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AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
Monday, December 08 2003 @ 07:34 AM EST

Another piece in our jigsaw puzzle, Amendment No. 1 to the 1995 Asset Purchase Agreement. Thanks go to Steve Martin for this transcription work.

***********************************************

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT

AMENDMENT NO. 1
TO ASSET PURCHASE AGREEMENT

As of the effective date indicated below, the September 19, 1995 asset Purchase Agreement (the "Agreement") between Novell, Inc. ("NOVELL") and The Santa Cruz Operation, Inc. ("SCO") is amended in the following respects.

  1. In the Recitals, Paragraph A, line 4 is amended to read as follows:
    -- other products ("Auxiliary Products") which are directly related to UNIX and UnixWare (collectively, the --
  2. In Section 1.1, the following new paragraph (d) is added:
    -- (d) Right of First Refusal. The parties agree that, within a reasonable time after the Closing Date, they will enter into a separate agreement whereby Buyer will have a right of first refusal to purchase from Seller (i) all appropriate copies of publications relating to the Business and in the possession, custody or control of Seller's technical library located at its facility in Florham Park, New Jersey and (ii) physical assets, including lab equipment and financial accounting server(s), owned by Seller and used in the Business. Each such item will be valued at net book value as of November 1, 1995. Such right of first refusal shall be exercisable until (1) February 29, 1996 as to the financial accounting server(s) and (2) January 31, 1996 as to all other items. --
  3. In Section 1.2, paragraph (b):

    1. The following clause is added at the beginning of the first sentence ("Buyer agrees ... Section 4.16 hereof"):
      -- Except as otherwise provided in paragraph (e) of this Section 1.2, ---
    2. Lines 14-15 are amended to read as follows:
      -- The amounts of additional royalties to be paid in connection with Buyer's sale of the UnixWare products are identified in detail in Schedule 1.2(b) hereto. Seller ---
  4. Section 1.2(d), is amended in its entirety to read as follows:

    -- (d) Asset Transfer and Transfer Taxes. Notwithstanding any other provision of this Agreement, the Assets shall remain the property of Seller until expeditiously delivered to Buyer in the manner and at the locations prescribed as follows in this Section 1.2(d), or as subsequently agreed in writing.

    Seller shall deliver and Buyer shall accept source code, object code, related documentation and other software assets described in Schedule 1.1(a) (collectively referred to as "Software Assets") only at Seller's facility in Florham Park, New Jersey.

    In the event that Seller subsequently discovers Software Assets outside of New Jersey contemplated by this Agreement which have not heretofore been delivered to Buyer in New Jersey, Seller shall consult with Buyer to determine if Seller may destroy such assets in place without delivery to Buyer, or transport them to New Jersey or another location specified by Buyer for delivery to Buyer.

    Seller represents that to its knowledge software documentation previously delivered to Buyer for the purpose of due diligence is the property of Seller, and Buyer agrees that it will destroy or return possession to Seller in New Jersey before title passes to Buyer.

    Seller and Buyer agree that the license that Seller is entitled to exercise after Closing pursuant to Section 1.6 hereof is a right not sold to Buyer and as such is a right retained by Seller.

    Buyer shall pay and promptly discharge when due the entire amount of any and all sales and use taxes ("Sales Taxes") imposed or levied by reason of the sale of the Assets to Buyer. The parties shall cooperate with each other to the extent reasonably requested and legally permitted to minimize any such Sales Taxes. If Seller is obligated to pay any of such Sales Taxes, Buyer shall reimburse Seller on demand for the amount of such payment.

  5. In section 1.2, the following new paragraphs (e) and (f) are added:
    -- (e) Revenues to be Retained by Buyer. Subject to the last sentence of paragraph (a) of Section 4.16 hereof, Buyer shall be entitled to retain 100% of the following categories of SVRX Royalties collected by Buyer:

    1. fees attributable to stand-alone contracts for maintenance and support of SVRX products listed under Item VI of Schedule 1.1(a) hereof;
    2. source code right to use fees under existing SVRX Licenses from the licensing of additional CPU's and from the distribution by Buyer of additional source code copies;
    3. source code right to use fees attributable to new SVRX licenses approved by Seller pursuant to Section 4.16(b) hereof; and
    4. royalties attributable to the distribution by Buyer and its distributors of binary copes of SVRX products, to the extent such copies are made by or for Buyer pursuant to Buyer's own licenses from Seller acquired before the Closing Date through Software Agreement No. SOFT-000302 and Sublicensing Agreement No. SUB-000302A.

