Defendants Opposition To Plaintiffs Motion To Lift Stay

Opposition

Cal. Super. - 1st Dist.March 28, 2018

~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Christopher W. Keegan (SBN 232045) chris.keegan @kirkland.com Austin Klar (SBN 292271) austin.klar @kirkland.com KIRKLAND & ELLIS LLP 555 California Street San Francisco, CA 94104 Telephone: (415) 439-1400 Facsimile: (415) 439-1500 Matthew Solum (admitted pro hac vice) matthew.solum @kirkland.com Stephen V. Potenza (admitted pro hac vice) stephen.potenza@kirkland.com Joseph M. Sanderson (SBN 305256) joseph.sanderson @kirkland.com KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: 212 446-4900 Attorneys for Defendants MICRO FOCUS INTERNATIONAL PLC and GISELLE MANON [Additional parties and counsel on signature page] Electronically by Supenor Court of California, County of San Mateo ON 7/2/2020 By /s/ Wai Shan Lee Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO COMPLEX CIVIL LITIGATION IN RE MICRO FOCUS INTERNATIONAL ) PLC SECURITIES LITIGATION, This Document Relates to: ALL ACTIONS N r ’ N r N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e Master File No. 18CIV01549 (Consolidated with 18CIV1653; 18CIV1827; 18CIV2038; 18CIV02583; 18CIV03975; and 20CIV01521) CLASS ACTION DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY Hearing Date: 7/27/2020 Time: 2:00 pm Dept. 2 Assigned for all purposes to the Honorable Marie S. Weiner Action filed: 3/28/2018 Consolidated Complaint Filed: 6/15/2018 Action Stayed: 12/3/2018 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page L. TINT ROT THC TTI mcm ms msi ie. 1 50 5050 50.585 505K 5 5 S08 AEA 0 5 II. BACKGROUND .....coottiititiit etris sabes eect eben 7 A. Recognizing Non-Contractual Forum Non Conveniens Factors Favored New York, This Court Stayed Proceedings. ...........ccceevvieimnieiiiiiinniiieeiiieeeiie ee 7 B. The New York Litigation CONtINUES. .......cccueerrieiiiiiereiiee e s ei e esis essai 8 C. Plaintiffs’ Motion to Lift the Stay. .....c..ccccovviiiiiiiiiiiie ee 9 II. ARGUMENT ....ooitiiitiii eects estes estes eects eee 10 A. Because the Reasons the Court Granted A Forum Non Conveniens Stay Have Not Changed, Plaintiffs’ Motion Should Be Denied. .........cc.ccccocveeniinnnnene. 10 1. Plaintiffs Must “Produce Competent and Persuasive Evidence” to Justify Lifting the Stay. .......ccoooiiiiiiiii eee 10 2. The Current Stay in Favor of the New York Proceedings Is Appropriate and Should Be Maintained.............ccooceevvierieinieeniecnnennneenne. 11 B. If the Court Is Inclined to Lift the Discretionary Stay, It Should Continue the Stay Based on the Contractual Forum-Selection Provisions and Rule on the Motion to QUAaSh SEIVICE. .......cccvviiiiiieiiieece eee ee eee 15 CONCLUSION Lottie ete sects sate ete eae sabes tee sabe e tee sbae ease e eae sabae cane 18 2 TABLE OF CONTENTS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases ACF Indus., Inc. v. Guinn, 384 F.2d 15 (Sth Cir. 19607) ccneeieeiieeeeeeeeteeeeetteetee st er ee sa e e stat ee sats eestbe ee saae ae ssae ee sase ee ssneennns 10 AG Oncon, LLC v. Ligand Pharm. Inc., No. CV 2018-0556-JTL, 2019 WL 2245976 (Del. Ch. May 24, 2019), aff'd, 224 A.A DOB (IDB. ZOD 55050 mms mn sss sisi 455555 555053558 35555550 5555S SE 08 SAS RSA RASA. 18 Bishop v. Air Line Pilots Ass’n, Int’l, 331 FR.D. 481 (IND. TIL 2019) cc uutieciiie eee ette eee tee esate ee saae ee saae ee saae ee sase es sse se ssaeennns 14 CalPERS v. ANZ Sec., Inc., 137 S. Cte 2042 (2017) curieeeiie eee eects cette steers ete e ete ae esas ee ease ae esas ae ssse ae ssseeessseeessseaessseessseeanes 14, 15 In re Cobalt Int’l Energy, Inc. Sec. Litig., No. CV H-14-3428, 2017 WL. 3620590 (S.D. Tex. Aug. 23, 2017) .usmsssssunssssssmssasssvssnosssssssusssmmsssnss 14 Corrigan v. Bjork Shiley Corp., 182 Cal. APP. 3d 166 (1986) neers eee eee este sete ate t ee sate sete e sees s ee sbae enna enns 11 Hahn v. Diaz-Barba, 194 Cal. APP. 4th T1177 (2011) cee eee e ete esbte sabe ene es beesbaeenbe anes 10 Landis v. North American Company, 290 U.S. 248 (19360). eee este e ste sabe e attest ee sbbe sabe anse eens ee sbae esse ante eteeeaae en 10, 11 Mottolese v. Kaufman, 176 F.2d 301 (2d Cir. 1949)... eee seater sa te eae atest tesa sabe e sees b ee ebaeenbe anes 10 Richards v. Lloyd's of London, 135 F.3d 1289 {O11 Cit. T9UBY o.com msn nwa sass sss sss 3555558 2550555550 555550 7085 5508 ais R55 2555 16, 17 Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. ATT (1989) cuits estes eset ae ee etae ees ae ee bae sabes esses esas ae esssaesassaesssseesssseessseeenes 16, 17 Salzberg v. Sciabacucchi, 227 A.3d 102 (DEL. 2020) ..uveeeieieeieie cies cites erasers eae e esate ee sate ee esse ae stseeessseaessseeessseeessseaessseessseeessaeeanns 17 Seafarers Pension Plan on behalf of Boeing Co. v. Bradway, Ng. 19 C B0gS, 2020"'WL. 3246326 (N.D.,. III, June: B, 20200) ssesssmsmmsssosmssmusmsmmansmsmmsssmmss ven 17 Smith, Valentino & Smith, Inc. v. Superior Court, 17 Cal. 3d 491 (1976) uveitis eee settee era e ete e sabes eaas ae eass ae esss ae ssss ae ssseaessseeesssesensnes 6 TABLE OF AUTHORITIES ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Solid Q Holding, LLC v. Arenal Energy Corp., No. 2:15-CV-00419-DN, 2017 WL 935891 (D. Utah Mar. 8, 2017) ....ccccveevrreereeciie rie i ee ein s 17 Spenta Enterprises, Ltd. v. Coleman, S74 F. Supp. 2d 851 (ND. TIL 2008) ...cueeeeeieerie eit ett erect sete st essa sabe e eee t ee sbae enna enneas 17 Stangvik v. Shiley Inc., SA Cal. 3A TAA (1991) covets eee ete ete ete eee e eee estat ae eabs ee eebe ae stse ae sase ee ssbe ee ssse ee ssseeesae senses 11 In re SunEdison, Inc. Sec. Litig., 329 FR.D. 124 (S.D.N.Y. 2019) etiiiiie tter ee sat ee see ease ee saae ee ssae ee ssae ee ssse ee ssaesennns 14 The Bremen v. Zapata Offshore Co., BOT U.S. 1 (1972) ciate eee eee eee ete ete eee staat ee eats ae eaas ae eass ae ssss ae essaaeesssaesaseeesesseeessseeesaeennses 7 Vernon v. Stabach, No. 13-62378-CIV, 2014 WL 1806861 (S.D. Fla. May 7, 2014).....ccccueeiuieeieniieniieeiie sees eee 17 Statutes Nese WIRHLICS 8 FH Csmns cmos on on 0 0 0 SO STH A 0S 14, 15 IS U.S.C. § TTI tiie eee eee eects teeta ete eta e estas eases essa ae esas ae esss ae esse ae ssseae esse ee ssseenssseeensseennses 14 Cal. Code Civ. Proc. § 350 oo eee 14 Cal. Com. COA § B202() .uvvrreeeeuriereeiiiieeeeestte ee ette ee esstaee esstara esssssaeeeessseeeassssseeasssssaes sssssse esnsssssesnsssnes 18 INLY. ULC.C. § 8-202(8) 100 euveeeerieeerieeeitieeiitte estas setae sssa esses asses assae assess asssaesssssessss essssssssssssssssesssssennns 17,18 4 TABLE OF AUTHORITIES ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IL. INTRODUCTION The Court should maintain the current discretionary stay of this class action in favor of the class action pending in the Southern District of New York before United States District Judge Andrew L. Carter. The Court’s original assessment of the non-contractual forum non conveniens and Farmland factors remains correct, and Plaintiffs offer no valid basis for lifting the stay and requiring Defendants to litigate on two coasts at the same time. Although Plaintiffs here are quick to take Judge Carter to task for the speed with which the New York federal case is progressing, the Lead Plaintiff there (represented by Bernstein Litowitz as lead counsel) continues to prosecute its claims on behalf of the putative class. The New York claims and the putative class itself are more expansive than in this action, as the putative class here is entirely subsumed within the New York action. To be sure, the New York action is at the motion to dismiss stage. But that is because after a first motion to dismiss was fully briefed and submitted for decision, the New York Lead Plaintiff sought leave from Judge Carter to amend the complaint based on factual developments during the second half of 2019 (i.e., further statements to the market by Micro Focus and a further Micro Focus American Depositary Share (“ADS”) price decline). After holding a conference and hearing from the parties, Judge Carter allowed the amendment. The parties then expeditiously briefed another motion to dismiss directed at the newly expanded complaint, and the motion was fully submitted in January 2020. Plaintiffs here were well aware of those developments in real time, because all plaintiffs except plaintiff Ian Green (who only filed his suit on March 9, 2020) submitted a joint status report with Defendants to the Court in December 2019 describing the amended complaint in New York and the schedule for the motion to dismiss. Plaintiffs did not ask to lift the stay then, or at any time within the ensuing six months, until Defendants contacted Plaintiffs with a draft of the joint status report that was due in this case the first week of June. The Court’s current stay should remain in effect. The scope of the claims before Judge Carter remain broader than the claims here-even more so now that Lead Plaintiff has further amended the New York complaint. New York remains a suitable forum: All defendants have still agreed to personal jurisdiction in New York, and the statute of limitations under federal law is the same whether this case is litigated here or in New York. And the public and private factors that the Court previously weighed 5 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 continue to favor New York. The action’s connection to San Mateo County remains tenuous to nonexistent. The “overwhelming center of the people and transactions involved in the sale and distribution of the Micro Focus ADRs” (Declaration of Stephen V. Potenza in Support of Defendants’ Opposition to Plaintiffs’ Motion to Lift Stay (“Potenza Decl.”) Ex. 1 (Case Management Order #6) at 15' is still New York, for the same reasons the Court previously enumerated: The registration statements were prepared in New York, using New York-based advisors, a New York-based depositary, a Deposit Agreement governed by New York law and providing for exclusive jurisdiction in New York, and a New York- authorized representative in the United States; the American Depositary Receipts (“ADRs”) were still issued in New York; and Micro Focus still maintains offices in New York. Id. at 15-16. Furthermore, the nexus between the claims and people and activities in the United Kingdom that the Court previously recognized takes on even more importance today, given the limitations on travel during these extraordinary times, which continue to affect all parties and courts. The eight-hour time difference between California and the United Kingdom, where important documents and witnesses are located, poses an even greater burden on the largely UK-based defendants than existed in the pre-COVID-19 world. Finally, if the Court were nonetheless inclined to lift the stay, Defendants respectfully request that the Court rule on the personal jurisdiction and forum-selection clause issues, which the Court previously deemed moot given the issuance of the current stay. As Defendants previously argued, this Court lacks jurisdiction over most individual defendants. And Plaintiffs here impermissibly filed their cases in California, as the terms of the ADRs and the Deposit Agreement expressly incorporated by reference therein that govern the rights and obligations of holders or beneficial owners of the securities at issue require such cases to be filed only in New York state or federal court. That agreement states: “Holders and Beneficial Owners each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, American Depositary Shares, Receipts or the transactions contemplated hereby or thereby or by virtue of ownership thereof, may only be instituted in a state or federal court in New York, New York[.]” (Emphasis added.) California and federal law favor the enforcement of forum selection clauses. See, e.g., Smith, Valentino & Smith, I" Unless otherwise specified, exhibit page citations refer to the page numbers of the Potenza Declaration. 