SCO Grp v. Novell Inc

Filing 260

DECLARATION of Edward Normand re 259 Memorandum in Support of Motion, filed by SCO Group. (Attachments: # 1 Exhibit 1 Part 1# 2 Exhibit 1 Part 2# 3 Exhibit 1 Part 3# 4 Exhibit 1 Part 4# 5 Exhibit 2-9# 6 Exhibit 10-20# 7 Exhibit 21-27# 8 Exhibit 28-31# 9 Exhibit 32-34# 10 Exhibit 35 Part 1# 11 Exhibit 35 Part 2# 12 Exhibit 36-41)(Normand, Edward)

SCO Grp v. Novell Inc

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC., Plaintiff and Counterclaim Defendant, vs. NOVELL, INC., Defendant and Counterclaim Plaintiff. ____________________________/ C.A. No. 2:04CV00139

Deposition of ALOK MOHAN February 23, 2007

Reported by Katherine E. Lauster CSR 1894 SHARI MOSS & ASSOCIATES Certified Shorthand Reporters 877 Cowan Road, Suite A Burlingame, California 94010-1204 [phone] [phone] FAX: [phone]

SHARI MOSS & ASSOCIATES

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THE VIDEOGRAPHER: Here begins the videotape number 1 of Volume 1 in the deposition of Alok Mohan in the matter of the SCO Group, Inc., versus Novell, Inc. in the United States District Court of Utah, Central Division. The Case Number is 2:04CV00139. Today's date is February 23rd, 2007. The time on the video monitor is 9:42. The video operator today is Vincent Spanier, contracted by Eureka Street Legal Video at 511 Eureka Street, San Francisco, California, telephone: [phone]. This video deposition is taking place at 6001 La Madrona Drive, Santa Cruz, California, and was noticed by Morrison & Foerster. Counsel, please identify yourselves and state whom you represent. MR. NORMAND: Edward Normand for SCO Group and the witness. MR. TIBBITTS: Brian Tibbitts, General Counsel for SCO Group and the witness. MR. BRAKEBILL: Ken Brakebill for Novell. THE VIDEOGRAPHER: The court reporter's name Kathy Lauster of Shari Moss and Associates. Would the re- -- oh, would you identify yourself for the record, please?

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A. I was chief operating officer for a short while and then I became CEO. Q. Do you remember what your position was at the time of the transaction between Novell and Santa Cruz? A. I was the CEO. Q. Were you also a member of the Board of Directors? A. Yes. Q. And would it be fair -- what would -were you aware that there was a contract relating to the transaction between Novell and Santa Cruz? Correct? A. Yes. Q. Would it be fair to say that your involvement in the Novell/Santa Cruz deal was only at a high level? MR. NORMAND: Objection to form. THE WITNESS: The -- I was involved as a CEO, at the CEO level. BY MR. BRAKEBILL: Q. Would it be fair to say that your involvement as CEO for Santa Cruz on the Novell/Santa Cruz transaction was only at a high level?

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LAURA JOHNSON: Laura Johnson, Boies, Schiller & Flexner. THE VIDEOGRAPHER: Would the reporter please swear in the witness? ALOK MOHAN, having been first duly sworn, testified as follows: THE VIDEOGRAPHER: Please begin. EXAMINATION BY MR. BRAKEBILL Q. Good morning, Mr. Mohan. A. Good morning. Q. How are you today? A. Good. Is that better? THE VIDEOGRAPHER: Thank you. BY MR. BRAKEBILL: Q. Do you understand you're here today to give some testimony, among other things, about the transaction between Novell and Santa Cruz Operation in 1995? A. Yes. Q. In 1995 were you the President of Santa Cruz Operation? A. I was CEO around that time, '95 to '98. Q. Were you President and CEO of Santa Cruz Operation in 1995?

MR. NORMAND: Objection to form. THE WITNESS: What do you mean by "high level"? BY MR. BRAKEBILL: Q. Do you recall having characterized your involvement in the Novell/Santa Cruz transaction as at the high level? A. Well, I was the CEO, and there were a lot of people involved in the transaction from our side. So I was involved as a CEO. Q. Do you recall giving a declaration in this matter? A. I've given a declaration, yes. Q. And do you recall having characterized your involvement in the Novell/Santa Cruz transaction as at the high level? A. I could read it. MR. BRAKEBILL: To save some time, let me just mark as -- as a new exhibit -- I believe, Exhibit 69. (Deposition Exhibit Number 69 was marked for identification.) BY MR. BRAKEBILL: Q. Mr. Mohan, we're handing you a document which we've marked as Exhibit 69 in this case, and

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A. I assume, yes. Q. And I'm trying to find out the basis of your belief. (Mr. Tibbitts entered the deposition room.) BY MR. BRAKEBILL: Q. Is it true that if I wanted to find out what rights Novell did retain I could look at the contract? A. I don't know that. Q. Okay. Was it a fair characterization that the -- that Novell was retaining no rights, with the exception that it was retaining a revenue stream, and it could do something to protect that revenue stream? A. That's right. That's my understanding. MR. NORMAND: Objection to form. BY MR. BRAKEBILL: Q. Now, do you have a personal belief as to -- I take it you have a personal belief that no copyrights were transferred -- I'm sorry, that Novell retained no copyrights as part of this transaction? MR. NORMAND: Objection to form. THE WITNESS: My belief is that we bought

