\nExhibit 1.1 Articles of Merger
\nExhibit 5.6 Form of Shareholder Agreement
\nExhibit 5.12 Form of Affiliates Agreement
\nExhibit 6.2(j) Form of Tax Matters Agreement
\n<\/c><\/c><\/s><\/table>\n (iii)
\n 132<\/p>\n
AGREEMENT AND PLAN OF REORGANIZATION<\/p>\n
THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”), dated as of
\nMarch 21, 1994, is entered into by and among NOVELL, INC., a Delaware
\ncorporation (“Novell”), NOVELL ACQUISITION CORP., a Delaware corporation and a
\nwholly owned subsidiary of Novell (“Sub”), and WORDPERFECT CORPORATION., a Utah
\ncorporation (“WordPerfect”). Alan C. Ashton (“Ashton”), Bruce W. Bastian (“Mr.
\nBastian”), and Melanie L. Bastian (“Ms. Bastian”) shareholders of WordPerfect,
\nare parties to this Agreement only for purposes of Section 5.3. Novell and
\nWordPerfect are sometimes referred to as a “Company” or the “Companies.”<\/p>\n
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
\nmutual covenants and agreements contained herein, Novell, Sub and WordPerfect
\nhereby agree as follows:<\/p>\n
ARTICLE I<\/p>\n
THE MERGER<\/p>\n
1.1 Merger; Effective Time. Subject to the terms and conditions of this
\nAgreement and of the Articles of Merger attached as Exhibit 1.1 (the “Articles
\nof Merger”), Sub will be merged into WordPerfect (the “Merger”) in accordance
\nwith the Utah Revised Business Corporation Act (the “URBCA”). The Articles of
\nMerger provide, among other things, the mode of effecting the Merger and the
\nmanner and basis of converting each issued and outstanding share of capital
\nstock of WordPerfect into shares of Common Stock of Novell (“Novell Common
\nStock”).<\/p>\n
Subject to the provisions of this Agreement and the Articles of Merger, the
\nArticles of Merger, together with required officers’ certificates, shall be
\nfiled in accordance with the URBCA on the Closing Date (as defined in Section
\n1.2). The Merger shall become effective upon confirmation of such filing of the
\nArticles of Merger and such officers’ certificates (the date of confirmation of
\nsuch filing is referred to as the “Effective Date” and the time of confirmation
\nof such filing is referred to as the “Effective Time”).<\/p>\n
1.2 Closing. The closing of the Merger (the “Closing”) will take place as
\nsoon as practicable on the later of (x) the date of the Shareholders’ Meeting
\nreferred to in Section 5.6 or (y) the first business day after satisfaction or
\nwaiver of the latest to occur of the conditions set forth in Article VI (the
\n“Closing Date”), at the offices of Wilson, Sonsini, Goodrich & Rosati, Two Palo
\nAlto Square, Palo Alto, California 94306, unless a different date or place is
\nagreed to in writing by the parties hereto.<\/p>\n
1.3 Effects of the Merger. At the Effective Time, (i) the separate
\nexistence of Sub shall cease and Sub shall be merged with and into WordPerfect
\n(Sub and WordPerfect are sometimes referred to as the “Constituent Corporations”
\nand WordPerfect after the Merger is sometimes referred to as the “Surviving
\nCorporation”), (ii) the Articles of Incorporation of WordPerfect shall be the
\nArticles of Incorporation of the Surviving Corporation, except that such
\nArticles of Incorporation shall be amended to provide that the authorized
\ncapital stock of the Surviving Corporation shall be 1,000,000 shares of Common
\nStock, (iii) the Bylaws of WordPerfect shall be the Bylaws of the Surviving
\nCorporation, (iv) the directors of Sub shall be the directors of the Surviving
\nCorporation, (v) the officers of WordPerfect shall be the officers of the
\nSurviving Corporation; and (vi) the Merger shall, from and after the Effective
\nTime, have all the effects provided by applicable law, this Agreement and the
\nArticles of Merger.<\/p>\n
1.4 Tax-Free Reorganization; Pooling of Interests. The Merger is intended
\nto be a reorganization within the meaning of Section 368 of the Internal Revenue
\nCode of 1986, as amended (the “Code”), and to be accounted for as a pooling of
\ninterests pursuant to Opinion No. 16 of the Accounting Principles Board.
\n 133<\/p>\n
ARTICLE II<\/p>\n
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
\n CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES<\/p>\n
2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
\nMerger and without any action on the part of the holder of any shares of capital
\nstock of WordPerfect:<\/p>\n
(a) Capital Stock of Sub. Each issued and outstanding share of capital
\n stock of Sub shall continue to be issued and outstanding and shall be
\n converted into one share of validly issued, fully paid and non-assessable
\n Common Stock of the Surviving Corporation. Each stock certificate of Sub
\n evidencing ownership of any such shares shall continue to evidence
\n ownership of such shares of capital stock of the Surviving Corporation.<\/p>\n
(b) Cancellation of Certain Shares of Capital Stock of
\n WordPerfect. All shares of capital stock of WordPerfect that are owned
\n directly or indirectly by WordPerfect or by any Subsidiary (as defined
\n below) of WordPerfect and any shares of capital stock of WordPerfect owned
\n by Novell, Sub or any other Subsidiary of Novell shall be cancelled and no
\n stock of Novell or other consideration shall be delivered in exchange
\n therefor. In this Agreement, a “Subsidiary” means a corporation or other
\n entity whose voting securities are owned or are otherwise controlled
\n directly or indirectly by a parent corporation or other intermediary entity
\n in an amount sufficient to elect at least a majority of the Board of
\n Directors or other managers of such corporation or other entity.<\/p>\n
(c) Conversion of Capital Stock of WordPerfect. Each issued and
\n outstanding share of WordPerfect Common Stock (other than shares to be
\n canceled pursuant to Section 2.1(b) and shares, if any, held by persons
\n exercising dissenters’ rights in accordance with the URBCA (“Dissenting
\n Shares”)), including shares issuable upon the exercise of any WordPerfect
\n Option (as defined in Section 3.2 below) prior to the Effective Time, that
\n are issued and outstanding immediately prior to the Effective Time (other
\n than Dissenting Shares) shall automatically be canceled and extinguished
\n and converted, without any action on the part of the holder thereof, into
\n the right to receive one share of Novell Common Stock. The ratio pursuant
\n to which each share of capital stock of WordPerfect will be exchanged for
\n one share of Novell Common Stock, determined in accordance with the
\n foregoing provisions, is referred to as the “Exchange Ratio.”<\/p>\n
(d) Adjustment of Exchange Ratio. If, between the date of this
\n Agreement and the Effective Time, the outstanding shares of Novell Common
\n Stock shall have been changed into a different number of shares or a
\n different class by reason of any reclassification, split-up, stock
\n dividend, stock combination, then the Exchange Ratio shall be
\n correspondingly adjusted.<\/p>\n
(e) Dissenters’ Rights. If holders of capital stock of WordPerfect are
\n entitled to dissenters’ rights in connection with the Merger under Part 13
\n of the URBCA, any Dissenting Shares shall not be converted into Novell
\n Common Stock but shall be converted into the right to receive such
\n consideration as may be determined to be due with respect to such
\n Dissenting Shares pursuant to the law of the State of Utah. WordPerfect
\n shall give Novell prompt notice of any demand received by WordPerfect to
\n require WordPerfect to purchase shares of capital stock of WordPerfect, and
\n Novell shall have the right to participate in all negotiations and
\n proceedings with respect to such demand. WordPerfect agrees that, except
\n with the prior written consent of Novell, or as required under the URBCA,
\n it will not voluntarily make any payment with respect to, or settle or
\n offer to settle, any such purchase demand. Each holder of Dissenting Shares
\n (“Dissenting Shareholder”) who, pursuant to the provisions of the URBCA,
\n becomes entitled to payment of the value of shares of capital stock of
\n WordPerfect shall receive payment therefor (but only after the value
\n therefor shall have been agreed upon or finally determined pursuant to such
\n provisions). In the event of legal obligation, after the Effective Time, to
\n deliver shares of Novell Common Stock to any holder of shares of capital
\n stock of WordPerfect who shall have failed to make an effective purchase
\n demand or shall have lost its status as a Dissenting Shareholder, Novell
\n shall issue and deliver, upon surrender by such Dissenting Shareholder of
\n such holder’s certificate or certificates representing<\/p>\n
A-2
\n 134<\/p>\n
shares of capital stock of WordPerfect, the shares of Novell Common
\n Stock to which such Dissenting Shareholder is then entitled under this
\n Section 2.1 and the Articles of Merger.<\/p>\n
(f) Fractional Shares. No fractional shares of Novell Common Stock
\n shall be issued, but in lieu thereof each holder of shares of capital stock
\n of WordPerfect who would otherwise be entitled to receive a fraction of a
\n share of Novell Common Stock shall receive from Novell an amount of cash
\n equal to the per share market value of Novell Common Stock (based on the
\n last sales price of Novell Common Stock as reported on the National Market
\n System of the National Association of Securities Dealers’ Automated
\n Quotation System on the Effective Date of the Merger) multiplied by the
\n fraction of a share of Novell Common Stock to which such holder would
\n otherwise be entitled. The fractional share interests of each WordPerfect
\n shareholder shall be aggregated, so that no WordPerfect shareholder shall
\n receive cash in an amount greater than the value of one full share of
\n Novell Common Stock.<\/p>\n
2.2 Exchange of Certificates.<\/p>\n
(a) Exchange Agent. Prior to the Closing Date, Novell shall appoint Mellon
\nBank, N.A. to act as exchange agent (the “Exchange Agent”) in the Merger.<\/p>\n
(b) Novell to Provide Common Stock. Promptly after the Effective Time,
\nNovell shall make available for exchange in accordance with this Article II and
\nthe Articles of Merger, through such reasonable procedures as Novell may adopt,
\nthe shares of Novell Common Stock issuable pursuant to Section 2.1 and the
\nArticles of Merger in exchange for outstanding shares of capital stock of
\nWordPerfect.<\/p>\n
(c) Exchange Procedures. As soon as practicable after the Effective Time,
\nthe Exchange Agent shall mail to each holder of record of a certificate or
\ncertificates which immediately prior to the Effective Time represented
\noutstanding shares of capital stock of WordPerfect (the “Certificates”) whose
\nshares are being converted into Novell Common Stock pursuant to Section 2.1 and
\nthe Articles of Merger, (i) a letter of transmittal (which shall specify that
\ndelivery shall be effected, and risk of loss and title to the Certificates shall
\npass, only upon delivery of the Certificates to the Exchange Agent and shall be
\nin such form and have such other provisions as Novell may reasonably specify)
\nand (ii) instructions for use in effecting the surrender of the Certificates in
\nexchange for Novell Common Stock. Upon surrender of a Certificate for
\ncancellation to the Exchange Agent or to such other agent or agents as may be
\nappointed by Novell, together with such letter of transmittal, duly executed,
\nthe holder of such Certificate shall be entitled to receive in exchange therefor
\nthe number of shares of Novell Common Stock to which the holder of capital stock
\nof WordPerfect is entitled pursuant to Section 2.1 hereof. The Certificate so
\nsurrendered shall forthwith be canceled. In the event of a transfer of ownership
\nof capital stock of WordPerfect which is not registered on the transfer records
\nof WordPerfect, the appropriate number of shares of Novell Common Stock may be
\ndelivered to a transferee if the Certificate representing such capital stock of
\nWordPerfect is presented to the Exchange Agent and accompanied by all documents
\nrequired to evidence and effect such transfer and to evidence that any
\napplicable stock transfer taxes have been paid. Until surrendered as
\ncontemplated by this Section 2.2, each Certificate shall be deemed at any time
\nafter the Effective Time to represent the right to receive upon such surrender
\nthe number of shares of Novell Common Stock as provided by this Article II and
\nthe provisions of the URBCA.<\/p>\n
(d) No Further Ownership Rights in Capital Stock of WordPerfect. All Novell
\nCommon Stock delivered upon the surrender for exchange of shares of capital
\nstock of WordPerfect in accordance with the terms hereof shall be deemed to have
\nbeen delivered in full satisfaction of all rights pertaining to such shares of
\ncapital stock of WordPerfect. There shall be no further registration of
\ntransfers on the stock transfer books of the Surviving Corporation of the shares
\nof capital stock of WordPerfect which were outstanding immediately prior to the
\nEffective Time. If, after the Effective Time, Certificates are presented to the
\nSurviving Corporation for any reason, they shall be cancelled and exchanged as
\nprovided in this Article II.<\/p>\n
A-3
\n 135<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF WORDPERFECT<\/p>\n
Except as disclosed in a document referring specifically to the
\nrepresentations and warranties in this Agreement which identifies the section
\nand subsection to which such disclosure relates and which is delivered by
\nWordPerfect to Novell prior to the execution of this Agreement (the “WordPerfect
\nDisclosure Schedule”), WordPerfect represents and warrants to Novell and Sub as
\nset forth below:<\/p>\n
3.1 Organization, Standing and Power. Each of WordPerfect and its
\nSubsidiaries is a corporation duly organized, validly existing and in good
\nstanding under the laws of its state of incorporation, and has all requisite
\npower and authority to own, operate and lease its properties and to carry on its
\nbusiness as now being conducted. A true and complete list of such Subsidiaries
\nis set out in Schedule 3.1 hereto together with the jurisdiction of
\nincorporation of each Subsidiary. Each of WordPerfect and its Subsidiaries is
\nduly qualified as a foreign corporation and is in good standing in each
\njurisdiction in which the failure to so qualify would have a Material Adverse
\nEffect (as defined below). WordPerfect has no direct or indirect equity interest
\nin or loans to any partnership, corporation, joint venture, business association
\nor other entity other than WordPerfect’s Subsidiaries and loans to entities
\naffiliated with employees of WordPerfect which in the aggregate do not exceed
\n$1,000,000. WordPerfect has delivered to Novell, or will deliver to Novell
\nwithin twenty one (21) days of the date hereof, complete and correct copies of
\nthe Articles of Incorporation and Bylaws (or other organizational or charter
\ndocument) of WordPerfect and each of WordPerfect’s Subsidiaries, in each case as
\namended to the date hereof.<\/p>\n
As used in this Agreement, the term “Material Adverse Effect” used in
\nconnection with a party or any of such party’s subsidiaries means any event,
\nchange or effect that is materially adverse to the condition (financial or
\notherwise), properties, assets, liabilities, businesses, operations, results of
\noperations or prospects of such party and its subsidiaries taken as a whole;
\nprovided, however, that a change or deterioration in the financial condition,
\nassets, liabilities or results of operations of WordPerfect and its Subsidiaries
\nwhich is reflected in the financial projections delivered by WordPerfect to
\nNovell on March 17, 1994 (the “WordPerfect Financial Projections”) will not be
\ndeemed to constitute a Material Adverse Effect with respect to WordPerfect for
\nany purpose under this Agreement.<\/p>\n
3.2 Capital Structure. The authorized capital stock of WordPerfect
\nconsists of 200,000,000 shares of Common Stock, no par value (“WordPerfect
\nCommon Stock”). At the close of business on March 18, 1994, there were
\n51,380,100 shares of WordPerfect Common Stock outstanding and 7,857,500 shares
\nof WordPerfect Common Stock were reserved for issuance upon the exercise of
\noutstanding employee stock options(“WordPerfect Options”), pursuant to the
\nWordPerfect Corporation 1992 Long-Term Incentive Plan (“WordPerfect Option
\nPlan”). All outstanding shares of WordPerfect Common Stock are, and any shares
\nof WordPerfect Common Stock issued upon exercise of any WordPerfect Option will
\nbe, validly issued, fully paid and nonassessable and not subject to preemptive
\nrights created by statute, WordPerfect’s Articles of Incorporation or Bylaws or
\nany agreement to which WordPerfect or any of its Subsidiaries is a party or by
\nwhich WordPerfect or any of its Subsidiaries may be bound. Except for the shares
\nlisted above issuable pursuant to WordPerfect Options, there are no options,
\nwarrants, calls, conversion rights, commitments or agreements of any character
\nto which WordPerfect or any Subsidiary of WordPerfect is a party or by which any
\nof them may be bound that do or may obligate WordPerfect or any Subsidiary of
\nWordPerfect to issue, deliver or sell, or cause to be issued, delivered or sold,
\nadditional shares of the capital stock of WordPerfect or of any Subsidiary of
\nWordPerfect or that do or may obligate WordPerfect or any Subsidiary of
\nWordPerfect to grant, extend or enter into any such option, warrant, call,
\nconversion right, commitment or agreement. WordPerfect is, or will be prior to
\nthe Closing, the owner of all outstanding shares of capital stock of each of its
\nSubsidiaries and all such shares are duly authorized, validly issued, fully paid
\nand nonassessable. WordPerfect is not under any obligation to register under the
\nSecurities Act of 1993, as amended (the “Securities Act”) any of its presently
\noutstanding securities or any securities that may subsequently be issued.<\/p>\n
3.3 Authority. WordPerfect has all requisite corporate power and authority
\nto enter into this Agreement and the Articles of Merger and, subject to approval
\nof this Agreement and the Articles of Merger by the shareholders of WordPerfect,
\nto perform its obligations hereunder, and to consummate the transactions<\/p>\n
A-4
\n 136<\/p>\n
contemplated hereby. The execution and delivery of this Agreement and the
\nArticles of Merger, the performance by WordPerfect of its obligations hereunder
\nand thereunder and the consummation of the transactions contemplated hereby and
\nthereby have been duly and validly authorized by all necessary corporate action
\non the part of WordPerfect, and have been unanimously approved by the Board of
\nDirectors of WordPerfect. No other corporate proceeding on the part of
\nWordPerfect is necessary to authorize this Agreement or the Articles of Merger
\nor the performance of WordPerfect’s obligations hereunder or thereunder or the
\nconsummation of the transactions contemplated hereby or thereby, other than the
\napproval of the Merger by WordPerfect’s shareholders. This Agreement and the
\nArticles of Merger have been duly executed and delivered by WordPerfect and
\nconstitute legal, valid and binding obligations of WordPerfect enforceable
\nagainst WordPerfect in accordance with their respective terms, except as
\nenforcement may be limited by bankruptcy, insolvency, or other similar laws
\naffecting the enforcement of creditors’ rights generally and except that the
\navailability of equitable remedies is subject to the discretion of the court
\nbefore which any proceeding therefor may be brought. Subject to satisfaction of
\nthe conditions set forth in Article VI, the execution and delivery of this
\nAgreement and the Articles of Merger do not, and the consummation of the
\ntransactions contemplated hereby and thereby will not conflict with or result in
\nany violation of any material statute, law, rule, regulation, judgment, order,
\ndecree, or ordinance applicable to WordPerfect or any Subsidiary of WordPerfect
\nor their respective properties or assets, or conflict with or result in any
\nbreach or default (with or without notice or lapse of time, or both) under, or
\ngive rise to a right of termination, cancellation or acceleration of any
\nobligation or to loss of a material benefit under, or result in the creation of
\na material lien or encumbrance on any of the properties or assets of WordPerfect
\nor any of its Subsidiaries pursuant to (i) any provision of the Articles of
\nIncorporation or Bylaws of WordPerfect or any Subsidiary of WordPerfect or (ii)
\nany material agreement, contract, note, mortgage, indenture, lease, instrument,
\npermit, concession, franchise or license to which WordPerfect or any of its
\nSubsidiaries is a party or by which WordPerfect or any of its Subsidiaries or
\nany of their properties or assets may be bound or affected. No consent,
\napproval, order or authorization of, or registration, declaration or filing
\nwith, any court, administrative agency, commission, regulatory authority or
\nother governmental authority or instrumentality, domestic or foreign (a
\n“Governmental Entity”), is required by or with respect to WordPerfect or any of
\nits Subsidiaries in connection with the execution and delivery of this Agreement
\nor the Articles of Merger by WordPerfect or the consummation by WordPerfect of
\nthe transactions contemplated hereby or thereby, except for (i) the filing of a
\npremerger notification report by WordPerfect under the Hart-Scott-Rodino
\nAntitrust Improvements Act of 1976, as amended (the “HSR Act”), (ii) the
\ndistribution of a proxy statement relating to the Shareholders’ Meeting (the
\n“Proxy Statement”) and the obtaining of the approval of the Merger by
\nWordPerfect’s shareholders, (iii) the filing of the Articles of Merger with the
\nUtah Division of Corporations and Commercial Code and the Secretary of the State
\nof the State of Delaware and appropriate documents with the relevant authorities
\nof other states in which WordPerfect is qualified to do business, (iv) such
\nconsents, approvals, orders, authorizations, registrations, declarations and
\nfilings as may be required under the laws of any foreign country, which if not
\nobtained or made would not have a Material Adverse Effect on WordPerfect and (v)
\nsuch other consents, authorizations, filings, approvals and registrations which
\nif not obtained or made would not have a Material Adverse Effect on WordPerfect.<\/p>\n
3.4 Financial Statements. WordPerfect has furnished Novell with its
\nfinancial statements for each of the fiscal years ended December 31, 1991, 1992
\nand 1993, including a consolidated balance sheet of WordPerfect and its
\nconsolidated Subsidiaries as at each of the fiscal years ended December 31,
\n1991, 1992 and 1993 (collectively, the “WordPerfect Financial Statements”). The
\nWordPerfect Financial Statements have been prepared in accordance with generally
\naccepted accounting principles consistently applied (except as may be indicated
\nin the notes thereto), and fairly present the consolidated financial position of
\nWordPerfect and its consolidated Subsidiaries as at the dates thereof and the
\nconsolidated results of their operations and changes in financial position for
\nthe periods then ended. WordPerfect will provide in a timely manner audited
\nWordPerfect Financial Statements and any interim financial statements required
\nin connection with the filing of any registration statement relating to the
\ntransactions contemplated hereby. All reserves established by WordPerfect with
\nrespect to assets of WordPerfect are adequate. There has been no change in
\nWordPerfect’s accounting policies, except as described in the notes to the
\nWordPerfect Financial Statements.<\/p>\n
A-5
\n 137<\/p>\n
3.5 Compliance with Law. Each of WordPerfect and its Subsidiaries is in
\ncompliance and has conducted its business so as to comply with all laws, rules
\nand regulations, judgments, decrees or orders of any Governmental Entity
\napplicable to its operations or with respect to which compliance is a condition
\nof engaging in the business thereof, except to the extent that failure to comply
\nwould, individually or in the aggregate, not have had and is reasonably expected
\nnot to have a Material Adverse Effect on WordPerfect. There are no material
\njudgments or orders, injunctions, decrees, stipulations or awards (whether
\nrendered by a court or administrative agency or by arbitration) against
\nWordPerfect or any Subsidiary of WordPerfect or against any of their respective
\nproperties or businesses.<\/p>\n
3.6 No Defaults. Neither WordPerfect nor any Subsidiary of WordPerfect is,
\nor has received notice that it would be with the passage of time, (i) in
\nviolation of any provision of the Articles of Incorporation or Bylaws (or other
\norganizational or charter document) of WordPerfect or any Subsidiary of
\nWordPerfect or (ii) in default or violation of any term, condition or provision
\nof (A) any material judgment, decree, order, injunction or stipulation
\napplicable to WordPerfect or any Subsidiary of WordPerfect or (B) any material
\nagreement, note, mortgage, indenture, contract, lease or instrument, permit,
\nconcession, franchise or license to which WordPerfect or any Subsidiary of
\nWordPerfect is a party or by which WordPerfect or any of its Subsidiaries or
\ntheir properties or assets may be bound.<\/p>\n
3.7 Litigation. There is no action, suit, proceeding, claim or
\ninvestigation pending or, to the best knowledge of WordPerfect, threatened,
\nagainst WordPerfect or any of its Subsidiaries which could, individually or in
\nthe aggregate, have a Material Adverse Effect or which in any manner challenges
\nor seeks to prevent, enjoin, alter or delay any of the transactions contemplated