    (f) Monthly Reports. Within one (1) calendar month following each calendar month in which SVRX Royalties [and royalties from Royalty-Bearing Products as contemplated in Schedule1.2(b) hereof] are received by Buyer, Buyer shall provide to Seller, in electronic file format, a report detailing all such royalties. Such monthly reports shall be separately broken down by revenue type (i.e. source code right to use fees, gross and net binary per copy fees, and support fees), by product, by customer, by quarterly period by which distribution occurs, and by country (if provided by customer) of distribution. Each such report shall also detail, with respect to the revenues reported, any third party payments attributable to such revenues, broken down by the identity of such third parties and the applicable payments to each. Buyer shall provide Seller with a single point of contact to discuss specific additional revenue and unit information (by customer) which, in Seller's judgment, are appropriate to supplement such monthly reports. Buyer shall also provide to Seller, on a monthly basis, a report that reconciles monthly revenues reported (and accounts receivable) to cash remittances actually made to Seller by Buyer. --
  6. In Section 1.4, line 8 is amended to read as follows:
    -- in the loss or diminution thereof provided, however, that Seller shall, as soon as practicable after the Closing Date and at its own expense, --
  7. In Section 1.6, lines 1-2 are amended to read as follows:
    -- 1.6 Seller's Licenses to Assets. Concurrent with the Closing, Buyer and Seller shall enter into a license agreement providing Seller with a royalty free, perpetual ---
  8. In Section 4.13:
    1. In the first paragraph, lines 5-6 are amended to read as follows:
      -- is comparable to that offered by Seller. The Benefits Package --
    2. The following new paragraphs are added at the end of the section:

      -- For purposes of this Section 4.13, the term "Type 1 employee" means a person who (1) as of the effective date of this Agreement was employed by Seller in any technical, business or financial (but not sales) capacity in Seller's Operating System Division in Florham Park, New Jersey, Provo, Utah or San Jose, California or otherwise in connection with the Business and/or the Assets and (2) whose employment with Seller thereafter terminates under circumstances under which such employee is given severance benefits from Seller including payment ("Severance Payment") calculated for a prescribed interval ("Severance Period").

      Buyer agrees that it will not knowingly offer employment to, or offer to hire as a contractor, any Type 1 employee until the Severance Period for such employee is completed.

      In the event that for any reason Buyer offers employment to, or offers to hire as a contractor, any such employee before the end of the period contemplated in the preceding sentence, Buyer shall remit to Seller a prorated portion of such Severance Payment applicable to the period between February 1, 1996 and the date of such offer. Such remittance shall be made to Seller within ten (10) days after such employee commences work on behalf of Buyer.

      Seller agrees that prior to February 1, 1996, it will provide to Buyer a list of persons who are Type 1 employees.

      Notwithstanding the above and except for normal attribution of previously hired employees, Buyer agrees not to hire any Type 1 employees for a period of 150 days from February 1, 1996. If Buyer does then Buyer will remit to Seller the full Severance Payment made to such Type 1 employees. --

  9. In Section 4.16, paragraph (a):
    1. The second sentence ("Within 45 days ... preceding quarter") is amended to read as follows:
      -- Within one (1) calendar month following each calendar month in which SVRX royalties (and royalties from Royalty-Bearing Products) are received by Buyer [except for those SVRX Royalties to be retained in their entirety by Buyer pursuant to paragraph (e) of Section 1.2 hereof] Buyer shall remit 100% of all such royalties to Seller or Seller's assignee. Buyer shall also provide to Seller, within six (6) days following the calendar month in which such royalties are received, and estimate of the total amount of such royalties. --
    2. In the last sentence ("In consideration ... SVRX Royalties") the following is added at the end before the period:
      -- together with a remittance sufficient to cover applicable third party payments, (if any) which are attributable to distributions giving rise to such SVRX Royalties (and royalties from Royalty-Bearing Products) and for which Buyer has assumed Seller's obligation of payment to such third party. --
  10. In Section 4.16, paragraph (b), the last sentence ("Buyer shall not ... Merged Product") is amended to read as follows:
    -- Notwithstanding the foregoing, Buyer shall have the right to enter into amendments of the SVRX Licenses (i) as may be incidentally involved through its rights to sell and license UnixWare software or the Merged Product [as such latter term is defined in a separate Operating Agreement between the parties to be effective as of the Closing Date, a copy of which is attached hereto as Exhibit 5.1(c)], or future versions of the Merged Product, or (ii) to allow a licensee under a particular SVRX License to use the source code of the relevant SVRX product(s) on additional CPU's or to receive an additional distribution, from Buyer, of such source code. In addition, Buyer shall not, and shall have no right to, enter into new SVRX Licenses except in the situation specified in (i) of the preceding sentence or as otherwise approved in writing in advance by Seller on a case by case basis. --
  11. In Schedule 1.1(a):
    1. In Item I:
      1. each occurrence of "UNIX" and "UnixWare" is changed to read
        -- UNIX, UnixWare and Auxiliary Products --.
      2. line 3, before "technical" the word "appropriate" is added.
      3. line 5, before "engineering" the word "appropriate" is deleted.
      4. in the UNIX Source Code Products listing, the title is changed to "UNIX and UnixWare Source Code Products" and item D is amended to read as follows:
        -- The following foreign versions of UnixWare software:
        UnixWare 1.0 French
        UnixWare 1.0 German
        UnixWare 1.0 Italian
        UnixWare 1.0 Spanish

