AGREEMENT AND PLAN OF REORGANIZATION
AMONG
NOVELL, INC.
NOVELL ACQUISITION CORP.
WORDPERFECT CORPORATION
ALAN C. ASHTON
BRUCE W. BASTIAN
AND
MELANIE L. BASTIAN
MARCH 21, 1994
129
TABLE OF CONTENTS
PAGE
----
ARTICLE I -- THE MERGER.............................................................. A-1
1.1 Merger; Effective Time................................................... A-1
1.2 Closing.................................................................. A-1
1.3 Effects of the Merger.................................................... A-1
1.4 Tax-Free Reorganization; Pooling of Interests............................ A-1
ARTICLE II -- EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES................................. A-2
2.1 Effect on Capital Stock.................................................. A-2
2.2 Exchange of Certificates................................................. A-3
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF WORDPERFECT......................... A-4
3.1 Organization, Standing and Power......................................... A-4
3.2 Capital Structure........................................................ A-4
3.3 Authority................................................................ A-4
3.4 Financial Statements..................................................... A-5
3.5 Compliance with Law...................................................... A-6
3.6 No Defaults.............................................................. A-6
3.7 Litigation............................................................... A-6
3.8 No Material Adverse Effect............................................... A-6
3.9 Absence of Undisclosed Liabilities....................................... A-7
3.10 Information Supplied..................................................... A-7
3.11 Certain Agreements....................................................... A-8
3.12 ERISA.................................................................... A-8
3.13 Major Contracts.......................................................... A-8
3.14 Taxes.................................................................... A-9
3.15 Interests of Officers and Directors...................................... A-10
3.16 Intellectual Property.................................................... A-10
3.17 Restrictions on Business Activities...................................... A-11
3.18 Title to Properties; Absence of Liens and Encumbrances; Condition of A-12
Equipment................................................................
3.19 Governmental Authorizations and Licenses................................. A-12
3.20 Environmental Matters.................................................... A-12
3.21 Insurance................................................................ A-12
3.22 Board Approval........................................................... A-13
3.23 Labor Matters............................................................ A-13
3.24 Questionable Payments.................................................... A-13
3.25 Accounting Matters....................................................... A-13
3.26 Brokers.................................................................. A-13
3.27 Disclosure............................................................... A-13
(i)
130
PAGE
----
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF NOVELL AND SUB....................... A-14
4.1 Organization; Standing and Power......................................... A-14
4.2 Capital Structure........................................................ A-14
4.3 Authority................................................................ A-14
4.4 SEC Documents; Novell Financial Statements............................... A-15
4.5 Information Supplied..................................................... A-15
4.6 Litigation............................................................... A-15
4.7 No Defaults.............................................................. A-16
4.8 Opinion of Financial Advisor............................................. A-16
4.9 Accounting Matters....................................................... A-16
4.10 Brokers.................................................................. A-16
4.11 Disclosure............................................................... A-16
ARTICLE V -- CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME; ADDITIONAL
AGREEMENTS.............................................................. A-16
5.1 Information and Access................................................... A-16
5.2 Conduct of Business of the Parties....................................... A-17
5.3 Negotiation With Others.................................................. A-19
5.4 Preparation of S-4 and the Proxy Statement; Other Filings................ A-19
5.5 Advice of Changes........................................................ A-20
5.6 Shareholder Approval..................................................... A-20
5.7 Agreements to Cooperate.................................................. A-20
5.8 State Statutes........................................................... A-21
5.9 Consents................................................................. A-21
5.10 Nasdaq National Market Listing........................................... A-21
5.11 Public Announcements..................................................... A-21
5.12 Affiliates............................................................... A-21
5.13 WordPerfect Options...................................................... A-22
5.14 Indemnification.......................................................... A-22
5.15 Notification of Certain Matters.......................................... A-23
5.16 Pooling Accounting....................................................... A-23
5.17 FIRPTA................................................................... A-23
5.18 Subsequent Amendments of Disclosure Schedules............................ A-23
5.19 Establishment of Applications Group...................................... A-23
5.20 Satisfaction of WordPerfect Obligations.................................. A-23
5.21 Continued Nomination of Directors........................................ A-23
5.22 Other Transactions....................................................... A-24
ARTICLE VI -- CONDITIONS PRECEDENT................................................... A-24
6.1 Conditions to Each Party's Obligation to Effect the Merger............... A-24
6.2 Conditions of Obligations of Novell and Sub.............................. A-24
6.3 Conditions of Obligation of WordPerfect.................................. A-25
(ii)
131
PAGE
----
ARTICLE VII -- TERMINATION........................................................... A-26
7.1 Termination.............................................................. A-26
7.2 Effect of Termination.................................................... A-27
ARTICLE VIII -- GENERAL PROVISIONS................................................... A-27
8.1 Nonsurvival of Representations, Warranties and Agreements................ A-27
8.2 Amendment................................................................ A-27
8.3 Expenses................................................................. A-27
8.4 Extension; Waiver........................................................ A-28
8.5 Notices.................................................................. A-28
8.6 Interpretation........................................................... A-28
8.7 Counterparts............................................................. A-29
8.8 Entire Agreement......................................................... A-29
8.9 No Transfer.............................................................. A-29
8.10 Severability............................................................. A-29
8.11 Other Remedies........................................................... A-29
8.12 Further Assurances....................................................... A-29
8.13 Absence of Third Party Beneficiary Rights................................ A-29
8.14 Mutual Drafting.......................................................... A-29
8.15 Governing Law............................................................ A-29
Exhibit 1.1 Articles of Merger
Exhibit 5.6 Form of Shareholder Agreement
Exhibit 5.12 Form of Affiliates Agreement
Exhibit 6.2(j) Form of Tax Matters Agreement
(iii)
132
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
March 21, 1994, is entered into by and among NOVELL, INC., a Delaware
corporation ("Novell"), NOVELL ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of Novell ("Sub"), and WORDPERFECT CORPORATION., a Utah
corporation ("WordPerfect"). Alan C. Ashton ("Ashton"), Bruce W. Bastian ("Mr.
Bastian"), and Melanie L. Bastian ("Ms. Bastian") shareholders of WordPerfect,
are parties to this Agreement only for purposes of Section 5.3. Novell and
WordPerfect are sometimes referred to as a "Company" or the "Companies."
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
mutual covenants and agreements contained herein, Novell, Sub and WordPerfect
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 Merger; Effective Time. Subject to the terms and conditions of this
Agreement and of the Articles of Merger attached as Exhibit 1.1 (the "Articles
of Merger"), Sub will be merged into WordPerfect (the "Merger") in accordance
with the Utah Revised Business Corporation Act (the "URBCA"). The Articles of
Merger provide, among other things, the mode of effecting the Merger and the
manner and basis of converting each issued and outstanding share of capital
stock of WordPerfect into shares of Common Stock of Novell ("Novell Common
Stock").
Subject to the provisions of this Agreement and the Articles of Merger, the
Articles of Merger, together with required officers' certificates, shall be
filed in accordance with the URBCA on the Closing Date (as defined in Section
1.2). The Merger shall become effective upon confirmation of such filing of the
Articles of Merger and such officers' certificates (the date of confirmation of
such filing is referred to as the "Effective Date" and the time of confirmation
of such filing is referred to as the "Effective Time").
1.2 Closing. The closing of the Merger (the "Closing") will take place as
soon as practicable on the later of (x) the date of the Shareholders' Meeting
referred to in Section 5.6 or (y) the first business day after satisfaction or
waiver of the latest to occur of the conditions set forth in Article VI (the
"Closing Date"), at the offices of Wilson, Sonsini, Goodrich & Rosati, Two Palo
Alto Square, Palo Alto, California 94306, unless a different date or place is
agreed to in writing by the parties hereto.
1.3 Effects of the Merger. At the Effective Time, (i) the separate
existence of Sub shall cease and Sub shall be merged with and into WordPerfect
(Sub and WordPerfect are sometimes referred to as the "Constituent Corporations"
and WordPerfect after the Merger is sometimes referred to as the "Surviving
Corporation"), (ii) the Articles of Incorporation of WordPerfect shall be the
Articles of Incorporation of the Surviving Corporation, except that such
Articles of Incorporation shall be amended to provide that the authorized
capital stock of the Surviving Corporation shall be 1,000,000 shares of Common
Stock, (iii) the Bylaws of WordPerfect shall be the Bylaws of the Surviving
Corporation, (iv) the directors of Sub shall be the directors of the Surviving
Corporation, (v) the officers of WordPerfect shall be the officers of the
Surviving Corporation; and (vi) the Merger shall, from and after the Effective
Time, have all the effects provided by applicable law, this Agreement and the
Articles of Merger.
1.4 Tax-Free Reorganization; Pooling of Interests. The Merger is intended
to be a reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code"), and to be accounted for as a pooling of
interests pursuant to Opinion No. 16 of the Accounting Principles Board.
133
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of capital
stock of WordPerfect:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall continue to be issued and outstanding and shall be
converted into one share of validly issued, fully paid and non-assessable
Common Stock of the Surviving Corporation. Each stock certificate of Sub
evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the Surviving Corporation.
(b) Cancellation of Certain Shares of Capital Stock of
WordPerfect. All shares of capital stock of WordPerfect that are owned
directly or indirectly by WordPerfect or by any Subsidiary (as defined
below) of WordPerfect and any shares of capital stock of WordPerfect owned
by Novell, Sub or any other Subsidiary of Novell shall be cancelled and no
stock of Novell or other consideration shall be delivered in exchange
therefor. In this Agreement, a "Subsidiary" means a corporation or other
entity whose voting securities are owned or are otherwise controlled
directly or indirectly by a parent corporation or other intermediary entity
in an amount sufficient to elect at least a majority of the Board of
Directors or other managers of such corporation or other entity.
(c) Conversion of Capital Stock of WordPerfect. Each issued and
outstanding share of WordPerfect Common Stock (other than shares to be
canceled pursuant to Section 2.1(b) and shares, if any, held by persons
exercising dissenters' rights in accordance with the URBCA ("Dissenting
Shares")), including shares issuable upon the exercise of any WordPerfect
Option (as defined in Section 3.2 below) prior to the Effective Time, that
are issued and outstanding immediately prior to the Effective Time (other
than Dissenting Shares) shall automatically be canceled and extinguished
and converted, without any action on the part of the holder thereof, into
the right to receive one share of Novell Common Stock. The ratio pursuant
to which each share of capital stock of WordPerfect will be exchanged for
one share of Novell Common Stock, determined in accordance with the
foregoing provisions, is referred to as the "Exchange Ratio."
(d) Adjustment of Exchange Ratio. If, between the date of this
Agreement and the Effective Time, the outstanding shares of Novell Common
Stock shall have been changed into a different number of shares or a
different class by reason of any reclassification, split-up, stock
dividend, stock combination, then the Exchange Ratio shall be
correspondingly adjusted.
(e) Dissenters' Rights. If holders of capital stock of WordPerfect are
entitled to dissenters' rights in connection with the Merger under Part 13
of the URBCA, any Dissenting Shares shall not be converted into Novell
Common Stock but shall be converted into the right to receive such
consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to the law of the State of Utah. WordPerfect
shall give Novell prompt notice of any demand received by WordPerfect to
require WordPerfect to purchase shares of capital stock of WordPerfect, and
Novell shall have the right to participate in all negotiations and
proceedings with respect to such demand. WordPerfect agrees that, except
with the prior written consent of Novell, or as required under the URBCA,
it will not voluntarily make any payment with respect to, or settle or
offer to settle, any such purchase demand. Each holder of Dissenting Shares
("Dissenting Shareholder") who, pursuant to the provisions of the URBCA,
becomes entitled to payment of the value of shares of capital stock of
WordPerfect shall receive payment therefor (but only after the value
therefor shall have been agreed upon or finally determined pursuant to such
provisions). In the event of legal obligation, after the Effective Time, to
deliver shares of Novell Common Stock to any holder of shares of capital
stock of WordPerfect who shall have failed to make an effective purchase
demand or shall have lost its status as a Dissenting Shareholder, Novell
shall issue and deliver, upon surrender by such Dissenting Shareholder of
such holder's certificate or certificates representing
A-2
134
shares of capital stock of WordPerfect, the shares of Novell Common
Stock to which such Dissenting Shareholder is then entitled under this
Section 2.1 and the Articles of Merger.
(f) Fractional Shares. No fractional shares of Novell Common Stock
shall be issued, but in lieu thereof each holder of shares of capital stock
of WordPerfect who would otherwise be entitled to receive a fraction of a
share of Novell Common Stock shall receive from Novell an amount of cash
equal to the per share market value of Novell Common Stock (based on the
last sales price of Novell Common Stock as reported on the National Market
System of the National Association of Securities Dealers' Automated
Quotation System on the Effective Date of the Merger) multiplied by the
fraction of a share of Novell Common Stock to which such holder would
otherwise be entitled. The fractional share interests of each WordPerfect
shareholder shall be aggregated, so that no WordPerfect shareholder shall
receive cash in an amount greater than the value of one full share of
Novell Common Stock.
2.2 Exchange of Certificates.
(a) Exchange Agent. Prior to the Closing Date, Novell shall appoint Mellon
Bank, N.A. to act as exchange agent (the "Exchange Agent") in the Merger.
(b) Novell to Provide Common Stock. Promptly after the Effective Time,
Novell shall make available for exchange in accordance with this Article II and
the Articles of Merger, through such reasonable procedures as Novell may adopt,
the shares of Novell Common Stock issuable pursuant to Section 2.1 and the
Articles of Merger in exchange for outstanding shares of capital stock of
WordPerfect.
(c) Exchange Procedures. As soon as practicable after the Effective Time,
the Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of capital stock of WordPerfect (the "Certificates") whose
shares are being converted into Novell Common Stock pursuant to Section 2.1 and
the Articles of Merger, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Novell may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for Novell Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Novell, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange therefor
the number of shares of Novell Common Stock to which the holder of capital stock
of WordPerfect is entitled pursuant to Section 2.1 hereof. The Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of capital stock of WordPerfect which is not registered on the transfer records
of WordPerfect, the appropriate number of shares of Novell Common Stock may be
delivered to a transferee if the Certificate representing such capital stock of
WordPerfect is presented to the Exchange Agent and accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to represent the right to receive upon such surrender
the number of shares of Novell Common Stock as provided by this Article II and
the provisions of the URBCA.
(d) No Further Ownership Rights in Capital Stock of WordPerfect. All Novell
Common Stock delivered upon the surrender for exchange of shares of capital
stock of WordPerfect in accordance with the terms hereof shall be deemed to have
been delivered in full satisfaction of all rights pertaining to such shares of
capital stock of WordPerfect. There shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the shares
of capital stock of WordPerfect which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be cancelled and exchanged as
provided in this Article II.
A-3
135
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WORDPERFECT
Except as disclosed in a document referring specifically to the
representations and warranties in this Agreement which identifies the section
and subsection to which such disclosure relates and which is delivered by
WordPerfect to Novell prior to the execution of this Agreement (the "WordPerfect
Disclosure Schedule"), WordPerfect represents and warrants to Novell and Sub as
set forth below:
3.1 Organization, Standing and Power. Each of WordPerfect and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, and has all requisite
power and authority to own, operate and lease its properties and to carry on its
business as now being conducted. A true and complete list of such Subsidiaries
is set out in Schedule 3.1 hereto together with the jurisdiction of
incorporation of each Subsidiary. Each of WordPerfect and its Subsidiaries is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which the failure to so qualify would have a Material Adverse
Effect (as defined below). WordPerfect has no direct or indirect equity interest
in or loans to any partnership, corporation, joint venture, business association
or other entity other than WordPerfect's Subsidiaries and loans to entities
affiliated with employees of WordPerfect which in the aggregate do not exceed
$1,000,000. WordPerfect has delivered to Novell, or will deliver to Novell
within twenty one (21) days of the date hereof, complete and correct copies of
the Articles of Incorporation and Bylaws (or other organizational or charter
document) of WordPerfect and each of WordPerfect's Subsidiaries, in each case as
amended to the date hereof.
As used in this Agreement, the term "Material Adverse Effect" used in
connection with a party or any of such party's subsidiaries means any event,
change or effect that is materially adverse to the condition (financial or
otherwise), properties, assets, liabilities, businesses, operations, results of
operations or prospects of such party and its subsidiaries taken as a whole;
provided, however, that a change or deterioration in the financial condition,
assets, liabilities or results of operations of WordPerfect and its Subsidiaries
which is reflected in the financial projections delivered by WordPerfect to
Novell on March 17, 1994 (the "WordPerfect Financial Projections") will not be
deemed to constitute a Material Adverse Effect with respect to WordPerfect for
any purpose under this Agreement.
3.2 Capital Structure. The authorized capital stock of WordPerfect
consists of 200,000,000 shares of Common Stock, no par value ("WordPerfect
Common Stock"). At the close of business on March 18, 1994, there were
51,380,100 shares of WordPerfect Common Stock outstanding and 7,857,500 shares
of WordPerfect Common Stock were reserved for issuance upon the exercise of
outstanding employee stock options("WordPerfect Options"), pursuant to the
WordPerfect Corporation 1992 Long-Term Incentive Plan ("WordPerfect Option
Plan"). All outstanding shares of WordPerfect Common Stock are, and any shares
of WordPerfect Common Stock issued upon exercise of any WordPerfect Option will
be, validly issued, fully paid and nonassessable and not subject to preemptive
rights created by statute, WordPerfect's Articles of Incorporation or Bylaws or
any agreement to which WordPerfect or any of its Subsidiaries is a party or by
which WordPerfect or any of its Subsidiaries may be bound. Except for the shares
listed above issuable pursuant to WordPerfect Options, there are no options,
warrants, calls, conversion rights, commitments or agreements of any character
to which WordPerfect or any Subsidiary of WordPerfect is a party or by which any
of them may be bound that do or may obligate WordPerfect or any Subsidiary of
WordPerfect to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of the capital stock of WordPerfect or of any Subsidiary of
WordPerfect or that do or may obligate WordPerfect or any Subsidiary of
WordPerfect to grant, extend or enter into any such option, warrant, call,
conversion right, commitment or agreement. WordPerfect is, or will be prior to
the Closing, the owner of all outstanding shares of capital stock of each of its
Subsidiaries and all such shares are duly authorized, validly issued, fully paid
and nonassessable. WordPerfect is not under any obligation to register under the
Securities Act of 1993, as amended (the "Securities Act") any of its presently
outstanding securities or any securities that may subsequently be issued.