\nhereby. The WordPerfect Disclosure Schedule sets forth with respect to each
\npending action, suit, proceeding, claim or investigation to which WordPerfect or
\nany of its Subsidiaries is a party to the extent that the aggregate damages
\nclaimed for all such complaints exceed $10,000,000, the forum, the parties
\nthereto, a brief description of the subject matter thereof and the amount of
\ndamages claimed. WordPerfect has delivered to, or will deliver within twenty one
\n(21) days of the date hereof to Novell correct and complete copies of all
\ncorrespondence prepared by its counsel for WordPerfect’s independent public
\naccountants in connection with the last three completed audits of WordPerfect’s
\nfinancial statements and any such correspondence since the date of the last such
\naudit.<\/p>\n
3.8 No Material Adverse Effect. Since December 31, 1993, WordPerfect and
\nits Subsidiaries have conducted their respective businesses in the ordinary
\ncourse and there has not occurred:<\/p>\n
(a) Any Material Adverse Effect with respect to WordPerfect;<\/p>\n
(b) Any amendments or changes in the Articles of Incorporation or
\n Bylaws of WordPerfect or any of its Subsidiaries other than in connection
\n with a consolidation of its business units prior to the date of this
\n Agreement in the manner previously disclosed to Novell;<\/p>\n
(c) Any damage, destruction or loss, whether covered by insurance or
\n not, that could reasonably constitute a Material Adverse Effect;<\/p>\n
(d) Any redemption, repurchase or other acquisition of shares of
\n capital stock of WordPerfect or its Subsidiaries by WordPerfect or its
\n Subsidiaries (other than pursuant to arrangements with terminated employees
\n or consultants), or any declaration, setting aside or payment of any
\n dividend or other distribution (whether in cash, stock or property) with
\n respect to the capital stock of WordPerfect or its Subsidiaries;<\/p>\n
(e) Any increase in or modification of the compensation or benefits
\n payable or to become payable by WordPerfect or any Subsidiary to any of
\n their directors or employees, except in the ordinary course of business
\n consistent with past practice;<\/p>\n
(f) Any increase in or modification of any bonus, pension, insurance
\n or other employee benefit plan, payment or arrangement (including, but not
\n limited to, the granting of stock options, restricted stock awards or stock
\n appreciation rights) made to, for or with any of its employees, except in
\n the ordinary course of business consistent with WordPerfect’s past
\n practice;<\/p>\n
A-6
\n 138<\/p>\n
(g) Any acquisition or sale of a material amount of property or assets
\n of WordPerfect or any of its Subsidiaries;<\/p>\n
(h) Any alteration in any term of any outstanding security of
\n WordPerfect or any of its Subsidiaries;<\/p>\n
(i) Any (A) incurrence, assumption or guarantee by WordPerfect or any
\n of its Subsidiaries of any debt for borrowed money; (B) issuance or sale of
\n any securities convertible into or exchangeable for debt securities of
\n WordPerfect or any of its Subsidiaries; or (C) issuance or sale of options
\n or other rights to acquire from WordPerfect or any of its Subsidiaries,
\n directly or indirectly, debt securities of WordPerfect or any of its
\n Subsidiaries or any securities convertible into or exchangeable for any
\n such debt securities;<\/p>\n
(j) Any creation or assumption by WordPerfect or any of its
\n Subsidiaries of any mortgage, pledge, security interest or lien or other
\n encumbrance on any asset (other than liens arising under existing lease
\n financing arrangements or liens arising in the ordinary course of
\n WordPerfect’s business which in the aggregate are not material and liens
\n for taxes not yet due and payable);<\/p>\n
(k) Any making of any loan, advance or capital contribution to or
\n investment in any person other than (A) loans, advances or capital
\n contributions to or investments in wholly-owned Subsidiaries of
\n WordPerfect, (B) travel loans or advances made in the ordinary course of
\n business of WordPerfect and its Subsidiaries and (C) loans to entities
\n affiliated with its employees prior to the date of this Agreement which do
\n not exceed $1,000,000 in the aggregate;<\/p>\n
(l) Any entry into, amendment of, relinquishment, termination or
\n non-renewal by WordPerfect or any of its Subsidiaries of any contract,
\n lease transaction, commitment or other right or obligation requiring
\n aggregate payments by WordPerfect in excess of $10,000,000 other than in
\n the ordinary course of business;<\/p>\n
(m) Any transfer or grant of a right under the WordPerfect
\n Intellectual Property Rights (as defined in Section 3.16), other than those
\n transferred or granted in the ordinary course of business consistent with
\n past practice;<\/p>\n
(n) Any labor dispute, other than routine individual grievances, or
\n any activity or proceeding by a labor union or representative thereof to
\n organize any employees of WordPerfect or any of its Subsidiaries; or<\/p>\n
(o) Any agreement or arrangement made by WordPerfect or any of its
\n Subsidiaries to take any action which, if taken prior to the date hereof,
\n would have made any representation or warranty set forth in this Section
\n 3.8 untrue or incorrect as of the date when made.<\/p>\n
3.9 Absence of Undisclosed Liabilities. WordPerfect and its Subsidiaries
\nhave no liabilities or obligations (whether absolute, accrued or contingent, and
\nwhether or not determined or determinable), of a character which, under
\ngenerally accepted accounting principles, should be accrued, shown or disclosed
\non a balance sheet of WordPerfect (including the footnotes thereto) except
\nliabilities (i) adequately provided for in the WordPerfect Balance Sheet, (ii)
\nincurred in the ordinary course of business and not required under generally
\naccepted accounting principles to be reflected on the WordPerfect Balance Sheet
\nor (iii) incurred since the date of the WordPerfect Balance Sheet which are not,
\nindividually or in the aggregate, material.<\/p>\n
3.10 Information Supplied. None of the information supplied or to be
\nsupplied by WordPerfect for inclusion in the Registration Statement on Form S-4
\nto be filed with the Securities and Exchange Commission (the “SEC”) by Novell in
\nconnection with the issuance of the Novell Common Stock in or as a result of the
\nMerger (the “S-4”), including the Proxy Statement included therein, at the date
\nsuch information is supplied and at the time of the Shareholders’ Meeting,
\ncontains or will contain any untrue statement of a material fact or omits or
\nwill omit to state any material fact required to be stated therein or necessary
\nin order to make the statements therein, in light of the circumstances under
\nwhich they are made, not misleading or will, in the case of the S-4 at the time
\nthe S-4 becomes effective under the Securities Act, contain any untrue statement
\nof a material fact or omit to state any material fact required to be stated
\ntherein or necessary to make the statements therein not misleading.<\/p>\n
A-7
\n 139<\/p>\n
3.11 Certain Agreements. Neither the execution and delivery of this
\nAgreement or the Articles of Merger nor the consummation of the transactions
\ncontemplated hereby or thereby will (i) result in any payment (including,
\nwithout limitation, severance, unemployment compensation, golden parachute,
\nbonus or otherwise) becoming due to any director or employee of WordPerfect or
\nits Subsidiaries from WordPerfect or its Subsidiaries, under any Plan (as
\ndefined in Section 3.12) or otherwise, (ii) materially increase any benefits
\notherwise payable under any Plan, or (iii) result in the acceleration of the
\ntime of payment or vesting of any such benefits, other than the acceleration of
\nthe WordPerfect Options.<\/p>\n
3.12 ERISA. All material employee benefit plans, programs, policies or
\narrangements covering any active, former or retired employee of WordPerfect or
\nits Subsidiaries are listed in the WordPerfect Disclosure Schedule (the
\n“Plans”). To the extent applicable, the Plans comply with the requirements of
\nthe Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and
\nthe Code, and any Plan intended to be qualified under Section 401(a) of the Code
\nhas either obtained a favorable determination letter as to its qualified status
\nfrom the Internal Revenue Service or still has a remaining period of time under
\napplicable Treasury Regulations or Internal Revenue Service pronouncements in
\nwhich to apply for such determination letter and to make any amendments
\nnecessary to obtain a favorable determination. To the extent any Plan with an
\nexisting determination letter from the Internal Revenue Service must be amended
\nto comply with the applicable requirements of the Tax Reform Act of 1986 and
\nsubsequent legislation, the time period for effecting such amendments will not
\nexpire prior to the Merger. WordPerfect has furnished or will furnish within
\ntwenty one (21) days of the date hereof, Novell with copies of the most recent
\nInternal Revenue Service letters and Forms 5500 with respect to any such Plan.
\nNo Plan is covered by Title IV of ERISA or Section 412 of the Code. Neither
\nWordPerfect, its Subsidiaries nor any officer or director of WordPerfect or any
\nof its Subsidiaries has incurred any liability or penalty under Sections 4975
\nthrough 4980 of the Code or Title I of ERISA. Each Plan has been maintained and
\nadministered in all material respects in compliance with its terms and with the
\nrequirements prescribed by any and all statutes, orders, rules and regulations,
\nincluding but not limited to ERISA and the Code, which are applicable to such
\nPlans. No suit, action or other litigation (excluding claims for benefits
\nincurred in the ordinary course of Plan activities) has been brought, or to the
\nbest knowledge of WordPerfect is threatened, against or with respect to any such
\nPlan. All material contributions, reserves or premium payments required to be
\nmade or accrued as of the date hereof to the Plans have been made or accrued.<\/p>\n
3.13 Major Contracts. Neither WordPerfect nor any of its Subsidiaries is a
\nparty to or subject to:<\/p>\n
(a) Any union contract or any employment contract or arrangement
\n providing for future compensation, written or oral, with any officer,
\n consultant, director or employee which is not terminable by it or its
\n Subsidiary on 30 days’ notice or less without penalty or obligation to make
\n payments related to such termination, other than (A) (in the case of
\n employees other than executive officers) such agreements as are not
\n materially different from standard arrangements offered to employees
\n generally in the ordinary course of business consistent with WordPerfect’s
\n past practices, copies of which have been provided, or will be provided
\n within twenty one (21) days of the date hereof to Novell and (B) such
\n agreements as may be imposed or implied by law;<\/p>\n
(b) Any plans, contracts or arrangements which collectively require
\n aggregate payments by WordPerfect in excess of $500,000, written or oral,
\n providing for bonuses, pensions, deferred compensation, severance pay or
\n benefits, retirement payments, profit-sharing, or the like;<\/p>\n
(c) Any joint venture contract or arrangement or any other agreement
\n which has involved or is expected to involve a sharing of profits with
\n other persons;<\/p>\n
(d) Any existing OEM agreement, distribution agreement, volume
\n purchase agreement, or other similar agreement in which the annual amount
\n involved in 1993 exceeded or is expected to exceed in fiscal 1994
\n $10,000,000 in aggregate amount or pursuant to which WordPerfect has
\n granted or received exclusive marketing rights related to any product,
\n group of products or territory;<\/p>\n
(e) Any lease for real or personal property in which the amount of
\n payments which WordPerfect is required to make on an annual basis exceeds
\n $1,000,000.<\/p>\n
A-8
\n 140<\/p>\n
(f) Any material agreement, contract, mortgage, indenture, lease,
\n instrument, license, franchise, permit, concession, arrangement, commitment
\n or authorization which may be, by its terms, terminated or breached by
\n reason of the execution of this Agreement, the Articles of Merger, the
\n closing of the Merger, or the transactions contemplated hereby or thereby;<\/p>\n
(g) Except for trade indebtedness incurred in the ordinary course of
\n business, any instrument evidencing or related in any way to indebtedness
\n in excess of $10,000,000 incurred in the acquisition of companies or other
\n entities or indebtedness in excess of $10,000,000 for borrowed money by way
\n of direct loan, sale of debt securities, purchase money obligation,
\n conditional sale, guarantee, or otherwise;<\/p>\n
(h) Any material license agreement, either as licensor or licensee
\n (excluding nonexclusive software licenses granted to customers or end-users
\n in the ordinary course of business) involving the payment of at least
\n $1,000,000;<\/p>\n
(i) Any contract containing covenants purporting to limit
\n WordPerfect’s freedom or that of any of its Subsidiaries to compete in any
\n line of business in any geographic area; or<\/p>\n
(j) Any other agreement, contract or commitment which is material to
\n WordPerfect and its Subsidiaries taken as a whole.<\/p>\n
Each agreement, contract, mortgage, indenture, plan, lease, instrument,
\npermit, concession, franchise, arrangement, license and commitment listed in the
\nWordPerfect Disclosure Schedule pursuant to this Section 3.13 is valid and
\nbinding on WordPerfect or its Subsidiaries, as applicable, and is in full force
\nand effect, and neither WordPerfect nor any of its Subsidiaries, nor to the
\nknowledge of WordPerfect, any other party thereto, has breached any material
\nprovision of, or is in material default under the terms of, any such agreement,
\ncontract, mortgage, indenture, plan, lease, instrument, permit, concession,
\nfranchise, arrangement, license or commitment.<\/p>\n
3.14 Taxes.<\/p>\n
(a) All Tax (as defined below) returns, statements, reports and forms
\n(including estimated Tax returns and reports and information returns and
\nreports) required to be filed with any Taxing Authority (as defined below) with
\nrespect to any Taxable period ending on or before the Effective Time, by or on
\nbehalf of WordPerfect or any of its Subsidiaries (collectively, the “WordPerfect
\nReturns”), have been or will be filed when due in accordance with all applicable
\nlaws (including any extensions of such due date), and all amounts shown due
\nthereon have been paid or have been fully accrued on the WordPerfect Financial
\nStatements in accordance with generally accepted accounting principles. Except
\nto the extent provided for or disclosed in the WordPerfect Financial Statements
\n(including notes thereto), the WordPerfect Returns correctly reflect in all
\nmaterial respects (and, as to any WordPerfect Returns not filed as of the date
\nhereof but filed prior to the Merger, will correctly reflect in all material
\nrespects) the Tax liability and status of WordPerfect and its Subsidiaries
\n(including each such corporation’s status as an S corporation within the meaning
\nof Section 1361 of the Code or any comparable provision under state law).
\nWordPerfect and its Subsidiaries have withheld and paid to the applicable
\nfinancial institution or Taxing Authority all amounts required to be withheld.
\nAll WordPerfect Returns pertaining to federal income tax filed with respect to
\nTaxable years of WordPerfect and its Subsidiaries through the Taxable year ended
\nDecember 31, 1990 in the case of the United States, have been examined and
\nclosed or are WordPerfect Returns with respect to which the applicable period
\nfor assessment under applicable law, after giving effect to extensions or
\nwaivers, has expired. Neither WordPerfect nor any of its Subsidiaries (or any
\nmember of any affiliated or combined group of which WordPerfect or any of its
\nSubsidiaries has been a member) has granted any extension or waiver of the
\nlimitation period applicable to any WordPerfect Returns. There is no claim,
\naudit, action, suit, proceeding, or investigation now pending or (to the best
\nknowledge of WordPerfect or any of its Subsidiaries) threatened against or with
\nrespect to WordPerfect or any of its Subsidiaries in respect of any Tax or
\nassessment. No notice of deficiency or similar document of any Tax Authority has
\nbeen received by WordPerfect or any of its Subsidiaries, and there are no
\nliabilities for Taxes (including liabilities for interest, additions to tax and
\npenalties thereon and related expenses) with respect to the issues that have
\nbeen raised (and are currently pending) by any Tax Authority that could, if
\ndetermined adversely to WordPerfect or any of its Subsidiaries, materially
\naffect the liability of<\/p>\n
A-9
\n 141<\/p>\n
WordPerfect or any of its Subsidiaries for Taxes in other Taxable (as defined
\nbelow) periods. Neither WordPerfect nor any of its Subsidiaries, nor any other
\nperson on behalf of WordPerfect or any of its Subsidiaries, has entered into nor
\nwill it enter into any agreement or consent pursuant to Section 341(f) of the
\nCode. There are no liens for Taxes upon the assets of WordPerfect or any of its
\nSubsidiaries except liens for current Taxes not yet due. Neither WordPerfect nor
\nany of its Subsidiaries has been or will be required to include any material
\nadjustment in Taxable income for any Tax period (or portion thereof) pursuant to
\nSection 481 or 263A of the Code or any comparable provision under state or
\nforeign Tax laws as a result of transactions, events or accounting methods
\nemployed prior to the Closing. There is no contract, agreement, plan or
\narrangement, including but not limited to the provisions of this Agreement,
\ncovering any employee or former employee of WordPerfect or any of its
\nSubsidiaries that, individually or collectively, could give rise to the payment
\nof any amount that would not be deductible pursuant to Section 162 (as
\nunreasonable compensation) or pursuant to Section 280G of the Code. WordPerfect
\nand its Subsidiaries have provided or made available to Novell or its designated
\nrepresentative true and correct copies of all material Tax Returns, and, as
\nreasonably requested by Novell prior to or following the date hereof,
\ninformation statements, reports, work papers, Tax opinions and memoranda and
\nother Tax data and documents. WordPerfect has not been within the five year
\nperiod preceding the date hereof a “United States real property holding
\ncorporation” within the meaning of Section 897(c)(2) of the Code. Neither
\nWordPerfect nor any of its Subsidiaries is a party to (or obligated under) any
\nTax allocation, Tax distribution, tax sharing, tax indemnity or similar
\nagreement or arrangement with respect to any tax (including without limitation
\nany such agreement or arrangement imposed by operation of law).<\/p>\n
(b) For purposes of this Agreement, the following terms have the following
\nmeanings: “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means (A)
\nany net income, alternative or add-on minimum tax, gross income, gross receipts,
\nsales, use, ad valorem, transfer, franchise, profits, license, withholding,
\npayroll, employment, excise, severance, stamp, occupation, premium, property,
\nenvironmental or windfall profit tax, custom, duty or other tax, governmental
\nfee or other like assessment or charge of any kind whatsoever, together with any
\ninterest or any penalty, addition to tax or additional amount imposed by any
\nGovernmental Entity (a “Taxing Authority”) responsible for the imposition of any
\nsuch tax (domestic or foreign), (B) any liability for the payment of any amounts
\nof the type described in (A) as a result of being a member of an affiliated,
\nconsolidated, combined or unitary group for any Taxable period and (C) any
\nliability for the payment of any amounts of the type described in (A) or (B) as
\na result of any express or implied obligation to indemnify any other person.<\/p>\n
3.15 Interests of Officers and Directors. Except as disclosed in a
\nsupplemental schedule to be delivered to Novell within 21 days following the
\ndate of this Agreement, no officer or director of WordPerfect or any “affiliate”
\nor “associate” (as those terms are defined in Rule 405 promulgated under the
\nSecurities Act) of any such person has had, either directly or indirectly, a
\nmaterial interest in: (i) any person or entity which purchases from or sells,
\nlicenses or furnishes to WordPerfect or any of its Subsidiaries any goods,
\nproperty, technology or intellectual or other property rights or services; (ii)
\nany any contract or agreement to which WordPerfect or any of its Subsidiaries is
\na party or by which it may be bound or affected; or (iii) any property, real or
\npersonal, tangible or intangible, used in or pertaining to its business or that
\nof its Subsidiaries, including any interest in the WordPerfect Intellectual
\nProperty Rights, except for rights as a shareholder, and except for rights under
\nany Plan.<\/p>\n
3.16 Intellectual Property.<\/p>\n
(a) WordPerfect owns, or is licensed or otherwise entitled to exercise,
\nwithout restriction, all rights to, all patents, trademarks, trade names,
\nservice marks, copyrights, mask work rights, trade secret rights and other
\nintellectual property rights, and any applications or registrations therefor,
\nand all mask works, net lists, schematics, technology, source code, know-how,
\ncomputer software programs and all other tangible and intangible information or
\nmaterial, that are used or currently proposed to be used in the business of
\nWordPerfect and its Subsidiaries as currently conducted or as currently proposed
\nto be conducted (collectively, the “WordPerfect Intellectual Property Rights”).<\/p>\n
A-10
\n 142<\/p>\n
(b) The WordPerfect Disclosure Schedule lists all patents, registered and
\nunregistered copyrights, trade names, trademarks, service marks and other
\ncompany, product or service identifiers and mask work rights, and any
\napplications or registrations therefor, included in the WordPerfect Intellectual
\nProperty Rights, together with a list of all of WordPerfect’s currently marketed
\nproducts and an indication as to which, if any, of such products have been
\nregistered for copyright protection with the United States Copyright Office and
\nany foreign offices.<\/p>\n
(c) Neither WordPerfect nor any of its Subsidiaries is, or as a result of
\nthe execution and delivery of this Agreement or the performance of WordPerfect’s
\nobligations hereunder will be, in violation of, or lose any rights pursuant to
\nany license, sublicense or agreement described in the WordPerfect Disclosure
\nSchedule.<\/p>\n
(d) WordPerfect or one of its Subsidiaries is the owner or licensee of,
\nwith all necessary right, title and interest in and to (free and clear of any
\nliens, encumbrances or security interests), the WordPerfect Intellectual
\nProperty Rights and has rights (and except as set forth in the WordPerfect
\nDisclosure Schedule is not contractually obligated to pay any compensation to
\nany third party in respect thereof) in an amount in excess of $1,000,000 to the
\nuse thereof or the material covered thereby in connection with the services or
\nproducts in respect of which the WordPerfect Intellectual Property Rights are
\nbeing used.<\/p>\n
(e) No claims with respect to the WordPerfect Intellectual Property Rights
\nhave been asserted or, to the best knowledge of WordPerfect, after reasonable
\ninvestigation, are threatened by any person, and WordPerfect knows of no claims
\n(i) to the effect that the manufacture, sale or use of any product as now used
\nor offered or proposed for use or sale by WordPerfect or any Subsidiary of
\nWordPerfect infringes any copyright, patent, trade secret, or other intellectual
\nproperty right, (ii) against the use by WordPerfect or Subsidiary of WordPerfect
\nof any WordPerfect Intellectual Property Rights, or (iii) challenging the
\nownership, validity or effectiveness of any of the WordPerfect Intellectual
\nProperty Rights.<\/p>\n
(f) All patents and registered trademarks, service marks, and other
\ncompany, product or service identifiers and registered copyrights held by
\nWordPerfect are valid and subsisting.<\/p>\n
(g) To the best knowledge of WordPerfect, there has not been and there is
\nnot now any material unauthorized use, infringement or misappropriation of any
\nof the WordPerfect Intellectual Property Rights by any third party, including
\nwithout limitation any employee or former employee of WordPerfect or any of its
\nSubsidiaries; neither WordPerfect nor any of its Subsidiaries has been sued or
\ncharged in writing as a defendant in any claim, suit, action or proceeding which
\ninvolves a claim of infringement of any patents, trademarks, service marks,
\ncopyrights or other intellectual property rights and which has not been finally
\nterminated prior to the date hereof; there are no such charges or claims
\noutstanding; and to the best knowledge of WordPerfect neither WordPerfect nor
\nany of its Subsidiaries has any infringement liability with respect to any
\npatent, trademark, service mark, copyright or other intellectual property right
\nof another.<\/p>\n
(h) No WordPerfect Intellectual Property Right is subject to any
\noutstanding order, judgment, decree, stipulation or agreement restricting in any
\nmanner the licensing thereof by WordPerfect or any of its Subsidiaries. Neither
\nWordPerfect nor any of its Subsidiaries has entered into any agreement to
\nindemnify any other person against any charge of infringement of any WordPerfect
