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To read comments to this article, go here
The SCO-York APA, as text
Thursday, January 03 2008 @ 01:49 PM EST

This is the proposed, and then withdrawn, Asset Purchase Agreement [PDF] SCO and York struggled to come up with, as text. When SCO withdrew its emergency motion to sell its Unix assets, it didn't promise never to come up with such a plan again. It was withdrawn without prejudice. When I put this APA together with the latest SCO motions to extend the exclusive time to file a reorganization plan and the one to renew the leases, I can't help but think that SCO means to bide its time and then come around the mountain again for another try.

There are some hints in this document, I think. Let me show you all the strange bits I notice. You may notice others.

Our thanks go to Steve Martin for tackling the text on this 57-page PDF. It wasn't until I read it as text that I noticed some of the items I am going to highlight, so that alone shows me the value of doing everything that we can as text. So thank you, Steve.

You will note that there are a number of typos in the original PDF, more than usual. For example, in the opening WHEREFORE section, at the end it uses the word 'premises' where it should be 'promises'. Probably it's reflective of the way the agreement was pulled together -- at the hearing about it on November 6, one lawyer for SCO was still working on it as they spoke, and they said they'd been working on it day and night for days. So it was a rush job, trying to get it ready for the hearing, and with a lot of sleepless nights where teams of lawyers worked through the night, and all for nothing in the end. Or is it?

I notice something that might not strike you, unless you are a paralegal too and have typed up contracts like this. The buyer is identified only like this:

[________], a Delaware [________] ("Purchaser")

So the document doesn't reveal who the proposed buyer was or whether it's a regular corporation or an LLC or whatever, but yet 'Delaware' is typed in as the state in which it was registered. I find that very odd. If you were trying to hide the entity buying the assets, and they were, you'd leave it *all* blank. So, from my experience, I suspect that they intended to set up an entity in Delaware, but never got that far before they withdrew the motion, and they hadn't decided yet what form it would be registered as. Either that or they simply goofed and included it by mistake, being sleep-deprived.

Not that they intended us to know who it was, I don't think. The definition of contract is unusual too -- this agreement defines it as any written or oral agreement. I can't tell you how strange that is. Usually lawyers want to avoid oral agreements and deliberately exclude them. What might it mean?

I think it means there is one, some oral agreement between SCO and someone, maybe with the money behind this, whoever that is, or whoever was trying to buy all the assets, if there is a distinction. It brought to my mind the breach of contract litigation Novell brought against Canopy, the Canopy before Ralph Yarro was forced out, that we learned about in 2004, where Canopy claimed there was an oral agreement that Canopy would sue Microsoft on Novell's behalf, and that they didn't put that in writing because Ray Noorda didn't want Microsoft to know about it. Novell denied it, and Canopy lost on the money part of the case, but the court did find that there had been an agreement. Is it impossible to believe that Yarro has done something like that again, only this time he's smart enough to require that oral agreements be recognized? You will note in Article IV there is a confidentiality agreement referenced, and it "shall survive any termination" of the agreement. So if there is any oral agreement, no one is supposed to tell, I'm guessing.

And here's the final odd note: the buyer was to take over SCO's leases, according to "Article 4.2. Deliveries by Sellers". This raises the obvious question: where was SCO going to be? Where would Darl McBride be when he went to his office to work on Me Inc.? They did tell us that Me Inc. would continue. You may recall that York's lawyer represented to the court that its client just liked to buy up old software. But why, then, would it need the leases? You don't need a particular building to house software or to license it or even to write it. Not even to sue over it. So what exactly was the real plan of "reorganization"?

And finally, some of the assets that were to be sold, the agreement says in "Section 2.5. Certain Subsidiaries", are owned by foreign subsidiaries. Which assets? The foreign subsidiaries are not in bankruptcy, so how does that work? We can only guess, because the schedules referenced throughout this APA are not attached.

The definitions section is fascinating too, particularly the definition of "Affiliate":

"Affiliate" means, with respect to any specified Person at any time, (a) each Person, directly or indirectly controlling, controlled by, or under direct or indirect common control with, such specified Person at such time, (b) each Person who is at such time an officer or director of, or direct or indirect beneficial holder of at least 20% of any class of the equity interests of, such specified person, (c) each Person that is managed by a common group of executive officers and/or directors as such specified Person, (d) the members of the immediate family (i) of each officer, director or holder described in clause (b) and (ii) if such specified Person is an individual, of such specified Person, and (e) each Person of which such specified Person or an Affiliate (as defined in clauses (a) through (d)) thereof will, directly or indirectly, beneficially own at least 20% of any class of equity interests at such time.

What is this talking about? Family members? Why are they included? It's the kind of wording that is clearly carving in someone very specific. Who? There is a lot SCO has not yet told us.

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

Exhibit A
APA

1

Filing Copy - In Substantially Final Form - 11/16/07





ASSET PURCHASE AGREEMENT
Dated as of November _____, 2007
by and between

[__________________]
as Purchaser

and

The SCO Group, Inc.
and certain of its Affiliates
as Sellers

2

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of November ____, 2007, by and among The SCO Group, Inc., a Delaware corporation ("SCO Group"), SCO Operations, Inc. ("SCO Operations") and certain Affiliates of SCO Group identified on the signature pages hereto (together with SCO Group and SCO Operations, each a "Seller" and collectively, "Sellers"), and [________], a Delaware [________] ("Purchaser"). Each of Sellers and Purchaser is a "Party" and collectively they are the "Parties" to this Agreement.

RECITALS

WHEREAS, Sellers own or hold a transferable interest in the Purchased Assets;

WHEREAS, on or about September 14, 2007 (the "Petition Date"), SCO Group and SCO Operations filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware, jointly administered as Case Nos. 07-11337 and 07-11338 (KG) (the "Chapter 11 Cases"); and

WHEREAS, on the terms and subject to the conditions set forth in this Agreement, Sellers desire to sell, transfer and assign to Purchaser, and Purchaser desires to purchase, acquire and assume from Sellers, pursuant to Sections 363 and 365 of the Bankruptcy Code, all of the Purchased Assets and Assumed Liabilities, all as more specifically provided herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, and intending to be legally bound, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Certain Definitions.

For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1:

"Action" means any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, mediation or other dispute resolution proceeding, investigation, hearing, charge, complaint, demand, notice or proceeding to, from, by or before any Governmental Authority.

"Affiliate" means, with respect to any specified Person at any time, (a) each Person, directly or indirectly controlling, controlled by, or under direct or indirect common control with, such specified Person at such time, (b) each Person who is at such time an officer or director of, or direct or indirect beneficial holder of at least 20% of any class of the equity interests of, such specified person, (c) each Person that is managed by a common group of executive officers and/or directors as such specified Person, (d) the members of the immediate family (i) of each officer, director or holder described in clause (b) and (ii) if such specified Person is an individual, of such specified Person, and (e) each Person of which such specified Person or an Affiliate (as defined in clauses (a) through (d))

1 (3)

thereof will, directly or indirectly, beneficially own at least 20% of any class of equity interests at such time.

"Alternative Transaction" means any transaction occurring after the Bidding Procedures Order is entered involving either (i) except as contemplated by this Agreement, the consummation of the sale of all or any material or significant portion of the Purchased Assets or the Business by any Seller to a purchaser other than Purchaser and/or one or more of its Affiliates at any time during the pendency of the Chapter 11 Cases or as a part of, or pursuant to, any plan of reorganization confirmed in the Chapter 11 Cases or (ii) except to the extent the Closing has occurred, the filing of a plan of reorganization by any Seller or the confirmation of a plan of reorganization with respect to any Seller that does not include a sale of all, or any portions of which in the aggregate involve substantially all, of the Purchased Assets and the Business by any Seller to Purchaser and/or one or more Affiliates of Purchaser. For the avoidance of doubt, the sale, transfer, assignment or license of Company Technology included in the Purchased Assets to any Person (other than Purchaser) or the sale, transfer, assignment or license of any Me Inc. Products or related Intellectual Property to any Person (other than Purchaser) in violation of the Cross License Agreement shall constitute an "Alternative Transaction".

"Auction" means the process established by the Bidding Procedures Order providing for the sale and assignment of the Purchased Assets either to Purchaser (assuming Purchaser is the "Winning Bidder" as defined therein) or pursuant to an Alternative Transaction, and approving and authorizing Sellers to consummate the transactions provided for in the Sale Order.

"Auction Date" means the date established by the Bidding Procedures Order to consummate the Auction, as may be changed, extended or continued by order of the Bankruptcy Court.

"Bankruptcy Code" means Title 11 of the United States Code.

"Bankruptcy Court" means the United States Bankruptcy Court for the District of Delaware, or such other court having jurisdiction over the Chapter 11 Cases originally administered in the United States Bankruptcy Court for the District of Delaware.

"Bid Submission Date" means [________], or such other date as may be determined in accordance with the Bid Procedures Order.

"Business" means all assets and business of Sellers, the Subsidiaries and the Sellers' Affiliates, including without limitation the design, manufacture, marketing, distribution, sale and related operations and functions of Operating System Products, the Layered Operating System Products and Hipcheck, but excluding the Me Inc. Products and the other Excluded Assets.

"Business Day" means any day of the year on which national banking institutions in New York City or Wilmington, Delaware are open to the public for conducting business and are not required or authorized to close.

"Channel Sales" means sales of Products on sale or return terms or to a distributor, partner or other reseller.

"Claims" means any and all claims as defined in Section 101(5) of the Bankruptcy

2 (4)

Code.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company Technology" means any and all Technology and Intellectual Property owned by, or licensed to, any Seller which is used in or related to the Business as is currently conducted or contemplated to be conducted.

"Competitive Bidding Period" means the competitive bidding period for the acquisition of the Purchased Assets, which period shall commence on the date on which the Bankruptcy Court enters the Bid Procedures Order and end on the Auction Date at the conclusion of the Auction.

"Computer Softare" means all computer softare including: source code; object code; operating systems, applications programs, firmware; files, records and data; product specifications; schematics; logic diagrams; flow charts; algorithms; databases; routines; sub-routines; program and system logic; program architecture; program structure, sequence and organization; listings; screen displays; programmers' notes; languages; compilers; testing routines and procedures; test results; documentation; operating instructions; technical and user manuals; training materials; all media on which any of the foregoing is recorded; all technology and tools used to design, develop, test, support, maintain and diagnose errors in the computer software; all updates, upgrades, modifications, enhancements, improvements and derivatives of the foregoing; and all other information and technical data related to the ownership, use, design, development, testing, enhancement, support and/or maintenance of the computer softare.

"Contract" means any written or oral contract, indenture, note, bond, lease, license or other legally binding agreement or arrangement.

"Contractual Obligation" means, with respect to any Person, any Contract, agreement, deed, mortgage, lease, license, commitment, promise, undertaking, arrangement or understanding, whether written or oral and whether express or implied, or other document or instrument (including any document or instrument evidencing or otherwise relating to any Debt) to which or by which such Person is a part or otherwise subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.

"Cross License Agreement" means the revenue sharing agreement, technology cross license, and mutual distribution agreement and/or OEM agreement between Me Inc. and Purchaser in substantially the form attached hereto as Exhibit B.

"Current Assets" means, as of any date of determination, the amount of Sellers' Accounts Receivable and Inventory as of such date, determined in accordance with GAAP.

"Debt" for any Person, means all means obligations (a) for borrowed money, (b) evidenced by notes, bonds, debentures or similar instruments, (c) for which interest charges are customarily paid, (d) under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) issued or assumed as the deferred purchase price of property or services (other than trade accounts payable), (f) earnouts arising in connection with acquisitions, (g) under capital leases, (h) in respect of interest rate protection agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements, (i) as an account part in respect

3 (5)

of letters of credit and bankers' acceptances, (j) with respect to any indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise to be secured by) any Encumbrances on property owned or acquired by such Person, (k) in the nature of guarantees of any indebtedness of others, and (l) all accrued interest on any of the foregoing.

"Employees" means all individuals, whether or not actively at work as of the date hereof, who are employed by any Seller or the Subsidiaries in connection with the Business, together with individuals who are hired in respect of the Business after the date hereof and prior to the Closing.

"Encumbrance" means any defect or imperfection in title, encumbrance, lien, interest, claim, charge, pledge, mortgage, deed of trust, security interest, lease, sublease, license, option, right of first refusal, easement, right-of-way, servitude, covenant, condition, proxy, voting trust or agreement or transfer restriction under any shareholder or similar agreement. For the avoidance of doubt, "Encumbrances" shall include any and all rights, claims and interests of any nature whatsoever with respect to the Company Technology that may have been or may be asserted by any Person (other than Sellers) under the agreements set forth on Schedule 1.1(a).

"Environmental Law" means any Law that relates to, or otherwise imposes liability or standards of conduct concerning, pollution, or protection of the environment, or protection of human or occupational health from environmental hazards, including those concerning discharges, releases or threatened releases of, petroleum or hazardous substances.

"Equipment" means all machinery, equipment, furniture, trade fixtures, furnishings, vehicles, leasehold improvements, Hardware and other tangible personal property used in connection with the Business as presently conducted, including, without limitation, all artwork, desks, chairs, tables, Hardware, copiers, telephone lines and numbers, facsimile machines and other telecommunication equipment, cubicles and miscellaneous office furnishings and supplies.

"Equity Interests" means (a) any capital stock, share, partnership or membership interest, unit of participation or other similar interest (however designated) in any Person and (b) any option, warrant, purchase right, conversion right, exchange rights or other Contractual Obligation which would entitle any Person to acquire any such interest in such Person or otherwise entitle any Person to share in the equity, profit, earnings, losses of gains of such Person (including stock appreciation, phantom stock, profit participation or other similar rights).

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Excluded Matter" means anyone or more of the following: (i) the effect of any change in the United States' economy generally or in the securities or financial markets in the United States in general in each case to the extent such conditions do not have a disproportionate impact on the Sellers, taken as a whole, relative to other companies operating in the same industries and geographies in which the Sellers operate; (ii) the effect of any change arising in connection with earthquakes, hostilities, acts of war, or military actions occurring after the date hereof or any escalation or material worsening of any such hostilities, acts of war, or military actions existing or underway as of the date hereof to the extent such conditions do not have a disproportionate impact on the Sellers, taken as a whole, relative to other companies operating in the same industries and geographies in which the Sellers operate, or (iii) any changes associated with the bankruptcy of Sellers pursuant to the Chapter 11 Cases.

4 (6)

"Facilities" means any buildings, plants, improvements or structures located on the Real Property.

"GAAP" means generally accepted accounting principles in the United States as of the date hereof as applied in a manner consistent with the Sellers' historical accounting policies.

"Government Order" means any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority.

"Governmental Authority" means any United States federal, state or local or any foreign government, or political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau, or division thereof) or any arbitrator or arbitral body.

"Hardware" means any and all computer and computer-related hardware, including, without limitation, computers, file servers, facsimile servers, scanners, color printers, laser printers and networks.

"Hazardous Substances" means any wastes, substances, products, pollutants or materials, whether solid, liquid or gaseous, that (i) are or contain asbestos, polychlorinated biphenyls, radioactive materials, oil, petroleum or any fraction thereof, (ii) require removal, remediation or reporting under any Environmental Law, or are defined, listed or identified as a "contaminant", "pollutant", "toxic substance", "toxic material", "hazardous waste" or "hazardous substance" or words of similar meaning and regulatory effect thereunder or (iii) are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and are regulated as such by any Governmental Authority under any Environmental Law.

"IBM Litigation" means that certain litigation identified as The SCO Group, Inc. vs. International Business Machines Corporation, currently pending as Civil Case No. 2:03CV0294DAK in the United States District Court, District of Utah, Central Division, and other Actions based on the same or substantially similar set of facts, causes of actions or allegations (but excluding the Linux Litigation or other Actions related to Purchased Assets).

"Intellectual Property" means the entire right, title and interest in and to all proprietary rights of every kind and nature, throughout the world, including all rights and interests pertaining to or deriving from: (a) registered and unregistered patents and copyrights, copyrightable works, mask work rights, technology, know-how, methods, processes, trade secrets, algorithms, inventions, works of authorship, proprietary data, databases, formulae, research and development information and Computer Softare; (b) trademarks, trade names, service marks, service names, brands, trade dress and logos, and the goodwill and activities associated therewith, together with all translations, adaptations, derivations and combinations thereof; (c) domain name rights, rights of privacy and publicity, moral rights, and proprietary rights of any kind or nature, however denominated, throughout the world in all media now known or hereafter created; (d) trade secrets, know-how and confidential information; (e) any and all registrations, applications, recordings, licenses, common-law rights and Contractual Obligations relating to any of the foregoing; and (f) all Actions and rights to sue at law or in equity for past or future infringement or other impairment of any of the foregoing, including the right to receive all proceeds and damages therefrom, and all rights

5 (7)

to obtain renewals, reissues, reexaminations, continuations, continuations-in-part, divisions or other extensions of legal protections pertaining thereto.

"Inventory" means all finished goods, work in process, raw materials, goods in transit, goods at customer sites and other inventory or goods held for sale of a Person in all forms, wherever located, now or hereafter existing.

"Law" means any federal, state, local or foreign law, common law, statute, code, ordinance, rule or regulation.

"Legal Requirement" means all requirements under Law and as imposed by all Orders and Contractual Obligations.

"Liability" means any Debt, liability or obligation (whether direct or indirect, known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due) and including all costs and expenses relating thereto.

"Licensed Intellectual Property" means all Company Technology that is licensed to any Seller from another Person.

"Linux Litigation" means the pending legal proceedings pending against Autozone and Red Hat, and any other legal proceedings to enforce the Intellectual Property related to the Business or the Purchased Assets against infringement, and other Actions based on the same or substantially similar set of facts, causes of actions or allegations or against Linux users (but excluding the IBM Litigation, the Novell Litigation or other Actions retained by Sellers under Section 2.2(e)).