3.3 Authority. WordPerfect has all requisite corporate power and authority
to enter into this Agreement and the Articles of Merger and, subject to approval
of this Agreement and the Articles of Merger by the shareholders of WordPerfect,
to perform its obligations hereunder, and to consummate the transactions
A-4
136
contemplated hereby. The execution and delivery of this Agreement and the
Articles of Merger, the performance by WordPerfect of its obligations hereunder
and thereunder and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
on the part of WordPerfect, and have been unanimously approved by the Board of
Directors of WordPerfect. No other corporate proceeding on the part of
WordPerfect is necessary to authorize this Agreement or the Articles of Merger
or the performance of WordPerfect's obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, other than the
approval of the Merger by WordPerfect's shareholders. This Agreement and the
Articles of Merger have been duly executed and delivered by WordPerfect and
constitute legal, valid and binding obligations of WordPerfect enforceable
against WordPerfect in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought. Subject to satisfaction of
the conditions set forth in Article VI, the execution and delivery of this
Agreement and the Articles of Merger do not, and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
any violation of any material statute, law, rule, regulation, judgment, order,
decree, or ordinance applicable to WordPerfect or any Subsidiary of WordPerfect
or their respective properties or assets, or conflict with or result in any
breach or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of
a material lien or encumbrance on any of the properties or assets of WordPerfect
or any of its Subsidiaries pursuant to (i) any provision of the Articles of
Incorporation or Bylaws of WordPerfect or any Subsidiary of WordPerfect or (ii)
any material agreement, contract, note, mortgage, indenture, lease, instrument,
permit, concession, franchise or license to which WordPerfect or any of its
Subsidiaries is a party or by which WordPerfect or any of its Subsidiaries or
any of their properties or assets may be bound or affected. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency, commission, regulatory authority or
other governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity"), is required by or with respect to WordPerfect or any of
its Subsidiaries in connection with the execution and delivery of this Agreement
or the Articles of Merger by WordPerfect or the consummation by WordPerfect of
the transactions contemplated hereby or thereby, except for (i) the filing of a
premerger notification report by WordPerfect under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the
distribution of a proxy statement relating to the Shareholders' Meeting (the
"Proxy Statement") and the obtaining of the approval of the Merger by
WordPerfect's shareholders, (iii) the filing of the Articles of Merger with the
Utah Division of Corporations and Commercial Code and the Secretary of the State
of the State of Delaware and appropriate documents with the relevant authorities
of other states in which WordPerfect is qualified to do business, (iv) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under the laws of any foreign country, which if not
obtained or made would not have a Material Adverse Effect on WordPerfect and (v)
such other consents, authorizations, filings, approvals and registrations which
if not obtained or made would not have a Material Adverse Effect on WordPerfect.
3.4 Financial Statements. WordPerfect has furnished Novell with its
financial statements for each of the fiscal years ended December 31, 1991, 1992
and 1993, including a consolidated balance sheet of WordPerfect and its
consolidated Subsidiaries as at each of the fiscal years ended December 31,
1991, 1992 and 1993 (collectively, the "WordPerfect Financial Statements"). The
WordPerfect Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently applied (except as may be indicated
in the notes thereto), and fairly present the consolidated financial position of
WordPerfect and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and changes in financial position for
the periods then ended. WordPerfect will provide in a timely manner audited
WordPerfect Financial Statements and any interim financial statements required
in connection with the filing of any registration statement relating to the
transactions contemplated hereby. All reserves established by WordPerfect with
respect to assets of WordPerfect are adequate. There has been no change in
WordPerfect's accounting policies, except as described in the notes to the
WordPerfect Financial Statements.
A-5
137
3.5 Compliance with Law. Each of WordPerfect and its Subsidiaries is in
compliance and has conducted its business so as to comply with all laws, rules
and regulations, judgments, decrees or orders of any Governmental Entity
applicable to its operations or with respect to which compliance is a condition
of engaging in the business thereof, except to the extent that failure to comply
would, individually or in the aggregate, not have had and is reasonably expected
not to have a Material Adverse Effect on WordPerfect. There are no material
judgments or orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency or by arbitration) against
WordPerfect or any Subsidiary of WordPerfect or against any of their respective
properties or businesses.
3.6 No Defaults. Neither WordPerfect nor any Subsidiary of WordPerfect is,
or has received notice that it would be with the passage of time, (i) in
violation of any provision of the Articles of Incorporation or Bylaws (or other
organizational or charter document) of WordPerfect or any Subsidiary of
WordPerfect or (ii) in default or violation of any term, condition or provision
of (A) any material judgment, decree, order, injunction or stipulation
applicable to WordPerfect or any Subsidiary of WordPerfect or (B) any material
agreement, note, mortgage, indenture, contract, lease or instrument, permit,
concession, franchise or license to which WordPerfect or any Subsidiary of
WordPerfect is a party or by which WordPerfect or any of its Subsidiaries or
their properties or assets may be bound.
3.7 Litigation. There is no action, suit, proceeding, claim or
investigation pending or, to the best knowledge of WordPerfect, threatened,
against WordPerfect or any of its Subsidiaries which could, individually or in
the aggregate, have a Material Adverse Effect or which in any manner challenges
or seeks to prevent, enjoin, alter or delay any of the transactions contemplated
hereby. The WordPerfect Disclosure Schedule sets forth with respect to each
pending action, suit, proceeding, claim or investigation to which WordPerfect or
any of its Subsidiaries is a party to the extent that the aggregate damages
claimed for all such complaints exceed $10,000,000, the forum, the parties
thereto, a brief description of the subject matter thereof and the amount of
damages claimed. WordPerfect has delivered to, or will deliver within twenty one
(21) days of the date hereof to Novell correct and complete copies of all
correspondence prepared by its counsel for WordPerfect's independent public
accountants in connection with the last three completed audits of WordPerfect's
financial statements and any such correspondence since the date of the last such
audit.
3.8 No Material Adverse Effect. Since December 31, 1993, WordPerfect and
its Subsidiaries have conducted their respective businesses in the ordinary
course and there has not occurred:
(a) Any Material Adverse Effect with respect to WordPerfect;
(b) Any amendments or changes in the Articles of Incorporation or
Bylaws of WordPerfect or any of its Subsidiaries other than in connection
with a consolidation of its business units prior to the date of this
Agreement in the manner previously disclosed to Novell;
(c) Any damage, destruction or loss, whether covered by insurance or
not, that could reasonably constitute a Material Adverse Effect;
(d) Any redemption, repurchase or other acquisition of shares of
capital stock of WordPerfect or its Subsidiaries by WordPerfect or its
Subsidiaries (other than pursuant to arrangements with terminated employees
or consultants), or any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with
respect to the capital stock of WordPerfect or its Subsidiaries;
(e) Any increase in or modification of the compensation or benefits
payable or to become payable by WordPerfect or any Subsidiary to any of
their directors or employees, except in the ordinary course of business
consistent with past practice;
(f) Any increase in or modification of any bonus, pension, insurance
or other employee benefit plan, payment or arrangement (including, but not
limited to, the granting of stock options, restricted stock awards or stock
appreciation rights) made to, for or with any of its employees, except in
the ordinary course of business consistent with WordPerfect's past
practice;
A-6
138
(g) Any acquisition or sale of a material amount of property or assets
of WordPerfect or any of its Subsidiaries;
(h) Any alteration in any term of any outstanding security of
WordPerfect or any of its Subsidiaries;
(i) Any (A) incurrence, assumption or guarantee by WordPerfect or any
of its Subsidiaries of any debt for borrowed money; (B) issuance or sale of
any securities convertible into or exchangeable for debt securities of
WordPerfect or any of its Subsidiaries; or (C) issuance or sale of options
or other rights to acquire from WordPerfect or any of its Subsidiaries,
directly or indirectly, debt securities of WordPerfect or any of its
Subsidiaries or any securities convertible into or exchangeable for any
such debt securities;
(j) Any creation or assumption by WordPerfect or any of its
Subsidiaries of any mortgage, pledge, security interest or lien or other
encumbrance on any asset (other than liens arising under existing lease
financing arrangements or liens arising in the ordinary course of
WordPerfect's business which in the aggregate are not material and liens
for taxes not yet due and payable);
(k) Any making of any loan, advance or capital contribution to or
investment in any person other than (A) loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries of
WordPerfect, (B) travel loans or advances made in the ordinary course of
business of WordPerfect and its Subsidiaries and (C) loans to entities
affiliated with its employees prior to the date of this Agreement which do
not exceed $1,000,000 in the aggregate;
(l) Any entry into, amendment of, relinquishment, termination or
non-renewal by WordPerfect or any of its Subsidiaries of any contract,
lease transaction, commitment or other right or obligation requiring
aggregate payments by WordPerfect in excess of $10,000,000 other than in
the ordinary course of business;
(m) Any transfer or grant of a right under the WordPerfect
Intellectual Property Rights (as defined in Section 3.16), other than those
transferred or granted in the ordinary course of business consistent with
past practice;
(n) Any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of WordPerfect or any of its Subsidiaries; or
(o) Any agreement or arrangement made by WordPerfect or any of its
Subsidiaries to take any action which, if taken prior to the date hereof,
would have made any representation or warranty set forth in this Section
3.8 untrue or incorrect as of the date when made.
3.9 Absence of Undisclosed Liabilities. WordPerfect and its Subsidiaries
have no liabilities or obligations (whether absolute, accrued or contingent, and
whether or not determined or determinable), of a character which, under
generally accepted accounting principles, should be accrued, shown or disclosed
on a balance sheet of WordPerfect (including the footnotes thereto) except
liabilities (i) adequately provided for in the WordPerfect Balance Sheet, (ii)
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected on the WordPerfect Balance Sheet
or (iii) incurred since the date of the WordPerfect Balance Sheet which are not,
individually or in the aggregate, material.
3.10 Information Supplied. None of the information supplied or to be
supplied by WordPerfect for inclusion in the Registration Statement on Form S-4
to be filed with the Securities and Exchange Commission (the "SEC") by Novell in
connection with the issuance of the Novell Common Stock in or as a result of the
Merger (the "S-4"), including the Proxy Statement included therein, at the date
such information is supplied and at the time of the Shareholders' Meeting,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading or will, in the case of the S-4 at the time
the S-4 becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
A-7
139
3.11 Certain Agreements. Neither the execution and delivery of this
Agreement or the Articles of Merger nor the consummation of the transactions
contemplated hereby or thereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute,
bonus or otherwise) becoming due to any director or employee of WordPerfect or
its Subsidiaries from WordPerfect or its Subsidiaries, under any Plan (as
defined in Section 3.12) or otherwise, (ii) materially increase any benefits
otherwise payable under any Plan, or (iii) result in the acceleration of the
time of payment or vesting of any such benefits, other than the acceleration of
the WordPerfect Options.
3.12 ERISA. All material employee benefit plans, programs, policies or
arrangements covering any active, former or retired employee of WordPerfect or
its Subsidiaries are listed in the WordPerfect Disclosure Schedule (the
"Plans"). To the extent applicable, the Plans comply with the requirements of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
the Code, and any Plan intended to be qualified under Section 401(a) of the Code
has either obtained a favorable determination letter as to its qualified status
from the Internal Revenue Service or still has a remaining period of time under
applicable Treasury Regulations or Internal Revenue Service pronouncements in
which to apply for such determination letter and to make any amendments
necessary to obtain a favorable determination. To the extent any Plan with an
existing determination letter from the Internal Revenue Service must be amended
to comply with the applicable requirements of the Tax Reform Act of 1986 and
subsequent legislation, the time period for effecting such amendments will not
expire prior to the Merger. WordPerfect has furnished or will furnish within
twenty one (21) days of the date hereof, Novell with copies of the most recent
Internal Revenue Service letters and Forms 5500 with respect to any such Plan.
No Plan is covered by Title IV of ERISA or Section 412 of the Code. Neither
WordPerfect, its Subsidiaries nor any officer or director of WordPerfect or any
of its Subsidiaries has incurred any liability or penalty under Sections 4975
through 4980 of the Code or Title I of ERISA. Each Plan has been maintained and
administered in all material respects in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to such
Plans. No suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of Plan activities) has been brought, or to the
best knowledge of WordPerfect is threatened, against or with respect to any such
Plan. All material contributions, reserves or premium payments required to be
made or accrued as of the date hereof to the Plans have been made or accrued.
3.13 Major Contracts. Neither WordPerfect nor any of its Subsidiaries is a
party to or subject to:
(a) Any union contract or any employment contract or arrangement
providing for future compensation, written or oral, with any officer,
consultant, director or employee which is not terminable by it or its
Subsidiary on 30 days' notice or less without penalty or obligation to make
payments related to such termination, other than (A) (in the case of
employees other than executive officers) such agreements as are not
materially different from standard arrangements offered to employees
generally in the ordinary course of business consistent with WordPerfect's
past practices, copies of which have been provided, or will be provided
within twenty one (21) days of the date hereof to Novell and (B) such
agreements as may be imposed or implied by law;
(b) Any plans, contracts or arrangements which collectively require
aggregate payments by WordPerfect in excess of $500,000, written or oral,
providing for bonuses, pensions, deferred compensation, severance pay or
benefits, retirement payments, profit-sharing, or the like;
(c) Any joint venture contract or arrangement or any other agreement
which has involved or is expected to involve a sharing of profits with
other persons;
(d) Any existing OEM agreement, distribution agreement, volume
purchase agreement, or other similar agreement in which the annual amount
involved in 1993 exceeded or is expected to exceed in fiscal 1994
$10,000,000 in aggregate amount or pursuant to which WordPerfect has
granted or received exclusive marketing rights related to any product,
group of products or territory;
(e) Any lease for real or personal property in which the amount of
payments which WordPerfect is required to make on an annual basis exceeds
$1,000,000.
A-8
140
(f) Any material agreement, contract, mortgage, indenture, lease,
instrument, license, franchise, permit, concession, arrangement, commitment
or authorization which may be, by its terms, terminated or breached by
reason of the execution of this Agreement, the Articles of Merger, the
closing of the Merger, or the transactions contemplated hereby or thereby;
(g) Except for trade indebtedness incurred in the ordinary course of
business, any instrument evidencing or related in any way to indebtedness
in excess of $10,000,000 incurred in the acquisition of companies or other
entities or indebtedness in excess of $10,000,000 for borrowed money by way
of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee, or otherwise;
(h) Any material license agreement, either as licensor or licensee
(excluding nonexclusive software licenses granted to customers or end-users
in the ordinary course of business) involving the payment of at least
$1,000,000;
(i) Any contract containing covenants purporting to limit
WordPerfect's freedom or that of any of its Subsidiaries to compete in any
line of business in any geographic area; or
(j) Any other agreement, contract or commitment which is material to
WordPerfect and its Subsidiaries taken as a whole.
Each agreement, contract, mortgage, indenture, plan, lease, instrument,
permit, concession, franchise, arrangement, license and commitment listed in the
WordPerfect Disclosure Schedule pursuant to this Section 3.13 is valid and
binding on WordPerfect or its Subsidiaries, as applicable, and is in full force
and effect, and neither WordPerfect nor any of its Subsidiaries, nor to the
knowledge of WordPerfect, any other party thereto, has breached any material
provision of, or is in material default under the terms of, any such agreement,
contract, mortgage, indenture, plan, lease, instrument, permit, concession,
franchise, arrangement, license or commitment.
3.14 Taxes.
(a) All Tax (as defined below) returns, statements, reports and forms
(including estimated Tax returns and reports and information returns and
reports) required to be filed with any Taxing Authority (as defined below) with
respect to any Taxable period ending on or before the Effective Time, by or on
behalf of WordPerfect or any of its Subsidiaries (collectively, the "WordPerfect
Returns"), have been or will be filed when due in accordance with all applicable
laws (including any extensions of such due date), and all amounts shown due
thereon have been paid or have been fully accrued on the WordPerfect Financial
Statements in accordance with generally accepted accounting principles. Except
to the extent provided for or disclosed in the WordPerfect Financial Statements
(including notes thereto), the WordPerfect Returns correctly reflect in all
material respects (and, as to any WordPerfect Returns not filed as of the date
hereof but filed prior to the Merger, will correctly reflect in all material
respects) the Tax liability and status of WordPerfect and its Subsidiaries
(including each such corporation's status as an S corporation within the meaning
of Section 1361 of the Code or any comparable provision under state law).
WordPerfect and its Subsidiaries have withheld and paid to the applicable
financial institution or Taxing Authority all amounts required to be withheld.
All WordPerfect Returns pertaining to federal income tax filed with respect to
Taxable years of WordPerfect and its Subsidiaries through the Taxable year ended
December 31, 1990 in the case of the United States, have been examined and
closed or are WordPerfect Returns with respect to which the applicable period
for assessment under applicable law, after giving effect to extensions or
waivers, has expired. Neither WordPerfect nor any of its Subsidiaries (or any
member of any affiliated or combined group of which WordPerfect or any of its
Subsidiaries has been a member) has granted any extension or waiver of the
limitation period applicable to any WordPerfect Returns. There is no claim,
audit, action, suit, proceeding, or investigation now pending or (to the best
knowledge of WordPerfect or any of its Subsidiaries) threatened against or with
respect to WordPerfect or any of its Subsidiaries in respect of any Tax or
assessment. No notice of deficiency or similar document of any Tax Authority has
been received by WordPerfect or any of its Subsidiaries, and there are no
liabilities for Taxes (including liabilities for interest, additions to tax and
penalties thereon and related expenses) with respect to the issues that have
been raised (and are currently pending) by any Tax Authority that could, if
determined adversely to WordPerfect or any of its Subsidiaries, materially
affect the liability of
A-9
141
WordPerfect or any of its Subsidiaries for Taxes in other Taxable (as defined
below) periods. Neither WordPerfect nor any of its Subsidiaries, nor any other
person on behalf of WordPerfect or any of its Subsidiaries, has entered into nor
will it enter into any agreement or consent pursuant to Section 341(f) of the
Code. There are no liens for Taxes upon the assets of WordPerfect or any of its
Subsidiaries except liens for current Taxes not yet due. Neither WordPerfect nor
any of its Subsidiaries has been or will be required to include any material
adjustment in Taxable income for any Tax period (or portion thereof) pursuant to
Section 481 or 263A of the Code or any comparable provision under state or
foreign Tax laws as a result of transactions, events or accounting methods
employed prior to the Closing. There is no contract, agreement, plan or
arrangement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of WordPerfect or any of its
Subsidiaries that, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to Section 162 (as
unreasonable compensation) or pursuant to Section 280G of the Code. WordPerfect
and its Subsidiaries have provided or made available to Novell or its designated
representative true and correct copies of all material Tax Returns, and, as
reasonably requested by Novell prior to or following the date hereof,
information statements, reports, work papers, Tax opinions and memoranda and
other Tax data and documents. WordPerfect has not been within the five year
period preceding the date hereof a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code. Neither
WordPerfect nor any of its Subsidiaries is a party to (or obligated under) any
Tax allocation, Tax distribution, tax sharing, tax indemnity or similar
agreement or arrangement with respect to any tax (including without limitation
any such agreement or arrangement imposed by operation of law).
(b) For purposes of this Agreement, the following terms have the following
meanings: "Tax" (and, with correlative meaning, "Taxes" and "Taxable") means (A)
any net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Entity (a "Taxing Authority") responsible for the imposition of any
such tax (domestic or foreign), (B) any liability for the payment of any amounts
of the type described in (A) as a result of being a member of an affiliated,
consolidated, combined or unitary group for any Taxable period and (C) any
liability for the payment of any amounts of the type described in (A) or (B) as
a result of any express or implied obligation to indemnify any other person.
3.15 Interests of Officers and Directors. Except as disclosed in a
supplemental schedule to be delivered to Novell within 21 days following the
date of this Agreement, no officer or director of WordPerfect or any "affiliate"
or "associate" (as those terms are defined in Rule 405 promulgated under the
Securities Act) of any such person has had, either directly or indirectly, a
material interest in: (i) any person or entity which purchases from or sells,
licenses or furnishes to WordPerfect or any of its Subsidiaries any goods,
property, technology or intellectual or other property rights or services; (ii)
any any contract or agreement to which WordPerfect or any of its Subsidiaries is
a party or by which it may be bound or affected; or (iii) any property, real or
personal, tangible or intangible, used in or pertaining to its business or that
of its Subsidiaries, including any interest in the WordPerfect Intellectual
Property Rights, except for rights as a shareholder, and except for rights under
any Plan.