\nIntellectual Property Right. Neither WordPerfect nor any of its Subsidiaries has
\nentered into any agreement granting any third party the right to bring
\ninfringement actions with respect to, or otherwise to enforce rights with
\nrespect to, any WordPerfect Intellectual Property Right. WordPerfect and its
\nSubsidiaries have the exclusive right to file, prosecute and maintain all
\napplications and registrations with respect to the WordPerfect Intellectual
\nProperty Rights.<\/p>\n
3.17 Restrictions on Business Activities. There is no material agreement,
\njudgment, injunction, order or decree binding upon WordPerfect or any of its
\nSubsidiaries which has or could reasonably be expected to have the effect of
\nprohibiting or materially impairing any business practice of WordPerfect or any
\nof its Subsidiaries, any acquisition of property by WordPerfect or any of its
\nSubsidiaries or the conduct of business by WordPerfect or any of its
\nSubsidiaries as currently conducted or as currently proposed to be conducted by
\nWordPerfect.<\/p>\n
A-11
\n 143<\/p>\n
3.18 Title to Properties; Absence of Liens and Encumbrances; Condition of
\nEquipment.<\/p>\n
(a) WordPerfect and its Subsidiaries have good and valid title to, or, in
\nthe case of leased properties and assets, valid leasehold interests in, all of
\ntheir tangible properties and assets, real, personal and mixed, used in their
\nbusiness, free and clear of any liens, charges, pledges, security interests or
\nother encumbrances, except as reflected in the WordPerfect Financial Statements
\nor except for such imperfections of title and encumbrances, if any, which are
\nnot substantial in character, amount or extent, and which do not materially
\ndetract from the value, or interfere with the present use, of the property
\nsubject thereto or affected thereby.<\/p>\n
(b) The equipment owned or leased by WordPerfect or its Subsidiaries is,
\ntaken as a whole, (A) adequate for the conduct of the business of WordPerfect
\nand its Subsidiaries consistent with their past practice, (B) suitable for the
\nuses to which it is currently employed, (C) in good operating condition, (D)
\nregularly and properly maintained, (E) not obsolete, dangerous or in need of
\nrenewal or replacement, except for renewal or replacement in the ordinary course
\nof business, and (F) free from any defects, except, with respect to clauses (B)
\nthrough (E) above, as would not have a Material Adverse Effect.<\/p>\n
3.19 Governmental Authorizations and Licenses. Each of WordPerfect and its
\nSubsidiaries is the holder of all licenses, authorizations, permits,
\nconcessions, certificates and other franchises of any Governmental Entity
\nrequired to operate its business (collectively, the “Licenses”). The Licenses
\nare in full force and effect. There is not now pending, or to the best knowledge
\nof WordPerfect is there threatened, any action, suit, investigation or
\nproceeding against WordPerfect or any of its Subsidiaries before any
\nGovernmental Entity with respect to the Licenses, nor is there any issued or
\noutstanding notice, order or complaint with respect to the violation by
\nWordPerfect or any of its Subsidiaries of the terms of any License or any rule
\nor regulation applicable thereto.<\/p>\n
3.20 Environmental Matters.<\/p>\n
(a) No substance that is regulated by any Governmental Entity or that has
\nbeen designated by any Governmental Entity to be radioactive, toxic, hazardous
\nor otherwise a danger to health or the environment (a “Hazardous Material”) is
\npresent in, on or under any property that WordPerfect or any of its Subsidiaries
\nhas at any time owned, operated, occupied or leased.<\/p>\n
(b) Neither WordPerfect nor any of its Subsidiaries has transported,
\nstored, used, manufactured, released or exposed its employees or any other
\nperson to any Hazardous Material in violation of any applicable statute, rule,
\nregulation, order or law.<\/p>\n
(c) WordPerfect and its Subsidiaries have obtained all permits, licenses
\nand other authorizations (“Environmental Permits”) required to be obtained by
\nany of them under the laws of any Governmental Entity relating to pollution or
\nprotection of the environment (collectively, “Environmental Laws”). All
\nEnvironmental Permits are in full force and effect. WordPerfect and its
\nSubsidiaries (A) are in compliance with all terms and conditions of the
\nEnvironmental Permits and (B) are in compliance in all material respects with
\nall other limitations, restrictions, conditions, standards, prohibitions,
\nrequirements, obligations, schedules and timetables contained in the
\nEnvironmental Laws or contained in any regulation, code, plan, order, decree,
\njudgment, notice or demand letter issued, entered, promulgated or approved
\nthereunder. Neither WordPerfect nor any of its Subsidiaries has received any
\nnotice or is aware of any past or present condition or practice of the
\nbusinesses conducted by WordPerfect or its present or former Subsidiaries which
\nforms or could form the basis of any claim, action, suit, proceeding, hearing or
\ninvestigation against WordPerfect or any of its Subsidiaries, arising out of the
\nmanufacture, processing, distribution, use, treatment, storage, spill, disposal,
\ntransport, or handling, or the emission, discharge, release or threatened
\nrelease into the environment, of any Hazardous Material.<\/p>\n
3.21 Insurance. WordPerfect maintains insurance policies and fidelity
\nbonds covering the assets, business, equipment, properties, operations,
\nemployees, officers and directors of WordPerfect and its Subsidiaries
\n(collectively, the “Insurance Policies”) which are of the type and in amounts
\ncustomarily carried by persons conducting businesses similar to those of
\nWordPerfect and its Subsidiaries. There is no material claim by WordPerfect or
\nany of its Subsidiaries pending under any of the material Insurance Policies as
\nto which coverage has been questioned, denied or disputed by the underwriters of
\nsuch policies or bonds. All<\/p>\n
A-12
\n 144<\/p>\n
premiums payable under all such material Insurance Policies have been paid and
\nWordPerfect and its Subsidiaries are otherwise in full compliance with the terms
\nof such policies and bonds (or other policies and bonds providing substantially
\nsimilar insurance coverage). WordPerfect does not know of any threatened
\ntermination of, or material premium increase with respect to, any of its
\nmaterial Insurance Policies.<\/p>\n
3.22 Board Approval. The Board of Directors of WordPerfect has, as of the
\ndate hereof, unanimously (i) approved this Agreement and the Articles of Merger
\nand the transactions contemplated hereby and thereby, (ii) determined that the
\nMerger is in the best interests of the shareholders of WordPerfect and is on
\nterms that are fair to such shareholders and (iii) recommended that the
\nshareholders of WordPerfect approve this Agreement, the Articles of Merger and
\nthe Merger.<\/p>\n
3.23 Labor Matters. WordPerfect and its Subsidiaries are in compliance in
\nall material respects with all currently applicable laws and regulations
\nrespecting employment, discrimination in employment, terms and conditions of
\nemployment and wages and hours and occupational safety and health and employment
\npractices, and are not engaged in any unfair labor practice. Neither WordPerfect
\nnor any of its Subsidiaries has received any notice from any Governmental
\nEntity, and there has not been asserted before any Governmental Entity, any
\nclaim, action or proceeding to which WordPerfect or any of its Subsidiaries is a
\nparty or involving WordPerfect or any of its Subsidiaries, and there is neither
\npending nor, to WordPerfect’s best knowledge, threatened any investigation or
\nhearing concerning WordPerfect or any of its Subsidiaries arising out of or
\nbased upon any such laws, regulations or practices.<\/p>\n
3.24 Questionable Payments. Neither WordPerfect nor any of its
\nSubsidiaries nor to its best knowledge any director, officer or other employee
\nof WordPerfect or any of its Subsidiaries has: (i) made any payments or provided
\nservices or other favors in the United States of America or in any foreign
\ncountry in order to obtain preferential treatment or consideration by any
\nGovernmental Entity with respect to any aspect of the business of WordPerfect or
\nany of its Subsidiaries; or (ii) made any political contributions which would
\nnot be lawful under the laws of the United States and the foreign country in
\nwhich such payments were made. Neither WordPerfect nor any of its Subsidiaries
\nnor to its best knowledge any director, officer or other employee of WordPerfect
\nor any of its Subsidiaries nor, to the best knowledge of WordPerfect, any
\ncustomer or supplier of any of them has been the subject of any inquiry or
\ninvestigation by any Governmental Entity in connection with payments or benefits
\nor other favors to or for the benefit of any governmental or armed services
\nofficial, agent, representative or employee with respect to any aspect of the
\nbusiness of WordPerfect or its Subsidiaries or with respect to any political
\ncontribution.<\/p>\n
3.25 Accounting Matters. Neither WordPerfect nor any of its Subsidiaries
\nnor, to WordPerfect’s best knowledge after reasonable inquiry, any of its
\nAffiliates (as defined in Section 5.12), has taken or agreed to take any action
\nthat would adversely affect the ability of Novell to account for the business
\ncombination to be effected by the Merger as a pooling of interests.<\/p>\n
3.26 Brokers. No broker, finder or investment banker is entitled to any
\nbrokerage, finder’s or other fee or commission in connection with the
\ntransactions contemplated by this Agreement. In the event that the preceding
\nsentence is in any way inaccurate, WordPerfect agrees to indemnify and hold
\nharmless Novell from any liability for any commission or compensation in the
\nnature of a finder’s fee (and the costs and expenses of defending against such
\nliability or asserted liability) for which Novell or any of its officers,
\npartners, employees or representatives is responsible.<\/p>\n
3.27 Disclosure. No representation or warranty made by WordPerfect in this
\nAgreement, nor any document, written information, statement, financial
\nstatement, certificate, schedule or exhibit prepared and furnished or to be
\nprepared and furnished by WordPerfect or its representatives pursuant hereto or
\nin connection with the transactions contemplated hereby, contains or will
\ncontain any untrue statement of a material fact, or omits or will omit to state
\na material fact necessary to make the statements or facts contained herein or
\ntherein not misleading in light of the circumstances under which they were
\nfurnished. To the best knowledge of WordPerfect after reasonable inquiry, there
\nis no event, fact or condition that has resulted in, or could reasonably be
\nexpected to result in, a Material Adverse Effect that has not been set forth in
\nthis Agreement or in the WordPerfect Disclosure Schedule. The WordPerfect
\nFinancial Projections constitute WordPerfect’s best estimate of the information
\npurported to be shown therein and WordPerfect reasonably<\/p>\n
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\n 145<\/p>\n
believes that there is a reasonable basis for such projections and is not aware
\nof any fact or information that would lead it to believe that such projections
\nare incorrect or misleading in any material respect.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF NOVELL AND SUB<\/p>\n
Except as disclosed in a document referring specifically to the
\nrepresentations and warranties in this Agreement which identifies the section
\nand subsection to which such disclosure relates and which is delivered by Novell
\nto WordPerfect prior to the execution of this Agreement (the “Novell Disclosure
\nSchedule”), Novell and Sub represent and warrant to, and agree with, WordPerfect
\nas follows:<\/p>\n
4.1 Organization; Standing and Power. Each of Novell and Sub is a
\ncorporation validly existing and in good standing under the laws of its state of
\nincorporation and has all requisite corporate power and authority to own, lease
\nand operate its properties and to carry on its businesses as now being
\nconducted. Novell has delivered to WordPerfect complete and correct copies of
\nthe Certificate of Incorporation and Bylaws of Novell and the Articles of
\nIncorporation and Bylaws of Sub as amended to the date hereof.<\/p>\n
4.2 Capital Structure. As of the date hereof the authorized capital stock
\nof Novell consists of 400,000,000 shares of Novell Common Stock, $.10 par value
\nand 500,000 shares of Novell Preferred Stock, $.10 par value. At the close of
\nbusiness on January 29, 1994, 309,021,297 shares of Novell Common Stock were
\noutstanding, 27,978,621 shares of Novell Common Stock were reserved for issuance
\nupon the exercise of outstanding stock options (“Novell Options”), no shares of
\nNovell Common Stock were held by Novell in its treasury, and no shares of Novell
\nPreferred Stock were outstanding. All the outstanding shares of Novell Common
\nStock are validly issued, fully paid, nonassessable and free of preemptive
\nrights except pursuant to rights issued under Novell’s Stockholder Rights Plan.
\nThe shares of Novell Common Stock issuable in connection with the Merger are
\nduly authorized and reserved for issuance and, when issued in accordance with
\nthe terms of this Agreement and the Articles of Merger, will be validly issued,
\nfully paid, nonassessable and free of preemptive rights (other than any rights
\nwhich may be issued pursuant to Novell’s Stockholder Rights Plan). As of the
\ndate hereof, the authorized capital stock of Sub consists of 1,000,000 shares of
\nCommon Stock, $0.01 par value, all of which are validly issued, fully paid and
\nnonassessable and owned by Novell. Except for the shares listed above issuable
\npursuant to Novell Options, there are not any options, warrants, calls,
\nconversion rights, commitments or agreements of any character to which Novell or
\nany Subsidiary of Novell is a party or by which any of them may be bound
\nobligating Novell or any Subsidiary of Novell to issue, deliver or sell, or
\ncause to be issued, delivered or sold, additional shares of the capital stock of
\nNovell or of any Subsidiary of Novell or obligating Novell or any Subsidiary of
\nNovell to grant, extend or enter into any such option, warrant, call, conversion
\nright, commitment or agreement.<\/p>\n
4.3 Authority. Novell and Sub have all requisite corporate power and
\nauthority to enter into this Agreement and, subject to any required stockholder
\napproval, to consummate the transactions contemplated hereby and by the Articles
\nof Merger. Sub has all requisite corporate power and authority to enter into the
\nArticles of Merger. The execution and delivery by Novell of this Agreement, and
\nby Sub of this Agreement and the Articles of Merger, and the consummation of the
\ntransactions contemplated by this Agreement and the Articles of Merger have been
\nduly authorized by all necessary corporate action on the part of Novell and Sub.
\nThis Agreement has been duly executed and delivered by Novell and Sub and
\nconstitutes a valid and binding obligation of Novell and Sub enforceable in
\naccordance with its terms, except as enforcement may be limited by bankruptcy,
\ninsolvency, or other similar laws affecting the enforcement of creditors’ rights
\ngenerally and except that the availability of equitable remedies is subject to
\nthe discretion of the court before which any proceeding therefor may be brought.
\nThe Articles of Merger have been duly executed and delivered by Sub and
\nconstitutes a valid and binding obligation of Sub enforceable in accordance with
\nits terms, except as enforcement may be limited by bankruptcy, insolvency, or
\nother similar laws affecting the enforcement of creditors’ rights generally and
\nexcept that the availability of equitable remedies is subject to the discretion
\nof the court before which any proceeding therefor may be brought. Subject to
\nsatisfaction of the conditions set forth in Article VI, the execution and
\ndelivery of this Agreement and the Articles of Merger and the consummation of
\nthe transactions contemplated hereby and thereby will not conflict with or
\nresult in any<\/p>\n
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\n 146<\/p>\n
violation of any material statute, law, rule, regulation, judgment, order,
\ndecree or ordinance applicable to Novell or any Subsidiary of Novell or their
\nrespective properties or assets, or conflict with or result in any breach or
\ndefault (with or without notice or lapse of time, or both) under, or give rise
\nto a right of termination, cancellation or acceleration of any obligation or to
\nloss of a material benefit, under (i) any provision of the Certificate of
\nIncorporation or Bylaws of Novell or any of its Subsidiaries or (ii) any
\nmaterial agreement, contract, note, mortgage, indenture, lease, instrument,
\npermit, concession, franchise or license to which Novell or any of its
\nSubsidiaries is a party or by which Novell or any of its Subsidiaries or their
\nrespective properties or assets may be bound or affected. No consent, approval,
\norder or authorization of, or registration, declaration or filing with, any
\nGovernmental Entity is required by or with respect to Novell or Sub in
\nconnection with the execution and delivery of this Agreement and the Articles of
\nMerger or the consummation by Novell and Sub of the transactions contemplated
\nhereby or thereby, except for (i) the filing of a premerger notification report
\nby Novell and Sub under the HSR Act, (ii) the filing of the S-4 and such other
\ndocuments with, and the obtaining of such orders from, the SEC and various state
\nsecurities or “blue sky” authorities, and the making of such reports under the
\nExchange Act, as are required in connection with the transactions contemplated
\nby this Agreement, (iii) the filing of the Articles of Merger with the Utah
\nDivision of Corporations and Commercial Code and the Secretary of State of the
\nState of Delaware and appropriate documents with the relevant authorities of
\nother states in which Novell is qualified to do business, (iv) such consents,
\napprovals, orders, authorizations, registrations, declarations and filings as
\nmay be required under the laws of any foreign country which if not obtained or
\nmade would not have a Material Adverse Effect and (v) such other consents,
\nauthorizations, filings, approvals and registrations which if not obtained or
\nmade would not have a Material Adverse Effect.<\/p>\n
4.4 SEC Documents; Novell Financial Statements. Novell has furnished
\nWordPerfect with or made available to WordPerfect a true and complete copy of
\neach statement, annual, quarterly and other report, registration statement
\n(without exhibits) and definitive proxy statement filed by Novell with the SEC
\nsince October 31, 1992 (the “Novell SEC Documents”). As of their respective
\nfiling dates, the Novell SEC Documents complied in all material respects with
\nthe requirements of the Exchange Act or the Securities Act, as the case may be,
\nand none of the Novell SEC Documents contained any untrue statement of a
\nmaterial fact or omitted to state a material fact required to be stated therein
\nor necessary to make the statements made therein, in light of the circumstances
\nin which they were made, not misleading, except to the extent corrected by a
\nsubsequently filed Novell SEC Document. The financial statements of Novell
\nincluded in the Novell SEC Documents (the “Novell Financial Statements”) comply
\nas to form in all material respects with applicable accounting requirements and
\nwith the published rules and regulations of the SEC with respect thereto, have
\nbeen prepared in accordance with generally accepted accounting principles
\nconsistently applied (except as may be indicated in the notes thereto or, in the
\ncase of unaudited statements, as permitted by Form 10-Q of the SEC) and fairly
\npresent the consolidated financial position of Novell and its consolidated
\nSubsidiaries at the dates thereof and the consolidated results of their
\noperations and changes in financial position for the periods then ended
\n(subject, in the case of unaudited statements, to normal, recurring audit
\nadjustments, provided that the notes and accounts receivable are collectible in
\nthe amounts shown thereon and inventories are not subject to write-down, except
\nin either case in an amount not material or for which Novell has provided
\nadequate reserves). There has been no change in Novell’s accounting policies or
\nestimates except as described in the notes to the Novell Financial Statements.<\/p>\n
4.5 Information Supplied. None of the information supplied by Novell or
\nSub for inclusion in the Proxy Statement or the S-4, at the time such
\ninformation is supplied and at the time of the Shareholders’ Meeting, contains
\nor will contain any untrue statement of a material fact or omits or will omit to
\nstate any material fact required to be stated therein or necessary in order to
\nmake the statements therein, in light of the circumstances under which they were
\nmade, not misleading, or will, in the case of the S-4, at the time the S-4
\nbecomes effective under the Securities Act, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary to make the statements therein not misleading.<\/p>\n
4.6 Litigation. There is no action, suit, proceeding, investigation or
\nclaim pending or, to the best knowledge of Novell, threatened against Novell or
\nany of its Subsidiaries which could, individually or in the<\/p>\n
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\n 147<\/p>\n
aggregate, have a Material Adverse Effect or which in any manner challenges or
\nseeks to prevent, enjoin, alter or materially delay any of the transactions
\ncontemplated hereby.<\/p>\n
4.7 No Defaults. Neither Novell nor any Subsidiary of Novell is, or has
\nreceived notice that it would be with the passage of time, (i) in violation of
\nany provision of the Certificate of Incorporation or Bylaws of Novell or any
\nSubsidiary of Novell; or (ii) in default or violation of any material term,
\ncondition or provision of (A) any material judgment, decree, order, injunction
\nor stipulation applicable to Novell or any Subsidiary of Novell or (B) any
\nmaterial agreement, note, mortgage, indenture, contract, lease or instrument,
\npermit, concession, franchise or license to which Novell or any Subsidiary of
\nNovell is a party or by which Novell or any of its Subsidiaries or their
\nproperties or assets may be bound.<\/p>\n
4.8 Opinion of Financial Advisor. Novell has been advised in writing by
\nits financial advisor, Morgan Stanley & Co., that in its opinion as of the date
\nhereof, the Exchange Ratio, when considered together with the transactions
\ncontemplated hereby, is fair to Novell from a financial point of view.<\/p>\n
4.9 Accounting Matters. Neither Novell nor any of its Subsidiaries nor, to
\nNovell’s best knowledge after reasonable inquiry, any of its Affiliates (as
\ndefined in (Section 5.12), has taken or agreed to take any action that would
\nadversely affect the ability of Novell to account for the business combination
\nto be effected by the Merger as a pooling of interests.<\/p>\n
4.10 Brokers. No broker, finder or investment banker (other than Morgan
\nStanley & Co.) is entitled to any brokerage, finder’s or other fee or commission
\nin connection with the transactions contemplated by this Agreement. Novell
\nagrees to indemnify and hold harmless WordPerfect from any liability for any
\ncommission or compensation in the nature of a finder’s fee (and the costs and
\nexpenses of defending against such liability or asserted liability) for which
\nNovell or any of its officers, partners, employees or representatives is
\nresponsible.<\/p>\n
4.11 Disclosure. No representation or warranty made by Novell in this
\nAgreement, nor any document, written information, statement, financial
\nstatement, certificate, schedule or exhibit prepared and furnished or to be
\nprepared and furnished by Novell or its representatives pursuant hereto or in
\nconnection with the transactions contemplated hereby, contains or will contain
\nany untrue statement of a material fact, or omits or will omit to state a
\nmaterial fact necessary to make the statements or facts contained herein or
\ntherein not misleading in light of the circumstances under which they were
\nfurnished. To the best knowledge of Novell after reasonable inquiry, there is no
\nevent, fact or condition that has resulted in, or could reasonably be expected
\nto result in, a Material Adverse Effect that has not been set forth in this
\nAgreement or in the Novell Disclosure Schedule.<\/p>\n
ARTICLE V<\/p>\n
CONDUCT AND TRANSACTIONS PRIOR TO
\n EFFECTIVE TIME; ADDITIONAL AGREEMENTS<\/p>\n
5.1 Information and Access. Subject to and in accordance with the terms
\nand conditions of that certain letter agreement dated March 7, 1994, between
\nNovell and WordPerfect (the “Confidentiality Agreement”), from the date of this
\nAgreement and continuing until the Effective Time, each party shall afford and,
\nwith respect to clause (b) below, such party shall cause its independent
\nauditors to afford, (a) to the officers, independent auditors, counsel and other
\nrepresentatives of the other party reasonable access to the properties, books,
\nrecords (including Tax returns filed and those in preparation) and personnel of
\nsuch party and its Subsidiaries in order that the other party may have a full
\nopportunity to make such investigation as it reasonably desires to make of such
\nparty and its Subsidiaries and (b) to the independent auditors of the other
