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April 1996 Amendment - Exhibit 13 - as text
Saturday, October 23 2004 @ 03:26 PM EDT

Here is Exhibit 13 as text, the April 1996 Amendment between IBM, Novell, and Novell on behalf of Santa Cruz Operation. It was attached as an exhibit to Michael J. DeFazio's Declaration, which is discussed here.

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

INTERNATIONAL BUSINESS MACHINES CORPORATION
THE SANTA CRUZ OPERATION, INC.

Amendment to Software Agreement SOFT-00015 as amended,
Sublicensing Agreement SUB-00015A as amended,
Software Agreement SOFT-00015 Supplement No. 170 as amended,
and Substitution Agreement XFER-00015B

This amendment ("Amendment") is between International Business Machines Corporation, a New York corporation, with a place of business at Old Orchard Road, Armonk, New York 10504 ("IBM") and Novell, Inc., a Delaware corporation, with a place of business at 2180 Fortune Drive, San Jose, California 95131 ("Novell") on behalf of itself and The Santa Cruz Operation, Inc. ("SCO"). This Amendment becomes effective when executed by an authorized representative of Novell, on behalf of SCO, and IBM (the "Effective Date").

RECITALS

AT&T Technologies, Inc. ("AT&T") and IBM entered into various software license agreements concerning the Software Product: UNIX System V, Release 3.2, which are Software Agreement SOFT-00015 as amended, Sublicensing Agreement SUB-00015A as amended, Software Agreement SOFT-00015 Supplement No. 170 as amended (or any other Supplements that pertain to prior versions or releases of the Software Product), and Substitution Agreement XFER-00015B (the "Related Agreements"). Novell acquired AT&T's rights under the Related Agreements. Except for all right, title and interest to the Software Product royalties (less an administration fee to SCO for administering the collection of such royalties), SCO purchased the Related Agreements in an Asset Purchase Agreement between Novell and SCO dated September 19, 1995 (the "SCO Agreement"). In the SCO Agreement, Novell has the right to amend the Related Agreements on behalf of SCO under certain circumstances applicable in this instance. In an effort to simplify the royalty requirements contained in the Related Agreements, the following modifications to the terms and conditions of the Related Agreements have been mutually agreed to by both parties. Capitalized terms in this Agreement will have the meanings assigned to them in this Amendment. All capitalized terms not defined herein will have the meanings assigned to them in the Related Agreements and such defined terms in the Related Agreements appear in all capitalized letters.

AMENDMENT

Novell, on behalf of SCO, and IBM agree as follows:

1. No Additional Royalty. Upon payment to SCO of the consideration in the section entitled "Consideration", IBM will have the irrevocable, fully paid-up, perpetual right to exercise all of its rights under the Related Agreements beginning January 1, 1996 at no additional royalty fee. However, if IBM requests delivery of additional copies of source code of the Software Product, IBM will pay the fees listed under Section 1(b) of Soft-00015 Supplement No. 170. Notwithstanding the above, the irrevocable nature of the above rights will in no way be construed to limit Novell'ls rights to enjoin or otherwise prohibit IBM from violating any and all of Novell's rights under this Amendment, the Related Agreements, or under general patent, copyright, or trademark law.

2. Relief of Section 2.05(b) and 2.05(c) of SUB-00015A. Section 2.05(b) and the second sentence of Section 2.05(c) will not apply to contractors to whom IBM has provided Software Products, provided that: (i) any use of such Software Products by such contractor is for Authorized Purposes in support of the contractor's distribution and support of Sublicensed Products; and (ii) if any such contractor is not a source code licensee of Novell or SCO for the relevant version of Software Product and previous releases, IBM will require such contractor to certify in writing to SCO, upon SCO's request, that any use by such contractor of such source code is as a contractor of IBM. For the purposes of this exemption, "Authorized Purpose" means making modifications to the Software Products, and furnishing such modifications to IBM and/or distribution of such modifications in Sublicensed Products form by the contractor to customers directly or through other Distributors, provided that such modifications are not for purposes of adaptation of Sublicensed Products to other system manufacturers' hardware systems and are solely to: (i) adapt the Sublicensed Products to support unique hardware features or devices (e.g. specialized graphics, adapters, or displays) intended for use in vertical applications; or (ii) provide temporary fixes to customers of the Sublicensed Product.