3.16 Intellectual Property.
(a) WordPerfect owns, or is licensed or otherwise entitled to exercise,
without restriction, all rights to, all patents, trademarks, trade names,
service marks, copyrights, mask work rights, trade secret rights and other
intellectual property rights, and any applications or registrations therefor,
and all mask works, net lists, schematics, technology, source code, know-how,
computer software programs and all other tangible and intangible information or
material, that are used or currently proposed to be used in the business of
WordPerfect and its Subsidiaries as currently conducted or as currently proposed
to be conducted (collectively, the "WordPerfect Intellectual Property Rights").
A-10
142
(b) The WordPerfect Disclosure Schedule lists all patents, registered and
unregistered copyrights, trade names, trademarks, service marks and other
company, product or service identifiers and mask work rights, and any
applications or registrations therefor, included in the WordPerfect Intellectual
Property Rights, together with a list of all of WordPerfect's currently marketed
products and an indication as to which, if any, of such products have been
registered for copyright protection with the United States Copyright Office and
any foreign offices.
(c) Neither WordPerfect nor any of its Subsidiaries is, or as a result of
the execution and delivery of this Agreement or the performance of WordPerfect's
obligations hereunder will be, in violation of, or lose any rights pursuant to
any license, sublicense or agreement described in the WordPerfect Disclosure
Schedule.
(d) WordPerfect or one of its Subsidiaries is the owner or licensee of,
with all necessary right, title and interest in and to (free and clear of any
liens, encumbrances or security interests), the WordPerfect Intellectual
Property Rights and has rights (and except as set forth in the WordPerfect
Disclosure Schedule is not contractually obligated to pay any compensation to
any third party in respect thereof) in an amount in excess of $1,000,000 to the
use thereof or the material covered thereby in connection with the services or
products in respect of which the WordPerfect Intellectual Property Rights are
being used.
(e) No claims with respect to the WordPerfect Intellectual Property Rights
have been asserted or, to the best knowledge of WordPerfect, after reasonable
investigation, are threatened by any person, and WordPerfect knows of no claims
(i) to the effect that the manufacture, sale or use of any product as now used
or offered or proposed for use or sale by WordPerfect or any Subsidiary of
WordPerfect infringes any copyright, patent, trade secret, or other intellectual
property right, (ii) against the use by WordPerfect or Subsidiary of WordPerfect
of any WordPerfect Intellectual Property Rights, or (iii) challenging the
ownership, validity or effectiveness of any of the WordPerfect Intellectual
Property Rights.
(f) All patents and registered trademarks, service marks, and other
company, product or service identifiers and registered copyrights held by
WordPerfect are valid and subsisting.
(g) To the best knowledge of WordPerfect, there has not been and there is
not now any material unauthorized use, infringement or misappropriation of any
of the WordPerfect Intellectual Property Rights by any third party, including
without limitation any employee or former employee of WordPerfect or any of its
Subsidiaries; neither WordPerfect nor any of its Subsidiaries has been sued or
charged in writing as a defendant in any claim, suit, action or proceeding which
involves a claim of infringement of any patents, trademarks, service marks,
copyrights or other intellectual property rights and which has not been finally
terminated prior to the date hereof; there are no such charges or claims
outstanding; and to the best knowledge of WordPerfect neither WordPerfect nor
any of its Subsidiaries has any infringement liability with respect to any
patent, trademark, service mark, copyright or other intellectual property right
of another.
(h) No WordPerfect Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting in any
manner the licensing thereof by WordPerfect or any of its Subsidiaries. Neither
WordPerfect nor any of its Subsidiaries has entered into any agreement to
indemnify any other person against any charge of infringement of any WordPerfect
Intellectual Property Right. Neither WordPerfect nor any of its Subsidiaries has
entered into any agreement granting any third party the right to bring
infringement actions with respect to, or otherwise to enforce rights with
respect to, any WordPerfect Intellectual Property Right. WordPerfect and its
Subsidiaries have the exclusive right to file, prosecute and maintain all
applications and registrations with respect to the WordPerfect Intellectual
Property Rights.
3.17 Restrictions on Business Activities. There is no material agreement,
judgment, injunction, order or decree binding upon WordPerfect or any of its
Subsidiaries which has or could reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of WordPerfect or any
of its Subsidiaries, any acquisition of property by WordPerfect or any of its
Subsidiaries or the conduct of business by WordPerfect or any of its
Subsidiaries as currently conducted or as currently proposed to be conducted by
WordPerfect.
A-11
143
3.18 Title to Properties; Absence of Liens and Encumbrances; Condition of
Equipment.
(a) WordPerfect and its Subsidiaries have good and valid title to, or, in
the case of leased properties and assets, valid leasehold interests in, all of
their tangible properties and assets, real, personal and mixed, used in their
business, free and clear of any liens, charges, pledges, security interests or
other encumbrances, except as reflected in the WordPerfect Financial Statements
or except for such imperfections of title and encumbrances, if any, which are
not substantial in character, amount or extent, and which do not materially
detract from the value, or interfere with the present use, of the property
subject thereto or affected thereby.
(b) The equipment owned or leased by WordPerfect or its Subsidiaries is,
taken as a whole, (A) adequate for the conduct of the business of WordPerfect
and its Subsidiaries consistent with their past practice, (B) suitable for the
uses to which it is currently employed, (C) in good operating condition, (D)
regularly and properly maintained, (E) not obsolete, dangerous or in need of
renewal or replacement, except for renewal or replacement in the ordinary course
of business, and (F) free from any defects, except, with respect to clauses (B)
through (E) above, as would not have a Material Adverse Effect.
3.19 Governmental Authorizations and Licenses. Each of WordPerfect and its
Subsidiaries is the holder of all licenses, authorizations, permits,
concessions, certificates and other franchises of any Governmental Entity
required to operate its business (collectively, the "Licenses"). The Licenses
are in full force and effect. There is not now pending, or to the best knowledge
of WordPerfect is there threatened, any action, suit, investigation or
proceeding against WordPerfect or any of its Subsidiaries before any
Governmental Entity with respect to the Licenses, nor is there any issued or
outstanding notice, order or complaint with respect to the violation by
WordPerfect or any of its Subsidiaries of the terms of any License or any rule
or regulation applicable thereto.
3.20 Environmental Matters.
(a) No substance that is regulated by any Governmental Entity or that has
been designated by any Governmental Entity to be radioactive, toxic, hazardous
or otherwise a danger to health or the environment (a "Hazardous Material") is
present in, on or under any property that WordPerfect or any of its Subsidiaries
has at any time owned, operated, occupied or leased.
(b) Neither WordPerfect nor any of its Subsidiaries has transported,
stored, used, manufactured, released or exposed its employees or any other
person to any Hazardous Material in violation of any applicable statute, rule,
regulation, order or law.
(c) WordPerfect and its Subsidiaries have obtained all permits, licenses
and other authorizations ("Environmental Permits") required to be obtained by
any of them under the laws of any Governmental Entity relating to pollution or
protection of the environment (collectively, "Environmental Laws"). All
Environmental Permits are in full force and effect. WordPerfect and its
Subsidiaries (A) are in compliance with all terms and conditions of the
Environmental Permits and (B) are in compliance in all material respects with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws or contained in any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or approved
thereunder. Neither WordPerfect nor any of its Subsidiaries has received any
notice or is aware of any past or present condition or practice of the
businesses conducted by WordPerfect or its present or former Subsidiaries which
forms or could form the basis of any claim, action, suit, proceeding, hearing or
investigation against WordPerfect or any of its Subsidiaries, arising out of the
manufacture, processing, distribution, use, treatment, storage, spill, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any Hazardous Material.
3.21 Insurance. WordPerfect maintains insurance policies and fidelity
bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of WordPerfect and its Subsidiaries
(collectively, the "Insurance Policies") which are of the type and in amounts
customarily carried by persons conducting businesses similar to those of
WordPerfect and its Subsidiaries. There is no material claim by WordPerfect or
any of its Subsidiaries pending under any of the material Insurance Policies as
to which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds. All
A-12
144
premiums payable under all such material Insurance Policies have been paid and
WordPerfect and its Subsidiaries are otherwise in full compliance with the terms
of such policies and bonds (or other policies and bonds providing substantially
similar insurance coverage). WordPerfect does not know of any threatened
termination of, or material premium increase with respect to, any of its
material Insurance Policies.
3.22 Board Approval. The Board of Directors of WordPerfect has, as of the
date hereof, unanimously (i) approved this Agreement and the Articles of Merger
and the transactions contemplated hereby and thereby, (ii) determined that the
Merger is in the best interests of the shareholders of WordPerfect and is on
terms that are fair to such shareholders and (iii) recommended that the
shareholders of WordPerfect approve this Agreement, the Articles of Merger and
the Merger.
3.23 Labor Matters. WordPerfect and its Subsidiaries are in compliance in
all material respects with all currently applicable laws and regulations
respecting employment, discrimination in employment, terms and conditions of
employment and wages and hours and occupational safety and health and employment
practices, and are not engaged in any unfair labor practice. Neither WordPerfect
nor any of its Subsidiaries has received any notice from any Governmental
Entity, and there has not been asserted before any Governmental Entity, any
claim, action or proceeding to which WordPerfect or any of its Subsidiaries is a
party or involving WordPerfect or any of its Subsidiaries, and there is neither
pending nor, to WordPerfect's best knowledge, threatened any investigation or
hearing concerning WordPerfect or any of its Subsidiaries arising out of or
based upon any such laws, regulations or practices.
3.24 Questionable Payments. Neither WordPerfect nor any of its
Subsidiaries nor to its best knowledge any director, officer or other employee
of WordPerfect or any of its Subsidiaries has: (i) made any payments or provided
services or other favors in the United States of America or in any foreign
country in order to obtain preferential treatment or consideration by any
Governmental Entity with respect to any aspect of the business of WordPerfect or
any of its Subsidiaries; or (ii) made any political contributions which would
not be lawful under the laws of the United States and the foreign country in
which such payments were made. Neither WordPerfect nor any of its Subsidiaries
nor to its best knowledge any director, officer or other employee of WordPerfect
or any of its Subsidiaries nor, to the best knowledge of WordPerfect, any
customer or supplier of any of them has been the subject of any inquiry or
investigation by any Governmental Entity in connection with payments or benefits
or other favors to or for the benefit of any governmental or armed services
official, agent, representative or employee with respect to any aspect of the
business of WordPerfect or its Subsidiaries or with respect to any political
contribution.
3.25 Accounting Matters. Neither WordPerfect nor any of its Subsidiaries
nor, to WordPerfect's best knowledge after reasonable inquiry, any of its
Affiliates (as defined in Section 5.12), has taken or agreed to take any action
that would adversely affect the ability of Novell to account for the business
combination to be effected by the Merger as a pooling of interests.
3.26 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement. In the event that the preceding
sentence is in any way inaccurate, WordPerfect agrees to indemnify and hold
harmless Novell from any liability for any commission or compensation in the
nature of a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which Novell or any of its officers,
partners, employees or representatives is responsible.
3.27 Disclosure. No representation or warranty made by WordPerfect in this
Agreement, nor any document, written information, statement, financial
statement, certificate, schedule or exhibit prepared and furnished or to be
prepared and furnished by WordPerfect or its representatives pursuant hereto or
in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished. To the best knowledge of WordPerfect after reasonable inquiry, there
is no event, fact or condition that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect that has not been set forth in
this Agreement or in the WordPerfect Disclosure Schedule. The WordPerfect
Financial Projections constitute WordPerfect's best estimate of the information
purported to be shown therein and WordPerfect reasonably
A-13
145
believes that there is a reasonable basis for such projections and is not aware
of any fact or information that would lead it to believe that such projections
are incorrect or misleading in any material respect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NOVELL AND SUB
Except as disclosed in a document referring specifically to the
representations and warranties in this Agreement which identifies the section
and subsection to which such disclosure relates and which is delivered by Novell
to WordPerfect prior to the execution of this Agreement (the "Novell Disclosure
Schedule"), Novell and Sub represent and warrant to, and agree with, WordPerfect
as follows:
4.1 Organization; Standing and Power. Each of Novell and Sub is a
corporation validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its businesses as now being
conducted. Novell has delivered to WordPerfect complete and correct copies of
the Certificate of Incorporation and Bylaws of Novell and the Articles of
Incorporation and Bylaws of Sub as amended to the date hereof.
4.2 Capital Structure. As of the date hereof the authorized capital stock
of Novell consists of 400,000,000 shares of Novell Common Stock, $.10 par value
and 500,000 shares of Novell Preferred Stock, $.10 par value. At the close of
business on January 29, 1994, 309,021,297 shares of Novell Common Stock were
outstanding, 27,978,621 shares of Novell Common Stock were reserved for issuance
upon the exercise of outstanding stock options ("Novell Options"), no shares of
Novell Common Stock were held by Novell in its treasury, and no shares of Novell
Preferred Stock were outstanding. All the outstanding shares of Novell Common
Stock are validly issued, fully paid, nonassessable and free of preemptive
rights except pursuant to rights issued under Novell's Stockholder Rights Plan.
The shares of Novell Common Stock issuable in connection with the Merger are
duly authorized and reserved for issuance and, when issued in accordance with
the terms of this Agreement and the Articles of Merger, will be validly issued,
fully paid, nonassessable and free of preemptive rights (other than any rights
which may be issued pursuant to Novell's Stockholder Rights Plan). As of the
date hereof, the authorized capital stock of Sub consists of 1,000,000 shares of
Common Stock, $0.01 par value, all of which are validly issued, fully paid and
nonassessable and owned by Novell. Except for the shares listed above issuable
pursuant to Novell Options, there are not any options, warrants, calls,
conversion rights, commitments or agreements of any character to which Novell or
any Subsidiary of Novell is a party or by which any of them may be bound
obligating Novell or any Subsidiary of Novell to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of the capital stock of
Novell or of any Subsidiary of Novell or obligating Novell or any Subsidiary of
Novell to grant, extend or enter into any such option, warrant, call, conversion
right, commitment or agreement.
4.3 Authority. Novell and Sub have all requisite corporate power and
authority to enter into this Agreement and, subject to any required stockholder
approval, to consummate the transactions contemplated hereby and by the Articles
of Merger. Sub has all requisite corporate power and authority to enter into the
Articles of Merger. The execution and delivery by Novell of this Agreement, and
by Sub of this Agreement and the Articles of Merger, and the consummation of the
transactions contemplated by this Agreement and the Articles of Merger have been
duly authorized by all necessary corporate action on the part of Novell and Sub.
This Agreement has been duly executed and delivered by Novell and Sub and
constitutes a valid and binding obligation of Novell and Sub enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies is subject to
the discretion of the court before which any proceeding therefor may be brought.
The Articles of Merger have been duly executed and delivered by Sub and
constitutes a valid and binding obligation of Sub enforceable in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency, or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies is subject to the discretion
of the court before which any proceeding therefor may be brought. Subject to
satisfaction of the conditions set forth in Article VI, the execution and
delivery of this Agreement and the Articles of Merger and the consummation of
the transactions contemplated hereby and thereby will not conflict with or
result in any
A-14
146
violation of any material statute, law, rule, regulation, judgment, order,
decree or ordinance applicable to Novell or any Subsidiary of Novell or their
respective properties or assets, or conflict with or result in any breach or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss of a material benefit, under (i) any provision of the Certificate of
Incorporation or Bylaws of Novell or any of its Subsidiaries or (ii) any
material agreement, contract, note, mortgage, indenture, lease, instrument,
permit, concession, franchise or license to which Novell or any of its
Subsidiaries is a party or by which Novell or any of its Subsidiaries or their
respective properties or assets may be bound or affected. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Novell or Sub in
connection with the execution and delivery of this Agreement and the Articles of
Merger or the consummation by Novell and Sub of the transactions contemplated
hereby or thereby, except for (i) the filing of a premerger notification report
by Novell and Sub under the HSR Act, (ii) the filing of the S-4 and such other
documents with, and the obtaining of such orders from, the SEC and various state
securities or "blue sky" authorities, and the making of such reports under the
Exchange Act, as are required in connection with the transactions contemplated
by this Agreement, (iii) the filing of the Articles of Merger with the Utah
Division of Corporations and Commercial Code and the Secretary of State of the
State of Delaware and appropriate documents with the relevant authorities of
other states in which Novell is qualified to do business, (iv) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under the laws of any foreign country which if not obtained or
made would not have a Material Adverse Effect and (v) such other consents,
authorizations, filings, approvals and registrations which if not obtained or
made would not have a Material Adverse Effect.
4.4 SEC Documents; Novell Financial Statements. Novell has furnished
WordPerfect with or made available to WordPerfect a true and complete copy of
each statement, annual, quarterly and other report, registration statement
(without exhibits) and definitive proxy statement filed by Novell with the SEC
since October 31, 1992 (the "Novell SEC Documents"). As of their respective
filing dates, the Novell SEC Documents complied in all material respects with
the requirements of the Exchange Act or the Securities Act, as the case may be,
and none of the Novell SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading, except to the extent corrected by a
subsequently filed Novell SEC Document. The financial statements of Novell
included in the Novell SEC Documents (the "Novell Financial Statements") comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles
consistently applied (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) and fairly
present the consolidated financial position of Novell and its consolidated
Subsidiaries at the dates thereof and the consolidated results of their
operations and changes in financial position for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring audit
adjustments, provided that the notes and accounts receivable are collectible in
the amounts shown thereon and inventories are not subject to write-down, except
in either case in an amount not material or for which Novell has provided
adequate reserves). There has been no change in Novell's accounting policies or
estimates except as described in the notes to the Novell Financial Statements.
4.5 Information Supplied. None of the information supplied by Novell or
Sub for inclusion in the Proxy Statement or the S-4, at the time such
information is supplied and at the time of the Shareholders' Meeting, contains
or will contain any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or will, in the case of the S-4, at the time the S-4
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
4.6 Litigation. There is no action, suit, proceeding, investigation or
claim pending or, to the best knowledge of Novell, threatened against Novell or
any of its Subsidiaries which could, individually or in the
A-15
147
aggregate, have a Material Adverse Effect or which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay any of the transactions
contemplated hereby.
4.7 No Defaults. Neither Novell nor any Subsidiary of Novell is, or has
received notice that it would be with the passage of time, (i) in violation of
any provision of the Certificate of Incorporation or Bylaws of Novell or any
Subsidiary of Novell; or (ii) in default or violation of any material term,
condition or provision of (A) any material judgment, decree, order, injunction
or stipulation applicable to Novell or any Subsidiary of Novell or (B) any
material agreement, note, mortgage, indenture, contract, lease or instrument,
permit, concession, franchise or license to which Novell or any Subsidiary of
Novell is a party or by which Novell or any of its Subsidiaries or their
properties or assets may be bound.
4.8 Opinion of Financial Advisor. Novell has been advised in writing by
its financial advisor, Morgan Stanley & Co., that in its opinion as of the date
hereof, the Exchange Ratio, when considered together with the transactions
contemplated hereby, is fair to Novell from a financial point of view.