6 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Inc. v. Superior Court, 17 Cal. 3d 491, 495 (1976); The Bremen v. Zapata Offshore Co.,407 U.S. 1 (1972). Recent decisions confirm that such clauses must be enforced for federal securities claims. In short, Plaintiffs provide no meritorious basis for the Court to revisit its previous conclusion that the private and public interests involved “weigh very little in California, none in San Mateo County, and overwhelmingly in New York.” See Potenza Decl. Ex. 1 (Case Management Order #6) at 16. The stay should continue in favor of the proceedings before Judge Carter. II. BACKGROUND A. Recognizing Non-Contractual Forum Non Conveniens Factors Favored New York, This Court Stayed Proceedings. After extensive briefing and oral argument, on December 3, 2018, the Court granted Defendants’ motion to stay both on non-contractual forum non conveniens grounds and in the exercise of its Farmland discretion. See Potenza Decl. Ex. 1 (Case Management Order #6). After determining that “the Farmland factors would support selection of either of” California or New York courts, the Court turned to the standards for a stay based upon non-contractual forum non conveniens. The court determined that (1) New York was a suitable forum, in part because each of the individual defendants had “affirmatively agreed to personal jurisdiction in New York” and “the statute of limitations (and any other affirmative defenses) are the same regardless because all of the causes of action are under the same federal securities laws”; and (2) “the private and public interests involved weigh very little in California, none in San Mateo County, and overwhelmingly in New York.” See id. at 14-16. Accordingly, the Court stayed the proceedings “in favor of the pending federal class action lawsuit in the Southern District of New York, on the basis of non- contractual forum non conveniens and/or Farmland discretion.” Id. at 7. Defendants also filed a motion to quash service for lack of personal jurisdiction, and Defendants’ motion to stay also sought a stay to enforce contractual forum-selection provisions. The former motion, filed by the individual defendants who reside overseas, contended principally that this Court should follow the majority of courts to have considered the issue and find that the Securities Act’s provision for nationwide service of process in cases proceeding in federal court did not (and could not) expand state courts’ jurisdiction. The contractual forum-selection aspect of the motion to stay was based upon the express provision on the face of the ADRs-the only security at issue in this action-and the Deposit 7 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Agreement incorporated by reference therein, which mandates that “any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, American Depositary Shares, Receipts or the transactions contemplated hereby or thereby or by virtue of ownership thereof, may only be instituted in a state or federal court in New York, New York[.]”* (Emphasis added.) Defendants noted that both the Deposit Agreement and the form of the ADRs were exhibits to the registration statement, that Plaintiffs consented to these terms by receiving and continuing to hold the securities, and that both California and federal law respect parties’ agreement to an exclusive forum for their litigation, including in securities cases. Having already stayed the case on non-contractual forum non conveniens grounds, the Court did not rule on the forum-selection clause aspect of Defendants’ motion to stay or the separate jurisdictional motion, instead deeming them moot. Potenza Decl. Ex. 1 (Case Management Order #6) at 7. B. The New York Litigation Continues. On September 12, 2018, shortly before the Court entered its stay, Judge Carter appointed Iron Workers Local No. 25 Pension Fund (“Iron Workers” or “Lead Plaintiff”) as Lead Plaintiff in the New York federal class action and approved Iron Workers’ selection of Bernstein Litowitz Berger & Grossman LLP as Lead Counsel for the putative class. Potenza Decl. Ex. 2 (9/12/2018 Order, ECF No. 62) at 19. Iron Workers filed an amended complaint on November 9, 2018, alleging claims under the Securities Act of 1933 (the “Securities Act”) and Securities Exchange Act of 1934 (the “Exchange Act”). Potenza Decl. Ex. 3 (S.D.N.Y. Docket Sheet ECF No. 65) at 32. Defendants filed a motion to dismiss on January 22, 2019, which was fully briefed as of April 8, 2019. Id. at 34. While the motion to dismiss was under submission, however, Micro Focus issued a further Trading Update and announced a strategic review on August 29, 2019, adjusting its prior constant-currency revenue guidance downward. Potenza Decl. Ex. 4 (08/29/19 Form 6-K) at 39-40. Micro Focus’s ADS price declined after this announcement. Less than a week later, Iron Workers informed Judge Carter that As explained in Defendants’ motion to stay, Plaintiffs herein acquired Micro Focus ADSs, which are evidenced by certificates called ADRs, both of which were created pursuant to and governed by the terms of the Deposit Agreement. Defs.” Micro Focus’ and Giselle Manon’s Mot. to Dismiss or Stay for Inconvenient Forum; Memorandum of Points and Authorities, filed on July 6, 2018 in this matter, at 10-11 & 13-15. There is no relevant distinction between ADSs and ADRs, and the terms are interchangeable for present purposes. 8 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 it wished to amend its complaint to add allegations related to the subsequent decline in Micro Focus’s ADS price and alleged stock sales by certain Micro Focus executives. Potenza Decl. Ex. 3 (S.D.N.Y. Docket Sheet ECF No. 85) at 34. Judge Carter ordered Iron Workers to file its Amended Complaint by September 30, 2019. Potenza Decl. Ex. 5 (9/9/2019 Order, ECF No. 87). Iron Workers did so, again alleging causes of action under the Securities Act and the Exchange Act, and seeking an extended Class Period of September 1, 2017, through August 28, 2019. Potenza Decl. Ex. 6 (Second Amended Complaint, ECF No. 88) at 1. Defendants again moved to dismiss on November 4, 2019. Ex. 3 (Docket Sheet ECF No. 94) at 35. The motion to dismiss was fully briefed as of January 17, 2020. Ex. 3 (Docket Sheet ECF No. 103) at 37. C. Plaintiffs’ Motion to Lift the Stay. On March 3, 2020, Plaintiff Ian Green (whose residence is not stated in either his original or amended complaints) filed a complaint substantively similar to all the prior complaints in this action, which was consolidated and stayed pursuant to the Court’s prior order on March 16, 2020. Green, like all of the other Plaintiffs, alleges claims exclusively under the Securities Act and challenges substantially the same provisions of the Registration Statement. Green briefly mentions subsequent ADS price declines, but does not allege a broader class period and makes little effort to tie any post-2018 announcement to anything in the Registration Statement. Green’s counsel had not previously appeared in these cases. Pursuant to the Court’s stay Order, the parties have filed joint status reports every six months during the stay. On May 29, 2020, Defendants sent Plaintiffs a draft joint status report and requested any comments. Plaintiffs did not respond until June 3, 2020, the same day that the joint status report was due, when Green’s counsel, on behalf of all Plaintiffs, informed Defendants for the first time that Plaintiffs intended to file a motion to lift the stay. Potenza Decl. 9. After seeking and obtaining leave of the Court, Plaintiffs filed their motion (“Mot.””) on June 12, 2020. Despite making a number of factual assertions, Plaintiffs attach no declarations or exhibits to their motion. 9 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. ARGUMENT A. Because the Reasons the Court Granted A Forum Non Conveniens Stay Have Not Changed, Plaintiffs’ Motion Should Be Denied. The stay of these proceedings in favor of New York remains appropriate, and Plaintiffs-who bear the burden to show that lifting of the stay is needed-do not demonstrate otherwise. 1. Plaintiffs Must “Produce Competent and Persuasive Evidence” to Justify Lifting the Stay. Plaintiffs are wrong to suggest (Mot. at 5) that Defendants must “demonstrate any entitlement to continued stay” and that the stay in this case has been in place for “an immoderate or indefinite period of time.” Under California law, it is Plaintiffs, as the party seeking to lift a stay entered on the basis of forum non conveniens, who bear the burden to produce “competent and persuasive evidence” to justify the lifting of the stay. See Hahn v. Diaz-Barba, 194 Cal. App. 4th 1177, 1191 (2011). Plaintiffs’ authorities do not say otherwise. Plaintiffs cite Landis v. North American Company for the proposition that “a stay of indefinite duration in the absence of pressing need” is an abuse of discretion. 299 U.S. 248, 255 (1936). But Landis was not a forum non conveniens case-rather, it involved staying one action challenging the constitutionality of a statute pending in a different suit involving partially, but not entirely, overlapping challenges to the same statute. Id. In fact, Landis has routinely been held to be consistent with stays based on forum non conveniens. See, e.g., Mottolese v. Kaufman, 176 F.2d 301, 303 (2d Cir. 1949) (L. Hand, J.) (quoting Landis and then noting that actions were “always subject to the plea, forum non conveniens” and holding that an action “may be stayed” pending a related action in another court); ACF Indus., Inc. v. Guinn, 384 F.2d 15, 20 (5th Cir. 1967) (citing Landis and finding district court’s order vacating forum non conveniens stay based on overlapping litigation was “an abuse of discretion”). In any event, the current stay is not one of “indefinite duration.” The current stay is in place because there are overlapping class actions in this Court and in New York, where each set of plaintiffs purports to represent the same class of Micro Focus ADS holders in connection with the same underlying events. The New York action, as the Court has previously recognized, is a broader class action covering more legal claims and events than the cases here. The New York action is even broader now than it was when the Court first issued the stay, and Plaintiffs’ claims here remain entirely subsumed within the New 10 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 York action. These circumstances make this case entirely different from Landis, Corrigan, and other cases where courts expressed concern about the duration of the stay.” None of those cases involved overlapping class actions where every member of the putative class in the court staying its proceedings was also a member of the putative class in the court to which it was deferring. Here, the continued stay does not deprive the putative class members of any rights. To the contrary, the New York proceeding was and is broader than this one, involving not only the same claims and seeking the same remedies as plaintiffs do in this forum, but also additional claims over which the New York court has exclusive jurisdiction. 