"Losses" means collectively, all damages, claims, liabilities, fines, penalties, levies, fees, costs or expenses (including reasonable expenses and disbursements of accountants and legal counsel), but not including any punitive, special, indirect, incidental or consequential damages.

"Material Adverse Effect" means any events, circumstances, development, change or effect that, individually or in the aggregate with all other events, circumstances, developments, changes and effects, has or could reasonably be expected to have: (i) a material adverse effect on the Business, Purchased Assets, properties, prospects, results of operations or condition (financial or otherwise) of Sellers (taken as a whole); or (ii) a material adverse effect on the ability of Sellers to consummate the transactions contemplated by this Agreement, in each case (clause (i) or (ii) above) other than an effect resulting from an Excluded Matter.

"Me Inc. Products" means the source and object code for the (i) Me Inc. Platform, (ii) the Me Inc. Mobile Server, (iii) the Me Inc. Client Framework, (iv) Me Inc. Shout, (v) Me Inc. MI4 time management, calendaring, and task management solution, (vi) Shout Hosted Platform, (vii) Shout Postcard, and (viii) Vote/Shoutback, (ix) Grassroots, (x) Order Entry, (xi) SCO Mobile Server, (xii) SCO Mobile Client Framework, (xiii) Edgeclick and (xiv) Edgeclick SDK, and all related Technology and Intellectual Property of Sellers, as of the date hereof, other than pursuant to the Business, in each case, solely to the extent licensed to Purchaser under the Cross-License Agreement.

"Novell Exception" means (i) prior to the entry of the final Sale Order, with respect to the Business, the Company Technology and related Purchased Assets, any and all existing or

6 (8)

potential ownership rights or interests, licenses, royalties or claims based on infringement, misappropriation or impermissible use, and any and all Encumbrances now or at any time owned or held by Novell, Inc., or that have been asserted or that could be asserted by Novell Inc., or its successors and assigns at any time and from time to time, including without limitation, all Actions, pleadings, declarations, admissions, judgments, orders or decrees made, arising or asserted in, or that could arise and be asserted in, or that have been or may in the future be entered in, the Novell Litigation or any appeals therefrom, or successor, replacement or similar proceedings involving the same or substantially similar claims, arising at any time in the Novell Litigation, the Bankruptcy Case or in any court or dispute resolution context, and (ii) upon the entry of the final Sale Order, such Novell Exception as qualified, limited or affected by the Sale Order.

"Novell Litigation" means that certain litigation identified as The SCO Group, Inc., vs. Novell, Inc., currently pending as Civil Case No. 2:04CV00139 in the United States District Court, District of Utah, Central Division, and other Actions based on the same or substantially similar set of facts, causes of actions or allegations (but excluding the Linux Litigation or other Actions related to Purchased Assets).

"OEM License Sales" means any sales to equipment manufacturers who bundle, attach or include the Operating System Products in their respective product offerings.

"Order" means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Authority.

"Ordinary Course of Business" means the ordinary and usual course of normal day-to-day operations of the Business since January 1, 2006.

"Organizational Documents" means any certificate or articles of incorporation or formation, memoranda of association, bylaws or other charter or other applicable organizational or governing documents of any Person.

"Permits" means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority.

"Permitted Encumbrances" means (i) any Encumbrance pursuant to the Novell Exception and (ii) any other Encumbrances which will be discharged on or before the Closing Date in connection with the Sale Order or any other actions of the Bankruptcy Court.

"Person" means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or other entity.

"Products" means any and all products developed, manufactured, marketed or sold in connection with the Business.

"Qualifying Accounts Receivable" means all bona fide accounts, accounts receivable, notes receivable, chattel paper, documents, and all other receivables of any type or nature of the company including, but not limited to, all accounts receivable arising from bona fide transactions for the sale of licenses or maintenance or services, entered in good faith, involving existing Products entered into in the Ordinary Course of Business that meet the following requirements: (a) the account

7 (9)

is not more than ninety (90) days overdue; (b) the account is not from a payor that has any account with Sellers that is more than ninety (90) days past due or has been forgiven or written off within the preceding twelve (12) months; (c) in the event that the transaction giving rise to the account involves a distributor, partner or other reseller, there is documentary evidence of an underlying transaction with an end user that otherwise meets the definition of Qualified Account Receivable; (d) the terms of payment on a domestic account are sixty (60) days or less from the date of the transaction and the terms of payment on an international account are ninety (90) days or less from the date of the transaction; (e) the account is not subject to any right of setoff, right of return or counterclaim and is unencumbered, provided, however, that the account shall be a Qualified Accounts Receivable to the extent of the amount of the account less the amount of the setoff, right of return or counterclaim; (f) the account is freely assignable to Purchaser; and (g) the account is not with any Affiliate of any Seller.

"Registered Intellectual Property" means all Intellectual Property owned or controlled by any Seller that has been registered, or for which an application for registration has been filed, with the United States Patent and Trademark Office, the United States Copyright Office or any other Governmental Authority.

"Release" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching, or migration at, into or onto the environment, including movement or migration through or in the environment, whether sudden or non-sudden and whether accidental or non-accidental, or any release, emission or discharge as those terms are defined in any applicable Environmental Law.

"Sellers' Knowledge" means the actual knowledge of those officers and directors of Sellers identified on Schedule 1.1(b), assuming reasonable inquiry by such individuals in the Ordinary Course of Business.

"Subsidiary" means any Person of which a majority of the outstanding voting securities or other voting equity interests are owned, directly or indirectly, by SCO Group.

"Tax Authority" means any federal, state, local or foreign government, or any agency, instrumentality or employee thereof, charged with the administration of any Law relating to Taxes.

"Tax Return" means all returns, declarations, reports, estimates, information returns and statements required to be filed in respect of any Taxes.

"Taxes" means (i) all federal, state, local or foreign taxes, charges or other assessments, including, without limitation, all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes; and (ii) all interest, penalties, fines, additions to tax or additional amounts imposed by any Tax Authority in connection with any item described in clause (i).

"Technology" means all inventions, works of authorship, discoveries, developments, innovations, know-how, ideas, concepts, research and development, information, formulae, compositions, methods, processes, techniques, data, designs, models, drawings, schematics, specifications, blueprints, customer and supplier lists, pricing and cost information, business and

8 (10)

marketing plans and proposals, documentation and manuals, Computer Software, Hardware, integrated circuits and integrated circuit masks, electronic, electrical and mechanical equipment and all other forms of technology, including improvements, modifications, works in progress, derivatives or changes, whether tangible or intangible, embodied in any form, whether or not protectible or protected by patent, copyright, mask, work right, trade secret Law or otherwise, and all notes, notebooks, reports, summaries, memoranda and other documentation and materials recording any of the foregoing.

"WARN" or "WARN Act" means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar state Law, and the rules and regulations thereunder.

1.2. Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have meanings set forth in the sections indicated:

TermSection
Accounting Firm3.4(a)
Actual Transition Costs8.11
AgreementPreamble
Assets5.10(a)
Assumed Contracts2.1(b)
Assumed Liabilities2.3
Audited Financials5.6(a)(i)
Bidding Procedures Order7.1
Break-Up Fee4.6(c)
Cash Component3.1(a)
Chapter 11 CasesRecitals
Closing4.1
Closing Date4.1
Competing Bid7.4
Confidential Information8.7
Confidentiality Agreement8.7
Confirmation Order7.1
Contractual Discount Customer8.2(b )(ix)
Cure Amount2.3(b)
Disclosed Contract 5.19(b)
Employee Plans5.17(a)
Escrow Agent3.2
Escrowed Funds3.2
Estimated Transition Costs8.11
Excluded Assets2.2
Excluded Liabilities2.4
Fees and Expenses4.6(d)
Financial Summary5.12
Financials5.6(a)(iii)
Indemnified Party12.4
Indemnifying Party12.4
Intellectual Property Licenses5.14(f)

9 (11)

Interim Financials5.6(a)(ii)
Lease Assignments 4.2(c)
Litigation Credit Facility 3.1(b)
Monthly Financials 5.6(a)(iii)
Most Recent Balance Sheet 5.6(a)(i)
Most Recent Balance Sheet Date 5.6(a)(i)
Party Preamble
Petition Date Recitals
Prepaid and Accrued Expenses 3.5
Plan 7.1
Predecessor 5.1(b)
Purchased Assets 2.1
Purchase Price 3.1
Purchaser Preamble
Purchaser Documents6.2
Purchaser Material Adverse Effect 6.4
Purchaser Party 12.2(a)
Purchaser Plans 9.2(b)
Real Property5.12(a)
Real Property Leases 5.12(a)
Requested Party 8.8(b)
Required Consents 5.3(a)
Required Discount 8.2(b)(ix)
Revised Statements 11.2
Sale Motion 7.1
Sale Order 7.1
Seller Party 12.3(a)
Sellers Preamble
Seller Documents 5.2
Subcontracted Services 8.11
Termination Date 4.4(a)
Third Party Claims 12.
Transferred Employees 9.1(a)
Transition Agreements 8.11
Transition Period 8.11
Transfer Taxes 11.1

1.3. Other Definitional and Interpretive Matters.

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

Calculation of Time Period. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

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Exhibits/Schedules. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any matter or item disclosed on one schedule shall be deemed to have been disclosed on each other schedule only where such matter or item's relevance is readily apparent on the face of such item. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in constring or interpreting this Agreement. All references in this Agreement to any "Section" are to the corresponding Section of this Agreement unless otherwise specified.

Herein. The words such as "herein," "hereinafter," "hereof" and "hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

Including. The words such as "includes" and "including" shall mean "including without limitation."

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the Parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

2.1. Purchased Assets. On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser shall purchase, acquire and accept from Sellers, and Sellers shall sell, transfer, assign, convey and deliver to Purchaser all of Sellers' right, title and interest in, to and under the Purchased Assets, free and clear of any Encumbrances. "Purchased Assets" shall mean all tangible and intangible assets, properties, interests and rights of Sellers as of the Closing, other than the Excluded Assets, including the following:

(a) All of Sellers' tangible personal property, supplies, computers, printers, Equipment, furniture, fixtures, goods and other similar Assets, including, but not limited to, those identified in the fixed asset depreciation schedule to be created and attached hereto by the Seller prior to the Closing as Schedule 2.1(a), except for furniture and personal property used solely in connection with the Me Inc. Products to be identified as used therefor on Schedule 2.1(a);

(b) All of Sellers' rights and benefits under Contracts assumed and assigned to Purchaser pursuant to the Sale Order, which Sellers shall identify and Purchaser shall designate in

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writing and attach hereto prior to Closing as Schedule 2.1(b) as Contracts to be assumed by Purchaser ("Assumed Contracts");

(c) All right, title and interest of Sellers in and to Company Technology;

(d) All rights of Sellers in and to general intangibles;

(e) All rights of Seller in and to (i) the customer and client lists, vendor lists, catalogues, data relating to vendors, promotion lists and marketing data and other compilations of names and requirements; (ii) telephone numbers, internet addresses and web sites; and (iii) other material information related to the Business;

(f) All Inventory of Sellers, including, but not limited to, the Inventory set forth on Schedule 2(f) to be created and attached hereto by Sellers prior to Closing;

(g) All accounts, accounts receivable, notes receivable, chattel paper, documents, and all other receivables of any type or nature of Sellers;

(h) The Linux Litigation;

(i) To the extent provided in Section 2.5, the Equity Interests owned by SCO Group or any of the Subsidiaries in and to SCO Operations and the Subsidiaries involved in the Business or any other investments or ventures identified in Schedule 2.1(i);

(j) All goodwill associated with the Sellers' and their business and the Purchased Assets;

(k) All rights in and to any governmental and other Permits, to the extent assignable, used in or relating to the Business or the Purchased Assets;

(1) An irrevocable, assignable, twenty percent (20%) interest (the "Percentage Interest") in any and all proceeds of any judgment, settlement or assignment (by operation of law or otherwise) for equity, compromise or other consideration to Sellers and their Affiliates and/or their successors or assigns (each, "Proceeds"), if any, when and as collected by Sellers and their Affiliates (and/or such successors and assigns) from, in connection with, or in respect of, any Action (including but not limited to the Novell Litigation and the IBM Litigation), regardless of whether or not such Proceeds result from Actions funded by the Litigation Credit Facility, it being understood that there is no assurance that any Proceeds will result from the Novell Litigation, the IBM Litigation or any other Action. The total payments to Purchaser under this Section 2.1(1) shall not exceed One Hundred Million Dollars ($100,000,000) (the "Cap"). The 20% Percentage Interest in Proceeds, up to a maximum of One Hundred Million Dollars ($100,000,000) as described above, assumes, and is conditioned upon, Purchaser electing to establish the Commitment Amount as defined in the Litigation Credit Facility at Ten Million Dollars ($10,000,000). If Purchaser elects to establish the Commitment Amount at Five Million Dollars ($5,000,000) instead of Ten Milion Dollars ($10,000,000), as is contemplated in the Litigation Credit Facility, then, in such event, Purchaser's Percentage Interest for purposes of this Section 2.1(1) shall be ten percent (10%), and the Cap shall be Fifty Million Dollars ($50,000,000). Purchaser's interest in Proceeds is junior to full payment of all attorneys' and other professionals' fees and costs (including contingency fees) incurred in the related Action, and amounts outstanding under the Litigation Credit Facility. The Parties intend,

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acknowledge and agree that the interest in Proceeds purchased by Purchaser under this Section 2.1(l) will be a present transfer at Closing of a property interest for which no further action of the Parties is required to effect assignment. The Parties will take such actions and execute such agreements as may be required to confirm the foregoing arrangements. The Purchaser may not assign, sell, hypothecate or otherwise transfer its interest in the Proceeds without the consent of the Sellers, not to be unreasonably withheld; and

(m) All Assets set forth on Schedule 2.1(m).

2.2. Excluded Assets. Nothing contained herein shall be deemed to sell, transfer, assign or convey the Excluded Assets to Purchaser, and Sellers shall retain all right, title and interest to, in and under the Excluded Assets. "Excluded Assets" shall mean the following Assets of Sellers:

(a) All Me Inc. Products and the furniture and personal property used solely in connection with the Me Inc. Products to be identified as used therefor on Schedule 2.1(a);

(b) All cash, cash deposits and cash equivalents held by Sellers at the time of the Closing (and interest or earnings thereon);

(c) All refunds, rebates, credits, loss allocations and losses for Taxes (and all related rights and claims) for any tax-reporting periods (or portions thereof) ending on or before the Closing Date, and including and any interest due thereon or penalty rebate arising therefrom;

(d) SCO Group's Equity Interests in its Subsidiaries (except for the Subsidiaries identified in Schedule 2.5);

(e) The Novell Litigation, the IBM Litigation and all other Actions other than the Linux Litigation first arising or accrued prior to the Closing (except as set forth in clause (1) of Section 2.1 above);

(f) All Contracts of Sellers other than the Assumed Contracts;

(g) All Assets not assignable or transferable under applicable Laws;

(h) Any (i) confidential personnel and medical records pertaining to any Employees not set forth on Schedule 5.22; (ii) other books and records relating solely to the Me Inc. Products or that Sellers are required by Law to retain or that Sellers determine are necessary or advisable to retain including, without limitation, Tax returns, financial statements, and corporate or other entity filings; provided, however, that Purchaser shall have, to the extent allowed by applicable Law, the right to make copies of any portions of such retained books and records that relate to the Business or any of the Purchased Assets; (iii) information management systems of Sellers, other than those used or useful in the conduct of the Business; (iv) minute books, stock or membership interest records and corporate seals; and (v) documents relating to proposals to acquire Assets or Equity Interests by Persons other than Purchaser;

(i) All Sellers' rights under this Agreement;

(j) All Actions of Sellers arising under Bankruptcy Code Sections 506, 544-553, inclusive, or otherwise against any third party and that do not relate to or arise from any of the Purchased Assets; and

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(k) All Assets set forth on Schedule 2.2(k), which schedule may be amended by Purchaser so as to exclude additional Assets in its discretion from time to time until one (1) Business Day prior to the Closing Date (provided however, no such exclusions (other than of any accounts receivable or any assets of any of the Subsidiaries listed on Schedule 2.5) shall result in any Purchase Price adjustment).

2.3. Assumed Liabilities. On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser shall assume the following, and only the following, Liabilities of Sellers (the "Assumed Liabilities"):

(a) All Liabilities specifically set forth in Schedule 2.3(a) (including but not limited to those arising from the Prohibited Transactions listed in Sections 8.2(b)(v) through and including 8.2(b)(xi)), to be created by Purchaser and attached hereto by no later than one (1) Business Day prior to Closing;

(b) All executory obligations under the Assumed Contracts first arising after the Closing and not as a result of or relating to any action or inaction taken by any Seller or any Affiliate thereof, including any breach of covenant or agreement under this Agreement thereby; and

(c) All amounts payable under Section 365 of the Bankruptcy Code to cure monetary defaults under the Assumed Contracts (the "Cure Amount"); provided that the sum of the Cure Amount plus the amount of Assumed Liabilities shall not exceed the Cash Component, as reduced pursuant to Section 3.1(a).