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part of it. BY MR. BRAKEBILL: Q. And what is the basis for your understanding that Santa Cruz got the Unix copyrightsNow -MR. NORMAND: Objection to form. THE WITNESS: I'm being very specific, and you're asking me about copyrights. I'm talking about the business. I believe we bought the business, and the APA states that too. We bought the business, and in that business everything belongs in that business, that's ours. BY MR. BRAKEBILL: Q. Where -A. We bought it. Q. What is the basis of your opinion that Santa Cruz got the business? MR. NORMAND: Objection to form. THE WITNESS: That -- that's -- that was the whole discussion and intent, negotiations. That's my recollection of what we were doing. BY MR. BRAKEBILL: Q. Is there anything in the contract you can point me to here today to support your belief that Santa Cruz got the whole Unix business?

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the business, except for the revenue stream. And when we bought the business everything came with it. BY MR. BRAKEBILL: Q. You believe that Santa Cruz got the Unix copyrights to through the APA; is that right? A. I believe -MR. NORMAND: Objection to form. THE WITNESS: I believe I bought the whole business. That includes all kinds of stuff. And -- and, you know, that's the answer, I think we bought -- we got the whole thing. BY MR. BRAKEBILL: Q. Okay. But you haven't -- you haven't confirmed -- is -- is part of the -A. Yes, they are -Q. Is Unix copyrights part of the Unix business? A. Absolutely. Q. Okay. So you believe that Santa Cruz got the Unix copyrights? A. Santa -MR. NORMAND: Objection to form. THE WITNESS: Santa Cruz got the whole business. Includes lots of things. Copyrights are

A. I can -- I can start going through line item by line item, but I think that APA does talk about the business and that we acquired the business. Q. Okay. You have before you Exhibit 1. Can you point to me anything in there in support of your view that Santa Cruz got the entire Unix business in this transaction? MR. NORMAND: Objection to form. Do you mean short of having him read it, or do you want him to read it? BY MR. BRAKEBILL: Q. Do you need to read -- do you need to read this document? MR. NORMAND: How would he not have to read the document in order to find any provision that supports his view, Ken? That was your question. How could he not read the document? I'm asking you a question. How could he not read the document to do that? MR. BRAKEBILL: I don't think you need to elevate your voice. MR. NORMAND: I think I do, because we've been wasting time for two and a half hours, and now you ask this question and express incredulity over

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previously been marked as Exhibit 1028. Exhibit 1028 is entitled "Press Release" under SCO letterhead. The title of the press release is, quote: SCO Acquires Unix Business From Novell And Licenses Netware Technology, end quote. Do you see that you're quoted in the second paragraph of the first page? A. Yes. Q. And do you see that Robert Frankenberg, Chairman and CEO of Novell, is quoted at the top of the second page? A. Yes. Q. To your understanding, was this press release one that was approved by both Santa Cruz and Novell? MR. BRAKEBILL: Foundation, speculation. THE WITNESS: I would assume -- I would assume that to be so. Our process of press releases -- we're a large enough company, 200 plus million in revenue. We had a process of running -getting approvals, especially when you quote somebody. So that would be my -- my read on it, that it would have gone through approvals.

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business, and for them to say that they are -- that they retained it was just not -- did not make any sense to me, and I was just surprised. Of course, I was not involved in any of the businesses. There was nothing for me to do. Q. Did anyone from Novell ever say to you, prior to the execution of the APA, that Novell intended to retain any Unix or UnixWare copyrights? A. No. Q. Did anyone from Santa Cruz ever say to you, prior to the execution of the APA, that they understood that Novell intended to retain any of the Unix or UnixWare copyrights? A. No. Q. You say in paragraph 6 of your declaration, quote: In approximately early April 1996, it came to my attention that Novell, purportedly on behalf of itself and Santa Cruz, was planning to enter into an agreement with IBM purportedly amending its UNIX license agreements by granting IBM a buy-out of its binary royalty obligations and expanding its source code rights, end quote.

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BY MR. NORMAND: Q. The press release states, on page 2, in the first sentence of the second paragraph, quote: According to the terms of the agreement, SCO will acquire Novell's UnixWare business and UNIX intellectual property, end quote. Do you see that language? A. Yes. Q. Does that language accurately reflect your understanding of the transaction? A. This language is consistent with what I've been saying today about we bought the business. We bought UnixWare and Unix intellectual property, we bought the business, and that's what I thought we were buying, and I still believe that's what we bought. Q. Did you have occasion in the last several years to become aware of -- of Novell's public claim that it had not sold the Unix copyrights to Santa Cruz? A. I had seen that, yes, somewhere. Q. What was your reaction when you saw that? A. I was absolutely surprised, because, as I said, again, I've said I thought we had bought the