        UnixWare 1.1 French
        UnixWare 1.1 German
        UnixWare 1.1 Italian
        UnixWare 1.1 Spanish
        UnixWare 1.1 Japanese
        UnixWare 1.1 Chinese

        UnixWare 2.01 French
        UnixWare 2.01 German
        UnixWare 2.01 Italian
        UnixWare 2.01 Spanish
        UnixWare 2.01 Japanese
      5. in the Products Under Development listing, the following is added to the end:
        -- F. Amadeus Software --
      6. (vi) the following new listing is inserted between the Products Under Development listing and the Other Technology listing:
        -- Auxiliary Products
        [as listed in Attachment 1 to this Schedule I.1(a)] --
    2. The following is added at the end of Item III:
      -- N. Agreements for development and licensing of Amadeus Software. --
    3. Item IV is changed to read:
      -- All master copies of UNIX, UnixWare and Auxiliary Software owned by Seller, except as retained by Seller in connection with seller's licenses specified in Section 1.6 hereof. --
    4. In Item VI:
      1. The first line is amended in its entirety to read as follows:
        -- All contracts relating to the SVRX Licenses and Auxiliary Product Licenses (collectively "SVRX Licenses") listed below: --
      2. The following is added to the list of SVR4 Licenses:
        -- Auxiliary Products --
  12. In Schedule I.1(b), Item VII is amended to read as follows:
    -- VII. All accounts-receivable or rights to payment concerning the Assets arising prior to the Closing Date, subject to appropriate payments to Buyer in several situations involving (a) prepayments received by Seller prior to the Closing Date under its customer agreements which cover orders for licenses to and/or support for UnixWare products that remain unfulfilled as of the Closing Date, or (b) any other rights to payments which accrued to Seller prior to the Closing Date under such agreements for such unfulfilled orders for UnixWare Products. Such situations are describe in Attachment 1 to this Schedule I.1(b). The parties agree to adapt more detailed procedures, where appropriate, to deal with such payments in each of such situations within ninety (90) days after the Closing Date.
  13. In Schedule 1.2(b), paragraph (b), the first sentence is amended to read as follows:
    -- (b) Amount of Royalties. Attachment 1 to this Schedule 1.2(b) represents Seller's annual forecast, as of the Closing Date, of the potential estimated market for units of Unix System V, UnixWare, Eiger, MXU and White Box software [the "Plan" or "Unit Plan"]. --
  14. In Exhibit 5.1(c), paragraph (b) is rewritten in its entirety as follows:
    -- Commencing November 1, 1995, Seller shall be responsible for bearing a certain amount of the reasonable, auditable and fully burdened costs incurred on a combined basis by Buyer and Seller for the completion of the GA version of the Eiger product, as follows:
    1. 100% of such costs incurred by SELLER from November 1, 1995 up to the Closing Date (estimated to be about $2,600,000);
    2. 50% of the first $5,000,000 of such costs incurred by both Companies after the Closing Date;
    3. 25% of the next $10,000,000 of such costs incurred by both companies after the Closing Date.
    Buyer and Seller will separately maintain records of such costs incurred. On a calendar month basis after the Closing Date, Buyer and Seller will exchange information as to such development costs incurred in that month. Each party ("first party") will render payment to the other party for any amounts such first party is responsible for which are in excess of all amounts such first party has incurred. Each such payment shall be remitted by such first party within thirty (30) days after receipt from the other party of an invoice for such excess amount.
  15. Attachments A, B and C to this Amendment No. 1 are incorporated as Attachment 1 to Schedule 1.1(a), Attachment 1 to Schedule 1.1(b) and Attachment 1 to Schedule 1.2(b), respectively.

All other terms and conditions of the Agreement shall remain in full force and effect.

The parties have executed this Amendment No. 1 through their duly authorized representatives on the respective dates indicated below. The effective date of this Amendment No. 1 shall be the later of such respective dates.

THE SANTA CRUZ OPERATION, INC. NOVELL, INC.
By: (signature) By: (signature)
Printed Name: Alok Mohan Printed Name: R. Duff Thompson
Title: Chief Executive Officer Title: Senior Vice President - Corporate Development
Date: December 6, 1995 Date: December 6, 1995


