the Company could be required to sell its HNS shares on terms which would otherwise be unacceptable to the Company. The Company is restricted in its ability to transfer its HNS shares outside of this buy-sell arrangement, and may not transfer its HNS common shares without the approval of all of the members of the Board of Managers of HNS and the approval of the holders of at least 50% of the outstanding HNS common shares, excluding the shares proposed to be transferred. Although the Company owns approximately 70% of the equity of HNS (assuming conversion of the BellSouth Debenture and the exercise of outstanding HNS options), the Company does not control the business and operations of HNS. Until January 1, 1997, the Company has the right to appoint only a minority of the members of the Board of Managers of HNS, and the Board of Managers has broad rights regarding the operation and direction of the business of HNS. Even if the Company ultimately controls the Board of Managers, the Board of Managers will have an obligation to act in the best interest of HNS. Consequently, it is possible that HNS will make business 4 6 decisions that may be adverse to the interests of the Company. Several executive officers of the Company also are executive officers of HNS, have a direct equity investment in HNS, and devote a substantial portion of their time to the business and affairs of HNS. These relationships divert their time and attention from the Company's affairs and could give rise to potential conflicting interests. Because the Company owns approximately a 70% of the equity interest in HNS (assuming conversion of the BellSouth Debenture and the exercise of outstanding HNS options), the Company and its shareholders will only realize benefits from the Company's investment in HNS proportionate with its equity interest. Additional funding which may be required in the future to support HNS could dilute or otherwise affect the Company's equity interest in HNS. Accordingly, shareholders in the Company should recognize that they will not directly share in 100% of any profits or increase in the value of the Company's equity interest in HNS, and a portion of any such profit and increase in value will be realized by the other investors in HNS, including certain officers, directors and existing shareholders of the Company. Integration of Recent Acquisitions; Risks of Potential Future Acquisitions. There can be no assurance that the Company can successfully assimilate its operations and integrate its software products with the operations, software products and technologies recently acquired in the NTEX, INOVIS and Harbinger NV acquisitions. Any delay in such integration could result in loss of product revenues and have a material adverse effect on the Company. Similar operations and software integration problems may arise if the Company undertakes future acquisitions. The Company may in the future pursue additional acquisitions of complementary products, technologies or businesses. Future acquisitions may result in potentially dilutive issuances of equity securities, the incurrence of additional debt, the write-off of in-process product development and capitalized product costs, and the amortization of expenses related to goodwill and other intangible assets, all of which could have a material adverse effect on the Company. Future acquisitions will involve numerous additional risks, including difficulties in the assimilation of the operations, products and personnel of the acquired company, the diversion of management's attention from other business concerns, risks of entering markets in which the Company has little or no direct prior experience, and the potential loss of key employees of the acquired company. Investment in Harbinger NV, NTEX and INOVIS. The Company believes that its continued growth and profitability will require expansion of its international revenues. This expansion will require financial resources and significant management attention, particularly by certain members of the management of the Company who are officers of or provide assistance to Harbinger NV, NTEX and INOVIS (the "International Subsidiaries"). The Company may need to make additional loans to or investments in the International Subsidiaries for working capital purposes or to fund acquisitions of complementary products, technologies or businesses. Each of the International Subsidiaries has experienced significant operating losses to date. To the extent that the International Subsidiaries are unable to penetrate international markets in a timely and profitable manner, the Company's growth, if any, in international sales will be limited, and the Company could be materially adversely affected. In addition, there can be no assurance that the Company will be able to maintain or increase international market demand for the Company's products. SSA Relationship. Under its Alliance Agreement with System Software Associates, Inc. ("SSA"), the Company granted licenses to SSA to use and sell certain software products of the Company in return for royalty payments. The SSA Alliance Agreement establishes minimum royalty payments which must be made by SSA. In connection with the inclusion of the Shares being offered by SSA in this offering, SSA has agreed to apply the proceeds of the sale of up to 275,000 of such Shares to the payment of the minimum royalties as due under the Alliance Agreement. Nevertheless, there is no assurance that the proceeds from the sale of the Shares being offered by SSA in this offering will be sufficient to satisfy the minimum royalties or that any royalties in excess of the minimum will ever be paid. The Internet. The Internet, which is an interconnected global network of computer networks linked together through a common protocol, provides a potential alternative means of providing electronic commerce to business trading partners. The market for Internet software and services is both emerging and highly competitive, 5 7 ranging from small companies with limited resources such as HNS to large companies with substantially greater financial, technical and marketing resources than the Company and HNS. The Company believes that existing competitors are likely to expand the range of their electronic commerce services to include Internet services. Moreover, new competitors, which may include telephone companies and media companies, are likely to increase the provision of business-to-business data transmission services using the Internet. Use of the Internet for business-to-business electronic commerce services raises numerous issues that, to the knowledge of the Company, have yet to be satisfactorily resolved. Such issues include reliability, data security and data integrity. If the Internet becomes an accepted method of electronic commerce, the Company could lose network customers which would reduce recurring revenue from network services and have a material adverse effect on the Company. There can be no assurance that the Company's interest in or contractual relationships with HNS will compensate for any adverse effect resulting from the adoption of the Internet as an accepted alternative for electronic commerce transmissions. Intense Competition. The electronic commerce, EDI and network services and products businesses are intensely competitive and the Company has many competitors with substantially greater financial, marketing, personnel and technological resources than the Company. Other companies offer products and services that may be considered by customers to be acceptable alternatives to the Company's products and services. Certain companies also operate private computer networks for transacting business with their trading partners. It is expected that other companies may develop and implement similar computer-to-computer networks, some of which may be "public" networks such as the Company's and others may be "private," providing services only to a specific group of trading partners, thereby reducing the Company's ability to increase sales of its network services. In addition, several companies offer PC-based, UNIX, midrange and mainframe computer software products which compete with the Company's software products. Advanced operating systems, such as Microsoft's Windows 95, also may offer electronic commerce functions that limit the Company's ability to sell its software products. The Company believes that the continuing acceptance of electronic commerce and EDI will attract new competitors, including software applications and operating systems companies that may bundle electronic commerce solutions with their programs, and alternative technologies that may be more sophisticated and cost effective than the Company's products and services. Competitive companies may offer certain electronic commerce products or services, such as communications software or network transactional services, at no charge or a deeply discounted charge, in order to obtain the sale of other products or services. Since the Company's agreements with its network subscribers are terminable upon 30 days' notice, the Company does not have the contractual right to prevent its customers from changing to a competing network. Technological Change; Dependence on New Products. The electronic commerce and EDI software markets are characterized by rapid technological change, frequent new product introductions and evolving industry standards. The Company's future success will depend in significant part on its ability to anticipate industry standards, continue to apply advances in network and product technologies, enhance its current products and network services, and develop and introduce new products on a timely basis that keep pace with technological developments. There can be no assurance that the Company will be successful in developing and marketing product enhancements or new products or network services that respond to technological change or evolving industry standards, that the Company will not experience difficulties that could delay or prevent the successful development, introduction and marketing of these products or services, or that its new products and services, and the enhancements thereto, will adequately meet the requirements of the marketplace and achieve market acceptance. In the past, the Company has experienced delays in the commencement of commercial shipments of new products and enhancements, resulting in delays or loss of product revenues. Such delays may result in additional and unexpected expenses to fund product development or to add programming personnel to complete a development project, and will reduce revenue because of the inability to sell the new product on a timely basis and the adverse impact that such delay may have on the demand for existing products. Any delay in the introduction of new products, or the failure of such products or services to achieve market acceptance, will have a material adverse effect on the Company. Dependence on Key Management and Personnel. The Company's success is largely dependent upon its executive officers, the loss of one or more of whom could have a material adverse effect on the Company. The future success of the Company will depend in large part upon its ability to attract and retain talented and qualified personnel. In particular, the Company believes