Do you see that language? A. Yes. Q. Did anyone from Novell ever say to you, at any time in 1996, that Novell had retained any Unix or UnixWare copyrights under the APA? MR. BRAKEBILL: Form. THE WITNESS: No, I don't recall that. BY MR. NORMAND: Q. Did anyone from Santa Cruz, including Santa Cruz's outside counsel, ever say to you, at any time in 1996, that they believed Novell had retained any Unix or UnixWare copyrights? A. I -MR. BRAKEBILL: Form. THE WITNESS: I don't recall that. BY MR. NORMAND: Q. You say in the second sentence of paragraph 6 of your declaration, quote: I promptly contacted Novell and communicated Santa Cruz's view that Novell lacked the authority under the APA to enter in such agreements and that they ran counter to the intent of the APA. Over the next several weeks, I gained Novell's assurances that the purported

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH _________________________________________________________ THE SCO GROUP, INC., ) ) Plaintiff/ ) Counterclaim Defendant, ) ) NOVELL, INC., ) ) Defendant/ ) Case No. 2:04CV-00139 Videotaped Deposition of: ROBERT J. FRANKENBERG

Counterclaim Plaintiff. ) _________________________________________________________

February 10, 2007 10:00 a.m.

Fillmore & Spencer 3301 N. University avenue Provo, UT 84604

Sharon Morgan, CSR, RPR, CRR Notary Public in and for the State of Utah Job: 191635

Esquire Deposition Services 1-800-944-9454

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object. Hopefully less frequently than more, but, in any event, if you understand a question, you should still seek to answer it. The objections are for the record and before a judge, if necessary, to rule upon at some future time. A. Uh-huh (affirmative). Q. Are you represented by counsel here in connection with this deposition? A. I am, yes. Bill Fillmore is my attorney. Q. I would like to begin by asking you to briefly summarize your educational background. A. I have a bachelor's degree in computer engineering from San Jose State University, and I'm an SEP graduate of the Stanford Graduate School of Business. Q. Can you briefly summarize your employment background prior to coming to Novell? A. I was in the U.S. Air Force from 1965 to 1969, joined Hewlett-Packard out of the Air Force as a manufacturing technician, and stayed there nearly 25 years, just a few months short of 25 years. And when I left, I was the vice president responsible for Hewlett-Packard's networking in personal computer businesses. Q. When did you leave Hewlett-Packard?
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largest single business. It provided the ability to connect personal computers to shared resources such as disks and printers and also, through those shared resources, to connect to other networks. Q. Did there come a -A. It also provided the capability to write applications on that shared resource and make further use of it. Q. Did there come a time when you decided, as CEO of the board, to explore divesting certain of the business lines of the company? A. Excuse me, I misspoke. At about the same -at about the same time that I joined, Novell had just purchased WordPerfect and the associated products there. So at the moment I was there it hadn't been completed, but shortly thereafter those were added. I don't know whether that was the intent of your question or not. Q. Well, it helps to add that to the picture. WordPerfect, as a lot of people will be familiar with, had a word processing program -A. Correct. Q. -- of the same name? A. Uh-huh (affirmative). Q. And did there come a time after you became
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A. In April of 1994. Q. Where did you go? A. To Novell. Q. And what position did you assume at Novell? A. I became the CEO and president of Novell and shortly thereafter also became chairman. Q. What was the date, Mr. Frankenberg, that you assumed the office of chief executive officer of Novell? A. It would have been in late March of 1994, or early April. I can't remember. It was right at the boundary. Q. Could you briefly describe the different lines, major lines, of Novell's business at that point? A. Novell's largest single business was NetWare. The second largest business was training people in the use, installation and application of NetWare. After that we had a number of smaller businesses including UNIX, UnixWare, DR-DOS, and a range of much smaller businesses having to do with document management and so forth. Q. Can you briefly describe what the NetWare business was? A. The NetWare business, as I said, was the

CEO when you decided it would be in the best interest of Novell to sell one or more of these businesses? A. Yes. Q. Approximately when did you come to that view? A. That would have been late in '94 to early in '95. Q. Can you recall your thinking as to why that would be advantageous? A. Well, there were several reasons. One, after a very thorough study, we looked at the range of businesses that we were trying to advance and came to the conclusion that we weren't able to fund appropriately all of those businesses. And as such, it made sense to get out of some of them or sell them and concentrate our efforts on the ones that we thought would be the most successful or the ones that we thought we could have the greatest success with, having moved the responsibility for some of the others elsewhere. Q. Were there particular businesses that fell in the category of those that you wanted to sell? A. Yes. Q. Which were those? A. The WordPerfect word processing software, and the associated office product that we called Perfect