4.9 Accounting Matters. Neither Novell nor any of its Subsidiaries nor, to
Novell's best knowledge after reasonable inquiry, any of its Affiliates (as
defined in (Section 5.12), has taken or agreed to take any action that would
adversely affect the ability of Novell to account for the business combination
to be effected by the Merger as a pooling of interests.
4.10 Brokers. No broker, finder or investment banker (other than Morgan
Stanley & Co.) is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement. Novell
agrees to indemnify and hold harmless WordPerfect from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
Novell or any of its officers, partners, employees or representatives is
responsible.
4.11 Disclosure. No representation or warranty made by Novell in this
Agreement, nor any document, written information, statement, financial
statement, certificate, schedule or exhibit prepared and furnished or to be
prepared and furnished by Novell or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished. To the best knowledge of Novell after reasonable inquiry, there is no
event, fact or condition that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect that has not been set forth in this
Agreement or in the Novell Disclosure Schedule.
ARTICLE V
CONDUCT AND TRANSACTIONS PRIOR TO
EFFECTIVE TIME; ADDITIONAL AGREEMENTS
5.1 Information and Access. Subject to and in accordance with the terms
and conditions of that certain letter agreement dated March 7, 1994, between
Novell and WordPerfect (the "Confidentiality Agreement"), from the date of this
Agreement and continuing until the Effective Time, each party shall afford and,
with respect to clause (b) below, such party shall cause its independent
auditors to afford, (a) to the officers, independent auditors, counsel and other
representatives of the other party reasonable access to the properties, books,
records (including Tax returns filed and those in preparation) and personnel of
such party and its Subsidiaries in order that the other party may have a full
opportunity to make such investigation as it reasonably desires to make of such
party and its Subsidiaries and (b) to the independent auditors of the other
Company, reasonable access to the audit work papers and other records of the
independent auditors of such party and its Subsidiaries. Additionally, subject
to and in accordance with the Confidentiality Agreement, each party and its
Subsidiaries will permit the other party to make such reasonable inspections of
such party and its Subsidiaries and their respective operations during normal
business hours as the other party may reasonably require and each party and its
Subsidiaries will cause its officers and the officers of its Subsidiaries to
furnish the other party with such financial and operating data and other
information with respect to the
A-16
148
business and properties of such party and its Subsidiaries as the other party
may from time to time reasonably request. WordPerfect further agrees to provide
Novell with the following information as soon as practicable following the date
of this Agreement:
(a) The jurisdictions in which each WordPerfect Intellectual Property
Right has been issued or registered or in which an application for such
issuance or registration has been filed, including the respective
registration or application numbers;
(b) all licenses, sublicenses and other agreements as to which
WordPerfect or any of its Subsidiaries is a party and pursuant to which
WordPerfect or any of its Subsidiaries or any other person is authorized to
use any WordPerfect Intellectual Property Right, including the identity of
all parties thereto, a description of the nature and subject matter
thereof, all material rights, restrictions, conditions, or other terms
pertaining to each WordPerfect Intellectual Property Right, the applicable
royalty or other consideration and the term thereof, and including the
extent to which rights with respect to WordPerfect Intellectual Property
Rights survive termination or expiration thereof (copies of all licenses,
sublicenses, and other agreements identified pursuant to this clause (b)
have previously been delivered by WordPerfect to Novell);
(c) all parties to whom WordPerfect has delivered copies of
WordPerfect source code, whether pursuant to an escrow arrangement or
otherwise, or parties who have the right to receive such source code;
(d) a true and complete list of all real property owned or leased by
WordPerfect or any of its Subsidiaries and the aggregate annual rental or
other fee payable under any such lease; and
(e) a true and complete list of all Environmental Permits.
No investigation pursuant to this Section 5.1 shall affect or otherwise obviate
or diminish any representations and warranties of any party or conditions to the
obligations of any party.
5.2 Conduct of Business of the Parties. During the period from the date of
this Agreement and continuing until the Effective Time or until the termination
of this Agreement pursuant to Section 7.1, the parties agree that (except to the
extent that the other parties have given their prior written consent):
(a) WordPerfect Conduct. WordPerfect and its Subsidiaries shall
conduct their respective businesses in the ordinary and usual course
consistent with past practice and shall use reasonable efforts to maintain
and preserve intact their business organizations, keep available the
services of their officers and employees and to maintain satisfactory
relations with licensors, licensees, suppliers, contractors, distributors,
customers and others having business relationships with them. Without
limiting the generality of the foregoing and except as expressly
contemplated by this Agreement, prior to the Effective Time, neither
WordPerfect nor any of its Subsidiaries shall, without the prior written
consent of Novell:
(i) declare, set aside or pay any dividends on or make any other
distribution (whether in cash, stock or property) in respect of any of
its capital stock except as permitted by subsection (iii) below;
(ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance or authorization of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock or repurchase, redeem or otherwise acquire any shares
of its capital stock;
(iii) issue, deliver, pledge, encumber or sell, or authorize or
propose the issuance, delivery, pledge, encumbrance or sale of, or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or rights, warrants or options to acquire,
any such shares of capital stock or other convertible securities (other
than the issuance of such capital stock upon the exercise or conversion
of WordPerfect Options, outstanding on the date of this Agreement in
accordance with their present terms); or except pursuant to mandatory
terms under options outstanding on the date hereof, accelerate, amend or
change the period of exercisability of options granted under the
WordPerfect Stock Option Plan or any other options, warrants or other
A-17
149
convertible securities or authorize cash payments in exchange for any
options granted under any of the WordPerfect Stock Option Plan or
authorize or propose any change in its equity capitalization;
(iv) cause or permit any amendments to its Articles of
Incorporation or Bylaws or other charter documents;
(v) acquire or agree to acquire by merging or consolidating with,
or by purchasing any material portion of the capital stock or assets of,
or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to the business condition of
WordPerfect and its Subsidiaries, taken as a whole;
(vi) sell, lease, pledge, license or otherwise dispose of or
encumber any of its assets or properties, except in the ordinary course
of business consistent with past practice (including, without
limitation, any indebtedness owed to it or any claims held by it);
(vii) except as contemplated by Section 5.20, transfer the stock of
any Subsidiary to any other Subsidiary or any assets or liabilities to
any new or, except in the ordinary course of business consistent with
past practice, existing Subsidiary;
(viii) incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any of its debt securities or
guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of others, or make loans or advances;
(ix) pay, discharge or satisfy any claims, liabilities or
obligations (whether absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities in the
ordinary course of business consistent with past practice of liabilities
reflected or reserved against in the consolidated financial statements
(or the notes thereto) of WordPerfect and its consolidated Subsidiaries;
(x) adopt or amend any Plan, or enter into or amend any employment,
severance, special pay arrangement with respect to termination of
employment or other similar arrangements or agreements with any of its
directors, officers or employees or increase the salaries or wage rates
of its employees other than pursuant to scheduled employee reviews under
WordPerfect's or any of its Subsidiaries' normal employee review cycle,
as the case may be, consistent with WordPerfect's past practices;
(xi) except in the ordinary course of business consistent with past
practices and other than transfers between or among WordPerfect and any
of its wholly-owned Subsidiaries, transfer to any person or entity any
rights to the WordPerfect Intellectual Property Rights;
(xii) enter into or amend any agreements pursuant to which any
other party is granted exclusive marketing or other rights of any type
or scope with respect to any products of WordPerfect or any of its
Subsidiaries;
(xiii) except in the ordinary course of business with prior notice
to Novell, violate, amend or otherwise modify the terms of any of the
contracts set forth on the WordPerfect Disclosure Schedule;
(xiv) commence a lawsuit other than for the routine collection of
bills;
(xv) change the accounting methods or practices followed by
WordPerfect or any of its Subsidiaries, including any change in any
assumption underlying, or method of calculating, any bad debt,
contingency or other reserve, except as may be required by changes in
generally accepted accounting principles make or change any material Tax
election, adopt or change any Tax accounting method, file any material
Tax return or any amendment to a material Tax return, enter into any
material closing agreement, settle any material Tax claim or assessment,
or consent to any extension or waiver of the limitation period
applicable to any material Tax claim or assessment, without the prior
consent of Novell, which consent will not be unreasonably withheld (for
purposes
A-18
150
of this covenant a "material" Tax Return, closing agreement, Tax
claim or assessment shall mean a Tax liability with respect to each
such item in excess of $500,000);
(xvi) take any action that would result in any of the
representations and warranties of WordPerfect set forth in this
Agreement becoming untrue or in any of the conditions to the Merger set
forth in Article VI not being satisfied;
(xvii) enter into any capital commitment or long term obligation
equal to or in excess of $500,000;
(xviii) authorize or propose any of the foregoing, or enter into
any contract, agreement, commitment or arrangement to do any of the
foregoing.
(b) Novell Conduct. Except in connection with transactions
contemplated by this Agreement, Novell shall not without the prior consent
of WordPerfect (i) amend the Certificate of Incorporation in any manner
which would adversely affect the rights of holders of Novell Common Stock,
or (ii) issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, or purchase or propose the purchase of, any shares of
its capital stock of any class or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements
or commitments of any character obligating it or any of its Subsidiaries to
issue any such shares or other convertible securities, except for the
issuance or proposed issuance of its capital stock or options to purchase
shares of its capital stock (A) in connection with a proposed business
combination, (B) in connection with privately negotiated sales of stock
pursuant to corporate partnering arrangements or (C) pursuant to stock
option grants or exercises or other employee stock benefit plans.
5.3 Negotiation With Others. WordPerfect will not, nor will Ashton, Mr.
Bastian or Ms. Bastian, directly or indirectly, through any officer, director,
other shareholder, affiliate or agent of WordPerfect or otherwise, solicit,
initiate, entertain, encourage or negotiate any proposals or offers from any
third party relating to the merger or acquisition of WordPerfect or a material
portion of its assets or capital stock of WordPerfect, including acquisition of
WordPerfect Common Stock (or voting agreements or proxies with respect thereto)
owned beneficially by Ashton, Mr. Bastian or Ms. Bastian, nor will WordPerfect,
Ashton, Mr. Bastian or Ms. Bastian, during this period participate in any
negotiations regarding, or furnish to any person any information with respect
to, or otherwise cooperate with, facilitate or encourage any effort or attempt
by any person to do or seek any such transaction. WordPerfect shall immediately
cease and cause to be terminated all such negotiations with the third parties
(other than Novell) which have occurred prior to the date of this Agreement.
5.4 Preparation of S-4 and the Proxy Statement; Other Filings. As promptly
as practicable after the date of this Agreement, WordPerfect shall provide to
Novell and its counsel for inclusion in the Prospectus/Proxy Statement on the
S-4 in form and substance satisfactory to Novell and its counsel, such
information concerning WordPerfect, its operations, capitalization, technology,
share ownership and other material as Novell or its counsel may reasonably
request. As promptly as practicable after the date of this Agreement, Novell
shall prepare and file with the SEC the S-4, in which the Proxy Statement will
be included as a prospectus. Each of Novell and WordPerfect shall use its
reasonable efforts to respond to any comments of the SEC, to have the S-4
declared effective under the Securities Act as promptly as practicable after
such filing and to cause the Proxy Statement to be mailed to WordPerfect's
shareholders at the earliest practicable time. As promptly as practicable after
the date of this Agreement, Novell and WordPerfect shall prepare and file any
other filings required under the Exchange Act, the Securities Act or any other
Federal or state securities or "blue sky" laws relating to the Merger and the
transactions contemplated by this Agreement and the Articles of Merger,
including, without limitation, under the HSR Act and State Takeover Laws (the
"Other Filings"). Each Company will notify the other Company promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff or any other government officials for amendments or supplements to
the S-4, the Proxy Statement or any Other Filing or for additional information
and will supply the other Company with copies of all correspondence between such
Company or any of its representatives, on the one hand, and the SEC, or its
staff or any other government officials, on the other hand, with respect to the
S-4, the Proxy Statement, the Merger or any Other Filing. The Proxy Statement,
the S-4 and the Other
A-19
151
Filings shall comply in all material respects with all applicable requirements
of law. Whenever any event occurs which should be set forth in an amendment or
supplement to the Proxy Statement, the S-4 or any Other Filing, Novell or
WordPerfect, as the case may be, shall promptly inform the other Company of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to shareholders of Novell and WordPerfect,
such amendment or supplement. The Proxy Statement shall include the unanimous
recommendation of the Board of Directors of WordPerfect that the shareholders of
WordPerfect approve the Merger.
5.5 Advice of Changes. Each Company shall confer on a regular and frequent
basis with the other Company, report on operational matters and promptly advise
the other orally and in writing of any change or event having, or which, insofar
as can reasonably be foreseen, could result in, a Material Adverse Effect with
respect to such Company. Each Company shall promptly provide the other Company
(or its counsel) copies of all filings made by such Company with any
Governmental Entity in connection with this Agreement, the Articles of Merger
and the transactions contemplated hereby and thereby.
5.6 Shareholder Approval. WordPerfect will call a meeting of its
shareholders (the "Shareholders' Meeting") to be held as promptly as practicable
for the purpose of obtaining the shareholder approval required in connection
with the transactions contemplated hereby and by the Articles of Merger and
shall use all reasonable efforts to obtain such approval. WordPerfect shall
coordinate and cooperate with Novell with respect to the timing of the
Shareholders Meeting. WordPerfect shall not change the date of the Shareholders
Meeting without the prior written consent of Novell, nor shall WordPerfect
adjourn the Shareholders Meeting without the prior written consent of Novell,
unless such adjournment is due to the lack of a quorum, in which case the
Chairman of the Shareholders Meeting shall announce at such meeting the time and
place of the adjourned meeting. Concurrently with the execution of this
Agreement, Ashton, Mr. Bastian and Ms. Bastian (collectively, the "WordPerfect
Principal Shareholders") shall have executed Shareholder Agreements in the form
of Exhibit 5.6 (the "Shareholder Agreements").
5.7 Agreements to Cooperate.
(a) WordPerfect shall take, and shall cause its Subsidiaries to take, all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on WordPerfect or its Subsidiaries with respect to the
Merger (including furnishing all information required under the HSR Act) and
shall take all reasonable actions necessary to cooperate promptly with and
furnish information to Novell in connection with any such requirements imposed
upon Novell or Sub or any Subsidiary of Novell or Sub in connection with the
Merger. WordPerfect shall take, and shall cause its Subsidiaries to take, all
reasonable actions necessary (i) to obtain (and will take all reasonable actions
necessary to promptly cooperate with Novell or Sub and their Subsidiaries in
obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity, or other third party, required to be obtained or
made by WordPerfect or any of its Subsidiaries (or by Novell or Sub or any of
their Subsidiaries) in connection with the Merger or the taking of any action
contemplated by this Agreement; (ii) to lift, rescind or mitigate the effect of
any injunction or restraining order or other order adversely affecting the
ability of WordPerfect to consummate the transactions contemplated hereby; (iii)
to fulfill all conditions applicable to WordPerfect pursuant to this Agreement;
and (iv) to prevent, with respect to a threatened or pending temporary,
preliminary or permanent injunction or other order, decree or ruling or statute,
rule, regulation or executive order, the entry, enactment or promulgation
thereof, as the case may be; provided, however, that WordPerfect shall not be
obligated to, nor shall WordPerfect be obligated to cause its Subsidiaries to,
dispose of or hold separate all or a material portion of the business or assets
of WordPerfect and its Subsidiaries, taken as a whole.
(b) Novell and Sub shall take, and shall cause their Subsidiaries to take,
all reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on them or their Subsidiaries with respect to the Merger
(including furnishing all information required under the HSR Act) and shall take
all reasonable actions necessary to cooperate promptly with and furnish
information to WordPerfect in connection with any such requirements imposed upon
WordPerfect or any Subsidiary of WordPerfect in connection with the Merger.
Novell and Sub shall take, and shall cause their Subsidiaries to take, all
reasonable actions necessary (i) to obtain (and will take all reasonable actions
necessary to promptly cooperate with
A-20
152
WordPerfect and its Subsidiaries in obtaining) any consent, authorization, order
or approval of, or any exemption by, any Governmental Entity, or other third
party, required to be obtained or made by Novell or Sub or any of their
Subsidiaries (or by WordPerfect or any of its Subsidiaries) in connection with
the Merger or the taking of any action contemplated by this Agreement; (ii) to
lift, rescind or mitigate the effect of any injunction or restraining order or
other order adversely affecting the ability of Novell or Sub to consummate the
transactions contemplated hereby; (iii) to fulfill all conditions applicable to
Novell or Sub pursuant to this Agreement; and (iv) to prevent, with respect to a
threatened or pending temporary, preliminary or permanent injunction or other
order, decree or ruling or statute, rule, regulation or executive order, the
entry, enactment or promulgation thereof, as the case may be; provided, however,
that Novell shall not be obligated to, nor shall Novell be obligated to cause
its Subsidiaries to, dispose of or hold separate or otherwise relinquish all or
a material portion of the business or assets either of WordPerfect or of Novell
and its Subsidiaries, taken as a whole, or to change its business in any
material way.
(c) Subject to the terms and conditions of this Agreement, each of the
parties shall use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement,
subject to the appropriate approval of the shareholders of Novell and
WordPerfect. The parties hereto will consult and cooperate with one another, and
consider in good faith the views of one another, in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act or any other federal or state
antitrust or fair trade law.
5.8 State Statutes. If any State Takeover Law shall become applicable to
the transactions contemplated by this Agreement, Novell and its Board of
Directors or WordPerfect and its Board of Directors, as the case may be, shall
use their reasonable efforts to grant such approvals and take such actions as
are necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effects of such State Takeover Law on
the transactions contemplated by this Agreement.
5.9 Consents. Novell, Sub and WordPerfect shall each use all reasonable
efforts to obtain the consent and approval of, or effect the notification of or
filing with, each person or authority whose consent or approval is required in
order to permit the consummation of the Merger and the transactions contemplated
by this Agreement and to enable the Surviving Corporation to conduct and operate
the business of WordPerfect and its Subsidiaries substantially as presently
conducted and as contemplated to be conducted.
5.10 Nasdaq National Market Listing. Novell shall use its reasonable
efforts to cause the shares of Novell Common Stock issuable to the shareholders
of WordPerfect in the Merger to be authorized for listing on the Nasdaq National
Market, upon official notice of issuance.
5.11 Public Announcements. Novell and WordPerfect shall cooperate with
each other prior to releasing information concerning this Agreement and the
transactions contemplated hereby, shall furnish to the other drafts of all press
releases or other public announcements prior to publication and shall obtain the
consent of the other prior to the issuance of press releases or the release of
other public announcements; provided that any party hereto shall have the right
(i) to furnish any information to any Governmental Entity or (ii) to issue any
other release, in each case when in the reasonable opinion of its counsel it is
legally required to do so.