that it will be important for the Company to hire experienced 6 8 product development personnel. Competition in the recruitment of highly-qualified personnel in the computer software and electronic commerce industries is intense. The inability of the Company to locate and retain such personnel may have a material adverse effect on the Company. No assurance can be given that the Company can retain its key employees or that it can attract qualified personnel in the future. The Company currently carries key-person life insurance policies on the lives of Messrs. Howle and Leach, and one other officer of the Company. Management of the Company, including Messrs. Howle, Leach, Davis, Katz and Meeker, are also involved in the management of HNS, thereby reducing the amount of time that these persons expend directly on behalf of the Company. Risks of Product Development. Software products as complex as those offered by the Company may contain undetected errors or failures when first introduced or when new versions are released. If software errors are discovered after introduction, the Company could experience delays or lost revenues during the period required to correct these errors. There can be no assurance that, despite testing by the Company and by current and potential customers, errors will not be found in new products or releases after commencement of commercial shipments, resulting in loss of or delay in market acceptance, additional and unexpected expenses to fund further product development or to add programming personnel to complete a development project, and loss of revenue because of the inability to sell the new product on a timely basis, any one or more of which could have a material adverse effect on the Company. Limited Protection of Proprietary Technology; Risks of Infringement. The Company relies primarily on a combination of copyright, patent and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect its proprietary rights. The Company seeks to protect its software, documentation and other written materials principally under trade secret and copyright laws, which afford only limited protection. The Company presently has one patent for an electronic document interchange test facility and patent applications pending for an EDI communication system. Despite the Company's efforts to protect its proprietary rights, unauthorized parties may attempt to copy aspects of the Company's products or to obtain and use information that the Company regards as proprietary. There can be no assurance that the Company's means of protecting its proprietary rights will be adequate or that the Company's competitors will not independently develop similar technology. In distributing its products, the Company relies primarily on "shrink wrap" licenses that are not signed by licensees and, therefore, may be unenforceable under the laws of certain jurisdictions. In addition, the laws of some foreign countries do not protect the Company's proprietary rights to as great an extent as the laws of the United States. The Company does not believe that any of its products infringe the proprietary rights of third parties. There can be no assurance, however, that third parties will not claim infringement by the Company with respect to current or future products. The Company expects that software product developers will increasingly be subject to infringement claims as the number of products and competitors in electronic commerce grows and the functionality of products in different industry segments overlaps. Any such claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require the Company to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to the Company or at all, which could have a material adverse effect on the Company. Potential Conflicts of Interests. Certain officers and directors of the Company also are officers and directors of HNS. The Company is likely to engage in ongoing transactions with HNS, and conflicts of interest could arise between the Company and HNS. No formal procedures have been adopted for dealing with these conflicts of interest, although the Company intends that material transactions between the Company and HNS will be structured to be on terms no less favorable to the Company than terms which would be offered to an unaffiliated third party, and that any such transactions will be subject to approval by members of the Company's Board of Directors who are not officers or directors of HNS. There can be no assurance, however, that these conflicts of interest will not have an adverse effect on the Company. Dependence on Data Centers. The Company's network service operations are dependent upon its ability to protect its computer equipment and the information stored in its data centers against damage that may be caused by fire, power loss, telecommunication failures, unauthorized intrusion, computer viruses and disabling devices and other similar events. The Company is party to a disaster recovery agreement that provides an alternative off-site 7 9 computer system for use in such disastrous events, and the Company has taken precautions to protect itself and its customers from events that could interrupt delivery of the Company's network services. These precautions include off-location storage of computer software backup data, fire protection and physical security systems, and an early warning detection and fire extinguishing system. Notwithstanding such precautions, there can be no assurance that a fire or other natural disaster, including national, regional or local telecommunications outages, would not result in a prolonged outage of the Company's network services. Although the Company maintains business interruption insurance and has contractual access to an alternative off-site computer system, in the event of a disaster, and depending on the nature of the disaster, it may take from several hours to several days before the Company's off-site computer system can become operational for all of the Company's customers and use of the alternative off-site computer would result in substantial additional cost to the Company. In the event that an outage of the Company's network extends for more than several hours, the Company will experience a reduction in revenues by reason of such outage. In the event that such outage extends for one or more days, the Company could potentially lose many of its customers which may have a material adverse effect on the Company. Government Regulatory and Industrial Policy Risks. The Company's network services are transmitted to its customers over dedicated and public telephone lines. These transmissions are governed by regulatory policies establishing charges and terms for communications. Changes in the legislative and regulatory environment relating to online services, EDI or the Internet access industry, including regulatory or legislative changes which directly or indirectly affect telecommunication costs or increase the likelihood of competition from regional telephone companies or others, could have an adverse effect on the Company's business. Congress has enacted, and President Clinton signed, the Telecommunications Act of 1996 ("Act") to amend the federal telecommunications laws to lift restrictions on regional telephone companies and others competing with the Company and to impose certain restrictions regarding obscene and indecent content communicated to minors over the Internet or through interactive computer services. The Act immediately lifts restrictions on regional telephone companies providing transport between defined geographic boundaries associated with the provision of its own information services. This will enable regional telephone companies to more readily compete with the Company by packaging information service offerings with other services. Additionally, the Act imposes fines and other criminal liability on any entity that knowingly uses a telecommunications device or interactive computer service to send obscene or indecent material to minors or permits any telecommunications facility under such entity's control to be used for such a purpose. The Act provides a defense for persons providing access or a connection so long as the access or connection provider is not involved in the creation of content. Litigation has been filed in federal court challenging the constitutionality of those provisions of the Act. A temporary restraining order has been issued by a federal court enjoining the U.S. Attorney General from enforcing the Act's "indecency" prohibition. This case is currently on appeal. The ability of state regulators and/or the FCC to impose regulations on the Internet is unclear. At present the Internet is treated by the FCC as an unregulated enhanced service. The FCC is currently considering a petition seeking to regulate voice communications over the Internet. In addition there are a number of bills currently being considered at the federal and state levels involving encryption and digital signatures that may impact the Company. The Company cannot predict the impact, if any, that the Act and future court opinions, legislation, regulations or regulatory changes may have on its business. Management believes that the Company is in compliance with all material applicable regulations. Ability to Manage Growth. The Company has experienced significant revenue growth in the last five years as it has added subscribers to the Harbinger network. Maintaining profitability during a period of expansion will depend, among other things, on the Company's ability to successfully expand its products, services and markets and to manage its operations effectively. Difficulties in managing continued growth, including difficulties in obtaining and retaining talented management and product development personnel, could have a material adverse effect on the Company. Anti-Takeover Provisions. The Board of Directors has authority to issue up to 20,000,000 shares of preferred stock and to fix the rights, preferences, privileges and restrictions, including voting rights, of the preferred stock without further vote or action by the Company's shareholders. The rights of the holders of Common Stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. While the Company has no present intention to issue additional shares of preferred stock, such issuance, while providing desired flexibility in connection with possible acquisitions and other corporate purposes, 8 10 could have the effect of making it more difficult for a third party to acquire a majority of the outstanding voting stock of the Company. In addition, the Company's Amended and Restated Articles of Incorporation and Bylaws contain provisions that may discourage proposals or bids to acquire the Company. This could limit the price that certain investors might be willing to pay in the future for shares of Common Stock. The Company's Amended and Restated Articles of Incorporation provide for a classified Board of Directors with three-year, staggered terms for its members. The classification of the Board of Directors could have the effect of making it more difficult for a third party to acquire control of the Company. SELLING SHAREHOLDERS The following table sets forth certain information regarding beneficial ownership of the Company's Shares by the Selling Shareholders at July 31, 1996.