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Is that, Mr. Frankenberg, an accurate statement in your understanding of the intent of the deal? A. Yes. Q. If we turn now -- now turn to Schedule 1.1(a), which appears after page 49, I would like to direct your attention to the very first Roman numeral item on this list of the assets, which you'll recall as the assets being sold. It states that "All rights and ownership of UNIX and UnixWare, including but not limited to all versions of UNIX and UnixWare and all copies of UNIX and UnixWare (including revisions and updates in process), and all technical, design, development, installation, operation and maintenance information concerning UNIX and UnixWare, including source codes, source documentation, source listings and annotations, appropriate engineering notebooks, test data and test results, as well as all reference manuals and support materials normally distributed by seller to end users and potential end users in connection with the distribution of UNIX and UnixWare, such assets to include without limitation the following," and it lists a variety of different technologies. Is that statement consistent with your understanding of the intent of this transaction?
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Q. Did you ever hear from anyone at Novell that copyrights were not being sold? A. I have some memory of there being a discussion of whether copyrights would be sold or not. Q. And as we've covered it, it was your intent under this transaction that those copyrights would be sold? A. Yes. Q. Now, I would like to briefly look at the other assets which were being sold on Schedule 1.1(a). If you look at III, is it your understanding that all of the seller's rights pertaining to UNIX and UnixWare under any software development contracts, licenses and other contracts to which seller is a party or by which it is bound and which pertain to the business (to the extent that such contracts are assignable), was being sold, including those listed without limitation in the various subparts below that? A. Yes. Q. Is it your understanding that to the extent there were contracts involving source code that had been entered into by AT&T and IBM that pertain to UNIX technology, that that was part of all of the seller's rights which were being sold to Santa Cruz in this transaction?
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A. Yes. Q. Is it your understanding that that sale of all rights and ownership of UNIX and UnixWare would include copyrights associated with UNIX and UnixWare? MR. JACOBS: Objection, calls for a legal conclusion. A. I guess I have to answer the question? Q. (By Mr. Singer) Yes, you should if you understand the question. A. Okay. I understand. Yes. Q. Now, did you ever give any directions to the team that was negotiating the deal, including Mr. Thompson, Mr. Chatlos, that they should transfer all right and title and interest to UNIX and UnixWare but retain copyrights for UNIX and UnixWare from being sold? A. No. Q. Did you ever tell anyone at Santa Cruz Operation that copyrights for UNIX and UnixWare were not part of the technology being sold? A. No. Q. Did you ever authorize anyone at Novell to tell anyone at Santa Cruz that copyrights were not being sold as part of the transaction? A. No.

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A. Yes. Q. There is a separate schedule that subsequently was amended by an amendment to the transaction that we will look at in a few moments -two amendments to the transaction, one in particular amended the schedule. That's Schedule 1.1(b) of Excluded Assets. Now, as we begin at the top of that page, you see the NetWare operating system that any asset not listed on Schedule 1.1(a), including the assets pertaining to NetWare and the NetWare operating system and services. Is it fair to say that you wanted to be clear that NetWare was not being transferred as part of the transaction? A. Yes. It was very important that we be clear that it was not part of the transaction. Q. If you now look at V under Intellectual Properties where it says, as part of the assets not being transferred, "All copyrights and trademarks, except for the trademarks UNIX and UnixWare," would you understand that to be a reference to Novell not transferring its own copyrights and trademarks with respect to NetWare products? MR. JACOBS: Objection. The document speaks

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for itself. A. I think -- well, it says that copyrights aren't transferred, so... Q. (By Mr. Singer) Is it your understanding of the intent of the transaction that the copyrights that would be retained would be those pertaining to NetWare? A. Yes. Q. And that the copyrights pertaining to UNIX and UnixWare would be transferred? A. Yes. Q. I would like to show you a joint -- a press release which was issued after the transaction. A. Are we through with this? Q. We're going to be coming back to it, but we're through with it for the moment. A. I'll leave it partly open, then. MR. GONZALEZ: This is what was previously marked as 1028. Q. (By Mr. Singer) Do you recall, Mr. Frankenberg, under the terms of the asset purchase agreement, Novell and Santa Cruz were to agree upon and issue a joint press release concerning a transaction? A. Yes.
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copyrights for UNIX and UnixWare were so transferred? A. Yes. Q. I would like to show you a Wall Street Journal article that appeared after the transaction, which we'll mark as the next exhibit. MR. GONZALEZ: This has been previously marked as 1030. Q. (By Mr. Singer) Mr. Frankenberg, Exhibit 1030 appears to be an excerpt -- or a copy of an article that appeared in The Wall Street Journal on September 20, 1995 under the title "Novell to Cede Control of UNIX To 2 Companies." If you could take a moment to look at this, I have just a couple of questions. Does this summary of the transaction, including specifically the statement on page -- in paragraph two, "The deal includes the purchase by Santa Cruz Operation of most trademarks and intellectual property associated with UNIX software" appear accurate to you? A. Yes, it does. Q. I would like to show you a Technology Licensing Agreement that was entered into in December of 1995. MR. GONZALEZ: This one has been previously
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Q. Take a moment and look at this press release, and my first question to you is whether you recognize this to be the jointly approved press release pertaining to that transaction? A. Yes, it is. Q. If you turn to page 2 of the press release, at the top of the page there's a quote attributed to you which says, "SCO's Business Critical Server focus and worldwide distribution channel makes them an ideal partner for taking UNIX application servers forward on the Intel platform. By focusing on our areas of expertise and working to integrate our technologies, Novell and SCO together will meet the application server needs of customers in a networked world." Is that a direct quote that you made at the time? A. It is, yes. Q. Right below that it states that "According to the terms of the agreement, SCO will acquire Novell's UnixWare business and UNIX intellectual property." Is that also consistent with your understanding of the transaction? A. Yes. Q. And is it consistent with your understanding that all right, title and interest, including the