3. Customers. A customer to whom IBM provides a Software Product for use in support of the customer's use of the Sublicensed Product received from IBM directly or through IBM's Distributors shall be deemed to be a contractor of IBM if the customer's use of the Software Product otherwise complies with the requirements of paragraph 3 of the February 1, 1985 amendment to SOFT-00015 and provided that the customer has no right to distribute the Software Product.

4. Consideration. As consideration for the above modifications to the terms and conditions of the Related Agreements, IBM agrees to pay SCO a nonrefundable fee of $10,125,000 per the following payment schedule: $4,860,000 due on the Effective Date of this Amendment (net 30 days); and $5,265,000 due on January 1, 1997 (net 15 days).

5. Authority. Novell represents and warrants to IBM that it has the unrestricted right and authority to enter into and execute this Amendment on behalf of SCO.

6. Restrictions on fully paid up License. For a period of five years from January 1, 1996, the royalty relief described in Section 1 of this Amendment shall apply only to use or distribution of the Software Products and Sublicensed Products in the IBM operating system referred to currently as AIX, any prior version or releases of AIX and derivative or follow-on version to AIX on the Power or PowerPC or Power2 architecture or derivatives or follow-on architectures irrespective of the names of such versions. During such five year period, any IBM distribution of Software Products or Sublicensed Products not covered by the preceding sentence, shall be subject to a royalty pursuant to the Related Agreements, with such royalty to be calculated at the aggregate discount percentage (80% in the case of Sublicensed Products) in effect at the time of execution of this Amendment. After such five year period, the royalty relief described in Section I of this Amendment shall apply to any use or distribution of the Software Products or Sublicensed Products: provided that if the Software Product is distributed as AIX or follow-on versions to AIX, then such use or distribution shall be in accordance with the provisions of Section 2.05(b) and 2.05(c) of SUB-00015A, as amended herein. The second to last sentence of paragraph 9 of the February 1, 1985 amendment to SOFT-00015 is modified by deleting the words "and employees of Licensee shall not refer to the physical documents and materials comprising Software Products subject to this Agreement when they are developing any such products or services or providing any such service."

7. Notwithstanding anything to the contrary in the Related Agreements, with respect only to Software Products and Sublicensed Products to which the paid up rights in Section 1 apply: (a) Designated CPUs are not required to be listed in a Supplement to SOFT-00015, and IBM may copy such Software Products as replacements or additions to Designated CPUs without notice to, or consent of, Novell or SCO; and (b) Section V of SUB-00015A shall not apply to such Sublicensed Products.

8. Indemnification; Limitations on Liability. Subject to the limitations on liability below, Novell agrees to indemnify and hold harmless IBM and IBM Subsidiaries from and against any and all losses, liabilities, judgments, and costs incurred as a result of any alleged or actual Novell breach of Novell's representations and warranty in Section 5 of this Amendment. Novell's indemnification of IBM shall be limited to the amount paid by IBM to SCO under this Amendment. In addition, provided that IBM has paid full consideration in accordance with this Amendment, Novell's indemnification of IBM shall also include the amount of any additional royalties paid to SCO by IBM if IBM would not have been obligated to pay such additional royalties absent such breach. Novell will defend at its sole expense any suits or proceedings related to the above indemnification provided that IBM gives Novell prompt notice and control of any claim of which is learns. Novell will have the right to choose legal counsel and IBM will have the right to participate in the defense of any such claim, provided that Novell will not be responsible for indemnifying IBM for the cost of IBM's attorney's fees. In no event will Novell be liable for any indirect, special, punitive or consequential damages, lost revenues, or profits, date, or use incurred by IBM however caused, no matter what theory of liability, even if Novell has been advised of the possibility of such damages.

9. Except as modified herein, all other terms and conditions of the Related Agreements will remain in effect.

INTERNATIONAL BUSINESS
MACHINES

By: ____[signature]____
R.L. Lee
(Print of Type Name)
Manager, IPS Contract Services
(Title)
4/26/96
(Date)

NOVELL, INC., and on behalf of
THE SANTA CRUZ OPERATION, INC.