Harbinger Shares Beneficially Number of Shares Beneficially Owned Prior to Offering(2) Shares Owned After Offering(2) Name of Selling --------------------------- ------ ------------------------- Shareholders(1) Number Percent Offered Number Percent --------------- ------ ------- ------- ------ ------- INOVIS: ------ Dr. Jacob Karszt+ 53,277 * 44,687 8,590 * Eugen Volbers 19,819 * 16,478 3,341 * Helmut Grimm+ 20,719 * 17,378 3,341 * Hans Arthur Rauh+ 14,799 * 12,413 2,386 * Jorg Blum+ 12,431 * 10,427 2,004 * Ulrich Rehn+ 5,919 * 4,965 954 * Prof. Dr. Wolffried Stucky 5,444 * 4,203 1,241 * Jurgen Matthias Diet 3,888 * 3,002 886 * Dr. Niklai Preiss 3,888 * 3,002 886 * ------- ------- ------ INOVIS Total 140,184 1.30% 116,555 23,629 * NTEX : ---- F.J. Nederlof B.V. + 35,133 * 35,133 -- * Ir A.G. Nederlof B.V. + 35,133 * 35,133 -- * H.W. I. Bol+ 2,972 * 2,972 -- * ------- ------- NTEX Total 73,238 * 73,238 -- * A. J. van Diepen 666 * 666 -- * Henk P.M. Kivits 2,666 * 2,666 -- * SSA 550,000 5.11% 550,000 -- * ------- ------- ------- TOTAL SELLING SHAREHOLDERS 766,754 7.12% 743,125 23,629 * - -----------------
(1) Certain of the Selling Shareholders, indicated with a "+", have recently become employees of the Company. Mr. Kivits is a director of the Company, and Roger E. Covey, a director of the Company, is an officer and director of SSA. Otherwise, the Selling Shareholders have no material relationship with the Company. (2) Based on 10,772,125 shares of Common Stock outstanding as of July 31, 1996. In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of Common Stock if such person has or shares voting power or investment power with respect to such security, or has the right to acquire beneficial ownership at any time within 60 days from July 31, 1996. As used herein, "voting power" is the power to vote or direct the voting of shares and "investment power" is the power to dispose or direct the disposition of shares. An asterisk (*) indicates less than 1% of the issued and outstanding shares of the Common Stock. LEGAL MATTERS The validity of the shares of the Common Stock offered hereby will be passed upon for the Company by Morris, Manning & Martin, L.L.P., Atlanta, Georgia. 9 11 EXPERTS The financial statements and schedule of the Company as of December 31, 1995, and for the year then ended, have been incorporated by reference herein and in the registration statement from the Company's Annual Report on Form 10-K in reliance upon the reports of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein and in the registration statement and upon the authority of said firm as experts in accounting and auditing. The financial statements and schedule of the Company as of December 31, 1994 and for each of the two years in the period then ended, which have been incorporated by reference herein and in the registration statement from the Company's Annual Report on Form 10-K, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein and in the registration statement in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. The consolidated financial statements for NTEX for December 31, 1995, incorporated by reference in this Prospectus from the Company's Current Report on Form 8-K/A Amendment No. 1 dated April 4, 1996, and filed June 17, 1996, have been audited by Moret Ernst & Young Accountants, independent public accountants, as stated in their report which is incorporated herein by reference, and have been so incorporated in reliance upon such report given upon the authority of said firm as experts in accounting and auditing. The financial statements of INOVIS as of December 31, 1995, and for the year then ended have been incorporated by reference herein and in the registration statement from the Company's Current Report of Form 8-K/A Amendment No. 1 dated April 19, 1996, and filed July 1, 1996, in reliance upon the report of KPMG Deutsche Truehand-Gesellschaft, independent certified public accountants, incorporated by reference herein and in the registration statement and upon the authority of said firm as experts in accounting and auditing. The consolidated financial statements of Harbinger N.V. and subsidiaries as of December 31, 1995, 1994, and 1993, and for the two years ended December 31, 1995, and 1994, and the one month ended December 31, 1993, have been incorporated by reference herein and in the registration statement from the Company's Current Report on Form 8-K/A Amendment No. 1 dated April 20, 1996, and filed July 2, 1996, in reliance upon the report of KPMG Accountants N.V., independent certified public accountants, incorporated by reference herein and in the registration statement and upon the authority of said firm as experts in accounting and auditing. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES The Company's Amended and Restated Articles of Incorporation authorizes the Company to indemnify any present or former director, officer, employee, or agent of the Company, or a person serving in a similar post in another organization at the request of the Company, against expenses, judgments, fines, and amounts paid in settlement incurred by him in connection with any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, to the fullest extent not prohibited by the Georgia Business Corporation Code, public policy or other applicable law. The Georgia Business Corporation Code authorizes a corporation to indemnify its directors, officers, employees, or agents in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including provisions permitting advances for expenses incurred) arising under the 1933 Act. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers, or persons controlling the registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its 10 12 counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the questions whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. 11 13 ========================================== ============================= NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN SO AUTHORIZED BY THE COMPANY, 743,125 SHARES ANY SELLING SHAREHOLDER OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE ANY OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE [HARBINGER LOGO] SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION TO WHICH IT IS UNLAWFUL COMMON STOCK TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. ------------------- TABLE OF CONTENTS
Page Available Information . . . . . . . . 2 Incorporation of Certain Information by Reference . . . . . . . . . . . . 2 The Company . . . . . . . . . . . . . 3 Risk Factors . . . . . . . . . . . . . 3 Selling Shareholders . . . . . . . . . 9 ---------------- Legal Matters. . . . . . . . . . . . . 9 PROSPECTUS Experts. . . . . . . . . . . . . . . . 10 ---------------- Disclosure of Commission Position on Indemnification for Securities Act Liabilities . . . . . . . . . . . . 10
------------------ UNTIL ________________, 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR NOT PARTICIPATING IN THE DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION August ___, 1996 TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. ========================================== ============================= 14 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The expenses relating to the registration of Shares will be borne by the Company. Such expenses are estimated to be as follows: Securities and Exchange Commission registration fee . . . . . . . . . . . . . . $ 6,598.44 Accountants' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . 15,000.00 Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000.00 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000.00 ------------ Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,598.44
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Georgia Business Corporation Code permits a corporation to eliminate or limit the personal liability of a director to the corporation or its shareholders for monetary damages for breach of duty of care of other duty as a director, provided that no provision shall eliminate or limit the liability of a director: (A) for an appropriation, in violation of his duties, of any business opportunity of the corporation; (B) for acts or omissions which involve intentional misconduct or a knowing violation of law; (C) for unlawful corporate distributions; or (D) for any transaction from which the director received an improper personal benefit. This provision pertains only to breaches of duty by directors in their capacity as directors (and not in any other corporate capacity, such as officers) and limits liability only for breaches of fiduciary duties under Georgia corporate law (and not for violation of other laws, such as the federal securities laws). The Company's Amended and Restated Articles of Incorporation (the "Restated Articles") exonerate the Company's directors from monetary liability to the extent permitted by this statutory provision. The Company's Restated Articles and Amended and Restated Bylaws (the "Restated Bylaws") also provide that the Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of the Company), by reason of the fact that such person is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including reasonable attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company (and with respect to any criminal action or proceeding, if such person had no reasonable cause to believe such person's conduct was unlawful), to the maximum extent permitted by, and in the manner provided by, the Georgia Business Corporation Code. Notwithstanding any provisions of the Company's Restated Articles and Bylaws to the contrary, the Georgia Business