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marked as 1008. Q. (By Mr. Singer) Please take a moment to look at Exhibit 1008. A. All right. Q. Do you recognize this to be an agreement called the Technology License Agreement that was entered into between Novell and Santa Cruz Operation on December 6th, 1995? A. Yes, I do. Q. And it was signed by Mr. Thompson as senior vice president - corporate development on behalf of Novell; is that correct? A. Yes. Q. Do you have an understanding of what the purpose was of the Technology License Agreement? A. To have a complete license back so that -- of the technologies so that we could make use of them as we saw fit internally and in our product. Q. Were there certain restrictions, which we'll come back to in a few moments, as to how Novell could use that technology with respect to the sale of products? A. That would be included in Novell's products, is my recollection. Q. You see Section II-A(2). Did you understand

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competitor to Microsoft. I remember that being part of the charge and I remember reminding Mr. Thompson about that. And we wanted to make sure Intel was supportive of what we came up with. Q. In connection with the Intel discussions that you had around the time of the Asset Purchase Agreement, do you remember any input Intel gave you about things that Intel thought would be important in the transaction that you were about to enter into with SCO? A. Not specifically. I'm sure we talked about a number of things, but I can't cite you a very specific this is what Intel told me was important right now, but I'm sure we talked about that. Q. Do you recall who your counterpart was at Intel on those discussions? A. Yeah, Dave Howse. Q. What was his position? A. Dave was a senior vice president, if I remember right, at least a vice president if not a senior vice president, and deeply involved in marketing and selling of processors. Q. Just give me a minute. MR. JACOBS: No further questions, sir. Thank you very much.
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Q. Would you have expected that if the lawyers or any other party to the negotiating team on behalf of Novell was going to seek to change a deal point like that, that they would have told you about it rather than just go off and do it? A. Yes. Q. And that never happened, did it? A. Not that I recall. Q. Now, there's been some questioning about the exact scope of the rights regarding Section 4.16 over which Novell had a continued interest. Do you recall those questions? A. Yes. Q. And do you recall testifying in questions I asked you on direct that what Novell was retaining when it's referring to SVRX licenses was a continuing right to retain a binary royalty stream that was in place at the time of the transaction. Do you recall that? A. I do. Q. Then there was some questions by Mr. Jacobs directed at whether or not in the course of a buyout there would be some need to deal with source code rights. Do you recall questions there? A. I do, yes.
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FURTHER EXAMINATION BY MR. SINGER: Q. Mr. Frankenberg, I do have some redirect. Do you recall being asked in cross-examination some questions about the intent of the transaction? A. Uh-huh (affirmative). Q. And the initial intent of the transaction? A. Yes. Q. I just want to be clear on a few things. Was your initial intent in the transaction that Novell would transfer copyrights to UNIX and UnixWare technology to Santa Cruz? A. Yes. Q. Was that your intent at the time when the APA was signed? A. Yes. Q. Was it your intent when that transaction closed? A. Yes. Q. And did that remain your intent, as you view it, at all relevant times? A. Yes. Q. So that never changed? A. No.

Q. Would you agree that Mr. Chatlos was one of the individuals specifically -- in fact, the individual specifically charged with negotiating the agreement from a business standpoint? A. With SCO? Q. Yes. A. Yes. Q. I would like to show you a declaration Mr. Chatlos has executed and which has previously been provided to counsel to Novell in this litigation, which we would like to mark as the next exhibit. MR. GONZALEZ: This will be marked as Exhibit 1045. (Exhibit No. 1045 marked.) Q. (By Mr. Singer) Could you take a moment to review Mr. Chatlos' declaration. A. Okay. Q. Have you had a chance to review Mr. Chatlos' declaration? A. Yes. Q. I would like to ask you about certain passages. If we turn to 4 of Mr. Chatlos' declaration, he states, "Novell's intent and agreement under the APA and Amendment No. 1 was to transfer the entire UNIX business, including the UNIX source code

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC., Plaintiff, vs. NOVELL, INC., Defendant.