\nCompany, reasonable access to the audit work papers and other records of the
\nindependent auditors of such party and its Subsidiaries. Additionally, subject
\nto and in accordance with the Confidentiality Agreement, each party and its
\nSubsidiaries will permit the other party to make such reasonable inspections of
\nsuch party and its Subsidiaries and their respective operations during normal
\nbusiness hours as the other party may reasonably require and each party and its
\nSubsidiaries will cause its officers and the officers of its Subsidiaries to
\nfurnish the other party with such financial and operating data and other
\ninformation with respect to the<\/p>\n
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\n 148<\/p>\n
business and properties of such party and its Subsidiaries as the other party
\nmay from time to time reasonably request. WordPerfect further agrees to provide
\nNovell with the following information as soon as practicable following the date
\nof this Agreement:<\/p>\n
(a) The jurisdictions in which each WordPerfect Intellectual Property
\n Right has been issued or registered or in which an application for such
\n issuance or registration has been filed, including the respective
\n registration or application numbers;<\/p>\n
(b) all licenses, sublicenses and other agreements as to which
\n WordPerfect or any of its Subsidiaries is a party and pursuant to which
\n WordPerfect or any of its Subsidiaries or any other person is authorized to
\n use any WordPerfect Intellectual Property Right, including the identity of
\n all parties thereto, a description of the nature and subject matter
\n thereof, all material rights, restrictions, conditions, or other terms
\n pertaining to each WordPerfect Intellectual Property Right, the applicable
\n royalty or other consideration and the term thereof, and including the
\n extent to which rights with respect to WordPerfect Intellectual Property
\n Rights survive termination or expiration thereof (copies of all licenses,
\n sublicenses, and other agreements identified pursuant to this clause (b)
\n have previously been delivered by WordPerfect to Novell);<\/p>\n
(c) all parties to whom WordPerfect has delivered copies of
\n WordPerfect source code, whether pursuant to an escrow arrangement or
\n otherwise, or parties who have the right to receive such source code;<\/p>\n
(d) a true and complete list of all real property owned or leased by
\n WordPerfect or any of its Subsidiaries and the aggregate annual rental or
\n other fee payable under any such lease; and<\/p>\n
(e) a true and complete list of all Environmental Permits.<\/p>\n
No investigation pursuant to this Section 5.1 shall affect or otherwise obviate
\nor diminish any representations and warranties of any party or conditions to the
\nobligations of any party.<\/p>\n
5.2 Conduct of Business of the Parties. During the period from the date of
\nthis Agreement and continuing until the Effective Time or until the termination
\nof this Agreement pursuant to Section 7.1, the parties agree that (except to the
\nextent that the other parties have given their prior written consent):<\/p>\n
(a) WordPerfect Conduct. WordPerfect and its Subsidiaries shall
\n conduct their respective businesses in the ordinary and usual course
\n consistent with past practice and shall use reasonable efforts to maintain
\n and preserve intact their business organizations, keep available the
\n services of their officers and employees and to maintain satisfactory
\n relations with licensors, licensees, suppliers, contractors, distributors,
\n customers and others having business relationships with them. Without
\n limiting the generality of the foregoing and except as expressly
\n contemplated by this Agreement, prior to the Effective Time, neither
\n WordPerfect nor any of its Subsidiaries shall, without the prior written
\n consent of Novell:<\/p>\n
(i) declare, set aside or pay any dividends on or make any other
\n distribution (whether in cash, stock or property) in respect of any of
\n its capital stock except as permitted by subsection (iii) below;<\/p>\n
(ii) split, combine or reclassify any of its capital stock or issue
\n or authorize or propose the issuance or authorization of any other
\n securities in respect of, in lieu of or in substitution for shares of
\n its capital stock or repurchase, redeem or otherwise acquire any shares
\n of its capital stock;<\/p>\n
(iii) issue, deliver, pledge, encumber or sell, or authorize or
\n propose the issuance, delivery, pledge, encumbrance or sale of, or
\n purchase or propose the purchase of, any shares of its capital stock or
\n securities convertible into, or rights, warrants or options to acquire,
\n any such shares of capital stock or other convertible securities (other
\n than the issuance of such capital stock upon the exercise or conversion
\n of WordPerfect Options, outstanding on the date of this Agreement in
\n accordance with their present terms); or except pursuant to mandatory
\n terms under options outstanding on the date hereof, accelerate, amend or
\n change the period of exercisability of options granted under the
\n WordPerfect Stock Option Plan or any other options, warrants or other<\/p>\n
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\n 149<\/p>\n
convertible securities or authorize cash payments in exchange for any
\n options granted under any of the WordPerfect Stock Option Plan or
\n authorize or propose any change in its equity capitalization;<\/p>\n
(iv) cause or permit any amendments to its Articles of
\n Incorporation or Bylaws or other charter documents;<\/p>\n
(v) acquire or agree to acquire by merging or consolidating with,
\n or by purchasing any material portion of the capital stock or assets of,
\n or by any other manner, any business or any corporation, partnership,
\n association or other business organization or division thereof, or
\n otherwise acquire or agree to acquire any assets which are material,
\n individually or in the aggregate, to the business condition of
\n WordPerfect and its Subsidiaries, taken as a whole;<\/p>\n
(vi) sell, lease, pledge, license or otherwise dispose of or
\n encumber any of its assets or properties, except in the ordinary course
\n of business consistent with past practice (including, without
\n limitation, any indebtedness owed to it or any claims held by it);<\/p>\n
(vii) except as contemplated by Section 5.20, transfer the stock of
\n any Subsidiary to any other Subsidiary or any assets or liabilities to
\n any new or, except in the ordinary course of business consistent with
\n past practice, existing Subsidiary;<\/p>\n
(viii) incur any indebtedness for borrowed money or guarantee any
\n such indebtedness or issue or sell any of its debt securities or
\n guarantee, endorse or otherwise as an accommodation become responsible
\n for the obligations of others, or make loans or advances;<\/p>\n
(ix) pay, discharge or satisfy any claims, liabilities or
\n obligations (whether absolute, accrued, contingent or otherwise), other
\n than the payment, discharge or satisfaction of liabilities in the
\n ordinary course of business consistent with past practice of liabilities
\n reflected or reserved against in the consolidated financial statements
\n (or the notes thereto) of WordPerfect and its consolidated Subsidiaries;<\/p>\n
(x) adopt or amend any Plan, or enter into or amend any employment,
\n severance, special pay arrangement with respect to termination of
\n employment or other similar arrangements or agreements with any of its
\n directors, officers or employees or increase the salaries or wage rates
\n of its employees other than pursuant to scheduled employee reviews under
\n WordPerfect’s or any of its Subsidiaries’ normal employee review cycle,
\n as the case may be, consistent with WordPerfect’s past practices;<\/p>\n
(xi) except in the ordinary course of business consistent with past
\n practices and other than transfers between or among WordPerfect and any
\n of its wholly-owned Subsidiaries, transfer to any person or entity any
\n rights to the WordPerfect Intellectual Property Rights;<\/p>\n
(xii) enter into or amend any agreements pursuant to which any
\n other party is granted exclusive marketing or other rights of any type
\n or scope with respect to any products of WordPerfect or any of its
\n Subsidiaries;<\/p>\n
(xiii) except in the ordinary course of business with prior notice
\n to Novell, violate, amend or otherwise modify the terms of any of the
\n contracts set forth on the WordPerfect Disclosure Schedule;<\/p>\n
(xiv) commence a lawsuit other than for the routine collection of
\n bills;<\/p>\n
(xv) change the accounting methods or practices followed by
\n WordPerfect or any of its Subsidiaries, including any change in any
\n assumption underlying, or method of calculating, any bad debt,
\n contingency or other reserve, except as may be required by changes in
\n generally accepted accounting principles make or change any material Tax
\n election, adopt or change any Tax accounting method, file any material
\n Tax return or any amendment to a material Tax return, enter into any
\n material closing agreement, settle any material Tax claim or assessment,
\n or consent to any extension or waiver of the limitation period
\n applicable to any material Tax claim or assessment, without the prior
\n consent of Novell, which consent will not be unreasonably withheld (for
\n purposes<\/p>\n
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\n 150<\/p>\n
of this covenant a “material” Tax Return, closing agreement, Tax
\n claim or assessment shall mean a Tax liability with respect to each
\n such item in excess of $500,000);<\/p>\n
(xvi) take any action that would result in any of the
\n representations and warranties of WordPerfect set forth in this
\n Agreement becoming untrue or in any of the conditions to the Merger set
\n forth in Article VI not being satisfied;<\/p>\n
(xvii) enter into any capital commitment or long term obligation
\n equal to or in excess of $500,000;<\/p>\n
(xviii) authorize or propose any of the foregoing, or enter into
\n any contract, agreement, commitment or arrangement to do any of the
\n foregoing.<\/p>\n
(b) Novell Conduct. Except in connection with transactions
\n contemplated by this Agreement, Novell shall not without the prior consent
\n of WordPerfect (i) amend the Certificate of Incorporation in any manner
\n which would adversely affect the rights of holders of Novell Common Stock,
\n or (ii) issue, deliver or sell or authorize or propose the issuance,
\n delivery or sale of, or purchase or propose the purchase of, any shares of
\n its capital stock of any class or securities convertible into, or
\n subscriptions, rights, warrants or options to acquire, or other agreements
\n or commitments of any character obligating it or any of its Subsidiaries to
\n issue any such shares or other convertible securities, except for the
\n issuance or proposed issuance of its capital stock or options to purchase
\n shares of its capital stock (A) in connection with a proposed business
\n combination, (B) in connection with privately negotiated sales of stock
\n pursuant to corporate partnering arrangements or (C) pursuant to stock
\n option grants or exercises or other employee stock benefit plans.<\/p>\n
5.3 Negotiation With Others. WordPerfect will not, nor will Ashton, Mr.
\nBastian or Ms. Bastian, directly or indirectly, through any officer, director,
\nother shareholder, affiliate or agent of WordPerfect or otherwise, solicit,
\ninitiate, entertain, encourage or negotiate any proposals or offers from any
\nthird party relating to the merger or acquisition of WordPerfect or a material
\nportion of its assets or capital stock of WordPerfect, including acquisition of
\nWordPerfect Common Stock (or voting agreements or proxies with respect thereto)
\nowned beneficially by Ashton, Mr. Bastian or Ms. Bastian, nor will WordPerfect,
\nAshton, Mr. Bastian or Ms. Bastian, during this period participate in any
\nnegotiations regarding, or furnish to any person any information with respect
\nto, or otherwise cooperate with, facilitate or encourage any effort or attempt
\nby any person to do or seek any such transaction. WordPerfect shall immediately
\ncease and cause to be terminated all such negotiations with the third parties
\n(other than Novell) which have occurred prior to the date of this Agreement.<\/p>\n
5.4 Preparation of S-4 and the Proxy Statement; Other Filings. As promptly
\nas practicable after the date of this Agreement, WordPerfect shall provide to
\nNovell and its counsel for inclusion in the Prospectus\/Proxy Statement on the
\nS-4 in form and substance satisfactory to Novell and its counsel, such
\ninformation concerning WordPerfect, its operations, capitalization, technology,
\nshare ownership and other material as Novell or its counsel may reasonably
\nrequest. As promptly as practicable after the date of this Agreement, Novell
\nshall prepare and file with the SEC the S-4, in which the Proxy Statement will
\nbe included as a prospectus. Each of Novell and WordPerfect shall use its
\nreasonable efforts to respond to any comments of the SEC, to have the S-4
\ndeclared effective under the Securities Act as promptly as practicable after
\nsuch filing and to cause the Proxy Statement to be mailed to WordPerfect’s
\nshareholders at the earliest practicable time. As promptly as practicable after
\nthe date of this Agreement, Novell and WordPerfect shall prepare and file any
\nother filings required under the Exchange Act, the Securities Act or any other
\nFederal or state securities or “blue sky” laws relating to the Merger and the
\ntransactions contemplated by this Agreement and the Articles of Merger,
\nincluding, without limitation, under the HSR Act and State Takeover Laws (the
\n“Other Filings”). Each Company will notify the other Company promptly of the
\nreceipt of any comments from the SEC or its staff and of any request by the SEC
\nor its staff or any other government officials for amendments or supplements to
\nthe S-4, the Proxy Statement or any Other Filing or for additional information
\nand will supply the other Company with copies of all correspondence between such
\nCompany or any of its representatives, on the one hand, and the SEC, or its
\nstaff or any other government officials, on the other hand, with respect to the
\nS-4, the Proxy Statement, the Merger or any Other Filing. The Proxy Statement,
\nthe S-4 and the Other<\/p>\n
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\n 151<\/p>\n
Filings shall comply in all material respects with all applicable requirements
\nof law. Whenever any event occurs which should be set forth in an amendment or
\nsupplement to the Proxy Statement, the S-4 or any Other Filing, Novell or
\nWordPerfect, as the case may be, shall promptly inform the other Company of such
\noccurrence and cooperate in filing with the SEC or its staff or any other
\ngovernment officials, and\/or mailing to shareholders of Novell and WordPerfect,
\nsuch amendment or supplement. The Proxy Statement shall include the unanimous
\nrecommendation of the Board of Directors of WordPerfect that the shareholders of
\nWordPerfect approve the Merger.<\/p>\n
5.5 Advice of Changes. Each Company shall confer on a regular and frequent
\nbasis with the other Company, report on operational matters and promptly advise
\nthe other orally and in writing of any change or event having, or which, insofar
\nas can reasonably be foreseen, could result in, a Material Adverse Effect with
\nrespect to such Company. Each Company shall promptly provide the other Company
\n(or its counsel) copies of all filings made by such Company with any
\nGovernmental Entity in connection with this Agreement, the Articles of Merger
\nand the transactions contemplated hereby and thereby.<\/p>\n
5.6 Shareholder Approval. WordPerfect will call a meeting of its
\nshareholders (the “Shareholders’ Meeting”) to be held as promptly as practicable
\nfor the purpose of obtaining the shareholder approval required in connection
\nwith the transactions contemplated hereby and by the Articles of Merger and
\nshall use all reasonable efforts to obtain such approval. WordPerfect shall
\ncoordinate and cooperate with Novell with respect to the timing of the
\nShareholders Meeting. WordPerfect shall not change the date of the Shareholders
\nMeeting without the prior written consent of Novell, nor shall WordPerfect
\nadjourn the Shareholders Meeting without the prior written consent of Novell,
\nunless such adjournment is due to the lack of a quorum, in which case the
\nChairman of the Shareholders Meeting shall announce at such meeting the time and
\nplace of the adjourned meeting. Concurrently with the execution of this
\nAgreement, Ashton, Mr. Bastian and Ms. Bastian (collectively, the “WordPerfect
\nPrincipal Shareholders”) shall have executed Shareholder Agreements in the form
\nof Exhibit 5.6 (the “Shareholder Agreements”).<\/p>\n
5.7 Agreements to Cooperate.<\/p>\n
(a) WordPerfect shall take, and shall cause its Subsidiaries to take, all
\nreasonable actions necessary to comply promptly with all legal requirements
\nwhich may be imposed on WordPerfect or its Subsidiaries with respect to the
\nMerger (including furnishing all information required under the HSR Act) and
\nshall take all reasonable actions necessary to cooperate promptly with and
\nfurnish information to Novell in connection with any such requirements imposed
\nupon Novell or Sub or any Subsidiary of Novell or Sub in connection with the
\nMerger. WordPerfect shall take, and shall cause its Subsidiaries to take, all
\nreasonable actions necessary (i) to obtain (and will take all reasonable actions
\nnecessary to promptly cooperate with Novell or Sub and their Subsidiaries in
\nobtaining) any consent, authorization, order or approval of, or any exemption
\nby, any Governmental Entity, or other third party, required to be obtained or
\nmade by WordPerfect or any of its Subsidiaries (or by Novell or Sub or any of
\ntheir Subsidiaries) in connection with the Merger or the taking of any action
\ncontemplated by this Agreement; (ii) to lift, rescind or mitigate the effect of
\nany injunction or restraining order or other order adversely affecting the
\nability of WordPerfect to consummate the transactions contemplated hereby; (iii)
\nto fulfill all conditions applicable to WordPerfect pursuant to this Agreement;
\nand (iv) to prevent, with respect to a threatened or pending temporary,
\npreliminary or permanent injunction or other order, decree or ruling or statute,
\nrule, regulation or executive order, the entry, enactment or promulgation
\nthereof, as the case may be; provided, however, that WordPerfect shall not be
\nobligated to, nor shall WordPerfect be obligated to cause its Subsidiaries to,
\ndispose of or hold separate all or a material portion of the business or assets
\nof WordPerfect and its Subsidiaries, taken as a whole.<\/p>\n
(b) Novell and Sub shall take, and shall cause their Subsidiaries to take,
\nall reasonable actions necessary to comply promptly with all legal requirements
\nwhich may be imposed on them or their Subsidiaries with respect to the Merger
\n(including furnishing all information required under the HSR Act) and shall take
\nall reasonable actions necessary to cooperate promptly with and furnish
\ninformation to WordPerfect in connection with any such requirements imposed upon
\nWordPerfect or any Subsidiary of WordPerfect in connection with the Merger.
\nNovell and Sub shall take, and shall cause their Subsidiaries to take, all
\nreasonable actions necessary (i) to obtain (and will take all reasonable actions
\nnecessary to promptly cooperate with<\/p>\n
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\n 152<\/p>\n
WordPerfect and its Subsidiaries in obtaining) any consent, authorization, order
\nor approval of, or any exemption by, any Governmental Entity, or other third
\nparty, required to be obtained or made by Novell or Sub or any of their
\nSubsidiaries (or by WordPerfect or any of its Subsidiaries) in connection with
\nthe Merger or the taking of any action contemplated by this Agreement; (ii) to
\nlift, rescind or mitigate the effect of any injunction or restraining order or
\nother order adversely affecting the ability of Novell or Sub to consummate the
\ntransactions contemplated hereby; (iii) to fulfill all conditions applicable to
\nNovell or Sub pursuant to this Agreement; and (iv) to prevent, with respect to a
\nthreatened or pending temporary, preliminary or permanent injunction or other
\norder, decree or ruling or statute, rule, regulation or executive order, the
\nentry, enactment or promulgation thereof, as the case may be; provided, however,
\nthat Novell shall not be obligated to, nor shall Novell be obligated to cause
\nits Subsidiaries to, dispose of or hold separate or otherwise relinquish all or
\na material portion of the business or assets either of WordPerfect or of Novell
\nand its Subsidiaries, taken as a whole, or to change its business in any
\nmaterial way.<\/p>\n
(c) Subject to the terms and conditions of this Agreement, each of the
\nparties shall use all reasonable efforts to take, or cause to be taken, all
\nactions and to do, or cause to be done, all things necessary, proper or
\nadvisable under applicable laws and regulations to consummate and make effective
\nas promptly as practicable the transactions contemplated by this Agreement,
\nsubject to the appropriate approval of the shareholders of Novell and
\nWordPerfect. The parties hereto will consult and cooperate with one another, and
\nconsider in good faith the views of one another, in connection with any
\nanalyses, appearances, presentations, memoranda, briefs, arguments, opinions and
\nproposals made or submitted by or on behalf of any party hereto in connection
\nwith proceedings under or relating to the HSR Act or any other federal or state
\nantitrust or fair trade law.<\/p>\n
5.8 State Statutes. If any State Takeover Law shall become applicable to
\nthe transactions contemplated by this Agreement, Novell and its Board of
\nDirectors or WordPerfect and its Board of Directors, as the case may be, shall
\nuse their reasonable efforts to grant such approvals and take such actions as
\nare necessary so that the transactions contemplated by this Agreement may be
\nconsummated as promptly as practicable on the terms contemplated by this
\nAgreement and otherwise to minimize the effects of such State Takeover Law on
\nthe transactions contemplated by this Agreement.<\/p>\n
5.9 Consents. Novell, Sub and WordPerfect shall each use all reasonable
\nefforts to obtain the consent and approval of, or effect the notification of or
\nfiling with, each person or authority whose consent or approval is required in
\norder to permit the consummation of the Merger and the transactions contemplated
\nby this Agreement and to enable the Surviving Corporation to conduct and operate
\nthe business of WordPerfect and its Subsidiaries substantially as presently
\nconducted and as contemplated to be conducted.<\/p>\n
5.10 Nasdaq National Market Listing. Novell shall use its reasonable
\nefforts to cause the shares of Novell Common Stock issuable to the shareholders
\nof WordPerfect in the Merger to be authorized for listing on the Nasdaq National
\nMarket, upon official notice of issuance.<\/p>\n
5.11 Public Announcements. Novell and WordPerfect shall cooperate with
\neach other prior to releasing information concerning this Agreement and the
\ntransactions contemplated hereby, shall furnish to the other drafts of all press
\nreleases or other public announcements prior to publication and shall obtain the
\nconsent of the other prior to the issuance of press releases or the release of
\nother public announcements; provided that any party hereto shall have the right
\n(i) to furnish any information to any Governmental Entity or (ii) to issue any
\nother release, in each case when in the reasonable opinion of its counsel it is
\nlegally required to do so.<\/p>\n
5.12 Affiliates.<\/p>\n
(a) The WordPerfect Disclosure Schedule sets forth those persons who are,
\nin WordPerfect’s reasonable judgment, “affiliates” of WordPerfect within the
\nmeaning of Rule 145 (each such person, together with the persons identified
\nbelow, an “Affiliate”) promulgated under the Securities Act (“Rule 145”),
\nincluding without limitation Mr. Bastian, Ms. Bastian and Ashton. WordPerfect
\nshall provide Novell such information and documents as Novell shall reasonably
\nrequest for purposes of reviewing such list. WordPerfect shall use its best
\nefforts to deliver or cause to be delivered to Novell, concurrently with the
\nexecution of this Agreement from each of the Affiliates of WordPerfect
\nidentified in the foregoing list Affiliates Agreements in the form<\/p>\n
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\n 153<\/p>\n
attached as Exhibit 5.12. Novell and Sub shall be entitled to place appropriate
\nlegends on the certificates evidencing any Novell Common Stock to be received by
\nsuch Affiliates pursuant to the terms of this Agreement and the Articles of
\nMerger, and to issue appropriate stop transfer instructions to the transfer
\nagent for Novell Common Stock, consistent with the terms of such Affiliates
\nAgreements.<\/p>\n
(b) Novell shall use its reasonable efforts to obtain prior to the
\nEffective Date the execution of agreements with respect to the sale of Novell
\nCommon Stock with each person who is an Affiliate of Novell regarding compliance
\nwith pooling restrictions.<\/p>\n
5.13 WordPerfect Options.<\/p>\n
(a) At the Effective Time, each outstanding option (each, a “WordPerfect
\nOption”) to purchase shares of WordPerfect Common Stock issued pursuant to the
\nWordPerfect Option Plan, whether vested or unvested, shall be assumed by Novell.