Corporation Code provides that the Company shall not indemnify a director or officer for any liability incurred in a proceeding in which the director is adjudged liable to the Company or is subjected to injunctive relief in favor of the Company: (1) for any appropriation, in violation of his duties, of any business opportunity of the Company; (2) for acts or omissions which involve intentional misconduct or a knowing violation of law; (3) for unlawful corporate distributions; or (4) for any transaction from which the director or officer received an improper personal benefit. The officers and directors of the Company are entitled to indemnification by the Selling Shareholders against any cause of action, loss, claim, damage or liability to the extent it arises out of or is based upon the failure of the Selling Shareholder (or his donees, legatees, or pledgees) and each underwriter to comply with the Prospectus delivery requirements under the federal securities laws or any applicable state securities laws or upon 15 any untrue statement or alleged untrue statement or omission or alleged omission made in this Registration Statement and the Prospectus contained herein, as the same shall be amended or supplemented, made in reliance upon or in conformity with written information furnished to the Company by such Selling Shareholder or such underwriter. ITEM 16. LIST OF EXHIBITS. The following exhibits are filed as part of, or are incorporated by reference into, this report on Form S-3:
Exhibit No. Description ----------- ----------- 4.1 Provisions of the Amended and Restated Articles of Incorporation and Amended and Restated Bylaws of the Company defining rights of the holders of the Common Stock (Incorporated by reference to Exhibits 3.1, 3.2, 3.3 and 3.4 to the Company's Registration Statement on Form S-1) 5.1 Opinion of Morris, Manning & Martin, L.L.P. as to the legality of the securities being registered 10.1* Amended and Restated Operating Agreement of Harbinger NET Services, LLC dated June 20, 1995 ("HNS") 10.2* Note and Security Agreement made by the Company to HNS for $6,000,000, dated June 20, 1995 10.3* HNS Subordinated Convertible Debenture for $3,000,000 due June 20, 2000 10.4* Amended and Restated Software License Agreement between the Company and HNS made as of June 20, 1995 and effective as of May 31, 1995 10.5* Amended and Restated System Operation Agreement between the Company and HNS made as of June 20, 1995 and effective as of May 31, 1995 10.6* Amended and Restated Development Agreement between the Company and HNS made as of June 20, 1995 and effective as of May 31, 1995 10.7* Subscription Documents of the Company for the acquisition of 1,428,571 shares of HNS dated June 20, 1995 10.8* Subscription Documents of the Company for 4,285,714 shares of HNS dated June 20, 1995 10.9* Agreement by and among the Company, HNS, and BellSouth Corporation dated June 20, 1995 10.10* Management Agreement between the Company and HNS dated as of May 31, 1995 10.11* Westinghouse Communications Order Form between the Company and Westinghouse Communications dated May 12, 1995 10.12* Promissory Note for $3,000,000 payable by the Company to NationsBank of Georgia, N.A. ("NationsBank") dated May 2, 1995 10.13* Loan Agreement between the Company and NationsBank dated as of August 15, 1994 with First Amendment dated as of May 2, 1995
16 10.14* Employment Agreement between the Company and Mr. James M. Travers effective as of February 1, 1995 with letter from the Company to Mr. Travers dated December 27, 1994 10.15* Employment Agreement between the Company and Mr. James C. Davis effective as of January 18, 1995 10.16* Assignment of Invention and Patents Thereon (Patent No. 5,367,664) by Texas Instruments, Incorporated ("TI") to the Company dated January 12, 1995 as recorded with United States Patent and Trademark Office on March 13, 1995 10.17* U.S. Patent No. 5,367,664 issued November 22, 1994 10.18* Assignment of Invention and Patents Thereon (Application No. 07/502,955) by TI to the Company dated January 12, 1995 as recorded with United States Patent and Trademark Office on March 13, 1995 10.19* Asset Purchase Agreement between the Company and TI dated as of December 31, 1994** 10.20*+ Business Financial Management System License Agreement between the Company and Private Business, Inc. dated December 28, 1994 10.21* Employment Agreement between the Company and Mr. David A. Meeker effective as of December 21, 1994 10.22* Exclusive Licensing Agreement between the Company and Tools & Techniques, Inc. ("T&T") dated as of October 31, 1994 10.23* Right-To-Purchase Agreement between the Company and the Principal Shareholders of T&T dated as of October 31, 1994 10.24* 401(k) Profit Sharing Plan amended and restated effective as of September 1, 1994; original effective date October 1, 1991 10.25* Employment Agreement between the Company and Mr. C. Tycho Howle effective as of March 7, 1994 10.26* Employment Agreement between the Company and Mr. Joel G. Katz effective as of March 7, 1994 10.27* Employment Agreement between the Company and Mr. David T. Leach effective as of March 7, 1994 10.28* Employment Agreement between the Company and Mr. George S. Hart effective as of March 7, 1994 10.29*+ License and Service Agreement between the Company and Bank of America National Trust and Savings Association dated as of February 18, 1994 10.30* Harbinger NV. ("HNV") Shareholders Agreement between the Company, AXA Equity & Law Life Assurance Society, Ltd. ("Equity & Law") and Vulcan Ventures, Inc. ("Vulcan") dated November 5, 1993 with Addendum made as of May 11,1994 10.31* Management Agreement between the Company and Harbinger NV dated as of November 5, 1993
17 10.32* Agreement between the Company and EDI Solutions, Inc. effective as of September 1, 1993 10.33* Amended and Restated 1993 Stock Option Plan for Nonemployee Directors effective as of August 11, 1993 10.34* Co-Marketing Agreement between the Company and Sprint Communications Company Limited Partnership of Delaware made as of August 9, 1993 10.35* Series C Preferred Stock Agreement between the Company and Equity & Law dated March 4, 1993 10.36* Series C Preferred Stock Agreement between the Company and Vulcan dated March 4, 1993 10.37* Form of Series B Preferred Stock Agreement by and among the Company and holders of the Series B Preferred Stock of the Company made as of November 30, 1992 10.38* Lease between the Company and Lenox Park Development No. 1 L.P. for office located at 1055 Lenox Park Boulevard, Atlanta, Georgia dated July 16, 1992 with First Amendment dated July 22, 1993 and Second Amendment dated December 27, 1993 10.39* Amended and Restated 1989 Stock Option Plan effective as of April 15, 1992 10.40*+ Harbinger Business Financial Management System License Agreement between the Company as assignee of Harbinger Computer Services, Inc. and Barnett Banks, Inc. dated November 18, 1991 with amendment dated May 21, 1992 10.41* Software License and Distribution Agreement between the Company and Sprint International Communications Corporation ("Sprint") effective July 27, 1990 with First Amendment effective as of May 24, 1993 10.42* Reseller Agreement (now known as Service Management Agreement) between the Company and Sprint effective July 27, 1990 with First Amendment effective as of May 1, 1991, Second Amendment effective as of May 1, 1992, and Third Amendment dated July 1, 1994 10.43* Form of Indemnification Agreement between the Company and Directors 10.44** Letter Agreement between the Company and Harbinger NET Services, L.L.C. 10.45** Subscription Agreement between the Company and Harbinger NV effective December 29, 1995 10.46** Subscription Agreement and Investor Suitability Representations (Regulation S) between the Company and Henk P.M. Kivits effective August 22, 1995 10.47** Harbinger NV Amended and Restated Shareholders Agreement between the Company, AXA Equity & Law Life Assurance Society, Ltd. and Vulcan Ventures dated December 29, 1995 10.48** Harbinger Corporation 1996 Stock Option Plan 10.49** Amended and Restated Harbinger Corporation Employee Stock Purchase Plan 10.50** First Amendment to Harbinger Corporation Amended and Restated 1989 Stock Option Plan
18 10.51** First Amendment to Alliance Agreement between System Software Associates, Inc. and Harbinger Corporation 10.52** Supplemental Agreement by and among Harbinger N.V., Harbinger Corporation, Vulcan Ventures, Inc. and AXA Equity & Law Assurance Society, Ltd. effective December 29, 1995 10.53 Second Amendment to Alliance Agreement between the Company and System Software Associates, Inc. dated August 26, 1996 10.54 Escrow Agreement by and among the Company, System Software Associates, Inc. and Finley, Colmar and Company dated August 26, 1996 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Arthur Andersen LLP 23.3 Consent of Moret Ernst & Young Accountants 23.4 Consent of KPMG Deutsche Truehand-Gesellschaft 23.5 Consent of KPMG Accountants N.V. 23.6 Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit 5) 24.1 Power of Attorney (included at Page II-4 of this Registration Statement)