2.4. Excluded Liabilities. Notwithstanding anything in this Agreement to the contrary, except for the Assumed Liabilities specifically described in Section 2.3 (it being understood that if a Liability could be construed to be described in both Section 2.3 and Section 2.4, then it shall be deemed an Excluded Liability), Purchaser shall not assume, be liable for, or have responsibility with respect to, and shall be deemed not to have assumed, be liable for, or have any responsibility with respect to, any of the Liabilities of the Sellers, whether known or unknown, absolute or contingent, accrued or unaccrued, due or to become due (collectively, the "Excluded Liabilities"), which Excluded Liabilities include:

(a) All Liabilities arising out of or relating to Excluded Assets, including Liabilities first arising or accruing prior to Closing under Assumed Contracts other than Cure Amounts;

(b) Any Contracts of the Subsidiaries (other than the Sellers and those Subsidiaries set forth on Schedule 2.5) and all Liabilities arising thereunder;

(c) Except as provided in Article IX, all Liabilities with respect to all employee benefit plans, policies, agreements and arrangements of the Sellers and their Affiliates, including all Employee Plans, and any Liability to or in respect of, or arising out of or in connection with, the employment by any of the Sellers or cessation of employment with any of the Sellers of any employees or independent contractors or former employees or independent contractors of any of the Sellers, including any severance obligations that arise on or prior to the Closing Date;

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(d) All Liabilities for (i) Taxes of Sellers (including all Liabilities for Taxes relating to the Purchased Assets) for any Tax periods (or portions thereof) ending on or before the Closing Date and (ii) Transfer Taxes;

(e) All Liabilities incurred in the Ordinary Course of Business and existing prior to the filing of the Chapter 11 Cases that are subject to compromise under the Bankruptcy Code, other than Purchaser's obligation to pay any Cure Amount pursuant to Section 2.3(b);

(f) Any Debt of Sellers;

(g) All Liabilities relating to amounts required to be paid by Sellers under this Agreement;

(h) All Liabilities relating to Real Property other than obligations under leases that are Assumed Contracts;

(i) All Liabilities associated with Current Assets conveyed to Purchaser under this Agreement;

(j) All Liabilities associated with brokers, finders or other consultants or advisors to Sellers or its Affiliates entitled to a fee or reimbursement of expenses with respect to this transaction; and

(k) All other Liabilities, accrued expenses or accounts payable of Sellers arising from or associated with the Business or the Purchased Assets arising from events, facts or circumstances occurring before the Closing, except to the extent expressly identified as an Assumed Liability.

2.5. Certain Subsidiaries. The parties acknowledge that a portion of the Purchased Assets are presently owned and/or held by the foreign Subsidiaries listed on Schedule 2.5. At the Closing, the Sellers shall transfer to the Purchaser all of the Purchased Assets held by those Subsidiaries. In the event that the parties reasonably determine that the Subsidiaries listed on Schedule 2.5 cannot transfer assets in order to comply with Sellers' obligations hereunder, or that such transfer would be unduly burdensome, Purchaser may, in addition to its other rights under this Agreement, elect at any time prior to Closing to have the Sellers transfer to Purchaser all equity and other interests in those Subsidiaries. In the event of such election and transfer, the Purchase Price payable under Section 3.1 shall also be appropriately adjusted upward or downward to reflect the difference between (i) any cash and cash equivalents (giving effect to any tax consequences, restrictions or other limitations on the use or distribution of that cash at Closing to a US corporate parent) held by a Subsidiary so transferred, and (ii) any Liabilities ofthat Subsidiary.

ARTICLE III

CONSIDERATION

3.1. Purchase Price. The total purchase price for the Purchased Assets consists of both cash and non-cash components in the estimated aggregate amount of up to Thirty Six Million Dollars ($36,000,000) (the "Purchase Price"), as set forth below:

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(a) A cash payment of up to Ten Million Dollars ($10,000,000) (the "Cash Component"), which shall be reduced, dollar for dollar, in an amount equal to the book value at Closing of all Assumed Liabilities as of Closing and all Cure Amounts and decreased dollar for dollar based on the difference, if any, between accounts receivable to be transferred to Purchaser and Qualifying Accounts Receivable at Closing, as reasonably determined by Purchaser. Ten (10) days prior to Closing, Sellers shall deliver to Purchaser an accounts receivable run in Microsoft Excel format. At Closing, Purchaser shall deliver to Sellers a statement indicating Qualified Accounts Receivable.

(b) Up to Ten Million Dollars ($10,000,000) in the form of a litigation credit facility (substantially in the form attached hereto as Exhibit A) to fund litigation expenses (the "Litigation Credit Facility").

(c) Up to Ten Million Dollars ($10,000,000) in the form of a 20% interest in any and all net Proceeds (as defined in Section 2.1(l)) which are realized by Purchaser and which will be paid to Sellers (after deducting the Purchaser's related fees and expenses and a preferred return on such fees and expenses paid by Purchaser at the prime rate, as reported from time to time by The Wall Street Journal, compounded semi-annually), if any, when and as collected by Purchaser, from or in connection with any Linux Litigation, it being understood that there is no assurance that any proceeds will result from any Linux Litigation. The Parties intend that Sellers' interest in the Proceeds under this Section 3.1(c) will be a present and vested assignment at Closing for which no further action of the Parties is required; provided that the Parties will take such actions and execute such agreements as may be required to confirm the foregoing arrangements. The Sellers may not assign, sell, hypothecate or otherwise transfer their interest under this Section 3.1(c) without the consent of the Purchaser, not to be unreasonably withheld.

(d) Up to Six Million Dollars ($6,000,000) as provided pursuant to the terms of the Cross License Agreement.

3.2. Purchase Price Deposit. Pursuant to the terms of this Agreement, Purchaser has deposited on October 25, 2007 with Berger Singerman, P.A., in its capacity as escrow agent (the "Escrow Agent"), One Million Eight Hundred Thousand Dollars ($1,800,000) by wire transfer of immediately available funds (the "Escrowed Funds"), into an interest-bearing account, to be released by the Escrow Agent and delivered to either Purchaser or Sellers, in accordance with the provisions of this Agreement. Pursuant to this Agreement, the Escrowed Funds (together with all accrued investment income or interest thereon) shall be distributed as follows:

(a) if the Closing occurs, the Escrowed Funds shall be applied towards the Cash Component payable by Purchaser to Sellers under Section 3.3 hereof, and all accrued investment income or interest thereon shall be delivered to Purchaser at the Closing;

(b) if this Agreement is terminated by Sellers due to a breach by Purchaser pursuant to Section 4.4(e), the Escrowed Funds shall be released to Sellers and all accrued investment income or interest thereon or any remainder, shall be returned to Purchaser;

(c) if this Agreement is terminated for any reason other than default by Purchaser pursuant to Section 4.4(e), the Escrowed Funds, together with all accrued investment income or interest thereon, shall be returned to Purchaser.

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(d) The Escrow Agent represents the Sellers herein, and shall be entitled to continue to do so, including in connection with any interpleader proceeding relating to the Escrow Funds. The Escrow Agent, in its capacity as such, shall act in accordance with the terms set forth in Schedule 3.2 attached hereto.

3.3. Cash Component Availability. Consistent with Section 6.6, in connection with the filing of the Sales Order, Purchaser will demonstrate to the reasonable satisfaction of the Sellers and the Bankruptcy Court, that sufficient cash is funded or irrevocably dedicated to Purchaser from a creditworthy source to ensure that Purchaser is, as of the hearing on the Sales Order, prepared to close and pay the Cash Component, as adjusted pursuant to this Article III, at Closing. The payment of the Cash Component, as adjusted pursuant to this Article III, less the Escrowed Funds, shall be made on the Closing Date by wire transfer of immediately available funds to an account designated by Sellers.

ARTICLE IV

CLOSING AND TERMINATION

4.1. Closing Date. Subject to the satisfaction of the conditions set forth in Sections 10.1, 10.2 and 10.3 hereof (or the waiver thereof by the Party entitled to waive that condition): (a) the closing of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities provided for in Article II hereof (collectively, the "Closing") shall take place at 5:00 p.m. Eastern Standard Time on the Business Day selected by Purchaser that is on or after the day the Sale Order becomes a final order no longer subject to appeal or reconsideration but before December 31, 2007; or (b) if (i) any appeal is filed but the Sale Order is not otherwise stayed, and (ii) Purchaser decides, in its sole and absolute discretion, to proceed with the Closing (which decision shall be made through written notice to Sellers within three (3) Business Days after Purchaser receives actual notice of such appeal), the Closing shall take place at 5:00 p.m. Eastern Standard Time on the Business Day selected by Purchaser that is on or before three (3) Business Days after the date on which Purchaser notifies Sellers of such decision. The Closing shall take place at the offices of Proskauer Rose LLP in New York (or at such other place as the Parties may designate in writing). The date on which the Closing shall be held is referred to in this Agreement as the "Closing Date." For purposes of determining what constitutes Purchased Assets, the Closing shall be deemed to have occurred at 11:59 p.m. New York City time on the Business Day prior to the Closing Date. As used herein, a "final order" refers to an Order of the Bankruptcy Court that has not been vacated, reversed, modified, amended, or stayed, and for which the time to further appeal or seek review or rehearing has expired.

4.2. Deliveries by Sellers. At the Closing, Sellers shall deliver to Purchaser:

(a) a bill of sale in the form of attached hereto as Exhibit C, duly executed by the Sellers;

(b) an assignment and assumption agreement in the form attached hereto as Exhibit D, duly executed by the Sellers;

(c) an assignment and assumption of lease for each of the Facilities in the form attached hereto as Exhibit E, with such modifications as are necessary to properly describe each

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Facility (collectively, the "Lease Assignments"), duly executed by the applicable Seller that holds the leasehold interest in each Facility;

(d) duly executed assignments of (i) any patents, patent applications, registered trademarks and applications for trademark registration owned by any Seller that are included in Company Technology, in forms suitable for recording in the United States Patent and Trademark Office, (ii) any copyright registrations and applications for copyright registration owned by any Seller that are included in Company Technology, in forms suitable for recording in the United States Copyright Office and (iii) any domain name registrations and applications for domain name registration owned by any Seller that are included in Company Technology, in forms suitable for transfer of such domain names;

(e) a certificate signed by an authorized officer of Sellers on behalf of all Sellers, dated the Closing Date, certifying that the conditions set forth in Section 1O.1(a)-(f) have been satisfied;

(f) a copy of all orders of the Bankruptcy Court pertaining to the transactions contemplated herein, including the Sale Order, in the form attached as Exhibit F, with such modifications mutually acceptable to Sellers and Purchaser in their respective sole discretion;

(g) a 10% warrant in the Me Inc. Products substantially in the form attached hereto as Exhibit G duly executed by Me Inc.;

(h) the Cross License Agreement duly executed by Me Inc.;

(i) the Litigation Credit Facility duly executed by Sellers;

(j) a closing statement mutually acceptable to Sellers and Purchaser (the "Closing Statement"), duly executed by Sellers; and

(k) all other instruments of conveyance and transfer, in form and substance reasonably acceptable to Purchaser, as may be necessary to convey the Purchased Assets to Purchaser.

4.3. Deliveries by Purchaser. At the Closing, Purchaser shall deliver to Sellers:

(a) the Cash Component (less the Escrowed Funds), subject to the terms and adjustments set forth in Article III hereof, in immediately available funds and evidence of payment of the Cure Amount in immediately available funds;

(b) an assignment and assumption agreement in the form attached hereto as Exhibit D, duly executed by Purchaser;

(c) the Lease Assignments duly executed by Purchaser;

(d) a certificate signed by an authorized officer of Purchaser, dated the Closing Date, certifying that the conditions set forth in Section 10.2(a)-(b) have been satisfied;

(e) the Cross License Agreement duly executed by Purchaser;

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(f) the Litigation Credit Facility duly executed by Purchaser;

(g) the Closing Statement, duly executed by Purchaser; and

(h) all other instruments of conveyance and transfer, in form and substance reasonably acceptable to Sellers, as may be necessary to convey the Purchased Assets to Purchaser.

4.4. Termination of Agreement. This Agreement may be terminated prior to the Closing as follows:

(a) by mutual written consent of Sellers and Purchaser;

(b) by Purchaser, if any of the conditions to the obligations of Purchaser set forth in Sections 10.1 and 10.3 shall have become incapable of fulfillment other than as a result of a breach by Purchaser of any covenant or agreement contained in this Agreement or any other Purchaser Document, and such condition is not waived by Purchaser;

(c) by Purchaser, if there shall be a breach by any Seller of any representation or warranty, or any covenant or agreement contained in this Agreement or any other Seller Document, which would result in a failure of a condition set forth in Section 10.1 or 10.3, and which breach cannot be cured or has not been cured by the earlier of (i) seven (7) Business Days after the giving of written notice by Purchaser to such Seller of such breach and (ii) the Termination Date;

(d) by Sellers, if any condition to the obligations of Sellers set forth in Sections 10.2 and 10.3 shall have become incapable of fulfillment other than as a result of a breach by any Sellers of any covenant or agreement contained in this Agreement or any other Seller Document, and such condition is not waived by Sellers;

(e) by Sellers, if there shall be a breach by Purchaser of any representation or warranty, or any covenant or agreement contained in this Agreement, which would result in a failure of a condition set forth in Section 10.2 or 10.3, and which breach cannot be cured or has not been cured by the earlier of (i) seven (7) Business Days after the giving of written notice by Sellers to Purchaser of such breach and (ii) the Termination Date;

(f) by either Purchaser or Seller if any Governmental Authority (other than the Bankruptcy Court) having competent jurisdiction issues a final and non-appealable order, decree or ruling restraining, enjoining or otherwise prohibiting the transaction;

(g) by Purchaser upon a determination by any Seller or either of Sellers' respective boards of directors to pursue, or upon approval by the Bankruptcy Court of, a Competing Bid or an Alternative Transaction, subject to Purchaser's right to payment of the Break-Up Fee in accordance with the provisions of Section 4.6;

(h) by Purchaser if (i) the Bidding Procedures Order, in form and content acceptable to Purchaser in its reasonable discretion, is not entered by the Bankruptcy Court on or before November 20, 2007, or (ii) the Sale Order, in form and content provided by Purchaser, is not entered by the Bankruptcy Court on or before December 31, 2007; or

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(i) by Purchaser or Sellers, if the Closing shall not have occurred by the close of business on April 30, 2008 (the "Termination Date"); provided that, in the case of Sellers, any delay was not caused by any Seller or its failure to comply with any provision of this Agreement.

4.5. Procedure Upon Termination. In the event of termination by Purchaser or Sellers, or both, pursuant to Section 4.4 hereof, written notice thereof shall forthwith be given to the other Party or Parties, and this Agreement shall terminate, and the purchase of the Purchased Assets hereunder shall be abandoned, without further action by Purchaser or Sellers. If this Agreement is terminated as provided herein each Party shall use reasonable efforts to destroy or redeliver all documents, work papers and other material of any other Party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the Party furnishing the same; provided that, subject to the confidentiality provisions set forth in Section 4.6(g) below, no Party will be liable for failing to destroy materials or make any such redelivery.

4.6. Effect of Termination: Break-Up Fee.

(a) In the event that this Agreement is validly terminated as provided herein, then each of the Parties shall be relieved of its duties and obligations arising under this Agreement effective on the date of such termination and such termination shall be without liability to Purchaser or Sellers; provided, however, that the obligations of the parties set forth in this Section 4.6 and Section 8.7 hereof shall survive any such termination and shall be enforceable hereunder.

(b) If this Agreement is terminated the Escrowed Funds shall be released to the appropriate Party pursuant to Section 3.2 above and once Escrow Agent has delivered the Escrowed Funds as provided in Section 3.2 above, Escrow Agent shall be released of all obligations hereunder with respect to such Escrowed Funds.

(c) Notwithstanding any other provision of this Agreement to the contrary, in the event that this Agreement is terminated for any reason other than due to a breach by Purchaser hereunder resulting in Sellers' termination of this Agreement pursuant to Section 4.4(e), then Purchaser shall within a reasonable time thereafter provide Seller with summary documentation (redacted as appropriate for attorney-client privilege and work product issues) for all costs of reviewing the Business and all fees and expenses, including attorney and other advisor's fees, incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby ("Fees and Expenses") of Purchaser, and promptly, but no later than five (5) Business Days after its receipt of such documentation, Sellers shall reimburse Purchaser for all such Fees and Expenses, not to exceed Four Hundred Eighty Thousand Dollars ($480,000.00) in the aggregate. The foregoing reimbursement obligation shall be entitled to super-priority administrative expense treatment under Sections 364(c), 503(b) and 507(a) of the Bankruptcy Code; and provided further that, in the event that, and only for so long as: (i) this Agreement is terminated because a condition set forth in Section 10.3 has not been timely satisfied or waived, (ii) the failure of such condition is not the result of a material breach by Sellers of this Agreement and (iii) no Competing Bid or Alternative Transaction is consummated, Sellers' reimbursement obligation hereunder shall not exceed Three Hundred Thousand Dollars ($300,000) in the aggregate. The Sellers shall also pay One Hundred Fifty Thousand Dollars ($150,000) in respect of the Fees and Expenses (the "Guaranteed Expense Reimbursement"). The Guaranteed Expense Reimbursement shall be paid promptly following entry of the Bankruptcy Court Order approving the bidding

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procedures contemplated by this Agreement, and shall be credited in reduction of any subsequent payment in respect of the Fees and Expenses.

(d) Notwithstanding any other provision of this Agreement to the contrary, in the event that (i) this Agreement is terminated for any reason other than due to a breach by Purchaser hereunder resulting in Sellers' termination of this Agreement pursuant to Section 4.4(e), and (ii) Sellers consummate a Competing Bid or Alternative Transaction or (iii) Purchaser is not the "Winning Bidder" at the Auction, then Purchaser will be paid in immediately available funds a fee (the "Break-Up Fee") equal to Six Hundred Thousand Dollars ($600,000.00). The Break-Up Fee shall be paid upon the consummation of the Competing Bid or Alternative Transaction, in lieu of any Losses Purchaser may suffer, as liquidated damages and not as a penalty, as Purchaser's sole and exclusive remedy (in addition to Sellers' reimbursement obligation set forth in Section 4.6(c) above) as a result of such a termination. The Break-Up Fee shall be entitled to super-priority administrative expense treatment under Sections 364(c), 503(b) and 507(a) of the Bankruptcy Code.