\nAccordingly, each WordPerfect Option shall be deemed to constitute an option to
\nacquire, on the same terms and conditions as were applicable under such
\nWordPerfect Option, the number, rounded down to the nearest whole integer, of
\nfull shares of Novell Common Stock the holder of such WordPerfect Option would
\nhave been entitled to receive pursuant to the Merger had such holder exercised
\nsuch Option in full, including as to unvested shares, immediately prior to the
\nEffective Time, at a price per share equal to (y) the aggregate exercise price
\nfor the shares of WordPerfect Common Stock otherwise purchasable pursuant to
\nsuch WordPerfect Option divided by (z) the number of full shares of Novell
\nCommon Stock deemed purchasable pursuant to such WordPerfect Option with such
\nexercise price per share rounded up to the nearest whole cent. The vesting of
\nthe WordPerfect Options shall accelerate upon consummation of the Merger, based
\non existing contractual commitments to holders of such WordPerfect Options.<\/p>\n
(b) As soon as practicable after the Effective Time, Novell shall deliver
\nto each holder of a WordPerfect Option a document evidencing the foregoing
\nassumption of such WordPerfect Option by Novell.<\/p>\n
(c) As soon as practicable after the Effective Time, Novell shall file a
\nregistration statement on Form S-8 (or any successor or other appropriate form),
\nor another appropriate form with respect to the shares of Novell Common Stock
\nsubject to such WordPerfect Options and shall use its reasonable efforts to
\nmaintain the effectiveness of such registration statement (and maintain the
\ncurrent status of the prospectus or prospectuses contained therein) for so long
\nas such WordPerfect Options remain outstanding. With respect to those
\nindividuals who subsequent to the Merger will be subject to the reporting
\nrequirements under Section 16(a) of the Exchange Act, where applicable, Novell
\nshall administer the WordPerfect Option Plan assumed pursuant to this Section
\n5.13 in a manner that complies with Rule 16b-3 promulgated by the SEC under the
\nExchange Act to the extent the applicable WordPerfect Option Plan complied with
\nsuch rule prior to the Merger.<\/p>\n
5.14 Indemnification. From and after the Effective Time, Novell and the
\nSurviving Corporation shall (to the fullest extent permitted by applicable law)
\nindemnify, defend and hold harmless each person who is now, or has been at any
\ntime prior to the date hereof or who becomes prior to the Effective Time, an
\nofficer or director of WordPerfect or any of its Subsidiaries (the “Indemnified
\nParties”) against any and all losses, damages, costs, expenses, liabilities or
\njudgments, or amounts that are paid in settlement of, or in connection with, any
\nclaim, action, suit, proceeding or investigation based on or arising out of the
\nfact that such person is or was a director or officer of WordPerfect or any
\nSubsidiary of WordPerfect, whether pertaining to any matter existing or
\noccurring at or prior to the Effective Time (“Indemnified Liabilities”). Without
\nlimiting the foregoing, in the event any such claim, action, suit, proceeding or
\ninvestigation is brought against any Indemnified Party (whether arising before
\nor after the Effective Time), (i) any counsel retained by the Indemnified
\nParties for any period after the Effective Time shall be reasonably satisfactory
\nto Novell (ii) after the Effective Time, Novell shall pay all reasonable fees
\nand expenses of counsel for the Indemnified Parties promptly as statements
\ntherefor are received; and (iii) after the Effective Time, Novell shall use all
\nreasonable efforts to assist in the defense of any such matter, provided that
\nNovell shall not be liable for any settlement of any claim effected without its
\nwritten consent, which consent, however, shall not be unreasonably withheld. Any
\nIndemnified Party wishing to claim indemnification under this Section upon
\nlearning of any such claim, action, suit, proceeding or investigation, shall
\nnotify Novell (but the failure so to notify Novell shall not relieve<\/p>\n
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\n 154<\/p>\n
it from any liability which it or the Surviving Corporation may have under this
\nSection except to the extent such failure materially prejudices Novell or the
\nSurviving Corporation). The Indemnified Parties as a group may retain only one
\nlaw firm to represent them with respect to each such matter unless there is,
\nunder applicable standards of professional conduct, a potential conflict on any
\nissue between the positions of any two or more Indemnified Parties.<\/p>\n
5.15 Notification of Certain Matters. WordPerfect shall give prompt notice
\nto Novell, and Novell and Sub shall give prompt notice to WordPerfect, of the
\noccurrence, or failure to occur, of any event, which occurrence or failure to
\noccur would be likely to cause (a) any representation or warranty contained in
\nthis Agreement to be untrue or inaccurate in any material respect at any time
\nfrom the date of this Agreement to the Effective Time, or (b) any material
\nfailure of WordPerfect or Novell and Sub, as the case may be, or of any officer,
\ndirector, employee or agent thereof, to comply with or satisfy any covenant,
\ncondition or agreement to be complied with or satisfied by it under this
\nAgreement.<\/p>\n
5.16 Pooling Accounting. Each party agrees not to take any action that
\nwould adversely affect the ability of Novell to treat the Merger as a pooling of
\ninterests, and each party agrees to take such action as may be reasonably
\nrequired to negate the impact of any past actions which would adversely impact
\nthe ability of Novell to treat the Merger as a pooling of interests. The
\nforegoing covenant shall be inapplicable, however, in the event that Novell
\nshall waive the condition precedent to Closing set forth in Section 6.2(c).<\/p>\n
5.17 FIRPTA. WordPerfect shall deliver to the Internal Revenue Service a
\nnotice regarding the statement described in Section 6.2(m) hereof, in accordance
\nwith the requirements of Treasury Regulation Section 1.897-2(h)(2).<\/p>\n
5.18 Subsequent Amendments of Disclosure Schedules. Novell and WordPerfect
\nshall each have the right after the date hereof but no later than twenty one
\n(21) days after the date hereof to deliver to the other written amendments to
\nthe applicable Sections of the Novell Disclosure Schedule or the WordPerfect
\nDisclosure Schedule, as the case may be; provided, that any such disclosure is
\nas of, and may not include events or actions subsequent to, the date hereof. To
\nthe extent that any such amendment shall not disclose any event or condition
\nthat, individually or in the aggregate, could be reasonably likely to have a
\nMaterial Adverse Effect on Novell or WordPerfect, respectively, such amendment
\nshall be deemed accepted by the other party and the relevant Section of the
\nDisclosure Schedule shall be deemed amended accordingly thereby. Notwithstanding
\nthe foregoing, each party hereby represents and warrants that it has used all
\nreasonable efforts to have completed such party’s Disclosure Schedule delivered
\nprior to execution of this Agreement.<\/p>\n
5.19 Establishment of Applications Group. Novell agrees that upon
\nconsummation of the Merger, it will establish and maintain WordPerfect as a
\nseparate operating unit constituting the Novell Applications Group. The present
\nPresident of WordPerfect shall be appointed President of the Novell Applications
\nGroup, to serve until his successor is duly appointed, who shall report directly
\nto the Chief Executive Officer and President of Novell and the remaining
\nexecutive officers shall report to such Novell Applications Group President.
\nNovell also agrees that the Novell Applications Group shall be operated in
\naccordance with a plan submitted by WordPerfect and approved by Novell, as
\nmodified from time to time.<\/p>\n
5.20 Satisfaction of WordPerfect Obligations. Novell agrees that in the
\nperiod following the Effective Date it shall, or shall cause WordPerfect to,
\nsatisfy and discharge the liabilities and obligations of WordPerfect in a timely
\nmanner in accordance with the contractual terms, if any, associated with any
\nsuch liability or obligation.<\/p>\n
5.21 Continued Nomination of Directors. The Board of Directors of Novell
\nshall take all necessary action to cause Ashton and Mr. Bastian (or a designee
\nof either of such persons which designee or designees shall be reasonably
\nacceptable to the Board of Directors of Novell) to be nominated as a member of
\nthe Novell management slate of directors to stand for election to the Novell
\nBoard of Directors to serve until such person’s successor shall be duly
\nappointed. The Board of Directors of Novell shall also take all necessary action
\nto cause Ashton and Mr. Bastian (or their designees) to be nominated for
\nelection at the Novell annual meeting of stockholders to be convened in Novell’s
\n1995 fiscal year.<\/p>\n
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\n 155<\/p>\n
5.22 Other Transactions. The parties acknowledge that any action taken by
\neither party with respect to the acquisition of rights to sell a spreadsheet
\nprogram mutually acceptable to the parties which has been approved by both
\nNovell and WordPerfect will not be deemed a breach of any representation,
\nwarranty or covenant, notwithstanding the terms of any such representation,
\nwarranty or covenant.<\/p>\n
ARTICLE VI<\/p>\n
CONDITIONS PRECEDENT<\/p>\n
6.1 Conditions to Each Party’s Obligation to Effect the Merger. The
\nrespective obligation of each party to effect the Merger is subject to the
\nsatisfaction prior to the Closing Date of the following conditions:<\/p>\n
(a) Effectiveness of the S-4. The S-4 shall have been declared
\n effective by the SEC under the Securities Act. No stop order suspending the
\n effectiveness of the S-4 shall have been issued by the SEC and no
\n proceedings for that purpose and no similar proceeding with respect to the
\n Proxy Statement shall have been initiated or threatened by the SEC.<\/p>\n
(b) Shareholder Approval. This Agreement and the Articles of Merger
\n shall have been approved and adopted by the affirmative vote or consent of
\n the holders of at least a majority of the issued and outstanding shares of
\n WordPerfect Common Stock present, in person or by proxy, at the meeting of
\n WordPerfect’s shareholders contemplated by Section 5.6. Notwithstanding
\n anything in this Agreement to the contrary, the issuance of shares of
\n Novell Common Stock, whether in the Merger or in connection with the Merger
\n or any transaction contemplated hereby, shall have been approved by the
\n stockholders of Novell if required by applicable law or by any requirement
\n of the National Association of Securities Dealers.<\/p>\n
(c) HSR Act. The applicable waiting period applicable to the
\n consummation of the Merger under the HSR Act shall have expired or been
\n terminated.<\/p>\n
(d) Governmental Entity Approvals. All material authorizations,
\n consents, orders or approvals of, or declarations or filings with, or
\n expiration of waiting periods imposed by, any Governmental Entity necessary
\n for the consummation of the transactions contemplated by this Agreement and
\n the Articles of Merger shall have been filed, expired or been obtained.<\/p>\n
(e) No Injunctions or Restraints; Illegality. No temporary restraining
\n order, preliminary or permanent injunction or other order issued by any
\n court of competent jurisdiction or other legal restraint or prohibition
\n preventing the consummation of the Merger shall be in effect, nor shall any
\n proceeding brought by an administrative agency or commission or other
\n governmental authority or instrumentality, domestic or foreign, seeking any
\n of the foregoing be pending; and there shall not be any action taken, or
\n any statute, rule, regulation or order enacted, entered, enforced or deemed
\n applicable to the Merger, which would (i) make the consummation of the
\n Merger illegal or (ii) render Novell, Sub or WordPerfect unable to
\n consummate the Merger, except for any waiting period provisions.<\/p>\n
(f) Tax Opinions. Novell and WordPerfect shall each have received
\n substantially identical written opinions from their respective counsel,
\n Wilson, Sonsini, Goodrich & Rosati, Professional Corporation and Brobeck,
\n Phleger & Harrison, in form and substance reasonably satisfactory to them
\n to the effect that the Merger will constitute a reorganization within the
\n meaning of Section 368(a) of the Code. In rendering such opinions, counsel
\n may rely upon (and, to the extent reasonably required, the parties and
\n WordPerfect’s shareholders shall make) reasonable representations related
\n thereto.<\/p>\n
6.2 Conditions of Obligations of Novell and Sub. The obligations of Novell
\nand Sub to effect the Merger are subject to the satisfaction of the following
\nconditions, unless waived by Novell and Sub:<\/p>\n
(a) Representations and Warranties. The representations and warranties
\n of WordPerfect set forth in this Agreement shall be true and correct in all
\n material respects (except for such representations and warranties which are
\n qualified by their terms by a reference to materiality, which
\n representations and warranties as so qualified shall be true in all
\n respects) (i) as of the date of this Agreement and (ii) as of<\/p>\n
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\n 156<\/p>\n
the Closing Date, as though made on and as of the Closing Date
\n (provided that in the cases of clauses (i) and (ii) any such
\n representation and warranty made as of a specific date shall be true
\n and correct in all material respects as of such specific date), unless
\n any failures to be true and correct, individually or in the aggregate,
\n do not have and could not reasonably be expected to have a Material
\n Adverse Effect on WordPerfect; and there shall have been no willful
\n breach by WordPerfect of any of its representations or warranties made
\n in the Agreement. Novell and Sub shall have received a certificate
\n signed by the chief executive officer and the chief financial officer
\n of WordPerfect to such effect on the Closing Date.<\/p>\n
(b) Performance of Obligations of WordPerfect. WordPerfect shall have
\n performed in all material respects all obligations and covenants required
\n to be performed by it under this Agreement and the Articles of Merger prior
\n to or as of the Closing Date, and Novell and Sub shall have received a
\n certificate signed by the chief executive officer and the chief financial
\n officer of WordPerfect to such effect.<\/p>\n
(c) Auditors Letter. (i) Novell shall have received a letter from
\n Ernst & Young in form and substance satisfactory to Novell to the effect
\n that the Merger will be accounted for as a pooling of interests and (ii)
\n Ernst & Young shall have received a substantially identical letter from
\n Price Waterhouse to such effect; provided that the letter from Price
\n Waterhouse may except any effect on the accounting of the Merger as a
\n pooling of interests based on any actions taken by Novell.<\/p>\n
(d) Opinion of WordPerfect’s Counsel. Novell shall have received an
\n opinion of Brobeck, Phleger & Harrison, counsel to WordPerfect dated the
\n Closing Date, in form and substance reasonably satisfactory to Novell and
\n WordPerfect.<\/p>\n
(e) Consents. Novell and Sub shall have received duly executed copies
\n of all material third-party consents and approvals contemplated by this
\n Agreement or the WordPerfect Disclosure Schedule in form and substance
\n reasonably satisfactory to Novell and Sub.<\/p>\n
(f) Affiliate Agreements. Novell shall have received the executed
\n WordPerfect Affiliate Agreements contemplated by Section 5.12.<\/p>\n
(g) Shareholder Agreements. Neither Ashton, Mr. Bastian nor Ms.
\n Bastian shall have breached the Shareholder Agreements.<\/p>\n
(h) No Material Adverse Effect. There shall have been no Material
\n Adverse Effect on WordPerfect or any of its Subsidiaries on or before the
\n Closing Date.<\/p>\n
(i) Resignation of Directors. The directors of WordPerfect in office
\n immediately prior to the Effective Time shall have resigned as directors of
\n the Surviving Corporation effective as of the Effective Time.<\/p>\n
(j) Tax Matters Agreement. The WordPerfect shareholders shall have
\n executed and delivered to Novell and WordPerfect a Tax Matters Agreement
\n substantially in the form attached to this Agreement as Exhibit 6.2(j).<\/p>\n
(k) FIRPTA. Novell, as agent for the shareholders of WordPerfect shall
\n have received a properly executed FIRPTA Notification Letter, in form and
\n substance satisfactory to Novell, which states that shares of capital stock
\n of WordPerfect do not constitute “United States real property interests”
\n under Section 897(c) of the Code, for purposes of satisfying Novell’s
\n obligations under Treasury Regulation Section 1.1445-2(c)(3).<\/p>\n
6.3 Conditions of Obligation of WordPerfect. The obligation of WordPerfect
\nto effect the Merger is subject to the satisfaction of the following conditions,
\nunless waived by WordPerfect:<\/p>\n
(a) Representations and Warranties. The representations and warranties
\n of Novell and Sub set forth in this Agreement shall be true and correct in
\n all material respects (except for such representations and warranties which
\n are qualified by their terms by a reference to materiality, which
\n representations and warranties as so qualified shall be true in all
\n respects) (i) as of the date of this Agreement and (ii) as of the Closing
\n Date, as though made on and as of the Closing Date (provided that in the
\n cases of clauses (i) and (ii) any such representation and warranty made as
\n of a specific date shall be true and correct in all<\/p>\n
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\n 157<\/p>\n
material respects as of such specific date), unless any failures to be
\n true and correct, individually or in the aggregate, do not have and
\n could not reasonably be expected to have a Material Adverse Effect on
\n Novell; and there shall have been no willful breach by Novell of any of
\n its representations or warranties made in the Agreement. WordPerfect
\n shall have received a certificate signed by the chief executive officer
\n and the chief financial officer of Novell and the president of Sub to
\n such effect on the Closing Date.<\/p>\n
(b) Performance of Obligations of Novell and Sub. Novell and Sub shall
\n have performed in all material respects all obligations and covenants
\n required to be performed by them under this Agreement and the Articles of
\n Merger prior to or as of the Closing Date, and WordPerfect shall have
\n received a certificate signed by the chief executive officer and the chief
\n financial officer of Novell and the president of Sub to such effect.<\/p>\n
(c) Opinion of Novell’s and Sub’s Counsel. WordPerfect shall have
\n received an opinion dated the Closing Date of Wilson, Sonsini, Goodrich & Rosati, counsel for Novell and Sub, in form and substance reasonably
\n satisfactory to WordPerfect and Novell.<\/p>\n
(d) Consents. WordPerfect shall have received duly executed copies of
\n all material third-party consents and approvals contemplated by this
\n Agreement and the Novell Disclosure Schedule in form and substance
\n satisfactory to WordPerfect.<\/p>\n
(e) No Material Adverse Effect. There shall have been no Material
\n Adverse Effect on Novell or any of its Subsidiaries on or before the
\n Closing Date.<\/p>\n
(f) Election of Director Nominees. The Board of Directors of Novell
\n shall have taken appropriate action to cause the number of directors
\n comprising the full Board of Directors of Novell to be increased by two
\n persons, from seven to nine, and Ashton and Mr. Bastian (or a designee of
\n either of such persons which designee or designees shall be acceptable to
\n the Board of Directors of Novell) shall have been elected to the Board of
\n Directors of Novell, effective upon the Effective Time, until their
\n successors, if any, are duly elected or appointed.<\/p>\n
(g) Acquisition of Rights to Sell a Spreadsheet Program. Either Novell
\n or WordPerfect shall have acquired the rights to sell a spreadsheet program
\n mutually acceptable to the parties hereto (which acquisition will close
\n prior to or simultaneously with the consummation of the Merger contemplated
\n by this Agreement).<\/p>\n
(h) Comparability of Employee Benefits. WordPerfect shall be
\n reasonably satisfied that the continuing employees of WordPerfect, after
\n giving effect to the Merger, shall be entitled to receive at least
\n comparable benefits to those being received by the employees of Novell,
\n taken as a whole, who occupy comparable positions and have comparable
\n responsibilities; provided, however, that, as soon as practicable after the
\n date hereof and in any event prior to the Closing, Novell and WordPerfect
\n shall confer and agree upon a plan that has as its primary purpose the
\n transition of WordPerfect employees to Novell benefits in a manner that
\n results in minimal disruption to the continuing operations of WordPerfect
\n and continued employment of key individuals. The parties hereto acknowledge
\n that such plan may take an extended period of time to implement
\n successfully.<\/p>\n
ARTICLE VII<\/p>\n
TERMINATION<\/p>\n
7.1 Termination. This Agreement may be terminated at any time prior to the
\nEffective Time, whether before or after approval of the Merger by the
\nshareholders of WordPerfect:<\/p>\n
(a) by mutual written agreement of Novell, Sub and WordPerfect;<\/p>\n
(b) by Novell, if there has been a breach by WordPerfect of any
\nrepresentation, warranty, covenant or agreement set forth in this Agreement on
\nthe part of WordPerfect or if any representation or warranty of WordPerfect
\nshall have become untrue, in either case such that the condition set forth in
\nSections 6.2(a) or<\/p>\n
A-26
\n 158<\/p>\n
6.2(b) would not be satisfied as of the time of such breach or as of the time
\nsuch representation or warranty shall have become untrue and which breach or
\ninaccuracy WordPerfect fails to cure within seven days after notice thereof is
\ngiven by Novell (except that no cure period shall be provided for a breach by
\nWordPerfect or inaccuracy which by its nature cannot be cured);<\/p>\n
(c) by WordPerfect, if there has been a breach by Novell or Sub of any
\nrepresentation, warranty, covenant or agreement set forth in this Agreement on
\nthe part of Novell or Sub or if any representation or warranty of Novell or Sub
\nshall have become untrue, in either case such that the condition set forth in
\nSections 6.3(a) or 6.3(b) would not be satisfied as of the time of such breach
\nor as of the time such representation or warranty shall have become untrue and
\nwhich breach or inaccuracy Novell or Sub, as the case may be, fails to cure
\nwithin seven days after notice thereof is given by WordPerfect (except that no
\ncure period shall be provided for a breach by Novell or Sub which by its nature
\ncannot be cured);<\/p>\n
(d) by Novell or WordPerfect, if the Merger shall not have been consummated
\non or before July 31, 1994 (other than delays attributable to concluding the HSR
\nAct waiting period or receiving an order of effectiveness from the SEC with
\nrespect to the S-4, but in no event later than September 30, 1994);<\/p>\n
(e) by Novell or WordPerfect if the required approval of the shareholders
\nof WordPerfect or, if required, the stockholders of Novell, contemplated by this
\nAgreement shall not have been obtained by reason of the failure to obtain the
\nrequired vote upon a vote taken at the Shareholders’ Meeting or at any
\nadjournment thereof or at any meeting of the Novell stockholders or any
\nadjournment thereof, to the extent determined to be necessary subsequent to the
\ndate hereof; or<\/p>\n
(f) by Novell or WordPerfect if any permanent injunction or other order of
\na court or other competent authority preventing the Merger shall have become
\nfinal and nonappealable.<\/p>\n
Where action is taken to terminate this Agreement pursuant to this Section
\n7.1, it should be sufficient for such action to be authorized by the Board of
\nDirectors of the party taking such action.<\/p>\n
7.2 Effect of Termination. In the event of termination of this Agreement
\npursuant to Section 7.1, this Agreement shall forthwith become void and there
\nshall be no liability on the part of any party hereto except that (i) the
\nprovisions of the Confidentiality Agreement and Section 3.26, Section 4.10 and
\nArticle VIII of this Agreement shall survive the termination of this Agreement
\nand (ii) nothing herein shall relieve any party from liability for any breach of
\nthis Agreement.<\/p>\n
ARTICLE VIII<\/p>\n
GENERAL PROVISIONS<\/p>\n
8.1 Nonsurvival of Representations, Warranties and Agreements. All
\nrepresentations, warranties and agreements in this Agreement or in any
\ninstrument delivered pursuant to this Agreement shall be deemed to be conditions
\nto the Merger and shall not survive the consummation of the Merger, except that
\nthe agreements contained in Article II, Section 3.26, Section 4.10 and Article
\nVIII, the agreements delivered pursuant to this Agreement and the
\nrepresentations made to counsel in connection with the tax opinions to be
\ndelivered pursuant to Section 6.1(f) shall survive the consummation of the
\nMerger.<\/p>\n
8.2 Amendment. The Merger Agreement may be amended by the parties hereto,
\nby action taken by their respective Board of Directors, at any time before or
\nafter approval of the Merger by the shareholders of WordPerfect; provided that
\nfollowing approval of the Merger by the shareholders of WordPerfect, no
\namendment shall be made which by law requires the further approval of such
\nshareholders without obtaining such further approval. This Agreement may not be
\namended except by an instrument in writing signed on behalf of each of the
\nparties hereto.<\/p>\n
8.3 Expenses. Whether or not the Merger is consummated, all costs and
\nexpenses incurred in connection with this Agreement, the Articles of Merger and
\nthe transactions contemplated hereby and thereby shall be paid by the party
\nincurring such expense, except that if the Merger is not consummated expenses<\/p>\n
A-27
\n 159<\/p>\n
incurred in connection with printing the documents distributed to shareholders
\nof WordPerfect and the S-4 shall be shared equally by Novell and WordPerfect.<\/p>\n
8.4 Extension; Waiver. At any time prior to the Effective Time, each of
\nWordPerfect and Novell, by action taken by its Board of Directors, may, to the
\nextent legally allowed, (i) extend the time for the performance of any of the
\nobligations or other acts of the other, (ii) waive any inaccuracies in the
\nrepresentations and warranties made to it contained herein or in any document
\ndelivered pursuant hereto and (iii) waive compliance with any of the agreements
\nor conditions for the benefit of it contained herein. Any agreement on the part
\nof a party hereto to any such extension or waiver shall be valid only if set
\nforth in an instrument in writing signed on behalf of such party.<\/p>\n
8.5 Notices. All notices and other communications hereunder shall be in
\nwriting and shall be deemed given if delivered personally or mailed by
\nregistered or certified mail (return receipt requested) or sent by telecopy,
\nconfirmation received, to the parties at the following addresses and telecopy
\nnumbers (or at such other address or number for a party as shall be specified by
\nlike notice):<\/p>\n
(a) if to Novell or Sub, to:<\/p>\n
Novell, Inc.
\n 122 East 1700 South
\n Provo, Utah 84606
\n Attention: David R. Bradford, Esq.
\n Telecopy No. (801) 377-7619
\n Telephone No. (801) 429-7000<\/p>\n
with a copy to:<\/p>\n
Wilson, Sonsini, Goodrich & Rosati
\n 2 Palo Alto Square
\n Palo Alto, California 94306
\n Attn: Larry W. Sonsini, Esq.
\n Telecopy No.: (415) 493-6811
\n Telephone No.: (415) 493-9300<\/p>\n
(b) if to WordPerfect, to:<\/p>\n
WordPerfect Corporation
\n 1555 North Technology Way
\n Orem, Utah 84057
\n Attention: R. Duff Thompson, Esq.
\n Telecopy No.: (801) 222-4477
\n Telephone No.: (801) 222-4400<\/p>\n
with a copy to:<\/p>\n
Brobeck, Phleger & Harrison
\n 2 Embarcadero Place
\n 2200 Geng Road
\n Palo Alto, California 94306
\n Attn: Joshua Green, Esq.