: : : : : : : : : :

Case No. 2:04CV00139 Videotaped Deposition of: TY MATTINGLY

January 19, 2007 - 9:23 a.m. Location: SCO Group 355 South 520 West Lindon, Utah 84042 Reporter: Teri Hansen Cronenwett Certified Realtime Reporter, Registered Merit Reporter Notary Public in and for the State of Utah

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Q. Uh-huh. I think you said you joined as senior product manager. When did your title change? What did it change to? A. I think the first change in it was probably a year later when Ray Noorda basically hired me to work directly for him, and Ray Noorda was the then chairman and CEO and founder of Novell. Q. In what capacity did he hire you to work for him? A. Title was executive director, office of the chairman. Q. What were your responsibilities? A. To be his right-hand man and gopher and body guard and -Q. Okay. How long did you hold that title? A. I probably worked for Ray for about two years. Q. Okay. And what was your next title at Novell? A. Basically kept the same title, and then when Ray retired, I worked in that same capacity for Bob Frankenberg. Q. Uh-huh. A. Who was his successor. Q. And until what time did you do that? A. I probably worked for Bob for maybe 18 months. Yeah, probably about 18 months. Q. So it started at some point in 1995, your responsibilities for Mr. Frankenberg?

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that was to go to a joint venture that Novell created with Netscape called Novonyx, N-O-V-O-N-Y-X. Q. How long did you work at Novonyx? A. About a year. Q. And then what? A. Novell basically acquired all of the equity in Novonyx, pulled that back into Novell, and that's when I had my severance agreement and left Novonyx. Q. Okay. What did you do at Novonyx? A. Sales and marketing. Q. And if you could take a minute to summarize the kind of work you have done since you left Novonyx. A. We started a consulting company. I knew that I did not like hardware from my IBM days and did not like software from my Novell days, and so thought I would get into the consulting where we just talked about both of those things. And we started a Internet consulting firm right when the Internet was all of the rage in about '98. And basically myself and a couple of others founded that company, and we built it and sold it in 2004. Q. What was the name of that company? A. It was SBI Razorfish, R-A-Z-O-R-F-I-S-H. Q. And what were your responsibilities with SBI Razorfish? A. Corporate development.

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A. It sounds about right. Q. Let me ask it a different way. Can you recall with any specificity either when you began working -A. Exactly. Q. -- in that capacity or when you stopped working? A. The day he was hired -Q. Oh, okay. A. -- is when I started work working for Bob Frankenberg, so I don't know exactly what day that was. So I remained in that transition through the transition of the new CEO and remained in that position until I left about a year and a half later and started working for Duff Thompson. Q. Uh-huh. A. And in that position and title I was vice president of corporate development and strategic relationships. Q. And when did your responsibilities in connection with Mr. Thompson begin? A. Well, probably about '96 time frame. Roughly, I think it was about a year and a half with Bob Frankenberg. Q. And the responsibilities you had in connection with your work with Mr. Frankenberg were similar to the work you had done with Mr. Noorda? A. Correct. Q. And when did you leave Novell? A. Well, I actually left Novell probably in '97, but

Q. And those ended in 2004? A. Yes. Q. How about since 2004? A. I have just been doing a consulting, personal consulting gigs and personal investing. Q. Okay. Were you involved with Novell's acquisition of the Unix business? A. I was not involved in the acquisition, but when Novell bought Unix Systems Labs from AT&T, that was one of the key reasons why I decided to join Novell because of the application environment and the business applications that ran on Unix that I believed would now be merged into NetWare. Q. Do you know why Novell acquired USL? A. I believe it was for the same reason. Ray Noorda had a vision of getting an application development environment inside of NetWare that he knew we needed to have in order to be competitive with Microsoft. Q. Did there come a time during your tenure at Novell when you learned that Novell was interested in selling some or all of its Unix business? A. Yes. Q. And when was that time? A. Well, let me think about that. It was probably a few months before we actually completed the divestiture to SCO, so I think that would have been about the '95 time

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A. I just told him about the deal, that we were divesting of the Unix business to SCO and gave him specifics as to why. Q. And do you recall what he said or how he reacted? A. I don't. It was a very cordial call, and he's a very nice guy, and that's basically it. That's the only one I can really remember, but I'm sure we had calls with all of the other people because there were about, I think, 13 partners that we really tried to work with. Q. Okay. I take it that the negotiations we have been discussing resulted in an asset purchase agreement? A. That's correct. Q. I'm going to mark this as an exhibit just to get it in. (Deposition Exhibit No. 1 was marked.) Q. (By Mr. Normand) I am handing you, Mr. Mattingly, the -- a document titled asset purchase agreement by and between the Santa Cruz Operation Inc. and Novell Inc. A. Uh-huh. Q. Dated as of September 19th, 1995. I take it you have seen this document before? A. Many moons ago. Q. Okay. When was the last time you saw this document? A. Probably -- this was dated on the 19th. It

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VIDEOGRAPHER: Going back on the record. The time is 10:07. Q. (By Mr. Normand) Mr. Mattingly, do you recall considering during the APA negotiations the issue of the Unix copyrights? MR. BRAKEBILL: Objection, vague and ambiguous. THE WITNESS: So what does that mean? MR. BRAKEBILL: Oh, we should probably say this. During the course of the deposition I will make objections as to the question just to preserve the record, but you can go ahead and answer the question. THE WITNESS: Okay. MR. BRAKEBILL: Unless it's a privilege issue that comes up due to your tenure at Novell. THE WITNESS: Uh-huh. MR. BRAKEBILL: We can consider it, and if necessary either answer or not answer. A. Okay. You want to give me a little more specificity? Q. (By Mr. Normand) Did you have an understanding during the course of the APA negotiations as to whether Novell owned copyrights in its Unix business? A. Yeah. Clearly Novell owned copyrights. We bought Unix Systems Labs from AT&T for some 300 plus million dollars. So, yeah, we owned the Unix business, lock, stock