By: ____[signature]_____
James T. Sullivan
(Print or Type Name)
VP Worldwide OEM Sales
(Title)
26 April 1996
(Date)

NOVELL, INC.

BY: ____[signature]____
James T. Sullivan
(Print or Type Name)
VP Worldwide OEM Sales
(Title)
26 April 1996
(Date)


  


April 1996 Amendment - Exhibit 13 - as text | 85 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Re: April 1996 Amendment - Exhibit 13 - as text
Authored by: martimus on Saturday, October 23 2004 @ 03:40 PM EDT

I guess this is why TSCOG is whispering that they are going to amend their claims/complaint. They intimate refiling to attempt to go after IBM for Monterrey problems, but I don't think they will get anything there either. It is clear from all these depositions, TSCOGs original case is completely shot and they know it.

[ Reply to This | # ]

a curious question
Authored by: Anonymous on Saturday, October 23 2004 @ 03:40 PM EDT
Is there proof that SCO knows of this 'exhibit 13'?

[ Reply to This | # ]

Corrections here please
Authored by: WojtekPod on Saturday, October 23 2004 @ 03:41 PM EDT
if you find any mistakes.

Wojciech Podgórni

[ Reply to This | # ]

April 1996 Amendment - Exhibit 13 - as text
Authored by: John Hasler on Saturday, October 23 2004 @ 04:31 PM EDT
> Notwithstanding the above, the irrevocable nature of the
> above rights will in no way be construed to limit Novell's
> rights to enjoin or otherwise prohibit IBM from violating
> any and all of Novell's rights under this Amendment, the
> Related Agreements, or under general patent, copyright,
> or trademark law.

This clearly implies that Novell retained copyrights.

[ Reply to This | # ]

April 1996 Amendment - Exhibit 13 - as text
Authored by: John Hasler on Saturday, October 23 2004 @ 04:42 PM EDT
> The second to last sentence of paragraph 9 of the February
> 1, 1985 amendment to SOFT-00015 is modified by deleting
> the words

> "and employees of Licensee shall not refer to the physical
> documents and materials comprising Software Products
> subject to this Agreement when they are developing any
> such products or services or providing any such service."

This appears to say that IBM's Linux developers are free to look at the SysV
docs and source while working on Linux.

[ Reply to This | # ]

Official "The SCO Group" Positions
Authored by: Anonymous on Saturday, October 23 2004 @ 04:44 PM EDT
Main posts in this thread may only be made by senior managers or attorneys for "The SCO Group". Main posts must use the name and position of the poster at "The SCO Group". Main posters must post in their official capacity at "The SCO Group".

Sub-posts will also be allowed from non-"The SCO Group" employees or attorneys. Sub-posts from persons not connected with "The SCO Group" must be very polite, address other posters and the main poster with the honorific "Mr." or "Mrs." or "Ms.", as appropriate, use correct surnames, not call names or suggest or imply unethical or illegal conduct by "The SCO Group" or its employees or attorneys.

This thread requires an extremely high standard of conduct and even slightly marginal posts will be deleted.

P.J. says you must be on your very best behavior.

If you want to comment on this thread, please post under "O/T"

[ Reply to This | # ]

Differences between Amendment X (October 1996) and this Amendment April 26th 1996
Authored by: thorpie on Saturday, October 23 2004 @ 05:41 PM EDT

I am confused. Previous discussion on Amendment X has stated it was the amendment where IBM paid the $10,125,000. Amendment X is dated October 1996.

Now we have this amendment (Amendment ??) dated earlier that has the IBM payment of $10,125,000.

A couple of questions:

I cannot locate Amendment X, is it available anywhere?

Does Amendment X overwrite this Amendment?

What is different between Amendment X and this agreement?

Are Amendments 1 to Amendment 9 available? (assuming Amendment X is Amendment 10??)

ta

---
The memories of a man in his old age are the deeds of a man in his prime - Floyd, Pink

[ Reply to This | # ]

Not good for SCOG.
Authored by: mandalay on Saturday, October 23 2004 @ 05:47 PM EDT
So, if this holds up, it raises the bar for SCO beyond their reach to prove
infringement. It's no use fishing around in the various verions of AIX and
comparing it with Linux; no use asking for each and every iteration of developer
check-ins in the discovery.