\n Telecopy No.: (415) 496-2885
\n Telephone No.: (415) 424-0160<\/p>\n
8.6 Interpretation. When a reference is made in this Agreement to Sections
\nor Exhibits, such reference shall be to a Section or Exhibit to this Agreement
\nunless otherwise indicated. The words “include,” “includes” and “including” when
\nused herein shall be deemed in each case to be followed by the words “without
\nlimitation.” The table of contents and headings contained in this Agreement are
\nfor reference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
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\n 160<\/p>\n
8.7 Counterparts. This Agreement may be executed in one or more
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each of
\nthe parties and delivered to the other party.<\/p>\n
8.8 Entire Agreement. This Agreement, the Confidentiality Agreement and
\nthe documents and instruments and other agreements among the parties delivered
\npursuant hereto constitute the entire agreement among the parties with respect
\nto the subject matter hereof and supersede all prior agreements and
\nunderstandings, both written and oral, among the parties with respect to the
\nsubject matter hereof and are not intended to confer upon any other person any
\nrights or remedies hereunder except as otherwise expressly provided herein.<\/p>\n
8.9 No Transfer. This Agreement and the rights and obligations set forth
\nherein may not be transferred or assigned by operation of law or otherwise
\nwithout the consent of each party hereto. This Agreement is binding upon and
\nwill inure to the benefit of the parties hereto and their respective successors
\nand permitted assigns.<\/p>\n
8.10 Severability. If any provision of this Agreement, or the application
\nthereof, will for any reason and to any extent be invalid or unenforceable, the
\nremainder of this Agreement and application of such provision to other persons
\nor circumstances will be interpreted so as reasonably to effect the intent of
\nthe parties hereto. The parties further agree to replace such void or
\nunenforceable provision of this Agreement with a valid and enforceable provision
\nthat will achieve, to the extent possible, the economic, business and other
\npurposes of the void or unenforceable provision.<\/p>\n
8.11 Other Remedies. Except as otherwise provided herein, any and all
\nremedies herein expressly conferred upon a party will be deemed cumulative with
\nand not exclusive of any other remedy conferred hereby or by law or equity on
\nsuch party, and the exercise of any one remedy will not preclude the exercise of
\nany other.<\/p>\n
8.12 Further Assurances. Each party agrees to cooperate fully with the
\nother parties and to execute such further instruments, documents and agreements
\nand to give such further written assurances as may be reasonably requested by
\nany other party to evidence and reflect the transactions described herein and
\ncontemplated hereby and to carry into effect the intents and purposes of this
\nAgreement.<\/p>\n
8.13 Absence of Third Party Beneficiary Rights. No provision of this
\nAgreement is intended, nor will be interpreted, to provide to create any third
\nparty beneficiary rights or any other rights of any kind in any client,
\ncustomer, affiliate, stockholder, employee, partner or any party hereto or any
\nother person or entity unless specifically provided otherwise herein, and,
\nexcept as so provided, all provisions hereof will be personal solely between the
\nparties to this Agreement.<\/p>\n
8.14 Mutual Drafting. This Agreement is the joint product of Novell and
\nWordPerfect, and each provision hereof has been subject to the mutual
\nconsultation, negotiation and agreement of Novell and WordPerfect, and shall not
\nbe construed for or against any party hereto.<\/p>\n
8.15 Governing Law. This Agreement shall be governed in all respects,
\nincluding validity, interpretation and effect, by the laws of the State of
\nDelaware (without giving effect to its choice of law principles).<\/p>\n
A-29
\n 161<\/p>\n
IN WITNESS WHEREOF, Novell, Sub and WordPerfect have caused this Agreement
\nto be signed by their respective officers thereunto duly authorized, all as of
\nthe date first written above.<\/p>\n
NOVELL, INC.<\/p>\n
By: \/s\/ JAMES R. TOLONEN
\n James R. Tolonen, Office of the
\n President and Chief Financial Officer<\/p>\n
WORDPERFECT CORPORATION<\/p>\n
By: \/s\/ R. DUFF THOMPSON
\n R. Duff Thompson, Executive
\n Vice-President<\/p>\n
NOVELL ACQUISITION CORP.<\/p>\n
By: \/s\/ JAMES R. TOLONEN
\n James R. Tolonen, President<\/p>\n
By: \/s\/ ALAN C. ASHTON
\n Alan C. Ashton*<\/p>\n
By: \/s\/ BRUCE W. BASTIAN
\n Bruce W. Bastian*<\/p>\n
By: \/s\/ MELANIE L. BASTIAN
\n Melanie L. Bastian*<\/p>\n
* For purpose of Section 5.3 only.<\/p>\n
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\n 162<\/p>\n
EXHIBIT 1.1<\/p>\n
ARTICLES OF MERGER<\/p>\n
These Articles of Merger, dated as of , 1994 (“Articles of
\nMerger”), are entered into between WordPerfect Corporation, a Utah corporation
\n(“WordPerfect”), and Novell, Inc., a Delaware corporation (“Novell” or
\n“Surviving Corporation”) (WordPerfect and Novell being collectively referred to
\nas the “Constituent Corporations”).<\/p>\n
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
\nmaterial covenants and agreements contained herein, the Constituent Corporations
\nhereby agree as follows:<\/p>\n
ARTICLE I<\/p>\n
THE MERGER PLAN<\/p>\n
1.1 Merger of WordPerfect With and Into Novell.<\/p>\n
(a) Agreement and Plan of Reorganization. Subject to the terms of these
\nArticles of Merger and an Agreement and Plan of Reorganization dated as of March
\n21, 1994, as amended (the “Reorganization Agreement”), WordPerfect shall be
\nmerged with and into Novell (the “Merger”).<\/p>\n
(b) Effective Time of the Merger. The Merger shall become effective at such
\ntime (the “Effective Time”) (the date the Merger shall become effective is
\nsometimes referred to as the “Effective Date”) as these Articles of Merger are
\nfiled with the Division of Corporations and Commercial Code of the State of Utah
\npursuant to Section 16-10a-1105 of the Revised Business Corporation Act of the
\nState of Utah.<\/p>\n
(c) Surviving Corporation. At the Effective Time, WordPerfect shall be
\nmerged with and into Novell and the separate corporate existence of WordPerfect
\nshall thereupon cease. Novell shall be the surviving corporation in the Merger
\nand the separate corporate existence of Novell shall continue after the Merger.<\/p>\n
1.2 Effect of the Merger; Additional Actions.<\/p>\n
(a) Effects. The Merger shall have the effects set forth in Section
\n16-10a-1106 of the Revised Business Corporation Act of the State of Utah.<\/p>\n
(b) Taking of Necessary Action; Further Action. If, at any time after the
\nEffective Time, any such further action is necessary or desirable to carry out
\nthe purposes of the Reorganization Agreement or these Articles of Merger and to
\nvest the Surviving Corporation with full right, title and possession to all
\nassets, property, rights, privileges, powers and franchises of WordPerfect, the
\nofficers and directors of Novell and WordPerfect are fully authorized in the
\nname of their respective corporations or otherwise to take, and will take, all
\nsuch lawful and necessary action.<\/p>\n
ARTICLE II<\/p>\n
THE CONSTITUENT CORPORATIONS<\/p>\n
2.1 Organization of WordPerfect.<\/p>\n
(a) Incorporation. WordPerfect was incorporated under the laws of the State
\nof Utah in 1979.<\/p>\n
(b) Authorized Stock. WordPerfect is authorized to issue an aggregate of
\n200,000,000 shares of Common Stock, $0.001 par value (“WordPerfect Common
\nStock”).<\/p>\n
(c) Outstanding Stock. At the close of business on , 1994,
\n shares of WordPerfect Common Stock were outstanding.<\/p>\n
2.2 WordPerfect Shareholder Approval. The Reorganization Agreement and
\nthese Articles of Merger were duly approved and adopted by the affirmative vote
\nof the holders of at least a majority of the shares of<\/p>\n
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\n 163<\/p>\n
WordPerfect Common Stock entitled to vote on the Reorganization Agreement and
\nthese Articles of Merger at a special meeting of the shareholders held on June
\n , 1994, in accordance with the provisions of Section 16-10a-1103 of the Utah
\nRevised Business Corporation Act.<\/p>\n
2.3 Organization of Novell.<\/p>\n
(a) Incorporation. Novell was incorporated under the laws of the State of
\nDelaware on , 1983.<\/p>\n
(b) Authorized Stock. The authorized capital stock of Novell consists of
\n400,000,000 shares of Common Stock, $.10 par value (“Novell Common Stock”), and
\n500,000 shares of preferred stock, $.10 par value (“Novell Preferred Stock”).<\/p>\n
(c) Outstanding Stock. On the date hereof, an aggregate of shares
\nof Novell Common Stock and no shares of Novell Preferred Stock are outstanding.<\/p>\n
2.4 Novell Stockholder Approval. The approval of the stockholders of
\nNovell is not required under the Delaware General Corporation Law or the
\nRestated Certificate of Incorporation and Bylaws.<\/p>\n
ARTICLE III<\/p>\n
CERTIFICATE OF INCORPORATION, BYLAWS AND<\/p>\n
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION<\/p>\n
3.1 Certificate of Incorporation of Surviving Corporation. The Restated
\nCertificate of Incorporation of Novell in effect immediately prior to the
\nEffective Time shall be the Certificate of Incorporation of the Surviving
\nCorporation.<\/p>\n
3.2 Bylaws of Surviving Corporation. The Bylaws of Novell in effect
\nimmediately prior to the Effective Time shall be the Bylaws of the Surviving
\nCorporation unless and until amended or repealed as provided by applicable law,
\nthe Certificate of Incorporation of the Surviving Corporation and such Bylaws.<\/p>\n
3.3 Directors and Officers of Surviving Corporation. The directors of
\nNovell immediately prior to the Effective Time shall be the directors of the
\nSurviving Corporation at the Effective Time, each to hold office in accordance
\nwith the Certificate of Incorporation and Bylaws of the Surviving Corporation,
\nand the officers of Novell immediately prior to the Effective Time shall be the
\nofficers of the Surviving Corporation, in each case, until their respective
\nsuccessors are duly elected or appointed or qualified.<\/p>\n
ARTICLE IV<\/p>\n
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
\n CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES<\/p>\n
4.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
\nMerger and without any action on the part of the holder of any shares of
\nWordPerfect Common Stock:<\/p>\n
(a) Cancellation of Certain Shares of WordPerfect Common Stock. All
\n shares of WordPerfect Common Stock that are owned directly or indirectly by
\n WordPerfect or by any Subsidiary (as defined below) of WordPerfect and any
\n shares of WordPerfect Common Stock owned by Novell or any Subsidiary of
\n Novell shall be cancelled and no stock of Novell or other consideration
\n shall be delivered in exchange therefor. “Subsidiary” means a corporation
\n or other entity whose voting securities are owned or are otherwise
\n controlled directly or indirectly by a parent corporation or other
\n intermediary entity in an amount sufficient to elect at least a majority of
\n the Board of Directors or other managers of such corporation or other
\n entity.<\/p>\n
(b) Conversion of WordPerfect Common Stock. Each issued and
\n outstanding share of WordPerfect Common Stock (other than shares to be
\n cancelled pursuant to Section 4.1(b) hereof and shares, if any, which then
\n or thereafter constitute dissenter’s shares within the meaning of Part 16
\n of the Utah Revised Business Corporation Act (“Dissenter’s Shares”)) shall<\/p>\n
be canceled and extinguished and<\/p>\n
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\n 164<\/p>\n
converted, without any action on the part of the holders thereof and
\n subject to Section 4(e) hereof, into one share of Novell Common Stock.<\/p>\n
(c) Dissenters’ Rights. If holders of WordPerfect Common Stock are
\n entitled to dissenters’ rights in connection with the Merger under Part 16
\n of the Utah Revised Business Corporation Act, any Dissenter’s Shares shall
\n not be converted into Novell Common Stock but shall be converted into the
\n right to receive such consideration as may be determined to be due with
\n respect to such Dissenter’s Shares pursuant to the law of the State of
\n Utah.<\/p>\n
(d) Fractional Shares. No fractional shares of Novell Common Stock
\n shall be issued, but in lieu thereof each holder of shares of WordPerfect
\n Common Stock who would otherwise be entitled to receive a fraction of a
\n share of Novell Common Stock shall receive from Novell an amount of cash
\n equal to the per share market value of Novell Common Stock (based on the
\n last sales price of Novell Common Stock as reported on the National Market
\n System of the National Association of Securities Dealers’ Automated
\n Quotation System on the Effective Date of the Merger) multiplied by the
\n fraction of a share of Novell Common Stock to which such holder would
\n otherwise be entitled. The fractional share interests of each WordPerfect
\n shareholder shall be aggregated, so that no WordPerfect shareholder shall
\n receive cash in an amount greater than the value of one full share of
\n Novell Common Stock.<\/p>\n
4.2 Exchange of Certificates.<\/p>\n
(a) Exchange Agent. Mellon Bank, N.A. shall act as exchange agent (the
\n“Exchange Agent”) in the Merger.<\/p>\n
(b) Novell to Provide Common Stock. Promptly after the Effective Time,
\nNovell shall make available to the Exchange Agent for exchange in accordance
\nwith the provisions of this Article IV and the Reorganization Agreement, through
\nsuch reasonable procedures as Novell may adopt, the shares of Novell Common
\nStock issuable pursuant to Section 4.1 of these Articles of Merger and the
\nprovisions of the Reorganization Agreement in exchange for outstanding shares of
\nWordPerfect Common Stock.<\/p>\n
(c) No Further Ownership Rights in WordPerfect Common Stock. All Novell
\nCommon Stock delivered upon the surrender for exchange of shares of WordPerfect
\nCommon Stock in accordance with the terms of the Reorganization Agreement and
\nthese Articles of Merger shall be deemed to have been delivered in full
\nsatisfaction of all rights pertaining to such shares of WordPerfect Common
\nStock. There shall be no further registration of transfers on the stock transfer
\nbooks of the Surviving Corporation of the shares of WordPerfect Common Stock
\nthat were outstanding immediately prior to the Effective Time. If, after the
\nEffective Time, certificates are presented to the Surviving Corporation for any
\nreason, they shall be cancelled and exchanged as provided in this Article IV and
\nthe Reorganization Agreement.<\/p>\n
ARTICLE V<\/p>\n
TERMINATION<\/p>\n
5.1 Termination by Mutual Agreement. Notwithstanding the approval of these
\nArticles of Merger by the shareholders of WordPerfect, these Articles of Merger
\nmay be terminated at any time prior to the Effective Time by mutual written
\nagreement of the Boards of Directors of Novell and WordPerfect.<\/p>\n
5.2 Termination of Agreement and Plan of Merger. Notwithstanding the
\napproval of these Articles of Merger by the shareholders of WordPerfect, these
\nArticles of Merger shall terminate forthwith in the event that the
\nReorganization Agreement shall be terminated as therein provided.<\/p>\n
5.3 Effects of Termination. In the event of the termination of these
\nArticles of Merger, these Articles of Merger shall forthwith become void and
\nthere shall be no liability on the part of either WordPerfect or Novell or their
\nrespective officers or directors, except as otherwise provided in the
\nReorganization Agreement.<\/p>\n
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\n 165<\/p>\n
ARTICLE VI<\/p>\n
GENERAL PROVISIONS<\/p>\n
6.1 Amendment. These Articles of Merger may be amended by the parties
\nhereto any time before or after approval hereof by the shareholders of
\nWordPerfect but, after such approval, no amendment shall be made which by law
\nrequires the further approval of shareholders of WordPerfect without obtaining
\nsuch approval. These Articles of Merger may not be amended except by an
\ninstrument in writing signed on behalf of each of the parties hereto.<\/p>\n
6.2 Counterparts. These Articles of Merger may be executed in one or more
\ncounterparts, each of which shall be deemed to be an original, but all of which
\ntogether shall constitute one agreement.<\/p>\n
6.3 Governing Law. These Articles of Merger shall be governed in all
\nrespects, including validity, interpretation and effect, by the laws of the
\nState of Utah.<\/p>\n
IN WITNESS WHEREOF, the parties have duly executed these Articles of Merger
\nas of the date first written above.<\/p>\n
WORDPERFECT CORPORATION
\n 1555 North Technology Way
\n Orem, Utah 84057<\/p>\n
By:
\n Alan C. Ashton, President and
\n Chief
\n Executive Officer<\/p>\n
NOVELL, INC.<\/p>\n
122 East 1700 South<\/p>\n
Provo, Utah 84606<\/p>\n
By:<\/p>\n
James R. Tolonen, Chief Financial
\n Officer<\/p>\n
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\n 166<\/p>\n
EXHIBIT 5.6<\/p>\n
WORDPERFECT CORPORATION<\/p>\n
SHAREHOLDER AGREEMENT<\/p>\n
THIS SHAREHOLDER AGREEMENT (this “Agreement”) is made and entered into as
\nof March 21, 1994, between Novell, Inc., a Delaware corporation (“Novell”),
\nWordPerfect Corporation, a Utah corporation (“WordPerfect”) and the undersigned
\nshareholder (“Shareholder”) of Wordperfect.<\/p>\n
RECITALS<\/p>\n
A. Concurrently with the execution of this Agreement, Novell, Novell
\nAcquisition Corp., a Delaware corporation and wholly-owned subsidiary of Novell
\n(“Sub”), and WordPerfect have entered into an Agreement and Plan of
\nReorganization (the “Reorganization Agreement”), which contemplates that
\nWordPerfect and Sub will enter into the Articles of Merger, which Reorganization
\nAgreement and Articles of Merger (collectively, the “Merger Agreements”) provide
\nfor the merger (the “Merger”) of Sub with and into WordPerfect. Pursuant to the
\nMerger, all outstanding capital stock of WordPerfect will be converted into
\nCommon Stock of Novell.<\/p>\n
B. Shareholder is the beneficial owner (as defined in Rule 13d-3 under the
\nSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) of such number
\nof shares of the outstanding Common Stock, no par value per share, of
\nWordPerfect as is indicated on the final page of this Agreement (the “Shares”).<\/p>\n
C. In consideration of the execution of the Reorganization Agreement by
\nNovell, Shareholder agrees not to transfer or otherwise dispose of any of the
\nShares, or any other shares of capital stock of WordPerfect acquired by
\nShareholder hereafter and prior to the Expiration Date (as defined in Section
\n1.1 below), and agrees to vote the Shares and any other such shares of capital
\nstock of WordPerfect so as to facilitate consummation of the Merger.<\/p>\n
NOW, THEREFORE, the parties agree as follows:<\/p>\n
1. Agreement to Retain Shares.<\/p>\n
1.1 Transfer and Encumbrance. Shareholder agrees not to transfer
\n (except as permitted under Section 1.3 below), sell, exchange, pledge
\n (except in connection with a bona fide loan transaction, provided that any
\n pledgee agrees not to transfer, sell, exchange, pledge or otherwise dispose
\n or encumber the Shares or any New Shares (as defined in Section 1.2 below)
\n prior to the Expiration Date and to be subject to the Proxy (as defined in
\n Section 3 below)) or otherwise dispose of or encumber the Shares or any New
\n Shares or to make any offer or agreement relating thereto, at any time
\n prior to the Expiration Date. As used herein, the term “Expiration Date”
\n shall mean the earlier to occur of (i) such date and time as the Merger
\n shall become effective in accordance with the terms and provisions of the
\n Merger Agreements or (ii) the termination of the Reorganization Agreement
\n in accordance with its terms.<\/p>\n
1.2 New Shares. Shareholder agrees that any shares of capital stock
\n of WordPerfect that Shareholder purchases or with respect to which
\n Shareholder otherwise acquires beneficial ownership after the date of this
\n Agreement and prior to the Expiration Date (“New Shares”) shall be subject
\n to the terms and conditions of this Agreement to the same extent as if they
\n constituted Shares.<\/p>\n
1.3 Permitted Transfers. Shareholder may transfer up to thirty
\n percent (30%) of the Shares or any New Shares to members of Shareholder’s
\n immediate family if, prior to any such transfer, (i) Novell receives advice
\n from its counsel that such transfer will not affect the treatment of the
\n Merger as a pooling of interests for accounting purposes and (ii) the
\n transferee agrees to be bound by the provisions of this Agreement.<\/p>\n
2. Agreement to Vote Shares. At every meeting of the shareholders of
\nWordPerfect called with respect to any of the following, and at every
\nadjournment thereof, and on every action or approval by written consent<\/p>\n
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\n 167<\/p>\n
of the shareholders of WordPerfect with respect to any of the following,
\nShareholder shall vote the Shares and any New Shares: (i) in favor of approval
\nof the Merger Agreements and the Merger and any matter that could reasonably be
\nexpected to facilitate the Merger; and (ii) against approval of any proposal
\nmade in opposition to or in competition with consummation of the Merger and the
\nMerger Agreements, against any merger, consolidation, sale of assets,
\nreorganization or recapitalization with any party and against any liquidation or
\nwinding up of WordPerfect (each of the foregoing is referred to as an “Opposing
\nProposal”). Shareholder agrees not, directly or indirectly, to solicit or
\nencourage any offer from any party concerning the possible disposition of all or
\nany substantial portion of WordPerfect’s business assets or capital stock.<\/p>\n
3. Irrevocable Proxy. Concurrently with the execution of this Agreement,
\nShareholder agrees to deliver to Novell a proxy in the form attached as Exhibit
\nA (the “Proxy”), which shall be irrevocable to the extent provided in Section
\n16-10a-722 of the Utah Revised Business Corporation Act, covering the total
\nnumber of Shares and New Shares of capital stock of WordPerfect beneficially
\nowned (as such term is defined in Rule 13d-3 under the Exchange Act) by
\nShareholder set forth therein.<\/p>\n
4. Affiliates Agreement. Concurrently with the execution of this
\nAgreement, Shareholder agrees to execute and deliver to Novell the Affiliates
\nAgreement in the form attached as Exhibit B.<\/p>\n
5. Representations, Warranties and Covenants of Shareholder. Shareholder
\nrepresents, warrants and covenants to Novell as follows:<\/p>\n
5.1 Ownership of Shares. Shareholder: (i) is the beneficial owner of
\nthe Shares, which at the date of this Agreement and at all times up until the
\nExpiration Date will be free and clear of any liens, claims, options, charges or
\nother encumbrances; (ii) does not beneficially own any shares of capital stock
\nof WordPerfect other than the Shares (excluding shares as to which Shareholder
\ncurrently disclaims beneficial ownership in accordance with applicable law); and
\n(iii) has full power and authority to make, enter into and carry out the terms
\nof this Agreement and the Proxy.<\/p>\n
5.2 No Proxy Solicitations. Shareholder will not, and will not permit
\nany entity under Shareholder’s control, to: (i) solicit proxies or become a
\n“participant” in a “solicitation” (as such terms are defined in Regulation 14A
\nunder the Exchange Act) with respect to an Opposing Proposal or otherwise
\nencourage or assist any party in taking or planning any action that would
\ncompete with, restrain or otherwise serve to interfere with or inhibit the
\ntimely consummation of the Merger in accordance with the terms of the Merger
\nAgreements; (ii) initiate a shareholders’ vote or action by written consent of
\nWordPerfect shareholders with respect to an Opposing Proposal; or (iii) become a
\nmember of a “group” (as such term is used in Section 13(d) of the Exchange Act)
\nwith respect to any voting securities of WordPerfect with respect to an Opposing
\nProposal.<\/p>\n
6. Additional Documents. Shareholder and Novell hereby covenant and agree
\nto execute and deliver any additional documents necessary or desirable, in the
\nreasonable opinion of Novell, to carry out the purpose and intent of this
\nAgreement.<\/p>\n
7. Consent and Waiver. Shareholder hereby gives any consents or waivers
\nthat are reasonably required for the consummation of the Merger under the terms
\nof any agreement to which Shareholder is a party or pursuant to any rights
\nShareholder may have.<\/p>\n
8. Termination. This Agreement and the Proxy delivered in connection
\nherewith shall terminate and shall have no further force or effect as of the
\nExpiration Date.<\/p>\n
9. Miscellaneous.<\/p>\n
9.1 Severability. If any term, provision, covenant or restriction of
\nthis Agreement is held by a court of competent jurisdiction to be invalid, void
\nor unenforceable, then the remainder of the terms, provisions, covenants and
\nrestrictions of this Agreement shall remain in full force and effect and shall
\nin no way be affected, impaired or invalidated.<\/p>\n
9.2 Binding Effect and Assignment. This Agreement and all of the
\nprovisions hereof shall be binding upon and inure to the benefit of the parties
\nhereto and their respective successors and permitted<\/p>\n
A-36
\n 168<\/p>\n
assigns, but, except as otherwise specifically provided herein, neither this
\nAgreement nor any of the rights, interests or obligations of the parties hereto
\nmay be assigned by either of the parties without the prior written consent of
\nthe other.<\/p>\n
9.3 Amendments and Modification. This Agreement may not be modified,
\namended, altered or supplemented except by the execution and delivery of a
\nwritten agreement executed by the parties hereto.<\/p>\n
9.4 Specific Performance; Injunctive Relief. The parties acknowledge
\nthat Novell will be irreparably harmed and that there will be no adequate remedy
\nat law for a violation of any of the covenants or agreements of Shareholder set
\nforth herein. Therefore, it is agreed that, in addition to any other remedies
\nthat may be available to Novell upon any such violation, Novell shall have the
\nright to enforce such covenants and agreements by specific performance,
\ninjunctive relief or by any other means available to Novell at law or in equity.<\/p>\n
9.5 Notices. All notices and other communications pursuant to this
\nAgreement shall be in writing and deemed to be sufficient if contained in a
\nwritten instrument and shall be deemed given if delivered personally,
\ntelecopied, sent by nationallyrecognized overnight courier or mailed by
\nregistered or certified mail (return receipt requested), postage prepaid, to the
\nparties at the following address (or at such other address for a party as shall
\nbe specified by like notice):<\/p>\n
If to Novell: Novell, Inc.