(e) If this Agreement is terminated due to breach by Purchaser, Sellers shall be entitled to receive the Escrowed Funds as liquidated damages and not as a penalty as Sellers' sole and exclusive remedy as a result of such a termination.

(f) The Confidentiality Agreement shall survive any termination of this Agreement and nothing in this Section 4.6 shall relieve Purchaser or Sellers of their respective obligations under the Confidentiality Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLERS

In order to induce Purchaser to enter into and perform this Agreement and to consummate the transactions contemplated hereby, each Seller hereby jointly and severally represents and warrants to Purchaser as follows:

5.1. Organization: Predecessors.

(a) Organization. Schedule 5.1(a) sets forth for each Seller its name and jurisdiction of organization. Each Seller is (i) duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (ii) is duly qualified to do business and in good standing in each jurisdiction in which it owns or leases Real Property and in each other jurisdiction in which the failure to so qualify has not had, and is not reasonably likely to have, a Material Adverse Effect. Sellers have delivered to Purchaser true, accurate and complete copies of (x) their Organizational Documents and (y) their minute books which contain records of all meetings held of, and other corporate actions taken by, their respective stockholders, Boards of Directors and any committees appointed by such Boards of Directors.

(b) Predecessors. Schedule 5.1(b) sets forth a list of (i) any Person that has ever merged with or into a Seller, (ii) any Person a majority of whose capital stock (or similar outstanding ownership interests) or Equity Interests has ever been acquired by a Seller, (iii) any Person all or substantially all of whose assets has ever been acquired by a Seller, and (iv) any prior names of any Seller or any Person described in clauses (i) through (iii) (each such Person, a "Predecessor").

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5.2. Power and Authorization.

(a) Contemplated Transaction. The execution, delivery and performance by each Seller of this Agreement and each other agreement, document, instrument or certificate to be executed by any Seller in connection with the consummation of the transactions contemplated by this Agreement (the "Seller Documents") have been duly authorized by all necessary action on the part of each Seller. This Agreement and each Seller Document to which each Seller is (or will be ) a party (i) has been (or, in the case of Seller Documents to be entered into at or prior to the Closing, will be) duly executed and delivered by each Seller and (ii) is (or, in the case of Seller Documents to be entered into at or prior to the Closing, will be) a legal, valid and binding obligation of such Seller, enforceable against each such Seller in accordance with its terms.

(b) Conduct of Business. Each Seller has the full power and authority necessary to own and use its Assets and carry on the Business.

5.3. Authorization of Governmental Authorities. Except for the Sale Order and as disclosed on Schedule 5.3 (collectively, "Required Approvals"), no action by (including any authorization, consent or approval), or in respect of, or filing with, any Governmental Authority, is required for, or in connection with, the valid and lawful (a) authorization, execution, delivery and performance by any Seller of this Agreement and each Seller Document to which it is (or will be) a part or (b) the consummation of the transactions contemplated hereby or thereby by each Seller.

5.4. Non-contravention. Except as disclosed on Schedule 5.4 (collectively, "Required Consents"), neither the execution, delivery and performance by any Seller of this Agreement or any Seller Document to which it is (or will be) a part nor the consummation of the transactions contemplated hereby will, except pursuant to the transaction specifically contemplated by this Agreement:

(a) assuming the entry of the Sale Order and the taking of any action by (including any authorization, consent or approval), or in respect of, or any filing with, any Governmental Authority, in each case, as disclosed on Schedule 5.3, violate any material Legal Requirement applicable to any Seller or the transactions contemplated by this Agreement;

(b) result in a breach or violation of, or default under, any Contractual Obligation of any Seller;

(c) require any actions by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any Contractual Obligation of any Seller;

(d) result in the creation or imposition of an Encumbrance upon, or the forfeiture of, any Asset; or

(e) result in a breach or violation of, or default under, the Organizational Documents of any Seller.

5.5. Capitalization of Sellers.

(a) Outstanding Capital Stock. As of the date of this Agreement, the entire authorized capital stock of each Seller is as set forth on Schedule 5.5(a). All of the outstanding shares of capital stock of each Seller have been duly authorized, validly issued, and are fully paid and

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non-assessable. None of the Sellers has violated the Securities Act of 1933, as amended, any state "blue sky" or securities laws, any other similar Legal Requirement or any preemptive or other similar rights of any Person in connection with the issuance or redemption of any of its Equity Interests.

(b) Ownership; Subsidiaries. All of the outstanding Equity Interests in each of the Subsidiaries are set forth on Schedule 5.5(c) and are validly issued, fully paid and non-assessable. Seller is the beneficial owner (and Seller or its Subsidiaries listed on Schedule 5.5(c) is the record owner) of all of the Equity Interests in the Subsidiaries and hold such Equity Interests free and clear of all Encumbrances except as are imposed by applicable securities Laws.

(c) Encumbrances. Except as disclosed on Schedule 5.5(d): (i) there are no preemptive rights or other similar rights in respect of any Equity Interests in any Seller, (ii) except as imposed by applicable securities Laws, there are no Encumbrances against, or other Contractual Obligations relating to, the ownership, transfer or voting of any Equity Interests in any Seller, or otherwise affecting the rights of any holder of the Equity Interests in any Seller, (iii) except for the transactions contemplated hereby, there is no Contractual Obligation, or provision in the Organizational Documents of any Seller which obligates it to purchase, redeem or otherwise acquire, or make any payment (including any dividend or distribution) in respect of, any Equity Interests in any Seller.

5.6. Financial Statements.

(a) Financial Statements. Attached to Schedule 5.6 are copies of each of the following:

(i) the audited consolidated balance sheet of the Sellers as of October 31, 2006 (respectively, the "Most Recent Balance Sheet," and the "Most Recent Balance Sheet Date"), October 31, 2006 and October 31, 2005, and the related audited consolidated statements of income, cash flow and changes in stockholders' equity of the Sellers for such fiscal years, accompanied by any notes thereto and the report of Tanner LC (collectively, the "Audited Financials");

(ii) the unaudited consolidated balance sheet of the Sellers for the quarters ended January 31, 2007, April 30, 2007 and July 31, 2007 and the related unaudited consolidated statement of income, cash flow and changes in stockholders' equity of the Sellers for such quarters (the "Interim Financials"); and

(iii) monthly unaudited financial statements of the Sellers in the form customarily prepared by management for internal use for each complete month from the Most Recent Balance Sheet Date through the date of this Agreement (the "Monthly Financials," and together with the Audited Financials and Interim Financials, collectively the "Financials").

(b) Compliance with GAAP, etc. Except as disclosed on Schedule 5.6, the Financials (including any notes thereto) (a) are complete and correct and were prepared in accordance with the books and records of the Sellers, (b) have been prepared in accordance with GAAP, consistently applied (subject, in the case of the unaudited Financials, to normal year-end audit adjustments, the effect of which will not, individually or in the aggregate, be materially adverse and the absence of notes that, if presented, would not differ materially from those included in the Most Recent Balance Sheet) and (c) fairly present the consolidated financial position of the Sellers as

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at the respective dates thereof and the consolidated results of the operations of the Sellers and changes in financial position for the respective periods covered thereby.

5.7. Absence of Undisclosed Liabilities. No Seller has any Liabilities except for (a) Liabilities set forth on the face of the Most Recent Balance Sheet and (b) Liabilities incurred in the Ordinary Course of Business since the Most Recent Balance Sheet Date (none of which results from, arise out of, or relates to any breach or violation of, or default under, a Contractual Obligation or material Legal Requirement).

5.8. Absence of Certain Developments. Since the Most Recent Balance Sheet Date, except for the filing of the Chapter 11 Cases, the Business has been conducted in the Ordinary Course of Business and, except for the matters disclosed in Schedule 5.8 (which matters have not had, and are not reasonably likely to have, a Material Adverse Effect):

(a) no Seller has (i) amended its Organizational Documents, (ii) amended any term of its outstanding Equity Interests or other securities or (iii) issued, sold, granted, or otherwise disposed of, its Equity Interests or other securities;

(b) no Seller has become liable in respect of any guarantee or has incurred, assumed or otherwise become liable in respect of any Debt, except for in the Ordinary Course of Business, (i) trade payables and (ii) borrowings under credit facilities in existence on the Most Recent Balance Sheet Date and disclosed on Schedule 5.19;

(c) no Seller has permitted any of its Assets to become subject to any Encumbrance other than a Permitted Encumbrance;

(d) no Seller has (i) made any declaration, set aside, dividend or other distribution with respect to, or any repurchase, redemption or other acquisition of, any of its capital stock or other Equity Interests or (ii) entered into, or performed, any transaction with, or for the benefit of, any Seller or any Affiliate of any Seller (other than payments made to officers, directors and Employees in the Ordinary Course of Business);

(e) there has been no material loss, destruction, damage or eminent domain taking (in each case, whether or not insured) affecting the Business or any Assets with a value in excess of $25,000, individually or in the aggregate, or otherwise material to the Business;

(f) no Seller has increased the compensation payable or paid, whether conditionally or otherwise, to (i) any Employee, consultant or agent other than in the Ordinary Course of Business, (ii) any director or officer or (iii) any Seller or any Affiliate of any Seller;

(g) no Seller has entered into any Contractual Obligation providing for the employment or consultancy of any Person on a full-time, part-time, consulting or other basis or otherwise providing compensation or other benefits to any officer, director, employee or consultant;

(h) no Seller has made any change in its methods of accounting or accounting practices (including with respect to reserves);

(i) no Seller has made, changed or revoked any material Tax election, elected or changed any method of accounting for Tax purposes, settled any Action in respect of Taxes or entered into any Contractual Obligation in respect of Taxes with any Governmental Authority;

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(j) no Seller has terminated or closed any Facility, business or operation;

(k) no Seller has adopted any Employee Plan or, except in accordance with terms thereof as in effect on the Most Recent Balance Sheet Date, increased any benefits under any Employee Plan;

(l) no Seller has written up or written down any of its material Assets or revalued its inventory;

(m) no Seller has entered into any Contractual Obligation to do any of the things referred to elsewhere in this Section 3.8; and

(n) to Sellers' Knowledge, no event or circumstance has occurred which has had, or is reasonably likely to have, a Material Adverse Effect.

5.9. Debt Guarantees. The Sellers have no Liabilities in respect of Debt except as set forth on Schedule 5.9. For each item of Debt, Schedule 5.9 correctly sets forth the debtor, the principal amount of the Debt as the date of this Agreement, the creditor, the maturity date, the collateral, if any, securing the Debt. No Seller has any Liability in respect of a guarantee of any Liability of any other Person (other than another Seller).

5.10. Assets.

(a) Ownership of Assets. Each Seller has sole and exclusive, good and marketable title to, or, in the case of property held under a lease, license or other Contractual Obligation, a sole and exclusive, enforceable leasehold interest or license in, or right to use, all of its properties, rights and Assets, whether real or personal and whether tangible or intangible, including all assets reflected in the Most Recent Balance Sheet or acquired after the Most Recent Balance Sheet Date (except for such assets which have been sold or otherwise disposed of since the Most Recent Balance Sheet Date in the Ordinary Course of Business) (collectively, the "Assets"). Except as disclosed on Schedule 5.10, none of the Assets is subject to any Encumbrance other than Permitted Encumbrances.

(b) Sufficiency of Assets. The Purchased Assets comprise all of the assets, properties and rights of every type and description, whether real or personal, tangible or intangible, used or useful in or necessary to the conduct of the Business and are adequate to conduct the Business as currently conducted and contemplated to be conducted.

(c) Investments. No Seller controls, directly or indirectly, or owns any direct or indirect Equity Interest in any Person which is not a Subsidiary or not set forth on Schedule 2.1(i).

5.11. Accounts Receivables. All accounts and notes receivable reflected on the Most Recent Balance Sheet and all accounts and notes receivable arising subsequent to the Most Recent Balance Sheet Date and on or prior to the Closing Date, have arisen or will arise in the Ordinary Course of Business, represent or will represent legal, valid, binding and enforceable obligations of a Seller and, subject only to consistently recorded reserves for bad debts established as of a date prior to the Closing Date in accordance with GAAP and in a manner consistent with past practice and disclosed to Purchaser in writing on or prior to the date hereof, have been, or will be, collected or are, or will be collectible in the aggregate recorded amounts thereof in accordance with their terms and, to

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the Sellers' Knowledge, will not be subject to any contests, claims, counterclaims or setoffs. No accounts or notes receivables are subject to any Encumbrance, and each of which is freely assignable to Purchaser at the Closing upon entry of the Sale Order.

5.12. Real Property.

(a) Schedule 5.12(a) sets forth a list of all real property owned by each of the Sellers and specifies the Sellers which occupy such property if different from the owners and describes each leasehold interest in real property leased, subleased by, licensed or with respect to which a right to use or occupy has been granted to or by any Seller (such leased Real Property together with such owned Real Property, the "Real Property"), and specifies the lessor(s) of such leased property, the Seller occupying such leased property, and identifies each lease or any other Contractual Obligation under which such property is leased (the "Real Property Leases"). Except as described on Schedule 5.12(a) there are no written or oral subleases, licenses, concessions, occupancy agreements or other Contractual Obligations granting to any other Person the right of use or occupancy of the Real Property and there is no Person (other than any Seller and any lessor(s) of leased Real Property) in possession of the leased Real Property. With respect to each Real Property Lease that is a sublease, to the Sellers' Knowledge, the representations and warranties set forth in Section 5.12(b) are true and correct with respect to the underlying lease.

(b) The Real Property Leases do not impose material restrictions on any portion of the Business other than radius or use restrictions described on Schedule 5.12 that do not materially interfere with the Business. No Seller is obligated to pay any leasing or brokerage commission as a result of the transactions contemplated hereby. There is no pending or, to Sellers' Knowledge, threatened eminent domain taking affecting any of the Real Property. The Sellers have delivered to Purchaser true, correct and complete copies of the Real Property Leases including all amendments, modifications, notices or memoranda of lease thereto and all estoppel certificates or subordinations, non-disturbance and attornment agreements related thereto in Sellers' possession.

(c) To Sellers' Knowledge, none of the Facilities currently existing on the Real Property encroaches upon, and any Facilities under construction on the Real Property will not encroach upon, the real property of any other Person, and no facility of any other Person encroaches upon the Real Property. Each Facility is supplied with utilities and other services (including gas, electricity, water, drainage, sanitary sewer, storm sewer, fire protection and telephone) necessary for the operation of such Facility as the same is currently operated or currently contemplated to be operated. Each parcel of Real Property abuts on, and has direct vehicular access to, a public road, or has access to a public road via a permanent irrevocable appurtenant easement benefiting the parcel of Real Property, in each case, to the extent necessary for the conduct of the Business.

(d) To Sellers' Knowledge, all Permits necessary in connection with the construction upon, and current and currently contemplated use and operation of, the Real Property and the lawful occupancy thereof have been issued by the appropriate Governmental Authorities. The current and currently contemplated use of the Real Property is, to Sellers' Knowledge in all material respects, in accordance with the certificates of occupancy relating thereto and the terms of any such Permits. All such Permits will to Sellers' Knowledge continue in full force and effect immediately after giving effect to the transactions contemplated hereby. To Sellers' Knowledge, the Real Property and its current and currently contemplated use, occupancy and operation by the Sellers and the Facilities located thereon do not (i) constitute a nonconforming use under any applicable building, zoning, subdivision or other land use or similar Legal Requirements or (ii) otherwise

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violate or conflict with any covenants, conditions, restrictions or other Contractual Obligations, including the requirements of any applicable Encumbrance. Except as set forth on Schedule 5.12(d), no Seller nor to Sellers' Knowledge, any Predecessor (x) is in violation of any Legal Requirement relating to Real Property, including setback requirements, zoning restrictions and ordinances, building, life, access, safety, health and fire codes and ordinances affecting the Real Property, or (y) has received notice of any eminent domain, condemnation or similar proceeding pending or, to the Sellers' Knowledge, threatened, or any Government Order relating thereto. The Real Property is not located within any flood plain or subject to any similar type of restriction for which any Permits necessary to the use thereof have not been obtain.

5.13. Equipment. All of the Equipment is, in all materials respects, (a) adequate and suitable for its present and intended uses, (b) in good working order, operating condition and state of repair, (c) without defects (whether patent or latent) and (d) maintained, and has been maintained, in accordance with normal industry practice.

5.14. Intellectual Property. Except as set forth on Schedule 5.14, as may be applicable to the following subclauses:

(a) Except as set forth on Schedule 5.14(a), Sellers are the sole owners of or have the sole right to use all Company Technology, and none of the Company Technology is in the possession, custody, or control of any Person other than Sellers.

(b) Except as set forth on Schedule 5.14(b), (i) no Seller (nor any Predecessor) has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of third parties; (ii) no Seller (nor any Predecessor) has received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation or violation (including any claim that a Person must license or refrain from using any Intellectual Property rights of any third party in connection with the conduct of the Business or the use of the Company Technology); and (iii) to Sellers' Knowledge, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Company Technology.

(c) Schedule 5.14(c) sets forth a true, accurate and complete list of all Registered Intellectual Property, and Sellers have delivered to Purchaser true, accurate, and complete copies of all such registrations and applications, in each case, as amended, or otherwise modified and in effect, as well as true, accurate and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item. Schedule 5.14(c) also identifies each trade name, trade dress and unregistered trademark or service mark used by any Seller in or in connection with the Business or the Company Technology. All items of Registered Intellectual Property are currently in compliance with formal Legal Requirements (including, without limitation, as applicable, payment of filing, examination, issue, registration and maintenance fees, proof of working or use, timely post-registration filing of affidavits of use or incontestability and renewal applications); are not subject to any maintenance fees or Taxes or Actions falling due within ninety (90) days after the Closing; and are valid, enforceable, subsisting, unexpired and have not been abandoned or canceled.