____________ * Incorporated by reference to Exhibits filed in response to Item 16(a), "Exhibits" of the Company's Registration Statement on Form S-1 (File No. 33-93804) declared effective on August 22, 1995. ** Incorporated by reference to Exhibits filed in response to Item 14(c) of the Company's Annual Report on Form 10-K for the year ended December 31, 1995. + The Company has received confidential treatment with respect to portions of these Exhibits. ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement. (i) To include in any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; 19 (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) For purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia on the 26th day of August, 1996. HARBINGER CORPORATION By: /s/ C. Tycho Howle ------------------------------- C. Tycho Howle Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints C. Tycho Howle and/or Joel G. Katz, jointly and severally, as his true and lawful attorneys-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign a Registration Statement relating to the registration of shares of common stock on Form S-3 and to sign any and all amendments (including post effective amendments) to the Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, could lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. /s/ C. Tycho Howle Chairman of the Board of Directors August 27, 1996 - ---------------------------------- and Chief Executive Officer C. Tycho Howle (Principal Executive Officer) /s/ David T. Leach President, Chief Operating Officer August 27, 1996 - ---------------------------------- and Director David T. Leach /s/ Joel G. Katz Vice President - Finance and Secretary August 27, 1996 - ---------------------------------- (Principal Financial Officer and Principal Joel G. Katz Accounting Officer) /s/ William D. Savoy Director August 27, 1996 - ---------------------------------- William D. Savoy /s/ William B. King Director August 27, 1996 - ---------------------------------- William B. King /s/ Stuart L. Bell Director August 27, 1996 - ---------------------------------- Stuart L. Bell /s/ Roger E. Covey Director August 27, 1996 - ---------------------------------- Roger E. Covey /s/ Henk P.M. Kivits Director August 27, 1996 - ---------------------------------- Henk P.M. Kivits
21 EXHIBIT INDEX The following exhibits are filed with or incorporated by reference into this Registration Statement pursuant to Item 601 of Regulation S-K:
Exhibit No. Description Sequential Page Number ----------- ----------- ---------------------- 4.1 Provisions of the Amended and Restated Articles of Incorporation and Amended and Restated Bylaws of the Company defining rights of the holders of the Common Stock (Incorporated by reference to Exhibits 3.1, 3.2, 3.3 and 3.4 to the Company's Registration Statement on Form S-1) N/A 5.1 Opinion of Morris, Manning & Martin, L.L.P. as to the legality of the securities being registered 10.1* Amended and Restated Operating Agreement of Harbinger NET Services, LLC dated June 20, 1995 ("HNS") N/A 10.2* Note and Security Agreement made by the Company to HNS for $6,000,000, dated June 20, 1995 N/A 10.3* HNS Subordinated Convertible Debenture for $3,000,000 due June 20, 2000 N/A 10.4* Amended and Restated Software License Agreement between the Company and HNS made as of June 20, 1995 and effective as of May 31, 1995 N/A 10.5* Amended and Restated System Operation Agreement between the Company and HNS made as of June 20, 1995 and effective as of May 31, 1995 N/A 10.6* Amended and Restated Development Agreement between the Company and HNS made as of June 20, 1995 and effective as of May 31, 1995 N/A 10.7* Subscription Documents of the Company for the acquisition of 1,428,571 shares of HNS dated June 20, 1995 N/A 10.8* Subscription Documents of the Company for 4,285,714 shares of HNS dated June 20, 1995 N/A 10.9* Agreement by and among the Company, HNS, and BellSouth Corporation dated June 20, 1995 N/A 10.10* Management Agreement between the Company and HNS dated as of May 31, 1995 N/A 10.11* Westinghouse Communications Order Form between the Company and Westinghouse Communications dated May 12, 1995 N/A
22 10.12* Promissory Note for $3,000,000 payable by the Company to NationsBank of Georgia, N.A. ("NationsBank") dated May 2, 1995 N/A 10.13* Loan Agreement between the Company and NationsBank dated as of August 15, 1994 with First Amendment dated as of May 2, 1995 N/A 10.14* Employment Agreement between the Company and Mr. James M. Travers effective as of February 1, 1995 with letter from the Company to Mr. Travers dated December 27, 1994 N/A 10.15* Employment Agreement between the Company and Mr. James C. Davis effective as of January 18, 1995 N/A 10.16* Assignment of Invention and Patents Thereon (Patent No. 5,367,664) by Texas Instruments, Incorporated ("TI") to the Company dated January 12, 1995 as recorded with United States Patent and Trademark Office on March 13, 1995 N/A 10.17* U.S. Patent No. 5,367,664 issued November 22, 1994 N/A 10.18* Assignment of Invention and Patents Thereon (Application No. 07/502,955) by TI to the Company dated January 12, 1995 as recorded with United States Patent and Trademark Office on March 13, 1995 N/A 10.19* Asset Purchase Agreement between the Company and TI dated as of December 31, 1994 N/A 10.20*+ Business Financial Management System License Agreement between the Company and Private Business, Inc. dated December 28, 1994 N/A 10.21* Employment Agreement between the Company and Mr. David A. Meeker effective as of December 21, 1994 N/A 10.22* Exclusive Licensing Agreement between the Company and Tools & Techniques, Inc. ("T&T") dated as of October 31, 1994 N/A 10.23* Right-To-Purchase Agreement between the Company and the Principal Shareholders of T&T dated as of October 31, 1994 N/A 10.24* 401(k) Profit Sharing Plan amended and restated effective as of September 1, 1994; original effective date October 1, 1991 N/A 10.25* Employment Agreement between the Company and Mr. C. Tycho Howle effective as of March 7, 1994 N/A 10.26* Employment Agreement between the Company and Mr. Joel G. Katz effective as of March 7, 1994 N/A 10.27* Employment Agreement between the Company and Mr. David T. Leach effective as of March 7, 1994 N/A
-2- 23 10.28* Employment Agreement between the Company and Mr. George S. Hart effective as of March 7, 1994 N/A 10.29*+ License and Service Agreement between the Company and Bank of America National Trust and Savings Association dated as of February 18, 1994 N/A 10.30* Harbinger NV. ("HNV") Shareholders Agreement between the Company, AXA Equity & Law Life Assurance Society, Ltd. ("Equity & Law") and Vulcan Ventures, Inc. ("Vulcan") dated November 5, 1993 with Addendum made as of May 11, 1994 N/A 10.31* Management Agreement between the Company and Harbinger NV dated as of November 5, 1993 N/A 10.32* Agreement between the Company and EDI Solutions, Inc. effective as of September 1, 1993 N/A 10.33* Amended and Restated 1993 Stock Option Plan for Nonemployee Directors effective as of August 11, 1993 N/A 10.34* Co-Marketing Agreement between the Company and Sprint Communications Company Limited Partnership of Delaware made as of August 9, 1993 N/A 10.35* Series C Preferred Stock Agreement between the Company and Equity & Law dated March 4, 1993 N/A 10.36* Series C Preferred Stock Agreement between the Company and Vulcan dated March 4, 1993 N/A 10.37* Form of Series B Preferred Stock Agreement by and among the Company and holders of the Series B Preferred Stock of the Company made as of November 30, 1992 N/A 10.38* Lease between the Company and Lenox Park Development No. 1 L.P. for office located at 1055 Lenox Park Boulevard, Atlanta, Georgia dated July 16, 1992 with First Amendment dated July 22, 1993 and Second Amendment dated December 27, 1993 N/A 10.39* Amended and Restated 1989 Stock Option Plan effective as of April 15, 1992 N/A 10.40*+ Harbinger Business Financial Management System License Agreement between the Company as assignee of Harbinger Computer Services, Inc. and Barnett Banks, Inc. dated November 18, 1991 with amendment dated May 21, 1992 N/A 10.41* Software License and Distribution Agreement between the Company and Sprint International Communications Corporation ("Sprint") effective July 27, 1990 with First Amendment effective as of May 24, 1993 N/A
-3- 24 10.42* Reseller Agreement (now known as Service Management Agreement) between the Company and Sprint effective July 27, 1990 with First Amendment effective as of May 1, 1991, Second Amendment effective as of May 1, 1992, and Third Amendment dated July 1, 1994 N/A 10.43* Form of Indemnification Agreement between the Company and Directors N/A 10.44** Letter Agreement between the Company and Harbinger NET Services, L.L.C. N/A 10.45** Subscription Agreement between the Company and Harbinger NV effective December 29, 1995 N/A 10.46** Subscription Agreement and Investor Suitability Representations (Regulation S) between the Company and Henk P.M. Kivits effective August 22, 1995 N/A 10.47** Harbinger NV Amended and Restated Shareholders Agreement between the Company, AXA Equity & Law Life Assurance Society, Ltd. and Vulcan Ventures dated December 29, 1995 N/A 10.48** Harbinger Corporation 1996 Stock Option Plan N/A 10.49** Amended and Restated Harbinger Corporation Employee Stock Purchase Plan N/A 10.50** First Amendment to Harbinger Corporation Amended and Restated 1989 Stock Option Plan N/A 10.51** First Amendment to Alliance Agreement between System Software Associates, Inc. and Harbinger Corporation N/A 10.52** Supplemental Agreement by and among Harbinger N.V., Harbinger Corporation, Vulcan Ventures, Inc. and AXA Equity & Law Assurance Society, Ltd. effective December 29, 1995 N/A 10.53 Second Amendment to Alliance Agreement between the Company and System Software Associates, Inc. dated August 26, 1996 10.54 Escrow Agreement by and among the Company, System Software Associates, Inc. and Finley, Colmar and Company dated August 26, 1996 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Arthur Andersen LLP 23.3 Consent of Moret Ernst & Young Accountants