ATTACHMENT A
Listing of Auxiliary Products

Open Network Computing+
386 Implementation of UNIX System V Release 4
Multi-National Language Supplement
386 Implementation of UNIX System V Release 4
Multi-National Language Supplement
3B2 Implementation of UNIX System V Release 4
Multi-National Language Supplement
Application Source Verifier Release 2.0
Artus
C Compilation System for Motorola 68000
C Optimized Compilation System for UNIX System V
386/486
C++ Documents
C++ Language System Release 2.1
C++ Language System Release 3.0 and 3.0.1
C++ Language System Release 3.0.2
C++ Language System Release 3.0.3
C++ Object Interface Library Release 1.1
C++ Standard Components Release 2.0
C++ Standard Components Release 2.0.1
C++ Standard Components Release 3.0
C++ Standard Libraries Release 2.0
C++ Standard Libraries Release 3.0
C++ Standard Library Extension Release 1.0
C++LS 2.0
C++Translator
CFRONT Release 1.2
Chinese System Messages Implementation of UNIX
System V Release 4 System Messages
Distributed Manager/Framework & Host Manager
Release 1.0
Distributed Manager/Framework & Host Manager
Technology Licensing Program 1
Distributed Host Manager/Framework & Host Manager U.I.
Early Access
Distributed Manager/Print Manager Release 1.0
Distributed Manager/Print Manager Technology
Licensing Program 1
Distributed Manager/Print Manager Technology
Licensing Program 1
Distributed Manager/Print Manager U.I Early
Access
DM/SM-TLP1
Documentation Reproduction Provision - Unix System
V Handbook
Documentation Reproduction Provision - UNIX System
V Programming Books
Documentation Reproduction Provision - UNIX System
V Reference Books
Documentation Reproduction Provision - UNIX System
V User_s and Administrator_s Books
European Supplement Release 3.2
European System Messages Release 3.2
French Application Environment1.0/3b2
French System Messages Implementation of UNIX
System V Release 4 System Messages
French System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
German Application Environment
German System Messages Implementation of UNIX
System V Release 4 System Messages
German System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
Hindi System Messages Implementation of UNIX
System V Release 4 System Messages
Intel386 Microprocessor Implementation of VERITAS
File System (VxFS) Release 1.0
Intel386 Microprocessor Implementation of VERITAS
Visual Administrator Release 1.01
Intel386 Microprocessor Implementation of VERITAS
Volume Manager (VxVM) Release 1.01
Intel386 Microprocessor Implementation of VERITAS
Volume Manager (VxVM) Release 1.1
Intel386 Microprocessor Implementation of VERITAS
Volume Manager (VxVM) Release 1.1.1
Italian System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
Italian System Messages Implementation of UNIX
System V Release 4 System Messages
Japanese Application Environment I/O Rel 1.0
Japanese Application Environment Release 2.0
Japanese Application Environment Release 2.0
Japanese Application Environment Release 2.1
Japanese Environment for SVR4.2
Japanese Extension Implementation of UNIX System V,
Release 4.2
Japanese I/O Release 1.0
Japanese System Messages Implementation of UNIX
System V Release 4 System Messages
Japanese System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
Japanese System Messages Release 3.2
Korean System Messages Implementation of UNIX
System V Release 4 System Messages
Optimizing C Compiler for Intel, Release 3.0
Spanish System Messages Implementation of UNIX
System V Release 4 System Messages
Spanish System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
System V Release 2.0 Machine Readable
Documentation
System V Release 3.0 Documentation Reproduction
Provision
System V Release 3.1 Documentation Reproduction
Provision
System V Release 3.2 Documentation Reproduction
Provision
System V Verification Suite Release 2
System V Verification Suite Release 3
System V Verification Suite Release 4
UNIX System V French System Messages Release 3.2
UNIX System V German System Messages Release 3.2
UNIX System V Release 1.0 for 3B2 Multi-National
Language Supplement
UNIX System V Release 1.0 for Intel 386 Multi-
National Language Supplement
UNIX System V Release 3.2 386 Doc. Reproduction
Provision
UNIX System V Release 3.2 for Intel 386 Multi-
National Language Supplement
UNIX System V Release 3.2 for Intel 386 Multi-
National Language Supplement
UNIX System V Release 3.2 Multi-National Language
Supplement
UNIX System V Release 4 European Language
Supplement
UNIX System V Release 4 STREAMS-Based Korean
Input/Output Subsystem
UNIX System V Release 4.0 386 Doc. Reproduction
Provision
UNIX System V Release 4.0 3B2 Doc. Reproduction
Provision
UNIX System V Release 4.0 i860 Doc. Reproduction
Provision
UNIX System V Release 4.2 European Language
Supplement, Version 1
UNIX System V Release 4.2 MP Japanese Extension
UNIX Time Sharing Operating System Phototypesetter
and C Compiler Edition # 7
USL Standard C Development Environment for the 860
Implementation of UNIX System V Release 4.0
Veritas File System (VxFS) Release 1.3 for UNIX
System V Release 4.2
XWIN Graphical Windowing System Release 3.0
XWIN Graphical Windowing System Release 4.0
XWIN Graphical Windowing System Release 4.0i


ATTACHMENT B
Treatment of Certain Prepayments and Rights
to Payment Specified in Item VII of Schedule 1.1(b)

Situation 1 - where the Seller customer contract [other than in Situation 3] involves a prepayment and/or an accrued right to payment (collectively "prepayment") that applies to a mix of UnixWare and non-UnixWare products.

Seller will send a notice requiring the customer to specify in writing (i) whether it wants any of the prepayment to be allocated to the UnixWare products and (ii) if so, how much of such prepayment should be so allocated. The notice shall state that if the customer does not respond within 30 days after the date of transmission by Seller, none of such prepayment shall apply to the UnixWare products. The notice shall also specify that any future prepayment under the contract in question will not apply to UnixWare products, and that orders for UnixWare products after the prepayment allocation is used up must be directed to Buyer.