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probably would have been maybe a few days prior to the signature. Q. Were your responsibilities in the weeks leading up to the negotiation -- let me rephrase that. Were your responsibilities in the weeks leading up to the execution of this agreement -A. Uh-huh. Q. -- any different than your responsibilities had been in the summer of '95? A. Well, they probably were just because I don't know that I was -- well, actually, I probably had been in that job for a while. But I think I transitioned from working for Bob Frankenberg to working for Duff Thompson probably in '95. Q. Okay. Did you have -- if you can recall, did you have occasion to attend a meeting of the Novell board of directors in September '95 regarding the APA? A. You know, I am sure that I attended all of the board of directors' meetings that would have dealt with the divestiture of Unix. MR. NORMAND: Let's mark that. MS. BORUCHOW: Can we just go off the record for a one second? VIDEOGRAPHER: Going off the record. The time is 9:59. (Discussion off the record and recess.)
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and barrel, and it was the Unix business that we divested to SCO. Q. And can you recall considering specifically the issue of Unix copyrights during the course of the APA negotiations? When I say you, I mean you personally. A. You know, I, personally do not recall sitting there saying, yes. The Unix copyrights are part of this lock-stock-and-barrel Unix business that we are selling. But once again, I think it's important to understand that at the high level, that's where I was involved. The detail level would be more Ed Chatlos, but at the highest level, the intention was that we were exiting the Unix business and selling that business to SCO so that they could pick up, unify the industry around Unix on X-86. Q. Do you know whether in this case Novell is asserting that the copyrights were not transferred? A. Well, I mean, I have read enough about the case early on. I haven't stayed real current lately. But I mean, obviously we're here today because Novell is asserting that the copyrights were not sold with the Unix business to SCO, and obviously SCO would assert that they purchased the Unix business from us lock, stock and barrel. Q. And do you have a view as to the merits of Novell's assertion, such as you understand it? A. I do.

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Q. And what is your view? A. Well, my firm belief is that we sold the Unix business to SCO, and that is why SCO paid us roughly 125 million dollars at that point because they bought the Unix business from us basically in its entirety. The only things that did not go with that was a kind of an agent relationship whereby SCO was collecting the SVRX royalties from existing OEMs at the time we sold that business and then giving the bulk of those moneys back to Novell. So that piece of the business, if you will, Novell maintained the royalty stream base of that going forward, and SCO acted as Novell's agent there for a very good reason. And that is that SCO wanted to create the relationships with those OEMs and move them from those existing licenses to their new UnixWare platform on X-86. That was basically the strategy that we wanted, and that was a rational approach for them to actually begin to create the relationships, associations, ties with those OEMs that they aspired to move. And we wanted them to move those OEM relationships over to UnixWare. Q. Why did you want them to do that? A. Well, remember the strategy. The strategy was about, how do we set up an alternative application platform out there in the industry that all of the -- what were existing minicomputer, microcomputer, mid-range computer RISC

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MR. BRAKEBILL: Objection, mischaracterizes testimony. A. So I can still answer? Yeah. I mean, absolutely. I believe that when they bought the business, when they paid us 125 million dollars, that the negotiations that we were involved with there was about selling them the entire business, the software, which would have included the copyrights. Q. (By Mr. Normand) You mentioned in the course of one of your answers the royalty stream. Do you recall mentioning that? A. Uh-huh, yes. Q. Is that an issue that you can recall specifically discussing either within Novell or with representatives of SCO? A. Yeah. I remember that, you know, at a fairly high level. Q. Uh-huh. A. With some clarity. Q. Okay. And who do you recall discussing that with either within Novell or with representatives of SCO? A. Well, I mean, we discussed that, you know, all the way up to the board level inside of Novell. Q. Okay. A. And then certainly we talked about that amongst our

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deal team, the Novell deal team. We talked about it amongst the SCO deal team, and we talked about it with our outside advisors. Q. You mentioned, I think in the course of an earlier answer, new UnixWare or new version of Unix. Do you recall sort of using that phrase? A. Well, I don't know if I said new, but yeah, UnixWare. I mean, basically UnixWare was the word play. I mean, Novell had NetWare, UnixWare. We're calling everything Ware, AppWare, and so Novell's version of Unix that we sold there was basically, you know, the old AT&T Unix. We just branded it UnixWare. Q. And do you recall the phrase merged product? Is that a phrase you recall being used in the course of these APA negotiations? A. I do recall that. Q. And what do you recall about what the merged product was? A. Well, I think it's important to understand that SCO, when I say that they were the leading Unix on Intel provider, my memory might be a little off here, but the leader was only selling 200,000 servers a year, you know, every year, year -- every year in and year out. You know, to contrast that, I mean Novell, we were probably in the, you know, 4 million plus servers out there.