2 The Current Stay in Favor of the New York Proceedings Is Appropriate and Should Be Maintained. Plaintiffs fail to show that anything significant has changed since this Court entered the stay. Their principal complaint is simply that the proceedings in New York have been too slow, as the parties await a decision on Defendants’ fully briefed motion to dismiss. But Plaintiffs do not-and cannot-demonstrate that the basis for the Court’s prior decision to issue the stay has changed in any way. To the contrary, the relevant factors apply with even more force now than they did then. a. New York Is Still a More Convenient Forum. In analyzing the non-contractual forum non conveniens factors, this Court previously found that “[t]he private and public interests involved weigh very little in California, none in San Mateo County, and overwhelmingly in New York.” Potenza Decl. Ex. 1 (Case Management Order #6) at 16. This finding is still true; if anything, the factors weigh even more overwhelmingly in favor of New York now. First, Plaintiffs do not contend that New York has become an unsuitable forum-nor could they. As this Court found the last time it considered this issue, Micro Focus, Hewlett Packard Enterprise Company (“HPE”), and the U.S.-resident defendants conceded personal jurisdiction in New York by filing or joining the motion to dismiss or stay for inconvenient forum. Id. at 15. The overseas individual 3 In addition, the California Supreme Court has expressly disapproved of Plaintiffs’ principal case, Corrigan v. Bjork Shiley Corp., 182 Cal. App. 3d 166 (1986), because the Corrigan court incorrectly held “that the fact the plaintiffs would be disadvantaged by the absence of this precise remedy in Australia was entitled to some weight.” See Stangvik v. Shiley Inc., 54 Cal. 3d 744, 764 (1991) (affirming grant of forum non conveniens stay). 11 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 defendants were and are challenging personal jurisdiction here, id., but they all have appeared in the New York litigation and did not assert personal jurisdiction defenses there, Potenza Decl. 9. The issue of whether the Securities Act’s nationwide service of process provision applies in state court remains a live one here but is not an issue in New York. Likewise, it remains true that “the statute of limitations (and any other affirmative defenses) are the same regardless because all of the causes of action are under the same federal securities laws.” Potenza Decl. Ex. 1 (Case Management Order #6) at 14. As further explained below, Plaintiffs each commenced their putative class actions within the three-year statute of repose, so that is a non-issue here. In any event, Plaintiffs cannot dispute that the exact same statute of repose applies here as in New York. Second, the balance of public and private interests still strongly favors a stay. It remains the case that zero plaintiffs reside in San Mateo County and zero defendants work or otherwise engaged in any activities related to this case in San Mateo County, while most of them live or work on the East Coast or overseas. Potenza Decl. Ex. 1 (Case Management Order #6) at 12, 15. Plaintiff Green does not state his location, although if he is the same Ian Green who has filed prior securities lawsuits in federal court, it appears that he lives in San Diego County. See Potenza Decl. Exs. 7, 8 (Civil Cover Sheets). New York remains “the overwhelming center of the people and transactions involved in the sale and distribution of the Micro Focus ADRs.” Potenza Decl. Ex. 1 (Case Management Order #6) at 15. New York law was chosen in the Deposit Agreement governing the rights of ADS holders. Further, New York is where Defendant Manon works; it is where the issuance and distribution of the ADSs occurred; it is where the depositary is; it is where Kirkland & Ellis LLP (for Micro Focus) and Wachtell, Lipton, Rosen & Katz (for HPE) worked on the transaction and associated securities filings; and it is where the ADSs trade. Id. at 15-16. Similarly, the significant involvement of Micro Focus’s directors, officers, and personnel in the United Kingdom continues to support a stay. It remains the fact that, once travel resumes, New York is much closer than California for UK-based witnesses and parties. Id. at 16. In the meantime, remote testimony from UK-based witnesses is much more feasible in a New York court-where there is at least some overlap in business hours-rather than in California, where 9:00 a.m. is 5:00 p.m. in London. The private and public interest factors continue to point to New York as the logical forum for these claims. 12 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Third, the Farmland factors, which this Court previously found would support either court, have not changed. Potenza Decl. Ex. 1 (Case Management Order #6) at 13. If anything, those factors now more strongly support the New York forum because the federal action is now even “broader in scope” to an even greater degree than the Court previously concluded, id. at 11, as the second amended complaint in New York expanded the factual averments and alleged class period.* In addition, and contrary to Plaintiffs’ erroneous assertion (Mot. at 4), Defendants have not yet filed any demurrer or other responsive pleading in this action. Defendants only filed a Motion to Quash Service and a Motion to Dismiss or Stay for Inconvenient Forum. b. Lifting the Stay Is Not Needed to Protect Shareholder Rights. Against all of these reasons to maintain the stay, Plaintiffs offer very little. Plaintiffs first state (Mot. at 2, 6) that there has been “no meaningful progress” in New York and that Judge Carter “has not protected the rights of the California Parties.” But those assertions are doubly flawed. First, and as the Court previously recognized, though they call themselves the “California Parties,” Plaintiffs here actually have virtually no connection to California-and none to San Mateo County. Only one of the original plaintiffs here (Clark) even lives in California (in San Bernardino County), and the new plaintiff (Green) does not state where he lives (although as noted above, if he is the same Ian Green who has filed federal securities actions, it may be San Diego County). Every other plaintiff lives outside of California, most on the East Coast. Potenza Decl. Ex. 1 (Case Management Order #6) at 12. Second, it is simply inaccurate to state that Judge Carter has not progressed the New York case or has acted in a manner that is not protective of shareholder rights. Judge Carter appointed a Lead Plaintiff and lead counsel, held two conferences with the counsel, and has allowed Lead Plaintiff to amend the complaint twice-including once after extensive and costly briefing on a first motion to dismiss. In allowing a second amended complaint, Judge Carter permitted Lead Plaintiff to add allegations and expand the alleged class period. Supra § 11.B. Plaintiffs here fault Judge Carter for not deciding the motion to dismiss sooner, but such Non-lead Plaintiff Green mentions Micro Focus ADS price declines during mid-2019, see Green Am. Compl. |] 111-115, and Plaintiffs refer to even more recent price declines amid the COVID-19 pandemic (Mot. at 2), but Plaintiffs do not allege that the more recent price-drops had anything to do with the Registration Statement that is the sole basis for the claims in this Court. Moreover, any post- Registration Statement statements that might be challenged in federal court under the Exchange Act cannot be challenged in state court under the Securities Act. 13 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 criticism is entirely unwarranted. The motion to dismiss has been sub judice for just over five months, which is hardly unusual, especially in light of the exceptional circumstances caused by the COVID-19 crisis. Nor does Plaintiffs’ desire for a faster decision alter the balance of the private and public factors, or make Judge Carter’s court any less suitable now than it was when this Court first issued a stay of this action.’ Plaintiffs also say (Mot. at 7) that the current stay “prejudices” them “particularly in light of” the Securities Act’s three-year statute of repose, which is not subject to equitable tolling. But that is wrong as well. The applicable statute states that “[i]Jn no event shall any such action be brought to enforce a liability created under section 77k or 771(a)(1) of this title more than three years after the security was bona fide offered to the public, or under section 771(a)(2) of this title more than three years after the sale.” 15 U.S.C. § 77m. Plaintiffs, of course, have already brought their claim, on behalf of themselves and a putative class. See Cal. Code Civ. Proc. § 350 (“An action is commenced, within the meaning of this Title, when the complaint is filed.”). Thus, the statute of repose is no bar to class certification, as every court to address the issue has found, including the Supreme Court in CalPERS v. ANZ Sec., Inc., 137 S. Ct. 2042 (2017). E.g., In re SunEdison, Inc. Sec. Litig., 329 F.R.D. 124, 145 (S.D.N.Y. 2019) (“That the timeliness of an absent class member’s claim is measured from the date that the class representative filed suit, rather than, for example, the date of the Court’s certification order, does no offense to the three-year repose period.”); In re Cobalt Int’l Energy, Inc. Sec. Litig., No. CV H-14-3428, 2017 WL 3620590, at *3 (S.D. Tex. Aug. 23, 2017) (“[T]here is nothing in the CalPERS decision that suggests class certification in a timely-filed putative class action is precluded once the statute of repose expires.”); see also Bishop v. Air Line Pilots Ass’n, Int’l, 331 F.R.D. 481, 485 (N.D. Ill. 2019) (“It necessarily follows that members of a class that is certified at some point during the litigation need not rely on tolling to satisfy the statute of limitations where, as here, the suit was timely filed.”). Plaintiffs’ argument is a red herring. Under The Scheduling Order in the New York litigation expressly contemplated potential intervention or other participation by the Plaintiffs in this action. Potenza Decl. Ex. 9 (Stipulation and Initial Scheduling Order, ECF No. 64) at 214 (“If any party from a related state court proceeding seeks to intervene in or otherwise be heard or participate in this Action, the parties will confer with such party in good faith with respect to the schedule set forth in this stipulation