Novell asks the Court to declare that Novell has the authority pursuant to Section 4.16(b) of the 1995 Asset Purchase Agreement (“APA”) to take the following actions: (1) to direct The SCO Group, Inc. (“SCO”) to waive its purported claims against IBM under the SVRX license agreements between IBM Corporation (“IBM”) and AT&T and between Sequent Computer Systems, Inc. (“Sequent”) and AT&T, and (2) because SCO refused (and still refuses) to follow that direction, to waive those claims on SCO’s behalf. In addition, Novell respectfully requests that this Court declare that SCO is obligated to recognize Novell’s waiver of SCO’s purported claims against IBM and Sequent.

The memo in support puts it like this:

Novell’s motion presents a single issue: whether the express terms of a 1995 contract authorize Novell to direct SCO to waive its purported legal claims for alleged breaches of SVRX license agreements with IBM and with Sequent, and to take action on SCO’s behalf when SCO refuses to so waive, where the plain language of the 1995 contract gives Novell “at its sole discretion and direction” the right to take such action concerning “any SVRX License,” and the IBM and Sequent SVRX license agreements are SVRX Licenses under the 1995 contract’s plain meaning of that term.

If Novell wins its motion here, obviously that makes it simpler to decide some of the IBM motions. There's a certain complexity to having the two cases going on at once, and now that the judge has indicated that IBM's motions will go forward, it matters to have some of the Novell issues decided.

Pacer records the following new filings:

12/01/2006 171 - MOTION for Partial Summary Judgment on Novell's Fourth Claim for Relief filed by Defendant Novell, Inc.. (Sneddon, Heather) (Entered: 12/01/2006)

12/01/2006 172 MEMORANDUM in Support re 171 MOTION for Partial Summary Judgment on Novell's Fourth Claim for Relief [REDACTED pursuant to the August 2, 2006 Stipulated Protective Order] filed by Defendant Novell, Inc.. (Sneddon, Heather) (Entered: 12/01/2006)

12/01/2006 173 - DECLARATION of Kenneth W. Brakebill re 171 MOTION for Partial Summary Judgment on Novell's Fourth Claim for Relief [REDACTED pursuant to the August 2, 2006 Stipulated Protective Order] filed by Novell, Inc.. (Attachments: #1, Exhibit 1 Part 1 (pp. 1-48 of Novell-Santa Cruz Asset Purchase Agreement); #2, Exhibit 1 Part 2 (continuation pp. 49-97, schedules and amendments); # 3, Exhibit 2, 3 , (the Novell-Santa Cruz Operating Agreement and Amendment 1 to the APA); #4, Exhibit 4-8 (Amendment 2 to the APA, and IBM-AT&T contracts); #5, Exhibit 12-15 and 17 - (AT&T and Novell/Santa Cruz contracts with IBM, including the IBM buyout); #6, Exhibit 23 (SCO Group's 10K for the period ending October 31, 2003); #7, Exhibits 24-27 (SCO-IBM/Sequent correspondence); #8, Exhibits 28-41, (part of the deposition of Jack Messman and Novell-SCO correspondence); #9, Exhibit 42 - Part 1 (Caldera 10K for the period ending October 31, 2002, part 1); #10, Exhibit 42 - Part 2 (10K continued); #11, Exhibits 43-45 (part of Ed Chatlos deposition)(Sneddon, Heather) (Entered: 12/01/2006)

12/01/2006 174 NOTICE OF CONVENTIONAL FILING of Memorandum and Declaration of Kenneth W. Brakebill in Support of Novell's Motion for Partial Summary Judgment on Its Fourth Claim for Relief [FILED UNDER SEAL pursuant to the August 2, 2006 Stipulated Protective Order] filed by Defendant Novell, Inc. re 171 MOTION for Partial Summary Judgment on Novell's Fourth Claim for Relief (Sneddon, Heather) (Entered: 12/01/2006)

If the attachments in the Pacer filing seem confusing, you're not alone. It's because they are listed as attachments, and several exhibits can be in one attachment, and also there are some exhibits missing, no doubt sealed, but the Declaration by Kenneth Brakebill lists them more clearly. For those of you on dialup, Exhibit 23 is over 200 pages long.