If the customer elects a UnixWare allocation of $100,000 or more, or makes a UnixWare allocation of an unspecified amount, Buyer will fulfill all of such customer's orders of UnixWare products against the unused prepayment allocation (or prepayment, if no allocation is made). Buyer will receive from Seller a payment reflecting a pro-rated portion of such prepayment allocation (or such prepayment). Such payment shall be deemed to be royalties received by Buyer for the UnixWare products in question.

If the customer allocates less than $100,000 of the prepayment to UnixWare products in response to such notice, Buyer will fulfill all of such customer's orders for UnixWare products against the prepayment and will received from Seller its actual and reasonable costs (including third party royalties assumed by Buyer under this Agreement) of such fulfillment plus a markup of five percent (5%).

Situation 2 - where Seller's customer's contract (other than in Situation 3) calls for prepayments applicable to UnixWare products only.

If the prepayment is $100,000 or more, the roles of Seller and Buyer set forth in Situation 1 for an allocation of $100,000 or more shall apply.

If the prepayment is less than $100,000, the roles of Seller and Buyer set forth in Situation 1 for an allocation of less than $100,000 shall apply.

Situation 3 - Seller's customer contracts with Siemens-Rolm, TMAC, Microport, Tatung and Sysorex.

These contracts involve prepayments that may apply either to a mix of UnixWare and non- UnixWare products (TMAC and Sysorex) or to UnixWare products alone. Irrespective of the type of allocation, the roles of Seller and Buyer set forth for a UnixWare allocation of $100,000 or greater shall apply.

For a period of up to sixty (60) days after the Closing Date Buyer and Seller will cooperate to attempt to identify additional ones of Seller's customers who have prepayments which could be allocated to UnixWare products in the amount of $100,000 or more. For each of such additional customers so identified, the roles of Buyer and Seller shall be as mutually agreed.


ATTACHMENT C
Unit Plan

Table A below represents Seller's forecast of the rates of shipments, through all appropriate channels, of units of the following offerings of Unix System V, UnixWare, Eiger, MXU and White Box software:

  • Single user and multi-user versions
  • Upgrades to existing units
  • Processor upgrades
  • Other components, specifically
    • Software developers kit
    • OnLine Data Manager
    • Locus Merge
  • All Units which Buyer receives payment for, directly or indirectly

Table A
Units (in thousands)

1995 1996 1997 1998 1999 2000 2001 2002
SCO Shipments 216.40 216.40 216.40 216.40 216.40 216.40 216.40 216.40
UnixWare binary - indirect 57.50 99.10 131.50 107.00 39.20 0.00 0.00 0.00
UnixWare - OEM 10.10 35.50 55.60 68.10 68.10 49.30 34.50 0.00
MXU Binary - indirect 0.00 0.00 43.80 160.40 282.60 334.40 305.30 201.30
MXU - OEM 0.00 0.00 13.90 45.40 91.90 148.00 186.50 233.20
WBOS Binary - indirect 0.00 0.00 0.00 0.00 70.60 222.90 457.90 805.40
WBOS - OEM 0.00 0.00 0.00 0.00 10.20 49.30 124.40 233.20
SVRX converted units 0.00 33.80 69.80 108.40 149.50 193.30 239.90 289.60
SVRX remaining 1072.00 1091.80 1112.00 1132.60 1153.60 1174.90 1196.60 1218.80
Total Unix Software Units 1356.00 1476.60 1643.00 1838.30 2082.10 2388.50 2761.30 3197.90


  


AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT | 30 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Blake Stowell on the judge's decision
Authored by: Anonymous on Monday, December 08 2003 @ 07:43 AM EST
PJ, I just posted a link with a very interesting quote by Blake Stowell on the
previous story.

[ Reply to This | # ]

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
Authored by: moogy on Monday, December 08 2003 @ 08:10 AM EST
This appears to be the amendments reported here:
http://biz.yahoo.com/e/031119/scox8-k.html

What I don't understand is why SCO is reporting to
the SEC in Nov. 2003, amendments for SCO/Novell
agreements made in 1995.


---
Mike Tuxford - irc.fdfnet.net #Groklaw
First they ignore you, then they laugh at you,
then they fight you, then you win. --Gandhi

[ Reply to This | # ]

Novell retained rights
Authored by: DrStupid on Monday, December 08 2003 @ 08:12 AM EST
Note:

"Seller and Buyer agree that the license that Seller is entitled to
exercise after Closing pursuant to Section 1.6 hereof is a right not sold to
Buyer and as such is a right retained by Seller."

i.e. the so-called "license back" of rights in UnixWare, whereby
Novell has the right to use, modify and distribute UW IP in its internal
business and in bundled products, is a right retained by Novell - that means
never sold to TSG. As TSG never owned this right, it would appear that TSG
cannot revoke or withdraw it.

The exact rights that Novell ended up retaining are detailed in the Techology
License Agreement posted previously on Groklaw.