5.12 Affiliates.
(a) The WordPerfect Disclosure Schedule sets forth those persons who are,
in WordPerfect's reasonable judgment, "affiliates" of WordPerfect within the
meaning of Rule 145 (each such person, together with the persons identified
below, an "Affiliate") promulgated under the Securities Act ("Rule 145"),
including without limitation Mr. Bastian, Ms. Bastian and Ashton. WordPerfect
shall provide Novell such information and documents as Novell shall reasonably
request for purposes of reviewing such list. WordPerfect shall use its best
efforts to deliver or cause to be delivered to Novell, concurrently with the
execution of this Agreement from each of the Affiliates of WordPerfect
identified in the foregoing list Affiliates Agreements in the form
A-21
153
attached as Exhibit 5.12. Novell and Sub shall be entitled to place appropriate
legends on the certificates evidencing any Novell Common Stock to be received by
such Affiliates pursuant to the terms of this Agreement and the Articles of
Merger, and to issue appropriate stop transfer instructions to the transfer
agent for Novell Common Stock, consistent with the terms of such Affiliates
Agreements.
(b) Novell shall use its reasonable efforts to obtain prior to the
Effective Date the execution of agreements with respect to the sale of Novell
Common Stock with each person who is an Affiliate of Novell regarding compliance
with pooling restrictions.
5.13 WordPerfect Options.
(a) At the Effective Time, each outstanding option (each, a "WordPerfect
Option") to purchase shares of WordPerfect Common Stock issued pursuant to the
WordPerfect Option Plan, whether vested or unvested, shall be assumed by Novell.
Accordingly, each WordPerfect Option shall be deemed to constitute an option to
acquire, on the same terms and conditions as were applicable under such
WordPerfect Option, the number, rounded down to the nearest whole integer, of
full shares of Novell Common Stock the holder of such WordPerfect Option would
have been entitled to receive pursuant to the Merger had such holder exercised
such Option in full, including as to unvested shares, immediately prior to the
Effective Time, at a price per share equal to (y) the aggregate exercise price
for the shares of WordPerfect Common Stock otherwise purchasable pursuant to
such WordPerfect Option divided by (z) the number of full shares of Novell
Common Stock deemed purchasable pursuant to such WordPerfect Option with such
exercise price per share rounded up to the nearest whole cent. The vesting of
the WordPerfect Options shall accelerate upon consummation of the Merger, based
on existing contractual commitments to holders of such WordPerfect Options.
(b) As soon as practicable after the Effective Time, Novell shall deliver
to each holder of a WordPerfect Option a document evidencing the foregoing
assumption of such WordPerfect Option by Novell.
(c) As soon as practicable after the Effective Time, Novell shall file a
registration statement on Form S-8 (or any successor or other appropriate form),
or another appropriate form with respect to the shares of Novell Common Stock
subject to such WordPerfect Options and shall use its reasonable efforts to
maintain the effectiveness of such registration statement (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such WordPerfect Options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, Novell
shall administer the WordPerfect Option Plan assumed pursuant to this Section
5.13 in a manner that complies with Rule 16b-3 promulgated by the SEC under the
Exchange Act to the extent the applicable WordPerfect Option Plan complied with
such rule prior to the Merger.
5.14 Indemnification. From and after the Effective Time, Novell and the
Surviving Corporation shall (to the fullest extent permitted by applicable law)
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Effective Time, an
officer or director of WordPerfect or any of its Subsidiaries (the "Indemnified
Parties") against any and all losses, damages, costs, expenses, liabilities or
judgments, or amounts that are paid in settlement of, or in connection with, any
claim, action, suit, proceeding or investigation based on or arising out of the
fact that such person is or was a director or officer of WordPerfect or any
Subsidiary of WordPerfect, whether pertaining to any matter existing or
occurring at or prior to the Effective Time ("Indemnified Liabilities"). Without
limiting the foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Party (whether arising before
or after the Effective Time), (i) any counsel retained by the Indemnified
Parties for any period after the Effective Time shall be reasonably satisfactory
to Novell (ii) after the Effective Time, Novell shall pay all reasonable fees
and expenses of counsel for the Indemnified Parties promptly as statements
therefor are received; and (iii) after the Effective Time, Novell shall use all
reasonable efforts to assist in the defense of any such matter, provided that
Novell shall not be liable for any settlement of any claim effected without its
written consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify Novell (but the failure so to notify Novell shall not relieve
A-22
154
it from any liability which it or the Surviving Corporation may have under this
Section except to the extent such failure materially prejudices Novell or the
Surviving Corporation). The Indemnified Parties as a group may retain only one
law firm to represent them with respect to each such matter unless there is,
under applicable standards of professional conduct, a potential conflict on any
issue between the positions of any two or more Indemnified Parties.
5.15 Notification of Certain Matters. WordPerfect shall give prompt notice
to Novell, and Novell and Sub shall give prompt notice to WordPerfect, of the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be likely to cause (a) any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date of this Agreement to the Effective Time, or (b) any material
failure of WordPerfect or Novell and Sub, as the case may be, or of any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement.
5.16 Pooling Accounting. Each party agrees not to take any action that
would adversely affect the ability of Novell to treat the Merger as a pooling of
interests, and each party agrees to take such action as may be reasonably
required to negate the impact of any past actions which would adversely impact
the ability of Novell to treat the Merger as a pooling of interests. The
foregoing covenant shall be inapplicable, however, in the event that Novell
shall waive the condition precedent to Closing set forth in Section 6.2(c).
5.17 FIRPTA. WordPerfect shall deliver to the Internal Revenue Service a
notice regarding the statement described in Section 6.2(m) hereof, in accordance
with the requirements of Treasury Regulation Section 1.897-2(h)(2).
5.18 Subsequent Amendments of Disclosure Schedules. Novell and WordPerfect
shall each have the right after the date hereof but no later than twenty one
(21) days after the date hereof to deliver to the other written amendments to
the applicable Sections of the Novell Disclosure Schedule or the WordPerfect
Disclosure Schedule, as the case may be; provided, that any such disclosure is
as of, and may not include events or actions subsequent to, the date hereof. To
the extent that any such amendment shall not disclose any event or condition
that, individually or in the aggregate, could be reasonably likely to have a
Material Adverse Effect on Novell or WordPerfect, respectively, such amendment
shall be deemed accepted by the other party and the relevant Section of the
Disclosure Schedule shall be deemed amended accordingly thereby. Notwithstanding
the foregoing, each party hereby represents and warrants that it has used all
reasonable efforts to have completed such party's Disclosure Schedule delivered
prior to execution of this Agreement.
5.19 Establishment of Applications Group. Novell agrees that upon
consummation of the Merger, it will establish and maintain WordPerfect as a
separate operating unit constituting the Novell Applications Group. The present
President of WordPerfect shall be appointed President of the Novell Applications
Group, to serve until his successor is duly appointed, who shall report directly
to the Chief Executive Officer and President of Novell and the remaining
executive officers shall report to such Novell Applications Group President.
Novell also agrees that the Novell Applications Group shall be operated in
accordance with a plan submitted by WordPerfect and approved by Novell, as
modified from time to time.
5.20 Satisfaction of WordPerfect Obligations. Novell agrees that in the
period following the Effective Date it shall, or shall cause WordPerfect to,
satisfy and discharge the liabilities and obligations of WordPerfect in a timely
manner in accordance with the contractual terms, if any, associated with any
such liability or obligation.
5.21 Continued Nomination of Directors. The Board of Directors of Novell
shall take all necessary action to cause Ashton and Mr. Bastian (or a designee
of either of such persons which designee or designees shall be reasonably
acceptable to the Board of Directors of Novell) to be nominated as a member of
the Novell management slate of directors to stand for election to the Novell
Board of Directors to serve until such person's successor shall be duly
appointed. The Board of Directors of Novell shall also take all necessary action
to cause Ashton and Mr. Bastian (or their designees) to be nominated for
election at the Novell annual meeting of stockholders to be convened in Novell's
1995 fiscal year.
A-23
155
5.22 Other Transactions. The parties acknowledge that any action taken by
either party with respect to the acquisition of rights to sell a spreadsheet
program mutually acceptable to the parties which has been approved by both
Novell and WordPerfect will not be deemed a breach of any representation,
warranty or covenant, notwithstanding the terms of any such representation,
warranty or covenant.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Effectiveness of the S-4. The S-4 shall have been declared
effective by the SEC under the Securities Act. No stop order suspending the
effectiveness of the S-4 shall have been issued by the SEC and no
proceedings for that purpose and no similar proceeding with respect to the
Proxy Statement shall have been initiated or threatened by the SEC.
(b) Shareholder Approval. This Agreement and the Articles of Merger
shall have been approved and adopted by the affirmative vote or consent of
the holders of at least a majority of the issued and outstanding shares of
WordPerfect Common Stock present, in person or by proxy, at the meeting of
WordPerfect's shareholders contemplated by Section 5.6. Notwithstanding
anything in this Agreement to the contrary, the issuance of shares of
Novell Common Stock, whether in the Merger or in connection with the Merger
or any transaction contemplated hereby, shall have been approved by the
stockholders of Novell if required by applicable law or by any requirement
of the National Association of Securities Dealers.
(c) HSR Act. The applicable waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated.
(d) Governmental Entity Approvals. All material authorizations,
consents, orders or approvals of, or declarations or filings with, or
expiration of waiting periods imposed by, any Governmental Entity necessary
for the consummation of the transactions contemplated by this Agreement and
the Articles of Merger shall have been filed, expired or been obtained.
(e) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any
of the foregoing be pending; and there shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, which would (i) make the consummation of the
Merger illegal or (ii) render Novell, Sub or WordPerfect unable to
consummate the Merger, except for any waiting period provisions.
(f) Tax Opinions. Novell and WordPerfect shall each have received
substantially identical written opinions from their respective counsel,
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation and Brobeck,
Phleger & Harrison, in form and substance reasonably satisfactory to them
to the effect that the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code. In rendering such opinions, counsel
may rely upon (and, to the extent reasonably required, the parties and
WordPerfect's shareholders shall make) reasonable representations related
thereto.
6.2 Conditions of Obligations of Novell and Sub. The obligations of Novell
and Sub to effect the Merger are subject to the satisfaction of the following
conditions, unless waived by Novell and Sub:
(a) Representations and Warranties. The representations and warranties
of WordPerfect set forth in this Agreement shall be true and correct in all
material respects (except for such representations and warranties which are
qualified by their terms by a reference to materiality, which
representations and warranties as so qualified shall be true in all
respects) (i) as of the date of this Agreement and (ii) as of
A-24
156
the Closing Date, as though made on and as of the Closing Date
(provided that in the cases of clauses (i) and (ii) any such
representation and warranty made as of a specific date shall be true
and correct in all material respects as of such specific date), unless
any failures to be true and correct, individually or in the aggregate,
do not have and could not reasonably be expected to have a Material
Adverse Effect on WordPerfect; and there shall have been no willful
breach by WordPerfect of any of its representations or warranties made
in the Agreement. Novell and Sub shall have received a certificate
signed by the chief executive officer and the chief financial officer
of WordPerfect to such effect on the Closing Date.
(b) Performance of Obligations of WordPerfect. WordPerfect shall have
performed in all material respects all obligations and covenants required
to be performed by it under this Agreement and the Articles of Merger prior
to or as of the Closing Date, and Novell and Sub shall have received a
certificate signed by the chief executive officer and the chief financial
officer of WordPerfect to such effect.
(c) Auditors Letter. (i) Novell shall have received a letter from
Ernst & Young in form and substance satisfactory to Novell to the effect
that the Merger will be accounted for as a pooling of interests and (ii)
Ernst & Young shall have received a substantially identical letter from
Price Waterhouse to such effect; provided that the letter from Price
Waterhouse may except any effect on the accounting of the Merger as a
pooling of interests based on any actions taken by Novell.
(d) Opinion of WordPerfect's Counsel. Novell shall have received an
opinion of Brobeck, Phleger & Harrison, counsel to WordPerfect dated the
Closing Date, in form and substance reasonably satisfactory to Novell and
WordPerfect.
(e) Consents. Novell and Sub shall have received duly executed copies
of all material third-party consents and approvals contemplated by this
Agreement or the WordPerfect Disclosure Schedule in form and substance
reasonably satisfactory to Novell and Sub.
(f) Affiliate Agreements. Novell shall have received the executed
WordPerfect Affiliate Agreements contemplated by Section 5.12.
(g) Shareholder Agreements. Neither Ashton, Mr. Bastian nor Ms.
Bastian shall have breached the Shareholder Agreements.
(h) No Material Adverse Effect. There shall have been no Material
Adverse Effect on WordPerfect or any of its Subsidiaries on or before the
Closing Date.
(i) Resignation of Directors. The directors of WordPerfect in office
immediately prior to the Effective Time shall have resigned as directors of
the Surviving Corporation effective as of the Effective Time.
(j) Tax Matters Agreement. The WordPerfect shareholders shall have
executed and delivered to Novell and WordPerfect a Tax Matters Agreement
substantially in the form attached to this Agreement as Exhibit 6.2(j).
(k) FIRPTA. Novell, as agent for the shareholders of WordPerfect shall
have received a properly executed FIRPTA Notification Letter, in form and
substance satisfactory to Novell, which states that shares of capital stock
of WordPerfect do not constitute "United States real property interests"
under Section 897(c) of the Code, for purposes of satisfying Novell's
obligations under Treasury Regulation Section 1.1445-2(c)(3).
6.3 Conditions of Obligation of WordPerfect. The obligation of WordPerfect
to effect the Merger is subject to the satisfaction of the following conditions,
unless waived by WordPerfect:
(a) Representations and Warranties. The representations and warranties
of Novell and Sub set forth in this Agreement shall be true and correct in
all material respects (except for such representations and warranties which
are qualified by their terms by a reference to materiality, which
representations and warranties as so qualified shall be true in all
respects) (i) as of the date of this Agreement and (ii) as of the Closing
Date, as though made on and as of the Closing Date (provided that in the
cases of clauses (i) and (ii) any such representation and warranty made as
of a specific date shall be true and correct in all
A-25
157
material respects as of such specific date), unless any failures to be
true and correct, individually or in the aggregate, do not have and
could not reasonably be expected to have a Material Adverse Effect on
Novell; and there shall have been no willful breach by Novell of any of
its representations or warranties made in the Agreement. WordPerfect
shall have received a certificate signed by the chief executive officer
and the chief financial officer of Novell and the president of Sub to
such effect on the Closing Date.
(b) Performance of Obligations of Novell and Sub. Novell and Sub shall
have performed in all material respects all obligations and covenants
required to be performed by them under this Agreement and the Articles of
Merger prior to or as of the Closing Date, and WordPerfect shall have
received a certificate signed by the chief executive officer and the chief
financial officer of Novell and the president of Sub to such effect.
(c) Opinion of Novell's and Sub's Counsel. WordPerfect shall have
received an opinion dated the Closing Date of Wilson, Sonsini, Goodrich & Rosati, counsel for Novell and Sub, in form and substance reasonably
satisfactory to WordPerfect and Novell.
(d) Consents. WordPerfect shall have received duly executed copies of
all material third-party consents and approvals contemplated by this
Agreement and the Novell Disclosure Schedule in form and substance
satisfactory to WordPerfect.
(e) No Material Adverse Effect. There shall have been no Material
Adverse Effect on Novell or any of its Subsidiaries on or before the
Closing Date.
(f) Election of Director Nominees. The Board of Directors of Novell
shall have taken appropriate action to cause the number of directors
comprising the full Board of Directors of Novell to be increased by two
persons, from seven to nine, and Ashton and Mr. Bastian (or a designee of
either of such persons which designee or designees shall be acceptable to
the Board of Directors of Novell) shall have been elected to the Board of
Directors of Novell, effective upon the Effective Time, until their
successors, if any, are duly elected or appointed.
(g) Acquisition of Rights to Sell a Spreadsheet Program. Either Novell
or WordPerfect shall have acquired the rights to sell a spreadsheet program
mutually acceptable to the parties hereto (which acquisition will close
prior to or simultaneously with the consummation of the Merger contemplated
by this Agreement).
(h) Comparability of Employee Benefits. WordPerfect shall be
reasonably satisfied that the continuing employees of WordPerfect, after
giving effect to the Merger, shall be entitled to receive at least
comparable benefits to those being received by the employees of Novell,
taken as a whole, who occupy comparable positions and have comparable
responsibilities; provided, however, that, as soon as practicable after the
date hereof and in any event prior to the Closing, Novell and WordPerfect
shall confer and agree upon a plan that has as its primary purpose the
transition of WordPerfect employees to Novell benefits in a manner that
results in minimal disruption to the continuing operations of WordPerfect
and continued employment of key individuals. The parties hereto acknowledge
that such plan may take an extended period of time to implement
successfully.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
shareholders of WordPerfect:
(a) by mutual written agreement of Novell, Sub and WordPerfect;
(b) by Novell, if there has been a breach by WordPerfect of any
representation, warranty, covenant or agreement set forth in this Agreement on
the part of WordPerfect or if any representation or warranty of WordPerfect
shall have become untrue, in either case such that the condition set forth in
Sections 6.2(a) or
A-26
158
6.2(b) would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue and which breach or
inaccuracy WordPerfect fails to cure within seven days after notice thereof is
given by Novell (except that no cure period shall be provided for a breach by
WordPerfect or inaccuracy which by its nature cannot be cured);
(c) by WordPerfect, if there has been a breach by Novell or Sub of any
representation, warranty, covenant or agreement set forth in this Agreement on
the part of Novell or Sub or if any representation or warranty of Novell or Sub
shall have become untrue, in either case such that the condition set forth in
Sections 6.3(a) or 6.3(b) would not be satisfied as of the time of such breach
or as of the time such representation or warranty shall have become untrue and
which breach or inaccuracy Novell or Sub, as the case may be, fails to cure
within seven days after notice thereof is given by WordPerfect (except that no
cure period shall be provided for a breach by Novell or Sub which by its nature
cannot be cured);
(d) by Novell or WordPerfect, if the Merger shall not have been consummated
on or before July 31, 1994 (other than delays attributable to concluding the HSR
Act waiting period or receiving an order of effectiveness from the SEC with
respect to the S-4, but in no event later than September 30, 1994);
(e) by Novell or WordPerfect if the required approval of the shareholders
of WordPerfect or, if required, the stockholders of Novell, contemplated by this
Agreement shall not have been obtained by reason of the failure to obtain the
required vote upon a vote taken at the Shareholders' Meeting or at any
adjournment thereof or at any meeting of the Novell stockholders or any
adjournment thereof, to the extent determined to be necessary subsequent to the
date hereof; or
(f) by Novell or WordPerfect if any permanent injunction or other order of
a court or other competent authority preventing the Merger shall have become
final and nonappealable.
Where action is taken to terminate this Agreement pursuant to this Section
7.1, it should be sufficient for such action to be authorized by the Board of
Directors of the party taking such action.
7.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 7.1, this Agreement shall forthwith become void and there
shall be no liability on the part of any party hereto except that (i) the
provisions of the Confidentiality Agreement and Section 3.26, Section 4.10 and
Article VIII of this Agreement shall survive the termination of this Agreement
and (ii) nothing herein shall relieve any party from liability for any breach of
this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall be deemed to be conditions
to the Merger and shall not survive the consummation of the Merger, except that
the agreements contained in Article II, Section 3.26, Section 4.10 and Article
VIII, the agreements delivered pursuant to this Agreement and the
representations made to counsel in connection with the tax opinions to be
delivered pursuant to Section 6.1(f) shall survive the consummation of the
Merger.