\n 122 East, 1700 South
\n Provo, Utah 84606
\n Attn: Chief Executive Officer
\n Telecopy No.: (801) 429-3951
\n Telephone No.: (801) 429-7000<\/p>\n
With a copy to: Wilson, Sonsini, Goodrich & Rosati
\n Two Palo Alto Square
\n Palo Alto, California 94306
\n Attn: Larry W. Sonsini, Esq.
\n Telecopy No.: (415) 493-6811
\n Telephone No.: (415) 493-9300<\/p>\n
If to Shareholder: To the address for notice set forth on the last
\npage hereof.<\/p>\n
With a copy to: WordPerfect Corporation
\n 1555 North Technology Way
\n Orem, Utah 84057
\n Attn: Chief Executive Officer
\n Telecopy No.: (801) 228-7077
\n Telephone No.: (801) 222-4400<\/p>\n
With a copy to: Brobeck, Phleger & Harrison
\n Two Embarcadero Place
\n 2200 Geng Road
\n Palo Alto, California 94306
\n Attn: Joshua Green, Esq.
\n Telecopy No.: (415) 496-2885
\n Telephone No.: (415) 424-0160<\/p>\n
9.6 Governing Law. This Agreement shall be governed by, construed and
\nenforced in accordance with the internal laws of the State of Utah.<\/p>\n
9.7 Entire Agreement. This Agreement and the Proxy contain the entire
\nunderstanding of the parties in respect of the subject matter hereof, and
\nsupersede all prior negotiations and understandings between the parties with
\nrespect to such subject matter.<\/p>\n
A-37
\n 169<\/p>\n
9.8 Counterparts. This Agreement may be executed in several
\ncounterparts, each of which shall be an original, but all of which together
\nshall constitute one and the same agreement.<\/p>\n
9.9 Effect of Headings. The section headings herein are for
\nconvenience only and shall not affect the construction or interpretation of this
\nAgreement.<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
\nexecuted on the day and year first above written.<\/p>\n
\n
\nNOVELL, INC. SHAREHOLDER
\nBy: By:
\nTitle:
\n Shareholder’s Address for Notice:
\n ——————————————–
\nWORDPERFECT CORPORATION
\n ——————————————–
\nBy:
\n ——————————————–
\nTitle:
\n Shares beneficially owned:
\n ——-shares of WordPerfect Corporation
\n Common Stock
\n<\/c><\/s><\/table>\n A-38
\n 170<\/p>\n
IRREVOCABLE PROXY<\/p>\n
TO VOTE<\/p>\n
WORDPERFECT CORPORATION STOCK<\/p>\n
The undersigned shareholder of WordPerfect Corporation, a Utah corporation
\n(“WordPerfect”), hereby irrevocably (to the full extent permitted by Section
\n16-10a-722 of the Utah Revised Business Corporation Act) appoints the directors
\non the Board of Directors of Novell, Inc., a Delaware corporation (“Novell”),
\nand each of them, as the sole and exclusive attorneys and proxies of the
\nundersigned, with full power of substitution and resubstitution, to vote and
\nexercise all voting and related rights (to the full extent that the undersigned
\nis entitled to do so) with respect to all of the shares of capital stock of
\nWordPerfect that now are or hereafter may be beneficially owned by the
\nundersigned, and any and all other shares or securities of WordPerfect issued or
\nissuable in respect thereof on or after the date hereof (collectively, the
\n“Shares”) in accordance with the terms of this Proxy. The Shares beneficially
\nowned by the undersigned shareholder of WordPerfect as of the date of this Proxy
\nare listed on the final page of this Proxy. Upon the undersigned’s execution of
\nthis Proxy, any and all prior proxies given by the undersigned with respect to
\nany Shares are hereby revoked and the undersigned agrees not to grant any
\nsubsequent proxies with respect to the Shares until after the Expiration Date
\n(as defined below).<\/p>\n
This proxy is irrevocable (to the extent provided in Section 16-10a-722 of
\nthe Utah Revised Business Corporation Act) is granted pursuant to that certain
\nShareholder Agreement dated as of March , 1994, between Novell and the
\nundersigned shareholder (the “Shareholder Agreement”), and is granted in
\nconsideration of Novell entering into that certain Agreement and Plan of
\nReorganization dated as of March , 1994 (the “Reorganization Agreement”),
\namong Novell, Novell Acquisition Corp., a Delaware corporation and wholly-owned
\nsubsidiary of Novell (“Sub”), and WordPerfect, and that certain related
\nAgreement of Merger between Sub and WordPerfect (such agreements are
\ncollectively referred to as the “Merger Agreements”). The Merger Agreements
\nprovide for the merger of Sub into WordPerfect in accordance with their terms
\n(the “Merger”). As used herein, the term “Expiration Date” shall mean the
\nearlier to occur of (i) such date and time as the Merger shall become effective
\nin accordance with the terms and provisions of the Merger Agreements or (ii) the
\ntermination of the Reorganization Agreement in accordance with its terms.<\/p>\n
The attorneys and proxies named above, and each of them, are hereby
\nauthorized and empowered by the undersigned, at any time prior to the Expiration
\nDate, to act as the undersigned’s attorney and proxy to vote the Shares, and to
\nexercise all voting and other rights of the undersigned with respect to the
\nShares (including, without limitation, the power to execute and deliver written
\nconsents pursuant to Section 16-10a-704 of the Utah Revised Business Corporation
\nAct) at every annual, special or adjourned meeting of the shareholders of
\nWordPerfect and in every written consent in lieu of such meeting: (a) in favor
\nof approval of the Merger and the Merger Agreements and in favor of any matter
\nthat could reasonably be expected to facilitate the Merger, and (b) against
\napproval of any proposal made in opposition to or in competition with the
\nconsummation of the Merger and the Merger Agreements, against any merger,
\nconsolidation, sale of assets, reorganization or recapitalization or WordPerfect
\nwith any party other than Novell and its affiliates and against any liquidation
\nor winding up of WordPerfect. The attorneys and proxies named above may not
\nexercise this Irrevocable Proxy on any other matter except as provided in
\nclauses (a) and (b) above. The undersigned shareholder may vote the Shares on
\nall other matters.<\/p>\n
Any obligation of the undersigned hereunder shall be binding upon the
\nsuccessors and assigns of the undersigned.<\/p>\n
A-39
\n 171<\/p>\n
This proxy is irrevocable (to the full extent permitted by Section
\n16-10a-722 of the Utah Revised Business Corporation Act).<\/p>\n
\n
\nDated: ——————, Signature of Shareholder:
\n 1994 ——————————————
\n Print Name of Shareholder:
\n —————————————
\n Shares beneficially owned:
\n —————shares of WordPerfect Corporation Common
\n Stock
\n<\/c><\/s><\/table>\n A-40
\n 172<\/p>\n
EXHIBIT 5.12<\/p>\n
WORDPERFECT CORPORATION<\/p>\n
AFFILIATES AGREEMENT<\/p>\n
This Affiliates Agreement (this “Agreement”) is made and entered into as of
\nMarch , 1994 between WordPerfect Corporation, a Utah corporation
\n(“WordPerfect”), Novell, Inc., a Delaware corporation (“Novell”) and the
\nundersigned affiliate (“Affiliate”) of WordPerfect.<\/p>\n
RECITALS<\/p>\n
A. Concurrently with the execution of this Agreement, WordPerfect and
\nNovell have entered into an Agreement and Plan of Reorganization (the
\n“Reorganization Agreement”), which contemplates that WordPerfect and Novell
\nAcquisition Corp., a Delaware corporation and wholly-owned subsidiary of Novell
\n(“Sub”), will enter into Articles of Merger, which Reorganization Agreement and
\nArticles of Merger (collectively, the “Merger Agreements”) provide for the
\nmerger (the “Merger”) of Sub with and into WordPerfect. Pursuant to the Merger,
\nall outstanding capital stock of WordPerfect will be converted into Common Stock
\nof Novell.<\/p>\n
B. Affiliate is the beneficial owner (as defined in Rule 13d-3 under the
\nSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) of such number
\nof shares of the outstanding Common Stock, no par value per share, of
\nWordPerfect as is indicated on the final page of this Agreement (the “Shares”).<\/p>\n
C. Affiliate understands that, since the Merger will be accounted for
\nusing the “pooling of interests” method and Affiliate is an “affiliate” of
\nWordPerfect (within the meaning of Rule 145 promulgated under the Securities Act
\nof 1933, as amended (the “Securities Act”)), the Shares may only be disposed of
\nin a conformity with the limitations described herein. Affiliate has been
\ninformed that the treatment of the Merger as a pooling of interests for
\naccounting purposes, and as a tax-free reorganization under applicable
\nprovisions of the Internal Revenue Code, is dependent upon the accuracy of
\ncertain of the representations and warranties and the compliance with certain of
\nthe agreements set forth herein. Affiliate further understands that the
\nrepresentations, warranties and agreement set forth herein will be relied upon
\nby Novell, WordPerfect and their respective counsel and accounting firms.<\/p>\n
NOW, THEREFORE, the parties agree as follows:<\/p>\n
1. Agreement to Retain Shares.<\/p>\n
1.1 Transfer and Encumbrance. Affiliate agrees not to transfer (except
\n as may be specifically required by court order or as permitted under
\n Section 1.3 below), sell, exchange, pledge (except in connection with a
\n bona fide loan transaction, provided that any pledgee agrees not to
\n transfer, sell, exchange, pledge or otherwise dispose or encumbrance the
\n Shares or any New Shares, as defined in Section 1.2 below, prior to the
\n Expiration Date) or otherwise dispose of or encumber the Shares or any New
\n Shares or to make any offer or agreement relating thereto, at any time
\n prior to the Expiration Date. As used herein, the term “Expiration Date”
\n shall mean the date Novell shall have publicly released a report including
\n the combined financial results of Novell and WordPerfect for a period of at
\n least 30 days of combined operations of Novell and WordPerfect.<\/p>\n
1.2 New Shares. Affiliate agrees that any shares of capital stock of
\n WordPerfect that Affiliate purchases or with respect to which Affiliate
\n otherwise acquired beneficial ownership after the date of this Agreement
\n and prior to the Expiration Date (“New Shares”) shall be subject to the
\n terms and conditions of this Agreement to the same extent as if they
\n constituted Shares.<\/p>\n
1.3 Permitted Transfers. Affiliate may transfer up to thirty percent
\n (30%) of the Shares or any New Shares to members of Affiliate’s immediate
\n family if, prior to any such transfer, (i) Novell receives advice from its
\n counsel that such transfer will not affect the treatment of the Merger as a
\n pooling of<\/p>\n
A-41
\n 173<\/p>\n
interests for accounting purposes and (ii) the transferee agrees to be
\n bound by the provisions of this Agreement.<\/p>\n
2. Tax Treatment: Rule 145. Affiliate understands and agrees that it is
\nintended that the Merger will be treated as a “reorganization” for federal
\nincome tax purposes. Affiliate further understands and agrees that Affiliate may
\nbe deemed to be an “affiliate” of WordPerfect within the meaning of Rule 145,
\nalthough nothing contained herein should be construed as an admission of such
\nfact.<\/p>\n
3. Reliance Upon Representations, Warranties and Covenants. Affiliate has
\nbeen informed that the treatment of the Merger as a reorganization for federal
\nincome tax purposes requires that a sufficient number of former shareholders of
\nWordPerfect maintain a meaningful continuing equity ownership interest in Novell
\nafter the Merger. Affiliate understands that the representations, warranties and
\ncovenants of Affiliate set forth herein will be relied upon by Novell,
\nWordPerfect and their respective counsel and accounting firms.<\/p>\n
4. Representations, Warranties and Covenants of Affiliate. Affiliate
\nrepresents, warrants and covenants as follows:<\/p>\n
(a) Affiliate has full power and authority to execute this Agreement,
\n to make the representations, warranties and covenants herein contained and
\n to perform Affiliate’s obligations hereunder.<\/p>\n
(b) Set forth below the signatures below is the number of shares of
\n Common Stock of WordPerfect (“WordPerfect Stock”) owned by Affiliate,
\n including all WordPerfect Stock as to which Affiliate has sole or shared
\n voting or investment power and all rights, options and warrants to acquire
\n WordPerfect Stock owned or held by Affiliate.<\/p>\n
(c) Affiliate will not sell, transfer, exchange, pledge (except in
\n connection with a bona fide loan transaction as set forth in Section 1.1
\n above) or otherwise dispose of, or make any offer or agreement relating to
\n any of the foregoing with respect to, any shares of Common Stock of Novell
\n (“Novell Stock”) that Affiliate may acquire in connection with the Merger,
\n or any securities that may be paid as a dividend or otherwise distributed
\n thereon or with respect thereto or issued or delivered in exchange or
\n substitution therefor (all such shares and other securities of Novell are
\n sometimes collectively referred to as “Restricted Securities”), or any
\n option, right or other interest with respect to any Restricted Securities,
\n unless: (i) such transaction is permitted pursuant to Rule 145(c) and
\n 145(d) under the Securities Act; (ii) counsel representing Affiliate, which
\n counsel is reasonably satisfactory to Novell, shall have advised Novell in
\n a written opinion letter satisfactory to Novell, shall have advised Novell
\n in a written opinion letter satisfactory to Novell and Novell’s legal
\n counsel, and upon which Novell and its legal counsel may rely, that no
\n registration under the Securities Act would be required in connection with
\n the proposed sale, transfer or other disposition; (iii) a registration
\n statement under the Securities Act covering the Novell Stock proposed to be
\n sold, transferred or otherwise disposed of, describing the manner and terms
\n of the proposed sale, transfer or other disposition, and containing a
\n current prospectus, shall have been filed with the Securities and Exchange
\n Commission (the “SEC”) and made effective under the Securities Act; or (iv)
\n an authorized representative of the SEC shall have rendered written advice
\n to Affiliate (sought by Affiliate or counsel to Affiliate, with a copy
\n thereof and all other related communications delivered to Novell) to the
\n effect that the SEC would take no action, or that the staff of the SEC
\n would not recommend that the SEC take any action, with respect to the
\n proposed disposition if consummated.<\/p>\n
(d) Affiliate has, and as of the Effective Time will have, no present
\n plan or intention (a “Plan”) to sell, transfer, exchange, pledge (other
\n than in a preexisting bona fide margin account) or otherwise dispose of,
\n including a distribution by a partnership to its partners, or a corporation
\n to its stockholders, or any other transaction which results in a reduction
\n in the risk of ownership (any of the foregoing, a “Sale”) of more than
\n thirty percent (30%) of the shares of Novell Stock that Affiliate may
\n acquire in connection with the Merger, or any securities that may be paid
\n as a dividend or otherwise distributed thereon with respect thereto or
\n issued or delivered in exchange or substitution therefor. Affiliate is not
\n aware of, or participating in, any Plan on the part of WordPerfect
\n stockholders to engage in Sales of the shares of Novell Stock to be issued
\n in the Merger such that the aggregate fair market value, as of the
\n Effective Time of the Merger, of the shares subject to such Sales would
\n exceed thirty percent (30%) of<\/p>\n
A-42
\n 174<\/p>\n
the aggregate fair market value of all shares of outstanding
\n WordPerfect Stock immediately prior to the Merger. For purposes of the
\n preceding sentence, shares of WordPerfect Stock (i) which are exchanged
\n for cash in lieu of fractional shares of Novell Common Stock or (ii)
\n with respect to which a pre-Merger Sale occurs in a Related Transaction
\n (as hereinafter defined), shall be considered to be shares of
\n WordPerfect Common Stock that are exchanged for Novell Stock in the
\n Merger and then disposed of pursuant to a Plan. A Sale of Novell Stock
\n shall be considered to have occurred pursuant to a Plan if, among other
\n things, such Sale occurs in a Related Transaction. For purposes of this
\n Section 4(d), a “Related Transaction” shall mean a transaction that is
\n in contemplation of, or related or pursuant to, the Merger or the
\n Merger Agreements. If any of Affiliate’s representations in this
\n Section 4(d) cease to be true at any time prior to the Effective Time,
\n Affiliate will deliver to each of WordPerfect and Novell, prior to the
\n Effective Time, a written statement to that effect, signed by
\n Affiliate.<\/p>\n
5. Rules 144 and 145. From and after the Effective Time and for so long as
\nis necessary in order to permit Affiliate to sell the Novell Stock held by
\nAffiliate pursuant to Rule 145 and, to the extent applicable, Rule 144 under the
\nSecurities Act, Novell will use its reasonable efforts to file on a timely basis
\nall reports required to be filed by it pursuant to Section 13 of the Securities
\nExchange Act of 1934, as amended, referred to in paragraph (c)(1) of Rule 144
\nunder the Securities Act, in order to permit Affiliate to sell the Novell Stock
\nheld by it pursuant to the terms and conditions of Rule 145 and the applicable
\nprovisions of Rule 144.<\/p>\n
6. Limited Resales. Affiliate understands that, in addition to the
\nrestrictions imposed under Section 3 of this Agreement, the provisions of Rule
\n145 limit Affiliate’s public resales of Restricted Securities, in the manner set
\nforth in subsections (a), (b) and (c) below:<\/p>\n
(a) Unless and until the restriction “Cut-off” provisions of Rule
\n 145(d)(2) or Rule 145(d)(3) set forth below become available, public
\n resales of Restricted Securities may only be made by Affiliate in
\n compliance with the requirements of Rule 145(d)(1). Rule 145(d)(1) permits
\n such resales only: (i) while Novell meets the public information
\n requirements of Rule 144(c); (ii) in brokers’ transactions or in
\n transactions with a market maker; and (iii) where the aggregate number of
\n Restricted Securities sold at any time together with all sales of
\n restricted Novell Stock sold for Affiliate’s account during the preceding
\n three-month period does not exceed the greater of (A) 1% of the Novell
\n Common Stock outstanding or (B) the average weekly volume of trading in
\n Novell Common Stock on all national securities exchanges, or reported
\n through the automated quotation system of a registered securities
\n association, during the four calendar weeks preceding the date of receipt
\n of the order to execute the sale.<\/p>\n
(b) Affiliate may make unrestricted sales of Restricted Securities
\n pursuant to Rule 145(d)(2) if: (i) Affiliate has beneficially owned (within
\n the meaning of Rule 144(d) under the Securities Act) the Restricted
\n Securities for at least two years after the Effective Time of the Merger;
\n (ii) Affiliate is not an affiliate of Novell; and (iii) Novell meets the
\n public information requirements of Rule 144(c).<\/p>\n
(c) Affiliate may make unrestricted sales of Restricted Securities
\n pursuant to Rule 145(d)(3) if Affiliate has beneficially owned (within the
\n meaning of Rule 144(d) under the Securities Act) the Restricted Securities
\n for at least three years and is not, and has not been for the last three
\n months, an affiliate of Novell.<\/p>\n
(d) Novell acknowledges that the provisions of Section 4(c) of this
\n Agreement will be satisfied as to any sale by the undersigned of the
\n Restricted Securities pursuant to Rule 145(d), by a broker’s letter and a
\n letter from the undersigned with respect to that sale stating that each of
\n the above-described requirements of Rule 145(d)(1) has been met or is
\n inapplicable by virtue of Rule 145(d)(2) or Rule 145(d)(3); provided,
\n however, that Novell has no reasonable basis to believe that such sales
\n were not made in compliance with such provisions of Rule 145(d).<\/p>\n
7. Legends. Affiliate also understands and agrees that stop transfer
\ninstructions will be given to Novell’s transfer agent with respect to
\ncertificates evidencing the Restricted Securities and that there will be placed
\non the certificates evidencing the Restricted Securities legends stating in
\nsubstance:<\/p>\n
“THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
\n PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF<\/p>\n
A-43
\n 175<\/p>\n
EXCEPT IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF
\n 1933, AS AMENDED, AND THE OTHER CONDITIONS SPECIFIED IN THAT CERTAIN
\n AFFILIATES AGREEMENT DATED AS OF MARCH 21, 1994 AMONG NOVELL, INC.,
\n WORDPERFECT CORPORATION AND THE SHAREHOLDER, A COPY OF WHICH AFFILIATES
\n AGREEMENT MAY BE INSPECTED BY THE HOLDER OF THIS CERTIFICATE AT THE
\n OFFICES OF NOVELL INC. NOVELL INC. WILL FURNISH, WITHOUT CHARGE, A COPY
\n THEREOF TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST
\n THEREFOR.”<\/p>\n
Novell agrees to remove promptly such stop transfer instructions and legend upon
\nfull compliance with this Agreement by the undersigned, including, without
\nlimitation, a sale or transfer or Novell Stock permitted under Section 4(c)
\nabove.<\/p>\n
8. Termination. This Agreement shall be terminated and shall be of no
\nfurther force and effect upon the termination of the Reorganization Agreement
\npursuant to Section 7.1 of the Reorganization Agreement.<\/p>\n
9. Counterparts. This Agreement shall be executed in one or more
\ncounterparts, each of which shall be deemed an original, and all of which
\ntogether shall constitute one instrument.<\/p>\n
10. Binding Agreement. This Agreement will inure to the benefit of and be
\nbinding upon and enforceable against the parties and their successors and
\nassigns, including administrators, executors, representatives, heirs, legatees
\nand devisees of Affiliate and any pledgee holding Restricted Securities as
\ncollateral.<\/p>\n
11. Waiver. No waiver by any party hereto of any condition or of any breach
\nof any provision of this Agreement shall be effective unless in writing and
\nsigned by each party hereto.<\/p>\n
12. Governing Law. This Agreement shall be governed by and construed,
\ninterpreted and enforced in accordance with the laws of the State of Delaware.<\/p>\n
13. Attorneys’ Fees. In the event of any legal actions or proceeding to
\nenforce or interpret the provisions hereof, the prevailing party shall be
\nentitled to reasonable attorneys’ fees, whether or not the proceeding results in
\na final judgment.<\/p>\n
14. Effect of Headings. The section headings herein are for convenience
\nonly and shall not affect the construction or interpretation of this Agreement.<\/p>\n
15. Third Party Reliance. Counsel to and accountants for the parties shall
\nbe entitled to rely upon this Agreement.<\/p>\n
A-44
\n 176<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
\nexecuted on the day and year first above written.<\/p>\n
\n
\nWORDPERFECT CORPORATION AFFILIATE
\nBy: By:
\nTitle:
\n Affiliate’s Address for Notice:
\n ——————————————–
\nNOVELL, INC.
\n ——————————————–
\nBy:
\n ——————————————–
\nTitle:
\n Shares beneficially owned:
\n ——-shares of WordPerfect Common Stock
\n<\/c><\/s><\/table>\n A-45
\n 177<\/p>\n
EXHIBIT 6.2(J)<\/p>\n
TAX MATTERS AGREEMENT<\/p>\n
This TAX MATTERS AGREEMENT (the “Agreement”) is made and entered into as of
\nthe day of 1994 between NOVELL, INC., a Delaware corporation
\n(“Novell”), WORDPERFECT CORPORATION, a Utah corporation (“WordPerfect”) and Alan
\nC. Ashton, Karen J. Ashton, Emily Ann Ashton, Amy Jo Ashton, Spencer C. Ashton,
\nMorgan A. Ashton, Brigham M. Ashton, Allison Rae Ashton, Samuel L. Ashton, Eliza
\nK. Ashton, Adam C. Ashton, Stephen D. Ashton, Rebekah R. Ashton, Bruce W.