What SCOG now has to do is prove that the copy to Linux took place from the
original SYSV code, (good luck!) but even then, their status of their
copyrights is very shaky.

[ Reply to This | # ]

OT thread
Authored by: Anni on Saturday, October 23 2004 @ 06:15 PM EDT
Because nobody has started one yet.

Posting to SCO thread is banned, I put this here:

NOW would be the prime time for the alert SCO administrators to make public
statements in the dedicated thread above. Please, do so.

Anni



---
I am not a laywer, I hate acronyms, and I have been wrong several times before

[ Reply to This | # ]

It's getting clearer
Authored by: codswallop on Saturday, October 23 2004 @ 08:01 PM EDT
Based on the earlier depositions, it looks like AT&T just ignored
ambiguities in language like what modifications, derivative works and
enhancements were, because given their mental contamination theory, it didn't
make much difference. In order to make any of them you had to have been
contaminated, so anything you did caught the disease presumptively. You had
learned the sacred ideas, methods and organization .

It's not clear how a contaminated person was supposed to rebut such a
presumption, or how long such contamination should last. This stretches the law
beyond all bounds. The Novell v. Timpanogos decision is a good example of what
restrictions the court would find reasonable.

Assuming the 1992 depositions are correct as to the meaning of the contract, SCO
still has a number of problems:

1) The terms as Otis Wilson describes them are unenforceable. They are vague,
overly broad, unlimited in time and almost impossible to rebut. They would deny
countless programmers the right to practice their trade in any area the SOFTWARE
PRODUCT reaches (almost everywhere).

2) Ignoring certain complications that don't apply to software, you can only
protect trade secrets. They have to be secrets (unavailable to the unauthorized)
and you have to try to protect them. You also have to give some notice as to
what is a secret, though it can be generic if a reasonable person would know
something was protected. I don't think that "all the methods, concepts,
structure and organization of Unix that hasn't yet been publicly disclosed and
we're not quite sure what that is" will quite cut it.

3) There are no trade secrets in System V.
a) SCO have so stipulated
b) All the major principles have so testified.
c) AT&T and successors officially disclosed and allowed disclosure on a
grand scale.
d) To much time has elapsed given the lifespan of a software trade secret and
the duration of the resulting constraints.

4) The 1992 depositions and the 1985 amendment agree that the confidentiality
terms are tied to the disclosure of the trade secrets. If there are no trade
secrets, there are no restrictions other than the license restrictions on
derivative works that arise under copyright law. These only apply to derivative
works in the copyright sense. An attempt to extend them to the looser sense
would be abuse of copyright.

5) Agreement X and the newly found agreement wave any restrictions on referring
to SOFTWARE PRODUCT.

6) Even under the mental contamination theory, it's the mind of the programmer
that has to be contaminated. Code can't contaminate other code by association or
use.

7) The newly found agreement is legally better evidence as to intent of the
license supervision terms than any parol evidence. Novell clearly has the right
to modify the agreements and waive terms.

This ought to be enough for anybody, but feel free to add any I missed.

---
IANAL This is not a legal opinion.
SCO is not a party to the APA.
Discovery relevance is to claims, not to sanity.

[ Reply to This | # ]

Sigh
Authored by: Anonymous on Saturday, October 23 2004 @ 08:04 PM EDT
This has to be at least the 10th time something has popped up on Groklaw, that
meant the total decimation of whatever SCO thinks is their case.

If only (1) SCO would stop changing their claims and (2) the U.S. court system,
which I have lost all faith in, would pick itself up and move on this case.

[ Reply to This | # ]

Where things stand for club fed
Authored by: Anonymous on Saturday, October 23 2004 @ 08:12 PM EDT
It seems to me this ammendment both raises the bar significently for SCO to
prove it even has legal standing, and at the same time lowers the bar for any
future SEC prosecution for security fraud, for certain corporate officers who
knowingly make false statements to materially effect the price of their stock,
as well as other possible fraud investigations. I think Darl's next office will
be
in club fed, and actually this is exactly what I thought would be the outcome
at the very start a year or so back as well.

[ Reply to This | # ]

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