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

MORRISON & FOERSTER LLP
Michael A. Jacobs (pro hac vice)
Kenneth W. Brakebill (pro hac vice)
[address, phone, fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[address, phone, fax]

Attorneys for Novell, Inc.

_______________________

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION

_______________________

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff and Counterclaim-
Defendant,

vs.

NOVELL, INC., a Delaware corporation,

Defendant and Counterclaim-
Plaintiff.

_________________________

NOVELL'S MOTION FOR PARTIAL
SUMMARY JUDGMENT ON ITS
FOURTH CLAIM FOR RELIEF

Case No. 2:04CV00139

Judge Dale A. Kimball

Novell, Inc. ("Novell") moves the Court for partial summary judgment as to its Fourth Claim for Relief for declaratory relief. Specifically, Novell asks the Court to declare that Novell has the authority pursuant to Section 4.16(b) of the 1995 Asset Purchase Agreement ("APA") to take the following actions: (1) to direct The SCO Group, Inc. ("SCO") to waive its purported claims against IBM under the SVRX license agreements between IBM Corporation ("IBM") and AT&T and between Sequent Computer Systems, Inc. ("Sequent") and AT&T, and (2) because SCO refused (and still refuses) to follow that direction, to waive those claims on SCO's behalf. In addition, Novell respectfully requests that this Court declare that SCO is obligated to recognize Novell's waiver of SCO's purported claims against IBM and Sequent.

Federal Rule of Civil Procedure 56(c) permits the Court to grant partial summary judgment if the pleadings, discovery, and affidavits show that there is no genuine issue of material fact and that Novell is entitled to judgment as a matter of law. Here, the undisputed facts establish that:

1. The APA gives Novell the authority, at its sole discretion, to direct SCO to waive rights under any SVRX License;

2. The IBM and Sequent Licenses are SVRX Licenses because they license rights to the UNIX System V software listed in Item VI to Schedule 1.1(a);

3. Novell directed SCO to waive its purported rights under the IBM and Sequent SVRX Licenses;

4. SCO refused to follow Novell's direction as to both the IBM and Sequent SVRX Licenses;

5. The APA authorizes Novell to take any action on SCO's behalf when SCO fails to take action directed by Novell;

6. Upon SCO's refusal, Novell properly took action on behalf of SCO by waiving SCO's purported claims against IBM and Sequent; and

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7. SCO improperly refused, and still refuses, to recognize Novell's authority and to abide by Novell's waiver.

Section 4.16(b) of the APA is a broad and unambiguous grant of authority to Novell. It states in plain language that Novell may, at its "sole discretion and direction," direct The Santa Cruz Operation, Inc. ("Santa Cruz") to "amend, supplement, modify or waive any rights under . . . any SVRX License . . . in any manner or respect." If Santa Cruz refuses to follow that direction, Novell is "authorized, and hereby is granted, the rights to take any action on [Santa Cruz's] own behalf." When SCO began to advance claims of SVRX License breach against IBM and Sequent, Novell subsequently directed SCO -- the admitted successor-in-interest to Santa Cruz's rights and obligations under the APA -- to waive those claims. When SCO refused to follow that direction, Novell waived the claims on SCO's behalf. SCO has ignored Novell's waiver, however, and in its co-pending lawsuit with IBM, continues to advance claims of SVRX License breach. Accordingly, Novell asks the Court to accord Novell's actions the legal effect they deserve by granting this motion.

DATED: December 1, 2006

ANDERSON & KARRENBERG

/s/ Heather M. Sneddon
Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon

-and-

MORRISON & FOERSTER LLP
Michael A. Jacobs (pro hac vice)
Kenneth W. Brakebill (pro hac vice)

Attorneys for Novell, Inc.

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 1st day of December, 2006, I caused a true and correct copy of NOVELL'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON ITS FOURTH CLAIM FOR RELIEF to be served to the following:

Via CM/ECF:

Brent O. Hatch
Mark F. James
HATCH JAMES & DODGE, P.C.
[address]

Via E-mail:

Stuart H. Singer
BOIES, SCHILLER & FLEXNER LLP
[address]

Edward J. Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

/s/ Heather M. Sneddon

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