\nBastian, Melanie L. Bastian, C. Richard Bastian, Darren B. Bastian, Jeffrey H.
\nBastian, and Robert A. Bastian (each such person a “Stockholder” and all such
\npersons, collectively, the “Stockholders”). Capitalized terms not defined herein
\nshall have the meaning set forth in the Merger Agreement (as hereinafter
\ndefined).<\/p>\n
WHEREAS, WordPerfect and its Subsidiaries were S corporations as defined in
\nSection 1361 of the Code (as hereinafter defined) for certain taxable years (or
\nportions thereof) ending prior to January 1, 1994;<\/p>\n
WHEREAS, WordPerfect owns one hundred percent (100%) of the outstanding
\ncapital stock of each of the Subsidiaries;<\/p>\n
WHEREAS, the Stockholders own one hundred percent (100%) of the outstanding
\ncapital stock of WordPerfect;<\/p>\n
WHEREAS, WordPerfect has entered into that certain Agreement and Plan of
\nReorganization, dated March 21, 1994 (and subsequently amended on May , 1994)
\namong Novell, Novell Acquisition Corp., a Delaware corporation (“Sub”), and
\nWordPerfect (the “Merger Agreement”) pursuant to which WordPerfect will be
\nmerged into Novell as of the Effective Time of the Merger (the “Merger”); and<\/p>\n
WHEREAS, as a condition of the consummation of the Merger, the Stockholders
\nhave agreed to make representations and warranties and to provide
\nindemnification with respect to certain tax matters relating to the former
\nstatus of WordPerfect and its Subsidiaries as S corporations.<\/p>\n
NOW, THEREFORE, the parties agree as follows.<\/p>\n
ARTICLE I<\/p>\n
DEFINITIONS<\/p>\n
1.1 Definitions. The following terms, as used herein, have the following
\nmeanings:<\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended, and, in the
\ncontext of a state or local tax, a reference to the Code or a section of the
\nCode includes any similar applicable provision of state or local law.<\/p>\n
“Final Determination” shall have the meaning set forth in section 1313(a)
\nof the Code or under similar state law.<\/p>\n
“Party” means Novell, WordPerfect or the Stockholders, and “Parties” means
\nNovell, WordPerfect and the Stockholders.<\/p>\n
“Sharing Percentage” shall mean with respect to each Stockholder the
\npercentage shown opposite such Stockholder’s name as set forth in Schedule A
\nattached hereto and incorporated herein by this reference.<\/p>\n
“Stockholders’ Representatives” shall mean the persons designated pursuant
\nto Article IV hereof.<\/p>\n
“Taxes” means all taxes, however denominated, including any interest,
\npenalties or additions to tax that may become payable in respect thereof,
\nimposed by any federal, state, local or foreign government or any agency or
\npolitical subdivision of any such government, which taxes shall include, without
\nlimiting the generality of the foregoing, all income, payroll and employee
\nwithholding, unemployment insurance, social security, sales and use, excise,
\nprofits, value added, ad valorem, occupancy, disability, franchise, gross
\nreceipts, environmental, occupation, real and personal property, stamp,
\ntransfer, license, net worth, real property gains, capital, and worker’s
\ncompensation taxes.<\/p>\n
A-46
\n 178<\/p>\n
“Tax Returns” means all reports, estimates, information statements and
\nreturns relating to, or required to be filed in connection with, any Taxes.<\/p>\n
ARTICLE II<\/p>\n
THE TERMINATION<\/p>\n
2.1 Termination of S Status. The Stockholders, severally and not jointly,
\nhereby represent and warrant that the S corporation elections of WordPerfect and
\neach of its Subsidiaries (that elected to be treated as S corporations) were
\nterminated on or before January 1, 1994.<\/p>\n
2.2 Distribution and Tax Sharing Agreements. Except with respect to (i)
\nthis Agreement, (ii) any promissory note or other indebtedness currently
\noutstanding and reflected on the financial statements of WordPerfect or (iii)
\nthose agreements shown on the disclosure schedule attached hereto as Schedule
\n2.2, the Stockholders, severally but not jointly, hereby represent and warrant
\nthat they are not a party to and do not claim any rights under any Tax
\nindemnity, Tax sharing, Tax allocation agreement with WordPerfect and\/or any of
\nits Subsidiaries or under any agreement obligating WordPerfect or any of its
\nSubsidiaries to make any distribution or payment of cash or property to the
\nStockholders in respect of, or in connection with, their ownership of shares of
\ncapital stock of WordPerfect or the Subsidiaries (collectively, “Tax Sharing
\nAgreements”). Except for this Tax Matters Agreement and any promissory notes or
\nother indebtedness currently reflected on the financial statements of
\nWordPerfect, to the extent any such Tax Sharing Agreements have existed or
\ncurrently exist, the Stockholders, WordPerfect and each of the Subsidiaries
\nhereby agree to terminate any and all such Tax Sharing Agreements effective as
\nof December 31, 1993 and hereby waive any rights they may have now or in the
\nfuture under such Tax Sharing Agreements.<\/p>\n
ARTICLE III<\/p>\n
TAX ALLOCATION AND INDEMNIFICATION<\/p>\n
3.1 Tax Returns. WordPerfect hereby covenants and agrees on behalf of
\nitself and its Subsidiaries that it shall be responsible for and shall cause the
\nfiling of all Tax Returns which it or any of its Subsidiaries is required to
\nfile, or in which it or any of its Subsidiaries is to be included (including any
\ncombined, unitary or consolidated returns) with respect to all taxable years (or
\nportions thereof) ending on or prior to December 31, 1993.<\/p>\n
3.2 Corporate Liability for Taxes.<\/p>\n
(a) Except as otherwise provided in Section 3.3 hereof, WordPerfect shall
\npay or cause to be paid any and all Taxes required to be paid by WordPerfect or
\nany of its Subsidiaries for all taxable years covered by the Tax Returns
\nreferred to in Section 3.1 as required by applicable law, and shall indemnify
\nand hold harmless the Stockholders from any liability for such Taxes.<\/p>\n
(b) In the event an assessment of additional foreign income taxes by a
\nforeign taxing authority against WordPerfect or any of it Subsidiaries, with
\nrespect to any taxable year ending on or prior to December 31, 1993, results in
\nthe WordPerfect Stockholders’ having a claim for additional credits or
\ndeductions for foreign income taxes, then each WordPerfect Stockholder shall
\napply for a refund to the fullest extent allowed by law in order to realize the
\ngreatest refund available with respect to such additional credits or deductions
\nand shall pay to Novell the amount thereof (plus interest received under Section
\n6611 of the Code) immediately upon receipt of such refund without regard to any
\nother adjustments to such Stockholder’s Tax Return for the taxable year for
\nwhich such refund was received, provided, however, the amount paid hereunder
\nshall be reduced by the reasonable fees and costs associated with such
\nStockholder’s claim for refund and any taxes paid in respect of such refund. The
\nliability of each Stockholder to WordPerfect hereunder shall be several and not
\njoint.<\/p>\n
A-47
\n 179<\/p>\n
3.3 Stockholder Indemnification for Certain Federal and State Corporate Tax
\nLiabilities.<\/p>\n
(a) Subject to section 3.3(b) below, each Stockholder, severally, in
\naccordance with such Stockholder’s Sharing Percentage (and not jointly), hereby
\nindemnifies and agrees to hold each of Novell, WordPerfect and each of its
\nSubsidiaries harmless from, against and in respect of any U.S. federal, Utah or
\nNew Mexico income tax liability, if any, resulting from (i) WordPerfect or any
\nof its Subsidiaries failing to qualify as an S corporation under Code Section
\n1361(a)(1) (as enacted and in effect prior to January 1, 1993) or under
\napplicable Utah or New Mexico state law (A) with respect to the Subsidiaries
\n(other than those Subsidiaries that never purported to be taxed as S
\ncorporations) for every taxable year (or any portion of a taxable year) ending
\non or prior to December 31, 1993 for which each such Subsidiary purported to be
\ntaxed as an S Corporation, and (B) with respect to WordPerfect, for every
\ntaxable year (or any portion of a taxable year) commencing on or after January
\n1, 1985 and ending on or before October 1, 1993 or (ii) a breach of any
\nrepresentation or warranty made by the Stockholders in Sections 2.1 and 2.2 of
\nthis Tax Matters Agreement. For the purposes of subsection (i) of this section
\n3.3(a), “income tax liability” shall mean the amount of the income tax liability
\n(plus interest, penalties and additions to taxes imposed with respect thereto)
\nas finally determined by the relevant taxing authority, but only to the extent
\nsuch amount represents the income tax liability that would have been payable
\nwith respect to the amount of taxable income shown on the relevant corporate tax
\nreturn as originally filed.<\/p>\n
(b) The total liability of each Stockholder under section 3.3(a)(i) shall
\nnot exceed the sum of (i) the product of the Stockholder’s Sharing Percentage
\nand One Hundred Fifteen Million Dollars ($115,000,000.00) (the “Indemnity
\nFund”), (ii) the sum of each year’s (or that portion of a year’s) Indemnity Fund
\nEarnings (as defined below) accrued on or after January 1, 1993; and (iii) the
\namount of any refund received by such Stockholder as a result of WordPerfect or
\nany of its Subsidiaries failing to qualify as S corporations (a “Failed S
\nElection”) for any taxable period (or that portion of any taxable period) during
\nwhich the relevant corporation reported its filing status as that of an S
\ncorporation less any taxes paid in respect of such refund. For purposes of the
\npreceding sentence, a Stockholder shall be deemed to have received a refund on
\nthe earlier to occur of (i) the date of the actual receipt of a refund
\nattributable to a Failed S Election or (ii) the date upon which a refund
\nattributable to a Failed S Election is applied against a tax liability of such
\nStockholder, but only after a Final Determination in respect of such other tax
\nliability. Notwithstanding the immediately preceding sentence, if a Stockholder
\ndoes not file a claim for refund within 90 days after receipt of written notice
\nof a Final Determination as to a Failed S Election, the Stockholder shall be
\ndeemed to have received a refund for purposes of this Section 3.3(b) on the date
\nwhich is 270 days after date of the receipt of such written notice. For purposes
\nof this Agreement, (i) “Indemnity Fund Earnings” shall mean the product of the
\nIndemnity Fund and 60 percent of the one year Treasury Bill rate in effect as of
\nJanuary 1st of the applicable year, and (ii) for purposes of calculating the
\nIndemnity Fund Earnings, the Indemnity Fund shall be increased each year by the
\ncumulative amount of the Indemnity Fund Earnings for all prior years.<\/p>\n
3.4 Audit and Contest Rights.<\/p>\n
(a) The parties hereto shall cooperate fully with each other in the conduct
\nof any audit or other proceeding relating to Taxes of WordPerfect or its
\nSubsidiaries and\/or relating to Taxes of the Stockholders and shall make
\navailable to each other such Tax data and other information as may be reasonably
\nrequired with respect to any Tax audit. Within twenty (20) days following notice
\nof any proposed adjustment which could give rise to a claim for indemnification
\nunder Section 3.3, WordPerfect shall notify the Stockholder Representative of
\nsuch proposed adjustment and thereafter, the Stockholders’ Representatives shall
\nhave the right to control any proceedings relating to such proposed adjustment
\nand to determine when, whether and to what extent to settle any such claim,
\nassessment or dispute; provided, however, that WordPerfect shall have the right
\nto control the conduct of any such audit or proceeding for which WordPerfect
\nwaives its rights to indemnification under Section 3.3 hereof.<\/p>\n
(b) Within twenty (20) days following notice of any proposed adjustment
\nthat would not adversely affect Novell, WordPerfect or any of the Subsidiaries
\n(as determined in good faith by WordPerfect) but that could have the effect of
\nincreasing the Stockholders’ Tax liability for any period, WordPerfect shall
\nnotify the Stockholder Representative of such proposed adjustment and thereafter
\nthe Stockholders’ Representatives<\/p>\n
A-48
\n 180<\/p>\n
shall have the right to control any proceedings relating to such proposed
\nadjustment and to determine when, whether and to what extent to settle any such
\nclaim, assessment or dispute. The Stockholders’ Representative shall notify
\nNovell within twenty (20) days with respect to the Stockholders intent to assume
\ncontrol of such proceeding. If the Stockholders elect not to assume control of
\nsuch proceeding or fail to respond by written notice within such twenty (20) day
\nperiod, the provisions of Section 3.4(c) shall apply.<\/p>\n
(c)(i) Except as provided in section 3.4(c)(iii), below, neither Novell nor
\nWordPerfect nor any Subsidiary shall make any election, take any Tax Return
\nposition, or agree to any Tax adjustment or adjustments that would have the
\neffect of increasing the Stockholders’ Tax liability with respect to any period
\nending on or prior to December 31, 1993 (“Company Action”), without first
\nobtaining the prior written consent of the Stockholders’ Agent, which consent
\nshall not be unreasonably withheld. Notwithstanding the foregoing, the affected
\ncompany may take the Company Action without the consent of the Stockholders’
\nAgent provided the affected company indemnifies the Stockholders against any
\nincrease in the Stockholders’ Tax liability resulting from the Company Action.<\/p>\n
(ii) A company desiring to take a Company Action shall notify the
\nStockholders’ Agent in writing of the proposed Company Action, and shall provide
\nan estimate to the Stockholders’ Agent of the aggregate increase in the
\nStockholders’ taxable income arising out of the Company Action. The
\nStockholders’ Agent shall have sixty (60) days from the date of the request for
\nconsent in which to notify the affected company in writing whether the
\nStockholders’ Agent consents to the Company Action. If the Stockholders’ Agent
\ndoes not respond within the sixty (60) day period the Stockholders’ Agent shall
\nbe conclusively deemed to have consented to the Company Action.<\/p>\n
(iii) The action of the Stockholders’ Agent to withhold consent with
\nrespect to any proposed Tax Return position or adjustment shall be conclusively
\npresumed to be reasonable if the aggregate increase in the Stockholders’ taxable
\nincome resulting therefrom, when added to any prior approved adjustment or Tax
\nReturn positions subject to this section 3.4, would be to increase the
\nStockholders’ aggregate taxable income by $10 million; provided, however, if
\nNovell provides to the Stockholders’ Agent a written opinion of tax counsel
\n(approved by the Stockholders’ Agent which approval shall not be unreasonably
\nwithheld) that is more likely than not that such Company Action is required by
\nlaw, then the Stockholders’ Agent shall be conclusively presumed to have given
\nconsent to such adjustment or Tax Return position, notwithstanding the
\nStockholders’ Agent prior disapproval, if any. However, if the aggregate
\nincrease in the Stockholders’ taxable income, when added to any prior Company
\nActions, would be to increase the such taxable income by less than $10 million,
\nthen consent shall not be withheld in the absence of delivery to Novell, within
\nsixty (60) days of the date of the request for such consent, of a written
\nopinion of tax counsel (approved by Novell which approval shall not be
\nunreasonably withheld) to the effect that it is more likely than not that such
\nTax Return position or adjustment is not required by law. The sixty (60) day
\nperiod provided in section 3.4(c)(ii) for action by the Stockholders’ Agent
\nshall be extended as necessary so that the Stockholders’ Agent have no less than
\nfourteen (14) days after receipt of the tax opinion to review and approve the
\nform of the tax opinion. If a proposed adjustment is not consented to pursuant
\nto this Section 3.4(c)(iii), then Novell shall be obligated to pursue the
\nproceedings in a manner consistent with the Stockholders’ best interest and the
\nStockholders shall reimburse Novell for all reasonable fees and costs associated
\nwith such proceedings. Solely with respect to an election, the action of a
\nStockholders’ Agent to withhold consent shall be conclusively presumed to be
\nreasonable absent Novell providing to the Stockholders’ Agent a written opinion
\nof tax counsel (approved by the Stockholders’ Agent which approval will not be
\nunreasonably withheld) to the effect that it is more likely than not that the
\nproposed election is required by law. No action by Novell pursuant to this
\nSection 3.4(c)(iii) shall preclude the Stockholders from contesting any proposed
\naudit adjustment affecting their individual returns under Sections 6241-6245 of
\nthe Code.<\/p>\n
(d) For purposes of this Section 3.4, an adjustment shall be deemed to be
\nproposed (and WordPerfect and Novell shall be deemed to have received notice of
\nsuch proposal) as of the first date that WordPerfect or Novell receives written
\nadvice from an applicable Taxing authority (or agent thereof) to the effect that
\nsuch Taxing authority is proposing to make an adjustment to the Tax liability or
\nTax Return of WordPerfect or any Stockholder.<\/p>\n
A-49
\n 181<\/p>\n
(e) In the event of a conflict between the provisions of subsections 3.4(a)
\nor 3.4(b), on the one hand, and subsection 3.4(c) on the other, the provisions
\nof subsection 3.4(a) or (b), as applicable, shall control.<\/p>\n
3.5 Payments. The Party or Parties required to make any payment under
\nSection 3.2 or Section 3.3 shall make such payment within thirty (30) days after
\nthe Final Determination of any Tax liability resulting in a claim for
\nindemnification hereunder.<\/p>\n
ARTICLE IV<\/p>\n
STOCKHOLDERS’ REPRESENTATIVES<\/p>\n
4.1 Stockholders’ Representatives. In order to facilitate the resolution
\nof any Tax audit issues between WordPerfect or Novell on the one hand, and the
\nStockholders, on the other, each Stockholder hereby designates and appoints Alan
\nC. Ashton and Bruce W. Bastian, acting jointly, as his or her representatives
\nhereunder (acting jointly, the “Stockholders’ Representatives”) and authorizes
\nthem to take all actions on his or her behalf under this Agreement including the
\nappointment of an agent (“Stockholders’ Agent”) to represent the Stockholders on
\na day to day basis in connection with any and all Tax audits. The Stockholders’
\nAgent shall be . The Stockholders’ Representative may change the
\nStockholders’ Agent upon ten (10) days written notice to Novell’s Tax Director.
\nNovell and WordPerfect shall be entitled to rely on all unanimous actions,
\ndecisions, representations and promises of the Stockholders’ Representatives and
\nStockholders’ Agent as if the same had been made by each Stockholder personally,
\nwithout any obligation to verify, authenticate or seek confirmation of any other
\nfacts from the Stockholders or from any other person. Upon the death or legal
\nincapacity of either of the individuals named above, the executor or guardian of
\nthe estate of such individual shall succeed him as a Stockholders’
\nRepresentative.<\/p>\n
4.2 Stockholder Vote. If the Stockholders’ Representatives are unable to
\nagree with respect to an action to be taken under Section 3.4 of this Agreement,
\nthey shall so notify Novell, WordPerfect and the Stockholders in writing.
\nThereafter, any action to be taken by the Stockholders’ Representatives or
\nStockholders’ Agent under Section 3.4 with respect to any such action shall be
\ndecided by a majority vote of the Stockholders who would be liable for any
\nresulting Tax under Section 3.3, with each such Stockholder having a vote equal
\nto his or her Sharing Percentage.<\/p>\n
ARTICLE V<\/p>\n
MISCELLANEOUS<\/p>\n
5.1 Counterparts. This Agreement may be executed in several counterparts,
\neach of which shall be deemed an original, but all of which counterparts
\ncollectively shall constitute one instrument representing the Agreement between
\nthe parties hereto.<\/p>\n
5.2 Construction of Terms. Nothing herein expressed or implied is
\nintended, or shall be construed, to confer upon or give any person, from or
\ncorporation, other than the parties hereto or their respective successors and
\nassigns, any rights or remedies under or by reason of this Agreement.<\/p>\n
5.3 Governing Law. This Agreement and the legal relations between the
\nparties hereto shall be governed by and construed in accordance with the
\nsubstantive laws of the State of Utah without regard to the Utah choice of law
\nrules.<\/p>\n
5.4 Amendment and Modification. This Agreement and all of the provisions
\nhereof shall be binding upon and inure to the benefit of the parties hereto and
\ntheir respective successors and permitted assigns, but neither this Agreement
\nnor any of the rights, interests or obligations hereunder shall be assigned by
\nany of the parties hereto without the prior written consent of the other
\nparties, nor is this Agreement intended to confer upon any other person except
\nthe parties any rights or remedies hereunder.<\/p>\n
5.5 Interpretation. The title, article and section headings contained in
\nthis Agreement are solely for the purpose of reference, are not part of the
\nagreement of the parties and shall not in any way affect the meaning or
\ninterpretation of this Agreement.<\/p>\n
A-50
\n 182<\/p>\n
5.6 Severability. In the event that any one or more of the provisions of
\nthis Agreement shall be held to illegal, invalid or unenforceable in any
\nrespect, the same shall not in any respect affect the validity, legality or
\nenforceability of the remainder of this Agreement, and the parties shall use
\ntheir best efforts to replace such illegal, invalid or unenforceable provisions
\nwith an enforceable provision approximating, to the extent possible, the
\noriginal intent of the parties.<\/p>\n
5.7 Entire Agreement. This Agreement embodies the entire agreement and
\nunderstanding of the parties hereto in respect of the subject matter contained
\nherein. There are no representations, promises, warranties, covenants, or
\nundertakings with respect to the subject matter contained herein, other than
\nthose expressly set forth or referred to herein. This Agreement supersedes all
\nprior agreements and understandings between the parties with respect to such
\nsubject matter.<\/p>\n
5.8 Successors and Assigns. The provisions of this Agreement shall inure
\nto the benefit of and be binding upon each party and such parties’ heirs,
\ndevises, legatees, personal representatives, successors and assigns.<\/p>\n
5.9 Advice of Counsel. Each party hereto represents that they have
\nconsulted with, or had the opportunity to consult with, legal counsel with
\nrespect to this Agreement.<\/p>\n
5.10 Effective Date. This Agreement shall become effective at the
\nEffective Date of the Merger.<\/p>\n
5.11 Notices. All notices and other communications pursuant to this
\nAgreement shall be in writing and deemed to be sufficient if contained in a
\nwritten instrument and shall be deemed given if delivered personally,
\ntelecopied, sent by nationally-recognized overnight courier or mailed by
\nregistered or certified mail (return receipt requested), postage prepaid, to the
\nparties at the following address (or at such other address for a party as shall
\nbe specified by like notice):<\/p>\n
If to Novell: Novell, Inc.
\n 122 East, 1700 South
\n Provo, Utah 84606
\n Attn: Tax Director
\n Telecopy No.: (801) 429-3951
\n Telephone No.: (801) 429-7000<\/p>\n
If to Stockholders’ Representatives:<\/p>\n
Alan C. Ashton<\/p>\n
Bruce W. Bastian<\/p>\n
With a copy to: Stockholders’ Agent<\/p>\n
A-51
\n 183<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.<\/p>\n
NOVELL INC.,
\na Delaware corporation<\/p>\n
By:
\n David C. Bradford
\n Senior Vice President and
\n General Counsel<\/p>\n
WORDPERFECT CORPORATION,
\na Utah corporation<\/p>\n
By:
\n Adriaan Rietveld, President
\n and Chief Executive Officer<\/p>\n
By:
\n R. Duff Thompson, Secretary<\/p>\n
A-52
\n 184<\/p>\n
STOCKHOLDERS’ SIGNATURE PAGE<\/p>\n
\n
\n R. Duff Thompson as custodian for:
\n Allison R. Ashton
\n Samuel L. Ashton
\n Eliza K. Ashton
\n Adam C. Ashton
\n Stephen D. Ashton
\n Rebekah R. Ashton
\n Charles R. Bastian
\n Darren B. Bastian
\n Jeffrey H. Bastian
\n Robert A. Bastian
\nAlan C. Ashton Spencer C. Ashton, as
\n Attorney-in-fact for Morgan A. Ashton
\nKaren Ashton Brigham M. Ashton
\nEmily A. Eddington Bruce W. Bastian
\nAmy J. Young Melanie Bastian
\nSpencer C. Ashton
\n<\/c><\/s><\/table>\n A-53<\/p>\n
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