[ Reply to This | # ]

OFF TOPIC: Entering into Computer Law?
Authored by: jmccorm on Monday, December 08 2003 @ 08:34 AM EST
Pamela,

I have to say that you and your site have been an inspiration to me. Thank you
very much for sharing your legal insight with us! You are WONDERFUL!

I am interested in computer law, and I had some questions. I am a highly skilled
31 year old UNIX systems administrator with a bachelor's degree. I make a
steady income approaching six digits. I've always said that I've wanted my
career to stay on a technical track, but it would probably be more precise to
say that I instead wanted to avoid a management track. (My boss isn't an expert
on these matters, but he says that I really SHOULD be a lawyer!)

I am interested in the area of law where it intersects with computers. It seems
chaotic and still a bit of a frontier. Challenge and chaos are job conditions
that interest me. But I'm uncertain on a number of issues.

This is probably my most important question. How does one make the leap into the
legal field? Is it a matter of applying at a law school? Becoming a technical
resource or researcher for a law firm? What are the avenues of approach? And are
there paths that would allow me to preserve something close to my existing
income during the process?

How long would the process take (and depending on what I want to become)? Of
course, I'm thinking of a position as a lawyer. But what about a paralegal,
like yourself? I can see that you're no slouch! Certainly, you are well
compensated? What are my options for the different positions in the legal
world?

How plausable is it that I could be involved in the intersection of law and
computers on the side of 'good'? I know that the world of law probably
doesn't make a distinction between good and evil (more rights vs no rights, or
lawful vs unlawful), but I'd rather be doing something more than chasing down
frivolous infringers of copyright for a large corporate master, or squelching
critics. Defending individuals, perhaps with novel defenses, would be
interesting, but I have a feeling that Joe Random isn't Joe Cash as well. Is it
tough to be a 'good lawyer', or maybe rephrased correctly, is it tough to be a
'good lawyer' and have some money?

I'm only 31, but am I too old to get onto law (be it because my mind isn't as
young, or because I would secretly be discriminated against)?

Are there any resources that you can point us to which would be helpful? Or are
you interested in creating a FAQ for those of us who are interested in pursuing
the legal profession?

I hope that you can take the time to answer some of these questions (I know that
I can't be the only one!). I'd really like to build a career path for myself
that I'm fairly certain won't end up in India. ;)

[ Reply to This | # ]

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
Authored by: rakaz on Monday, December 08 2003 @ 08:59 AM EST

I think the important question relating to these new documents is "What did The Santa Cruz Operation exactly buy from Novell?".

The original Asset purchase schedule stated:

UNIX Source Code Products

A. UnixWare 2.0 as described in the UnixWare 2.0 Licensing Schedule and those products listed as "prior" products on such schedule (includes source code updates where appropriate - i.e. UnixWare product family).

B. UNIX SVR4.1 ES as described in the UNIX SVR4.1 ES Licensing Schedule and those products listed as "prior" products on such schedule.

C. UNIX SVR4.0 MP as described in the UNIX SVR4.0 MP Licensing Schedule and those products listed as "prior" products on such schedule.

D. Ancillary SVRx Products (a final list of which shall be developed by the partied prior to the Closing)

Amendment No.1 changes this in a very important way:

UNIX and UnixWare Source Code Products

A. UnixWare 2.0 as described in the UnixWare 2.0 Licensing Schedule and those products listed as "prior" products on such schedule (includes source code updates where appropriate - i.e. UnixWare product family).

B. UNIX SVR4.1 ES as described in the UNIX SVR4.1 ES Licensing Schedule and those products listed as "prior" products on such schedule.

C. UNIX SVR4.0 MP as described in the UNIX SVR4.0 MP Licensing Schedule and those products listed as "prior" products on such schedule.

D. The following foreign versions of UnixWare software: UnixWare 1.0 French, UnixWare 1.0 German, UnixWare 1.0 Italian, UnixWare 1.0 Spanish, UnixWare 1.1 French, UnixWare 1.1 German, UnixWare 1.1 Italian, UnixWare 1.1 Spanish, UnixWare 1.1 Japanese, UnixWare 1.1 Chinese, UnixWare 2.01 French, UnixWare 2.01 German, UnixWare 2.01 Italian, UnixWare 2.01 Spanish, UnixWare 2.01 Japanese

It appears that according to this amendment Santa Cruz Operation did not purchase the rights to the Ancillary SVRx Products. So, The SCO Group only bought SVR4.0, SVR 4.1 and UnixWare and not older versions of System V.

Also, older products such as 32V are not even mentioned and it looks like they are also not part of this contract. So, who gave The SCO Group the right to publish 32V these under a BSD style license?

[ Reply to This | # ]

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
Authored by: Anonymous on Monday, December 08 2003 @ 11:30 AM EST
The thing that strikes me is that Schedule 1.1(a) of the original was never
interpreted to convey any of the copyrights to SVRX - until this year.

That's because Schedule 1.1(b) specifically excluded all of the copyrights.