architecture, that would move to this unified Unix that would run on the new Intel X-86 architecture. So the idea is, if you can create a platform there so that now as an ISV -- so strategically, Microsoft's big strength in the industry is, they have this ISV control. And that means that these independent software vendors that write business applications that solve business problems run on NT. And they secured more of those people on their platform by, I don't know, a hundred X or more than what Novell did. So the whole strategy here is, how do you take and create this alternative platform so that ISVs will say, gosh, if I write for UnixWare, now HP, Sun, IBM, et al., I'll be able to sell my applications into those environments, and it will run on every one of those vendors' platforms that run on Intel architecture. So the strategy there, I think, is really important to understand because that's what drove all of our decisions. And quite honestly that was my value-add in this negotiation is, is everything we're doing consistent with that strategy. I am not the guy then or even today that is the detail guy that gets down into all of the nuts and bolts and looks at all of the fine language inside of this nice, thick document. Q. Would it be fair to say that the transfer of the Unix copyrights to SCO was consistent with your view of this overall strategy?

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sale of UnixWare technology as more fully set forth in the asset purchase agreement. So that seems to be consistent. Q. Okay. In that same paragraph there's a reference in the preceding sentence to 95 percent of the SVRX royalties. Do you see that phrasing? A. Uh-huh, uh-huh. Q. What did you understand that to mean? A. Well, at the time we sold the business, Novell had a number of existing SVRX OEMs that were predominantly these minicomputer OEMs. Q. Yeah. A. And with respect to those people, and I guess you can see down below who the big ones must have been, because we had this right of first refusal on Sun Microsystems, Microsoft, Hewlett-Packard, IBM, Digital and Fujitsu, so those likely were some of the big licensees. And the intent there was to, you know, is for SCO to collect all of those existing SVRX royalty streams and then pay Novell 95 percent of that and keep 5 percent as an administrative fee. Q. The minutes say that -- I'm looking now back at page 1 at the end of the last paragraph on page 1. The minutes say that you answered questions from the board. Do you recall any of the questions? A. You know, I don't. But I mean, as usual, I mean,

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retaining all of the Unix and NetWare copyrights? A. Not the Unix copyrights, but Novell clearly -- and you asked this earlier. Novell would not have transferred any of their copyrights around NetWare and ZenWorks and GroupWise or any of those bundled products that Novell sold with UnixWare. So I think, I think that's probably what that's getting to is that, hey, look. We're going to own all our intellectual property. They're going to own all of this, with the exception of the naming of Unix and then, of course, that 95 percent fee that you see above it. Q. Is there anything else specific about this meeting that you can recall? A. No. I mean, I remember those are always -- they're always tense meetings, and you know, when we got into that final discussion, I think as you would expect, you take a pretty thorough set of questioning from a number of directors just firing questions away at you, but -Q. But nothing specific? A. Nothing specific. I think we had, you know, the facts down pretty clearly at that point. And even though 12 years later I'm not as good on the facts, I was pretty good back then. Q. I think you said earlier that you were familiar with some of the issues arising out of these lawsuits from

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reading press. Is that a fair description of what you said before? A. Yeah, I think press and some of these, you know, hate SCO message boards and all that good stuff. Q. You have been on those message boards? A. I have looked at them back when they first -- back when the first shots across the bow went out. Q. Are you familiar with a claim that's arisen in these litigations in which Novell claims the right to waive SCO's claims against IBM for alleged breaches of IBM's Unix agreements? A. I am aware of that. Q. And do you have a view from your experience in negotiating the APA as to the merits of that claim? A. Well, I mean, my perspective on that is that, you know, quite honestly, Novell doesn't have any rights to do that. And I, personally, you know, look at this whole litigation between Novell and SCO and think it's absurd. I think it's unbelievable to me that, you know, a great company like Novell would suggest that somebody spent 125 million dollars and didn't buy this Unix business. And then I don't know what the relationships or discussions are between Novell and IBM, and I don't know why they have done some of those things. I mean, I have been out of the company for, well, since 1998. So I don't have any

you take a grilling in these types of meetings, and so I'm sure I was grilled by the board, asking all of the obvious questions that yes, we had thought of and -Q. But nothing in particular comes to mind? A. Not really. I mean, it's been a long time. Q. The minutes say on page 2 in the paragraph that's actually squared off. A. Uh-huh. Q. And as a side note, that's just how the document was produced. They say, quote, Novell will retain all of its patents, copyrights and trademarks, open parens, except for the trademarks Unix and UnixWare, close parens. The sentence goes on, but that's the phrase I want to focus on. Do you recall the issue of copyrights being discussed at the meeting? A. You know, I don't. I mean, here where it talks about the trademark Unix and UnixWare, that goes to the naming convention that we talked about earlier, which was, didn't want SCO to be able to not grant the ability to call an EOM's product Unix if they met the certain specifications, and so that's why that was not retained by Novell. It was also not transferred to SCO because that was the piece that was moved over to X/Open. Q. Uh-huh. With respect to the reference to copyrights, was it your understanding that Novell was

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