-4- 25 23.4 Consent of KPMG Deutsche Truehand-Gesellschaft 23.5 Consent of KPMG Accountants N.V. 23.6 Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit 5) N/A 24.1 Power of Attorney (included at Page II-4 of this Registration Statement) N/A
____________ * Incorporated by reference to Exhibits filed in response to Item 16(a), "Exhibits" of the Company's Registration Statement on Form S-1 (File No. 33-93804) declared effective on August 22, 1995. ** Incorporated by reference to Exhibits filed in response to Item 14(c) of the Company's Annual Report on Form 10-K for the year ended December 31, 1995. + The Company has received confidential treatment with respect to portions of these Exhibits. -5- EX-5.1 2 LEGALITY OPINION 1 EXHIBIT 5.1 Opinion of Morris, Manning & Martin, L.L.P. 2 August 23, 1996 Harbinger Corporation 1055 Lenox Park Blvd. Atlanta, Georgia 30319 Re: Registration Statement on Form S-3 Gentlemen: We have acted as counsel for Harbinger Corporation, a Georgia corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended, pursuant to a Registration Statement on Form S-3, of a proposed offering of up to 743,125 shares of the Company's common stock, $.0001 par value per share ("Shares"), by certain shareholders of the Company. We have examined such documents, corporate records, and other instruments as we have considered necessary and advisable for purposes of rendering this opinion. Based upon and subject to the foregoing, we are of the opinion that the Shares have been duly authorized and validly issued, and are fully paid and nonassessable. This opinion is limited by and is in accordance with, the January 1, 1992, edition of the Interpretive Standards applicable to Legal Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion Committee of the Corporate and Banking Law Section of the State Bar of Georgia. We hereby consent to the filing of this Opinion as an exhibit to the Company's registration statement on Form S-3 and to the reference to our firm under the caption "Legal Matters" in the Prospectus contained in the Registration Statement. Very truly yours, MORRIS, MANNING & MARTIN, L.L.P. /s/ Larry W. Shackelford ------------------------ Larry W. Shackelford EX-10.53 3 2ND AMENDMENT TO ALLIANCE AGREEMENT 1 EXHIBIT 10.53 Second Amendment to Alliance Agreement 2 SECOND AMENDMENT TO ALLIANCE AGREEMENT This SECOND AMENDMENT (this "Amendment") dated the 26th day of August, 1996 and effective as of August 26, 1996 (the "Effective Date"), is between HARBINGER CORPORATION (hereinafter "Harbinger") and SYSTEM SOFTWARE ASSOCIATES, INC. (hereinafter "SSA"). This Second Amendment amends and revises the Alliance Agreement between Harbinger and SSA made as of July 21, 1995 as modified by the First Amendment to Alliance Agreement effective as of July 21, 1995 (collectively, the "Agreement" or "Alliance Agreement"). Capitalized terms not defined herein shall have the meaning assigned to them in the Agreement. Background. A. The parties have previously entered into an Alliance Agreement dated July 21, 1995, as modified by the First Amendment effective July 21, 1995. B. Under Section 3.A.(xv) of the Alliance Agreement, SSA has been granted registration rights covering certain shares of Harbinger Common Stock, including two (2) demand registrations. C. Section 6.C of the Alliance Agreement sets forth the following Minimum Royalties to be paid by SSA to Harbinger: First Annual Minimum of $1,381,718 due January 1, 1996; Second Annual Minimum of $5,741,271 due January 1, 1997; and Final Annual Minimum of $99,011 due January 31, 1997. D. As of the Effective Date, SSA had paid in full to Harbinger the First Annual Minimum. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. In consideration for this Second Amendment, Harbinger will allow SSA to exercise one of the registration rights as of the Effective Date. 2. The existing Alliance Agreement contains errors in the internal section references. Section 3.B does not exist. All cross references and internal references in the Alliance Agreement to Section 3.B.(xv) or Section 3(xv) are hereby revised to Section 3.A.(xv). 3. Registration Rights. SSA shall be entitled to register 550,000 shares of Harbinger Common Stock (the "Registered Shares") in accordance to Section 3.A.(xv) of the Alliance Agreement. SSA's registration of such Shares (the "Registration") will constitute the one (1) occasion and SSA will have one (1) remaining occasion to exercise its registration rights as set forth in Section 3.A.(xv). Any exercise of the second occasion will be subject to the terms and conditions of the Alliance Agreement. This Second Amendment shall not be construed in any way to waive the obligations and conditions to the exercise of the second occasion. 3 4. Escrow. Within five (5) days from the effective date of the Registration, SSA shall transfer 275,000 of the Registered Shares (the "Escrowed Shares") to the Escrow Agent along with appropriate stock powers and powers of attorney and other documents as may be reasonably requested by Escrow Agent, in accordance with the attached Escrow Agreement. 5. Sale of Escrowed Shares. During the period of effectiveness of a registration statement covering the sale of the Escrowed Shares, SSA may sell those Shares at any time during the term of the Agreement in accordance with the terms of the Escrow Agreement. In addition, SSA agrees and hereby authorizes the Escrow Agent to sell the Escrowed Shares under the following conditions in accordance with the terms of the Escrow Agreement: (i) In the event that SSA has not paid the Second Annual Minimum in full to Harbinger by January 1, 1997; and/or (ii) In the event that SSA has not paid the Final Annual Minimum in full to Harbinger by January 31, 1997. 6. Proceeds. Proceeds from the sale of the Escrowed Shares will be applied toward the Minimum Royalties as set forth in Section 6.C. of the Alliance Agreement and shall be distributed by Escrow Agent to Harbinger and SSA in accordance with the terms of the Escrow Agreement. 7. General. Nothing in this Second Amendment (i) waives or amends any of SSA's or Harbinger's obligations under the Alliance Agreement, or (ii) shall be construed to alter any payment obligations under the Alliance Agreement, including but not limited to the obligations to make Minimum Royalty payments, and the parties acknowledge that all of SSA's obligation with respect to Minimum Royalties shall continue in full force and effect in accordance with the Alliance Agreement. Except as set forth above, the terms and conditions of the Alliance Agreement remain in full force and effect. Upon execution by all parties hereto, this Second Amendment shall be attached to and form a part of the Agreement. This Second Amendment may be executed in counterparts, all of which when taken together shall constitute the full and binding agreement of the parties. SYSTEM SOFTWARE ASSOCIATES, INC. HARBINGER CORPORATION - -------------------------------------- ------------------------------- Signature Signature - -------------------------------------- ------------------------------- Title Date Title Date -2- EX-10.54 4 ESCROW AGREEMENT 1 EXHIBIT 10.54 Escrow Agreement 2 ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Agreement") is entered into and effective as of the 26th day of August, 1996, by and among HARBINGER CORPORATION (hereinafter "Harbinger"), SYSTEM SOFTWARE ASSOCIATES, INC. (hereinafter "SSA"), and FINLEY, COLMER AND COMPANY (hereinafter "Escrow Agent"). BACKGROUND Harbinger and SSA have entered into an Alliance Agreement dated July 21, 1995 and related First and Second Amendments (collectively, the "Alliance Agreement"). Harbinger and SSA desire to establish an escrow for the shares of Harbinger stock (the "Escrowed Shares") as provided under the Second Amendment to the Alliance Agreement, and the Escrow Agent is willing to serve as Escrow Agent upon the terms and conditions set forth herein. In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. DEPOSIT WITH ESCROW AGENT. In accordance with the Second Amendment to the Alliance Agreement, SSA shall transfer the Escrowed Shares to the Escrow Agent along with appropriate stock powers and powers of attorney, and other documents as may be reasonably requested by Escrow Agent. The Escrow Agent agrees that it will accept, in its capacity as escrow agent, the Escrowed Shares received by it from SSA and any Escrowed Funds received by it. 2. DISTRIBUTION OF ESCROWED SHARES AND ESCROWED FUNDS. (a) The Escrow Agent shall distribute the Escrowed Shares and Escrowed Funds in the amounts, at the times, and upon the following conditions as set forth in the attached EXHIBIT A. (b) All sales of the Escrowed Shares initiated in accordance with this Agreement shall be transacted through Alex. Brown & Sons, Inc. or such other firm as selected by SSA and reasonably acceptable to Harbinger (the "Broker"). SSA agrees to execute and deliver any and all other documents as may be reasonably requested by Broker for Broker to sell the Escrowed Shares as set forth herein. (c) If all Minimum Royalties due under the Alliance Agreement have been fully paid on or prior to January 31, 1997, the Escrow Agent shall return the remaining Escrowed Shares and Escrowed Funds in its possession to SSA. (d) Notwithstanding anything to the contrary in this Agreement, under no circumstances will the Escrowed Shares be transferred to Harbinger. 3 3. DISTRIBUTION OF DIVIDENDS. Any dividends earned on the Escrowed Shares shall be applied toward the Minimum Royalties in the same manner as the proceeds of the sale of the Escrowed Shares as set forth herein. 