(d) Except as set forth in Schedule 5.14(d), with respect to each item of Company Technology: (i) one of the Sellers possesses all right, title and interest in and to such item free and clear of any Encumbrance other than the Permitted Encumbrances; (ii) such item is not subject to any

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outstanding Government Order, and no Action is pending or, to Sellers' Knowledge, threatened, which challenges the legality, validity, enforceability, use or ownership of such item; and (iii) no Seller has agreed or has a Contractual Obligation to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to such item.

(e) Schedule 5.14(e) sets forth a true, accurate and complete list of all licenses, sublicenses and other Contractual Obligations to which any Seller is a part or by which it is bound and pursuant to which any other Person is authorized to have access to, or use of, Company Technology or to exercise any other right with regard thereto. Sellers have delivered to Purchaser true, accurate and complete copies of all such licenses, in each case, as amended, or otherwise modified and in effect.

(f) Schedule 5.14(f) sets forth a true, accurate and complete list of all licenses, sublicenses and other agreements or arrangements pursuant to which any Seller has been granted a right or license to any Licensed Intellectual Property for use in or in connection with the Business (such licenses, together with the licenses set forth on Schedule 5.14(e), "Intellectual Property Licenses"). Sellers have delivered to Purchaser true, accurate and complete copies of all such Third Part Licenses, in each case, as amended, or otherwise modified and in effect. Except as disclosed on Schedule 5.14(f), there are no royalties for the use of any such Licensed Intellectual Property.

With respect to each such item identified on Schedule 5.14(f): (i) such item is not subject to any outstanding Government Order, and no action is pending or, to Sellers' Knowledge, threatened which challenges the legality, validity or enforceability of such item and (ii) no Seller has granted any sublicense or similar right with respect to any such Licensed Intellectual Property.

(g) Each of the Intellectual Property Licenses is a legal, valid and binding obligation of each of the parties thereto, enforceable in accordance with its terms; to Sellers' Knowledge, no part to such Intellectual Property License is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, thereunder; and no notice of default with respect to any such Intellectual Property License has been sent or received by any Seller.

(h) The Company Technology constitutes all of the Technology and Intellectual Property necessary to conduct the Business as currently conducted and contemplated to be conducted.

(i) Immediately subsequent to the Closing, all Company Technology will be owned or available for use by Purchaser upon terms and conditions identical to those under which Sellers owned or used such Company Technology immediately prior to the Closing.

(j) Except as set forth on Schedule 5.14(j), no Seller has licensed, sublicensed, assigned, transferred or otherwise conveyed any right or interest in any Company Technology to any Person, and no other Person has any such right or interest in the Company Technology.

(k) Neither the execution nor delivery of this Agreement and the other Seller Documents, nor the consummation of the transactions contemplated hereby will result in a default under or require the consent of any other Person in respect of any Intellectual Property License, or will alter or impair the Sellers' rights in the Company Technology.

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(l) Sellers have taken all reasonable steps to protect and maintain the secrecy, confidentiality and value of their trade secrets, including, without limitation, requiring all employees, consultants, contractors and other Persons with access to such trade secrets to execute binding confidentiality agreements and, to Sellers' Knowledge, no such employee, consultant, contractor or other Person is in breach of any such confidentiality agreement.

(m) (i) Except as set forth on Schedule 5.14(m), no Computer Software included within Company Technology has been delivered or made available to any third party in source code form, and no Seller has agreed to or undertaken to provide any such Computer Software in source code form to any third party; (ii) there are no third parties entitled to: (A) be enrolled as a beneficiary under a technology escrow arrangement or otherwise with respect to the source code for any such Computer Software or (B) receive the source code for any such Computer Software (including without limitation, receiving the source code as a result of an event (including a change of control of ownership of any Seller, bankruptcy of any Seller or otherwise) under an escrow arrangement or otherwise and (iii) the source code for such Computer Software has been in the possession of only those parties set forth in Schedule 5.14(m).

(n) To Sellers' Knowledge, the Company Technology does not contain any viruses, time-bombs, key-locks or any other devices that could disrupt or interfere with the operation of the Company Technology or the integrity of the data, information or signals produced by the Company Technology in a manner that could be adverse to a user of the Company Technology.

(o) Except as set forth in Schedule 5.14(o), all Products made, used, or licensed under any patents that are part of the Company Technology are properly marked with patent notices. All Products and other materials that use any trademark or service mark that is part of the Company Technology or otherwise used in the Business bear proper trademark notices. All works that are part of the Company Technology and provided or published to third parties are marked with proper copyright notices.

(p) Except as set forth in Schedule 5.14(p), all current and former employees and contractors of any Seller or Predecessor who contributed to the Company Technology in any way have executed enforceable Contractual Obligations that assign to such Seller all the respective rights, including Intellectual Property, to any inventions, improvements, discoveries or information relating to the Business.

(q) Except as set forth in Schedule 5.14(q), none of the Company Technology constitutes or is dependent on any open source computer code, and none of the Company Technology is subject to any license or other Contractual Obligation that would require the Sellers to divulge to any Person any source code or trade secret that is part of the Company Technology.

5.15. Legal Compliance; Illegal Payments; Permits. (a) Compliance. No Seller is in breach or violation of, or default under, and has not, since January 1, 2002, been in breach or violation of, or default under:

(i) its Organizational Documents nor, to Sellers' Knowledge, is there a basis which could constitute such a breach, violation or default; or

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(ii) any material Legal Requirement nor, to Sellers' Knowledge, is there a basis which could constitute such a breach, violations or default, except for breaches, violation or defaults (x) disclosed on Schedule 5.15 and (y) which have not had, and are not reasonably likely to have, a Material Adverse Effect.

(b) Illegal Payments, etc. In the conduct of the Business, no Seller nor any of its directors, officers, employees or agents, has (a) directly or indirectly, given, or agreed to give, any illegal gift, contribution, payment or similar benefit to any supplier, customer, governmental official or employee or other Person who was, is or may be in a position to help or hinder and Seller (or assist in connection with any actual or proposed transaction) or made, or agreed to make, any illegal contribution, or reimbursed any illegal political gift or contribution made by any other Person, to any candidate for federal, state, local or foreign public office or (b) established or maintained any unrecorded fund or asset or made any false entries on any books or records for any purpose.

(c) Permits. Each Seller has been duly granted all Permits under all material Legal Requirements necessary for the conduct of the Business as currently conducted and contemplated to be conducted. Schedule 5.15(c) describes each Permit affecting, or relating to, the Assets or the Business together with the Governmental Authority or other Person responsible for issuing such Permit. Except as disclosed on Schedule 5.15(c), (i) the Permits are valid and in full force and effect, (ii) no Seller is in breach or violation of, or default under, any such Permit, and, to the Sellers' Knowledge, no basis exists which, with notice or lapse of time or both, would constitute any such breach, violation nor default and (iii) the Permits will continue to be valid and in full force and effect, on identical terms following the consummation of the transactions contemplated hereby.

5.16. Tax Matters.

(a) Each Seller has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it in accordance with all Legal Requirements. All such Tax Returns were true, correct and complete in all respects. All Taxes owed by each Seller (whether or not shown on any Tax Return) have been timely paid in full. No claim has ever been made by an authority in a jurisdiction where any Seller does not file Tax Returns that such Seller is or may be subject to taxation by that jurisdiction, and, to the Sellers' Knowledge, there is no basis for any such claim to be made. There are no Encumbrances with respect to Taxes upon any Asset other than Permitted Encumbrances for current Taxes not yet due and payable.

(b) Each Seller has deducted, withheld and timely paid to the appropriate Governmental Authority all Taxes required to be deducted, withheld or paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third part, and each Seller has complied with all reporting and recordkeeping requirements.

(c) Except as set forth on Schedule 5.16(c), to the Sellers' Knowledge, there is no dispute, audit, investigation, proceeding or claim concerning any Tax Liability of any Seller pending, being conducted, claimed, raised by a Governmental Authority in writing. Each Seller has provided or delivered to Purchaser true, correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies filed, assessed against, or agreed to by any Seller since January 1, 2002.

(d) No Seller has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. No Seller has executed any

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power of attorney with respect to any Tax, other than powers of attorney that are no longer in force. No closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings relating to Taxes have been entered into or issued by any Governmental Authority with or in respect of any Seller.

(e) The unpaid Taxes of the Sellers (a) did not as of the Most Recent Balance Sheet Date exceed the reserve for Taxes (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto) and (b) will not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Sellers in filing their Tax Returns.

(f) No Seller has made any payments, or has been or is a part to any agreement, contract, arrangement or plan that could result in it making payments, that have resulted or would result, separately or in the aggregate, in the payment of any "excess parachute payment" within the meaning of Code Section 280G or in the imposition of an excise Tax under Code Section 4999 (or any corresponding provisions of state, local or foreign Tax law) or that were or would not be deductible under Code Section 162 or 404.

(g) No Seller has ever been a member of an "affiliated group" within the meaning of Code Section 1504(a) filing a consolidated federal income Tax Return (other than the "affiliated group" the common parent of which is SCO Group). No Seller is a part to any Contractual Obligation relating to Tax sharing or Tax allocation. No Seller has any Liability for the Taxes of any person (other than any Seller) under Treasury Regulation 1.1 502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise.

(h) No Seller has filed a consent under Code Section 341(f).

(i) No Seller is or has been required to make any adjustment pursuant to Code Section 481(a) (or any predecessor provision) or any similar provision of state, local or foreign tax law by reason of any change in any accounting methods, or will be required to make such an adjustment as a result of the transactions contemplated hereby, and there is no application pending with any Governmental Authority requesting permission for any changes in any of its accounting methods for Tax purposes. To the Sellers' Knowledge, no Governmental Authority has proposed any such adjustment or change in accounting method.

(j) No Seller will be required to include any amount in taxable income or exclude any item of deduction or loss from taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of (i) any "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local or foreign Income Tax law) executed on or prior to the Closing Date, (ii) any deferred intercompany gain or excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision or administrative rule of federal, state, local or foreign Income Tax law), (iii) installment sale or open transaction disposition made on or prior to the Closing Date, (iv) any prepaid amount received on or prior to the Closing Date or (v) any change in Legal Requirements.

(k) No Seller owns any property of a character, the indirect transfer of which, pursuant to this Agreement, would give rise to any documentary, stamp, or other transfer Tax.

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(l) If the Purchaser notifies the Sellers of their election to purchase the stock of any of the foreign Subsidiaries, then the Sellers will promptly cooperate with Purchaser in providing all requested due diligence, tax and other information relating thereto.

5.17. Employee Benefit Plans.

(a) For purposes of this Agreement, "Employee Plan" means any plan, program, agreement, policy or arrangement, whether or not reduced to writing, and whether covering a single individual or a group of individuals, that is (a) a welfare plan with the meaning of Section 3(1) of ERISA, (b) a pension benefit plan within the meaning of Section 3(2) of ERISA, (c) a stock bonus, stock purchase, stock option, restricted stock, stock appreciation right or similar equity-based plan or (d) any other deferred-compensation, retirement, welfare-benefit, bonus, incentive or fringe-benefit plan, program or arrangement.

(b) Schedule 5.17 lists all Employee Plans as to which any Seller sponsors, maintains, contributes or is obligated to contribute, or under which any Seller has or may have any Liability, or which benefits any current or former employee, director, consultant or independent contractor of any Seller or the beneficiaries or dependents of any such Person. With respect to each Employee Plan, the Sellers have delivered to Purchaser true, accurate and complete copies of each of the following: (i) if the plan has been reduced to writing, the plan document together with all amendments thereto, (ii) if the plan has not been reduced to writing, a written summary of all material plan terms, (iii) if applicable, copies of any trust agreements, custodial agreements, insurance policies, administrative agreements and similar agreements, and investment management or investment advisory agreements, (iv) copies of any summary plan descriptions, employee handbooks or similar employee communications, (e) in the case of any plan that is intended to be qualified under Code Section 401(a), a copy of the most recent determination letter from the Internal Revenue Service and any related correspondence, and a copy of any pending request for such determination, (f) in the case of any funding arrangement intended to qualify as a VEBA under Code Section 501(c)(9), a copy of the Internal Revenue letter determining that it so qualifies and (g) in the case of any plan for which Forms 5500 are required to be filed, a copy of the two most recently filed Forms 5500, with schedules attached.

(c) No Seller or any other Person that would be considered a single employer with any Seller under the Code or ERISA has ever maintained a plan subject to Title IV of ERISA or Code Section 412, including any "multi employer plan" as defined in Section 4001(a)(8) of ERISA.

(d) Each Employee Plan that is intended to be qualified under Code Section 401(a) is so qualified. Each Employee Plan, including any associated trust or fund, has been administered in accordance with its terms and with applicable Legal Requirements, and nothing has occurred with respect to any Employee Plan that has subjected or could subject any Seller t a penalty under Section 502 of ERISA or to an excise tax under the Code, or that has subjected or could subject any participant in, or beneficiary of, a Employee Plan to a tax under Code Section 4973. Each Employee Plan that is a qualified contribution plan is an "ERISA Section 404(c) Plan" within the meaning of the applicable Department of Labor regulations.

(e) All required contributions to, and premium payments on account of, each Employee Plan have been made on a timely basis.

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(f) There is no pending or, to the Sellers' Knowledge, threatened, Action relating to a Employee Plan, other than routine claims in the Ordinary Course of Business for benefits provided for by the Employee Plans. No Employee Plan is or, within the last six years, has been the subject of an examination or audit by a Governmental Authority, is the subject of an application or filing under, or is a participant in, a government-sponsored amnesty, voluntary compliance, self correction or similar program.

(g) Except as required under Section 601 et seq. of ERISA, no Employee Plan provides benefits or coverage in the nature of health, life or disability insurance following retirement or other termination of employment.

5.18. Environmental Matters. Except as set forth in Schedule 5.18, (a) the Sellers and their Predecessors are, and have been, in compliance with all material Environmental Laws, (b) there has been no release or threatened release of any Hazardous Substance on, upon, into or from any site currently or heretofore owned, leased or otherwise used by any Seller or a Predecessor, (c) there have been no Hazardous Substances generated by any Seller or a Predecessor that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local "superfund" site list or any other similar list of hazardous or toxic waste sites published by any Governmental Authority, (d) there are no underground storage tanks located on, PCBs (polychlorinated biphenyls) or PCB-containing Equipment used or stored on, and no "hazardous waste" as defined by the Resource Conservation and Recovery Act stored on, any site owned or operated by any Seller or a Predecessor, except for the storage of such hazardous waste in compliance with Environmental Laws, and (e) the Sellers have delivered to Purchaser true, accurate and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments, in each case as amended and currently in effect.

5.19. Contracts

(a) Contracts. Except for this Agreement and as disclosed on Schedule 5.19, no Seller is bound by or a party to:

(i) any Contractual Obligation (or group of related Contractual Obligations) for the purchase or sale of inventory, raw materials, commodities, supplies, goods, products, equipment or other personal propert, or for the furnishing or receipt of services, in each case, the performance of which will extend over a period of more than one year or which provides for aggregate or annual rental or other payments in excess of $25,000;

(ii) (A) any capital lease or (B) any other lease or other Contractual Obligation relating to the Equipment providing for aggregate or annual rental payments in excess of $25,000, under which any Equipment is held of used by any Seller;

(iii) any Contractual Obligation, other than Real Property Leases or leases relating to the Equipment, relating to the lease or license of any Asset (including Company Technology and including all customer license and maintenance agreements) that is not included on Schedule 5.14;

(iv) any Contractual Obligation relating to the acquisition or disposition of (A) any business of any Seller (whether by merger, consolidation or other business combination,

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sale of securities, sale of assets or otherwise) or (B) any Asset other than in the Ordinary Course of Business;

(v) any Contractual Obligation under which any Seller is, or may become, obligated to pay any amount in respect of indemnification obligations, purchase price adjustment or otherwise in connection with any (A) acquisitions or disposition of Assets or securities (other than the sale of inventory in the Ordinary Course of Business), (B) merger, consolidation or business combination or (C) series or group of related transactions or events of the type specified in clauses (A) and (B) above.

(vi) any Contractual Obligation concerning or consisting of a partnership, limited liability company, joint venture agreement or strategic alliance;

(vii) any Contractual Obligation (or group of related Contractual Obligations) (A) under which any Seller has created, incurred, assumed or guaranteed any Debt in excess of $25,000 or (ii) under which any Seller has permitted any Asset to become subject to any Encumbrance;

(viii) any Contractual Obligation under which any Seller has guaranteed any Debt of any other Person or any other Person has guaranteed any Debt of any Seller;

(ix) any Contractual Obligation related to confidentiality or non-competition (whether any Seller is subject to or the beneficiary of such obligations);

(x) any Contractual Obligation under which any Seller is, or may become, obligated in incur any severance pay or other compensation obligations which would become payable by reason of, this Agreement of the transactions contemplated hereby;

(xi) any Contractual Obligation under which any Seller is, or may, have any Liability to any investment bank, broker, financial advisor, finder's agreement or other similar Person (including an obligation to pay any legal, accounting, brokerage, finder's or similar fees or expenses in connection with this agreement or the transactions contemplated hereby);

(xii) any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, incentive or other plan or arrangement for the benefit of any Seller's current or former directors, officers, and employees;

(xiii) any Contractual Obligation providing for the employment or consultancy with an individual on a full-time, part-time, consulting, independent contractor or other basis or otherwise providing compensation or other benefits to any officer, director, employee or consultant (other than the Employee Plan);

(xiv) any agency, dealer, distributor, sales representative, marketing or other similar agreement; or

(xv) any Contractual Obligation (or group of related Contractual Obligations) the performance of which involves consideration in excess of $25,000 over the life of such Contractual Obligation.