8.2 Amendment. The Merger Agreement may be amended by the parties hereto,
by action taken by their respective Board of Directors, at any time before or
after approval of the Merger by the shareholders of WordPerfect; provided that
following approval of the Merger by the shareholders of WordPerfect, no
amendment shall be made which by law requires the further approval of such
shareholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.3 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement, the Articles of Merger and
the transactions contemplated hereby and thereby shall be paid by the party
incurring such expense, except that if the Merger is not consummated expenses
A-27
159
incurred in connection with printing the documents distributed to shareholders
of WordPerfect and the S-4 shall be shared equally by Novell and WordPerfect.
8.4 Extension; Waiver. At any time prior to the Effective Time, each of
WordPerfect and Novell, by action taken by its Board of Directors, may, to the
extent legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other, (ii) waive any inaccuracies in the
representations and warranties made to it contained herein or in any document
delivered pursuant hereto and (iii) waive compliance with any of the agreements
or conditions for the benefit of it contained herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
8.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) or sent by telecopy,
confirmation received, to the parties at the following addresses and telecopy
numbers (or at such other address or number for a party as shall be specified by
like notice):
(a) if to Novell or Sub, to:
Novell, Inc.
122 East 1700 South
Provo, Utah 84606
Attention: David R. Bradford, Esq.
Telecopy No. (801) 377-7619
Telephone No. (801) 429-7000
with a copy to:
Wilson, Sonsini, Goodrich & Rosati
2 Palo Alto Square
Palo Alto, California 94306
Attn: Larry W. Sonsini, Esq.
Telecopy No.: (415) 493-6811
Telephone No.: (415) 493-9300
(b) if to WordPerfect, to:
WordPerfect Corporation
1555 North Technology Way
Orem, Utah 84057
Attention: R. Duff Thompson, Esq.
Telecopy No.: (801) 222-4477
Telephone No.: (801) 222-4400
with a copy to:
Brobeck, Phleger & Harrison
2 Embarcadero Place
2200 Geng Road
Palo Alto, California 94306
Attn: Joshua Green, Esq.
Telecopy No.: (415) 496-2885
Telephone No.: (415) 424-0160
8.6 Interpretation. When a reference is made in this Agreement to Sections
or Exhibits, such reference shall be to a Section or Exhibit to this Agreement
unless otherwise indicated. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
A-28
160
8.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
8.8 Entire Agreement. This Agreement, the Confidentiality Agreement and
the documents and instruments and other agreements among the parties delivered
pursuant hereto constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and are not intended to confer upon any other person any
rights or remedies hereunder except as otherwise expressly provided herein.
8.9 No Transfer. This Agreement and the rights and obligations set forth
herein may not be transferred or assigned by operation of law or otherwise
without the consent of each party hereto. This Agreement is binding upon and
will inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
8.10 Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
8.11 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law or equity on
such party, and the exercise of any one remedy will not preclude the exercise of
any other.
8.12 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
8.13 Absence of Third Party Beneficiary Rights. No provision of this
Agreement is intended, nor will be interpreted, to provide to create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, employee, partner or any party hereto or any
other person or entity unless specifically provided otherwise herein, and,
except as so provided, all provisions hereof will be personal solely between the
parties to this Agreement.
8.14 Mutual Drafting. This Agreement is the joint product of Novell and
WordPerfect, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of Novell and WordPerfect, and shall not
be construed for or against any party hereto.
8.15 Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware (without giving effect to its choice of law principles).
A-29
161
IN WITNESS WHEREOF, Novell, Sub and WordPerfect have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
NOVELL, INC.
By: /s/ JAMES R. TOLONEN
James R. Tolonen, Office of the
President and Chief Financial Officer
WORDPERFECT CORPORATION
By: /s/ R. DUFF THOMPSON
R. Duff Thompson, Executive
Vice-President
NOVELL ACQUISITION CORP.
By: /s/ JAMES R. TOLONEN
James R. Tolonen, President
By: /s/ ALAN C. ASHTON
Alan C. Ashton*
By: /s/ BRUCE W. BASTIAN
Bruce W. Bastian*
By: /s/ MELANIE L. BASTIAN
Melanie L. Bastian*
* For purpose of Section 5.3 only.
A-30
162
EXHIBIT 1.1
ARTICLES OF MERGER
These Articles of Merger, dated as of , 1994 ("Articles of
Merger"), are entered into between WordPerfect Corporation, a Utah corporation
("WordPerfect"), and Novell, Inc., a Delaware corporation ("Novell" or
"Surviving Corporation") (WordPerfect and Novell being collectively referred to
as the "Constituent Corporations").
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
material covenants and agreements contained herein, the Constituent Corporations
hereby agree as follows:
ARTICLE I
THE MERGER PLAN
1.1 Merger of WordPerfect With and Into Novell.
(a) Agreement and Plan of Reorganization. Subject to the terms of these
Articles of Merger and an Agreement and Plan of Reorganization dated as of March
21, 1994, as amended (the "Reorganization Agreement"), WordPerfect shall be
merged with and into Novell (the "Merger").
(b) Effective Time of the Merger. The Merger shall become effective at such
time (the "Effective Time") (the date the Merger shall become effective is
sometimes referred to as the "Effective Date") as these Articles of Merger are
filed with the Division of Corporations and Commercial Code of the State of Utah
pursuant to Section 16-10a-1105 of the Revised Business Corporation Act of the
State of Utah.
(c) Surviving Corporation. At the Effective Time, WordPerfect shall be
merged with and into Novell and the separate corporate existence of WordPerfect
shall thereupon cease. Novell shall be the surviving corporation in the Merger
and the separate corporate existence of Novell shall continue after the Merger.
1.2 Effect of the Merger; Additional Actions.
(a) Effects. The Merger shall have the effects set forth in Section
16-10a-1106 of the Revised Business Corporation Act of the State of Utah.
(b) Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry out
the purposes of the Reorganization Agreement or these Articles of Merger and to
vest the Surviving Corporation with full right, title and possession to all
assets, property, rights, privileges, powers and franchises of WordPerfect, the
officers and directors of Novell and WordPerfect are fully authorized in the
name of their respective corporations or otherwise to take, and will take, all
such lawful and necessary action.
ARTICLE II
THE CONSTITUENT CORPORATIONS
2.1 Organization of WordPerfect.
(a) Incorporation. WordPerfect was incorporated under the laws of the State
of Utah in 1979.
(b) Authorized Stock. WordPerfect is authorized to issue an aggregate of
200,000,000 shares of Common Stock, $0.001 par value ("WordPerfect Common
Stock").
(c) Outstanding Stock. At the close of business on , 1994,
shares of WordPerfect Common Stock were outstanding.
2.2 WordPerfect Shareholder Approval. The Reorganization Agreement and
these Articles of Merger were duly approved and adopted by the affirmative vote
of the holders of at least a majority of the shares of
A-31
163
WordPerfect Common Stock entitled to vote on the Reorganization Agreement and
these Articles of Merger at a special meeting of the shareholders held on June
, 1994, in accordance with the provisions of Section 16-10a-1103 of the Utah
Revised Business Corporation Act.
2.3 Organization of Novell.
(a) Incorporation. Novell was incorporated under the laws of the State of
Delaware on , 1983.
(b) Authorized Stock. The authorized capital stock of Novell consists of
400,000,000 shares of Common Stock, $.10 par value ("Novell Common Stock"), and
500,000 shares of preferred stock, $.10 par value ("Novell Preferred Stock").
(c) Outstanding Stock. On the date hereof, an aggregate of shares
of Novell Common Stock and no shares of Novell Preferred Stock are outstanding.
2.4 Novell Stockholder Approval. The approval of the stockholders of
Novell is not required under the Delaware General Corporation Law or the
Restated Certificate of Incorporation and Bylaws.
ARTICLE III
CERTIFICATE OF INCORPORATION, BYLAWS AND
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1 Certificate of Incorporation of Surviving Corporation. The Restated
Certificate of Incorporation of Novell in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation.
3.2 Bylaws of Surviving Corporation. The Bylaws of Novell in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation unless and until amended or repealed as provided by applicable law,
the Certificate of Incorporation of the Surviving Corporation and such Bylaws.
3.3 Directors and Officers of Surviving Corporation. The directors of
Novell immediately prior to the Effective Time shall be the directors of the
Surviving Corporation at the Effective Time, each to hold office in accordance
with the Certificate of Incorporation and Bylaws of the Surviving Corporation,
and the officers of Novell immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, in each case, until their respective
successors are duly elected or appointed or qualified.
ARTICLE IV
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
4.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of
WordPerfect Common Stock:
(a) Cancellation of Certain Shares of WordPerfect Common Stock. All
shares of WordPerfect Common Stock that are owned directly or indirectly by
WordPerfect or by any Subsidiary (as defined below) of WordPerfect and any
shares of WordPerfect Common Stock owned by Novell or any Subsidiary of
Novell shall be cancelled and no stock of Novell or other consideration
shall be delivered in exchange therefor. "Subsidiary" means a corporation
or other entity whose voting securities are owned or are otherwise
controlled directly or indirectly by a parent corporation or other
intermediary entity in an amount sufficient to elect at least a majority of
the Board of Directors or other managers of such corporation or other
entity.
(b) Conversion of WordPerfect Common Stock. Each issued and
outstanding share of WordPerfect Common Stock (other than shares to be
cancelled pursuant to Section 4.1(b) hereof and shares, if any, which then
or thereafter constitute dissenter's shares within the meaning of Part 16
of the Utah Revised Business Corporation Act ("Dissenter's Shares")) shall
be canceled and extinguished and
A-32
164
converted, without any action on the part of the holders thereof and
subject to Section 4(e) hereof, into one share of Novell Common Stock.
(c) Dissenters' Rights. If holders of WordPerfect Common Stock are
entitled to dissenters' rights in connection with the Merger under Part 16
of the Utah Revised Business Corporation Act, any Dissenter's Shares shall
not be converted into Novell Common Stock but shall be converted into the
right to receive such consideration as may be determined to be due with
respect to such Dissenter's Shares pursuant to the law of the State of
Utah.
(d) Fractional Shares. No fractional shares of Novell Common Stock
shall be issued, but in lieu thereof each holder of shares of WordPerfect
Common Stock who would otherwise be entitled to receive a fraction of a
share of Novell Common Stock shall receive from Novell an amount of cash
equal to the per share market value of Novell Common Stock (based on the
last sales price of Novell Common Stock as reported on the National Market
System of the National Association of Securities Dealers' Automated
Quotation System on the Effective Date of the Merger) multiplied by the
fraction of a share of Novell Common Stock to which such holder would
otherwise be entitled. The fractional share interests of each WordPerfect
shareholder shall be aggregated, so that no WordPerfect shareholder shall
receive cash in an amount greater than the value of one full share of
Novell Common Stock.
4.2 Exchange of Certificates.
(a) Exchange Agent. Mellon Bank, N.A. shall act as exchange agent (the
"Exchange Agent") in the Merger.
(b) Novell to Provide Common Stock. Promptly after the Effective Time,
Novell shall make available to the Exchange Agent for exchange in accordance
with the provisions of this Article IV and the Reorganization Agreement, through
such reasonable procedures as Novell may adopt, the shares of Novell Common
Stock issuable pursuant to Section 4.1 of these Articles of Merger and the
provisions of the Reorganization Agreement in exchange for outstanding shares of
WordPerfect Common Stock.
(c) No Further Ownership Rights in WordPerfect Common Stock. All Novell
Common Stock delivered upon the surrender for exchange of shares of WordPerfect
Common Stock in accordance with the terms of the Reorganization Agreement and
these Articles of Merger shall be deemed to have been delivered in full
satisfaction of all rights pertaining to such shares of WordPerfect Common
Stock. There shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of WordPerfect Common Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article IV and
the Reorganization Agreement.
ARTICLE V
TERMINATION
5.1 Termination by Mutual Agreement. Notwithstanding the approval of these
Articles of Merger by the shareholders of WordPerfect, these Articles of Merger
may be terminated at any time prior to the Effective Time by mutual written
agreement of the Boards of Directors of Novell and WordPerfect.
5.2 Termination of Agreement and Plan of Merger. Notwithstanding the
approval of these Articles of Merger by the shareholders of WordPerfect, these
Articles of Merger shall terminate forthwith in the event that the
Reorganization Agreement shall be terminated as therein provided.
5.3 Effects of Termination. In the event of the termination of these
Articles of Merger, these Articles of Merger shall forthwith become void and
there shall be no liability on the part of either WordPerfect or Novell or their
respective officers or directors, except as otherwise provided in the
Reorganization Agreement.
A-33
165
ARTICLE VI
GENERAL PROVISIONS
6.1 Amendment. These Articles of Merger may be amended by the parties
hereto any time before or after approval hereof by the shareholders of
WordPerfect but, after such approval, no amendment shall be made which by law
requires the further approval of shareholders of WordPerfect without obtaining
such approval. These Articles of Merger may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
6.2 Counterparts. These Articles of Merger may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.
6.3 Governing Law. These Articles of Merger shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Utah.
IN WITNESS WHEREOF, the parties have duly executed these Articles of Merger
as of the date first written above.
WORDPERFECT CORPORATION
1555 North Technology Way
Orem, Utah 84057
By:
Alan C. Ashton, President and
Chief
Executive Officer
NOVELL, INC.
122 East 1700 South
Provo, Utah 84606
By:
James R. Tolonen, Chief Financial
Officer
A-34
166
EXHIBIT 5.6
WORDPERFECT CORPORATION
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is made and entered into as
of March 21, 1994, between Novell, Inc., a Delaware corporation ("Novell"),
WordPerfect Corporation, a Utah corporation ("WordPerfect") and the undersigned
shareholder ("Shareholder") of Wordperfect.
RECITALS
A. Concurrently with the execution of this Agreement, Novell, Novell
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Novell
("Sub"), and WordPerfect have entered into an Agreement and Plan of
Reorganization (the "Reorganization Agreement"), which contemplates that
WordPerfect and Sub will enter into the Articles of Merger, which Reorganization
Agreement and Articles of Merger (collectively, the "Merger Agreements") provide
for the merger (the "Merger") of Sub with and into WordPerfect. Pursuant to the
Merger, all outstanding capital stock of WordPerfect will be converted into
Common Stock of Novell.
B. Shareholder is the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such number
of shares of the outstanding Common Stock, no par value per share, of
WordPerfect as is indicated on the final page of this Agreement (the "Shares").
C. In consideration of the execution of the Reorganization Agreement by
Novell, Shareholder agrees not to transfer or otherwise dispose of any of the
Shares, or any other shares of capital stock of WordPerfect acquired by
Shareholder hereafter and prior to the Expiration Date (as defined in Section
1.1 below), and agrees to vote the Shares and any other such shares of capital
stock of WordPerfect so as to facilitate consummation of the Merger.
NOW, THEREFORE, the parties agree as follows:
1. Agreement to Retain Shares.
1.1 Transfer and Encumbrance. Shareholder agrees not to transfer
(except as permitted under Section 1.3 below), sell, exchange, pledge
(except in connection with a bona fide loan transaction, provided that any
pledgee agrees not to transfer, sell, exchange, pledge or otherwise dispose
or encumber the Shares or any New Shares (as defined in Section 1.2 below)
prior to the Expiration Date and to be subject to the Proxy (as defined in
Section 3 below)) or otherwise dispose of or encumber the Shares or any New
Shares or to make any offer or agreement relating thereto, at any time
prior to the Expiration Date. As used herein, the term "Expiration Date"
shall mean the earlier to occur of (i) such date and time as the Merger
shall become effective in accordance with the terms and provisions of the
Merger Agreements or (ii) the termination of the Reorganization Agreement
in accordance with its terms.
1.2 New Shares. Shareholder agrees that any shares of capital stock
of WordPerfect that Shareholder purchases or with respect to which
Shareholder otherwise acquires beneficial ownership after the date of this
Agreement and prior to the Expiration Date ("New Shares") shall be subject
to the terms and conditions of this Agreement to the same extent as if they
constituted Shares.
1.3 Permitted Transfers. Shareholder may transfer up to thirty
percent (30%) of the Shares or any New Shares to members of Shareholder's
immediate family if, prior to any such transfer, (i) Novell receives advice
from its counsel that such transfer will not affect the treatment of the
Merger as a pooling of interests for accounting purposes and (ii) the
transferee agrees to be bound by the provisions of this Agreement.
2. Agreement to Vote Shares. At every meeting of the shareholders of
WordPerfect called with respect to any of the following, and at every
adjournment thereof, and on every action or approval by written consent
A-35
167
of the shareholders of WordPerfect with respect to any of the following,
Shareholder shall vote the Shares and any New Shares: (i) in favor of approval
of the Merger Agreements and the Merger and any matter that could reasonably be
expected to facilitate the Merger; and (ii) against approval of any proposal
made in opposition to or in competition with consummation of the Merger and the
Merger Agreements, against any merger, consolidation, sale of assets,
reorganization or recapitalization with any party and against any liquidation or
winding up of WordPerfect (each of the foregoing is referred to as an "Opposing
Proposal"). Shareholder agrees not, directly or indirectly, to solicit or
encourage any offer from any party concerning the possible disposition of all or
any substantial portion of WordPerfect's business assets or capital stock.
3. Irrevocable Proxy. Concurrently with the execution of this Agreement,
Shareholder agrees to deliver to Novell a proxy in the form attached as Exhibit
A (the "Proxy"), which shall be irrevocable to the extent provided in Section
16-10a-722 of the Utah Revised Business Corporation Act, covering the total
number of Shares and New Shares of capital stock of WordPerfect beneficially
owned (as such term is defined in Rule 13d-3 under the Exchange Act) by
Shareholder set forth therein.
4. Affiliates Agreement. Concurrently with the execution of this
Agreement, Shareholder agrees to execute and deliver to Novell the Affiliates
Agreement in the form attached as Exhibit B.
5. Representations, Warranties and Covenants of Shareholder. Shareholder
represents, warrants and covenants to Novell as follows:
5.1 Ownership of Shares. Shareholder: (i) is the beneficial owner of
the Shares, which at the date of this Agreement and at all times up until the
Expiration Date will be free and clear of any liens, claims, options, charges or
other encumbrances; (ii) does not beneficially own any shares of capital stock
of WordPerfect other than the Shares (excluding shares as to which Shareholder
currently disclaims beneficial ownership in accordance with applicable law); and
(iii) has full power and authority to make, enter into and carry out the terms
of this Agreement and the Proxy.
5.2 No Proxy Solicitations. Shareholder will not, and will not permit
any entity under Shareholder's control, to: (i) solicit proxies or become a
"participant" in a "solicitation" (as such terms are defined in Regulation 14A
under the Exchange Act) with respect to an Opposing Proposal or otherwise
encourage or assist any party in taking or planning any action that would
compete with, restrain or otherwise serve to interfere with or inhibit the
timely consummation of the Merger in accordance with the terms of the Merger
Agreements; (ii) initiate a shareholders' vote or action by written consent of
WordPerfect shareholders with respect to an Opposing Proposal; or (iii) become a
member of a "group" (as such term is used in Section 13(d) of the Exchange Act)
with respect to any voting securities of WordPerfect with respect to an Opposing
Proposal.
6. Additional Documents. Shareholder and Novell hereby covenant and agree
to execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of Novell, to carry out the purpose and intent of this
Agreement.