or any subsequent schedule for this Action.”). Plaintiffs have not bothered to do so. Nor did any plaintiff here apply to serve as lead plaintiff in New York. 14 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CalPERS, the statute of repose does not bar class certification in a timely-filed action; all it means is that class members who wish to opt out of the class must timely commence their individual lawsuits before the statute of repose expires. See CalPERS, 137 S. Ct. at 2054. Any ADS holder who wishes to do so (including Plaintiffs here) could file an opt-out action in New York within the applicable period. The stay does not prejudice any rights of Plaintiffs or members of the putative class in this respect. Plaintiffs ratchet up the hyperbole, arguing (Mot. at 6) that a continued stay in favor of the New York proceeding will “greatly hamper” discovery efforts and even “wipe out the ability of the Class to recover altogether” if discovery cannot progress by September 1, 2020. But even if it were realistic to assume that meaningful discovery involving a foreign-headquartered company, foreign-based individuals, and overseas data systems could be completed by September 1 (and it seems even more unlikely in the current pandemic environment), that assertion is principally based upon Plaintiffs’ misapprehension concerning the statute of repose. Plaintiffs offer no basis to conclude that any ADS holder would be prejudiced. Moreover, although discovery is certainly stayed in New York pursuant to the Private Securities Litigation Reform Act while the motion to dismiss is pending, the Federal Rules of Civil Procedure continue to govern the preservation of evidence in any event. The ability of the putative class to recover, if warranted, is hardly being “wiped out” due to the current motion practice in New York. Plaintiffs’ collateral attack on the New York proceedings should be rejected. B. If the Court Is Inclined to Lift the Discretionary Stay, It Should Continue the Stay Based on the Contractual Forum-Selection Provisions and Rule on the Motion to Quash Service. Finally, if the Court were inclined to lift the stay (and it should not), Defendants respectfully request that the Court consider the issues that the Court previously found unnecessary to reach. Specifically, the Court’s Order deemed moot Defendants” motion to quash service of process for lack of personal jurisdiction and Defendants’ argument for a stay based on contractual forum-selection provisions. Potenza Decl. Ex. 1 (Case Management Order #6) at 7. If the Court were inclined to lift the current stay, Plaintiffs make a cursory assertion (Mot. at 6) that they need discovery to plead the identities of Doe Defendants. But since the categories of persons subject to potential Securities Act liability are extremely limited, see, e.g., 15 U.S.C. § TTk(a)(1)- (5), all the information Plaintiffs need to identify potential Securities Act defendants appears in the registration statement and other Micro Focus securities filings to which Plaintiffs have long had access. 15 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 which is based solely on Farmland and non-contractual forum non conveniens, Defendants’ contractual arguments and jurisdictional motion will no longer be moot, and Defendants respectfully request rulings on them.” Plaintiffs’ ADRs unequivocally state that they incorporate the terms of the Deposit Agreement, which provides that “any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, American Depositary Shares, Receipts or the transactions contemplated hereby or thereby or by virtue of ownership thereof, may only be instituted in a state or federal court in New York, New York[.]” Norton Decl. Ex. 2 (Deposit Agreement § 7.6) at 1172 (emphasis added).® The exclusive jurisdiction language is, in fact, printed on the ADRs themselves. Norton Decl. Ex. 1 (Form F-4, Ex. 4.2 at B-16) at 700. Both of these were part of the Registration Statement, and the Form F-4 itself expressly warned Plaintiffs that “[y]our rights as a Micro Focus ADS holder will be governed by, among other things, the terms of the Deposit Agreement with the Depositary.” Norton Decl. Ex. 1 (Form F-4 at 15) at 31. That is a mandatory forum-selection clause, and this lawsuit plainly “aris[es] out of” or is “based upon” the “American Depositary Shares, Receipts or the transactions contemplated hereby or thereby,” and certainly is “by virtue of ownership thereof.” Norton Decl. Ex. 1 (Form F-4, Ex. 4.2 at B-16) at 700; and Norton Decl. Ex. 2 (Deposit Agreement § 7.6) at 1172. Given the links between the transaction and New York (as well as New York courts’ general experience in securities cases and the common practice of New York-based ADR depositaries choosing a New York forum), New York was and is a reasonable choice of forum, and as Defendants previously argued, nothing in the Securities Act overrides the general rule that reasonable forum-selection provisions are enforceable. See, e.g., Richards v. Lloyd's of London, 135 F.3d 1289, 1294-96 (9th Cir. 1998) (en banc); Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 482-83 (1989). Because the Order granted Defendants’ motion to stay this case, Defendants’ alternative, fully briefed argument that the contractual forum-selection provision also requires a stay will become ripe if (and only if) the Court now concludes that the reasons stated in the Order do not warrant continuing the stay. If the Court agrees with Defendant that the stay should in all events continue, then the Court need not address the individual Defendants’ jurisdictional motion at this time. For the Court’s convenience, Appendix A hereto attaches excerpts from the Norton Declaration and the exhibits thereto previously submitted in support of the motion to stay. The full declaration and exhibits were filed on July 6, 2018 in this matter. 16 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Since the Court’s ruling deeming that aspect of the motion moot, additional state and federal courts have ruled unequivocally that forum-selection provisions covering federal securities claims are valid and binding. The Delaware Supreme Court recently ruled in Salzberg v. Sciabacucchi that provisions in articles of incorporation mandating a specific federal forum for securities litigation “do not violate federal law or policy.” 227 A.3d 102, 132 (Del. 2020). It noted that the U.S. Supreme Court, in Rodriguez de Quijas v. Shearson/American Express, Inc., had upheld the arbitrability of federal securities claims by describing the arbitration clause at issue as “in effect, a specialized kind of forum selection clause” that “should not be prohibited under the Securities Act. ...” 490 U.S. at 482-83. As the Delaware Supreme Court noted, Rodriguez “provides forceful support for the notion that FFPs do not violate federal policy by narrowing the forum alternatives available under the Securities Act.” Salzberg, 227 A.3d at 132. The forum selection provision here is more permissive than the one in Salzberg and therefore even more obviously unobjectionable, because it does not require a federal forum but rather merely requires the litigation occur in a state or federal court located in New York. Likewise, federal courts have reaffirmed the enforceability of forum selection provisions that apply to federal securities claims. In Seafarers Pension Plan on behalf of Boeing Co. v. Bradway, for example, the court enforced an exclusive-forum provision selecting Delaware state courts even though the claims there were Exchange Act claims that would ordinarily be subject to exclusive federal jurisdiction. No. 19 C 8095, 2020 WL 3246326 (N.D. Ill. June 8, 2020). The Seafarers decision is one in a long line of cases enforcing such provisions even as to federal securities claims. See, e.g., Richards, 135 F.3d at 1294-96 ; Spenta Enterprises, Ltd. v. Coleman, 574 F. Supp. 2d 851, 857 (N.D. Ill. 2008); Solid Q Holding, LLC v. Arenal Energy Corp., No. 2:15-CV-00419-DN, 2017 WL 935891, at *2 (D. Utah Mar. 8, 2017); Vernon v. Stabach, No. 13-62378-CIV, 2014 WL 1806861, at *6 (S.D. Fla. May 7, 2014). Indeed, because Securities Act jurisdiction is concurrent rather than exclusive, there is no question that Plaintiffs can assert exactly the same claims in the appropriate New York forums. In addition, courts continue to recognize the principle that the terms of a security-Ilike the ADSs- “include terms stated on the certificate and terms made part of the security by reference on the certificate to another instrument, indenture, or document.” N.Y. U.C.C. § 8-202(a); see also id. (“The terms of an uncertificated security include those stated in any instrument, indenture, or document . . . pursuant to 17 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 which the security is issued.”); accord Cal. Com. Code § 8202(a). This principle has been reaffirmed since the prior briefing. The Delaware Court of Chancery, for example, in a decision summarily affirmed by the Delaware Supreme Court, held that New York’s version of U.C.C. section 8-202(a) operated to allow incorporation by reference of the entirety of an indenture for convertible notes into the Global Note Certificate. AG Oncon, LLC v. Ligand Pharm. Inc., No. CV 2018-0556-JTL, 2019 WL 2245976, at *6 (Del. Ch. May 24, 2019), aff'd, 224 A.3d 963 (Del. 2020). Here, of course, both the ADR certificates themselves and the Deposit Agreement pursuant to which the ADSs were issued expressly require ADS holders such as Plaintiffs to proceed in New York. Norton Decl. Ex. 2 (Deposit Agreement § 7.6) at 1171-72. If the Court were to determine that the discretionary stay should be lifted (which it should not be), the Court should enforce the forum selection provision in the Deposit Agreement governing Plaintiffs’ ADSs, stay these proceedings on that basis, and direct Plaintiffs to proceed in New York, where, under the plain terms of the securities themselves, Plaintiffs agreed to proceed with any litigation. CONCLUSION For all of the reasons set forth above, the Court should continue the current discretionary stay of the proceedings. In the alternative, the Court should decide the previously mooted issues and (i) stay the proceeding to enforce the forum-selection clause governing the Plaintiffs” ADSs and (ii) grant Defendants’ motion to quash service of process on the individual defendants. 