The new sections e and f that were added to section 1.2 here in Amendment 1
finally give Old SCO some very limited SVRX business entitlements, but imposes a
monthly reporting regime to keep Novell in control. Old SCO is allowed to keep
some of the SVRX royalties for additional CPU licensing, source code right to
use fees, and maintenance and support of the SVRX contracts. They also can keep
royalties earned from their own pre-existing UNIX source code license. Novell's
rights under section 4.16 remain essentially unchanged. Novell's Section 4.16
control of the licenses remains intact.

There was always a seperate attachment with the heading "Selling
Copyrights in Product(s) of the Business" that did not include any System
V OS copyrights, but did include the 5th, 6th, 7th, and 32V Operating Systems -
which surely were not contained or marketed in any 1995 Novell products.

When Amendment 2 B refers to SCO's SVRX rights, those would be the ones we've
already seen, plus these very limited new ones decribed here for the first time.
What copyrights were for sale, and which ones do they need to acquire this new
SVRX royalty business? Since Amendment 2 is the Magna Carta of SCO's copyrights
what are they? Why does Amendment 2 C make SCO's new rights terminable?

Copyrights like any other property right can be shared. We see here that Novell
retains a perpetual worldwide right to use all of the technology (trade secrets,
copyrights, and patents) that SCO acquired. These were never really strictly
speaking sold to Buyer or licensed-back. The non-compete clause was with
Tarantella, not Caldera. Novell signed the three-way contract with IBM too, and
waived any SCO attempt to terminate the AIX license.

I just can't see a clear-cut claim that Amendment 2 really gave SCO any claim
to the System V copyrights.

---
Each SOFTWARE PRODUCT shall become subject to this agreement on acceptance by
AT&T of a supplement executed by LICENSEE that indentifies such SOFTWARE
PRODUCT

[ Reply to This | # ]

What did Santa Cruz Operation buy from Novell?
Authored by: rakaz on Monday, December 08 2003 @ 02:58 PM EST

The SCO Group bought the UNIX business from Santa Cruz Operation which it bought earlier from Novell. To determine what rights the The SCO Group has in respect to UNIX it is important to look at what Santa Cruz Operation bought from Novell.

To begin we have to look at the Asset Purchase Agreement between the Santa Cruz Operation and Novell. Right at the beginning, in the recitals it defines what “the Business” is. This was later amended by Amendment 1 to the Asset Purchase Agreement and should read:

A. Seller is engaged in the business of developing a line of software products currently known as Unix and UnixWare, the sale of binary and source code licenses to various versions of Unix and UnixWare, the support of such products and the sale of other products ("Auxiliary Products") which are directly related to UNIX and UnixWare (collectively, the "Business").

Right now, this isn’t important yet, but it will be referenced to later. So, for now, just keep this section in mind.

Next thing we are going to look at is section 1.1 (a), which reads:

Purchase and Sale of Assets. On the terms and subject to the conditions set forth in this Agreement, Seller will sell, convey, transfer, assign and deliver to Buyer and Buyer will purchase and acquire from Seller on the Closing Date (as defined in Section 1.7), all of Seller's right, title and interest in and to the assets and properties of Seller relating to the Business (collectively the "Assets") identified on Section 1.1 (a) hereto. Notwithstanding the foregoing, the Assets to be so purchased shall not include those assets (the "Excluded Assets") set forth on Schedule 1.1 (b)

This section is very important because it tells us where we can find the actual list of properties and assets that Novell is selling the SCO. Everything listed on Schedule 1.1(a) is sold to SCO, everything listed on Schedule 1.1(b) is kept by Novell.

Section 2.10 is also very important, because it tells us where we can find a list of all rights to patents, trademarks and copyrights that Novell owns. This doesn’t mean that everything in this list will be sold to SCO. It’s just a list of everything that Novell owns. It is important to have such a list because SCO needed to know that Novell owned the rights in case of some other company claiming copyright to something that SCO bought or licensed from Novell. In such a case SCO could simply point to this Agreement and say: “Don’t blame us, Novell told us they owned this.”.

To the knowledge of Seller, as of the date hereof, Seller owns, co-owns or is licensed or otherwise entitled to use rights to all patents, trademarks, trade names, service marks, copyrights, mask work rights, trade secret rights, and other intellectual property rights and any applications therefor, and all maskworks, net lists, schematics, technology, source code, know-how, computer software programs and all other tangible information or material, that are used in the Business as currently conducted (the "Seller Intellectual Property Rights"). The Seller Disclosure Schedule lists, as of the date hereof, (i) all patents, registered copyrights, trademarks, service marks, mask work rights, and any applications therefor, included in the Seller Intellectual Property Rights;

So, to find out what Novell could have sold to SCO we need to look at the Seller Disclosure Schedule, which states that “Attachment E to this Schedule contains a listing of Seller's copyright registrations covering product(s) of the Business.”.

Attachment E contains a fairly long list of all items to which Novell claimed copyright. Of course this list only contains items related to “the Business” as defined in the recitals. Other copyrights owned by Novell are not on this list.