7. Consent and Waiver. Shareholder hereby gives any consents or waivers
that are reasonably required for the consummation of the Merger under the terms
of any agreement to which Shareholder is a party or pursuant to any rights
Shareholder may have.
8. Termination. This Agreement and the Proxy delivered in connection
herewith shall terminate and shall have no further force or effect as of the
Expiration Date.
9. Miscellaneous.
9.1 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
9.2 Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted
A-36
168
assigns, but, except as otherwise specifically provided herein, neither this
Agreement nor any of the rights, interests or obligations of the parties hereto
may be assigned by either of the parties without the prior written consent of
the other.
9.3 Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except by the execution and delivery of a
written agreement executed by the parties hereto.
9.4 Specific Performance; Injunctive Relief. The parties acknowledge
that Novell will be irreparably harmed and that there will be no adequate remedy
at law for a violation of any of the covenants or agreements of Shareholder set
forth herein. Therefore, it is agreed that, in addition to any other remedies
that may be available to Novell upon any such violation, Novell shall have the
right to enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to Novell at law or in equity.
9.5 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationallyrecognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Novell: Novell, Inc.
122 East, 1700 South
Provo, Utah 84606
Attn: Chief Executive Officer
Telecopy No.: (801) 429-3951
Telephone No.: (801) 429-7000
With a copy to: Wilson, Sonsini, Goodrich & Rosati
Two Palo Alto Square
Palo Alto, California 94306
Attn: Larry W. Sonsini, Esq.
Telecopy No.: (415) 493-6811
Telephone No.: (415) 493-9300
If to Shareholder: To the address for notice set forth on the last
page hereof.
With a copy to: WordPerfect Corporation
1555 North Technology Way
Orem, Utah 84057
Attn: Chief Executive Officer
Telecopy No.: (801) 228-7077
Telephone No.: (801) 222-4400
With a copy to: Brobeck, Phleger & Harrison
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94306
Attn: Joshua Green, Esq.
Telecopy No.: (415) 496-2885
Telephone No.: (415) 424-0160
9.6 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the internal laws of the State of Utah.
9.7 Entire Agreement. This Agreement and the Proxy contain the entire
understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
A-37
169
9.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
9.9 Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
NOVELL, INC. SHAREHOLDER
By: By:
Title:
Shareholder's Address for Notice:
--------------------------------------------
WORDPERFECT CORPORATION
--------------------------------------------
By:
--------------------------------------------
Title:
Shares beneficially owned:
-------shares of WordPerfect Corporation
Common Stock
A-38
170
IRREVOCABLE PROXY
TO VOTE
WORDPERFECT CORPORATION STOCK
The undersigned shareholder of WordPerfect Corporation, a Utah corporation
("WordPerfect"), hereby irrevocably (to the full extent permitted by Section
16-10a-722 of the Utah Revised Business Corporation Act) appoints the directors
on the Board of Directors of Novell, Inc., a Delaware corporation ("Novell"),
and each of them, as the sole and exclusive attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to all of the shares of capital stock of
WordPerfect that now are or hereafter may be beneficially owned by the
undersigned, and any and all other shares or securities of WordPerfect issued or
issuable in respect thereof on or after the date hereof (collectively, the
"Shares") in accordance with the terms of this Proxy. The Shares beneficially
owned by the undersigned shareholder of WordPerfect as of the date of this Proxy
are listed on the final page of this Proxy. Upon the undersigned's execution of
this Proxy, any and all prior proxies given by the undersigned with respect to
any Shares are hereby revoked and the undersigned agrees not to grant any
subsequent proxies with respect to the Shares until after the Expiration Date
(as defined below).
This proxy is irrevocable (to the extent provided in Section 16-10a-722 of
the Utah Revised Business Corporation Act) is granted pursuant to that certain
Shareholder Agreement dated as of March , 1994, between Novell and the
undersigned shareholder (the "Shareholder Agreement"), and is granted in
consideration of Novell entering into that certain Agreement and Plan of
Reorganization dated as of March , 1994 (the "Reorganization Agreement"),
among Novell, Novell Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Novell ("Sub"), and WordPerfect, and that certain related
Agreement of Merger between Sub and WordPerfect (such agreements are
collectively referred to as the "Merger Agreements"). The Merger Agreements
provide for the merger of Sub into WordPerfect in accordance with their terms
(the "Merger"). As used herein, the term "Expiration Date" shall mean the
earlier to occur of (i) such date and time as the Merger shall become effective
in accordance with the terms and provisions of the Merger Agreements or (ii) the
termination of the Reorganization Agreement in accordance with its terms.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting and other rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents pursuant to Section 16-10a-704 of the Utah Revised Business Corporation
Act) at every annual, special or adjourned meeting of the shareholders of
WordPerfect and in every written consent in lieu of such meeting: (a) in favor
of approval of the Merger and the Merger Agreements and in favor of any matter
that could reasonably be expected to facilitate the Merger, and (b) against
approval of any proposal made in opposition to or in competition with the
consummation of the Merger and the Merger Agreements, against any merger,
consolidation, sale of assets, reorganization or recapitalization or WordPerfect
with any party other than Novell and its affiliates and against any liquidation
or winding up of WordPerfect. The attorneys and proxies named above may not
exercise this Irrevocable Proxy on any other matter except as provided in
clauses (a) and (b) above. The undersigned shareholder may vote the Shares on
all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
A-39
171
This proxy is irrevocable (to the full extent permitted by Section
16-10a-722 of the Utah Revised Business Corporation Act).
Dated: ------------------, Signature of Shareholder:
1994 ------------------------------------------
Print Name of Shareholder:
---------------------------------------
Shares beneficially owned:
---------------shares of WordPerfect Corporation Common
Stock
A-40
172
EXHIBIT 5.12
WORDPERFECT CORPORATION
AFFILIATES AGREEMENT
This Affiliates Agreement (this "Agreement") is made and entered into as of
March , 1994 between WordPerfect Corporation, a Utah corporation
("WordPerfect"), Novell, Inc., a Delaware corporation ("Novell") and the
undersigned affiliate ("Affiliate") of WordPerfect.
RECITALS
A. Concurrently with the execution of this Agreement, WordPerfect and
Novell have entered into an Agreement and Plan of Reorganization (the
"Reorganization Agreement"), which contemplates that WordPerfect and Novell
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Novell
("Sub"), will enter into Articles of Merger, which Reorganization Agreement and
Articles of Merger (collectively, the "Merger Agreements") provide for the
merger (the "Merger") of Sub with and into WordPerfect. Pursuant to the Merger,
all outstanding capital stock of WordPerfect will be converted into Common Stock
of Novell.
B. Affiliate is the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such number
of shares of the outstanding Common Stock, no par value per share, of
WordPerfect as is indicated on the final page of this Agreement (the "Shares").
C. Affiliate understands that, since the Merger will be accounted for
using the "pooling of interests" method and Affiliate is an "affiliate" of
WordPerfect (within the meaning of Rule 145 promulgated under the Securities Act
of 1933, as amended (the "Securities Act")), the Shares may only be disposed of
in a conformity with the limitations described herein. Affiliate has been
informed that the treatment of the Merger as a pooling of interests for
accounting purposes, and as a tax-free reorganization under applicable
provisions of the Internal Revenue Code, is dependent upon the accuracy of
certain of the representations and warranties and the compliance with certain of
the agreements set forth herein. Affiliate further understands that the
representations, warranties and agreement set forth herein will be relied upon
by Novell, WordPerfect and their respective counsel and accounting firms.
NOW, THEREFORE, the parties agree as follows:
1. Agreement to Retain Shares.
1.1 Transfer and Encumbrance. Affiliate agrees not to transfer (except
as may be specifically required by court order or as permitted under
Section 1.3 below), sell, exchange, pledge (except in connection with a
bona fide loan transaction, provided that any pledgee agrees not to
transfer, sell, exchange, pledge or otherwise dispose or encumbrance the
Shares or any New Shares, as defined in Section 1.2 below, prior to the
Expiration Date) or otherwise dispose of or encumber the Shares or any New
Shares or to make any offer or agreement relating thereto, at any time
prior to the Expiration Date. As used herein, the term "Expiration Date"
shall mean the date Novell shall have publicly released a report including
the combined financial results of Novell and WordPerfect for a period of at
least 30 days of combined operations of Novell and WordPerfect.
1.2 New Shares. Affiliate agrees that any shares of capital stock of
WordPerfect that Affiliate purchases or with respect to which Affiliate
otherwise acquired beneficial ownership after the date of this Agreement
and prior to the Expiration Date ("New Shares") shall be subject to the
terms and conditions of this Agreement to the same extent as if they
constituted Shares.
1.3 Permitted Transfers. Affiliate may transfer up to thirty percent
(30%) of the Shares or any New Shares to members of Affiliate's immediate
family if, prior to any such transfer, (i) Novell receives advice from its
counsel that such transfer will not affect the treatment of the Merger as a
pooling of
A-41
173
interests for accounting purposes and (ii) the transferee agrees to be
bound by the provisions of this Agreement.
2. Tax Treatment: Rule 145. Affiliate understands and agrees that it is
intended that the Merger will be treated as a "reorganization" for federal
income tax purposes. Affiliate further understands and agrees that Affiliate may
be deemed to be an "affiliate" of WordPerfect within the meaning of Rule 145,
although nothing contained herein should be construed as an admission of such
fact.
3. Reliance Upon Representations, Warranties and Covenants. Affiliate has
been informed that the treatment of the Merger as a reorganization for federal
income tax purposes requires that a sufficient number of former shareholders of
WordPerfect maintain a meaningful continuing equity ownership interest in Novell
after the Merger. Affiliate understands that the representations, warranties and
covenants of Affiliate set forth herein will be relied upon by Novell,
WordPerfect and their respective counsel and accounting firms.
4. Representations, Warranties and Covenants of Affiliate. Affiliate
represents, warrants and covenants as follows:
(a) Affiliate has full power and authority to execute this Agreement,
to make the representations, warranties and covenants herein contained and
to perform Affiliate's obligations hereunder.
(b) Set forth below the signatures below is the number of shares of
Common Stock of WordPerfect ("WordPerfect Stock") owned by Affiliate,
including all WordPerfect Stock as to which Affiliate has sole or shared
voting or investment power and all rights, options and warrants to acquire
WordPerfect Stock owned or held by Affiliate.
(c) Affiliate will not sell, transfer, exchange, pledge (except in
connection with a bona fide loan transaction as set forth in Section 1.1
above) or otherwise dispose of, or make any offer or agreement relating to
any of the foregoing with respect to, any shares of Common Stock of Novell
("Novell Stock") that Affiliate may acquire in connection with the Merger,
or any securities that may be paid as a dividend or otherwise distributed
thereon or with respect thereto or issued or delivered in exchange or
substitution therefor (all such shares and other securities of Novell are
sometimes collectively referred to as "Restricted Securities"), or any
option, right or other interest with respect to any Restricted Securities,
unless: (i) such transaction is permitted pursuant to Rule 145(c) and
145(d) under the Securities Act; (ii) counsel representing Affiliate, which
counsel is reasonably satisfactory to Novell, shall have advised Novell in
a written opinion letter satisfactory to Novell, shall have advised Novell
in a written opinion letter satisfactory to Novell and Novell's legal
counsel, and upon which Novell and its legal counsel may rely, that no
registration under the Securities Act would be required in connection with
the proposed sale, transfer or other disposition; (iii) a registration
statement under the Securities Act covering the Novell Stock proposed to be
sold, transferred or otherwise disposed of, describing the manner and terms
of the proposed sale, transfer or other disposition, and containing a
current prospectus, shall have been filed with the Securities and Exchange
Commission (the "SEC") and made effective under the Securities Act; or (iv)
an authorized representative of the SEC shall have rendered written advice
to Affiliate (sought by Affiliate or counsel to Affiliate, with a copy
thereof and all other related communications delivered to Novell) to the
effect that the SEC would take no action, or that the staff of the SEC
would not recommend that the SEC take any action, with respect to the
proposed disposition if consummated.
(d) Affiliate has, and as of the Effective Time will have, no present
plan or intention (a "Plan") to sell, transfer, exchange, pledge (other
than in a preexisting bona fide margin account) or otherwise dispose of,
including a distribution by a partnership to its partners, or a corporation
to its stockholders, or any other transaction which results in a reduction
in the risk of ownership (any of the foregoing, a "Sale") of more than
thirty percent (30%) of the shares of Novell Stock that Affiliate may
acquire in connection with the Merger, or any securities that may be paid
as a dividend or otherwise distributed thereon with respect thereto or
issued or delivered in exchange or substitution therefor. Affiliate is not
aware of, or participating in, any Plan on the part of WordPerfect
stockholders to engage in Sales of the shares of Novell Stock to be issued
in the Merger such that the aggregate fair market value, as of the
Effective Time of the Merger, of the shares subject to such Sales would
exceed thirty percent (30%) of
A-42
174
the aggregate fair market value of all shares of outstanding
WordPerfect Stock immediately prior to the Merger. For purposes of the
preceding sentence, shares of WordPerfect Stock (i) which are exchanged
for cash in lieu of fractional shares of Novell Common Stock or (ii)
with respect to which a pre-Merger Sale occurs in a Related Transaction
(as hereinafter defined), shall be considered to be shares of
WordPerfect Common Stock that are exchanged for Novell Stock in the
Merger and then disposed of pursuant to a Plan. A Sale of Novell Stock
shall be considered to have occurred pursuant to a Plan if, among other
things, such Sale occurs in a Related Transaction. For purposes of this
Section 4(d), a "Related Transaction" shall mean a transaction that is
in contemplation of, or related or pursuant to, the Merger or the
Merger Agreements. If any of Affiliate's representations in this
Section 4(d) cease to be true at any time prior to the Effective Time,
Affiliate will deliver to each of WordPerfect and Novell, prior to the
Effective Time, a written statement to that effect, signed by
Affiliate.
5. Rules 144 and 145. From and after the Effective Time and for so long as
is necessary in order to permit Affiliate to sell the Novell Stock held by
Affiliate pursuant to Rule 145 and, to the extent applicable, Rule 144 under the
Securities Act, Novell will use its reasonable efforts to file on a timely basis
all reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, referred to in paragraph (c)(1) of Rule 144
under the Securities Act, in order to permit Affiliate to sell the Novell Stock
held by it pursuant to the terms and conditions of Rule 145 and the applicable
provisions of Rule 144.
6. Limited Resales. Affiliate understands that, in addition to the
restrictions imposed under Section 3 of this Agreement, the provisions of Rule
145 limit Affiliate's public resales of Restricted Securities, in the manner set
forth in subsections (a), (b) and (c) below:
(a) Unless and until the restriction "Cut-off" provisions of Rule
145(d)(2) or Rule 145(d)(3) set forth below become available, public
resales of Restricted Securities may only be made by Affiliate in
compliance with the requirements of Rule 145(d)(1). Rule 145(d)(1) permits
such resales only: (i) while Novell meets the public information
requirements of Rule 144(c); (ii) in brokers' transactions or in
transactions with a market maker; and (iii) where the aggregate number of
Restricted Securities sold at any time together with all sales of
restricted Novell Stock sold for Affiliate's account during the preceding
three-month period does not exceed the greater of (A) 1% of the Novell
Common Stock outstanding or (B) the average weekly volume of trading in
Novell Common Stock on all national securities exchanges, or reported
through the automated quotation system of a registered securities
association, during the four calendar weeks preceding the date of receipt
of the order to execute the sale.
(b) Affiliate may make unrestricted sales of Restricted Securities
pursuant to Rule 145(d)(2) if: (i) Affiliate has beneficially owned (within
the meaning of Rule 144(d) under the Securities Act) the Restricted
Securities for at least two years after the Effective Time of the Merger;
(ii) Affiliate is not an affiliate of Novell; and (iii) Novell meets the
public information requirements of Rule 144(c).
(c) Affiliate may make unrestricted sales of Restricted Securities
pursuant to Rule 145(d)(3) if Affiliate has beneficially owned (within the
meaning of Rule 144(d) under the Securities Act) the Restricted Securities
for at least three years and is not, and has not been for the last three
months, an affiliate of Novell.
(d) Novell acknowledges that the provisions of Section 4(c) of this
Agreement will be satisfied as to any sale by the undersigned of the
Restricted Securities pursuant to Rule 145(d), by a broker's letter and a
letter from the undersigned with respect to that sale stating that each of
the above-described requirements of Rule 145(d)(1) has been met or is
inapplicable by virtue of Rule 145(d)(2) or Rule 145(d)(3); provided,
however, that Novell has no reasonable basis to believe that such sales
were not made in compliance with such provisions of Rule 145(d).
7. Legends. Affiliate also understands and agrees that stop transfer
instructions will be given to Novell's transfer agent with respect to
certificates evidencing the Restricted Securities and that there will be placed
on the certificates evidencing the Restricted Securities legends stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF
A-43
175
EXCEPT IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE OTHER CONDITIONS SPECIFIED IN THAT CERTAIN
AFFILIATES AGREEMENT DATED AS OF MARCH 21, 1994 AMONG NOVELL, INC.,
WORDPERFECT CORPORATION AND THE SHAREHOLDER, A COPY OF WHICH AFFILIATES
AGREEMENT MAY BE INSPECTED BY THE HOLDER OF THIS CERTIFICATE AT THE
OFFICES OF NOVELL INC. NOVELL INC. WILL FURNISH, WITHOUT CHARGE, A COPY
THEREOF TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST
THEREFOR."
Novell agrees to remove promptly such stop transfer instructions and legend upon
full compliance with this Agreement by the undersigned, including, without
limitation, a sale or transfer or Novell Stock permitted under Section 4(c)
above.
8. Termination. This Agreement shall be terminated and shall be of no
further force and effect upon the termination of the Reorganization Agreement
pursuant to Section 7.1 of the Reorganization Agreement.
9. Counterparts. This Agreement shall be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
10. Binding Agreement. This Agreement will inure to the benefit of and be
binding upon and enforceable against the parties and their successors and
assigns, including administrators, executors, representatives, heirs, legatees
and devisees of Affiliate and any pledgee holding Restricted Securities as
collateral.
11. Waiver. No waiver by any party hereto of any condition or of any breach
of any provision of this Agreement shall be effective unless in writing and
signed by each party hereto.
12. Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the laws of the State of Delaware.
13. Attorneys' Fees. In the event of any legal actions or proceeding to
enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results in
a final judgment.
14. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.
15. Third Party Reliance. Counsel to and accountants for the parties shall
be entitled to rely upon this Agreement.
A-44
176
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
WORDPERFECT CORPORATION AFFILIATE
By: By:
Title:
Affiliate's Address for Notice:
--------------------------------------------
NOVELL, INC.
--------------------------------------------
By:
--------------------------------------------
Title:
Shares beneficially owned:
-------shares of WordPerfect Common Stock
A-45
177
EXHIBIT 6.2(J)
TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (the "Agreement") is made and entered into as of
the day of 1994 between NOVELL, INC., a Delaware corporation
("Novell"), WORDPERFECT CORPORATION, a Utah corporation ("WordPerfect") and Alan
C. Ashton, Karen J. Ashton, Emily Ann Ashton, Amy Jo Ashton, Spencer C. Ashton,
Morgan A. Ashton, Brigham M. Ashton, Allison Rae Ashton, Samuel L. Ashton, Eliza
K. Ashton, Adam C. Ashton, Stephen D. Ashton, Rebekah R. Ashton, Bruce W.
Bastian, Melanie L. Bastian, C. Richard Bastian, Darren B. Bastian, Jeffrey H.