18 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DATED: July 2, 2020 KIRKLAND & ELLIS LLP /s/ Stephen V. Potenza Christopher W. Keegan (SBN 232045) Austin Klar (SBN 292271) KIRKLAND & ELLIS LLP 555 California Street San Francisco, CA 94104 Telephone: (415) 439-1400 Facsimile: (415) 439-1500 Email: chris.keegan @kirkland.com austin.klar@kirkland.com -and- Matthew Solum (admitted pro hac vice) Stephen V. Potenza (admitted pro hac vice) Joseph M. Sanderson (SBN 305256) KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: matthew.solum @kirkland.com stephen.potenza@kirkland.com joseph.sanderson @kirkland.com Attorneys for Defendants Micro Focus International plc and Giselle Manon MORGAN, LEWIS & BOCKIUS LLP /s/ Joseph E. Floren Joseph E. Floren (SBN 168292) One Market, Spear Street Tower San Francisco, CA 94105 Telephone: (415) 442-1391 Facsimile: (415) 442-1001 Email: joseph.floren@morganlewis.com -and- Marc J. Sonnenfeld (pro hac vice) Karen Pieslak Pohlmann (pro hac vice) 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5572 Facsimile: (215) 963-5001 Email: marc.sonnenfeld @morganlewis.com karen.pohlmann @morganlewis.com Attorneys for Defendant John Schultz 19 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BERGESON LLP /s/ Daniel Bergeson Daniel Bergeson (SBN 105439) John Pernick (SBN 155468) Adam Trigg (SBN 261498) 111 North Market Street, Suite 600 San Jose, CA 95113 Telephone: (408) 291-6200 Facsimile: (408) 297-6000 Email: dbergeson@be-law.com jpernick @be-law.com atrigg @be-law.com Attorneys for Defendant Christopher Hsu 20 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO LIFT STAY Appendix A Declaration of Graham Norton and Excerpts of Exhibits (Filed July 6, 2018) wn A W N o e 1 OY 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Electronically by Superior Court of California, County of San Mateo ON 7/6/2018 By /s/ Mia Marlowe Deputy Clerk Christopher W. Keegan (SBN 232045) Austin Klar (SBN 292271) KIRKLAND & ELLIS LLP 555 California Street San Francisco, CA 94104 Telephone: (415) 439-1400 Facsimile: (415) 439-1500 Email: chris.keegan@kirkland.com austin.klar@kirkland.com Matthew Solum (Admitted pro hac vice) Stephen V. Potenza (Admitted pro hac vice) Joseph M. Sanderson (SBN 305256) KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: matthew.solum@kirkland.com stephen.potenza@kirkland.com joseph.sanderson@kirkland.com Attorneys for Defendants MICRO FOCUS INTERNATIONAL PLC and GISELLE MANON SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO COMPLEX CIVIL LITIGATION In re MICRO FOCUS INTERNATIONAL Master File No. 18CIV01549 PLC SECURITIES LITIGATION, (Consolidated with 18CIV1653; 18CIV1827 and 18CIV2038) CLASS ACTION This Document Relates to: ALL ACTIONS Assigned for All Purposes to Hon. Marie S. Weiner, Dept. 2 DECLARATION OF GRAHAM NORTON IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS OR STAY FOR INCONVENIENT FORUM DECLARATION OF GRAHAM NORTON 1 N = © w e N Y Wn B W N N R N N N r m ee e s em e e e e e m ee ee «0 N N Un A W N = O e S Y A W N e e 1. I am Graham Norton, Director of Finance, an employee of a subsidiary of Micro Focus International PLC (“Micro Focus” or “the Company”). My current position is Director of Finance. At the time of the merger of Micro Focus with the software business of Hewlett Packard Enterprise Company (“HPE”), my position was the same. 2. [ submit this declaration in support of Defendants’ Motion to Dismiss or Stay for Inconvenient Forum dated July 6, 2018. This declaration is based on my personal knowledge and review of Micro Focus’s business records and filings with the Securities and Exchange Commission (“SEC”), and the Consolidated Class Action Complaint in this matter, dated June 15, 2018 (“Complaint”). If called upon to do so, I could testify competently thereto. The Micro Focus-HPE Software Business Merger Transaction. 3. On September 7, 2016, Micro Focus announced that it planned to merge with HPE’s software business in a transaction valued at $8.8 billion, consisting of $2.5 billion in cash and $6.3 billion in Micro Focus equity, and that the combined company would be 50.1% owned by HPE shareholdets and 49.9% owned by existing Micro Focus shareholders (the “Merger Transaction™). 4. The Merger Transaction was accomplished in five steps, which are described at pages 19-22 and 179-190 of the Form F-4 Registration Statement filed with the SEC on August 3, 2017 (“Form F-4”). A true and correct copy of the Form F-4 is attached as Exhibit 1. 3. Among those steps, HPE spun off its software business to a wholly-owned subsidiary, Seattle SpinCo, Inc. (“Seattle”). HPE distributed shares in Seattle to then-current HPE shareholders. Seattle merged with a subsidiary of Micro Focus to become an indirect wholly-owned subsidiary of Micro Focus, in return for HPE shareholders receiving 50.1% of the combined company. 6. To provide HPE shareholders with 50.1% of the combined company, Micro Focus appointed Deutsche Bank Trust Company America (“Deutsche Bank Trust”) in New York, as depositary pursuant to a Deposit Agreement by and among Micro Focus, Deutsche Bank Trust, and the Holders and Beneficial Owners of American Depositary Shares, dated August 11,2017. Micro Focus issued consideration shares that are listed on the London Stock Exchange and deposited them with Deutsche Bank AG in London, acting as custodian for Deutsche Bank Trust. Deutsche Bank w wn Oo 0 a AD 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Trust in New York, New York then issued American Depositary Shares (“ADSs™), each representing the right to the deposited Micro Focus shares as set forth in the Deposit Agreement. A true and correct copy of the executed Deposit Agreement is attached as Exhibit 2. Micro Focus and New York. 7. Micro Focus and its subsidiaries (together, “the Group™) maintains an office at One Pennsylvania Plaza, New York, New York 10119. 8. Micro Focus American Depositary Shares (“ADS”) are listed on the New York Stock Exchange under the ticker MFGP. 9. Micro Focus appointed Law Debenture Corporate Services as its process agent for service and authorized representative in the United States. Law Debenture Corporate Services, Inc.’s address is 801 Second Avenue, New York, New York 10017. 10. Defendant Giselle Manon works for Law Debenture in New York and did so at the time of the Merger Transaction. 11. Deutsche Bank Trust acts as the depositary for Micro Focus ADSs. Deutsche Bank Trust is located at 60 Wall Street, New York, New York 10005. Deutsche Bank Trust filed the Form F-6 Registration Statement for American Depositary Shares (“Form F-6”) that registered Micro Focus ADSs. 12. Micro Focus engaged Kirkland & Ellis in New York, New York as a legal advisor in connection with the Merger Transaction. 13. Meetings regarding the Merger Transaction were held in New York, New York. Micro Focus Is In the United Kingdom. 14. Micro Focus is a multinational software and information technology business with its headquarters at The Lawn, 22-30 Old Bath Road, Newbury, Berkshire, RG14 1QN, United Kingdom. 15. The Company is organized under the laws of England and Wales. 16. Micro Focus is subject to (a) the U.K. Companies Act 2006, as amended, (b) the U.K. Corporate Governance Code, and (c) the U.K. Listing Rules. R N A S o 11 13 14 15 16 17 18 19 20 1 22 23 24 25 26 27 28 17. Micro Focus is treated as a tax resident of the United Kingdom for United Kingdom tax purposes. 18. The majority of Micro Focus’ assets are located outside the United States and the Group has more than 100 offices throughout the world. 19. The Group has a number of offices in the United Kingdom, including in Bracknell, United Kingdom; Cambridge, United Kingdom; Edinburgh, United Kingdom; Glasgow, United Kingdom; London, United Kingdom; and Newbury, United Kingdom. 20. The meetings of the Board of Directors of Micro Focus are held principally in the United Kingdom. 21. The Company’s Annual General Meeting is always held in the United Kingdom. 22. Micro Focus’ shares are listed on the London Stock Exchange as MCRO. 23. The Company’s corporate records are kept and maintained in the United Kingdom, 24. In connection with the Merger Transaction, Micro Focus (a) listed consideration shares on the London Stock Exchange; (b) issued a prospectus approved by the United Kingdoms Financial Conduct Authority and prepared in accordance with the prospectus rules produced by the United Kingdom Financial Conduct Authority under part V1 of FSMA; (¢) issued the U.K. Circular, which was approved by the United Kingdom Financial Conduct Authority; (d) engaged as a financial advisor, J.P. Morgan Cazenove of London, United Kingdom; and (e) engaged as a legal advisor, Travers Smith LLP of London, United Kingdom. 25. The Micro Focus general meeting at which Micro Focus shareholders approved the Merger Transaction, including issuance of consideration shares, was held in the United Kingdom. 26. The following eight individuals who are named in the Complaint as defendants worked and resided in the United Kingdom at the time the Form-4 was prepared and signed, and continue to do so today: Kevin Loosemore (Executive Chairman), Stephen Murdoch (Chief Executive Officer), Mike Phillips (Director, Mergers and Acquisitions), Karen Slatford (Senior Independent Director), Richard Atkins (Non-Executive Director), Amanda Brown (Non-Executive Director), Silke Scheiber (Non-Executive Director), and Darren Roos (Non-Exeuctive Director). oO 0 ~~ O h 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Defendant Nils Brauckmann resides and works in Germany and did so at the time of the Merger Transaction. 27. Defendants Chris Hsu and John Schultz are no longer affiliated with the Group. 28. The Company’s press releases, including those referenced in the Complaint, were issued from the Company’s offices in the United Kingdom. [ declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed in London, United Kingdom. Dated: July 6,2018 = n Graham Norton Excerpts of Form F-4 (Norton Declaration Exhibit 1) TABLE OF CONTENTS As filed with the Securities and Exchange Commission on August 3 , 2017. Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM F+4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MICRO FOCUS INTERNATIONAL PLC (Exact Name of Registrant as Specified in its Charter) England and Wales 7372 Not Applicable (State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer Identification Number) Incorporation or Organization) Classification Code Number) The Lawn, 22-30 Old Bath Road Newbury, Berkshire RG14 1QN United Kingdom +44 (0) 1635-565-459 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices) Mike Ebilling Chief Financial Officer The Lawn, 22-30 Old Bath Road Newbury, Berkshire RG14 1QN United Kingdom +44 (0) 1635-565-459 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: Richard B. Aftanas, P.C. Spencer Summerfield Andrew R. Brownstein Julian Pritchard David A. Curtiss Jon Reddington Benjamin M. Roth Freshfields Bruckhaus Deringer LLP Kirkland & Ellis LLP Travers Smith LLP Wachtell, Lipton, Rosen & Katz 65 Fleet Street 601 Lexington Avenue 10 Snow Hill 51 West 52nd Street London EC4Y 1HS New York, NY 10022 London EC1A 2AL New York, NY 10019 United Kingdom United Kingdom Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective and upon completion of the merger described in the enclosed document. If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: 0 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer 00 Accelerated filer O0 Non-accelerated filer XI (Do not check if a smaller reporting company) Smaller reporting company [1 If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction: Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) O Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) O0 CALCULATION OF REGISTRATION FEE Title of each class of securities to be registered Amount to be Proposed maximum offering | Proposed maximum aggregate Amount of 1 registered 2) price per share offering price (3) registration fee (4) Ordinary Shares 222,390,000 N/A $ 6,061,000,000 | § 702,469.90 (1) The securities being offered hereby will be issued in the form of American Depositary Shares of the registrant, referred to as Micro Focus ADSs. Each Micro Focus ADS represents one ordinary share, par value £0.10 per share, of the registrant, referred to as ordinary shares. The Micro Focus ADSs will be issuable upon deposit of ordinary shares with Deutsche Bank Trust Company Americas, acting as the depositary, and will be registered under a registration statement on Form F-6 (Registration No. 333- ). (2) Represents an estimate as of July 27, 2017 of the maximum number of ordinary shares of the registrant issuable upon completion of the transactions contemplated by the Agreement and Plan of Merger dated as of September 7, 2016, among the registrant, Hewlett Packard Enterprise Company, Seattle SpinCo, Inc., Seattle Holdings, Inc. and Seattle MergerSub, Inc., as described in this registration statement. The estimated number of ordinary shares of the registrant is calculated pursuant to the following formula: an estimate of the registrant's outstanding ordinary shares on a fully diluted basis immediately prior to the closing of the merger, multiplied by the quotient of 50.1% divided by 49.9%, such that the amount of ordinary shares registered pursuant to this registration statement represents 50.1% of all outstanding ordinary shares of the registrant on a fully diluted basis after giving effect to the issuance. Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers an indeterminate number of additional shares of the registrant as may be issuable as a result of stock splits, stock dividends or similar transactions. (3) Calculated pursuant to Rule 457(f)(2) under the Securities Act, based on the book value, as of April 30, 2017 (which is the most recent date for which such information is available) of all of the Seattle SpinCo, Inc. securities to be received by the registrant in exchange for the securities to be issued hereunder. (4) Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $115.90 per $1,000,000 of the proposed maximum aggregate offering price. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. 0 TABLE OF CONTENTS Q: How may HPE Stockholders sell the Micro Focus ADSs that they will be entitled to receive in the Merger prior to receiving those Micro Focus ADSs? A: It is currently expected that beginning on or about August 17,2017, which is two business days before the Distribution Record Date, and continuing through the close of trading on August 31, 2017, which is the business day prior to September 1, 2017, the expected Closing Date), there will be a “when issued” market in Micro Focus ADSs on the NYSE. The “when issued” market will be a market for the Micro Focus ADSs that will be issued to holders of Seattle Shares at Closing. If an HPE Stockholder sells Micro Focus ADSs in the “when issued” market during this time period, that HPE Stockholder will be required to deliver the number of Micro Focus ADSs so sold in settlement of the sale after Micro Focus ADSs are issued upon Closing. It is currently expected that “when issued” trades of Micro Focus ADSs will settle within three business days after the Closing Date and that if the Merger is not completed, all trades in this “when issued” market will be cancelled. After the close of trading on August 31, 2017, Micro Focus ADSs will no longer trade in this “when issued” market. Q: What are the implications to HPE Stockholders of Micro Focus being a “foreign private issuer?” A: Following completion of the Transactions, Micro Focus will be subject to the reporting requirements under the Exchange Act applicable to foreign private issuers. Micro Focus will be required to file an annual report on Form 20-F with the SEC within four months after the end of each fiscal year. Micro Focus’ current fiscal year begins on May 1 and ends on April 30. However, as described further below, Micro Focus intends to align its accounting year end with HPE Software’s accounting year end of October 31 upon Closing. In addition, Micro Focus will be required to furnish reports on Form 6-K to the SEC regarding certain information required to be publicly disclosed by Micro Focus by way of a Regulatory News Service, referred to as an RNS, in the United Kingdom or filed with the LSE or U.K. Companies House, or regarding information distributed or required to be distributed by Micro Focus to Micro Focus Shareholders under English law and/or regulations. Micro Focus will be exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations under Section 14 of the Exchange Act, and will not be required to comply with Regulation FD, which addresses certain restrictions on the selective disclosure of material information. In addition, among other matters, Micro Focus’ officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of Micro Focus Shares. If Micro Focus loses its status as a foreign private issuer, it will no longer be exempt from such rules and, among other things, will be required to file periodic reports and financial statements as if it were a domestic U.S. issuer. Q: What is the effect of Micro Focus aligning its accounting year end with HPE Software in connection with Closing? A: At and conditional upon Closing, Micro Focus will align its accounting year end with HPE Software’s accounting year end of October 31, with the first accounting period to be audited after Closing being for the 18 months ended October 31, 2018. During this extended accounting period and in order to comply with the U.K. Listing Rules, Micro Focus will publish an unaudited interim report for the six months ended October 31, 2017 and a second unaudited interim report for the six months ended April 30, 2018. QUESTIONS AND ANSWERS ABOUT AMERICAN DEPOSITARY SHARES “To 6 99 ¢c 5 For the purposes of this section, my,” “you” and “your” refer to each HPE Stockholder as of the close of business on the Distribution Record Date, each of whom will be entitled to receive Seattle Shares in the Distribution, with such Seattle Shares being converted into Micro Focus ADSs in the Merger, as further described elsewhere herein. The following is only a summary of the questions and answers you may have relating to the Micro Focus ADSs that you will become entitled to receive in the Merger upon conversion of the Seattle Shares distributed to you in the Distribution. Your rights as a Micro Focus ADS holder will be governed by, among other things, the terms of the Deposit Agreement with the Depositary. You should read the section below in conjunction with the section entitled “Description of the Micro Focus American Depositary Shares” and the Deposit Agreement, which is included as an exhibit to the registration statement on Form F-4 of Micro Focus of which this information statement/prospectus forms a part. 15 31 TABLE OF CONTENTS Q: What is an ADS and will the Micro Focus ADSs be listed? A: An American Depositary Share, or ADS, is a security representing another security that has been deposited at a custodian bank. ADSs allow investors in the United States to more easily hold and trade interests in foreign-based companies. ADSs are represented by American Depositary Receipts, or ADRs, and are typically issued by a depositary in uncertificated form. Micro Focus is a public limited company incorporated under the laws of England and Wales that issues ordinary shares that are equivalent in many respects to common stock of a U.S. corporation. Each Micro Focus ADS will represent one Micro Focus Share, unless another ratio is agreed by Micro Focus and HPE. We have applied to list the Micro Focus ADSs on the NYSE under the symbol “MFGP.” Micro Focus Shares are listed on the main market of the LSE and quoted in sterling under the symbol “MCRO.” Q: Can I request a certificated American Depositary Receipt? A: Yes. All of the Micro Focus ADSs issued will be part of the Depositary’s direct registration system, and a registered holder will receive periodic statements from the Depositary which will show the number of Micro Focus ADSs represented by uncertificated ADRs registered in such holder’s name. Typically, the registered holder is either The Depository Trust Company (“DTC”) or an intermediary, such as a broker, which holds the ADRs in the interest of the beneficial owner. Alternatively, upon receipt by the Depositary of a proper instruction from a registered holder of uncertificated Micro Focus ADSs requesting the exchange of uncertificated Micro Focus ADSs for certificated Micro Focus ADSs, the Depositary will execute and deliver as directed by the registered holder a certificated ADR evidencing those Micro Focus ADSs. Q: How can I cancel my Micro Focus ADS and obtain deposited securities? A: As a registered holder, you may turn in your ADSs at the Depositary’s principal office, but if you are not a registered holder, you must provide appropriate instructions to your broker. Upon payment of applicable fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the Depositary will direct the custodian to deliver the Micro Focus Shares and any other deposited securities underlying the Micro Focus ADSs to you or a person you designate. Q: How do I vote as a Micro Focus ADS holder? A: You may instruct the Depositary to vote the Micro Focus Shares or other deposited securities underlying your Micro Focus ADSs. Otherwise, you could exercise your right to vote directly if you withdraw the Micro Focus Shares underlying your Micro Focus ADSs. However, there can be no guarantee that you will know about any applicable meeting of Micro Focus Shareholders sufficiently far in advance to withdraw the Micro Focus Shares underlying your Micro Focus ADSs in time to vote such Micro Focus Shares at such meeting. Upon timely notice from us as described in the Deposit Agreement, the Depositary will notify you of any upcoming vote and arrange to deliver our voting materials to you by regular mail delivery or by electronic transmission. The materials will (i) describe the matters to be voted on, (ii) explain how you may instruct the Depositary to vote the Micro Focus Shares or other deposited securities underlying your Micro Focus ADSs as you direct and (iii) include an express indication that if no vote is timely received or instructions are timely received that do not specify the manner in which the Depositary is to vote, then no vote will be placed on your behalf. For your voting instructions to be valid, the Depositary must receive them in writing on or before the date specified. The Depositary will, subject to timely receipt of valid voting instructions, applicable law and the provisions of the Deposit Agreement, the deposited securities and the Micro Focus Articles, vote or have its agents vote the Micro Focus Shares or other deposited securities as you instruct. The Depositary will only vote or attempt to vote as you instruct. If we timely requested the Depositary to solicit instructions of holders of Micro Focus ADSs but no instructions are received by the Depositary from an owner with respect to any of the deposited securities represented by the Micro Focus ADSs of that owner on or before the date established by the Depositary for such purpose, the Depositary shall not exercise any voting rights whatsoever with respect to the deposited securities. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the Depositary to vote the deposited securities underlying your Micro Focus ADSs. In addition, the Depositary and 16 32 Exhibit 4.2 EXECUTION VERSION DEPOSIT AGREEMENT by and among MICRO FOCUS INTERNATIONAL PLC AND DEUTSCHE BANK TRUST COMPANY AMERICAS AND THE HOLDERS AND BENEFICIAL OWNERS OF AMERICAN DEPOSITARY SHARES EVIDENCED BY AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER Dated as of [date] , 2017 631 DEPOSIT AGREEMENT This DEPOSIT AGREEMENT , dated as of , 2017, is entered into by and among (i) MICRO FOCUS INTERNATIONAL PLC, a company incorporated under the laws of England and Wales (together with its successors, the “ Company ”), (ii) DEUTSCHE BANK TRUST COMPANY AMERICAS, an indirect wholly owned subsidiary of Deutsche Bank A.G., acting in its capacity as depositary, and any successor depositary hereunder (the Depositary ”), and (iii) all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued hereunder (all such capitalized terms as hereinafter defined). WITNESSETH THAT: WHEREAS , the Company desires to establish an ADR facility with the Depositary to provide for the deposit of the Shares and the creation of American Depositary Shares representing the Shares so deposited; WHEREAS , the Depositary is willing to act as the Depositary for such ADR facility upon the terms set forth in this Deposit Agreement; WHEREAS , the American Depositary Receipts evidencing the American Depositary Shares issued pursuant to the terms of this Deposit Agreement are to be substantially in the forms of Exhibit A and Exhibit B annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement; WHEREAS , the Shares are listed on the London Stock Exchange, and the American Depositary Shares to be issued pursuant to the terms of this Deposit Agreement are to be listed for trading on the New York Stock Exchange; and WHEREAS , the Board of Directors of the Company (or an authorized committee thereof) has duly approved the establishment of an ADR facility upon the terms set forth in this Deposit Agreement, the execution and delivery of this Deposit Agreement on behalf of the Company, and the actions of the Company and the transactions contemplated herein. NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 632 EXHIBIT A [FORM OF FACE OF RECEIPT] Number CUSIP American Depositary Shares (Each American Depositary Share representing one Fully Paid Ordinary Share) AMERICAN DEPOSITARY RECEIPT FOR AMERICAN DEPOSITARY SHARES representing DEPOSITED ORDINARY SHARES of MICRO FOCUS INTERNATIONAL PLC (Incorporated under the laws of England and Wales) DEUTSCHE BANK TRUST COMPANY AMERICAS, as depositary (herein called the “Depositary”), hereby certifies that is the owner of American Depositary Shares (hereinafter “ADSs” or “American Depositary Shares”), representing deposited ordinary shares, including evidence of rights to receive such ordinary shares (the “Shares”), of MICRO FOCUS INTERNATIONAL PLC, a company incorporated under the laws of England and Wales (the “Company”). As of the date of the Deposit Agreement (hereinafter referred to), each ADS represents one Share deposited under the Deposit Agreement with the Custodian which at the date of execution of the Deposit Agreement is Deutsche Bank AG, London Branch (the “Custodian”). The ratio of ADSs to Shares is subject to subsequent amendment as provided in Article IV and VI of the Deposit Agreement. The Depositary’s Principal Office is located at 60 Wall Street, New York, New York 10005, U.S.A. 1) The Deposit Agreement . This American Depositary Receipt is one of an issue of American Depositary Receipts (“Receipts”), all issued and to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of [®], 2017 (as amended from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party thereto and becomes bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of Receipts and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time, received in respect of such Shares and held thereunder (such Shares, other securities, property and cash are herein called “Deposited Securities”). Copies of the Deposit Agreement are on file at the Principal Office of the Depositary and the Custodian. A-1 674 Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof. The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and the Company’s constituent documents (as in effect on the date of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. All capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed thereto in the Deposit Agreement. To the extent there is any inconsistency between the terms of this Receipt and the terms of the Deposit Agreement, the terms of the Deposit Agreement shall prevail. Prospective and actual Holders and Beneficial Owners are encouraged to read the terms of the Deposit Agreement. The Depositary makes no representation or warranty as to the validity or worth of the Deposited Securities. The Depositary has made arrangements for the acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such ADSs. The Receipt evidencing the ADSs held through DTC will be registered in the name of a nominee of DTC. So long as the ADSs are held through DTC or unless otherwise required by law, ownership of beneficial interests in the Receipt registered in the name of DTC (or its nominee) will be shown on, and transfers of such ownership will be effected only through, records maintained by DTC (or its nominee) or DTC Participants (or their nominees). 2) Surrender of Receipts and Withdrawal of Deposited Securities . Upon surrender, at the Principal Office of the Depositary, of ADSs evidenced by this Receipt for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals and cancellation of Receipts (as set forth in Article (9) hereof or in Section 5.9 of the Deposit Agreement) and (ii) all applicable taxes, duties (including stamp duty and stamp duty reserve tax) and/or governmental charges payable in connection with such surrender and withdrawal, and, subject to the terms and conditions of the Deposit Agreement, the Company’s constituent documents, Section 7.8 of the Deposit Agreement, Article (22) of this Receipt and the provisions of or governing the Deposited Securities and other applicable laws, the Holder hereof is entitled to Delivery, to him or upon his order, of the Deposited Securities represented by the ADS so surrendered. ADSs may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such ADSs (if held in certificated form) or by book-entry Delivery of such ADSs to the Depositary. A-2 675 EXHIBIT B [FORM OF REVERSE OF RECEIPT] SUMMARY OF CERTAIN ADDITIONAL PROVISIONS OF THE DEPOSIT AGREEMENT (13) Dividends and Distributions in Cash, Shares, etc . Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights securities or other entitlements under the Deposit Agreement, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (upon the terms of the Deposit Agreement), be converted on a practicable basis, into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars and will distribute promptly the amount thus received (net of the applicable fees and charges of, and expenses incurred by, the Depositary and taxes and governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of ADSs held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties (including stamp duty and stamp duty reserve tax) or other governmental charges, the amount distributed to Holders of the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary, as the case may be, to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, such reports necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts. Any Foreign Currency received by the Depositary shall be converted upon the terms and conditions set forth in the Deposit Agreement. The Depositary shall not incur any liability for any consequences of Foreign Currency conversion that may be incurred by Holders and/or Beneficial Owners on account of their ownership of American Depositary Shares or otherwise. The Company shall not incur any liability to Holders and Beneficial Owners for any consequences of Foreign Currency conversion that may be incurred by Holders and/or Beneficial Owners on account of their ownership of American Depositary Shares or otherwise. If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or their nominees. Upon receipt of confirmation of such deposit from the Custodian, the Depositary shall, subject to and in accordance with the Deposit Agreement, establish the ADS Record Date and either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held by such Holders as of the ADS Record Date, additional ADSs, which represent in aggregate the number of Shares received as such dividend, or free distribution, subject to the terms of the Deposit Agreement (including, without limitation, the applicable fees and charges of, and expenses incurred by, the Depositary and taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of the applicable fees and charges of and expenses incurred by, the Depositary and taxes and governmental charges). In lieu of Delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms set forth in the Deposit Agreement. B-1 685 The Depositary shall be under no obligation to inform Holders or Beneficial Owners about the requirements of any law, rule and/or regulation or any changes therein or thereto, including, without limitation, any law, rule and/or regulation giving rise to a disclosure obligation or ownership limitation, nor shall the Depositary have any responsibility to ensure compliance, or liability with respect to any non-compliance, by Holders or Beneficial Owners with the provisions hereof or with respect to any applicable law, rule and/or regulation (without limiting the Depositary’s other obligations expressly set forth herein). (25) Waiver: Jurisdiction; Arbitration . EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY). The Company, the Depositary and by holding an American Depositary Share (or interest therein) Holders and Beneficial Owners each agree that, notwithstanding the foregoing, with regard to any claim or dispute or difference of whatever nature between or involving the parties hereto arising directly or indirectly from the relationship created by the Deposit Agreement, the Depositary, in its sole discretion, shall be entitled to refer such dispute or difference for final settlement by arbitration (“Arbitration”) in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”) then in force The arbitration shall be conducted by three arbitrators, one nominated by the Depositary, one nominated by the Company, and one nominated by the two party- appointed arbitrators within thirty (30) calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. Judgment upon the award rendered by the arbitrators may be enforced in any court having jurisdiction thereof. The seat and place of any reference to Arbitration shall be New York City, New York, and the procedural law of such Arbitration shall be New York