4. INVESTMENT OF ESCROWED FUNDS. The Escrow Agent shall invest any funds, including the proceeds of any sales of the Escrowed Shares or dividends paid thereon (the "Escrowed Funds"), not yet paid to either Harbinger or SSA pursuant to the terms of this Agreement in deposit accounts or short-term certificates of deposit which are fully insured by the Federal Deposit Insurance Corporation or another agency of the United States government, short-term securities issued or fully guaranteed by the United States government or money market funds investing only in securities issued or fully guaranteed by the United States government. SSA shall provide the Escrow Agent with instructions from time to time concerning in which of the specific investment instruments described above the Escrowed Funds shall be invested, and the Escrow Agent shall adhere to such instructions. 5. FEES OF ESCROW AGENT. SSA shall pay the Escrow Agent a fee of Two thousand five hundred Dollars ($2,500.00) for its services hereunder, payable upon transfer of the Escrowed Shares to the Escrow Agent, and such other reasonable fees and expenses associated with establishment of this escrow arrangement. SSA shall also pay any commissions or expenses associated with the sale of any of the Escrowed Shares. 6. LIABILITY OF ESCROW AGENT. (a) In performing any of its duties under this Agreement, or upon the claimed failure to perform its duties hereunder, the Escrow Agent shall not be liable to anyone for any damages, losses or expenses which it may incur as a result of the Escrow Agent so acting, or failing to act; provided, however, the Escrow Agent shall be liable for damages arising out of its willful default or misconduct or its gross negligence under this Agreement. Accordingly, the Escrow Agent shall not incur any such liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of its counsel which is given with respect to any questions relating to the duties and responsibilities of the Escrow Agent hereunder; or (ii) any action taken or omitted to be taken in reliance upon any document, including any written notice or instructions provided for this Escrow Agreement, not only as to its due execution and to the validity and effectiveness of its provisions but also as to the truth and accuracy of any information contained therein, if the Escrow Agent shall in good faith believe such document to be genuine, to have been signed or presented by a proper person or persons, and to conform with the provisions of this Agreement. (b) The other parties hereto agree to jointly and severally indemnify and hold harmless the Escrow Agent against any and all losses, claims, damages, liabilities and expenses, including, without limitation, reasonable costs of investigation and counsel fees and disbursements which may be imposed by the Escrow Agent or incurred by it in connection with its acceptance of this appointment as Escrow Agent hereunder or the performance of its duties hereunder, including, without limitation, any litigation arising from this Escrow Agreement or involving the subject matter thereof; except, that if the Escrow Agent shall be found guilty of -2- 4 willful misconduct or gross negligence under this Agreement, then, in that event, the Escrow Agent shall bear all such losses, claims, damages and expenses. (c) If a dispute ensues between any of the parties hereto which, in the opinion of the Escrow Agent, is sufficient to justify its doing so, the Escrow Agent shall retain legal counsel of its choice as it reasonably may deem necessary to advise it concerning its obligations hereunder and to represent it in any litigation to which it may be a part by reason of this Agreement. The Escrow Agent shall be entitled to tender into the registry or custody of any court of competent jurisdiction all money or property in its hands under the terms of this Agreement, and to file such legal proceedings as it deems appropriate, and shall thereupon be discharged from all further duties under this Agreement. Any such legal action may be brought in any such court as the Escrow Agent shall determine to have jurisdiction thereof. In connection with such dispute, other parties shall jointly and severally indemnify the Escrow Agent against its court costs and reasonable attorney's fees and expenses incurred. (d) The Escrow Agent may resign at any time upon giving thirty (30) days written notice to SSA and Harbinger. If a successor escrow agent reasonably acceptable to Harbinger is not appointed by SSA within thirty (30) days after notice of resignation, the Escrow Agent may petition any court of competent jurisdiction to name a successor escrow agent and the Escrow Agent herein shall be fully relieved of all liability under this Agreement to any and all parties upon the transfer of the Escrowed Shares and all related documentation thereto, including appropriate information to assist the successor escrow agent appointed by the court. 7. APPOINTMENT OF SUCCESSOR. SSA may, upon the delivery of thirty (30) days written notice executed by SSA, appointing a successor escrow agent to the Escrow Agent (provided such successor agent shall be reasonably acceptable to Harbinger), terminate the services of the Escrow Agent hereunder. In the event of such termination, the Escrow Agent shall immediately deliver to the successor escrow agent, all Escrowed Shares and Escrowed Funds in its possession, less any fees and expenses due to the Escrow Agent or required to be paid by the Escrow Agent to a third party pursuant to this Agreement. 8. NOTICE. All notices, requests, demands and other communications or deliveries required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given three days after having been deposited for mailing if sent by registered mail, or certified mail return receipt requested, or delivery by courier, to the respective addresses set forth below: IF TO HARBINGER: Harbinger Corporation 1055 Lenox Park Boulevard Atlanta, Georgia 30319 Attn.: Joel Katz Phone: (404) 841-4334 Fax: (404) 841-4316 -3- 5 IF TO SSA: System Software Associates, Inc. 500 West Madison Chicago, Illinois 60661 Attn.: Joe Skadra Phone: (312) 258-6157 Fax: (312) 474-7500 IF TO THE ESCROW AGENT: Finley, Colmer and Company 115 Perimeter Center Place, Suite 640 Atlanta, Georgia 30346 Attn.: Peter Colmer Phone: (770) 668-0637 Fax: (770) 668-0641 9. DISPUTE RESOLUTION AND ARBITRATION. In the event of a dispute between SSA and Harbinger under this Agreement, including but not limited to a dispute over the amount of Minimum Royalties due and/or payable, the parties shall first submit the dispute for resolution by the CFOs (or comparable position) of each party. If these persons do not satisfactorily resolve the dispute within twenty-four (24) hours of such submission, then the CEOs (or comparable position) of each party shall attempt to resolve it. If the dispute is not resolved by these persons within twenty-four (24) hours of submission to them (or such longer period of time as the CEOs may mutually agree), both parties agree to submit the dispute to binding arbitration. In such case, both parties agree to the appointment of one (1) arbitrator selected by the American Arbitration Association ("AAA"). The arbitration shall be conducted in Atlanta, Georgia in accordance with the rules, regulations and procedures of the AAA, and the decision of the arbitrator shall be final and binding on both parties. SSA and Harbinger shall equally bear the costs of such arbitration. 10. GENERAL. (a) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia. (b) The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. (c) This Agreement and the Alliance Agreement set forth the entire agreement and understanding of the parties with regard to this escrow transaction and supersedes all prior agreements, arrangements and understandings relating to the subject matter hereof. (d) This Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each party hereto or, in the case of a waiver, by the party waiving compliance. The failure of any part at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. Time is of the essence of this Agreement. No waiver in -4- 6 any one or more instances by any part of any condition, or of the breach of any term contained in this Agreement, whether by conduct or otherwise, shall be deemed to be, or construed as, a further or continuing waiver of any such condition or breach, or a waiver of any other condition or of the breach of any other terms of this Agreement. (e) This Agreement may be executed simultaneously 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. (f) This Agreement shall inure to the benefit of the parties hereto and their respective administrators, successors and assigns. The Escrow Agent shall be bound only by the terms of this Escrow Agreement and shall not be bound by or incur any liability with respect to any other agreement or understanding between the parties except as herein expressly provided. The Escrow Agent shall not have any duties hereunder except those specifically set forth herein. (g) No interest in any part to this Agreement shall be assignable in the absence of a written agreement by and between all the parties to this Agreement, executed with the same formalities as this original Agreement. IN WITNESS WHEREOF, the parties have duly executed this Agreement as the date first written above. SSA: HARBINGER: SYSTEM SOFTWARE ASSOCIATES, INC. HARBINGER CORPORATION - -------------------------------- --------------------------------- Signature Signature - -------------------------------- --------------------------------- Title Date Title Date ESCROW AGENT: FINLEY, COLMER AND COMPANY - -------------------------------- Signature - -------------------------------- Title Date -5- 7 EXHIBIT A DISTRIBUTION OF ESCROWED SHARES 1. The Minimum Royalties due under the Alliance Agreement are as follows:
PERIODS AMOUNT DUE DATE ------- ------ -------- First Annual Minimum: $1,381,718 due January 1, 1996 (fully paid by SSA) Second Annual Minimum: $5,741,271 due January 1, 1997 Final Annual Minimum: $ 99,011 due January 31, 1997