This list consists mostly of manuals and guides, for example: UNIX(R) SYSTEM V/386: Programmer’s Guide and UNIX(R) SYSTEM V RELEASE 3.2: User's Guide. The list also contains five software products to which Novell claimed copyright:

Operating System Utility Programs - TXu 301 868
UNIX(R) Operating System Edition 5 and Instruction Manual - TXu 510 028
UNIX(R) Operating System Edition 6 and Instruction Manual - TXu 511 236
UNIX(R) Operating System Edition 32V and Instruction Manual - TXu 516 704
UNIX(R) Operating System Edition 7 and Instruction Manual - TXu 516 705

The next step I am going to make is to look at the Schedule 1.1(a) and (b) to determine what SCO actually bought from Novell. Again, this list is fairly long and contains many different products. Section I of Schedule 1.1(a) was amended by Amendment 1 to the Asset Purchase Agreement and should read:

All rights and ownership of UNIX, UnixWare and Auxiliary Products, including but not limited to all versions of UNIX, UnixWare and Auxiliary Products and all copies of UNIX, UnixWare and Auxiliary Products (including revisions and updates in process), and all appropriate technical, design, development, installation, operation and maintenance information concerning UNIX, UnixWare and Auxiliary Products, including source code, source documentation, source listings and annotation, engineering, notebooks, test data and test results, as well as all reference manuals and support materials normally distributed by Seller to end-users and potential end-users in connection with the distribution of UNIX, UnixWare and Auxiliary Products, such assets to include without limitation the following:

So, it appears SCO buys all rights and ownership to certain products. This is also important because this does not seem to include the copyrights to the source code. I think, it only includes the rights to use the source code. This is very important because the products that Novell sold also contained source code that they did not own themselves, but was licensed from other companies. They bought the product, everything they needed to market the product and the right market the product. They did not buy the copyrights to the source code.

Section V A of Schedule 1.1(b) was amended by Amendment 2 to the Asset Purchase Agreement and should read:

A. All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. However, in no event shall Novell be liable to SCO for any claim brought by any third party pertaining to said copyrights and trademarks.

It basically says that Novell will keep all copyrights and trademarks, except for those which are needed by SCO to “exercise its rights with respect to the acquisition of UNIX and UnixWare technologies”.

This is fairly vague. First of all what are the technologies they are referring to? Once again we are going to look at Schedule 1.1(a) I. Apart from the list of existing products, a list of products in development and auxiliary products, it also contains a list of other technologies. If one part of section I is marked as ‘other technologies’ it would be safe to assume that the other parts of the section I are also technologies.

Secondly, exactly which copyrights are sold to SCO? Only copyrights that are needed by SCO to ‘exercise its rights’. The next question would be ‘which rights are we talking about?’. Once again we need to look at schedule 1.1(a):

All rights and ownership of UNIX, UnixWare and Auxiliary Products…

I am not a layer, but I think it is safe to assume that SCO would need the copyrights to the products listed in section I to ‘exercise all rights’.

Once again we need to look at which copyrights are bought by SCO. Well, it is not that difficult actually. The Attachment E already defines all the copyrights Novell owns that are related to “Product(s) of Business”. Unfortunately for SCO, that list only contains five software products:

Operating System Utility Programs - TXu 301 868
UNIX(R) Operating System Edition 5 and Instruction Manual - TXu 510 028
UNIX(R) Operating System Edition 6 and Instruction Manual - TXu 511 236
UNIX(R) Operating System Edition 32V and Instruction Manual - TXu 516 704
UNIX(R) Operating System Edition 7 and Instruction Manual - TXu 516 705

So, does SCO own the copyright to SVR4? From what I can tell (and once again, IANAL and I may be completely wrong here) it does not. It does own the copyrights to some older versions of UNIX, but not to the more recent versions.

[ Reply to This | # ]

OT - You just have to love Darl...
Authored by: pooky on Monday, December 08 2003 @ 04:15 PM EST

Do a search up on EDGAR sometime at sec.gov for "caldera". They have tons of filings littered with statements like this one:

CALDERA SYSTEMS, INC.

Caldera Systems, Inc. (Nasdaq: CALD) is the "Unifying UNIX with Linux for Business" technology leader in developing and marketing successful Linux-based business solutions, including its award-winning OpenLinux, NetWare for Linux, Linux technical training, certification and support--with free 30-day phone support and on-site consulting. Caldera OpenLearning Providers offer exceptional distribution-neutral Linux training and certification based on Linux Professional Institute (LPI(TM)) certification

Caldera was FORMED to advance Linux as an operating system for businesses. See here from same document:

Caldera, Inc. was co-founded in 1994 by Ransom Love. Caldera Systems, Inc. was founded by Ransom Love in 1998 to develop Linux-based business solutions. Based in Orem, UT, Caldera Systems has offices and 1000+ resellers worldwide. For more information, see www.calderasystems.com or in the US call 888-GO-Linux (888-465-4689).

C'mon Darl give it up, IBM will hang you with this stuff.

-pooky

PS: Here's the link:
http://www.sec.gov/Archives/edgar/data/1102542/000095013401000995/d8402 3e425.txt

---
IANAL, etc...

[ Reply to This | # ]

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