Each written Contractual Obligation listed on Schedule 5.19 provided to Purchaser is a true, accurate

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and complete copy thereof, in each case, as amended or otherwise modified and in effect. The Sellers will, prior to the Auction Date, deliver to Purchaser a written summary setting forth the terms and conditions of each oral Contractual Obligation listed on Schedule 5.19.

(b) Enforceability, etc. To the Sellers' Knowledge, each Contractual Obligation required to be disclosed on Schedules 5.9 (Debt), 5.12 (Real Property), 5.14 (Intellectual Property), 5.17 (Employee Plans), 5.19 (Contracts), 5.21 (Customers and Suppliers) or 5.25 (Insurance) (each, a "Disclosed Contract") is enforceable against each party to such Contractual Obligation, and is in full force and effect, and, subject to obtaining any necessary consents disclosed in Schedule 5.3, will continue to be so enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby.

(c) Breach, etc. No Seller or, to the Sellers' Knowledge, any other party to any Disclosed Contract is in breach or violation of, or default under, or has repudiated any provision of, any Disclosed Contract.

5.20. Affiliate Transactions. Except for the matters disclosed on Schedule 5.20, no Seller or any Affiliate of any Seller is an officer, director, employees, consultant, competitor, creditor, debtor, customer, distributor, supplier or vendor of, or is a party to any Contractual Obligation with, any Seller. Except as disclosed on Schedule 5.20, no Persons other than the Sellers owns any Asset used in, or necessary to, the Business.

5.21. Customer and Suppliers. Schedule 5.21 sets forth the complete and accurate list of (a) the ten largest customers of the Sellers (measured by aggregate billings) during the fiscal year ended on the Most Recent Balance Sheet Date, indicating the existing Contractual Obligations for each such customer by product or service provided and (b) the ten largest suppliers of materials, products or services to the Sellers (measured by the aggregate amount purchased by the Sellers) during the fiscal year ended on the Most Recent Balance Sheet Date, indicating the Contractual Obligations for continued supply from each such supplier. The relationships of the Sellers with the customers and the suppliers required to be listed on Schedule 5.21 are good commercial working relationships (subject to payment delinquencies or interruptions related to Sellers' bankruptcy) and none of such customers or suppliers has canceled, terminated or otherwise materially altered (including any materials reduction in the rate or amount of sales or purchases of material increase in the prices charges or paid, as the case may be) or notified the Seller of any intention to do any of the foregoing or otherwise threatened in writing to cancel, terminate or materially alter (including any material reduction in the rate or amount of sales or purchases, as the case may be) its relationship with any Seller and to Sellers' Knowledge there is no basis therefor.

5.22. Employees. Except as disclosed on Schedule 5.22, there are no labor troubles (including any work slowdown, lockout, stoppage, picketing or strike) pending, or to the Sellers' Knowledge, threatened between any Seller, on the one hand, and its employees on the other hand, and there have been no such troubles since January 1, 2002. Except as set forth on Schedule 5.22, (a) no employees of any Seller are represented by a labor union, (b) no Seller is a part to, or otherwise subject to, any collective bargaining agreement or other labor union contract, (c) no petition has been filed or proceeding instituted by an employee of group of employees of any Seller with any labor relations board seeking recognition of a bargaining representative and (d) there is no organization effort currently being made of threatened by, or on behalf of, any labor union to organize employees of any Seller and no demand for recognition of employees of any Seller has been made by, or on behalf of, any labor union. No executive officer's or other key employee's employment with the

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Sellers has been terminated for any reason nor has any such officer or employee notified the Company of his or her intention to resign or retire since January 1, 2002.

5.23. Litigation; Government Orders.

(a) Litigation. Except as set forth on Schedule 5.23 (which matters have not had, and are not reasonable likely to have, a Material Adverse Effect), there is no Action to which any Seller is a part (either as plaintiff or defendant or otherwise) or to which its Assets or the Business are subject pending, or to the Sellers Knowledge, threatened, which affect any Seller or its ownership of, or interest in, any Asset or the use or exercise by any Seller of any Asset or the Business. There is no Action to which the Seller is a part (either as plaintiff or defendant or otherwise) or to which its Assets or the Business are subject pending, or to the Sellers' Knowledge, threatened, which (a) in any manner challenges or seeks to rescission of, or seeks to prevents, enjoin, alter or materially delay the consummation of, or otherwise related to, this Agreement and the transactions contemplated hereby, or (b) to Sellers' Knowledge, is there any basis for any of the foregoing. Except as set forth on Schedule 5.23, there is no Action which any Seller presently intends to initiate.

(b) Government Orders. Except as disclosed on Schedule 5.23, no Government Order has been issued which is applicable to, or otherwise affects, any Seller or its Assets or the Business.

5.24. Product Warranties; Defects; Liability.

(a) Except as disclosed in Schedule 5.24 (and except for the other Liabilities for which there is a reserve which meets the standards described in the following sentences), each Product is, and at all times has been, (a) in compliance with all applicable Legal Requirements, (b) fit for the ordinary purposes for which it is intended to be used and in conformity with any and all Contractual Obligations express and implied warranties, promises and affirmations of fact made by Sellers. No Seller has any Liability (and, to the Sellers' Knowledge, there is no basis for any present of future Action giving rise to any Liability) for replacement of repair of any Products or any other Losses in connection with any Products, subject only to the reserve for product warranty claims set further on the fact of the Most Recent Balance Sheet, as adjusted for the passage of time in accordance with GAAP, applied on a basis consistent with the principles applied in the preparation of the Most Recent Balance Sheet, which reserve is adequate to address all such Liabilities. Each Product contains adequate warnings, the content and display of which conform with the applicable Legal Requirements and current industry practice. There is no design defect with respect to any Product.

(b) Except as disclosed in Schedule 5.24, no Product is subject to any guaranty, warranty, or other indemnity beyond the applicable standard terms and conditions of sale, lease of license. Schedule 5.24 includes a summary of the standard terms and conditions of sale, lease or license for the Sellers (including applicable guaranty, warranty, and indemnity provisions).

(c) Except as disclosed on Schedule 5.24, there is no Action to which any Seller is a part pending, or to the Sellers' Knowledge, threatened relating to, or otherwise involving, alleged defects in the Products or services provided by any Seller, or the failure of any such Products or services to meet certain specifications, and to the Sellers' Knowledge, there is no basis for any of the foregoing. Schedule 5.24 sets forth all concluded Actions (including the disposition thereof) against any Seller since January 1, 2002, relating to, or otherwise involving, alleged defects in the

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Products or services provided by any Seller, 0 the alleged failure of any such services of Products to meet certain specifications. No Seller has any Liability (and, to the Sellers' Knowledge, there is no basis for any present or future Action giving rise to any Liability) arising out of any injury to any person or property as a result of any service provided by and Seller, or the ownership, possession, or use of the Products.

5.25. Insurance. Schedule 5.25 sets further a list of insurance policies, including policies by which the Sellers, or any of their Assets, employees, officers or directors or the Business has been insured since January 1, 2002 (the "Liability Policies") and, with respect to such Liability Policies under which the Sellers, or any of their Assets, employees, officers or directors of the Business is currently insured (the "Current Liability Policies"). Schedule 5.25 includes for each Liability Policy the type of policy, form of coverage, policy number and name of insurer and expiration date. The Sellers have delivered to Purchaser true, accurate and complete copies of all Liability Policies, in each case, as amended or otherwise modified and currently in effect. Schedule 5.25 describes any self-insurance arrangements affecting the Sellers. The Sellers have since January 1, 2002 maintained in full force and effect with financially sound and reputable insurers insurance with respect to their Assets and the Business, in such amount and against such losses and risks as is customarily carred by Persons engaged in the same or similar business as Seller and as is required under the terms of any applicable Real Property Leases of other Contractual Obligations. Except as disclosed on Schedule 5.25, no insurer (a) has questioned, denied or disputed (or otherwise reserved its right with respect to) the coverage of any claim pending under any Liability Policy or (b) to Sellers' Knowledge has threatened to cancel any Liability Policy. Except as disclosed on Schedule 5.25, to the Sellers' Knowledge no insurer plans to raise the premiums for, or materially alter the coverage under, any Current Liability Policy. Except as disclosed on Schedule 5.25, the Sellers will after the Closing continue to have coverage under all of the Current Liability Policies with respect to events occurring prior to the Closing.

5.26. Banking Facilities. Schedule 5.26 sets forth a true, correct and complete list of: (a) each bank, savings and loan or similar financial institution with which any Seller has an account or safety deposit box or other arrangements, and any numbers or other identifying codes of such accounts, safety deposit boxes or such other arrangements maintained by any Seller thereat; and (b) the names of all persons authorized to draw on any such account or to have access to any such safety deposit box facility or such other arrangement. Sellers will withdraw all cash on hand in all deposit accounts prior to the Closing.

5.27. Powers of Attorney. No Seller has general of special powers of attorney outstanding (whether as grantor or grantee thereof).

5.28. No Brokers. No Seller has any Liability of any kind to, or is subject to any claim of, any broker, finder or agent in connection with the transactions contemplated hereby other than those which will be borne by the Sellers.

5.29. Disclosure. The representation and warranties contained in this Section 5 and in the schedules and the other Seller Documents do not contain and will not contain any untrue statement of fact or (when taken as a whole) omit to state any material fact necessary in order to make the statements and information contained therein not misleading in light of the circumstances in which such statements are made.

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ARTICLE VI

REPRESENTATIONS AND WARNTIES OF PURCHASER

Purchaser hereby represents and warrants to Sellers that:

6.1. Organization and Good Standing. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties, to carry on its business as currently conducted and contemplated to be conducted and to perform its obligations under this Agreement and the Purchaser Documents.

6.2. Authorization of Agreement. Purchaser has full corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate to be executed by Purchaser in connection with the consummation of the transactions contemplated by this Agreement (the "Purchaser Documents"), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Purchaser of this Agreement and the Purchaser Documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on behalf of Purchaser. This Agreement has been, and each Purchaser Document will be at or prior to the Closing, duly executed and delivered by Purchaser and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each Purchaser Document when so executed and delivered will constitute, the legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms.

6.3. Conflicts: Consents of Third Parties.

(a) None of the execution and delivery by Purchaser of this Agreement or the Purchaser Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by Purchaser with any of the provisions hereof or thereof will conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation under any provision of (i) Purchaser's Organizational Documents, (ii) any Contract or Permit to which Purchaser is a part or by which Purchaser or its properties are bound or (iii) any applicable Law. (b) Except for the consent of the Bankruptcy Court under the Bidding Procedures Order and the entry of the Sale Order, no consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Authority is required on the part of Purchaser in connection with the execution and delivery of this Agreement or the Purchaser Documents, the compliance by Purchaser with any of the provisions hereof or thereof, the consummation of the transactions contemplated hereby without any material delay, the performance by Purchaser of its obligations hereunder, or the taking by Purchaser of any other action contemplated hereby.

6.4. Litigation. There are no Actions pending or, to the knowledge of Purchaser, threatened against Purchaser, or to which Purchaser is otherwise a part before any Governmental Authority, which, if adversely determined, would reasonably be expected to have a Purchaser Material Adverse Effect. For the purposes of this Agreement, "Purchaser Material Adverse Effect" means a material adverse effect on the ability of Purchaser to (i) consummate the transactions

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contemplated hereby or by the Purchaser Documents without any material delay or (ii) perform their respective obligations under this Agreement or the Purchaser Documents. Purchaser is not subject to any Order of any Governmental Authority except to the extent the same would not reasonably be expected to have a Purchaser Material Adverse Effect.

6.5. No Brokers. Purchaser has no Liability to any broker, finder or agent in connection with the transactions contemplated hereby other than those which will be borne by Purchaser.

6.6. Financial Capability. Purchaser (i) has, based on existing commitments, sufficient funds available to pay the Purchase Price subject to the terms of Article II and any expenses incurred by Purchaser in connection with the transactions contemplated by this Agreement, (ii) has, based on existing commitments, the resources and capabilities (financial or otherwise) to perform its obligations hereunder and (iii) has not incurred any obligation, commitment, restriction or Liability of any kind, that would impair or adversely affect such resources and capabilities or could reasonable be expected to have a Purchaser Material Adverse Effect.

6.7. Adequate Assurances Regarding Executory Contracts. Purchaser is and will be capable of satisfying the conditions and requirements contained in Section 365(b)(1)(C) and 365(f) of the Bankruptcy Code, the Sale Order, this Agreement and the other Seller Documents with respect to the Assumed Contracts.

ARTICLE VII

BANKRUPTCY COURT MATTERS

7.1. Bankruptcy Actions. Sellers have filed with the Bankruptcy Court a motion in a form satisfactory to Purchaser seeking, among other things, entry of an order approving (A) the bidding protections described and/or set forth in Article IV of this Agreement or otherwise set forth in such motion, and (B) certain bidding procedures for alternative offers for the Purchased Assets, which order shall be substantially in the form attached hereto as Exhibit H or otherwise acceptable to Seller and Purchaser (the "Bidding Procedures Order"). No later than three (3) Business Days after the hearing on the entry of the Bidding Procedures Order, Seller shall file with the Bankruptcy Court a motion or motions (the "Sale Motion") in form and substance reasonably satisfactory to Purchaser seeking among other things the entry of the Sale Order and an order approving the Litigation Credit Facility. The "Sale Order" shall be an order in the form attached hereto as Exhibit F, with such modifications mutually acceptable to Sellers and Purchaser in their sole respective discretion, and shall include provisions covering, among other things (i) approving the sale of the Purchased Assets to Purchaser free and clear of all Encumbrances (other than Permitted Encumbrances) whatsoever under Section 363 of the Bankruptcy Code and any other applicable sections of the Bankruptcy Code on the terms and conditions set forth in this Agreement, or such higher and better terms and conditions offered at the Sale Hearing, and authorizing Sellers to proceed with this transaction; (ii) stating that any objections timely filed with respect to the sale of the Purchased Assets, which have not been withdrawn, are overruled or the interests of such objections have been otherwise satisfied or adequately provided for by the Bankruptcy Court, (iii) finding that the Purchase Price as provided in Article II represents fair value for the Purchased Assets, (iv) finding that the sale is in the best interests of Sellers' estates and creditors, (v) finding that Purchaser is a good faith purchaser of the Purchased Assets under Section 363(m) of the Bankruptcy Code and that the provisions of Section 363(n) of the Bankruptcy Code have not been violated, (vii) finding that upon the Closing, Purchaser shall be able to operate the business in the same manner as Sellers currently operate the Business

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(including, without limitation, any royalty, license or other obligation consistent with how the Business has previously been conducted); (viii) providing that the Bankruptcy Court shall retain jurisdiction for the purpose of enforcing the provisions of the Sale Order including, without limitation, compelling delivery of the Purchased Assets to Purchaser and protecting Purchaser against any Encumbrances against Sellers or the Purchased Assets; (ix) authorizing and directing Sellers to execute, deliver, perform under, consummate and implement this Agreement, together with all additional instruments and documents that may be reasonably necessary or desirable to implement the foregoing, (x) determining that Purchaser is not a successor to Sellers or otherwise liable for any of the Excluded Liabilities and permanently enjoining each and every holder of any of the Excluded Liabilities from commencing, continuing or otherwise pursuing or enforcing any Action or Encumbrance against Purchaser or the Purchased Assets related thereto; (xi) providing that all monetary obligations of the Sellers, including any and all indemnification claims asserted by Purchaser under this Agreement shall be entitled to administrative expense priority in the Chapter 11 Cases pursuant to Sections 503(b) and 507(a) of the Bankruptcy Code; (xii) finding that, pursuant to Section 1146(a) of the Bankruptcy Code, the within transaction is "in contemplation of a plan or plans of reorganization to be confirmed in the Chapter 11 Cases," and as such shall be free and clear of any and all transfer tax, stamp tax or similar Taxes; provided, however, that Purchaser's obligations hereunder shall not be conditioned on the finding set forth in this clause (xii), (xiii) providing either that the sale transactions provided for herein shall consummate without requiring any assumption or assignment of the Sellers' Contracts with Novel, Inc., or that if such assumption and assignment is required, then the Cure Amount applicable to such Contracts is zero or such other amount determined by the Bankruptcy Court; (xiv) providing that any p1an(s) of reorganization respecting the Sellers confirmed in the Chapter 11 Cases (hereinafter, and as same may be amended or modified, collectively, the "Plan") and any confirmation order(s) entered with respect to such p1an(s) (hereinafter, and as same may be amended or modified, collectively, the "Confirmation Order") shall ratify, reaffirm and provide for the assumption by the reorganized Sellers (or any other successors to the Sellers) under such Plan, all obligations of the Sellers under or relating to the Sale Order and the Seller Documents; and (xv) providing that (y) the Sale Order, the Seller Documents and all obligations of the Sellers arising under or relating thereto shall survive entry of (a) any Confirmation Order, (b) any order converting any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, and (c) any order dismissing any of the Chapter 11 Cases or any successor cases under Chapter 7 of the Bankruptcy Code; and (z) the Sellers' obligations under or relating to the Sale Order and Seller Documents (a) shall not be discharged, released, waived, terminated, modified or in any manner altered by any Plan or Confirmation Order, and (b) shall be binding upon, and inure to the benefit of, the Purchaser, the Sellers and their estates, and their respective trustees, officers, heirs, executors, administrators, successors and assigns, including, without limitation, any Chapter 11 or Chapter 7 trustee appointed with respect to the Chapter 11 Cases.

7.2. Seller Actions. Sellers shall use their reasonable efforts to have the Bankruptcy Court (i) schedule a hearing on the Sale Motion and (ii) enter the Sale Order as and when contemplated by the Bidding Procedures Order, but in any case no later than December 21,2007. Furthermore, Sellers shall use their reasonable efforts to obtain any other approvals or consents from the Bankruptcy Court that may be reasonably necessary to consummate the transactions contemplated in this Agreement.

