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Novell Notifies SCO
Thursday, February 12 2004 @ 05:00 AM EST

It seems SCO did not obey Novell's instructions by the deadline. Consequently, Novell in a new letter, dated February 11, takes the following action:

"Accordingly, pursuant to Section 4.16(b) of the Asset Purchase Agreement, Novell, on behalf of The SCO Group, hereby waives any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license."


Here is Section 4.16(b) of the Asset Purchase Agreement, which you can find, along with all the Amendments and Schedules on the Legal Docs page, which has a permanent link on the left of the page:

"(b) Buyer shall not, and shall not have the authority to, amend, modify or waive any right under or assign any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer shall amend, supplement, modify or waive any rights under, or shall assign any rights to, any SVRX License to the extent so directed in any manner or respect by Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf. Buyer shall not, and shall have no right to, enter into future licenses or amendments of the SVRX Licenses, except as may be incidentally involved through its rights to sell and license the Assets or the Merged Product (as such term is defined in the proposed Operating Agreement, attached hereto as Exhibit 5.1(c)) or future versions thereof of the Merged Product."

The letter also references Software Agreement No. SOFT-000321 et seq, which may be referring to the Sublicensing Agreement.

Here is the entire letter, and the original is available here.

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

Joseph A. LaSala, Jr.
Senior Vice President
General Counsel and Secretary

VIA FACSIMILE AND CERTIFIED MAIL
RETURN RECEIPT REQUESTED

February 11, 2004

Mr. Ryan Tibbitts
General Counsel
The SCO Group
[address]

Mr. Ronald A. Lauderdale
Vice-President, Assistant General Counsel
International Business Machines Corporation
[address]

Re: Sequent Computer Systems

Dear Counsel:

Reference is made to the following:

  • Asset Purchase Agreement by and between The Santa Cruz Operation, Inc. and Novell, Inc. dated as of September 19, 1995, and more particularly to Section 4.16(b) of that agreement;
  • Software Agreement No. SOFT-000321, et seq., between AT&T Information Systems Inc. and Sequent Computer Systems, Inc. ("Sequent's SVRX license);
  • Letters dated May 29, 2003 and August 11, 2003 from The SCO Group to Sequent Computer Systems, Inc.;
  • Letter dated August 14, 2003 from IBM to The SCO Group;
  • Letter dated October 7, 2003 from Novell, Inc. to The SCO Group regarding IBM Code; and
  • Letter dated February 6, 2004 from Novell, Inc. to The SCO Group regarding Sequent Computer Systems.

In its February 6 letter to The SCO Group, Novell directed "SCO to waive any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license." The letter defined Sequent Code as code developed by Sequent, or licensed by Sequent from a third party, which Sequent incorporated in its UNIX variant but which itself does not contain proprietary UNIX code supplied by AT&T under the license agreements between AT&T and Sequent. Novell directed SCO to take this action by noon, MST, February 11, 2004.

SCO has failed to take the actions directed by Novell.

Accordingly, pursuant to Section 4.16(b) of the Asset Purchase Agreement, Novell, on behalf of The SCO Group, hereby waives any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license.

Sincerely,

/s/ Joseph A. LaSala, Jr.

cc: Mr. Darl McBride
President and CEO


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