If at any time the Royalty paid by SSA to Harbinger exceeds the Minimum for that Period, then the excess in any one Period will be applied to reduce the Minimum for the next Period as set forth in Section 6.C. of the Alliance Agreement. 2. The Escrow Agent shall sell the Escrowed Shares or an appropriate portion thereof if so directed by SSA or if required by Section 3 below, and apply the proceeds of any such sale as provided in Section 3 below. 3. The proceeds from sale of the Escrowed Shares shall be applied against the outstanding Minimum Royalties and distributed by Escrow Agent as follows: A. ON OR BEFORE JANUARY 1, 1997 If at any time on or prior to January 1, 1997, the Escrow Agent sells any of the Escrowed Shares, the net proceeds from such sale (after deducting brokerage commissions and other expenses) (the "Net Proceeds") shall be distributed as follows: 1. The Escrow Agent shall deduct from the Net Proceeds an amount up to the sum of the Second Annual Minimum and Final Annual Minimum ("Set-Aside Amount") and shall retain such amount for payment to Harbinger as set forth below; and 2. The remainder of the Net Proceeds, if any, shall be distributed to SSA. B. FROM JANUARY 1, 1997 TO JANUARY 30, 1997 1. At any time on or after January 1, 1997, Harbinger shall notify the Escrow Agent and SSA ("Harbinger First Notice") that the Second Annual -6- 8 Minimum has not been fully paid as of January 1, 1997. Harbinger shall include in such notice: (i) the amount of Second Annual Minimum less any applicable reductions based on royalty payments, if any, made by SSA as specified in the latest Monthly Report ("Monthly Report" as described in Sections 6.B. and 6.H. of the Alliance Agreement) submitted by SSA to Harbinger as of the Harbinger First Notice date (the "Amount Due"), and (ii) a copy of such Monthly Report. Within three (3) days after SSA's receipt of the Harbinger First Notice, SSA may notify Escrow Agent and Harbinger in writing of any dispute with the Amount Due. In the event SSA provides such notice of a dispute within this three (3) day period, the parties shall seek to resolve such dispute in accordance with Section 9 of this Escrow Agreement. In the event that the Escrow Agent has not received a notice of dispute from SSA within the three (3) day period specified herein, the Escrow Agent shall perform the following: (i) the Escrow Agent shall immediately pay to Harbinger such Amount Due out of the Set-Aside Amount, if any; and (ii) in the event that the Set-Aside Amount is less than the Amount Due, the Escrow Agent shall immediately sell as many Escrowed Shares (or if necessary all of them) as needed to result in the Net Proceeds that, when added to the Set-Aside Amount, equals the Amount Due, and immediately pay such Amount Due to Harbinger; provided the Escrow Agent shall immediately sell all of the remaining Escrowed Shares if the aggregate value of the remaining Escrowed Shares based on the closing price of Harbinger stock on Nasdaq on the third day of the three (3) day period specified above is less than the Amount Due and shall immediately pay the Net Proceeds therefrom to Harbinger, with the balance of any Amount Due remaining an obligation of SSA to Harbinger as set forth in the Alliance Agreement. 2. If at any time from January 1, 1997 to January 30, 1997, Escrow Agent sells any of the Escrowed Shares, then after satisfying the obligations under Section B.1. above, any remaining Net Proceeds from such sale(s) will be distributed as follows: (i) Escrow Agent shall deduct from the remaining Net Proceeds an amount that, when added to the remaining Set-Aside Amount, equals the Final Annual Minimum (the "Final Set-Aside") and shall retain such amount for payment to Harbinger as set forth below; and (ii) The remainder of the Net Proceeds, if any, shall be distributed to SSA. C. ON OR AFTER JANUARY 31, 1997 1. At any time on or after January 31, 1997, Harbinger shall notify the Escrow Agent and SSA ("Harbinger Second Notice") that the Final Annual Minimum has not been fully paid as of January 31, 1997. Harbinger shall include -7- 9 in such notice: (i) the amount of Final Annual Minimum less any applicable reductions based on royalty payments, if any, made by SSA as specified in the latest Monthly Report submitted by SSA to Harbinger as of the Harbinger Second Notice date (the "Final Amount Due"), and (ii) a copy of such Monthly Report. Within three (3) days after SSA's receipt of the Harbinger Second Notice, SSA may notify Escrow Agent and Harbinger in writing of any dispute with the Amount Due. In the event SSA provides such notice of a dispute within this three (3) day period, the parties shall seek to resolve such dispute in accordance with Section 9 of this Escrow Agreement. In the event that the Escrow Agent has not received a notice of dispute from SSA within the three (3) day period specified herein, the Escrow Agent shall perform the following: (i) the Escrow Agent shall immediately pay to Harbinger such Final Amount Due out of the Final Set-Aside, if any; and (ii) in the event that the Final Set-Aside is less than the Final Amount Due, the Escrow Agent shall sell as many Escrowed Shares as needed to result in the Net Proceeds that, when added to the Final Set-Aside, equals the Final Amount Due, and immediately pay such Final Amount Due to Harbinger; provided the Escrow Agent shall immediately sell all of the remaining Escrowed Shares if the aggregate value of the remaining Escrowed Shares based on the closing price of Harbinger stock on Nasdaq on the third day of the three (3) day period specified above is less than the Final Amount Due and shall immediately pay the Net Proceeds therefrom to Harbinger, with the balance of any Final Amount Due remaining an obligation of SSA to Harbinger as set forth in the Alliance Agreement. The remainder of the Escrowed Shares and/or Net Proceeds, if any, shall be released and/or paid to SSA. -8- EX-23.1 5 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Harbinger Corporation We consent to the use of our reports dated February 9, 1996 relating to the balance sheet of Harbinger Corporation as of December 31, 1995 and the related statements of operations, shareholders' equity, and cash flows for the year then ended and the financial statement schedule incorporated by reference in the Form S-3 Registration Statement of Harbinger Corporation and to the reference to our firm under the heading of "Experts" in the prospectus. /s/ KPMG Peat Marwick LLP --------------------------- KPMG Peat Marwick LLP Atlanta, Georgia August 23, 1996 EX-23.2 6 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form S-3 Registration Statement of our report dated March 14, 1995 included in Harbinger Corporation's report on Form 10-K for the year ended December 31, 1995 and to all references to our Firm included in this registration statement. /s/ Arthur Andersen LLP ----------------------- Arthur Andersen LLP Atlanta, Georgia August 23, 1996 EX-23.3 7 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23.3 INDEPENDENT AUDITORS' CONSENT The Board of Directors Harbinger Corporation We consent to the use of our report dated June 14, 1996 relating to the consolidated balance sheet of NTEX Holding B.V. as of December 31, 1995, and the related consolidated statements of operations, shareholders' equity, and cash flows for the year then ended incorporated by reference in the Form S-3 Registration Statement of Harbinger Corporation and to the reference to our firm under the heading of "Experts" in the prospectus. /s/ Moret Ernst & Young Accountants ----------------------------------- Moret Ernst & Young Accountants The Hague August 23, 1996 EX-23.4 8 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23.4 INDEPENDENT AUDITORS' CONSENT The Board of Directors Harbinger Corporation We consent to the use of our report dated June 11, 1996 relating to the balance sheet of INOVIS GmbH & Co. computergestutze Informationssysteme as of December 31, 1995 and the related statements of operations and accumulated deficit, partners' equity, and cash flows for the year then ended incorporated by reference in the Form S-3 Registration Statement of Harbinger Corporation and to the reference to our firm under the heading of "Experts" in the prospectus. /s/ KPMG Deutsche Treuhand-Gesellschaft --------------------------------------- KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft Zweigniederlassung Munchen August 23, 1996 EX-23.5 9 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23.5 INDEPENDENT AUDITORS' CONSENT The Board of Directors Harbinger Corporation We consent to the use of our report dated June 5, 1996 relating to the consolidated balance sheets of Harbinger N.V. and subsidiaries as of December 31, 1995, 1994, and 1993 and the related consolidated statements of operations, shareholders' equity, and cash flows for the two years ended December 31, 1995 and 1994 and the one month ended December 31, 1993 incorporated by reference in the Form S-3 Registration Statement of Harbinger Corporation and to the reference to our firm under the heading of "Experts" in the prospectus. /s/ KPMG Accountants N.V. ------------------------- KPMG Accountants N.V. The Hague August 23, 1996 -----END PRIVACY-ENHANCED MESSAGE-----