7.3. Purchaser Actions. Purchaser agrees that it will promptly take such reasonable actions as are reasonably requested by Sellers to assist in obtaining the Sale Order and the Bidding Procedures Order, including, without limitation, furnishing affidavits or other documents or information for filing with the Bankruptcy Court for the purposes, among others, of providing

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necessary assurances of performance by Purchaser under this Agreement and demonstrating that Purchaser is a "good faith" purchaser under Section 363(m) of the Bankruptcy Code.

7.4. Competing Bid. From the date hereof until the Bidding Procedures Order is entered, Sellers shall not, and will not permit any Person acting for or on behalf of Sellers to solicit any offers for any Alternative Transactions. After the entry, and subject to the terms, of the Bidding Procedures Order, Sellers may solicit "higher or better" offers for the Purchased Assets pursuant to the Bidding Procedures Order approved by the Bankruptcy Court in the Bidding Procedures Order ("Competing Bids") and respond to any inquires or offers for Competing Bids and to perform any and all other acts reasonably related thereto to the extent required under the Bankruptcy Code or other applicable Law including, without limitation, supplying information relating to the Purchased Assets and the Assumed Liabilities to any prospective purchasers constituting qualified purchasers under the Bidding Procedures Order. If Seller determines in good faith that any offer constitutes a Competing Bid, Sellers shall have the right to enter into the Competing Bid and Purchaser shall have the right to terminate this Agreement pursuant to Section 4.4(g).

ARTICLE VIII

COVENANTS

8.1. Access to Information. Sellers agree that, prior to the Closing Date, Purchaser shall be entitled, through its officers, employees and representatives (including, without limitation, its legal advisors and accountants), to make such investigation of the properties, businesses and operations of the Business and such examination of the books and records of the Business, the Purchased Assets and the Assumed Liabilities as it reasonably requests and to make extracts and copies of such books and records. Any such investigation and examination shall be conducted during regular business hours upon reasonable advance notice and under reasonable circumstances and shall be subject to restrictions under applicable Law. Sellers shall cause the officers, employees, consultants, agents, accountants, attorneys and other representatives of Sellers to cooperate with Purchaser and Purchaser's representatives in connection with such investigation and examination, and Purchaser and its representatives shall cooperate with Sellers and their representatives and shall use their reasonable efforts to minimize any disruption to the Business. Notwithstanding anything herein to the contrary, no such investigation or examination shall be permitted to the extent that it would require Sellers to disclose information subject to attorney-client privilege or conflict with any confidentiality obligations to which any Seller is bound. Purchaser will not contact any employee, customer or supplier of Sellers with respect to this Agreement without the prior written consent of Sellers (which such consent will not be unreasonably withheld or delayed); provided, however, that so long as there is no disruption to the Business and Purchaser's conduct is in accordance with the reasonable requirements of Sellers, Purchaser shall be entitled to contact and engage in discussions with (i) counterparties to Assumed Contracts in connection with Purchaser's attempt to negotiate amounts necessary to cure any breach or default under such Contracts, (ii) Sellers' vendors and (iii) Seller's customers, and, Sellers shall cooperate with Purchaser to facilitate such contact and discussions between Purchaser and such counterparties, vendors and customers. Promptly following the date of this Agreement, Seller shall provide Purchaser with contact information for each customer and supplier identified on Schedule 5.21 and notwithstanding any agreement between the parties to the contrary, Purchaser shall be entitled to contact such customers and suppliers. Purchaser agrees to repair at its sole cost any damage to each Facility due to investigation and to indemnify and hold Sellers harmless of and from any claim for physical damages or physical injuries arising from Purchaser's investigation of each Facility, and notwithstanding anything to the contrary in this

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Agreement, such obligations to repair and to indemnify shall survive the closing or any termination of this Agreement.

8.2. Conduct of the Business Pending the Closing.

(a) Prior to the Closing, and subject to any obligations as debtors-in-possession under the Bankruptcy Code and except (1) as set forth on Schedule 8.2(a), (2) as required by applicable Law, (3) as otherwise expressly contemplated by this Agreement or (4) with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), Sellers shall:

(i) use commercially reasonable efforts to maintain the Purchased Assets in the Ordinary Course of Business, pay expenses and payables, bill customers, collect receivables, purchase Inventory, repair and continue normal maintenance (normal wear and tear excepted), maintain theirs books, records and accounts in accordance with GAAP and otherwise conduct the Business in the Ordinary Course of Business;

(ii) (A) comply in all material respects with all Laws and Assumed Contracts, (B) maintain all existing Permits applicable to the Business, and (C) pay all applicable Taxes as such Taxes become due and payable;

(iii) use commercially reasonable efforts to maintain working capital and current asset and current liability levels consistent with those reflected in the Sellers' financial statements previously provided to Purchaser;

(iv) maintain in full force and effect all Company Technology owned by Sellers;

(v) utilize commercially reasonable efforts to pursue Section 363 of the Bankruptcy Code sales processes and to comply at all times with the Sale Motion and Bidding Procedures Order;

(vi) use their commercially reasonable efforts to (A) preserve the present business operations, organization and goodwill of the Business and (B) preserve the present relationships with customers and suppliers of the Business and employees of Sellers; and

(vii) promptly inform Purchaser in writing of the occurrence or nonoccurrence of any event known to any Seller that would cause the condition set forth in Section 10.1(a) not to be satisfied or the breach of any covenant hereunder by any Seller.

(b) Subject to any obligations as debtors-in-possession under the Bankruptcy Code and except (1) as set forth on Schedule 8.2(b), (2) as required by applicable Law, (3) as otherwise contemplated by this Agreement or (4) with the prior written consent of Purchaser, Sellers shall not (and shall not have since the date hereof), solely as it relates to the Business or other Assets of the Sellers in which the Purchaser has any rights or interests:

(i) modify or amend, in any material respect, or terminate any Contract set forth on Schedule 5.19 or waive, release or assign any material rights or claims thereunder;

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(ii) enter into any Contractual Obligation or transaction relating to the purchase of Assets primarily for use in the Business in excess of Fifty Thousand Dollars ($50,000);

(iii) increase salaries or wages, declare bonuses, increase compensation or benefits or institute any new employment arrangement, benefit plan or program with respect to any director, Employee or consultant, except as required by Law, as required by the terms of previously existing Employee Plans or in the Ordinary Course of Business, and except that Sellers can declare or pay bonuses or enter into deferred compensation or similar arrangements in connection with the retention of the continued services of directors, Employees or consultants;

(iv) sell, lease, transfer, mortgage, encumber, alienate or dispose of Assets for an aggregate purchase price in excess of Fifty Thousand Dollars ($50,000) except for (A) sales of Inventory in the Ordinary Course of Business or (B) licenses of Company Technology granted in the Ordinary Course of Business, subject to the other provisions of this Section 8.2(b);

(v) accelerate any payments that are not currently due under any maintenance or license agreement or Contractual Obligation (any such acceleration shall result in an Assumed Liability under Section 2.3);

(vi) enter into any maintenance agreement or Contractual Obligation with a term of greater than one (1) year;

(vii) renew any maintenance agreement or Contractual Obligation that is not within one (1) month, for domestic contracts, and within two (2) months, for international contracts, of the expiration date for maintenance services contained in such agreement;

(viii) renew or reinstate any maintenance agreement that has expired for an amount less than the annual amount of such maintenance during the last period such maintenance agreement was in effect; or

(ix) with respect to direct and OEM License Sales, (A) with respect to any sale to a customer or OEM that was, on the Petition Date, part to an agreement with Seller granted such customer or OEM a discount from list (a "Contractual Discount Customer"), discount any sale more than the required contractual percentage off of Seller's list price (the "Required Discount"), (B) with respect to any sale to a customer or OEM that was not on the Petition Date, a Contractual Discount Customer, discount any sale more than fiibiblio.org percent (15%); (C) grant any site licenses, special sales incentives of any form, or engage in any time-shift in financial performance, or (D) enter a license sale that (i) has not been put into production within two weeks of sale in the case of direct customers or, in the case of OEMs, has not been shipped to a bona fide customer within two (2) weeks of sale as evidenced by information received from the customer or OEM, and (ii) together with all other transactions entered into with such customer or OEM during the preceding thirty (30) days, exceeds the normal and usual requirements of such customer or OEM by more than the average monthly volume of licenses sold to such customer or OEM during the twelve (12) months preceding such transaction;

(x) with respect to Channel Sales, (A) with respect to any Contractual Discount Customer, discount any sale more than the Required Discount; (B) with respect to any customer that is not a Contractual Discount Customer, discount any sale more than fiibiblio.org percent (15%) off of Seller's list price; (C) grant any site licenses, special sales incentives of any form, or

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engage in any time-shift in financial performance, or (D) enter into any license sale that (i) has not been sold to an end user customer within two (2) weeks of sale, as evidenced by information received from the end user customer and (ii) together with all other transactions entered into with such distributor during the preceding thirty (30) days exceeds the normal and usual requirements of such distributor by more than the average monthly volume of licenses sold to such distributor during the twelve (12) months preceding such transaction;

(xi) discount any Qualified Account Receivable by more than five percent (5%);

(xii) settle any Action or Claim or fail to pursue any Action or Claim in good faith (including, without limitation, the IBM Litigation, the Novel Litigation and the Linux Litigation) or assign to any third party any part of any Action or Claim; or

(xiii) agree to do anything prohibited by this Section 8.2.

(c) Prior to the Closing, each of the Sellers shall take any and all necessary actions to transfer, assign, record or perfect in its name record title to any of its Purchased Assets that is not presently held or recorded in its name, including, without limitation, filing any necessary notices of assignment in the United States Patent and Trademark Office or United States Copyright Office, as applicable, with respect to the Registered Intellectual Property.

8.3. Regulatory Approvals. Purchaser and Sellers shall use commercially reasonable efforts to (a) obtain all Required Consents and (b) take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, consistent with applicable Law, to consummate the transactions contemplated hereby.

8.4. Further Assurances. Each of Sellers and Purchaser shall use its commercially reasonable best efforts to (i) take all actions necessary or appropriate to consummate the transactions contemplated by this Agreement and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement. Sellers will not oppose and will cooperate with Purchaser to create an incentive plan for key members of the Sellers' management team reasonably requested by Purchaser in order to assist in connection with the Linux Litigation.

8.5. Assumed Liabilities. Subsequent to the Closing, Purchaser agrees to pay, perform and discharge the Assumed Liabilities as they become due, including, without limitation, the discharge and performance when due of each and every obligation of Sellers to be satisfied or performed on or after the Closing Date, under the Assumed Contracts.

8.6. Intentionally Deleted.

8.7. Confidentiality.

(a) Purchaser acknowledges that the Confidential Information provided to it in connection with this Agreement, including under Section 8.1, and the consummation of the transactions contemplated hereby, is subject to the terms of the confidentiality agreement between Purchaser and Seller dated September 21, 2007 (the "Confidentiality Agreement"), the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing Date, the

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Confidentiality Agreement shall terminate with respect to Confidential Information relating solely to the Business or otherwise included in the Purchased Assets; provided, however, that Purchaser acknowledges that any and all other Confidential Information provided to it by any Seller or its representatives concerning any Seller and the Subsidiaries shall remain subject to the terms and conditions of the Confidentiality Agreement after the Closing Date. For purposes of this Section 8.7 "Confidential Information" shall mean any confidential information with respect to, without limitation, methods of operation, customers, customer lists, Products, prices, fees, costs, Technology, inventions, trade secrets, know-how, softare, marketing methods, plans, personnel, suppliers, competitors, markets or other specialized information or proprietary matters.

(b) The Sellers have had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information) regarding the Purchased Assets and the Business. Each Seller agrees that unless it first secures the written consent of an authorized representative of Purchaser, it shall not use for itself or anyone else, and shall not disclose to others, any Confidential Information except to the extent such use or disclosure is required by Law (in which event it shall inform Purchaser in advance of any such required disclosure, shall cooperate with Purchaser in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Seller shall use reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.

8.8. Preservation of Records. For a period of five (5) years after the Closing Date (or such longer period as may be required by any Governmental Authority or ongoing claim):

(a) Purchaser shall not dispose of or destroy any of the business records and files of the Business held by Purchaser and relating to the period preceding the Closing Date. If Purchaser wishes to dispose of or destroy such records and files after that time, or if Sellers wish at any time to destroy any business records and files of the Business held by it, the Party proposing such disposition or destruction shall first give thirty (30) days' prior written notice to the other Party, and such other Party shall have the right, at its option and expense, upon prior written notice to the notifying Party within such 30-day period, to take possession of the records and files within fiibiblio.org (15) days after the date of such notice. Purchaser shall bear the costs associated with preserving these records.

(b) Each party (the "Requested Party") shall allow the other party and any of its directors, officers, employees, counsel, representatives, accountants and auditors reasonable access during normal business hours to all employees and files of the Requested Party and any books and records and other materials included in the Purchased Assets relating to periods prior to the Closing Date in connection with general business purposes, whether or not relating to or arising out of this Agreement or the transactions contemplated hereby (including the preparation of Tax returns, amended Tax returns or claims for refund (and any materials necessary for the preparation of any of the foregoing), and financial statements for periods ending on or prior to the Closing Date, the management and handling of any audit, investigation, litigation or other proceeding in, whether such audit, investigation, litigation or other proceeding is a matter with respect to which indemnification may be sought hereunder), to comply with the rules and regulations of the Internal Revenue Service, the Securities and Exchange Commission or any other Governmental Authority or otherwise relating to Sellers' other businesses or operations. Sellers shall further provide prompt notice to Purchaser of any notices, documents or the like delivered or forwarded to any Seller that relate to the Business acquired by Purchaser.

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8.9. Publicity. No Sellers nor Purchaser shall issue any press release or public announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of the other Parties hereto, which approval will not be unreasonably withheld or delayed, unless, in the sole judgment of Purchaser or Sellers, disclosure is otherwise required by applicable Law or by the Bankruptcy Court with respect to filings to be made with the Bankruptcy Court in connection with this Agreement or by the applicable rules of any stock exchange on which Purchaser or Sellers list securities, provided that the Party intending to make such release shall use its reasonable efforts consistent with such applicable Law or Bankruptcy Court requirement to consult with the other Party with respect to the text thereof.

8.10. Certain Consents. Sellers shall use their commercially reasonable efforts to obtain prior to (or, if not obtained prior to, subsequent to) the Closing all Required Approvals and Required Consents. Purchaser will use commercially reasonable efforts to cooperate with Seller in connection with seeking and obtaining such Required Approvals and Required Consents.

8.11. Sublease and Subcontract. For a period of sixty (60) days after the Closing Date (the "Transition Period"), Sellers shall, as applicable, sublease or subcontract to Purchaser the contracts and leases set forth on Schedule 8.11 (the "Transition Agreements") and subcontract to Purchaser during the Transition Period the provision of such utilities and other services reasonably necessary and useful to conduct the Business as determined by Purchaser in its sole discretion (the "Subcontracted Services"), in order to transition the Business and Purchased Assets to Purchaser. Not less than six (6) Business Days before the Closing Date, the Purchaser shall provide a schedule setting forth the Subcontract Services. Not more than three (3) Business Days after actually receiving the such schedule, Sellers shall provide Purchaser with a schedule setting forth the estimated costs that Sellers will likely accrue or incur under or on account of the Transition Agreements and the Subcontracted Services during the Transition Period (the "Estimated Transition Costs"). Purchaser shall be liable for and shall pay within thirty (30) Business Days of notice thereof from Sellers or their agent, representative or designee any Actual Transition Costs. During the Transition Period, Sellers shall not seek to reject or terminate any of the Transition Agreements or the Subcontracted Services except to the extent that any such rejection or termination becomes effective after the end of the Transition Period. During the Transition Period, Sellers shall, at the expense and request of Purchaser and to the extent they continue as debtors in possession, object to or challenge any motion or other attempt to reject, terminate, suspend or modify the Transition Agreements or the Subcontracted Services except to the extent that any such rejection, termination, suspension or modification becomes effective after the end of the Transition Period.

ARTICLE IX

EMPLOYEES AND EMPLOYEE BENEFITS

9.1. Employment.

(a) Sellers shall terminate all Employees immediately prior to Closing, other than employees to be retained by Sellers or Purchaser (as identified by Purchaser not later than the Closing). Purchaser shall offer employment effective as of the Closing to certain Employees at its sole discretion as set forth on Schedule 5.22. Employees who accept Purchaser's offer of employment and become employees of Purchaser as of or after the Closing Date shall be referred to as the "Transferred Employees" effective on their respective initial dates of employment with Purchaser.

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(b) Sellers shall be responsible for providing all WARN notices related to the termination of the Employees by Sellers, and Sellers shall bear full liability for all WARN Liability associated with its termination of Employees. Purchaser shall bear no responsibility to provide any WARN notice associated with the termination of Employees pursuant to the transaction contemplated hereby.

9.2. Accrued and Unused Vacation. Purchaser agrees to assume and maintain all Liabilities with respect to accrued vacation pay for each Transferred Employee, as set forth on Schedule 9.2 and in an aggregate amount to be determined by Purchaser, acting reasonably, in accordance with such vacation policies set forth on Schedule 9.2.