Bastian, and Robert A. Bastian (each such person a "Stockholder" and all such
persons, collectively, the "Stockholders"). Capitalized terms not defined herein
shall have the meaning set forth in the Merger Agreement (as hereinafter
defined).
WHEREAS, WordPerfect and its Subsidiaries were S corporations as defined in
Section 1361 of the Code (as hereinafter defined) for certain taxable years (or
portions thereof) ending prior to January 1, 1994;
WHEREAS, WordPerfect owns one hundred percent (100%) of the outstanding
capital stock of each of the Subsidiaries;
WHEREAS, the Stockholders own one hundred percent (100%) of the outstanding
capital stock of WordPerfect;
WHEREAS, WordPerfect has entered into that certain Agreement and Plan of
Reorganization, dated March 21, 1994 (and subsequently amended on May , 1994)
among Novell, Novell Acquisition Corp., a Delaware corporation ("Sub"), and
WordPerfect (the "Merger Agreement") pursuant to which WordPerfect will be
merged into Novell as of the Effective Time of the Merger (the "Merger"); and
WHEREAS, as a condition of the consummation of the Merger, the Stockholders
have agreed to make representations and warranties and to provide
indemnification with respect to certain tax matters relating to the former
status of WordPerfect and its Subsidiaries as S corporations.
NOW, THEREFORE, the parties agree as follows.
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the following
meanings:
"Code" means the Internal Revenue Code of 1986, as amended, and, in the
context of a state or local tax, a reference to the Code or a section of the
Code includes any similar applicable provision of state or local law.
"Final Determination" shall have the meaning set forth in section 1313(a)
of the Code or under similar state law.
"Party" means Novell, WordPerfect or the Stockholders, and "Parties" means
Novell, WordPerfect and the Stockholders.
"Sharing Percentage" shall mean with respect to each Stockholder the
percentage shown opposite such Stockholder's name as set forth in Schedule A
attached hereto and incorporated herein by this reference.
"Stockholders' Representatives" shall mean the persons designated pursuant
to Article IV hereof.
"Taxes" means all taxes, however denominated, including any interest,
penalties or additions to tax that may become payable in respect thereof,
imposed by any federal, state, local or foreign government or any agency or
political subdivision of any such government, which taxes shall include, without
limiting the generality of the foregoing, all income, payroll and employee
withholding, unemployment insurance, social security, sales and use, excise,
profits, value added, ad valorem, occupancy, disability, franchise, gross
receipts, environmental, occupation, real and personal property, stamp,
transfer, license, net worth, real property gains, capital, and worker's
compensation taxes.
A-46
178
"Tax Returns" means all reports, estimates, information statements and
returns relating to, or required to be filed in connection with, any Taxes.
ARTICLE II
THE TERMINATION
2.1 Termination of S Status. The Stockholders, severally and not jointly,
hereby represent and warrant that the S corporation elections of WordPerfect and
each of its Subsidiaries (that elected to be treated as S corporations) were
terminated on or before January 1, 1994.
2.2 Distribution and Tax Sharing Agreements. Except with respect to (i)
this Agreement, (ii) any promissory note or other indebtedness currently
outstanding and reflected on the financial statements of WordPerfect or (iii)
those agreements shown on the disclosure schedule attached hereto as Schedule
2.2, the Stockholders, severally but not jointly, hereby represent and warrant
that they are not a party to and do not claim any rights under any Tax
indemnity, Tax sharing, Tax allocation agreement with WordPerfect and/or any of
its Subsidiaries or under any agreement obligating WordPerfect or any of its
Subsidiaries to make any distribution or payment of cash or property to the
Stockholders in respect of, or in connection with, their ownership of shares of
capital stock of WordPerfect or the Subsidiaries (collectively, "Tax Sharing
Agreements"). Except for this Tax Matters Agreement and any promissory notes or
other indebtedness currently reflected on the financial statements of
WordPerfect, to the extent any such Tax Sharing Agreements have existed or
currently exist, the Stockholders, WordPerfect and each of the Subsidiaries
hereby agree to terminate any and all such Tax Sharing Agreements effective as
of December 31, 1993 and hereby waive any rights they may have now or in the
future under such Tax Sharing Agreements.
ARTICLE III
TAX ALLOCATION AND INDEMNIFICATION
3.1 Tax Returns. WordPerfect hereby covenants and agrees on behalf of
itself and its Subsidiaries that it shall be responsible for and shall cause the
filing of all Tax Returns which it or any of its Subsidiaries is required to
file, or in which it or any of its Subsidiaries is to be included (including any
combined, unitary or consolidated returns) with respect to all taxable years (or
portions thereof) ending on or prior to December 31, 1993.
3.2 Corporate Liability for Taxes.
(a) Except as otherwise provided in Section 3.3 hereof, WordPerfect shall
pay or cause to be paid any and all Taxes required to be paid by WordPerfect or
any of its Subsidiaries for all taxable years covered by the Tax Returns
referred to in Section 3.1 as required by applicable law, and shall indemnify
and hold harmless the Stockholders from any liability for such Taxes.
(b) In the event an assessment of additional foreign income taxes by a
foreign taxing authority against WordPerfect or any of it Subsidiaries, with
respect to any taxable year ending on or prior to December 31, 1993, results in
the WordPerfect Stockholders' having a claim for additional credits or
deductions for foreign income taxes, then each WordPerfect Stockholder shall
apply for a refund to the fullest extent allowed by law in order to realize the
greatest refund available with respect to such additional credits or deductions
and shall pay to Novell the amount thereof (plus interest received under Section
6611 of the Code) immediately upon receipt of such refund without regard to any
other adjustments to such Stockholder's Tax Return for the taxable year for
which such refund was received, provided, however, the amount paid hereunder
shall be reduced by the reasonable fees and costs associated with such
Stockholder's claim for refund and any taxes paid in respect of such refund. The
liability of each Stockholder to WordPerfect hereunder shall be several and not
joint.
A-47
179
3.3 Stockholder Indemnification for Certain Federal and State Corporate Tax
Liabilities.
(a) Subject to section 3.3(b) below, each Stockholder, severally, in
accordance with such Stockholder's Sharing Percentage (and not jointly), hereby
indemnifies and agrees to hold each of Novell, WordPerfect and each of its
Subsidiaries harmless from, against and in respect of any U.S. federal, Utah or
New Mexico income tax liability, if any, resulting from (i) WordPerfect or any
of its Subsidiaries failing to qualify as an S corporation under Code Section
1361(a)(1) (as enacted and in effect prior to January 1, 1993) or under
applicable Utah or New Mexico state law (A) with respect to the Subsidiaries
(other than those Subsidiaries that never purported to be taxed as S
corporations) for every taxable year (or any portion of a taxable year) ending
on or prior to December 31, 1993 for which each such Subsidiary purported to be
taxed as an S Corporation, and (B) with respect to WordPerfect, for every
taxable year (or any portion of a taxable year) commencing on or after January
1, 1985 and ending on or before October 1, 1993 or (ii) a breach of any
representation or warranty made by the Stockholders in Sections 2.1 and 2.2 of
this Tax Matters Agreement. For the purposes of subsection (i) of this section
3.3(a), "income tax liability" shall mean the amount of the income tax liability
(plus interest, penalties and additions to taxes imposed with respect thereto)
as finally determined by the relevant taxing authority, but only to the extent
such amount represents the income tax liability that would have been payable
with respect to the amount of taxable income shown on the relevant corporate tax
return as originally filed.
(b) The total liability of each Stockholder under section 3.3(a)(i) shall
not exceed the sum of (i) the product of the Stockholder's Sharing Percentage
and One Hundred Fifteen Million Dollars ($115,000,000.00) (the "Indemnity
Fund"), (ii) the sum of each year's (or that portion of a year's) Indemnity Fund
Earnings (as defined below) accrued on or after January 1, 1993; and (iii) the
amount of any refund received by such Stockholder as a result of WordPerfect or
any of its Subsidiaries failing to qualify as S corporations (a "Failed S
Election") for any taxable period (or that portion of any taxable period) during
which the relevant corporation reported its filing status as that of an S
corporation less any taxes paid in respect of such refund. For purposes of the
preceding sentence, a Stockholder shall be deemed to have received a refund on
the earlier to occur of (i) the date of the actual receipt of a refund
attributable to a Failed S Election or (ii) the date upon which a refund
attributable to a Failed S Election is applied against a tax liability of such
Stockholder, but only after a Final Determination in respect of such other tax
liability. Notwithstanding the immediately preceding sentence, if a Stockholder
does not file a claim for refund within 90 days after receipt of written notice
of a Final Determination as to a Failed S Election, the Stockholder shall be
deemed to have received a refund for purposes of this Section 3.3(b) on the date
which is 270 days after date of the receipt of such written notice. For purposes
of this Agreement, (i) "Indemnity Fund Earnings" shall mean the product of the
Indemnity Fund and 60 percent of the one year Treasury Bill rate in effect as of
January 1st of the applicable year, and (ii) for purposes of calculating the
Indemnity Fund Earnings, the Indemnity Fund shall be increased each year by the
cumulative amount of the Indemnity Fund Earnings for all prior years.
3.4 Audit and Contest Rights.
(a) The parties hereto shall cooperate fully with each other in the conduct
of any audit or other proceeding relating to Taxes of WordPerfect or its
Subsidiaries and/or relating to Taxes of the Stockholders and shall make
available to each other such Tax data and other information as may be reasonably
required with respect to any Tax audit. Within twenty (20) days following notice
of any proposed adjustment which could give rise to a claim for indemnification
under Section 3.3, WordPerfect shall notify the Stockholder Representative of
such proposed adjustment and thereafter, the Stockholders' Representatives shall
have the right to control any proceedings relating to such proposed adjustment
and to determine when, whether and to what extent to settle any such claim,
assessment or dispute; provided, however, that WordPerfect shall have the right
to control the conduct of any such audit or proceeding for which WordPerfect
waives its rights to indemnification under Section 3.3 hereof.
(b) Within twenty (20) days following notice of any proposed adjustment
that would not adversely affect Novell, WordPerfect or any of the Subsidiaries
(as determined in good faith by WordPerfect) but that could have the effect of
increasing the Stockholders' Tax liability for any period, WordPerfect shall
notify the Stockholder Representative of such proposed adjustment and thereafter
the Stockholders' Representatives
A-48
180
shall have the right to control any proceedings relating to such proposed
adjustment and to determine when, whether and to what extent to settle any such
claim, assessment or dispute. The Stockholders' Representative shall notify
Novell within twenty (20) days with respect to the Stockholders intent to assume
control of such proceeding. If the Stockholders elect not to assume control of
such proceeding or fail to respond by written notice within such twenty (20) day
period, the provisions of Section 3.4(c) shall apply.
(c)(i) Except as provided in section 3.4(c)(iii), below, neither Novell nor
WordPerfect nor any Subsidiary shall make any election, take any Tax Return
position, or agree to any Tax adjustment or adjustments that would have the
effect of increasing the Stockholders' Tax liability with respect to any period
ending on or prior to December 31, 1993 ("Company Action"), without first
obtaining the prior written consent of the Stockholders' Agent, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, the affected
company may take the Company Action without the consent of the Stockholders'
Agent provided the affected company indemnifies the Stockholders against any
increase in the Stockholders' Tax liability resulting from the Company Action.
(ii) A company desiring to take a Company Action shall notify the
Stockholders' Agent in writing of the proposed Company Action, and shall provide
an estimate to the Stockholders' Agent of the aggregate increase in the
Stockholders' taxable income arising out of the Company Action. The
Stockholders' Agent shall have sixty (60) days from the date of the request for
consent in which to notify the affected company in writing whether the
Stockholders' Agent consents to the Company Action. If the Stockholders' Agent
does not respond within the sixty (60) day period the Stockholders' Agent shall
be conclusively deemed to have consented to the Company Action.
(iii) The action of the Stockholders' Agent to withhold consent with
respect to any proposed Tax Return position or adjustment shall be conclusively
presumed to be reasonable if the aggregate increase in the Stockholders' taxable
income resulting therefrom, when added to any prior approved adjustment or Tax
Return positions subject to this section 3.4, would be to increase the
Stockholders' aggregate taxable income by $10 million; provided, however, if
Novell provides to the Stockholders' Agent a written opinion of tax counsel
(approved by the Stockholders' Agent which approval shall not be unreasonably
withheld) that is more likely than not that such Company Action is required by
law, then the Stockholders' Agent shall be conclusively presumed to have given
consent to such adjustment or Tax Return position, notwithstanding the
Stockholders' Agent prior disapproval, if any. However, if the aggregate
increase in the Stockholders' taxable income, when added to any prior Company
Actions, would be to increase the such taxable income by less than $10 million,
then consent shall not be withheld in the absence of delivery to Novell, within
sixty (60) days of the date of the request for such consent, of a written
opinion of tax counsel (approved by Novell which approval shall not be
unreasonably withheld) to the effect that it is more likely than not that such
Tax Return position or adjustment is not required by law. The sixty (60) day
period provided in section 3.4(c)(ii) for action by the Stockholders' Agent
shall be extended as necessary so that the Stockholders' Agent have no less than
fourteen (14) days after receipt of the tax opinion to review and approve the
form of the tax opinion. If a proposed adjustment is not consented to pursuant
to this Section 3.4(c)(iii), then Novell shall be obligated to pursue the
proceedings in a manner consistent with the Stockholders' best interest and the
Stockholders shall reimburse Novell for all reasonable fees and costs associated
with such proceedings. Solely with respect to an election, the action of a
Stockholders' Agent to withhold consent shall be conclusively presumed to be
reasonable absent Novell providing to the Stockholders' Agent a written opinion
of tax counsel (approved by the Stockholders' Agent which approval will not be
unreasonably withheld) to the effect that it is more likely than not that the
proposed election is required by law. No action by Novell pursuant to this
Section 3.4(c)(iii) shall preclude the Stockholders from contesting any proposed
audit adjustment affecting their individual returns under Sections 6241-6245 of
the Code.
(d) For purposes of this Section 3.4, an adjustment shall be deemed to be
proposed (and WordPerfect and Novell shall be deemed to have received notice of
such proposal) as of the first date that WordPerfect or Novell receives written
advice from an applicable Taxing authority (or agent thereof) to the effect that
such Taxing authority is proposing to make an adjustment to the Tax liability or
Tax Return of WordPerfect or any Stockholder.
A-49
181
(e) In the event of a conflict between the provisions of subsections 3.4(a)
or 3.4(b), on the one hand, and subsection 3.4(c) on the other, the provisions
of subsection 3.4(a) or (b), as applicable, shall control.
3.5 Payments. The Party or Parties required to make any payment under
Section 3.2 or Section 3.3 shall make such payment within thirty (30) days after
the Final Determination of any Tax liability resulting in a claim for
indemnification hereunder.
ARTICLE IV
STOCKHOLDERS' REPRESENTATIVES
4.1 Stockholders' Representatives. In order to facilitate the resolution
of any Tax audit issues between WordPerfect or Novell on the one hand, and the
Stockholders, on the other, each Stockholder hereby designates and appoints Alan
C. Ashton and Bruce W. Bastian, acting jointly, as his or her representatives
hereunder (acting jointly, the "Stockholders' Representatives") and authorizes
them to take all actions on his or her behalf under this Agreement including the
appointment of an agent ("Stockholders' Agent") to represent the Stockholders on
a day to day basis in connection with any and all Tax audits. The Stockholders'
Agent shall be . The Stockholders' Representative may change the
Stockholders' Agent upon ten (10) days written notice to Novell's Tax Director.
Novell and WordPerfect shall be entitled to rely on all unanimous actions,
decisions, representations and promises of the Stockholders' Representatives and
Stockholders' Agent as if the same had been made by each Stockholder personally,
without any obligation to verify, authenticate or seek confirmation of any other
facts from the Stockholders or from any other person. Upon the death or legal
incapacity of either of the individuals named above, the executor or guardian of
the estate of such individual shall succeed him as a Stockholders'
Representative.
4.2 Stockholder Vote. If the Stockholders' Representatives are unable to
agree with respect to an action to be taken under Section 3.4 of this Agreement,
they shall so notify Novell, WordPerfect and the Stockholders in writing.
Thereafter, any action to be taken by the Stockholders' Representatives or
Stockholders' Agent under Section 3.4 with respect to any such action shall be
decided by a majority vote of the Stockholders who would be liable for any
resulting Tax under Section 3.3, with each such Stockholder having a vote equal
to his or her Sharing Percentage.
ARTICLE V
MISCELLANEOUS
5.1 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which counterparts
collectively shall constitute one instrument representing the Agreement between
the parties hereto.
5.2 Construction of Terms. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give any person, from or
corporation, other than the parties hereto or their respective successors and
assigns, any rights or remedies under or by reason of this Agreement.
5.3 Governing Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the
substantive laws of the State of Utah without regard to the Utah choice of law
rules.
5.4 Amendment and Modification. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties, nor is this Agreement intended to confer upon any other person except
the parties any rights or remedies hereunder.
5.5 Interpretation. The title, article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
A-50
182
5.6 Severability. In the event that any one or more of the provisions of
this Agreement shall be held to illegal, invalid or unenforceable in any
respect, the same shall not in any respect affect the validity, legality or
enforceability of the remainder of this Agreement, and the parties shall use
their best efforts to replace such illegal, invalid or unenforceable provisions
with an enforceable provision approximating, to the extent possible, the
original intent of the parties.
5.7 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no representations, promises, warranties, covenants, or
undertakings with respect to the subject matter contained herein, other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
5.8 Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of and be binding upon each party and such parties' heirs,
devises, legatees, personal representatives, successors and assigns.
5.9 Advice of Counsel. Each party hereto represents that they have
consulted with, or had the opportunity to consult with, legal counsel with
respect to this Agreement.
5.10 Effective Date. This Agreement shall become effective at the
Effective Date of the Merger.
5.11 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Novell: Novell, Inc.
122 East, 1700 South
Provo, Utah 84606
Attn: Tax Director
Telecopy No.: (801) 429-3951
Telephone No.: (801) 429-7000
If to Stockholders' Representatives:
Alan C. Ashton
Bruce W. Bastian
With a copy to: Stockholders' Agent
A-51
183
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
NOVELL INC.,
a Delaware corporation
By:
David C. Bradford
Senior Vice President and
General Counsel
WORDPERFECT CORPORATION,
a Utah corporation
By:
Adriaan Rietveld, President
and Chief Executive Officer
By:
R. Duff Thompson, Secretary
A-52
184
STOCKHOLDERS' SIGNATURE PAGE
R. Duff Thompson as custodian for:
Allison R. Ashton
Samuel L. Ashton
Eliza K. Ashton
Adam C. Ashton
Stephen D. Ashton
Rebekah R. Ashton
Charles R. Bastian
Darren B. Bastian
Jeffrey H. Bastian
Robert A. Bastian
Alan C. Ashton Spencer C. Ashton, as
Attorney-in-fact for Morgan A. Ashton
Karen Ashton Brigham M. Ashton
Emily A. Eddington Bruce W. Bastian
Amy J. Young Melanie Bastian
Spencer C. Ashton
A-53
185