law. The language to be used in the Arbitration shall be English. The fees of the arbitrator and other costs incurred by the parties in connection with such Arbitration shall be paid by the party or parties that is (are) unsuccessful in such Arbitration. B-15 699 Holders and Beneficial Owners understand, and holding an American Depositary Share or an interest therein, such Holders and Beneficial Owners each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, American Depositary Shares, Receipts or the transactions contemplated hereby or thereby or by virtue of ownership thereof, may only be instituted in a state or federal court in New York, New York, and by holding an American Depositary Share or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Holders and Beneficial Owners agree that the provisions of this paragraph shall survive such Holders’ and Beneficial Owners’ ownership of American Depositary Shares or interests therein. B-16 700 (ASSIGNMENT AND TRANSFER SIGNATURE LINES) FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto whose taxpayer identification number is and whose address including postal zip code is , the within Receipt and all rights thereunder, hereby irrevocably constituting and appointing attorney-in-fact to transfer said Receipt on the books of the Depositary with full power of substitution in the premises. Dated: Name: By: Title: NOTICE: The signature of the Holder to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever. If the endorsement be executed by an attorney, executor, administrator, trustee or guardian, the person executing the endorsement must give his/her full title in such capacity and proper evidence of authority to act in such capacity, if not on file with the Depositary, must be forwarded with this Receipt. SIGNATURE GUARANTEED 701 Excerpts of Deposit Agreement (Norton Declaration Exhibit 2) EXECUTION VERSION DEPOSIT AGREEMENT by and among MICRO FOCUS INTERNATIONAL PLC AND DEUTSCHE BANK TRUST COMPANY AMERICAS AND THE HOLDERS AND BENEFICIAL OWNERS OF AMERICAN DEPOSITARY SHARES EVIDENCED BY AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER Dated as of August 11, 2017 EMEA 113029270 (2K) 1132 unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.4 Holders and Beneficial Owners as Parties; Binding Effect. The Holders and Beneficial Owners from time to time of American Depositary Shares shall be parties to the Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any Receipt by acceptance hereof or any beneficial interest therein. SECTION 7.5 Notices. Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex, facsimile transmission or electronic transmission, confirmed by letter, addressed to Micro Focus International plc, The Lawn 22-30 Old Bath Road, Newbury, Berkshire, RG14 1QN, United Kingdom, Attention: Mike Phillips, telephone: +44 (0) 1635-565-459, email: mike. phillips @microfocus.com or to any other address which the Company may specify in writing to the Depositary. Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Company's expense, unless otherwise agreed in writing between the Company and the Depositary, confirmed by letter, addressed to Deutsche Bank Trust Company Americas, 60 Wall Street, New York, New York 10005, USA Attention: ADR Department, telephone: (001) 212 250-9100, facsimile: (001) 732 544 6346 or to any other address which the Depositary may specify in writing to the Company. Any and all notices to be given to any Holder shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Company's expense, unless otherwise agreed in writing between the Company and the Depositary, addressed to such Holder at the address of such Holder as it appears on the transfer books for Receipts of the Depositary, or, if such Holder shall have filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address specified in such request. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of this Deposit Agreement. Failure to notify a Holder or any defect in the notification to a Holder shall not affect the sufficiency of notification to other Holders. Delivery of a notice sent by mail, air courier or cable, telex, facsimile or electronic transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex, facsimile or electronic transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service. The Depositary or the Company may, however, act upon any cable, telex, facsimile or electronic transmission received by it from the other or from any Holder, notwithstanding that such cable, telex, facsimile or electronic transmission shall not subsequently be confirmed by letter as aforesaid, as the case may be. EMEA 113029270 (2K) 3 8 1170 SECTION 7.6 Governing Law and Jurisdiction. This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Subject to the Depositary's rights under the third paragraph of this Section 7.6, the Company and the Depositary agree that the federal or state courts in the City of New York shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or in connection with this Deposit Agreement and, for such purposes, each irrevocably submits to the exclusive jurisdiction of such courts. Notwithstanding the above, the parties hereto agree that any judgment and/or order from any such New York court may be enforced in any court having jurisdiction thereof. The Company hereby irrevocably designates, appoints and empowers Law Debenture Corporate Services Inc. (the “Process Agent”) now at 801 2nd Avenue, Suite 403, New York, NY 10017, Attention: Giselle Manon as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail of any and all legal process, summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in any federal or state court as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Process Agent shall cease to be available to act as such, the Company agrees to designate a new agent in the City of New York on the terms and for the purposes of this Section 7.6 reasonably satisfactory to the Depositary. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Process Agent (whether or not the appointment of such Process Agent shall for any reason prove to be ineffective or such Process Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 7.5 hereof. The Company agrees that the failure of the Process Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. The Company, the Depositary and by holding an American Depositary Share (or interest therein) Holders and Beneficial Owners each agree that, notwithstanding the foregoing, with regard to any claim or dispute or difference of whatever nature between or involving the parties hereto arising directly or indirectly from the relationship created by this Deposit Agreement, the Depositary, in its sole discretion, shall be entitled to refer such dispute or difference for final settlement by arbitration (“Arbitration”) in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”) then in force The arbitration shall be conducted by three arbitrators, one nominated by the Depositary, one nominated by the Company, and one nominated by the two party-appointed arbitrators within thirty (30) calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not EMEA 113029270 (2K) 39 1171 been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. Judgment upon the award rendered by the arbitrators may be enforced in any court having jurisdiction thereof. The seat and place of any reference to Arbitration shall be New York City, New York, and the procedural law of such Arbitration shall be New York law. The language to be used in the Arbitration shall be English. The fees of the arbitrator and other costs incurred by the parties in connection with such Arbitration shall be paid by the party or parties that is (are) unsuccessful in such Arbitration. Holders and Beneficial Owners understand, and holding an American Depositary Share or an interest therein, such Holders and Beneficial Owners each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, American Depositary Shares, Receipts or the transactions contemplated hereby or thereby or by virtue of ownership thereof, may only be instituted in a state or federal court in New York, New York, and by holding an American Depositary Share or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Holders and Beneficial Owners agree that the provisions of this paragraph shall survive such Holders' and Beneficial Owners’ ownership of American Depositary Shares or interests therein. EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY). The provisions of this Section 7.6 shall survive any termination of this Deposit Agreement, in whole or in part. SECTION 7.7 Assignment. Subject to the provisions of Section 5.4 hereof, this Deposit Agreement may not be assigned by either the Company or the Depositary. SECTION 7.8 Compliance with U.S. Securities Laws. Notwithstanding anything in this Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act. SECTION 7.9 Titles; References. All references in this Deposit Agreement to exhibits, articles, sections, subsections, paragraphs and other subdivisions refer to the exhibits, EMEA 113029270 (2K) 40 1172 articles, sections, subsections, paragraphs and other subdivisions of this Deposit Agreement unless expressly provided otherwise. The words “this Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import refer to the Deposit Agreement as a whole as in effect between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of this Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in this Deposit Agreement. SECTION 7.10 Agents. The Depositary shall be entitled, in its sole but reasonable discretion, to appoint one or more agents (the “Agents”) for the purpose, inter alia, of making distributions to the Holders or otherwise carrying out its obligations under this Deposit Agreement. In connection with the sale of securities, including, without limitation, Deposited Securities, the Depositary shall not have any liability for the price received in connection with any such sale, the timing thereof or any delay in action or omission to act nor shall it be responsible for any error or delay in action, omission to act, default or negligence on the part of the party so retained in connection with any such sale or proposed sale. SECTION 7.11 Exclusivity. The Company agrees not to appoint any other depositary for the issuance or administration of depositary receipts evidencing any class of stock of the Company so long as Deutsche Bank Trust Company Americas is acting as Depositary hereunder. SECTION 7.12 Affiliates etc. The Depositary reserves the right to utilize and retain a division or Affiliate(s) of the Depositary to direct, manage and/or execute any public and/or private sale of securities hereunder and to engage in the conversion of Foreign Currency hereunder. It is anticipated that such division and/or Affiliate(s) will charge the Depositary a fee and/or commission in connection with each such transaction, and seek reimbursement of its costs and expenses related thereto. Such fees/commissions, costs and expenses, shall be deducted from amounts distributed hereunder and shall not be deemed to be fees of the Depositary under Article (9) of the Receipt or otherwise. EMEA 113029270 (2K) 4 1 1173