ARTICLE X

CONDITIONS TO CLOSING

10.1. Conditions Precedent to Obligations of Purchaser. The obligation of Purchaser to consummate the transactions contemplated by this Agreement is subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions (any or all of which may be waived by Purchaser in whole or in part to the extent permitted by applicable Law):

(a) each of the representations and warranties of Sellers set forth in this Agreement and the other Seller Documents shall be true and correct in all material respects as of the Closing Date (or on the date when made in the case of any representation and warranty which specifically relates to an earlier date) with the same force and effect as though made on and as of the Closing Date;

(b) Sellers shall have performed and complied in all material respects with all obligations and agreements required in this Agreement or the other Seller Documents to be performed or complied with by the Sellers prior to the Closing Date;

(c) all Required Approvals and Required Consents required to be obtained by Sellers for the authorization, execution and delivery of this Agreement and the other Seller Documents and the consummation of the transactions contemplated hereby and thereby shall have been obtained by Sellers;

(d) there shall not have occurred an event or failure to act causing a Material Adverse Effect;

(e) there shall be (i) no pending or overtly threatened Action (other than any Action which is determined by the parties in good faith, after consulting their respective attorneys, to be without legal or factual substance or merit), whether brought against any Seller or Purchaser, that seeks to enjoin the consummation of any of the transactions contemplated by this Agreement, (ii) no order that has been issued by any Governmental Authority having jurisdiction that restrains or prohibits the consummation of the purchase and sale of the Purchased Assets hereunder and no Action pending that is reasonably likely to result in the issuance of such an order; and (iii) no pending or overtly threatened Action, which has had or is expected to have a Material Adverse Effect;

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(f) no appeal of or motion for stay, reargument, rehearing or reconsideration with respect to the Bidding Procedures Order of the Sale Order shall have been served on any Seller or shall have been filed;

(g) Sellers shall have delivered, or caused to be delivered, to Purchaser all of the items set forth in Section 4.2 in form and substance satisfactory to Purchaser;

(h) Sellers shall cause its Subsidiaries in the United Kingdom, France, Germany, Japan and India to assign to Sellers all of its customer agreements and contracts, that are in fact assignable, and Sellers shall then assign those agreements and contracts that Purchaser identifies in writing to Purchaser;

(i) with respect to each Assumed Contract, Sellers shall have obtained a final and non-appealable order from the Bankruptcy Court authorizing Sellers to assume such Assumed Contract and to assign such Assumed Contract to Purchaser; and

(j) the adjustments to the Purchase Price pursuant to Section 3.1(a) shall not, in the aggregate, reduce the Purchase Price payable pursuant to Section 3.1(a) to less than zero.

10.2. Conditions Precedent to Obligations of Sellers. The obligations of Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction, prior to or on the Closing Date, of each of the following conditions (any or all of which may be waived by Sellers in whole or in part to the extent permitted by applicable Law):

(a) each of the representations and warranties of Purchaser set forth in this Agreement shall be true and correct, in all material respects on and as of the date hereof and as of the Closing Date (or on the date when made in the case of any representation and warranty which specifically relates to an earlier date) with the same force and effect as though made on and as of the Closing Date;

(b) Purchaser shall have performed and complied in all material respects with all obligations and agreements required by this Agreement and the other Purchase Documents to be performed or complied with by Purchaser on or prior to the Closing Date; and

(c) Purchaser shall have delivered, or caused to be delivered, to Sellers all of the items set forth in Section 4.3.

10.3. Conditions Precedent to Obligations of Purchaser and Sellers. The respective obligations of Purchaser and Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions (any or all of which may be mutually waived by Purchaser and Sellers in whole or in part to the extent permitted by applicable Law):

(a) there shall not be in effect any Order by a Governmental Authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

(b) the Bankruptcy Court shall have entered the Bidding Procedures Order, in form and substance acceptable to Sellers and Purchaser; and

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(c) the Bankruptcy Court shall have entered the Sale Order; provided that, notwithstanding anything contained in this Agreement to the contrary, if the Bankruptcy Court issues the Sale Order but fails to approve the assignment to Purchaser of any Assumed Contract solely by reason of a failure by Purchaser to provide adequate assurance of future performance as required by the Bankruptcy Code, then the Assumed Contract the contemplated assignment of which was not approved by the Bankruptcy Court, shall become an Excluded Asset, and, assuming the other conditions to Purchaser's obligations under the Agreement have been satisfied, the Parties shall proceed with the Closing without any corresponding adjustment to the Purchase Price.

10.4. Frustration of Closing Conditions. Neither Sellers nor Purchaser may rely on the failure of any condition set forth in Section 10.1, 10.2 or 10.3, as the case may be, if such failure was caused by such Party's failure to comply with any provision of this Agreement.

ARTICLE XI

TAXES

11.1. Transfer Taxes. Purchaser shall have no liability for any sales, use, stamp, documentary stamp, filing, recording, transfer or similar fees or taxes or governmental charges (including any interest and penalty thereon) payable in connection with the transactions contemplated by this Agreement ("Transfer Taxes"). Sellers, however, shall seek to include in the Sale Order a provision that provides that the transfer of the Purchased Assets shall be free and clear of any stamp or similar taxes under Section 11 46( a) of the Bankruptcy Code. In addition, Sellers shall indemnify and hold harmless Purchaser from and against any such Transfer Taxes so long as Purchaser is in compliance with Section 11.2. Any amounts payable by Sellers to Purchaser on account of such indemnity shall be entitled to super priority administrative treatment under Sections 503(b) and 507 of the Bankruptcy Code. Sellers and Purchaser shall cooperate and otherwise take commercially reasonable efforts to obtain any available refunds for Transfer Taxes.

11.2. Purchase Price Allocation. Purchaser shall allocate the Purchase Price (including the Assumed Liabilities) among the Purchased Assets within one year after Closing and Sellers and Purchaser shall file their income Tax Returns in Form 8594, in accordance with such allocation; provided, however, that nothing contained herein shall prevent Sellers and Purchaser from settling any proposed deficiency or adjustment by any Tax Authority based upon or arising out of the purchase price allocation, and neither Sellers nor Purchaser shall be required to litigate before any court, any proposed deficiency or adjustment by any taxing authority challenging such allocation. Purchaser shall revise from time to time the purchase price allocation so as to report any matters that need updating (including purchase price adjustments, if any) consistent with the agreed upon allocation.

ARTICLE XII

NO SURVIVAL

12.1. No Survival of Representations and Warranties. All of the representations and warranties set forth in this Agreement or any other Seller Document shall terminate and not survive the Closing.

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ARTICLE XII

MISCELLANEOUS

13.1. Expenses. Except as otherwise provided in this Agreement, Sellers and Purchaser shall bear their own Fees and Expenses. Notwithstanding the foregoing, in the event of any action or proceeding to interpret or enforce this Agreement, the prevailing part in such action or proceeding shall be entitled to have and recover from the non-prevailing part such costs and expenses (including, without limitation, all court costs and reasonable attorneys' fees) as the prevailing part may incur in the pursuit or defense thereof.

13.2. Injunctive Relief. Damages at law may be an inadequate remedy for the breach of any of the covenants, promises and agreements contained in this Agreement, and, accordingly, any Party hereto shall be entitled to injunctive relief with respect to any such breach, including, without limitation, specific performance of such covenants, promises or agreements or an order enjoining a part from any threatened, or from the continuation of any actual, breach of the covenants, promises or agreements contained in this Agreement. The rights set forth in this Section 13.2 shall be in addition to any other rights which is Party may have at law or in equity pursuant to this Agreement.

13.3. Entire Agreement: Amendments and Waivers. This Agreement (including the Schedules and Exhibits hereto) and the Confidentiality Agreement represent the entire understanding and agreement between the Parties with respect to the subject matter hereof. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the Party against whom enforcement of any such amendment, supplement, modification or waiver is sought. No action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any Part to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

13.4. Parties in Interest. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any Persons other than Sellers and Purchaser and their respective successors and permitted assigns. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third Persons to Sellers or Purchaser. No provision of this Agreement shall give any third Persons any right of subrogation or action over or against Sellers or Purchaser.

13.5. GOVERNING LAW: CONSENT TO SERVICE OF PROCESS: WAIVER OF RIGHT TO TRIAL BY JURY. THIS AGREEMENT, THE SELLER DOCUMENTS AND THE PURCHASER DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE BANKRUPTCY CODE AND, TO THE EXTENT NOT INCONSISTENT WITH THE BANKRUPTCY CODE, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS WHICH WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW OF ANY OTHER JURISDICTION. PURCHASER AND SELLERS FURTHER AGREE THAT THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER MATTERS

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RELATING TO (A) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER SELLER DOCUMENT OR PURCHASER DOCUMENT; AND/OR (B) THE PURCHASED ASSETS AND/OR THE ASSUMED LIABILITIES AND THE PARTIES EXPRESSLY CONSENT TO AND AGREE NOT TO CONTEST SUCH EXCLUSIVE JURISDICTION; PROVIDED, HOWEVER, THAT IF THE BANKRUPTCY COURT REFUSES TO ACCEPT JURISDICTION OVER ANY SUCH DISPUTE, THEN ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK SHALL HAVE JURISDICTION OVER SUCH DISPUTE AND PURCHASER AND SELLERS HEREBY EACH CONSENT TO THE JURISDICTION OF SUCH COURT IN ANY SUCH CASE. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN AN OTHER MANNER PROVIDED BY LAW. EACH PARTY HEREBY CONSENTS TO PROCESS BEING SERVED BY ANY PARTY IN ANY SUIT, ACTION OR PROCEEDING BY DELIVERY OF A COPY THEREOF IN ACCORDANCE WITH THE PROVISIONS OF SECTION 13.6. EACH PARTY WAIVES AN RIGHT TO TRIAL BY JURY IN ANY ACTION, MATTER OR PROCEEDING REGARDING OR RELATING TO THIS AGREEMENT OR ANY OTHER SELLER DOCUMENT OR PURCHASER DOCUMENT.

13.6. Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) on the day when sent when sent by facsimile (with written confirmation of transmission) if so sent and confirmed prior to 5:00 p.m. New York City time on any Business Day or, if after 5:00 p.m., on the next Business Day or (iii) one Business Day following the day sent by overnight courier (with written confirmation of receipt), in each case at the following addresses and facsimile numbers (or to such other address or facsimile number as a part may have specified by notice given to the other part pursuant to this provision):

If to Sellers, to:

[INSERT NAME & ADDRESS]

With a copy (which shall not constitute notice) to:

Berger Singerman, P.A.
[address]
Attention: Arthur J. Spector, Esq.
[fax]

If to Purchaser, to:

c/o York Capital Management
[address]
Attention: Adam J. Semler, CFO and Charles C. Hale, Managing Director
[fax]

With a copy (which shall not constitute notice) to:

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McNutt & Litteneker, LLC
[address]
Attention: Scott H. McNutt, Esq.
[fax]

and to:

Proskauer Rose LLP
[address]
Attention: Adam J. Kansler, Esq.
[fax]

13.7. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, this Agreement shall be modified so as to effect the original economic position of the Parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

13.8. Binding Effect: Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person or entity not a Party to this Agreement except as provided below (including without limitation any employee or contractor of any Seller). No assignment of this Agreement or of any rights or obligations hereunder may be made by Sellers (by operation of law or otherwise) without the prior written consent of Purchaser and any attempted assignment without the required consent shall be void.

13.9. Non-Recourse. No past, present or future director, officer, employee, incorporator, member, partner or equityholder (other than Sellers) of any Seller shall have any Liability for any obligations or Liabilities of Sellers under this Agreement or the Seller Documents or for any claim or Action based on, in respect of, or by reason of, the transactions contemplated hereby and thereby except for any claim or Action against an individual based on the fraud of such individual in connection with the representations set forth in this Agreement or any other Seller Document.

13.10. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

13.11. Post-Closing Cooperation. In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each Seller will take such further action (including the execution and delivery of such further instruments and documents) as Purchaser may request, all at the sole cost and expense of the requesting part. Without limiting the foregoing, if required in order for Sellers to fully pursue any Action retained by Sellers that relates to rights

52 (54)

under Assumed Contracts, or if pursuit of that Action requires information pertaining to Assumed Contracts, Purchaser will take such actions as may be necessary and reasonably practicable in order to facilitate Sellers' dispute resolution strategy and the implementation thereof (including, as appropriate, limited assignments of Contract rights, third-part beneficiary status, and/or joining in Sellers' Actions as a nominal part for that sole purpose), and Purchaser will otherwise reasonably cooperate with Sellers to provide information or other assistance in support of Sellers' Actions; provided that Purchaser will not be required to incur expenses or liabilities, and Purchaser's compliance herewith will be reasonably tailored in order that Purchaser's obligations will not be unreasonably burdensome on employees or representatives of Purchaser and will not be in breach of Assumed Contracts as result of its compliance with this Section 13 .11. In addition, without limiting the foregoing, if required in order for Purchaser to fully pursue any Action acquired by Purchaser that relates to rights under any agreements or assets or rights held by Sellers, or if pursuit of an Action requires information pertaining to such agreements, assets or rights, Sellers will take such actions as may be necessary and reasonably practicable in order to facilitate Purchaser's dispute resolution strategy and the implementation thereof (including, as appropriate, limited assignments of contract rights, third-part beneficiary status, and/or joining in Purchaser's Actions as a nominal part for that sole purpose), and Sellers will otherwise reasonably cooperate with Purchaser to provide information or other assistance in support of Purchaser's Actions; provided that Sellers will not be required to incur expenses or liabilities, and Sellers' compliance herewith will be reasonably tailored in order that Sellers' obligations will not be unreasonably burdensome on employees or representatives of Sellers and will not be in breach of the applicable contracts, rights or agreements as result of its compliance with this Section. In addition, the Parties will act reasonably and communicate with each other and their respective counsel and advisors, and discuss strategy, tactics and goals under a joint prosecution or confidentiality agreement as to be approved prior to Closing, and the Parties will provide status reports and respond to inquires from time to time in furtherance of their mutual cooperation and assurance covenants herein.

13.12. No Third Party Beneficiaries. This Agreement is intended for the benefit of the Parties and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise expressly provided in this Agreement.

13.13. Limitation on Damages. No Party nor any of its respective Affiliates, officers, directors, employees, agents, representatives, successors and assigns shall be liable to any other Party or its respective Affiliates, officers, directors, employees, agents, representatives, successors and assigns, whether in contract, tort, negligence, indemnity, strict liability or otherwise, for any punitive, special, indirect, incidental or consequential damages in connection with or arising out of or relating to the performance, non-performance or breach of this Agreement or any other Seller Document or Purchaser Document or any obligations arising hereunder or thereunder.

13.14. Risk of Loss.

(a) Sellers will bear all risk of loss occurring to or upon any portion of the Purchased Assets prior to the Closing, other than any Losses caused by acts of gross negligence of Purchaser or any of its representatives or agents, which Losses shall be the responsibility of Purchaser upon Closing.

(b) If, prior to Closing, all or any material portion of the Purchased Assets is taken by eminent domain or is the subject of a pending, or to Sellers' Knowledge, contemplated taking which has not been consummated, or if all or a material portion of the Purchased Assets is

53 (55)

damaged or destroyed by earthquake, fire or other casualty, Sellers shall notify Purchaser promptly in writing of such fact. If such taking, contemplated taking, damage or destruction would have a Material Adverse Effect, Sellers shall have the option, if exercised by prompt notice to Purchaser, to restore, repair or replace the taken or damaged Purchased Assets prior to the Closing. Upon any taking, contemplated taking, damage or destruction of less than a material portion of the Purchased Assets, Purchaser and Sellers shall negotiate in good faith to settle the Losses resulting from such taking, damage or destruction by making a fair and equitable adjustment to the Purchase Price and, subject to all other terms and conditions of this Agreement, proceed with the consummation of the transactions contemplated by this Agreement at Closing. If Sellers elect to restore, repair or replace the Purchased Assets, which election shall be made by notice to Purchaser within shirt (30) days following the occurrence of the taking or casualty, the completion of the restoration, repair or replacement shall be a condition to the Closing pursuant to Section 10.1 and the Closing Date shall automatically be postponed at the election of Sellers for the amount of time reasonably necessary to complete such restoration, repair or replacement (not to exceed 180 days after receipt by Purchaser of such notice without Purchaser's consent). In the event that Sellers elect not to restore, repair or replace such damaged Purchased Assets, or in the event that Sellers, having elected to restore, repair or replace such damaged Purchased Assets, fails to complete the repair, replacement or restoration within such 180-day period, then the Parties shall negotiate in good faith an equitable adjustment to the Purchase Price to reflect to impact of the casualty or taking, as mitigated by any restoration, repair or replacement work actually completed by Sellers, on the Purchased Assets being sold to Purchaser, and shall, subject to all other terms and conditions of this Agreement, proceed with the consummation of the transactions contemplated by this Agreement at Closing. In the event that the Parties fail to reach agreement on an equitable adjustment to the Purchase Price within thirty (30) days, then Purchaser shall have the option, exercisable by written notice to any Seller, within fiibiblio.org (15) days immediately following the expiration of such thirty (30)-day period, to either (i) proceed with the consummation of the transactions contemplated by this Agreement at Closing, with a reduction in the Purchase Price consistent with Sellers' last offer communicated to Purchaser, in which event Sellers shall assign over and deliver to Purchaser at Closing all condemnation or insurance proceeds which Sellers have received or to which Sellers are entitled by virtue of such casualty or taking or (ii) terminate this Agreement, in which event this Agreement shall terminate and neither Party shall thereafter have any obligation or Liability to the other by reason of such termination except pursuant to Section 4.6. If Purchaser shall fail to make such election within the prescribed fiibiblio.org (15)-day period, Purchaser shall be deemed to have made an election to proceed with the Closing.

13.15. Acknowledgment. Purchaser acknowledges the existence of the Novell Exception as defined herein. Purchaser has undertaken preliminary independent due diligence with respect thereto and has been provided with underlying facts and circumstances. Sellers advise and Purchasers acknowledge that the Novell Exception qualifies and affects various representations and warranties of the Sellers.

[Remainder of page intentionally left blank.
Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first written above.

PURCHASER

[___________________]

By: ___________________
Name:
Title:

SELLERS

The SCO Group, Inc.

By: ___________________
Name:
Title:

SCO Operations, Inc.

By: ____________________
Name:
Title:

SCO Global, Inc.
By:
Name:
Title:

[Add other Sellers]

55 (57)


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